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2026 Supreme(Ori) 634

IN THE HIGH COURT OF ORISSA AT CUTTACK
BIRAJA PRASANNA SATAPATHY, J.
Rina Rath – Appellant
Versus
State of Odisha and Others – Respondent 
W.P. (C) No. 15191 of 2022
Decided On : 18-02-2026

Advocates Appeared:
For the Appellants : P. Mohanty, P. Rath
For the Respondent: S.P. Das

Recovery of excess payments from retired employees is impermissible unless circumstances warranting such recovery exist, as reinforced by Supreme Court precedents.

Headnote:(A) Odisha Service Code - Rules 79(d) and 159(2)(b) - Re-fixation of retiral benefits - The court held that 2624 days of leave treated as Extraordinary Leave does not count towards service benefits such as TBA, ACP, and MACP leading to a liability of Rs.69,700/- on the petitioner; however, recovery was barred based on Supreme Court precedents where recovery from retired employees or those near retirement is impermissible. (Paras 2, 5.2, 5.5)

(B) Recovery of payments made in excess - The court affirmed that despite errors in benefits extended to the petitioner, recovery is not permitted given the employee's continued enjoyment of benefits for over five years. (Paras 5.5, 5.6)

Facts of the case:
The petitioner entered service in 1983 and received various benefits until an office order dated 07.06.2022, which re-fixed benefits due to a lengthy period of Extraordinary Leave, leading to recovery demands.

Findings of Court:
The court found no illegality in the re-fixation of benefits but recognized that recovery from the petitioner should not occur given the Supreme Court's stance on the matter.

Issues: The main issues involved whether the Extraordinary Leave counts towards service benefits and whether recovery of excess payments is permissible.

Ratio Decidendi: The court held that while re-fixation of the benefits is valid, recovery is impermissible due to established precedents protecting retired employees.

Result: Writ Petition allowed in part, no recovery permitted.

Table of Content
1. challenge against office order regarding salary benefits. (Para 1 , 2)
2. petitioner's entitlement to benefits based on leave classification. (Para 3)
3. arguments on the validity of the order on leave treatment. (Para 4)
4. court's interpretation of benefits and recovery policy. (Para 5)
5. final decision on writ petition regarding recovery. (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,

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