Salary Can't Be Re-Fixed After Superannuation, Hence Recovery Of Excess Payment From Retired Employee Impermissible: P&H HC

A Division bench of the Punjab and Haryana High Court comprising Justice Harsimran Singh Sethi and Justice Vikas Suri held that the refixation of salary after an employee's superannuation, leading to recovery of excess payments made without any misrepresentation or fraud by the employee, is impermissible in law. Background Facts The petitioner was a government employee. He retired upon attaining the age of superannuation on 31.07.2016. After his retirement, the Accounts Department of the respondents identified a discrepancy in his pay fixation. The petitioner's pay had been incorrectly fixed at Rs. 11,840/- instead of Rs. 11,170/-. Therefore, the respondents passed an order refixing the petitioner's pay. It was determined that an excess amount of Rs. 1,75,274/- had been paid to him during his service. This amount was recovered from the petitioner's pensionary benefits. The petitioner challenged the recovery before the Central Administrative Tribunal (CAT). However, the tribunal upheld the respondents' action. But the Tribunal granted the petitioner interest on the delayed release of his pensionary benefits. Aggrieved by the Tribunal's order, the petitioner filed the writ petition. It was submitted by the petitioner that the respondents have committed a grave error by effecting a recovery of Rs. 1,75,274/- after he had already retired from service on 31.07.2016. On the other hand, it was submitted by the respondents-Union of India that a discrepancy was discovered by the Accounts Department regarding the petitioner's pay fixation. It was contended that the petitioner's pay had been wrongly fixed at Rs. 11,840/- instead of Rs. 11,170/-. It was further submitted that the subsequent refixation of pay and the recovery of the excess amount of Rs. 1,75,274/- was well justified as the said amount constituted public money. The respondents argued that the petitioner cannot be permitted to retain an amount beyond his entitlement. Findings of the Court It was observed by the court that the petitioner had retired from service upon attaining the age of superannuation on 31.07.2016. The judgment in State of Punjab and others vs Rafiq Masih and others was relied upon wherein it was held by the Supreme Court that recovery cannot be made from a retired employee where payments have mistakenly been made by the employer, in excess of their entitlement. It was further observed that there was no allegation of any misrepresentation or fraud on the part of the petitioner in the initial fixation of his pay. The Supreme Court's judgment in Thomas Daniel vs. State of Kerala was also relied upon which held that if an excess payment is made by the employer due to a mistake without any fault of the employee, such an amount cannot be recovered. It was noted by the court that the equity jurisdiction of the court is exercised to relieve an employee from the hardship of recovery in such circumstances. It was further held by the court that if an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, then the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess. It was observed by the court that the employee retired from service when his pay was revised and the recovery was made from him. It was held that there was no misrepresentation or fraud on the part of the petitioner in fixation of his salary, which was re-fixed after his retirement, therefore, the excess amount paid to him during service period could not be recovered. It was further held that any recovery made from the petitioner out of his pensionary benefits was unsustainable. Therefore, it was set aside. Further it was directed by the court that the sum of Rs.1,75,274/- recovered from the petitioner be refunded to him within a period of eight weeks. With the aforesaid observations and directions, the writ petition filed by the petitioner employee was disposed of by the court. Case Name : Virender Pal vs. Union of India and Ors. Case No. : CWP-13301-2021 Counsel for the Petitioner : R.S. Sangwan, Advocate Counsel for the Respondents : Arvind Seth, Senior Panel CounselClick Here To Read/Download The Order

Salary Can't Be Re-Fixed After Superannuation, Hence Recovery Of Excess Payment From Retired Employee Impermissible: P&H HC

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Salary Can't Be Re-Fixed After Superannuation, Hence Recovery Of Excess Payment From Retired Employee Impermissible: P&H HC

Namdev Singh

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