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

The applicant, a retired South Eastern Railway Track Maintainer Grade-II, retired on 31 July 2024. During final verification before retirement, the respondents concluded that an increment granted in July 2006 was inadmissible because the applicant had been absent during June 2006 and had not completed the required six months.

They refixed his pay and recovered ₹1,58,000 from his retirement gratuity, without prior notice or hearing. The applicant sought refixation/restoration of pay and refund of the deduction; he maintained that no fraud or misrepresentation was alleged against him. After his representation received no favourable response, he filed the O.A.

Whether recovery from the applicant’s retirement gratuity for an alleged pay-fixation error dating to 2006 was impermissible, given his retirement, Group ‘C’ status, and the absence of alleged fraud or misrepresentation.

Whether the recovery made without notice or an opportunity to be heard could be sustained.

The Tribunal applied the principles in State of Punjab & Ors. v. Rafiq Masih (White Washer) & Ors., (2015) 4 SCC 334, which identifies circumstances in which recovery of excess payments by an employer is impermissible, including recovery from Group ‘C’ or Group ‘D’ employees, from retired employees or those due to retire within a year, and where excess payment continued for more than five years before the recovery order; recovery may also be barred where it would be iniquitous, harsh, or arbitrary.

The Tribunal also relied on the principle that post-retirement recovery for a past pay-fixation error, absent employee fault, fraud, or misrepresentation, cannot be sustained.

The alleged excess payment arose from an increment granted in 2006, while recovery was made from the applicant’s gratuity on retirement in 2024. The applicant was a retired Group ‘C’ employee, and the respondents did not attribute fraud or misrepresentation to him. The recovery therefore fell within the categories identified in Rafiq Masih as impermissible.

The Tribunal additionally found that the respondents had recovered the amount without notice or an opportunity to be heard, rendering the action arbitrary and contrary to the applicable principles.

The O.A. was disposed of without an order as to costs. The order directed a refund; it did not expressly grant the separate requested relief of pay refixation.