Recently, a division bench of the Orissa High Court comprising Hon’ble Justice Chakradhari Sharan Singh and Hon’ble Justice Sangam Kumar Sahoo ruled that employers cannot recover excess payments made to government employees from their 'leave encashment benefits' post-retirement, particularly when the excess payment was made due to employer error and not the fault of the employee.
Brief Facts:
In the present case, the Opposite Party a Mail Man was errenously granted a financial benefit prior to eligibility under the Modified Assured Career Progression Scheme (MACP). This discrepancy was discoverd post-retirement, leading the authorities to withold his leave encashment benefit. The Opposite Party challenged this decision before the Central Administrative Tribunal, which ruled in his favor, directin g immediate release of the withheld amount with 9% interest. Dissatisfied, the Petitioners have filed this writ petition.
Contentions of the Petitioner:
It was contended that according to the Central Civil Services (Leave) Rules, there is no provision for payment of interest or assigning responsibility for delayed payment of leave encashment. Additionally, leave encashment is regarded as a benefit under the leave rules, not a pensionary benefit, thus absolving anyone of responsibility.
Observations of the Court:
The issue to be addressed was whether excess payment made in favour an employee can be recovered from his leave encashment benefits after his retirement, especially when it is palpable that the excess payment was made by the authorities on an erroneous calculation or improper interpretation of rules and not because of any fault on the part of the employee.
The Court noted that withholding leave encashment benefit is governed by Rule 39(3) of the Central Civil Services (Leave) Rules, 1972, which allows withholding if the employee was under suspension or facing disciplinary or criminal proceedings upon retirement. However, in this case, the opposite party met none of these conditions upon retiring , hence rendering the provision inapplicable.
The Bench held that withholding pension, gratuity, or leave encashment without statutory provision violates the employee's right to property under Article 300-A of the Constitution.
The Court highlighted the absence of any order enabling recovery of the erroneously sanctioned excess amount from the opposite party.
Further, it was opined that since the Petitioner-authorities erred in granting excess payment without fault on the employee's part, they could not have recovered the amount from his leave encashment benefits.
The decision of the Court:
Based on the aforementioned reasons, the writ petition was accordingly dismissed.
Case Title: Union of India & Ors. v. Md. Ahmed Baig
Coram: Hon’ble Mr. Justice Chakradhari Sharan Singh & Hon’ble Mr. Justice S.K Sahoo
Case No.: WP (C) No. 9987 of 2021
Advocates for the Petitioner: Advs. Mr. P.K Parhi, Mr. D. Gochhayat
Advocate for the Respondent: Adv. Mr. T.K Mishra
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