Recovery from Retired Group 'C' Employee's Gratuity Without Fraud is Impermissible.

The applicant, Rokkam Ramanadha Rao, was appointed as a Junior Clerk in the South Eastern Railway on 24.06.1984, eventually promoted to Chief Office Superintendent.

On 20.04.2006, he was temporarily posted as an Establishment Instructor under the Supervisor Training Centre, Kharagpur, and was granted Training Allowance at 15% of his basic pay.

This posting was regularized on 02.02.2007, with a stipulation that the tenure in the ex-cadre post would not exceed eight years.

The applicant continued in this post and, prior to his superannuation on 30.06.2015, sought repatriation to his parent cadre via an application on 27.12.2014, and subsequently an RTI application on 18.03.2015.

He was repatriated on 31.03.2015 and joined his parent cadre on 01.04.2015.

Upon his retirement on 30.06.2015, an amount of Rs. 39,327/- was recovered from his Death-cum-Retirement Gratuity (DCRG).

The respondents clarified on 31.03.2016 and 22.06.2019 that the recovery was for excess Training Allowance paid beyond the permissible eight-year tenure.

1. Whether the recovery of Rs. 39,327/- from the applicant's gratuity after his retirement, on account of alleged excess payment of Training Allowance, is legally sustainable.

Principles laid down by the Hon’ble Supreme Court of India regarding the impermissibility of recovering excess payments from employees in certain categories.

*State of Punjab & Ors. vs. Rafiq Masih (White Washer)*, (2015) 4 SCC 334, which held that recovery from retired employees or employees belonging to Group C and Group D service is impermissible if the excess payment was not attributable to their fault or misrepresentation.

*Thomas Daniel vs. State of Kerala*, (2022) 5 SCC 545, which reiterated that recovery from retired employees is impermissible and inequitable in the absence of misrepresentation or fraud.

The Department of Personnel and Training Office Memorandum dated 02.03.2016, incorporating the *Rafiq Masih* judgment, also guided the decision.

The court analyzed the facts in light of the Supreme Court precedents, noting key admissions: the applicant was posted in the ex-cadre post by the respondents and continued there under their orders.

The applicant had sought repatriation, and there was no allegation of fraud, misrepresentation, or misconduct on his part.

Crucially, the court found that the applicant, a retired Group ‘C’ employee, fell squarely within the categories identified in *Rafiq Masih (supra)* where recovery would be impermissible, especially since the recovery was from his gratuity and without fault attributed to him.

The court asserted that the continuation of the applicant in the ex-cadre post beyond the stipulated tenure was within the respondents' control, and administrative lapses by the employer cannot penalize the employee.

Additionally, the recovery from gratuity was effected without a show cause notice, violating principles of natural justice and further confirming the recovery's unsustainability.

The O.A. was allowed, and the respondents were directed to refund the recovered amount of Rs. 39,327/- to the applicant within 90 days from the date of receipt of the order.