J&K High Court says Excess Salary paid to employee can’t be recovered after retirement

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The Jammu and Kashmir and Ladakh High Court has quashed a recovery order passed by the Srinagar Development Authority (SDA) that directed a retired employee, Mohammad Ramzan Tantray, to return the excess amount paid to him due to a mistake in his pay scale upgrade. The court ruled that the recovery of excess amount paid to an employee due to a mistake or wrong interpretation of rules cannot be made.

Background of the Case

Mohammad Ramzan Tantray was appointed as a daily wager in 1976 and was later temporarily appointed as a Chowkidar in 1981. In 1993, his designation was changed to Pump Operator due to his technical skills, and his pay scale was upgraded from Rs. 750-940 to Rs. 940-1400. Upon his retirement on March 31, 2014, a notice was issued recommending the recovery of the excess amount paid to him due to this upgradation, amounting to Rs. 6,08,022.

Court’s Observations

Justice Wasim Sadiq Nargal, in his detailed judgment, noted that the respondents had not substantiated their claim that the upgrade was against the rules. The court highlighted that no misrepresentation was made by the petitioner, and the respondents had not conducted any inquiry during his service or after his retirement. The court stated that “consequential benefits cannot be taken at this belated stage after retirement of the petitioner”.

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The court also referred to multiple Supreme Court judgments and emphasized the principle that recovery from employees, especially after retirement, causes undue hardship and is not permissible unless there was fraud or misrepresentation by the employee. The court further cited a previous ruling by the High Court, reinforcing that pay fixation issues cannot be scrutinized beyond a 24-month period preceding retirement.

Court’s Decision

The Jammu and Kashmir High Court quashed the recovery order and directed the respondents to release all pensionary benefits due to Mohammad Ramzan Tantray, including an amount of Rs. 3,26,982 withheld from his gratuity. The court further mandated compliance within eight weeks, failing which an interest of 9% per annum would be applicable.

In conclusion, the Jammu and Kashmir and Ladakh High Court ruled that the recovery of excess salary paid to an employee due to a mistake or wrong interpretation of rules cannot be made. The court quashed the recovery order and directed the respondents to release all pensionary benefits due to the retired employee.

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