Recovery from retired employees or those retiring within one year is impermissible.

The applicants, retired Superintendents of Central Excise and an Assistant Commissioner of Central Excise, were initially placed in Pay Band-2 with Grade Pay of Rs. 4800/- following the 6th Central Pay Commission recommendations

Subsequently, they were granted a revised pay in Pay Band-2 with Grade Pay of Rs. 5400/- on a functional basis

Having completed 30 years of service and received two promotions, they became eligible for the 3rd financial upgradation under the Modified Assured Career Progression (MACP) Scheme

A Screening Committee meeting on 28.05.2010 granted them the 3rd financial upgradation to the next higher Grade Pay of Rs. 5400/-, and orders were issued on 25.06.2010

However, this order was later withdrawn by the 4th respondent, leading to recovery orders from the 5th respondent for the amounts already granted

The applicants in OA Nos. 1537, 1539, and 1012 of 2016 retired in 2011 and 2012, while the recovery orders were passed in 2013, 2014, and 2015

The applicant in OA No. 1583 of 2016 had the recovery order passed in 2013 while still in service, retiring later in 2017

The applicants contended that recovery was arbitrarily and discriminately applied, as similarly placed officers were not subjected to recovery

Whether the action of the respondents in passing recovery orders against the applicants after their retirement is justified

Whether the recovery made from the applicant in OA No. 1583 of 2016, who was in service when the recovery order was passed, warrants interference

The Tribunal primarily applied the principles laid down by the Supreme Court regarding recovery of excess payments from employees.

Key precedents included Thomas Daniel Vs. State of Kerala and Others (Civil Appeal No.7115 of 2010), which held that recovery from retired employees or those due to retire within one year is not justifiable, especially when the excess amount was not paid due to misrepresentation or fraud by the employee

The Court also relied on State of Punjab v. Rafiq Masih (White Washer), which outlined specific situations where recoveries by employers would be impermissible, including recovery from retired employees or those retiring within one year of the recovery order

Furthermore, the judgment in Union of India v. N.M. Raut & Ors. (dated 12.12.2024), involving similar MACP issues, stated that no recovery of arrears should be effected from retirees or those retiring within one year from the date of pronouncement of the judgment, and where recoveries have been made from retirees, they should be refunded

The Tribunal analyzed the recovery orders in light of the Supreme Court's pronouncements.

For applicants K. S. Gopal, M. Seethalakshmi, and M. Vijayaraghavan (OA Nos. 1537, 1539, and 1012/2016), the recovery orders were passed after their retirement

Applying the ratio of Thomas Daniel, Rafiq Masih, and N.M. Raut, the Tribunal found that recovery from retired employees is impermissible in law, especially when there was no misrepresentation or fraud by the employees

The Court in Rafiq Masih explicitly listed recovery from retired employees as an impermissible situation

Therefore, the recoveries made from these applicants were deemed illegal and unsustainable

In the case of V. Vaithehi (OA No. 1583/2016), the recovery order was passed in 2013 while she was still in service and she retired in 2017

Based on the "clear ratio laid down by the Hon’ble Apex Court in N.M. Raut," which stated that recoveries should not be made from retirees but did not offer similar protection to serving employees where recoveries had already been made, the Tribunal concluded that the recovery effected in her case did not warrant interference

The respondents were directed to refund the amounts recovered from these applicants, without interest, within three months from the date of receipt of the order

However, no relief was granted to the applicant in OA No. 1583 of 2016, and the amount already recovered from her need not be refunded, in view of the law laid down by the Hon'ble Apex Court in N.M. Raut

All the applications were disposed of in these terms, with no order as to costs