Lok Sabha Question No. 2764 (UNSTARRED), answered on 2021-12-15
Subject: Recoveries on Excess Payments
Ministry: PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS
Asked by: P.R. Natarajan

## GOVERNMENT OF INDIA MNNISTRY QF PERSONNEL; PUBLIC GRIEVANCES AND PENSIONS

## (DEPARTMENT OF PERSONNEL AND TRAINING)

## LOK SABHA UNSTARRED QUESTION NO. 2764 (TO BE ANSWERED ON 15.12.2021)

## RECOVERIES ON EXCESS PAYMENTS

## 2764. SHRI NATARAJAN PR:

Will the PRIME MINISTER be pleased to state:

- whether the recoveries on excess payment made by the employers would be impermissible in law as per the Hon'ble Supreme Court's observations in the case of CANo.11527 in State of Punjab and others, etc. VS Refiq Masih; and
- if the details of situations under which recoveries by the employers is impermissible as per law? SO,

## ANSWER

## MINISTER OF STATE INTHE MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS AND MINISTER OF STATE IN THE PRIME MINISTER'S OFFICE (DR JITENDRA SINGH)

(a) (b): Sir: The Hon'ble Supreme Court in its Order dated 18.12.2014 in the case of State of Punjab and Others Vs Masih (White Washer) etc: in CA: No. 11527 of2014 (arising of 11684 of 20i2) observed that it is not possible to postulate all situationsoof mistakenly made by the employer; in excess of their entitlements The Hon'ble Supreme Court; be impermissible in law: No, Rafiq

- (i) Recovery from employees belonging to Class-III and Class-IV service (or Group C' and Group D' service).
- (ii) Recovery from retired employees, or employees who are due to retire within one of the order of recovery. year;
- (iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
- (iv) Retovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been accordingly, even though he should have rightfully been required to work against an inferior post. paid
- In any other case; where the Court arrives at the conclusion; that recovery if made from the employee; would be   iniquitous or harsh or arbitrary to such an extent; as would far outweigh the equitable balance of the employer's right to recover:

In the wake of the Orders of Hon'ble Supreme Court; instructions were issued in the (Annexed):

## Department of Personnel & Training

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## Government of India Ministry of Personnel, Public Grievances Pensions

New Delhi; the March; 2016

## OFFICE MEMORANDUM

Sub: Recovery of wrongful\_ excess payments made to Government servants:

The undersigned is directed to refer to this Department' s OM No.18/26/2011-Estt (Pay-D) dated 6th February, 2014 wherein certain instructions have been issued to deal with the issue of recovery of wrongful excess payments made to Government servants in view of the law declared by Courts, particularly, in the case of Chandi Prasad Uniyal And Ors: Uttarakhand And Ors , 2012 AIR SCW 4742, (2012) 8 SCC 417. Para 3(iv) of the OM be made in all cases of overpayment barring few exceptions of extreme hardships

- 2 The issue has subsequently come up for consideration before the Hon'ble Supreme Court in the case of State of Punjab & Ors vS   Rafiq Masih (White Washer) etc in CA No.11527 of 2014 (Arising out of SLP(C) No.11684 of 2012) wherein Hon 'ble Court on 18.12.2014 decided a bunch of cases in which monetary benefits were given to employees in excess of their entitlement due to unintentional mistakes committed by the concered competent   authorities, in   determining the emoluments to and the employees were not guilty of fumishing any incortect information misrepresentation fraud, which had commit the mistake of making the higher payment to the employees. The employees were as innocent as their employers  in the wrongful  determination of their inflated  emoluments The  Hon'ble Supreme Court in its judgment dated 18th December; 2014 ibid has, inter-alia, observed as under: payable them;
- Having examined a number of judgments rendered by this Court; we are of the view, that  orders by the employer  seeking recovery of monetary benefits wrongly extended to employees; can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh the equitable balance of the employer 's right to recover: In other words, interference would be calledfor, only in such cases where, it would be iniquitous to recover the payment made. In order to ascertain the parameters 0f the above consideration and the test to be applied, reference needs to be made to situations when this Court exempted employees from Such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India Repeated exercise of such power, "'for complete justice in any cause would establish that the recovery being effected was iniquitous, and therefore, arbitrary: And accordingly, the interference at the hands of this Court. passed doing
- "10. In view of the afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of this country, has to be the

basis Of all governmental actions: An action of the State, ordering a recovery from an employee, would be in order, so as it is not rendered the extent that the action of recovery would be iniquitous to more unfair, more wrongful, more improper, and more unwarranted than the corresponding employer, to recover the amount: Or in other words; right of the till such time as the recovery-would have a harsh and arbitrary effect on the employee, it would permissible in law. Orders passed in given situations be even of the Constitution of India will disclose the parameters of the realm %f an action ofrecovery excess amount to an employee) which would breach the (of an State; to citizens of this country and render the action obligations of the violative of the mandate contained in Article 14 0f the arbitrary, and therefore, Constitution of India long in paid

- 3\_ The issue that was required to be adjudicated by the Hon'ble whether all the private respondents, against whom an Order of Supreme Court was amount) has been made; should be recovery (of the excess exempted in from the reimbursement of the same For the applicability of the instant order; and the conclusions recorded indispensable. essentially law,
- 4 The Hon"ble Supreme Court while observing that it is not possible to situations of hardship which would govern employees on the issue of postulate all summarized the bas impermissible in law:employers would be
- Group 'C' and D' service). Group
- (ii)  Recovery from employees, when the excess payment has been made for a period in excess of five years; before the order of recovery is issued
- (ii) Recovery from retired employees; or employees who are due to retire within one year, of the order of recovery
- (iv) Recovery in cases where an employee has wrongfully been and has been required to even against an inferior post: paid
- In any other case, where the Court arrives at the conclusion that made from the employee, would be iniquitous or harsh or recovery if an arbitrary to such extent; would far outweigh the equitable balance of the right to recover. employer
- 5\_ The matter consequently, been examined in consultation with the of Expenditure ad the Department of Legal Affairs The Ministries Department advised to deal  with the  issue of Departments are servants in  accordance excess payments made to Government CA others etc VS Rafiq Masih (White Washer) etc: However; wherever the and in the above-mentioned situations is waiver of recovery considered, the same may be allowed with the

express approval of Department of Expenditure in  terms of this Department'$ OM No.18/26/2011-Estt (Pay-I) dated 6" February, 2014.

6. In SO far as persons serving in the Indian Audit and Accounts concerned, these orders are issued with the concurrence of the Department are General of India Comptroller and Auditor
7. Hindi version will follow.

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(AK. Jain) Deputy Secretary to the Government of India

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AIL Ministries / Departments of Govemment of India NIC, DOP&T with a request to upload this OM on the Department's website under OMs Orders (Establishment Rules) and also under " What is New" . Pay

## also forwarded to: Copy

1. The Comptroller & Auditor General of India
2. Controller General of Accounts Controller of Accounts, Ministry of Finance.
2. Secretary General, Supreme Court of India.
4. 4\_ Union Public   Service Commission Lok  Sabha Sectt Cabinet Sectt: ICentral Vigilance Commission President's Sectt VicePresident' s Sectt. Prime Minister' s Office Niti Aayog:
5. 6, Department of Personnel and Training (AIS Division) JCA /Admn: Section:
5. Governments of all States and Union Territories
7. Delhi:
8. 8 All Members of Staff Side of the National Council of JCM Council. Departmental
9. 9\_ All Officers Sections of Department of Personnel and Training Department of Administrative Reforms & Public Grievances Department of Pensions & Pensioners' Welfare PESB .
11. Additional Secretary (Union Territories), Ministry of Home Affairs.
10. Joint Secretary (Pers), Department of Expenditure; Ministry of Finance.