Recovery from Group C employees' gratuity due to excess payment is illegal.

The applicant, Rajshekar Auradkar, was appointed as a temporary Turner in the Defence Department on August 24, 1987, and was subsequently promoted to various grades, including Highly Skilled Grade I, before superannuating as a Toolmaker (HS II), a Group C post, on August 24, 2017

In the initial Pension Payment Order (PPO), his last pay drawn was Rs. 56,900/-, and the average pay for the last 10 months was Rs. 56,560/-

On August 5, 2022, Respondent No. 3 conveyed a proposal from Respondent No. 4 to recover Rs. 2,75,301/- from the applicant's gratuity while processing his pension claim

Despite the applicant's requests for a refund, the amount was retained

A Corrigendum PPO was later issued on January 29, 2025, revising the pay in the pay matrix to Rs. 60,400/-, and Rs. 1,23,738/- was paid to the applicant based on a re-audited and verified refixation of pay

However, the initial recovery of Rs. 2,75,301/- towards excess payment remained

Whether the recovery of Rs. 2,75,301/- from the retirement gratuity of a retired Group C employee, allegedly an excess payment made over a period exceeding five years, is illegal and unsustainable

The court applied the legal principles established by the Supreme Court of India regarding the impermissibility of recovering excess payments from certain categories of employees.

It relied on the judgment in State of Punjab & Ors vs. Rafiq Masih (White Washer) and Ors., (2015) 4 SCC 334, which outlines situations where recoveries from employees would be impermissible in law, including recovery from Class-III and Class-IV service (or Group 'C' and Group 'D' service), recovery from retired employees, and recovery when the excess payment has been made for a period exceeding five years before the order of recovery is issued

The court also referenced Thomas Daniel v. State of Kerala, 2022 SCC OnLine SC 536, which reiterated these principles

Further, the court considered the OM dated 02.03.2016 issued by the DOPT, which adopted the guidelines from Rafiq Masih

The court found that the recovery of Rs. 2,75,301/- from the applicant's retirement gratuity was illegal because the applicant was a Group C employee, and the alleged excess payment spanned a period from 1997 to 2022, exceeding five years

The court emphasized that it is well-settled law that no recovery from Group C employees is permissible, especially at the time of settling retirement benefits, and when the excess payment was made for a period exceeding five years before the recovery order

Citing the Rafiq Masih judgment and the DOPT OM dated 02.03.2016, the court highlighted that recovery from Group C employees and recovery for errors extending beyond five years are explicitly deemed impermissible situations

The court noted that there was no allegation of misrepresentation or fraud by the applicant, which is a key factor in allowing such recoveries

It concluded that the recovery action also violated principles of natural justice as it was not preceded by due process

The respondents were directed to refund the said amount of Rs. 2,75,301/- to the applicant forthwith, with compliance required within eight weeks from the date of receipt of the certified copy of the order

The original application was disposed of accordingly