The Supreme Court held that excess payments made to an employee, without any misrepresentation or fraud on their part, cannot be recovered by an employer. The Court also quashed recovery orders directing the employees to deposit the excess arrears.
Excess payments had been made to stenographers in Cuttack’s district judiciary. Recovery orders were issued six years later. The former employees challenged these orders before the High Court and were unsuccessful.
The Supreme Court reversed the High Court’s decision citing several judgements including Thomas Daniel v State of Kerala (2022). It noted that as the payments arose from the employer’s misinterpretation of the rules with no fault attributable to the employees, those recoveries will be barred by equity.
Read the judgement here.
Jogeswar Sahoo v The District Judge, Cuttack
Citation: 2025 INSC 449 | 2025 SCO.LR 4(5)
Bench: Justices P.S. Narasimha and P.K. Mishra
Key Phrases: Recovery of excess payments from employees—misinterpretation of applicable rules by employer—service law—equity—absence of fraud or misrepresentation by employee
Read the judgement here.
Case Comment
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.
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