HC sets aside recovery of excess payments to its employees

Ruling against its own administration, the Punjab and Haryana High Court has asserted that it did not follow the rules of natural justice while carrying out recovery of “excess” amount paid to its employees. The assertion came as the high court quashed the recovery of excess salary paid to its Class III and IV employees, while making it clear that the action was illegal and in violation of settled legal principles.

Justice Harsimran Singh Sethi also directed the court and other respondents to refund any amounts already deducted, while making it clear that the benefit would extend to all similarly placed employees, irrespective of whether they had approached the court.

The verdict came in response to a bunch of petitions challenging the court administration’s decision to recover excess pay from employees dating back to 2018. The petitioners contended that they had neither misrepresented facts nor committed fraud to receive the excess amount –– an averment the court agreed to while relying on binding precedents from the Supreme Court.

Referring to the Supreme Court judgments categorically barring the recovery of excess salary paid to Class III and IV employees unless fraud or misrepresentation was involved, Justice Sethi observed that the petitioners' pay was fixed by the administration itself. There was no evidence that they were responsible for the fixation or had knowingly received excess salary beyond their entitlement.

“A bare perusal of the Supreme Court rulings shows that no recovery of an excess amount paid can be done from a Class III and Class IV employee. It is a conceded position that in the present petitions, the petitioners are working on Class III and Class IV posts, and hence, the above said judgment covers their cases with regard to non-recovery of the excess amount paid to them,” Justice Sethi ruled.

The court observed a crucial aspect of the case was the delay in implementing the pay revision. The court noted that the revised pay was granted to the petitioners from 2013 onwards, while the recovery order was issued only in 2019. This, too, violated the legal principle laid down by the apex court, which prohibited the recovery if the excess amount was paid for over five years.

Justice Sethi also found that the recovery was carried out without following due process. Show-cause notice was not issued to the petitioners before carrying out the deductions, depriving them of an opportunity to be heard.