Any excess payment made to an Employee is not recoverable if the Employer made an error in interpreting the Rule: Supreme Court  

CASE: Thomas Daniel vs the State of Kerala

COURT: Justice S. Abdul Nazeer and Vikram Nath

In its recent judgments, the Supreme Court of India held that if any excess payment is made to an employee by an employer, any rule is not recoverable due to an error in the interpretation of the employer. The essential factor of this ruling lies in the fact that there should not be any fraud or misrepresentation on the part of the employee. 

In this case, an excess payment was made to a teacher under the allowance of Kerala Service Rules due to a wrong interpretation of the Employer of the rules. Ten years later, when the accountant general pointed out this mistake, proceedings were initiated against the teacher for the recovery of money. A writ petition was filed by the teacher in the High Court of Kerala challenging the recovery proceedings initiated by the State against him, on the ground of error committed by them. The court dismissed the petition stating that mistakes committed by the department can be rectified later by affecting the employee s D.C.R.G. amount if errors are committed due to wrong interpretation of rules or law. 

The teacher, further appealed to the Supreme Court of India challenging the Kerala High Court s order on the ground that recovery of the amount would cause a huge loss to him. The court observed that in a case, if any excess amount is paid to any employee under the pretext of wrong interpretation of any rule, the amount will not be recoverable by the department. This was held on the ground of equity, avoiding any hardship that may occur to a person due to the recovery.