The Madhya Pradesh High Court stated that recovering money from retired employees or those about to retire is not allowed if there is no misrepresentation or fraud involved.
The Madhya Pradesh High Court overturned an order that required recovery from a Class-III employee. The court clarified that recovery from retired employees or those about to retire is not allowed if there was no misrepresentation when they claimed their benefits. The Gwalior Bench emphasized that no recovery can be made from Class-III and Class-IV employees, especially if they are retired or nearing retirement within a year of the recovery order. Justice Anil Verma stated that it is established law that recovery cannot occur if excess payments were made more than five years before the recovery order. Additionally, if the excess payment was not due to misrepresentation or fraud by the employee, it cannot be recovered, and the employee must be given a chance to be heard.
Advocate Arun Katare represented the petitioner, while Government Advocate B.M. Patel represented the State. The petitioner was hired in 1979 as a Lower Division Clerk, promoted in 1985 to Field Officer, and retired in 2020. At retirement, there were no pending inquiries or punishments against him. After retiring, he asked the department for his outstanding post-retirement dues, which were initially not paid. Following his appeal, he eventually received his retiral benefits.
The petitioner went to court after not receiving his gratuity and leave encashment. The court ruled in his favor, granting him all his unpaid dues. However, the department mistakenly fixed his pay for nine years, leading to a recovery of Rs 226,587 from his gratuity and leave encashment. The petitioner challenged this action in the High Court, arguing it was illegal and against natural justice, stating that no recovery should be made from a Class III employee. The court referred to a previous ruling in State of Punjab and Others Vs. Rafiq Masih, which stated that recovering money from Class III, Class IV, or retired employees is not allowed.
The court noted that recovery from retired employees or those about to retire is not permissible, especially if there was no misrepresentation when claiming benefits. It also pointed out that the petitioner is a Class III employee and that the indemnity bond he allegedly signed was done at his retirement, while the incorrect pay fixation occurred from 2006 to 2015. The petitioner retired in 2020, and the bond was not signed when he received his benefits.
The commitment made by the petitioner at retirement cannot be considered a valid reason for recovering an overpayment made long ago. This commitment does not benefit the respondents, making the recovery from the petitioner unlawful, the Bench stated. Therefore, the Petition is granted, and the Bench ordered, “The order dated 28.07.2023 (Annexure P/1) for recovery from the petitioner is canceled. Any amount already taken from the petitioner must be returned with interest at 6% from the recovery date until repayment. This should be completed within three months of receiving a certified copy of this order. The petitioner’s pay fixation remains unchanged.”
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
