A signed undertaking binds a retiree to recovery of overpaid allowances from gratuity.

The applicant was appointed as a Security Assistant in the Intelligence Bureau on 11 May 1987 and retired on superannuation on 30 April 2024 as Assistant Central Intelligence Officer-I after approximately 37 years of service.

A Pension Payment Order dated 26 March 2024 assessed his admissible retirement gratuity at ₹15,39,450 but directed recovery of ₹1,59,900, leaving ₹13,79,550 payable.

The recovered amount represented Tough Location Allowance/Hardship Allowance allegedly paid to the applicant while posted at the Subsidiary Intelligence Bureau, Itanagar, pursuant to the departmental circular dated 24 July 2019.

The applicant challenged the recovery, contending that it was made from his gratuity without adequate notice or opportunity of hearing and contrary to State of Punjab v. Rafiq Masih, (2014) 8 SCC 883, as well as relevant DoPT instructions.

The respondents contended that the applicant had executed an undertaking agreeing to refund any overpayment of the allowances when demanded.

The Tribunal found that the applicant had signed the undertaking and accepted the allowances with knowledge of the possibility of recovery.

Whether the respondents were entitled to recover ₹1,59,900 from the applicant’s retirement gratuity towards alleged overpayment of Tough Location/Hardship Allowance?

Whether the principles against recovery of excess payments laid down in State of Punjab v. Rafiq Masih barred the recovery despite the applicant’s undertaking to refund any overpayment?

The Tribunal considered Rule 71 of the CCS (Pension) Rules, under which government dues may be adjusted against retirement gratuity.

It also considered the principle in State of Punjab v. Rafiq Masih, (2014) 8 SCC 883, restricting recovery of excess payments in circumstances where recovery would be inequitable, particularly from retired employees.

However, it applied the exception recognized in High Court of Punjab & Haryana v. Jagdev Singh, Civil Appeal No. 3500 of 2006, that the protection against recovery does not ordinarily apply where the employee had expressly undertaken to refund any excess payment.

The Tribunal further relied on the contractual and equitable effect of the undertaking executed by the applicant, holding that he was bound by it and could not resist recovery after accepting the allowances on that basis.

The Tribunal held that the allowances had been wrongly or excessively paid after an audit objection identified the applicant’s receipt of overlapping or inadmissible allowances.

The applicant had signed the prescribed undertaking accompanying the 24 July 2019 circular, expressly agreeing that any overpayment would be refunded whenever demanded.

Applying Jagdev Singh, the Tribunal treated this undertaking as a decisive distinction from cases where recovery is sought without prior notice or consent.

Consequently, the applicant could not successfully rely on Rafiq Masih to defeat recovery, since he had accepted the allowance with prior knowledge of the refund condition.

The Tribunal therefore found no ground to interfere with adjustment of the alleged overpayment from the retirement gratuity.

It upheld the recovery of ₹1,59,900 from his retirement gratuity on the basis of the undertaking executed by him and the respondents’ authority to adjust recoverable government dues.

The Original Application was accordingly dismissed, with no order as to costs.