Recovery of excess payments from Group 'C' employees is impermissible in law.

The applicant, Manmohan Joshi, was promoted to Law Assistant on January 16, 2003.

He was subsequently promoted to Chief Law Assistant on September 9, 2008, following a select list issued on August 28, 2008.

After the implementation of the VIth Central Pay Commission (CPC) and revised pay rules notified on September 4, 2008, the pay scales of Law Assistant and Chief Law Assistant were merged, resulting in a new revised Pay Band.

The Ministry of Finance issued an OM dated October 16, 2015, allowing pay fixation on promotions between January 1, 2006, and the notification date of the Railway Service (Revised Pay) Rules.

The Ministry of Railway also issued RBE No. 33/2016 on April 8, 2016.

Based on these, the applicant submitted a representation and his pay was fixed with a promotional benefit on April 24, 2017.

However, the Railway Board later clarified through RBE No. 196/2017 on December 29, 2017, that promotions between January 1, 2006, and September 4, 2008 (the date of notification of Railway Service (Revised Pay) Rules), would be covered by the OM dated October 16, 2015.

Since the applicant's promotion was on September 9, 2008, which was after September 4, 2008, the respondents issued a Show Cause Notice on June 6, 2018, proposing to withdraw the promotional benefit and recover the amount paid.

Whether the applicant, a Group 'C' employee, is entitled to protection against recovery of excess payment based on the judgment of the Apex Court in State of Punjab v. Rafiq Masih (White Washer) and others.

The court primarily applied the legal principles established in State of Punjab and others Vs. Rafiq Masih (White Washer) and others - (2015) 4 SCC 334.

Specifically, it referred to the five situations outlined in Rafiq Masih where recoveries by employers would be impermissible in law, with particular emphasis on situation (i), which prohibits recovery from employees belonging to Class-III and Class-IV service (or Group ‘C’ and Group ‘D’ service).

The court also referred to Railway Board’s Letter dated June 22, 2016, RBE No. 72/2016, which stated that no recovery can be made from Group 'C' employees.

The court analyzed the facts in light of the Rafiq Masih judgment, noting that the applicant was a Group 'C' employee.

The respondents had issued a show cause notice for recovery of a promotional increment, which was initially granted to the applicant due to an erroneous interpretation of rules regarding pay fixation for promotions occurring around the implementation of the VIth CPC.

The court found that the excess payment was a result of the department’s lack of diligence, and there was no allegation of misrepresentation or fault on the applicant's part.

Crucially, the court emphasized that the applicant fell within the first criteria laid down by the Hon’ble Apex Court in Rafiq Masih, which explicitly prohibits recovery from Class-III (Group 'C') employees.

Therefore, based on the established legal precedent, any recovery would be impermissible.

The instant original application was allowed, and the impugned Show Cause Notice dated June 6, 2018 (Annexure A-1) was set aside.

The respondents were directed not to recover any amount paid to the applicant on account of his pay fixation with one increment vide order dated April 24, 2017.

The respondents were, however, granted liberty to re-fix the applicant's pay as per rules, if required.

There was no order as to costs.