In a significant judgment, the Calcutta High Court has ruled that employers cannot deduct or recover excess payments made to employees due to erroneous pay scale fixation from their retirement benefits. The division bench, comprising Justice Harish Tandon and Justice Prasenjit Biswas, upheld the earlier decision of a single judge in favor of the retired employee.
Background of the Case
The case involved a lecturer from Ramkrishna Mission Shilpapitha, Belgharia, Kolkata, who joined the institution on March 26, 1996. The lecturer retired on December 21, 2013, after serving for over 17 years. During his tenure, he was granted Career Advancement Scheme (CAS) benefits twice, in 2001 and 2006, respectively.
However, after his retirement, the authorities claimed that the lecturer was not eligible for the CAS benefits due to an error in pay scale fixation. They argued that he did not possess an M.Tech. degree when he joined the institution, a qualification he obtained only on March 25, 1996. Based on a government order dated October 24, 2007, the lecturer was entitled to the first CAS only after six years of service, delaying his eligibility for the second CAS.
The authorities demanded the recovery of the excess amount paid due to the error. Aggrieved, the retired lecturer filed a writ petition, which was decided in his favor by a single judge. The authorities then filed an appeal against this decision.
Arguments Presented
- For the Authorities: The appellants contended that the lecturer did not meet the eligibility criteria for the CAS benefits at the time of joining and sought recovery of the excess payment. They also claimed that the lecturer had signed a declaration agreeing to refund any overpayment.
- For the Employee: The retired lecturer argued that the CAS benefits were granted after due consideration and a meeting with the Additional Director of the Department, where no objections were raised. He further contended that recovering the excess payment after retirement would cause undue hardship.
Legal Precedents Cited
The court referred to several Supreme Court rulings:
- Chandi Prasad Uniyal vs. State of Uttarakhand: Allowed recovery of payments made without legal authority unless it caused extreme hardship.
- State of Punjab vs. Rafiq Masih: Prohibited recovery from retired employees or those close to retirement, considering it unjust enrichment.
- Shyam Babu Verma vs. Union of India: Barred recovery of excess payments unless fraud or misrepresentation was involved.
- High Court of Punjab and Haryana vs. Jagdev Singh: Allowed recovery if the employee had signed an undertaking agreeing to refund excess payments.
Court’s Findings
The bench found that:
- The declaration form cited by the authorities was not part of the trial court records.
- The government notification did not mandate such a declaration form.
- The employee had not committed any fraud or misrepresentation.
The court concluded that the case fell under the exceptions outlined in the Rafiq Masih judgment, making the recovery of excess payments impermissible.
Verdict
The division bench dismissed the appeal and upheld the single judge’s ruling, stating that the authorities had no justification to recover the excess amount from the employee’s retirement benefits.
This judgment reinforces the principle that recovery of excess payments from retirees is unlawful if it causes undue hardship or lacks legal basis.
-
-
-
-
-
-
