Indian Supreme Court: No Recovery of Excess Payment on Grounds of Administrative Errors

The Supreme Court of India recently ruled that payments made to an employee in excess of what they were entitled to, due to the oversight made by the employer, will not be recovered by the employer. The new decision modified a pervious ruling which allows a few exemptions. Employers in India should be aware of the change.  

The Court held that its ruling resulted not from any employee right to the money but as a matter of equity, given the hardship that would cause if the money was ordered recoverable. The Court further held that if in a given case, it is proved that an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess.