The Central Administrative Tribunal (CAT) has ruled that excess payments made to employees due to the employer’s misinterpretation of rules or application of incorrect principles cannot be recovered. This applies specifically after the employee’s retirement.
This ruling aligns with previous judgments by various courts on similar matters.
In a recent case, a CAT bench, presided over by member D S Mahra, quashed an order that sought to recover excess allowances paid to an employee during his service. The tribunal emphasised that overpayment is not recoverable if it was not the result of any misrepresentation or fraud by the employee. Instead, the overpayment must have stemmed from an employer’s error in calculating allowances. If this error was based on a misinterpretation of rules or incorrect application of principles, such excess amounts cannot be reclaimed.
The CAT’s decision highlights that any erroneous excess payments made during an employee’s service tenure are not recoverable post-superannuation. This applies unless the employee deliberately misled the employer to receive those additional payments.
This ruling further underscores the responsibility of employers to ensure accurate payment calculations. It also clarifies the protection employees have from financial recovery demands for mistakes made by the employer.
