Recovery of excess payment from a Group C employee is impermissible absent fraud or misrepresentation.

The applicant, originally engaged as an Extra Departmental Branch Postmaster on 21 November 1996, was promoted to the Postman cadre through the LDCE on 31 December 2022.

The Department sanctioned and paid him ₹1,50,000 as GDS gratuity for service rendered from 21 November 1996 to 19 December 2022, along with severance allowance of ₹21,750.

Subsequently, the respondents alleged that, upon his absorption as a departmental Postman, he was not eligible for GDS gratuity and had also received ₹250 in excess severance allowance.

By communications dated 23 December 2024 and 26 May 2025, the applicant was directed to deposit ₹1,50,000 and ₹250.

The applicant challenged the recovery, contending that the payments had been sanctioned by the Department, that he had made no fraud or misrepresentation, and that recovery from a Group ‘C’ employee was impermissible under State of Punjab v. Rafiq Masih.

The respondents defended the recovery as correction of an erroneous overpayment.

Whether recovery of ₹1,50,000 paid as GDS gratuity and ₹250 paid as excess severance allowance could be made from the applicant, a serving Group ‘C’ employee, in the absence of fraud or misrepresentation on his part.

Whether the impugned recovery order dated 26 May 2025 was liable to be quashed under the principles laid down by the Supreme Court in State of Punjab v. Rafiq Masih.

Whether any amount already recovered from the applicant was required to be refunded, and whether interest was payable in case of delay.

The Tribunal applied the principles governing recovery of excess payments laid down by the Supreme Court in State of Punjab & Others v. Rafiq Masih (White Washer), Civil Appeal No. 11527 of 2014, particularly that recovery is ordinarily impermissible from employees belonging to Group ‘C’ and Group ‘D’, from retired employees or those nearing retirement, where the excess payment relates to a period exceeding five years, and where recovery would be harsh, inequitable or arbitrary.

The Tribunal further relied on the principle that, absent fraud or misrepresentation by the employee, an erroneous payment attributable to the employer should not ordinarily be recovered from the employee; responsibility for an incorrect pay fixation or overpayment may instead lie with the authority responsible for the error.

The Tribunal found that the applicant was still in service and belonged to Group ‘C’.

It further found that the gratuity and severance payments had been sanctioned by the competent departmental authority and that there was no allegation or evidence of fraud or misrepresentation by the applicant in obtaining them.

Applying the categorical protection recognised in Rafiq Masih for Group ‘C’ employees, the Tribunal held that recovery of the sanctioned payments, particularly the substantial amount of ₹1,50,000, was unjustified.

The fact that the Department later concluded that the applicant was ineligible for GDS gratuity did not, in the Tribunal’s view, overcome the prohibition against recovery in the circumstances of the case.

The recovery order dated 26 May 2025 was quashed and set aside.

The respondents were directed not to recover ₹1,50,000 or ₹250 from the applicant pursuant to that order.

Any amount already recovered was directed to be refunded within three months from receipt of the certified copy of the order; failing such refund, the amount would carry interest at the GPF rate.

No costs were awarded, and all connected miscellaneous applications were disposed of.