Recovery from gratuity based on erroneous pay fixation must be reviewed in light of N.M. Rout judgment.

The applicant, a 65-year-old retired Assistant Commissioner (CBIC), challenged the recovery of Rs. 3,64,170/- from his gratuity as per a Pension Payment Order (PPO) dated 03/09/2020.

The respondents initiated this recovery on the grounds of "wrong fixation" of Grade Pay during the grant of ACP and MACP benefits.

The applicant submitted a representation dated 20.01.2025 to Respondent No. 4, which was subsequently forwarded to Respondent No. 2 on 04.03.2025 with a recommendation for refund in light of recent judicial precedents.

The applicant approached the Tribunal seeking the quashing of the recovery and a refund of the deducted amount.

1. Whether the recovery of Rs. 3,64,170/- from the applicant's gratuity is legally sustainable in view of established judicial precedents regarding recoveries from retired employees.

2. Whether the competent authority should be directed to decide the applicant’s pending representation in a time-bound manner.

The court primarily relied on the principles established by the Hon’ble Supreme Court in State of Punjab and others etc. v. Rafiq Masih, CA No. 11527 of 2014, and Union of India & Ors. v. N.M. Rout, 2024 INSC 1042.

These precedents, along with the DoPT OM dated 02.03.2016, generally prohibit or restrict recoveries from retired employees or those nearing retirement where the excess payment was not due to any fraud or misrepresentation by the employee.

The Tribunal observed that the applicant's grievance centered on the allegedly illegal recovery from his retiral benefits following a re-fixation of pay.

The court noted that Respondent No. 4 had already acknowledged the merit of the applicant’s case by forwarding a communication on 04.03.2025 to Respondent No. 2, suggesting a refund based on the N.M. Rout judgment.

Without delving into the merits of the recovery itself, the Tribunal found that the principles of natural justice would be best served by requiring the respondents to formally adjudicate the pending representation.

The Tribunal emphasized that the authorities must consider the specific recommendation made in the communication dated 04.03.2025 while passing a reasoned order.

The authority is required to pass a reasoned and speaking order within six weeks from the receipt of the certified copy of the judgment, specifically considering the internal communication dated 04.03.2025.

The applicant was granted liberty to challenge the decision if it is not in his favor.

No order as to costs was made.