Employee can’t escape recovery of excess payments: SC

New Delhi, Nov 2 (IANS): The Supreme Court has said that even after retirement from service, an employee can’t escape the recovery of the excess amount that is credited due to an error in salary calculations.
Rejecting the submission that no amount should be recovered from the excess salary paid to employees, the apex court bench of Justice Anil R. Dave and Justice Dipak Misra said, “…if any amount had been paid due to mistake, the mistake must be rectified and the amount so paid in pursuance of the mistake must be recovered”.
“It might also happen that the employer might have to pay some amount to the respondent as a result of some mistake and in such an event, even the appellant (employer) might have to pay to the respondent (employee),” said Justice Dave in the judgment pronounced Friday.

“Be that as it may, upon settlement of the account, whatever amount has to be paid to the respondent employee or to the appellant employer shall be paid and the account shall be adjusted accordingly”, the court said setting aside a Punjab and Haryana High Court order.
The apex court said this while allowing an appeal by Chandigarh administration challenging the March 20, 2008 decision of Punjab and Haryana High Court by which it had allowed the plea of Gurcharan Singh against the recovery of excess of money that was paid to him due to erroneous fixation of his salary by the Chandigarh Transport Undertaking where he had worked as a clerk.
Gurcharan Singh had moved the High Court after his plea against the recovery of excess money was junked by the Central Administrative Tribunal Jan 4,2002.
Singh, who had served as Combatant Clerk, was discharged from the army Jan 31,1990. He got employed with Chandigarh Transport Undertaking April 15, 1990 against ex-servicemen quota.
Two years later, he got his pay that was fixed by an order of Sep 2,1992. Upon his retirement, it emerged during an audit that his pay was wrongly fixed by the communication of Sep 2.
On retrospective re-fixation of his salary, it emerged that he was paid excess payment and same were sought to be recovered.

Source: http://www.daijiworld.com/news/news_disp.asp?n_id=199032
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  • This is an old judgement dated 02nd November,2013. Pl. publish the recent Hon'ble Supreme Court judgement in CIVIL APPEAL NO. 11527 OF 2014 (Arising out of SLP(C) No.11684 of 2012) where in it was stated that: ……recoveries by the employers, would be impermissible in law:
    (i) Recovery from employees belonging to Class-III and Class-IV service (or Group ‘C’ and Group ‘D’ service).
    (ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
    (iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
    (iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
    (v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer’s right to recover.