Erroneous SRO 59 benefits may be refixed, but excess payments cannot be recovered.

The applicant, a retired Class-IV employee of the Jal Shakti/Public Health Engineering Department, was initially engaged as a daily-wage Helper and was subsequently regularised.

She was granted placement in the pay scale of ₹950–1500 notionally from 1 April 1994 and retired on 31 March 2023.

The Department had extended to her the benefit of SRO 59 of 1990 with effect from 1 February 2017.

At the time of settlement of her retiral benefits, the Department calculated an alleged excess payment of ₹5,32,772 and requested its adjustment from her gratuity.

Against total gratuity of ₹8,05,992, only ₹2,73,220 was authorised, while ₹5,32,772 was deducted towards the alleged excess payment.

Whether the respondents were entitled to refix the applicant’s pay and consequential pension by excluding the benefit granted under SRO 59 of 1990, if that benefit had been erroneously or inadmissibly extended?

Whether the respondents could recover or adjust ₹5,32,772 from the applicant’s gratuity and retiral benefits towards alleged excess payment arising from the SRO 59 benefit?

The Tribunal applied the distinction between refixation and recovery recognised by the Jammu & Kashmir and Ladakh High Court in UT of J&K & Ors. v. Maqbool Sheikh & Ors., WP(C) No. 936/2025, decided on 6 March 2026: the employer may refix pay and pension by excluding an erroneously granted SRO 59 benefit, but cannot recover amounts already paid pursuant to that erroneous fixation; amounts already recovered must be refunded.

The protection against recovery was additionally supported by State of Punjab & Ors. v. Rafiq Masih (White Washer) & Ors., particularly the principle that recovery from retired employees and Class-III/Class-IV employees is generally impermissible.

The Tribunal also relied on its decision in Koushal Kumar & Others, O.A. No. 61/492/2025, applying the same principle.

The Tribunal held that the applicant could not claim continuation of a benefit under SRO 59 merely because the corresponding higher pay had been drawn before retirement.

If the benefit was inadmissible under the applicable rules, the respondents were competent to correct the pay fixation and calculate future pension on the basis of the lawfully refixed pay.

However, the recovery issue was distinct.

The applicant was a retired Class-IV employee, and the deduction of ₹5,32,772 was made from her gratuity at the stage of settlement of retiral benefits.

Applying Maqbool Sheikh and Rafiq Masih, the Tribunal concluded that correction of the erroneous fixation could not retrospectively authorise recovery of sums already paid.

The undertaking furnished by the applicant did not alter this result because the later binding decision in Maqbool Sheikh specifically prohibited recovery in SRO 59 cases while preserving the power of refixation.

The respondents were permitted to refix the applicant’s pay and pension by excluding the SRO 59 benefit to the extent it was wrongly or inadmissibly granted, and her future pensionary benefits were to be regulated on the basis of the lawfully refixed pay.

However, no recovery could be made from the applicant towards excess payments arising from the earlier SRO 59 fixation.

The adjustment of ₹5,32,772 from her gratuity was held unsustainable, and the respondents were directed to refund or release that amount, subject to verification of the actual amount recovered, within three months of receiving a certified copy of the order.

The refixation was expressly held not to authorise any past recovery.

No order as to costs was made.