Excess Payment of Salary – Impermissibility to Recover

It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. In the following situations, recoveries by employers would be impermissible in law:
(a) Recovery from employees belonging to Class III and Class IV service (for Group ‘C’ and Group ‘D” service).
(b) Recovery from retiring employees, or employees who are due to retire within one year, of the order of recovery.
(c) 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.
(d) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(e) 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. State of Punjab and Others v. Rafiq Masih, 2015 (2) AWC 1570.


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