Himachal Pradesh High Court Orders State To Refund "Excess Payment" Deducted From Class-III Employee's Retiral Benefits
Observing that recovery of payments made in excess by employers is impermissible in law in certain situations, the Himachal Pradesh High Court granted relief to State Education Department's retired employee whose General Provident Fund (GPF) amount to the extent of Rs. 1.3 lakh was withheld.Justice Jytosna Rewal Dua noted that the petitioner had retired from the position of a Class-III...
Observing that recovery of payments made in excess by employers is impermissible in law in certain situations, the Himachal Pradesh High Court granted relief to State Education Department's retired employee whose General Provident Fund (GPF) amount to the extent of Rs. 1.3 lakh was withheld.
Justice Jytosna Rewal Dua noted that the petitioner had retired from the position of a Class-III employee and thus held,
"Apart from deducting the principal amount of Rs.13942/-, alleged to have been wrongly credited in petitioner’s GPF account in the years 1984-85 and 1989-90 the respondents also added interest thereupon and arrived at the figure of Rs. 1,31,152/- ,which they have deducted from the due and admissible GPF amount payable towards the petitioner. Such a recourse in the given facts was impermissible in law. The prayer of the petitioner for refund of an amount of Rs.1,31,152/- along with interest after quashing the impugned decision dated January 7, 2010 (ordering effecting recovery of this amount) is justified”.
The case involved a petitioner who joined the Education Department as a Junior Basic Trained Teacher and rose to become a Central Head Teacher before retiring in 2009. The petitioner claimed that an amount of Rs.6,71,835/- was due to be paid to him as GPF on his retirement, but the respondents paid only Rs.5,40,682/-. The petitioner alleged that Rs.1,31,152/- was illegally deducted from his GPF amount, and interest on the delayed payment was not paid. The respondents, on the other hand, claimed that the deduction was made because of an objection raised by the Office of the Accountant General, due to an error in the petitioner's GPF account. The error was rectified, and the amount of Rs.1,31,152/- was deducted from the petitioner's GPF payment.
The court found respondent's action impermissible in law, and the petitioner's request for a refund and interest was held to be justified.
It noted that the respondents' fault in maintaining records for the GPF account caused the mistake, and it was incumbent upon them to rectify it at the appropriate time. The court further observed that the petitioner had retired from a Class-III post, and therefore, the case fell under the aforementioned situations where recovery was impermissible in law.
In this regard, the bench referred to the Supreme Court's decision in State Of Punjab & Ors vs Rafiq Masih, which provided a few situations where recoveries by employers would be impermissible in law, including cases where recovery has been made from employees belonging to Class-III and Class-IV service or Group 'C' and Group 'D' service, recovery from retired employees or employees who are due to retire within one year of the order of recovery, 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, recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and recovery 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.
Accordingly, the Court ordered refund along with interest.
Case Title: Jawahar Lal (deceased) through LRs v. State of H.P. & Ors.
Citation: 2023 LiveLaw (HP) 34