Recovery of excess pensionary payments is barred where overpayment arose from employer error and recovery after retirement would be inequitable.

Excess increments paid to a retired employee were held not recoverable where there was no fraud or misrepresentation and the payment arose from a mistaken interpretation of the service rules. The SC applied the equitable principle that recovery of overpayments is ordinarily barred when it would cause undue hardship, especially after retirement and after a long delay. As the excess payment resulted from the employer's error under the Kerala Service Rules and recovery was initiated nearly ten years after retirement, the recovery orders were set aside and protection against recovery was affirmed.

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Issues: Whether increments paid to a retired employee could be recovered nearly ten years after retirement when the excess payment was not caused by fraud or misrepresentation.

Analysis: The governing principle is that excess monetary benefits paid by an employer are ordinarily not recoverable when the employee was not guilty of fraud or misrepresentation and the payment resulted from a mistaken interpretation or application of the relevant service rules. Relief against recovery is granted in equity to avoid hardship, particularly where the employee has retired and the error was detected long after the payment was made. In this case, the excess increments were paid on the basis of a mistaken understanding of the Kerala Service Rules, and there was no allegation of fraud or misrepresentation by the employee. The attempted recovery was initiated long after retirement, which made the proposed recovery inequitable.

Conclusion: Recovery of the increments was impermissible and the challenge to the recovery succeeded.

Final Conclusion: The employee was entitled to protection against recovery of the excess increments, and the orders directing such recovery were set aside.

Ratio Decidendi: Excess payments made without fraud or misrepresentation, due to an employer's mistaken interpretation of service rules, are not recoverable where recovery after long delay or post-retirement would be inequitable and cause undue hardship.

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