Orissa High Court in Union of India and others vs. Md. Ahmed Baig [W.P(c) No. 9987/2021], while responding to the question of whether an excess payment made in favour of an employee due to the erroneous calculation can be recovered from his leave encashment benefits after his retirement, observed that in the absence of a statutory mandate, the employer cannot withhold or take away a part of leave encashment. The Court placed reliance on the Supreme Court judgment given in Syed Abdul Qadir vs. State of Bihar (2009)3SCC475, wherein it was held that recovery of excess payment is bad in law as it causes undue hardship on employee however if it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, court may order for recovery of the amount paid in excess.
Also read: I.D. Act & IR Code Voluntary Reference to Arbitration : The Road Ahead
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