Excess Payments Of Emoluments Or Allowances Made By Employer By Applying Wrong Principle For Calculation Not Recoverable: Supreme Court
The appeal before the Apex Court was directed against the final judgment directing the retired Stenographers to deposit excess drawn arrears.
The Supreme Court set aside the orders by which the retired Stenographers were directed to deposit the excess drawn arrears and reiterated that if the excess amount is made by the employer by applying a wrong principle for calculating the pay/allowance or based on a particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable.
The appeal before the Apex Court was directed against the final judgment passed by the Orissa High Court dismissing the appellants’ writ petition in which a challenge was made to the orders of the Special Judge, Special Court, Cuttack and Registrar, Civil Courts, Cuttack directing recovery of Rs 26,034, Rs.40713, Rs. 26539, Rs. 24683 and Rs 21,485.
The Division Bench of Justice Pamidighantam Sri Narasimha and Justice Prashant Kumar Mishra said, “This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part 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, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered.”
AOR Kedar Nath Tripathy represented the Appellant while Advocate Aditya Narayan Tripathy represented the Respondent.
Factual Background
The appellants were working as Stenographer Grade-I and Personal Assistant in the establishment of District Judiciary, Cuttack, Orissa. They were granted financial benefit for a sum of Rs 26,034, Rs.40713, Rs. 26539, Rs. 24683 and Rs. 21,485 by way of credit to their account vide an Office Order passed by the District Judge, Cuttack granting promotion/appointment retrospectively w.e.f April 1, 2003 consequent upon the upgrading of the Stenographers in three grades.
In the year 2017, the appellants superannuated from their respective posts sometime in the year 2020. After three years of their retirement and six years of granting the financial benefit, the first Respondent ordered the recovery of the said amount on the ground that the extension of the benefit of Shetty Commission’s recommendations to the appellants was on an erroneous interpretation of such recommendations.
Orders came to be passed in the year 2023, whereby the appellants were directed to deposit the excess drawn arrears. Since the orders were passed without affording any opportunity of hearing to the appellants, they preferred a writ petition before the High Court, which came to be dismissed under the impugned judgment.
Reasoning
On the issue of whether recovery of the amount extended to the appellants while they were in service was justified after their retirement and that too without affording any opportunity of hearing, the Bench observed that excess payment made by the employer by applying a wrong principle for calculating the pay/allowance is not recoverable.
Coming to the facts of the case, the Bench noticed that the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It was not reflected in the record that such payment was made to the appellants on account of any fraud or misrepresentation by them. When the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court, which resulted in the subsequent order of recovery. The payment was made in the year 2017 whereas the recovery was directed in the year 2023, and the appellants had already retired in the year 2020.
In light of the fact that the appellants were not afforded any opportunity of hearing before issuing the order of recovery, and they had superannuated on a ministerial post of Stenographer, the Bench found the recovery to be unsustainable as they were not holding any gazetted post.
Thus, allowing the appeals, the Bench set aside the orders by which the appellants were directed to deposit the excess drawn arrears.
Cause Title: Jogeswar Sahoo & Ors. v. The District Judge, Cuttack & Ors. (Neutral Citation: 2025 INSC 449)
Appearance:
Appellant: AOR Kedar Nath Tripathy, Advocate Aditya Narayan Tripathy
Respondent: AOR Joby P. Varghese, AOR Shovan Mishra