Case Note & Summary
The petitioners, employees of the respondent-Corporation, were promoted and granted stepping up of pay in 1996. In 2012, the Corporation sought to recover excess payment made due to wrong pay fixation under the 5th Pay Commission, without giving any opportunity of hearing. The recovery was sought at the fag-end of their service career. The petitioners challenged the recovery action. The High Court held that recovery without hearing is violative of natural justice and that the Corporation cannot recover amounts paid due to its own mistake after a long period, especially when the employee did not misrepresent. The court quashed the recovery orders and directed the Corporation to refund any amounts already recovered.
Headnote
A) Service Law - Recovery of Excess Payment - Principles of Natural Justice - Recovery of excess salary paid due to wrong pay fixation without affording opportunity of hearing and at the fag-end of service is arbitrary and violative of principles of natural justice - Held that recovery cannot be sustained as it was without hearing and at the fag-end of service (Paras 3, 6-8). B) Service Law - Recovery of Excess Payment - Employer's Mistake - When excess payment is made by employer due to wrong pay fixation and employee has not misrepresented, recovery is not permissible - Held that the Corporation cannot recover the amount after decades (Paras 5-8).
Issue of Consideration
Whether recovery of excess payment of salary from the petitioners by the respondent-Corporation without affording any opportunity of hearing and at the fag-end of their service career is legal and justified.
Final Decision
The court quashed the recovery orders and directed the respondent-Corporation to refund any amounts already recovered from the petitioners.
Law Points
- Recovery of excess payment without hearing is arbitrary
- Principles of natural justice must be followed before recovery
- Recovery at fag-end of service is impermissible
- Wrong pay fixation by employer cannot be recovered from employee
- No misrepresentation by employee
