No recovery of excess payment made due to wrong application of rules: Supreme Court

The court allowed an appeal filed by a retired teacher against the decision by the Kerala High Court for recovery of excess payment made to him

The Supreme Court on Monday emphasised that an excess emoluments or allowances paid to an employee due to wrong principle of calculation or interpretation of rule cannot be recovered from him in order to save the worker from hardship.

"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," a bench of Justices S Abdul Nazeer and Vikram Nath said.

The court allowed an appeal filed by a retired teacher from Kerala, Thomas Daniel against the decisions by the Kerala High Court's single and division bench decisions for recovery of excess payment made to him due to wrong interpretation of the service rules.

The bench pointed out this court in a catena of decisions has consistently held that 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, subsequently found to be erroneous, such payment of emoluments or allowances are not recoverable.

However, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess, applying its discretion, if 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 bench added.

In the instant case, the court said the attempt to recover the excess increments wrongly paid to the appellant, that too 10 years after his retirement, was unjustified. It set aside the order passed by the Public Redressal Complaint Cell of the Chief Minister of Kerala in 2000 and the recovery notice of 1997 against the appellant.

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