Recovery of excess payments made to a retired employee is impermissible
Bombay High Court Bars Recovery from Retired Employee's Benefits. Court rules against recovery of excess payments from retiral benefits, upholding employee's exemption and promotion entitlements.
In a recent judgment, the Bombay High Court has ruled against the recovery of excess payments from the retiral benefits of Mr. Vinay, a retired employee of the Maharashtra Jeevan Pradhikaran. The division bench, comprising Justices Ravindra V. Ghuge and Ashwin D. Bhobe, emphasized that such recoveries would impose undue hardship on retired employees, particularly when promotions and pay scales were neither revoked nor challenged.
The case stemmed from a dispute over the fixation of Mr. Vinay's pay and an alleged excess payment recovery notice issued by the Maharashtra Jeevan Pradhikaran. Despite the promotions and grade pay granted to Mr. Vinay during his tenure, the respondent sought to recover Rs. 13,34,265 from his pension, arguing that Mr. Vinay did not clear the mandatory departmental examination required for promotion.
Mr. Vinay contended that he was exempted from this examination, having completed a Civil Draftsman course from a government ITI. This exemption, alongside his promotions to higher posts, had not been revoked, thus he was entitled to the benefits as per his last drawn pay, including a grade pay of Rs. 4,200/-.
The court examined precedents from the Supreme Court, including the rulings in State of Punjab v. Rafiq Masih and Sayyed Abdul Quadir v. State of Bihar, which disallow recovery from retired employees if payments were not obtained through fraud or misrepresentation. The court noted that Mr. Vinay had received promotions based on legitimate qualifications and that any error in pay fixation was on the employer's part.
In its judgment, the Bombay High Court reiterated that recovery from retired employees, especially when based on a promotion that was not challenged or invalidated, is impermissible. The court directed the Maharashtra Jeevan Pradhikaran to calculate Mr. Vinay's retirement benefits based on his last drawn pay and to refrain from recovering any alleged excess payments. This decision aligns with the court's earlier rulings in similar cases, ensuring equitable treatment of retired employees.
This judgment serves as a significant precedent, reinforcing the protection of retiral benefits against undue recoveries, especially when the employer is at fault.
Bottom Line:
Recovery of excess payments made to a retired employee is impermissible when the promotions and pay scales granted to the employee were not revoked or canceled, and the recovery would cause undue hardship.
Statutory provision(s): Article 226 of the Constitution of India
