Service Law & Refund of Embezzled Amount by Employee: Supreme Court Answers the Effect on Penalty

Service Law & Refund of Embezzled Amount by Employee: Supreme Court Answers the Effect on Penalty

In case of Union of India v. Indraj [2025] GCtR 1770 (SC), employer had challenged the order by which penalty was set aside. It was held that the fact remains that mere deposit of the embezzled amount will not absolve an employee of the misconduct. Order of penalty of removal from service was held not to be excessive and penalty was restored.

The employee was appointed as Gramin Dak Sevak/ Branch Post Master on 12.01.1998. His services are governed by Gramin Dak Sevak (Conduct and Engagement) Rules, 2011. During annual inspection, on 16.06.2011, certain irregularities were found and he was issued a chargesheet for misappropriation of public funds on 17.12.2013. There were two charges against him.

It was noted that while trying to explain the discrepancies, the employee admitted the guilt. The amount embezzled by him had already been deposited in the accounts of the account holders. He prayed for forgiveness while reassuring that no such mistake will occur in future.

It has emerged that an employee with more than 12 years of service cannot be allowed to plead ignorance of law.

It was proved that the employee had stamped the passbooks of the account holders but did not make respective entries in the books of accounts maintained in the post office, despite the fact that he had received the amount from the account holders. When caught, he deposited the amount.