Supreme Court Relief for Odisha Retired Employees – Recovery of Excess Salary Declared Illegal

The Supreme Court of India has delivered a major relief to five retired employees of the Odisha judiciary department who had mistakenly received excess salary arrears. The Court ruled that excess payments made to employees cannot be recovered if they did not engage in fraud or misrepresentation leading to the overpayment.

These employees, who served as Stenographers Grade-I and Personal Assistants in the Cuttack District Judiciary, had received arrears between Rs 21,000 and Rs 40,000 in 2017 following retrospective promotions based on the Shetty Commission’s report. They retired in 2020, but in 2023, recovery orders were issued against them by the Cuttack Judiciary Department.

The Supreme Court bench of Justice P.S. Narasimha and Justice Prashant Kumar Mishra set aside these recovery orders, calling them unjust and inequitable. The Court noted that the payments were not obtained through fraud and that recovering such amounts after retirement would cause undue hardship.

Referring to past judgments, including Sahib Ram vs. State of Haryana and Thomas Daniel vs. State of Kerala, the Court reiterated that if the overpayment was due to an employer’s mistake or misinterpretation of rules, the amount cannot be legally recovered.

The judgment clarified that recovery from retired employees, or those who received excess payments more than five years prior, is not permissible in law. This decision strengthens the principle of fairness and protects low-paid and retired employees from retrospective recoveries.

The Supreme Court concluded by allowing the appeal and setting aside the Odisha High Court order that had previously upheld the recovery. The ruling is a significant win for government employees across Odisha and India who face similar recovery proceedings.