Recovery of excess pay from retired Group C employees is impermissible absent fraud or misrepresentation.

The applicant, a retired Group ‘C’ railway employee, superannuated on 31 January 2023 from the post of Master Craftsman/Senior Technician (Electrical) under the North-Eastern Railway.

Shortly before retirement, the respondents informed him that his pay had been re-fixed at ₹49,000 instead of ₹52,600 and proposed recovery of ₹3,79,604 towards alleged excess payment arising from an erroneous pay fixation.

The applicant submitted a representation objecting to the re-fixation and recovery, relying upon the Railway Board’s RBE No. 72/2016 and the Supreme Court’s decision in *State of Punjab v. Rafiq Masih*.

The respondents maintained that a discrepancy existed between the applicant’s service book and pay bills and that the excess amount had been deducted from his retiral/settlement dues after approval by the competent authority.

The applicant’s earlier OA No. 505/2023 had been withdrawn with liberty to file a fresh application.

The Tribunal condoned the delay in filing the present OA, treating the pension-related grievance as a continuing financial injury and noting that the respondents had not opposed the delay-condonation application.

Whether the respondents were competent to scrutinise and correct the applicant’s erroneous pay fixation shortly before his retirement?

Whether the respondents were legally entitled to recover ₹3,79,604 from the applicant’s retiral/settlement dues after correcting the pay fixation?

The Tribunal applied Section 21(3) of the Administrative Tribunals Act, 1985, which permits condonation of delay where sufficient cause is shown.

On the merits, it held that the competent authority may verify service records and correct an erroneous pay fixation under the applicable Railway pension/service rules; an employee cannot insist that an incorrect fixation be perpetuated merely because it continued for a period of time.

However, correction of pay fixation is legally distinct from recovery of amounts already paid.

Relying on the DoPT Office Memorandum dated 2 March 2016, Railway Board RBE No. 72/2016, and *State of Punjab & Ors. v. Rafiq Masih (White Washer), (2015) 4 SCC 334*, the Tribunal applied the rule that recovery is impermissible in specified hardship situations, including recovery from retired employees, employees due to retire within one year, and Group ‘C’ or Group ‘D’ employees, particularly where there is no fraud or misrepresentation.

The controlling principle is that recovery must not be inequitable, harsh, arbitrary or disproportionate.

The Tribunal distinguished between the respondents’ authority to correct the applicant’s pay and their authority to recover past payments.

Since the respondents identified a discrepancy between the pay reflected in the service book and the pay bills, communicated the proposed re-fixation, and afforded the applicant an opportunity to submit documents, the correction of pay to ₹49,000 was not considered unlawful merely because it occurred shortly before retirement.

However, the applicant was a retired Group ‘C’ employee, and the recovery was made from his settlement dues after his superannuation.

The respondents did not establish fraud, misrepresentation or deliberate concealment by the applicant.

These facts placed the recovery within the categories recognised in *Rafiq Masih* as impermissible, and the Tribunal held that the lawful correction of pay could not automatically justify recovery of the excess amount already paid.

The Tribunal upheld the respondents’ authority to correct/re-fix the applicant’s pay at ₹49,000 per month and declined to interfere with that re-fixation.

However, it held that recovery of ₹3,79,604 from the applicant’s retiral/settlement dues was impermissible and directed the respondents to refund that amount within two months from receipt or production of the order before the competent authority.

No interest or costs were awarded.