SC on Excess Pay: No Recovery from Retired Stenographers After 6 Years Without Hearing

A. Principle of Law: Service Law – Recovery of Excess Payment – Equity and Hardship Ratio: Recovery of excess emoluments or allowances paid to an employee is impermissible if: 1. The excess payment was not made on account of any misrepresentation or fraud on the part of the employee; and 2. The excess payment was made by the employer by applying a wrong principle for calculating pay/allowance or on the basis of a particular interpretation of a rule/order, which is subsequently found to be erroneous. The relief against such recovery is granted not as a right of the employee, but in equity, exercising judicial discretion to relieve the employee from the hardship that will be caused if recovery is ordered. (Paras: 9, 10 (quoting Col. B.J. Akkara)) ________________________________________ B. Principle of Law: Service Law – Recovery from Retired Employees / Class III & IV Employees – State of Punjab v. Rafiq Masih (White Washer) Applied Ratio: Based on the principles summarized in State of Punjab v. Rafiq Masih, recovery of excess payments mistakenly made by an employer is impermissible in law in specific situations of hardship, including: (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. (Para: 10 (quoting Para 18 of Rafiq Masih)) ________________________________________ C. Principle of Law: Service Law – Recovery of Arrears Paid on Erroneous Interpretation Ratio: Where financial benefits (arrears) were paid to Stenographers (a ministerial post) in 2017 consequent to a retrospective promotion based on an interpretation of the Shetty Commission recommendations , and this interpretation was later deemed erroneous by the High Court (administratively) , an order to recover this amount issued in 2023 , after the employees had already retired in 2020, is unsustainable. This is especially so when the payment was not made on account of any fraud or misrepresentation by the employees. (Para: 11) ________________________________________ D. Principle of Law: Principles of Natural Justice – Audi Alteram Partem Ratio: An order directing the recovery of allegedly excess drawn arrears from retired employees, passed without affording any opportunity of hearing to the appellants, violates the principles of natural justice and is liable to be set aside. (Paras: 4, 7, 11, 12) 2. CASE DETAILS Case Title: Jogeswar Sahoo vs. District Judge, Cuttack Case Number: Civil Appeal No(s). of 2025 (Arising out of SLP(C) No(s). 5918/2024) Date of Decision: 04.04.2025 Judges: Hon’ble Mr. Justice Pamidighantam Sri Narasimha and Hon’ble Mr. Justice Prashant Kumar Mishra #indianlaw #legaleducation #advocate #argument #civilcourts #clat #court #law #news