F.No.18/26/2011-Estt (Pay-I)
Government of India
Ministry of Personnel, PG and Pension
Department of Personnel and Training
North Block, New Delhi,
Dated the 6th February, 2014
OFFICE MEMORANDUM
Subject: Recovery of wrongful/excess payments made to Government servants.
The undersigned is directed to say that the issue of recovery of
wrongful/excess payments made to Government servants has been examined
in consultation with the Department of Expenditure and the Department of
Legal Affairs in the light of the recent judgement of the Hon’ble
Supreme Court in Chandi Prasad Uniyal And On vs State Of Uttarakhand And
Ors, 2012 AIR SCW 4742, (2012) 8 ‘SCC 417, decided on 17th August,
2012. The Hon’ble Court has observed as under:
15. We are not convinced that this Court in various judgments referred to hereinbefore has laid down any proposition of law that only if the State or its officials establish that there was misrepresentation or fraud on the part of the recipients of the excess pay, then only the amount paid could be recovered. On the other hand, most of the cases referred to hereinbefore turned on the peculiar facts and circumstances of those cases either because the recipients had retired or on the verge of retirement or were occupying lower posts in the administrative hierarchy.
16. We are concerned with the excess payment of public money which is often described as "tax payers money" which belongs neither to the officers who have effected over-payment nor that of the recipients. We fail to see why the concept of fraud or misrepresentation is being brought in such situations. Question to be asked is whether excess money has been paid or not may be due to a bona fide mistake. Possibly, effecting excess payment of public money by Government officers may be due to various reasons like negligence, carelessness, collusion, favouritism etc. because money in such situation does not belong to the payer or the payee. Situations may also arise where both the payer and the payee are at fault, then the mistake is mutual. Payments are being effected in many situations without any authority of law and payments have been receiyed by the recipients also without any authority of law. Any amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment.
2. Hon’ble Supreme Court also distinguished the cases like Shyam Babu
Verma v UOI, 1994 SCR (1) 700, 1994 SCC (2) 52, Syed Abdul Qadir and
Ors. v. State of Bihar and Ors,(2009) 3 SCC 475, Sahib Ram v. State of
Haryana,1995 Supp (1) SCC 18 etc., where it had not allowed recovery of
excess payment in view of the peculiar facts and circumstances of those
cases so as to avoid extreme hardship to the concerned employees, for
example, where the employees concerned were mostly junior employees, or
they had retired or were on verge of retirement, the employees were not
at fault, and recovery which was ordered after a gap of many years would
have caused extreme hardship.
3. In view of the law declared by Courts and recently reiterated by the
Hon’ble Supreme Court in the above cited case, Chandi Prasad Uniyal And
Ors vs State Of Uttarakhand And Ors, 2012 AIR SCW 4742, (2012) 8 SCC
417, the Ministries/Departments are advised to deal with the issue of
wrongful/excess payments as follows:
i. In all cases where the excess payments on account of wrong pay
fixation, grant of scale without due approvals, promotions without
following the procedure, or in excess of entitlements etc come to
notice, immediate corrective action must be taken.
ii. In a case like this where the authorities decide to rectify an
incorrect order, a show-cause notice may be issued to the concerned
employee informing him of the decision to rectify the order which has
resulted in the overpayment, and intention to recover such excess
payments. Reasons for the decision should be clearly conveyed to enable
the employee to represent against the same. Speaking orders may
thereafter be passed after consideration of the representations, if any,
made by the employee.
iii. Whenever any excess payment has been made on account of fraud,
misrepresentation, collusion, favouritism, negligence or, carelessness,
etc., roles of those responsible for over payments in such cases, and
the employees who benefitted from such actions should be identified, and
departmental/criminal action should be considered in appropriate cases.
iv. Recovery should be made in all cases of overpayment barring few
exceptions of extreme hardships. No waiver of recovery may be allowed
without the approval of Department of Expenditure.
v. While ordering recovery, all the circumstances of the case should be
taken into account. In appropriate cases, the concerned employee may be
allowed to refund the money in suitable installments with the approval
of Secretary in the Ministry, in consultation with the FA.
vi. Wherever the relevant rules provide for payment of interest on
amounts retained by the employee beyond the stipulated period etc as in
the case of TA, interest would continue to be recovered from the
employee as heretofore.
sd/-
(Mukesh Chaturvedi)
Deputy Secretary to the Government of India
Source: www.persmin.gov.in
