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

The applicant, a retired BCR Postal Assistant, voluntarily retired on 20.07.2009.

He resides more than 5 km from the CGHS Wellness Centre, Trichy, and was receiving Fixed Medical Allowance (FMA) of ₹1,000 per month as per the 06.04.2018 Office Memorandum from the Ministry of Health and Family Welfare.

The 2nd respondent subsequently stopped FMA payment from 01.09.2024, citing the 1st respondent's 18.12.2019 letter that the applicant's pincode fell within CGHS coverage.

An order dated 23.12.2024 was issued by the 2nd respondent, directing the stoppage and recovery of ₹60,000 (at ₹3,000 per month from December 2024), based on an objection raised during an Inspection – 2024, despite no misrepresentation by the applicant.

No show cause notice was issued before the recovery order.

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

The Tribunal primarily applied the principles laid down by the Hon'ble Apex Court regarding the recovery of excess payments from employees, especially retired ones.

Key precedents include *Sahib Ram v. State of Haryana* (1995) Supp (1) SCC 18, *Shyam Babu Verma v. Union of India* (1994) 2 SCC 521, *Union of India v. M. Bhaskar* (1996) 4 SCC 416, *V. Gangaram v. Regional Jt. Director* (1997) 6 SCC 139, and *Thomas Daniel v. State of Kerala & Ors* (2022) SCC online SC 536.

Furthermore, the Tribunal relied on *State of Punjab v. Rafiq Masih (White Washer)* (2015) AIR SCW 501, which summarized situations where recoveries are impermissible, including from retired employees or Class III/IV service personnel, especially when there is no misrepresentation or fraud.

The principle is that if excess payment was not due to misrepresentation or fraud by the employee, or was due to a wrong interpretation of rules by the employer, such payments are not recoverable.

The Tribunal analyzed the case by applying the established legal principles that recovery of excess payments is unsustainable if there is no misrepresentation or fraud by the employee, particularly when the employee is retired.

The applicant retired voluntarily in 2009, and the FMA was paid based on an OM dated 06.04.2018; there was no record of fraud or misrepresentation on his part.

Furthermore, no opportunity of hearing was afforded to the applicant before the recovery order was issued in 2024.

Crucially, the Tribunal noted that the applicant is a retired Group "C" employee, falling under categories where recovery is generally impermissible as per the *Rafiq Masih* guidelines.

The recovery was initiated by the respondents due to an alleged objection during inspection and a later interpretation of rules regarding CGHS coverage, not due to employee fault.

Therefore, the recovery was deemed arbitrary, illegal, and unfair.

The Tribunal concluded that the recovery of FMA was unsustainable and unjustifiable under the circumstances.

The impugned order dated 23.12.2024, directing the stoppage and recovery, was set aside.

The interim order dated 18.09.2025 regarding recovery was made absolute.

The Tribunal directed the respondents to refund any amount already recovered from the applicant without interest, with this exercise to be completed within two months from the date of receipt of the order.