Recovery From Retired Employees Or Employees Who Are Due To Retire Is Impermissible When There Is No Misrepresentation Or Fraud: Madhya Pradesh HC
The Madhya Pradesh High Court set aside an Order directing recovery to be made from a Class-III employee and explained that recovery from the retired employee or employees who are due to retire is impermissible when there is no misrepresentation on the part of the person concerned, at the time of claiming benefit in his favor.
Expounding on the law relating to recovery from Class III employees, the Gwalior Bench of the High Court reiterated that no recovery can be made from the employees belonging to Class -III and Class- IV, even more when they have retired or are due to retire within one year of the order of recovery.
The Single-Judge Bench of Justice Anil Verma said, “It is also legally settled that recovery from the employees when the excess payment has been made for the period in excess of five years before the order of recovery is issued is not permissible. It is also well settled that in case excess payment is not made on account of misrepresentation or fraud on the part of the employee, the same could not be recovered and it cannot be recovered without giving any opportunity of hearing also.”
Advocate Arun Katare appeared for the petitioner while Government Advocate B.M. Patel appeared for the respondent/State.
The petitioner, in this case, was appointed in the year 1979 on the post of Lower Division Clerk. Thereafter the petitioner was promoted in 1985 from the post of Senior Inspector to Field Officer and petitioner retired from service in the year 2020. At the time of retirement there was no departmental enquiry or punishment pending against the petitioner and there was no punishment given to the petitioner at the time of retirement. After his retirement, he requested to the respondents/Department to issue the outstanding post retiral dues to him, but the same was not paid to the petitioner. On preferring the representation, the benefit of retiral dues was given to him.
On non-payment of gratuity and leave encashment petitioner approached the Court and an order was passed in his favour giving him all the outstanding dues. However, some wrong fixation was done by the department for a duration of 9 years and the same was recovered by the respondent no.3. to the tune of Rs 226587 from the outstanding dues of the gratuity and leave encashment of the petitioner. The petitioner approached the High Court calling this action to be illegal and contrary to the principle of natural justice claiming that no recovery could be made against the Class III employee.
The Bench placed reliance upon the judgment in State of Punjab and Others Vs. Rafiq Masih (White Washer) reported in 2015 (1) MPHT 130 (SC), wherein the Apex Court highlighted that the recovery from employees belonging to Class- III, Class-IV service (or Group D service) and retired employees, or employees who are due to retire within one year is impermissible.
The Bench observed, “Thus, from the aforesaid dictum, it can be gathered that recovery from the retired employee or employees who are due to retire is impermissible also when there is no misrepresentation on the part of the person concerned, at the time of claiming benefit in his favor.”
The Court also noted that the petitioner is a Class-III employee and the undertaking/indemnity bond which has allegedly been furnished by the petitioner, has been executed at the time of retirement of the petitioner whereas his incorrect pay fixation was made for the period of 2006 to 2015. It was also noticed that the petitioner had retired in the year 2020 and the undertaking was not furnished by the petitioner at the time of extending benefit to him.
“The undertaking furnished by the petitioner at the time of his retirement cannot be said to be an undertaking for which recovery of excess payment which has been made long back would become effective. The said undertaking does not benefit the respondents and the recovery being made from the petitioner is consequently illegal”, the Bench added.
Thus, allowing the Petition, the Bench directed, “The impugned dated 28.07.2023 (Annexure P/1) directing the recovery be made from the petitioner is hereby set aside. The amount, if already recovered from the petitioner, be refunded to him along with interest @ 6% from the date of recovery till the date of repayment. Let the same be done within a period of three months from the date of receipt of a certified copy of this order. The pay fixation of the petitioner is however maintained.”
Cause Title: Hari Shankar Soni v. The State of Madhya Pradesh and Others [Neutral Citation: 2024:MPHC-GWL:21023]
Appearance:
Petitioner: Advocate Arun Katare
Respondent: Government Advocate B.M. Patel