In Brief
Thomas Daniel, a retired school headmaster in Kerala, was granted increments and a higher pay scale upon promotion in 1989. Nearly eight years later, the State claimed the increments should be recovered because his leave for higher education studies was improperly counted for service credit. The State withheld his retirement benefits as recovery. The Supreme Court held that excess payments made without employee fraud or misrepresentation, based on erroneous rule interpretation, cannot be recovered long after retirement. It is inequitable to recover after ten years when the employee innocently relied on and spent the payments. The appeal was allowed and all recovery proceedings set aside.
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