Recovery from gratuity is permissible for excess pay caused by non-qualifying absence.

The applicant, a Railway employee who retired on 31 December 2024, challenged a pay-revision memo dated 1 August 2024 and a notice dated 21 August 2024 seeking recovery of ₹8,70,693 as excess payment from his gratuity.

He claimed that the pay had been fixed by the Railway authorities, that he had made no misrepresentation, and that recovery was barred by State of Punjab v. Rafiq Masih and Railway Board instructions.

The respondents attributed the excess payment to the failure to account for 3,941 days of absence treated as leave without pay and other non-qualifying periods when regulating increments.

They stated that the pay was revised after examining the service and leave records and that ₹8,36,353 was recoverable under Rule 15 of the Railway Services (Pension) Rules, 1993.

The Tribunal dismissed the application.

1. Whether the respondents were justified in revising the applicant’s pay fixation to account for leave without pay and other non-qualifying periods.

2. Whether recovery of the alleged excess payment from the applicant’s retirement gratuity was impermissible under Rafiq Masih or otherwise unlawful.

Rule 15 of the Railway Services (Pension) Rules, 1993 provides for adjustment of outstanding Railway or Government dues against retirement gratuity and includes overpayment of pay and allowances among such dues.

The Tribunal also considered State of Punjab v. Rafiq Masih (White Washer), which recognises that recovery of mistaken excess payments may be impermissible in specified circumstances where recovery would be inequitable; its application depends on the facts of the case.

The Tribunal accepted the respondents’ explanation that increments had been regulated without properly accounting for the applicant’s extensive leave-without-pay and other non-qualifying periods.

It found that the respondents had examined the service and leave records, disclosed the basis for the revised fixation, and stated that the applicant had been given an opportunity to object.

The applicant did not provide a calculation or service-record evidence showing that the revised amount was wrong.

The Tribunal considered the long period of absence and the applicant’s alleged knowledge of it relevant to distinguishing the case from Rafiq Masih.

It also held that Rule 15 authorised adjustment of overpaid salary against gratuity and that payment of income tax on the salary received did not entitle the applicant to retain any amount found not legally due.

It dismissed the application, declining to quash the pay-fixation memo and recovery notice or order a refund; there was no order as to costs.