Employee Cannot Be Deprived Of Leave Encashment Benefits For Recovery Of Excess Payment Of Allowance: Orissa HC
The Orissa High Court held that the government cannot be allowed to recover excess payment of allowances if the said payment was made by applying a wrong principle for calculating the pay.
The employee was working as a Mail Man and he would have been entitled to the benefits of financial upgradation under the Modified Assured Career Progression Scheme (MACP scheme) after completion of 30 years of service. Hw was erroneously granted the said sum before his retirement and this discrepancy was pointed out by the internal audit report. Subsequently, after the employee’s retirement from service, his leave encashment benefits were withheld for recovery of the excess amount paid to him under the MACP scheme.
The Court had to determine whether an excess payment made in favour of an employee can be recovered from his leave encashment benefits after his retirement, especially when it is palpable that the excess payment was made by the authorities on an erroneous calculation or improper interpretation of rules and not because of any fault on the part of the employee.
A Division Bench of Chief Justice Chakradhari Sharan Singh and Justice S.K. Sahoo observed, “It is no more res integra that the government cannot be allowed to recover excess payment of emoluments/allowances if the said payment was made by the employer by applying a wrong principle for calculating the pay or on the basis of erroneous interpretation of the rules.”
DSG P.K. Parhi represented the petitioners, while Advocate T.K. Mishra appeared for the opposite party.
The employee filed an application before the Central Administrative Tribunal (Tribunal) seeking disbursement of the leave encashment. The Tribunal held that there was no order passed following the due procedure of law on the basis of which the amount could have been recovered from the leave encashment entitlement of the employee and awarded interest on the withheld amount.
The Court referred to Rule 39(3) of the Central Civil Services (Leave) Rules, 1972 (Rules) and stated that “it is apparent that the competent authority is authorized to withhold either whole or a part of cash equivalent of earned leave of a Government servant who retires from service while under suspension or while disciplinary or criminal proceedings are pending against him.”
However, the employee did not fall within the purview of Rule 39(3) since he did not face suspension nor was he under any disciplinary or criminal proceeding. Therefore, the Court held that none of the pre-conditions of Rule 39(3) were satisfied which could have empowered the authorities to withhold the encashment of earned leaves by the employee.
The Court held that the “authorities erred in deducting the excess payment made to the opposite party from the leave encashment benefits and thus, the action of the authorities cannot be countenanced and the same is invalidated.”
The Court also stated that the Tribunal was justified in awarding interest on the withheld amount.
Accordingly, the High Court dismissed the petition.
Cause Title: Union of India & Ors v. Md. Ahmed Baig
Appearance:
Petitioners: DSG P.K. Parhi and CGC D. Gochhayat
Opposite Party: Advocate T.K. Mishra
