- This topic has 30 replies, 13 voices, and was last updated 1 year, 4 months ago by
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UMy friend’s company mistakenly paid an ex-employee for 8 or 9 months after he left, due to a payroll error. The amount is between INR 80,000 and 1,00,000. The company is asking the ex-employee to return the money, but they are not asking for the PF, ESI, or other contributions. The ex-employee claims his father is in debt, so he is unable to repay the amount immediately.
The company has agreed to let him repay in 6 monthly installments, but they want him to sign an agreement and issue a post-dated cheque, which would only be cashed if he defaults on repayment. The agreement also mentions consequences under the Negotiable Instruments Act if the cheque bounces. The ex-employee is hesitant to sign this agreement, feeling it is too legal, but the company is willing to remove the fixed dates for payment, requiring only fixed monthly amounts.
I want to help my friend as much as i can.
My questions are:
1) What legal actions can the company take if the ex-employee refuses to sign the agreement or defaults on repayment?
2) Is the ex-employee legally obligated to repay the amount, even though it was a payroll mistake?
3) Can the company still charge him legally or recover the money without a signed agreement from the ex-employee?
Any legal insights would be greatly appreciated. Thanks!
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UNo no, i am friend of the director of the company, The company is new and i want to help my friend in recovering the amount, hence the above questions
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DWhat they can do?
1. File a recovery suit against him.
2. If it is a small firm, they will not mind playing dirty and may even involve local police.
3. They can screw up background verification against him. -
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DWow!!
Why does your friend doesn’t want to pay what doesn’t belong to her?
Free loading has become a habit in our country!!
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UHey, maybe there’s a mistake at my end in phrasing the post properly😅 , but the thing is i wanted to know that if the ex-employee doesnt pays the company back, what legal actions can we take against him?
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PThe guy needs to pay back what is not his..period..it is theft by another name..not returning what is not his. A legal notice and filing a civil recovery suit will be best recourse. .The legal notice can also mention that any feedback to new employers in future will not be positive till such time he returns the full money plus feedback to his current employer about his doubtful integrity..his story about father being in debt can not and should not be taken at face value. Agreement and PDC ..your friend is being extra nice.!
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DNope. The guy hasn’t stolen. He can say that these are dues from his work. It will take an era to fix.
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PPls look up the definition of theft ..keeping what does not belong to you is ..
“Whoever, intending to take dishonestly any movable property out of the possession of any person without that person’s consent, moves that property in order to such taking, is said to commit theft”…
In this case did he have consent of his employer to keep the money ..NO. This guy is being dishonest from the first date when he received wrong credit..and did not have consent to keep it.. IPC Sec 378.
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Dhow did the money land in his account? without consent?
in this country, you cant reverse a recharge done to the wrong mobile number. And you are talking about this shit
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PDont indulge in semantics..plain ad simple integrity issue…if he did not report needless Credit after quitting..he is asking for trouble..not a reliable guy for future employers.
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UThanks for letting me know,
Some people are saying that employee is not entitled to pay and the court will go in favour of the employee, it is a bit confusing,
Can you please let me know if there is a particular section which had addressed situations like this?Thank you!
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PYou dont need to worry about sections..file a civil recovery suit and get it referred to mediation at the first hearing and arrive at a settlement agreement basis which he will need to payback in instalments and finally both parties can inform court that agreement terms have been adhered to and matter is closed..whereupon court will close the proceedings.
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QIt is not mistake , just to show the expenses and later take the cash, black money, seen with startups lot of them are doing like this .
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PYour friend has to repay the company..period. what is not his ..amounts to theft..by keeping quiet his integrity has come under cloud..a person of good values would have notified the company and returned this windfall ..his ex employer is being nice to him..if he tries to act smart they may even go to police !
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UHey, seems like i had not phrased the og post properly, i have edited it now.
Actually my friend is director of the company and i wanna help him recover the amount from the ex- employee -
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DPersonal advice :
You are in a bit of soup. Courts tend to agree with the employee mostly.
Below points noted by Honorable Supreme Court in Col B J Akkara Vs Union Of India
(a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee.
(b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.Even if you look at other cases like Sanjay Sharma Vs State of Punjab and others , Sahib Ram Vs State of Haryana
Etc all these cases point out that courts are lenient and will side towards employee if employee has not done fraudulently .
If your employee is willing to pay it in installments so be it . You can take it. If you force this and employee gets a representation then the money gets stuck.
You cannot start recovery proceedings in this case.
Best case negotiate without forcing signatures .
Rest you can always get a lawyer who can guide you in detail.
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DIts legally called unjust enrichment. There are several laws against it under Indian contract act. Please see a lawyer.
“It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained”
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