Service Law: Retirement – Excess payment made to employees by error, recovery of – On facts, recovery of increments granted to the employee while in service almost ten years after his retirement on the ground that the said increments were granted on account of an error – Justification of – Held: If the excess amount was not paid on account of any misrepresentation or fraud of the employee or paid by applying wrong principle for calculating the pay/allowance or interpretation of rule/order which is subsequently found to be erroneous, such excess payment made are not recoverable – Relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that would caused if the recovery is ordered – However, if the error is detected or corrected in short time of wrong payment or the employee had the knowledge of excess payment, then the courts can order for recovery of amount paid in excess – On facts, excess payment made due to a mistake in interpreting the Kerela Service Rules – Thus, attempt to recover the said amount after ten years of retirement unjustified – Equity.
Allowing the appeal, the Court
HELD: 1.1 If the excess amount was not paid on account of any misrepresentation or fraud of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order which is subsequently found to be erroneous, such excess payment of emoluments or allowances are not recoverable. This relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered. If in a given case, it is proved that 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, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess. [Para 9][610-A-D]
1.2 It is not contended that on account of the misrepresentation or fraud played by the appellant, the excess amounts have been paid. The appellant has retired on 31.03.1999. In fact, the case of the respondents is that excess payment was made due to a mistake in interpreting Kerala Service Rules which was subsequently pointed out by the Accountant General. In view thereof, an attempt to recover the said increments after passage of ten years of his retirement is unjustified. [Paras 14 and 15][614E-F] Sahib Ram v. State of Haryana and Others (1995) 1 Suppl. SCC 18; Col. B.J. Akkara (Retd.) v. Government of India and Others (2006) 11 SCC 709 : [2006] 7 Suppl. SCR 58; Syed Abdul Qadir and Others v. State of Bihar and Others (2009) 3 SCC 475 : [2008] 17 SCR 917; State of Punjab and Others v. Rafiq Masih (White Washer) and Others (2015) 4 SCC 334 : [2014]
13 SCR 1343 – referred to
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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