Recovery of Wrongful excess payments made to Government servants.- Article by Shri. K.V. Sridharan

 Kayveeyes’ Daily Rules Recap

Recovery of Wrongful excess payments made to Government servants.
 
This DOPT order outlines guidelines for recovering wrongful or excess payments made to government servants. It acknowledges the Supreme Court's ruling in the Rafiq Masih case, which prohibits recovery in certain situations:

From lower-level employees (Class III/IV): Recovery may be prohibited.

From near-retirees: Recovery may be prohibited if retirement is within a year of the recovery order.
·        For payments made more than five years ago: Recovery may be prohibited.
·        For payments made while performing higher-level duties: Recovery may be prohibited.
·        In cases of inequity or arbitrariness: Recovery may be prohibited if it would be unfair to the employee.

The order instructs ministries/departments to follow the Supreme Court's decision and seek approval from the Department of Expenditure for any waiver of recovery in the specified situations.
 
The Hon’ble Supreme Court while observing that it is not possible to postulate all situation 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 has summarized the following few situations, wherein recoveries by the employers would be impermissible in law: -
 
(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 year, of the order of recovery.
(iii)   Recvoery from employees, when the excess payments has been made for a period in excess of five years, before the orders of recovery is issued.
(iv)   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.
(v)    In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or arbitrary to such an extent, as would for outweigh the equitable balance of the employer’s right to recover.
 
The matter has, consequently, been examined in consultation with the Department of Expenditure and the Department of Legal Affairs. The Ministries/Departments are advised to deal with the issue of wrongful/excess payments made to Government servants in accordance with above decision of the Hon’ble Supreme Court in CA No. 11527 of 2014 (Arising out of SLP (C) No. 11684 of 2012) in State of Punjab and others etc vs Rafiq Masih (White Washer) etc. However, wherever the waiver of recovery in the above-mentioned situations is considered, the same may be allowed with the express approval of Department of Expenditure in terms of this Department’s Om No. 18/26/2011-Estt (pay-I) dated 6^th February, 2014.
(DOPT OM No. 18/03/2015-Estt (Pay-I) Dated 02.03.2016)