Recovery of alleged excess pay from a retired Group C employee’s gratuity is impermissible.

The applicant, a former Head Constable in the Railway Protection Force, was medically de-categorised in August 2012 and subsequently appointed to an alternative post of Office Superintendent in the Northern Railway on 23 July 2014. He retired on superannuation on 31 December 2016.

His last drawn basic pay was allegedly ₹50,500, but the respondents subsequently reduced the pay for settlement purposes to ₹47,600 and calculated his pensionary benefits on that basis. The applicant also alleged that ₹1,90,213 was recovered from his gratuity without notice or an opportunity of hearing.

The respondents contended that the legality of the pay fixation was already pending before the Allahabad High Court, Lucknow Bench, in W.P. No. 7702 (S/S) of 2014, in which the applicant was petitioner No. 6.

The applicant did not press the reliefs challenging the pay-fixation calculation and seeking settlement of terminal dues on the basis of ₹50,500.

1. Whether the Tribunal could adjudicate the applicant’s challenge to the reduction of his pay and consequential calculation of pensionary benefits when the issue was pending before the High Court.

2. Whether recovery of ₹1,90,213 from the gratuity of a retired Group ‘C’ employee, allegedly towards excess payment arising from erroneous pay fixation, was impermissible in law.

3. Whether the applicant was entitled to refund of the recovered amount and interest on the delayed payment of gratuity.

The Tribunal applied the principles laid down by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, particularly the rule that recovery of excess payments is impermissible where it is made from employees belonging to Class III or Class IV/Group ‘C’ or Group ‘D’ service and from retired employees or employees nearing retirement.

The Tribunal also relied on Rule 65 of the CCS (Pension) Rules, 2021, under which interest on delayed gratuity is payable at the rate applicable to the General Provident Fund.

Further, issues already pending adjudication before the High Court were not entertained by the Tribunal.

The Tribunal declined to examine the correctness of the applicant’s pay fixation and the consequential reduction from ₹50,500 to ₹47,600 because the issue was pending before the High Court, and the applicant had also expressly not pressed the corresponding reliefs.

On the recovery issue, the Tribunal found that the applicant was a retired Group ‘C’ employee. Applying categories (i) and (ii) of paragraph 12 of Rafiq Masih, it held that recovery of alleged excess payment from his gratuity was legally impermissible, irrespective of the pending dispute regarding the underlying pay fixation.

Since the recovery was impermissible and gratuity had allegedly been delayed, the applicant was held entitled both to refund of ₹1,90,213 with interest and to interest on the delayed gratuity payment.

It allowed the applicant’s claim concerning recovery and directed the respondents to refund ₹1,90,213 recovered from his gratuity, together with interest, and to pay interest on the delayed gratuity at the rate applicable to GPF under Rule 65 of the CCS (Pension) Rules, 2021, calculated from the due date until actual payment.

The directions were to be complied with within three months from receipt of the certified copy of the order.

The Original Application was disposed of without costs, and the connected miscellaneous applications were also disposed of.