Recovery from Retired Class-IV Employees Without Fraud is Impermissible.

The applicant, Mehraj-ud-Din Bhat, retired on April 30, 2024, at the age of 60, from the post of Road Worker after rendering over three decades of service.

Upon his retirement, a sum of ₹4,40,413/- was deducted from his gratuity, and his monthly pension was fixed at ₹19,150/- through Pension Payment Order No. 2224223578 and Gratuity Payment Order No. 2424223578, both dated July 11, 2024.

The deduction was based on an alleged excess payment arising from the application of SRO 59 of 1990.

The applicant contended that the benefit under SRO 59 of 1990 was extended to him during his service by the department without any misrepresentation or fraud on his part.

He further stated that the recovery was effected without any show-cause notice or speaking order, violating settled legal principles.

Whether the deduction of ₹4,40,413/- from the applicant's gratuity and the consequential reduction in his monthly pension, based on an alleged excess payment under SRO 59 of 1990, is legally permissible when no fraud or misrepresentation is attributable to the applicant?

Whether the recovery of amounts already paid, particularly from a retired Class-IV employee in the absence of fraud or misrepresentation, is impermissible in light of established legal precedents?

The court primarily applied the principle established in Muzammal Shah & Others v. State of J&K, TA No. 1580/2020, affirmed by the J&K High Court in WP No. 1806/2022 and by the Supreme Court in SLP (C) Diary No. 42001 of 2023, which held that while respondents are entitled to refix pay structure by denying the benefit of a higher scale, they cannot recover amounts already paid, especially if the recovery is from a retired employee and there is no evidence of misrepresentation or fraud.

Additionally, the court applied the precedent from Deshbir Singh v. Union Territory of J&K, WP(C) No. 1730 of 2020, affirmed by the J&K High Court in LPA No. 119/2022 and by the Supreme Court in SLP Diary No. 18074/2024, which similarly ruled against the recovery of excess amounts paid to retired employees where the error was departmental and no misrepresentation was involved, while upholding the right to refix future pension.

The court analyzed the case in light of the "settled legal position" derived from multiple judgments, including Muzammal Shah and Deshbir Singh, which were upheld by the Hon'ble High Court and the Hon'ble Supreme Court.

It noted that these precedents consistently held that recovery of amounts already paid, particularly from retired Class-IV employees and in the absence of fraud or misrepresentation, is impermissible.

In the present case, the applicant is a retired Road Worker, and the benefit under SRO 59 of 1990 was extended by the department itself, with no allegation of fraud or misrepresentation against him.

The respondents' counsel was unable to controvert this settled legal position regarding recovery from retired Class-IV employees.

Therefore, the court concluded that the recovery effected from the applicant's retiral dues could not be sustained as the respondents failed to distinguish the matter from these binding precedents.

The court directed the respondents to refund the recovered amount of ₹4,40,413/- to the applicant within a period of six weeks from the date of receipt of a certified copy of the order.

The Original Application was disposed of with no order as to costs.