UNITED INDIA INSURANCE COMPANY LTD Vs. ROY

JUDGEMENT

(1.) To err is human; to correct an error is also human. Due to an error in the Divisional Office, respondent was paid cash incentive contrary to the guidelines issued by the General Insurance Company of India. Provisions of the guidelines stipulated that extension of notional credit cannot be taken into account for computation of development incentive. Relevant provision of the guidelines issued by the General Insurance Corporation of India is extracted below.

(2.) We find it difficult to accept the reasoning of the learned Single Judge. Facts would evidently show that payment was made by mistake contrary to the direction given by the General Insurance Company of India, which all the Insurance Companies are bound to follow. Mistake evidently has been crept in the Divisional Office. Divisional Offices and other offices are under the control of the United India Insurance Company transacting large volume of business all over the country. It is a large organization where several employees are working and large volume of work is being transacted. In such a situation, human error at times cannot be avoided. Nobody could expect an ideal situation without any error or mistake in the matter of administration. Due to inadvertence or otherwise a mistake has been committed which can always be corrected. Duty is cast not only on the administrators but on the beneficiary of the mistake to correct the error. The beneficiary is also part of the administration like the person who has committed the mistake. Writ petitioner cannot make a capital out of a mistake committed by his colleague in the office. Circular issued by the General Insurance Corporation of India is applicable not only to the administrators but to the beneficiary of the mistake also. So mistake can be corrected not only by the administrators but also by the beneficiaries.

(3.) On facts we find that notional business credit was extended to the respondent due to an inadvertent mistake. Appellant is entitled to correct the said mistake. On correction of the mistake necessarily excess amount paid has to be recovered especially when the respondent is a Development Officer. If the employee is a Class IV employee occupying lowest post in the establishment, some sympathetic consideration can be shown. There is no such consideration in the case of a person holding an officer post. We therefore set aside the judgment of the learned Single Judge and allow this appeal. However, we are inclined to permit the respondent to pay off the amount in six equal monthly instalment; first instalment is to be paid on 1st April 2005 failing which it is open to the Insurance Company to recover the amount in accordance with law.