Recovery of erroneous excess payments is impermissible from retired employees absent fraud or misrepresentation.

The applicant, a Junior Telecom Officer (JTO), retired from BSNL service on 31 October 2017. She had been promoted from the post of Telecom Technical Assistant (TTA) to JTO with effect from 5 April 2016, and her pay was fixed at ₹30,140 by order dated 17 May 2016.

She contended that her annual increment in the TTA cadre was due on 1 October 2016 and that her promotional pay should have been fixed after granting that increment. After completing training, she submitted a representation dated 3 September 2016 seeking such fixation, but the respondents rejected it on 9 September 2016 on the ground that the option was time-barred.

At retirement, her pension was fixed at ₹15,145 per month before commutation and ₹9,087 after commutation. The respondents deducted ₹81,193 and ₹14,790 from her pay and ₹27,030 from her gratuity, allegedly on account of erroneous pay fixation.

Her earlier application, O.A. No. 1149 of 2018, was disposed of with a direction to the respondents to decide her representation by a reasoned and speaking order. The respondents thereafter passed the impugned order dated 16 January 2019 rejecting her claim.

During the pendency of the present proceedings, the applicant died and her legal representative was substituted.

Whether the applicant was entitled to re-fixation of her pay in the JTO cadre from 1 October 2016 after grant of the annual increment due in the TTA cadre.

Whether the respondents could recover alleged excess payments from the applicant’s salary shortly before retirement and from her gratuity after retirement, in the absence of fraud or misrepresentation on her part.

The Tribunal exercised jurisdiction under Section 19 of the Administrative Tribunals Act, 1985.

It applied the principles governing recovery of excess payments laid down by the Supreme Court in State of Punjab v. Rafiq Masih (Whitewasher) & Ors., (2015) 4 SCC 334.

Under paragraph 18 of Rafiq Masih, recovery is generally impermissible where it would cause undue hardship, including recovery from retired employees or employees due to retire within one year, recovery relating to payments made for more than five years, and recovery where the excess payment was not caused by the employee’s fraud or misrepresentation.

The Tribunal also applied the procedural principle that a claim concerning pay fixation could not ordinarily be reopened when the earlier rejection order had not been specifically challenged.

The Tribunal declined to reopen the applicant’s original pay fixation claim because neither party produced the promotion order or other material establishing that she was required to exercise an option within a specified period, and the rejection letter dated 9 September 2016 had not been challenged in the present application.

However, it treated the recovery issue separately. The respondents had retrospectively revisited pay fixation from 1 December 1998, 1 October 2004 and 7 November 2005 in 2016, but failed to satisfactorily explain why such re-fixation was undertaken shortly before the applicant’s retirement.

Although the department could correct an erroneous fixation and determine lawful retiral benefits, correction did not automatically authorise recovery of amounts already paid, particularly where there was no allegation or proof of fraud, misrepresentation or fault by the applicant.

Since part of the recovery was made from her salary within approximately two or three months before retirement and the balance from gratuity after retirement, the case fell squarely within the protection recognised in paragraph 18(ii) of Rafiq Masih.

However, it quashed and set aside the impugned order dated 16 January 2019 to the extent that it authorised recovery of alleged excess payments.

The respondents were directed to refund to the applicant’s legal representative all amounts recovered from the applicant’s salary before retirement and from her gratuity after retirement, within three months of receiving a certified copy of the order.

No order as to costs was made, and all pending miscellaneous applications were disposed of.