MP HC | Illicit deduction of amount from the retiral dues; Directions issued to refund the amount

Madhya Pradesh High Court: Sushrut Arvind Dharmadhikari, J. allowed a writ petition which was filed assailing the legality, validity and propriety of the order dated 1-8-2018 whereby the excess amount of Rs.81,239/- has been sought to be recovered from the gratuity payable to him.

Petitioner was aggrieved by the order of recovery after retirement, his grievance was that neither he was afforded any opportunity of hearing nor he was given any show cause notice before deducting the amount from the retiral dues i.e. gratuity of the petitioner. The petitioner was neither found guilty of any misconduct nor held guilty of any offence in the criminal proceedings. The inaction on the part of the respondents was in flagrant violation of principles of natural justice.

Counsel for the petitioner contended that the recovery cannot be made from the retiral dues of the petitioner because there was no misrepresentation or fault on the part of the petitioner. The said recovery had been done without prior approval of the Governor, which was in violation of Rule 9 of the Pension Rules, 1976.

The Court on the perusal of record noticed that it is not the case of the respondents that any undertaking was given by the petitioner for refund of the amount, if any excess payment is made. The Court relied on State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334 wherein the Supreme Court had laid down the following few situations wherein recoveries by the employee 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 the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order 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 harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer’™s right to recover.

The Court held that the case falls under category 3 as the respondents 4 had wrongly issued the impugned order directing recovery of the amount of Rs.81,239/- and thus allowed the petition directing to refund the aforesaid amount, if already recovered, to the petitioner within a period of 3 months.[Rammani Patel v. State of Madhya Pradesh, 2022 SCC OnLine MP 879, decided on 22-04-2022]


For the petitioner: Mr C.L.Patel

For the respondents: Mr Dhiraj Tiwari


Suchita Shukla, Editorial Assistant has reported this brief.

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