Employer cannot deduct excess amount from retirement benefits payable to employee on the basis of wrong pay scale fixation: Calcutta High Court

The respondent employee in the case was appointed as Lecturer in Ramakrishna Mission Shilpapith, Belgharia, Kolkata on 26.03.1996. He retired from 21.12.2013. The employee was granted Career Advancement Scheme (CAS) benefits from 26.03.2001 and second CAS from 26.03.2006.

Later the appellant authorities found that at the time of joining the post the employee did not possess M.Tech. degree which was obtained on 25.03.1996. Therefore, in view of the Government order dated 24.10.2007, the employee was entitled to first CAS only after successfully completing 6 years of service and similarly, second CAS should have been granted after the expiry of the additional period provided. The appellant observed wrong fixation of pay scale by the benefit extended under CAS. Therefore, the authorities asked for refund of the excess amount paid to the employee after his retirement from service.

Aggrieved by this, the employee filed a writ petition. The single Judge ruled in favour of the employee holding that the authorities cannot recover the excess amount paid to the employee. Being aggrieved, the authorities filed an appeal against the order of the single Judge.

It was argued by the appellant that the service book was not forwarded to the officer before the retirement of the employee for availing the benefit of Career Advancement Scheme on 01.01.1996 for obtaining the degree but it was missing as the employee had obtained the M.Tech degree on 25.03.1996 and therefore, he was not entitled to the benefits of CAS. On the other hand, it was argued by the employee that while granting the second CAS, a meeting was held on 25.01.2008 in the presence of an Additional Director of the Department and 'no objection' was raised therein while extending the second CAS benefit. Therefore, the excess payment cannot be recovered from him after retirement.

Findings of the Court

The Court relied on the case of Chandi Prasad Uniyal & Ors. v. State of Uttarakhand & Ors. in which the Supreme Court held that any amount paid to an employee without any legal right can always be recovered. Further, the Court made an exception that if such recovery causes extreme hardship, any attempt to seek refund would amount to unjust enrichment.