Recovery of excess FMA from retired Group C employees without misrepresentation is impermissible.

The applicant, G. Jaganathan, a retired HSG Supervisor, was receiving Fixed Medical Allowance (FMA) of ₹1,000 per month since his retirement on superannuation on November 30, 2008, as he resided 7 km from the CGHS Wellness Centre, Trichy, exceeding the 5 km radius for FMA eligibility as per the OM dated April 6, 2018.

The 2nd respondent stopped FMA payments from September 1, 2024, citing a letter dated December 18, 2019, from the 1st respondent, which stated the applicant's pincode fell within the CGHS, Trichy coverage area.

Subsequently, on March 14, 2025, the 2nd respondent, based on an objection during an Inspection-2024, ordered the stoppage and recovery of ₹60,000 in alleged excess FMA at ₹3,000 per month from his pension starting March 2025.

The applicant contends that he made no misrepresentation and that the recovery is arbitrary, illegal, and unfair.

He also argued that no show cause notice was issued, and recovery of alleged overpayment from a retired employee's pension violates Supreme Court guidelines, especially the "White Washer case".

The respondents contended that pensioners residing in CGHS-covered areas cannot opt out of CGHS and avail FMA, and since the applicant was eligible for CGHS enrolment, he was not entitled to FMA, thus justifying the stoppage and recovery.

Whether the alleged excess payment of FMA can be recovered from the applicant, a retired employee, when there was no misrepresentation or fraud on his part and no prior notice or opportunity of hearing was afforded to him before such recovery was made.

The court primarily applied the principles established by the Supreme Court regarding the recovery of excess payments made to employees.

Specifically, it relied on the precedents set in *Sahib Ram vs. State of Haryana* (1995) Supp (1) SCC 18, *Shyam Babu Verma Vs. Union of India* (1994) 2 SCC 521, *Union of India Vs. M. Bhaskar* (1996) 4 SCC 416, *V. Gangaram Vs. Regional Jt. Director* (1997) 6 SCC 139, and *Thomas Daniel Vs. State of Kerala & Ors* (2022) SCC online SC 536, which collectively state that excess payments are not recoverable if not made due to employee misrepresentation or fraud, but rather due to employer error in applying rules.

The court further cited *State of Punjab v. Rafiq Masih (White Washer)* (2015 AIR SCW 501), outlining situations where recovery from employees is impermissible in law, including recovery from retired employees, Class III/IV service employees, or when recovery would be iniquitous, harsh, or arbitrary.

The Tribunal analyzed the issue by applying the well-settled principles from various Supreme Court judgments, including the "White Washer case".

The court noted that there was no reflection in the record that the FMA payments were made due to any fraud or misrepresentation by the applicant.

Furthermore, it was an admitted position that the applicant was not given any opportunity of hearing before the recovery order was issued in 2025.

Considering that the applicant had superannuated in 2008 and was a Group "C" employee (not holding a gazetted post), the Tribunal concluded that applying the principles enunciated by the Apex Court, particularly those safeguarding retired and lower-grade employees from recovery of erroneous payments, rendered the recovery "unsustainable & unjustifiable".

The court found that the recovery would be iniquitous and arbitrary given the circumstances, aligning with the exceptions for recovery outlined in *State of Punjab v. Rafiq Masih*.

Therefore, the impugned order dated March 14, 2025, which directed the recovery, was set aside, and the interim order dated September 18, 2025, preventing recovery, was made absolute.

The OA was allowed, and the respondents were directed to refund any recovered amount to the applicant without interest within two months from the date of receipt of the order.