Excess payment on wrong calculation, flawed interpretation of rules not recoverable: CAT

Srinagar, Oct 16: The Central Administrative Tribunal (CAT) has held that excess payment made by the employer based on wrong calculation of the pay, allowances, or erroneous interpretation of rules is not recoverable from the employee.

Allowing a transfer application by a retired employee, Habibullah Yatoo, a bench of M S Latif Member (J) directed the authorities of the Rural Development Department (RDD) to release within six weeks the withheld gratuity of Rs 4.10 lakh in favour of the applicant and disburse it to him by the law.

Yatoo was working as a village-level worker in RDD and was given the benefits of in situ promotion and higher pay scale but at the time of his retirement, the department withheld his gratuity to the tune of Rs 4.10 lakh.

In his plea, Yatoo submitted that even if there was a mistake committed by the authorities in fixing his pay, it could not be attributed to him.

The authorities opposed his plea on the ground that he had no right to claim the pay grade which he was not entitled to under rules.

“In the present case, the benefit of in situ promotion and higher pay scale given by the respondents, even if by a mistake, the petitioner cannot be held to be at fault,” the tribunal said.

It said that in the Judgment ‘Thomas Daniel versus State of Kerala and others’, reported as AIR 2022 SC 2153, the Supreme Court has held: “If the excess amount was not paid on account of any misrepresentation or fraud of an employee or if the excess payment was made by the employer based on the wrong calculation of the pay or allowances or if the excess payment was made based on an erroneous interpretation of rules or order, such excess payment of emoluments or allowances are not recoverable.”

However, the tribunal said that in the same judgment, it has been further held: “If at any given point of time, it is proved that the employee knew that the payment received by him was more than what was otherwise not due to him and the dues were wrongly paid, the courts may, on the facts and circumstances of a particular case, order for recovery of the amount paid in excess.”

Relying on the Supreme Court judgment ‘Syed Abdul Qadir versus State of Bihar’, 2009 Vol 3 SCC 475, the tribunal said in the judgment apex court has held: “Undoubtedly the excess amount that has been paid to the teachers was not because of any misrepresentation or fraud on their part and the appellants did not know that the amount that was being paid to them was more than they were entitled to.”

The tribunal observed that the gratuity of the applicant had been withheld but the fact remains that the in-situ promotion granted was not a result of any fraud or misrepresentation on his part.

“It is none of the cases of the respondents, as is revealed from the reply affidavit, that the applicant, at any point of time, misrepresented before the respondent department or committed any fraud,” the tribunal said and allowed Yatoo’s application.