In a significant ruling, the Orissa High Court has addressed the precise question of law whether an excess payment made in favour of an employee can be recovered from his leave encashment benefits after his retirement.
Hearing a writ petition, a division bench of Chief Justice Chakradhari Sharan Singh and Justice SK Sahoo said, "It is no more res integra that the Government cannot be allowed to recover excess payment of 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."
The ruling was passed while hearing the writ petition filed by the Centre against one Md Ahmed Baig. Deputy Solicitor General of India PK Parhi along with D Gochhayat (CGC) presented the case on behalf of the government.
As per the case details, Md Ahmed Baig joined service as a Mail Man (MTS) on 17.01.1984. The Department of Personnel and Training, Government of India vide its letter dated 19.05.2009 recommended for financial upgradation under a scheme named as „Modified Assured Career Progression Scheme‟ (for short „the MACP scheme).
The opposite party was entitled to get the benefits of 3rd MACP upon completion of 30 years of service from his initial entry grade, i.e. 17.01.2014. However, he was erroneously granted 3rd MACP vide office order dated 21.04.2010. This discrepancy was pointed out by the internal audit report dated 03.04.2012. Subsequently, the opposite party retired from service on 31.07.2017, but his leave encashment benefits were withheld for recovery of excess amount paid to him under the 3rd MACP.
Aggrieved by the move, Baig had filed an application before the Central Administrative Tribunal, Cuttack (‘Tribunal’) which had directed the petitioner-Authority to disburse the amount of Rs 3,88,548/- to the respondent along with interest.
Taking up the case for hearing, the Orissa High Court said that the petitioner-Authority failed to produce any material to show that the respondent was under suspension, or that he was facing any disciplinary or criminal proceeding at the time of his retirement.
The Court said that the petitioner-Authority was not authorised to withhold or to deduct any amount from the credit which was outstanding in favour of the respondent on the date of his retirement.
Further, the Court upheld the Tribunal’s order directing the petitioner-Authority to disburse the amount of Rs 3,88,548 to the respondent along with interest on such amount from 01-08-2017 till the actual date of disbursement to the respondent at the rate of 9 per cent per annum.