The Karnataka High Court has ruled that an employer cannot recover excess salary from a retired employee when the overpayment was caused by the employer’s own mistake and there was no fraud or misrepresentation by the employee.
Justice M Nagaprasanna directed Bangalore Electricity Supply Company Limited (Bescom) to refund ₹2,81,887 recovered from the pension of retired assistant lineman Manjunath N. The amount related to an increment that had allegedly been granted erroneously about 15 years earlier.
Manjunath retired from service on April 30, 2025. After his retirement, Bescom sought to recover the amount on the ground that he had received excess payment because of an incorrect increment.
The petitioner, represented by advocate Devaraj N, contended that the additional amount had not been obtained through fraud or misrepresentation. It was argued that the payment resulted entirely from an error on Bescom’s part.
Bescom also acknowledged before the court that recovery from a retired employee would not be permissible in the absence of fraud or misrepresentation attributable to the employee.
Court Relies On Supreme Court Ruling
The High Court referred to the Supreme Court’s decision in Jogeswar Sahoo vs District Judge, Cuttack (2025).
The Supreme Court had held that excess payments cannot be recovered where they were not caused by any misrepresentation or fraud by the employee. It had also recognised that recovery would not be permissible where the excess amount resulted from an employer applying an incorrect principle for calculating pay or allowances, or from an interpretation of a rule or order that was subsequently found to be erroneous.
Applying that principle, the High Court noted that there was no allegation that Manjunath had committed fraud or made any misrepresentation to obtain the excess amount.
In its September 25 order, the court held that excess emoluments or allowances paid in such circumstances are not recoverable from the employee.
The court consequently directed Bescom to refund ₹2,81,887 to Manjunath along with interest within eight weeks.
