'Employer Can't Recover Excess Amount For Period Extending 5 Years', Delhi High Court Reiterates

A Single Bench of the Delhi High Court comprising Justice Jyoti Singh held that the recovery of an excess amount of Rs. 9 lacs would not be just and fair. The Court reiterated that although an Employer has the right to recover the excess amount mistakenly paid to an Employee, the same cannot be done in cases where the excess payment has been made for a period in excess of five years before the order of recovery is issued and where the recovery is iniquitous, harsh or arbitrary. Background The Petitioner's husband was an employee in Shri Guru Teg Bahadur Khalsa (Evening) College. He had joined the Department of Mathematics. He expired on 09.05.2021 due to being infected with Covid-19. On 09.06.2021, the Petitioner made a representation to the Principal of the College to release her late husband's retiral benefits. She also produced all the necessary documents in support of her claim. She kept reminding the College but no payment was made. However, in July 2021, the Petitioner's provident fund dues were released. The Petitioner was informed that the file of her husband regarding the refixation of his pay was sent to the University of Delhi and it was found that some dues were recoverable from him. Therefore, the College could proceed only after the University had decided the Petitioner's husband's case. Moreover, the College also claimed to not be in a position to release the Gratuity or Leave Encashment. The Petitioner was informed in August 2021 that her husband had received an excess payment of Rs. 9 lacs and it would be deducted from his leave encashment. The Petitioner cited the judgment of the Supreme Court in State of Punjab and Others v. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334 while filing a representation asking the authorities to waive the recovery. Subsequently the College was informed by the University that the excess amount could be waived if the Department of Expenditure (DoE), Government of India approved such action and directed the College accordingly. The College sought permission from DoE to waive the recovery of the excess amount and also forward the Petitioner's case to the Ministry of Finance. Subsequently, the Petitioner was informed by the DoE through a Letter that they had received no such letter that covered her husband's case. Following this, she sent many letters but was told that the issue was under consideration. Aggrieved, the Petitioner approached the High Court. Contentions of the Parties: The Counsel for the Petitioner submitted that the Leave Encashment of the Petitioner's husband was not released because the University stated that he was not eligible for stepping up of his pay at Rs.14,940/- w.e.f. 19.05.2001 but the same was paid to him. The University gave its approval for refixation of the pay of teaching faculty and accordingly the Recovery was initiated. The Petitioner's husband also fell in the group of employees from whom recovery was sought. In the Petitioner's husband's case, the University gave its approval on 16.08.2021 while he had expired. The Counsel argued that the Petitioner's husband would have challenged the recovery had he been alive as the University took action after 21 years and even the approval was given after his death. Citing the case of State of Punjab and Others v. Rafiq Masih (White Washer) and Others, the Counsel argued that even if the excess payment was mistakenly given, recovery for the same could not be sought for a period more than five years before the issuance of the order of recovery. It was argued that deducting the excess amount after so many years would be arbitrary and unjust to the Petitioner considering that she had lost her husband at an early age and also lost her son, both in a short span, causing immense mental trauma. On the other hand, the Counsel for the Respondents stated that the College was in support of the Petitioner and had already requested the University to waive the recovery. Stating that the College had sent a Letter to DoE, Government of India for waiver of recovery through the Dean of Colleges, University of Delhi, the Counsel argued that the decision from Ministry of Education was yet to be conveyed. Therefore, the College could not on its own release the leave encashment amount, the Counsel stated. Meanwhile, the Counsel for the Ministry argued that it had constantly asked the University to submit a consolidated proposal for waiver of recovery of overpayment in consultation with the College, however, no response was provided. Findings of the Court: On perusal of the documents produced by the parties, the Court held that no action was taken and the files had only moved from one department to another. The Bench emphasized that the Petitioner being traumatised due to the death of her husband was made to run here and there to seek release of leave encashment payable to her husband. On...

'Employer Can't Recover Excess Amount For Period Extending 5 Years', Delhi High Court Reiterates

Syed Nazarat Fatima

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