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2026 Supreme(Ori) 502

IN THE HIGH COURT OF ORISSA AT CUTTACK
BIRAJA PRASANNA SATAPATHY, J.
Rina Rath - Petitioner
Versus
State of Odisha And Others – Respondents 
W.P.(C) No.15191 of 2022
Decided On : 18-02-2026 Advocates Appeared : 
For the Petitioner : Mr. P. Mohanty, Advocate on behalf of Ms. P. Rath, Sr. Advocate
For the Respondent : Mr. S.P. Das, Asc

Advocates Appeared:
For the Petitioner:Mr. P. Mohanty, Advocate on behalf of Ms. P. Rath, Sr. Advocate
For the Respondent: Mr. S.P. Das, Asc

Recovery of excess payments from employees is impermissible when based on incorrect administrative entries, particularly concerning increments due to extraordinary leave.

Headnote:(A) Odisha Service Code - Rule 79(d) - Recovery of excess payments - The petitioner challenged the office order directing recovery of Rs.69,700/- based on Extraordinary Leave being treated as non-qualifying service for increments and benefits previously extended. The court reinforced that recovery is impermissible when employees unknowingly benefited from incorrect entries, reiterating principles established by the Supreme Court, notably in Rafiq Masih. (Paras 2, 3.4, 5.5)

(B) Increment and benefits upon retirement - The legality of refixing increments and benefits was evaluated, with specific reference to the entitlement process outlined in the Odisha Service Code, leading to the conclusion that no recovery should ensue based on previous wrong calculations. (Paras 5.4, 5.6).

Facts of the case:
The petitioner, having served since 1983, received various benefits, including increments, before an office order in 2022 re-fixed these based on Extraordinary Leave, treating it as non-qualifying service.

Findings of Court:
The court determined no illegality was present in the order to re-fix benefits; however, it prohibited the recovery of excess payments made to the petitioner.

Issues: The main issues revolved around the validity of treating the periods of Extraordinary Leave as non-servicable and the legality of the recovery of the previously sanctioned amounts.

Ratio Decidendi: The court confirmed that a ministry order about the treatment of leave, made erroneously, should not jeopardize the employee’s financial stability post-retirement, aligning with established precedents.

Result: The court quashed the recovery order while affirming the re-fixing of the increments and benefits.

Table of Content
1. challenge to re-fixing of service benefits. (Para 2)
2. petitioner’s arguments on service benefits entitlement. (Para 3)
3. respondent’s arguments and legal justifications. (Para 4)
4. court analysis of service benefits and legality of recovery. (Para 5)
5. final order regarding recovery of excess payment. (Para 6)

JUDGMENT :

Biraja Prasanna Satapathy, J.

1. Heard Mr. P. Mohanty, learned counsel appearing on behalf of Ms. P. Rath, learned Senior Counsel for the petitioner and Mr. S.P. Das, learned Addl. Standing Counsel for the State.

2. The present Writ Petition has been filed inter alia challenging office order dated 07.06.2022, so issued by the Opp. Party No.1 under Annexure-5. Vide the said order, sanction of the benefit of TBA, ACP as well as RACP and MACP as well as increments were re-fixed and while re-fixing all those benefits, petitioner was held liable to pay back a sum of Rs.69,700/-.

3. Learned counsel for the petitioner contended that petitioner entered into service on 13.07.1983 as an Assistant Tourist Officer. While so continuing, petitioner was sanctioned with the benefit of TBA as well as ACP and RACP in due course of time. Not only that petitioner was also sanctioned with the increments and benefit of MACP. But just prior to her retirement, the impugned office order dated 07.06.2022 under Annexure-5 was passed, wherein benefit of TBA, ACP and RACP was re-fixed on the ground that while regularizing the leave of the petitioner, 2624 days of the leave was treated as Extraordinary Leave and accordingly the said period cannot be taken as service period of the petitioner, for the purpose of her entitlement to get the benefit of increment as well as benefit of TBA, ACP and RACP.

3.1. Learned counsel for the petitioner though does not dispute that while regularizing the leave period, 2624 days was treated as Extraordinary Leave, but contended that after such regularization of the leave period, an entry was made in the service book so available at Page-16 under Annexure-1, that the leave period will count towards increment, under Rule-79(d) of the Odisha Service Code.

3.2. It is contended that basing on such entry made in the service book, petitioner was extended with the benefit of increment, TBA, ACP and RACP all through on completion of the required years of service and by taking the initial date of joining of the petitioner as 13.07.1983. But just prior to her retirement on the ground that such Extraordinary Leave period will not count towards increment, benefits of TBA, ACP, RACP and increments were re-fixed and petitioner was held liable to refund a sum of Rs.69,700/- vide the impugned order dated 07.06.2022 under Annexure-5.

3.3. Learned counsel for the petitioner contended that since after regularization of the leave period, petitioner was held eligible to get the benefit of increment and other benefits, which were duly sanctioned, the same could not have been withdrawn with re-fixation of the benefit as well as increment vide the impugned order under Annexure-5.

3.4. It is also contended that since petitioner was extended with the benefit and last such benefit was extended in the year 2016, no recovery can be made in view of the decision of the Hon’ble Apex Court in the case of State of Punjab & Others Vs. Rafiq Masih, AIR 2015 SC 696 so followed in the case of Thomas Daniel Vs. State of Kerala & Others, 2022 Live Law (SC) 438.

Hon’ble Apex Court in Para 18 of the judgment in the case of Rafiq Masih and in Para-18 of the judgment in the case of Thomas Daniel has held as follows.

xxx

xxx

xxx

“18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. But that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Re















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