The Gauhati High Court has ruled that excess gratuity paid to a retired government employee cannot be recovered if the overpayment arose from the employer’s own calculation and there is no allegation of fraud or misrepresentation on the part of the employee.
The case involved a former Forest Range Officer who joined service in 1976 and retired in 2011 as Assistant Conservator of Forests. At retirement, he received a gratuity of ₹6.76 lakh. Following a revision in his pension benefits, an additional ₹1.54 lakh was released, taking the total to ₹8.30 lakh. The revision came after the employee was retrospectively promoted to Deputy Conservator of Forests during ongoing litigation over his service benefits.
Subsequently, the office of the Accountant General flagged the total payment as excessive, determined that the admissible gratuity should have been capped at Rs 7 lakh, and directed recovery of ₹1,30,594.
The employee challenged the recovery order in court, arguing that the gratuity had been calculated and disbursed by the competent authority itself, and no error was attributable to him. Justice Budi Habung agreed, stating that there was no allegation of misrepresentation or fraud by the petitioner.
The court observed that the alleged excess payment arose, if at all, from a departmental recalculation following a retrospective promotion, adding that the impugned recovery was “arbitrary, inequitable and contrary to law.”
As such, the court quashed the recovery order and directed authorities to refund the amount within three months. Any delay in repayment, it held, would attract interest at 6% per annum, reinforcing accountability on the employer’s side.
The ruling reiterates a line of Supreme Court precedent holding that where overpayment results from the employer’s own error, the burden of recovery cannot be transferred to the retired employee.
