Order of recovery of excessive payment made to employees would be impermissible in law if the mistake is detected after 5 years or if it is from Group C or D employees or from retired employees: SC...

Quashing an order of recovery of excessive payments made to employees, a Supreme Court bench comprising of Justice J.S. Khehar and Justice Arun Kumar Mishra has held that, if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same, but if the payment is made for a period in excess of five years, even though it would be open. Khehar and Justice Arun Kumar Mishra has held that, if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same, but if the payment is made for a period in excess of five years, even though it would be open to the employer to correct the mistake, it would be extremely iniquitous and arbitrary to seek a refund of the payments mistakenly made to the employee. The Bench held that such recovery would be impermissible in law, if 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. Recovery of excess payments, made from employees who have retired from service, or are close to their retirement, according to the Court, would entail extremely harsh consequences outweighing the monetary gains by the employer.