IMPORTANT POINT
Excess payments made to an employee due to erroneous calculations by the employer cannot be recovered from the employee's benefits unless specific legal conditions are met, protecting the employee's rights under the law.

JUDGMENT

S.K. Sahoo, J.

The precise question of law which needs to be addressed in this writ petition is that whether excess payment made in favour an employee can be recovered from his leave encashment benefits after his retirement, especially when it is palpable that the excess payment was made by the authorities on an erroneous calculation or improper interpretation of rules and not because of any fault on the part of the employee.

2. The brief factual matrix, bereft of superfluous details, leading to the present writ petition is that the opposite party joined as a Mail Man (MTS) on 17.01.1984. The Department of Personnel and Training, Government of India vide its letter dated 19.05.2009 recommended for financial upgradation under a scheme named as 'Modified Assured Career Progression Scheme' (for short 'the MACP scheme'). The opposite party was entitled to get the benefits of 3rd MACP upon completion of 30 years of service from his initial entry grade, i.e. 17.01.2014. However, he was erroneously granted 3rd MACP vide office order dated 21.04.2010. This discrepancy was pointed out by the internal audit report dated 03.04.2012. Subsequently, the opposite party retired from service on 31.07.2017, but his leave encashment benefits were withheld for recovery of excess amount paid to him under the 3rd MACP.

Being aggrieved by the aforesaid action of the authorities, the opposite party filed an Original Application before the Central Administrative Tribunal, Cuttack (hereafter 'the Tribunal') vide OA No.260/109/2018 seeking disbursement of the leave encashment benefit with 18% interest. Therein, it was submitted on behalf of the opposite party that under the Rule 39(2) of the Central Civil Services (Leave) Rules, 1972 (for short 'the Rules, 1972'), the competent authority was required to sanction the cash equivalent of the earned leave at the credit of the opposite party on the date of his retirement i.e. 31.7.2017 and under the Rule 39(3), the authority can withhold full or part of the cash equivalent of the earned leave if he would have retired while on suspension or if any disciplinary or criminal proceedings were pending against him. Thus, it was submitted on his behalf that since the opposite party was neither under suspension on the date of his retirement nor any disciplinary or criminal proceeding was pending against him, the decision to withhold such benefit payable to him is illegal and he is entitled for release of the leave encashment benefit with interest at the rate of 18%.

The petitioners filed their counter affidavit in the O.A. wherein it is stated that claim of the opposite party is not justified and tenable and therefore, the O.A. should be dismissed.

3. After hearing the arguments for both the sides, the learned Tribunal vide order dated 14.10.2020 held that no order was passed following due procedure of law on the basis of which such amount could have been recovered from the leave encashment entitlement of the opposite party. It also observed that the authorities remained silent and withheld the entire leave encashment benefit payable to the applicant and all of a sudden on 10.10.2018, an amount of Rs.3,88,548/- was released without any details about proposed recovery. Accordingly, while setting aside the recovery made by authorities, the learned Tribunal held as follows:-

'8. In view of the discussions above, the delay in release of the leave encashment is entirely due to the decision of the respondents to withhold the leave encashment benefit in full, which is not sustainable in the eye of law. The applicant is, therefore, entitled for payment of interest for such delay in release of at least the part amount of Rs. 3,88,548/- which was required to be released on the date of retirement of the applicant on 31.7.2017. If the applicant did not receive the cheque released by letter dated 10.1.2018, the reason for not transferring such amount directly to the applicant's bank account or sending the cheque to the applican