Recovery from Retired Group 'C' Employees for Administrative Error Impermissible.

The applicant, Surjit Singh, joined the Chandigarh Police on December 12, 1983, and retired voluntarily as an ORP Inspector (Group C) on November 1, 2019.

Prior to retirement, a 'No Due Certificate' was issued, and his retiral dues, including pension, were released.

The Chandigarh Administration adopted the Punjab Civil Services (Revised Pay) Rules, 2021, effective from January 1, 2016, requiring employees to submit option forms for revised pay, which the applicant did.

Respondent No. 5 (Accountant General) subsequently revised the applicant's pay fixation and issued a revised certificate (Annexure A-4) on November 16, 2022, directing the recovery of an overpayment of Rs. 1,02,468 from his DCRG, which was deducted without a show cause notice.

The overpayment was due to a rectification of an earlier step-up of pay granted to the applicant effective October 21, 2007, at par with his junior Sh. Dalbir Singh, as indicated in an order dated October 19, 2016.

The applicant was a Group C employee and retired by the time the recovery was ordered.

There was no allegation of fraud, misrepresentation, or fault on the applicant's part regarding the erroneous pay fixation.

Whether the recovery of an alleged overpayment from the DCRG of a retired Group C employee, made without a show cause notice, is illegal and arbitrary.

Whether the lack of a proper communication of the recovery order to the applicant violates principles of natural justice.

The principles laid down by the Hon'ble Apex Court in State of Punjab & Ors. Vs. Rafiq Masih, SCT 2015 (1) 195, which summarized situations where recoveries by employers are impermissible in law, specifically including recovery from Class-III and Class-IV (Group C and Group D) employees, and recovery from retired employees or those due to retire within one year.

Thomas Daniel Vs. State of Kerala, 2022 INSC 497, which held that belated recovery after a long lapse is inequitable and impermissible.

DoPT OM dated March 2, 2016, adopted by UT Chandigarh, which prohibits recovery from retired employees, Group C employees, and excess payments due to administrative error.

The general principles of natural justice, requiring a show cause notice before affecting recovery.

The court found that the applicant's case fell squarely within categories (i) and (ii) of the Rafiq Masih judgment, as he was a Group C employee and had already retired when the recovery order was made.

The erroneous pay fixation, particularly the stepping-up and alignment of increment, was an administrative decision by the parent department, and there was no allegation of fraud, misrepresentation, or fault attributable to the applicant.

The recovery from DCRG was deemed prohibited, especially since no misconduct was established.

The impugned order dated April 5, 2023, was found to be bad in law as its copy was not issued or marked to the applicant, thus violating the principles of natural justice.

The court also highlighted that belated recovery after a long lapse is inequitable and impermissible, aligning with Thomas Daniel v. State of Kerala.

The respondents' argument regarding the applicant's undertaking on November 1, 2019, was implicitly rejected as the recovery was deemed impermissible under established legal precedents.

Accordingly, the Original Applications were allowed.

The impugned orders dated April 5, 2023 (in OA No. 195/2024), December 15, 2023 (in OA No. 197/2024), March 22, 2023 (in OA No. 300/2024), June 29, 2023 (in OA No. 302/2024), and May 26, 2023 (in OA No. 469/2024) were quashed and set aside to the extent they ordered recovery of amounts from the applicants.

The respondents were directed to refund the recovered amounts to the applicants, along with interest at the GPF rate from the date of recovery until the date of actual payment, to be carried out within eight weeks from the receipt of the order.