Salary Knowingly Received Beyond Entitlement Can Be Recovered From Employee: Punjab & Haryana High Court

The Punjab and Haryana High Court has clarified that if an employee knowingly receives salary or financial benefits beyond their legal entitlement, such excess amounts can rightfully be recovered by the employer.

The court emphasised that the landmark State of Punjab v. Rafiq Masih (2015) judgment—which placed restrictions on recoveries from employees in certain circumstances—does not offer protection in such cases of conscious overpayment.

Justice Harsimran Singh Sethi said, "Though, it is a settled principle of law that no recovery can be affected from the retired employee but, the employee has also to be truthful to the authorities concerned. The employee, in case has received any amount beyond entitlement, and he knows about the said fact at the time of receiving the same, the judgment of 'Rafiq Masih's case' will not be applicable."

The Court explained that the said, principle of law is only applicable where an amount has been given to an employee without his knowledge that he was being paid beyond his entitlement.

It clarified that, no employee can receive pay as well as pension for the same period and therefore, the recovery of excess amount paid of the pension for the aforementioned period which the petitioner has already received the salary is within the jurisdiction of the State keeping in view the facts and circumstances of the present case.

The plea was filed by Chanchal Mehbub Singh a Punjab Government employee, seeking challenge to the order dated 03.04.2017, vide which the recovery was directed from pension of the petitioner on the ground that excess payment of Rs.1,38,683 from 01.10.2005 to 31.01.2007 was made, which was recovered from the pensionary benefits of the petitioner, which is causing prejudice.

Counsel for the petitioner argued that once any payment has been made, even if the same was not as per the entitlement, but the said payment cannot be recovered after the retirement by placing reliance on the judgment of Hon'ble Supreme Court of India in the case State of Punjab and others etc. vs. Rafiq Masih (White Washer) etc. 2015(1) SCT 195. 

No recovery can be done from the retired employee and therefore, the benefit of excess payment already given to the petitioner employee, cannot be withdrawn and the recovered amount be released to the petitioner employee, he added.

The State counsel said that the retirement date of the petitioner employee was 30.09.2005 but after considering the correct date of birth i.e. 02.01.1949, the petitioner was allowed to continue in service upto 31.01.2007. Upto the said period, the petitioner has already availed the benefit of salary, which has been paid by the respondent-department and accepted by him.

Considering that the employee received the extra payment with due knowledge, the Court said, "the petitioner employee knew that he has received the salary for the period from 01.10.2005 to 31.01.2007 hence when for the same period, the pension was paid to him, being an honest citizen of this Country he should have inform the authorities concerned that he has already worked and has received the salary for the period in question rather than accepting the amount of pension for the same period, which was beyond his entitlement."

Justice Sethi highlighted that, despite due knowledge of the said fact petitioner accepted the pension as well. Once an employee accepts the amount beyond his entitlement with due knowledge, "it is to be treated as misrepresentation for all intent and purposes and where any employee received an amount with misrepresentation, recovery can always be accepted."

In the light of the above, the plea was dismissed.

Mr. Harbans Lal Sharma, Advocate for the applicant-petitioner.

Mr. Rahul Rampal, Addl. AG, Punjab

Title: Chanchal Mehbub Singh v. State of Punjab and others

Click here to read/download the order