Case Note & Summary
The petitioners, employees of Ordnance Factory Bhandara, were granted a higher pay scale by the employer. Subsequently, the employer sought to recover the excess amount paid, alleging that the grant was a mistake. The petitioners challenged the recovery order before the Central Administrative Tribunal, which dismissed their application. Aggrieved, they filed a writ petition before the Bombay High Court. The High Court considered the submissions and relied on the Supreme Court judgments in Syed Abdul Qadir vs State of Bihar and State of Punjab vs Rafiq Masih (White Washer). The court held that recovery of excess payment from employees is impermissible when the mistake is attributable to the employer, the employees are in the same or higher pay scale, and there is no misrepresentation or fraud by them. The court quashed the impugned orders of the Tribunal and the employer, directing that no recovery be made from the petitioners.
Headnote
A) Service Law - Recovery of Excess Payment - Mistake by Employer - Recovery of excess amount paid to employees due to employer's mistake is impermissible when employees are in the same or higher pay scale and there is no misrepresentation or fraud by them - The court relied on the principle that recovery from employees in the same or higher pay scale is not permissible as it would cause hardship - Held that the impugned orders of recovery are quashed and set aside (Paras 1-5).
Issue of Consideration
Whether recovery of excess amount paid to employees due to a mistake by the employer in granting higher pay scale is permissible when the employees are in the same or higher pay scale and there is no misrepresentation by them.
Final Decision
The impugned order dated 10.03.2017 passed by the Central Administrative Tribunal and order dated 26.05.2016 passed by respondent no.3 are quashed and set aside. The respondents are directed not to make recovery of excess amount received by the petitioners towards grant of higher pay scale.
Law Points
- Recovery of excess payment from employees is impermissible when the mistake is attributable to the employer
- the employee is in the same or higher pay scale
- and no misrepresentation is involved
