No recovery of excessive payment of allowance from employee: Orissa HC

No recovery of excessive payment of allowance from employee: 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.  It has been held in the case of Union of India &Ors v. Md. Ahmed Baig.

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. He 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.

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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.”

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.”

Source: verdictum

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