Recovery of excess payment from retired employees or after five years is impermissible.

The applicant, Gayatri Trivedi, retired on June 30, 2023, as Chief Office Superintendent.

She had previously filed OA No. 322 of 2023 challenging deductions from her retirement dues, leading to a Tribunal order on August 16, 2023, directing the respondents to consider her representation.

The respondents, Northern Railway, subsequently rejected her representation via an order dated January 29, 2024, stating that her pay was erroneously fixed at Rs. 5,900/- instead of Rs. 5,750/- with effect from November 1, 2003, at the time of her promotion to Head Clerk.

Consequently, Rs. 3,04,291/- was recovered from her gratuity.

The applicant contends this recovery is impermissible under established law.

The respondents assert that the recovery was done as per rules in vogue due to the erroneous pay fixation.

It is undisputed that the erroneous fixation was not due to the applicant's fault.

Whether the recovery of an alleged excess payment of salary from the applicant, a retired employee, is permissible in law.

The Central Administrative Tribunal (CAT) primarily applied the principles laid down by the Hon'ble Supreme Court in State of Punjab vs. Rafiq Masih (Whitewasher) (2015) 4 SCC 334, which restricts the impermissibility of recovery in specific hardship situations.

The CAT specifically focused on the exceptions where recovery is impermissible, notably from retired employees, or when the excess payment has been made for a period exceeding five years before the recovery order is issued.

The Department of Personnel & Training (DoPT) Office Memorandum dated March 2, 2016, circulated by the respondents via RBE No. 72 of 2016, also reinforces these principles regarding recovery.

The CAT analyzed the facts in light of the Rafiq Masih judgment, noting that the applicant was a retired employee at the time of recovery.

The court found it undisputed that the erroneous pay fixation from November 1, 2003, was not due to any fault of the applicant, ruling out misrepresentation or fraud on her part.

The recovery order dated January 29, 2024, was issued at the time of her retirement and pertains to an excess payment made over a period far exceeding five years (from November 1, 2003, to June 30, 2023).

Based on the specific exceptions outlined in Rafiq Masih, particularly clause (ii) concerning retired employees and clause (iii) regarding recovery for payments made in excess of five years, the CAT concluded that the recovery from the applicant was impermissible.

The court determined that the conditions prescribed by the Supreme Court, which exempt certain categories of employees from recovery, were met in this case.

The court quashed and set aside the impugned order dated January 29, 2024, to the extent it effected recovery.

The respondents were directed to refund the amount of Rs. 3,04,291/- recovered from the applicant's gratuity, along with interest as per the applicable Bank rate, within three months from the date of receipt of the certified copy of the order.

Pending MAs were also disposed of, with parties bearing their own costs.