An employer’s right to recover excess payment from pensionary benefits of employee who has committed no fraud or misrepresentation whatsoever, must be strictly construed

Calcutta High Court: In the present case, where the petitioner was aggrieved due to the impugned Pension Payment Order, 1999 by which the respondent authorities had deducted an amount of Rs. 29,447 on account of alleged overdrawal, the Bench of Arijit Banerjee, J., held that pensionary benefits are paid to a superannuated person by way of social welfare measure to enable him to live a life of dignity which is now recognized as a fundamental right of a citizen of India. An employer’s right to recover excess payment from the pensionary benefits of an employee who has committed no fraud or misrepresentation whatsoever, must be strictly construed. However, if fraud has been committed by an employee to induce the employer to make the excess payment, then such an employer’s right to recovery from pensionary benefits cannot be doubted.

In the instant case, the counsel for the petitioner Sourav Mitra contended that recovery of excess payment cannot be made from the retiral benefits of an employee unless such excess payment was made to the concerned employee because of some misrepresentation or fraud on his part. Meanwhile, the State via Supriyo Chattopadhyay, contended that excess payments made due to irregular pay fixation can be recovered by the employer.

Upon perusing the rival contentions and noting the declaration signed by the petitioner for his employer as to recovery excess payment, the Court observed that the form of declaration clearly means that even at the highest, recovery of excess payment could be made by the State from the salary bill of the petitioner during the tenure of his service and such a declaration would not entitle the State to recover any overdrawals from the pensionary benefits of the petitioner. The Court also went on to observe that declarations as to recovery excess payments are signed by employees under compelling circumstances with no real choice in such issues. [Shiba Rani Maity v. State of West Bengal, 2017 SCC OnLine Cal 109, decided on 18.01.2017]


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