The Calcutta High Court has recently issued an order directing the State Government to refund an overdrawn amount that was deducted from the retirement benefits of a Group ‘C’ employee. The amount had been recovered by the state-owned corporation after the employee’s retirement, and the court directed the corporation to make the payment.
The employee in question retired in the year 2002, and the overdrawn amount was recovered from his retirement benefits in the year 2013. The recovery was made on account of an alleged overpayment made to the employee during his service period. The recovery was made despite the employee’s objections, and he subsequently filed a case in the Calcutta High Court seeking a refund of the overdrawn amount.
The court observed that the state-owned corporation had no authority to recover the overdrawn amount from the employee’s retirement benefits. The recovery was made without any prior notice to the employee, and the corporation had not followed the due process of law. The court also noted that the recovery had been made after a lapse of 11 years from the employee’s retirement, which was an unreasonable delay.
The court further observed that the overdrawn amount could only have been recovered from the employee during his service period. Since the employee had already retired, the recovery was not legal. The court, therefore, directed the state-owned corporation to refund the overdrawn amount to the employee, along with interest at the rate of 9% per annum from the date of recovery until the date of refund.
The court’s order is significant as it upholds the principle that the recovery of any overdrawn amount should be made during the service period of the employee, and not after their retirement. The court’s directive for the payment of interest also serves as a deterrent against arbitrary and unlawful recoveries by employers.
Name- Nidhi Bhadauriya , College- Vivekananda Institute of Professional Studies , Semester- BA.LLB 2nd semester
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