Recovery of excess payments from retired employees is impermissible.

The applicants were Superintendents of Central Excise (retd.) and one Assistant Commissioner of Central Excise, who, after the 6th Central Pay Commission recommendations, were initially placed in Pay Band-2 with Grade Pay of Rs. 4800/-.

Subsequently, they received revised pay in Pay Band-2 with Grade Pay of Rs. 5400/- on a functional basis.

Having completed 30 years of service and received only two regular promotions, they became eligible for 3rd financial upgradation under the Modified Assured Career Progression (MACP) Scheme.

A Screening Committee on 28.05.2010 granted them this upgradation to the immediate next higher Grade Pay of Rs. 5400/-, with orders issued on 25.06.2010.

However, this order was later withdrawn by the 4th respondent, leading to recovery orders from the 5th respondent for pay and arrears already granted.

The applicants in OA Nos. 1537, 1539, and 1012 of 2016 retired in 2011 and 2012, before the recovery orders were finally passed and effected.

The applicant in OA No. 1583 of 2016 had the recovery order passed while she was still in service in 2013 and retired in 2017.

The applicants alleged arbitrary selective discrimination as other similarly placed officers were not subjected to such recovery.

Whether the action of the respondents in passing recovery orders against the applicants after their retirement is justified.

Whether recovery from employees who retired prior to the issuance of recovery orders is permissible in law.

The court primarily applied the principle established in `State of Punjab v. Rafiq Masih (White Washer)` and reiterated in `Union of India v. N.M. Raut & Ors.`, which holds that recovery from retired employees, or employees due to retire within one year of the recovery order, is not justifiable, especially when the excess payment was not due to misrepresentation or fraud by the employee.

This relief is granted in equity to prevent hardship.

The Supreme Court in `Rafiq Masih` outlined specific situations where recoveries are impermissible, including from retired employees or those retiring within one year of the recovery order.

In `N.M. Raut`, it was specifically directed that no recovery of arrears be effected from retirees or those retiring within one year from the date of pronouncement of the judgment, and if recoveries have been made from retirees, they shall be refunded.

The court applied the established legal principles regarding recovery of excess payments from employees, particularly focusing on retired employees.

For applicants K. S. Gopal (OA No. 1537/2016), M. Seethalakshmi (OA No. 1539/2016), and M. Vijayaraghavan (OA No. 1012/2016), the recovery orders were issued after their retirement in 2011 and 2012.

Citing `State of Punjab v. Rafiq Masih (White Washer)` and `Union of India v. N.M. Raut & Ors.`, the Tribunal found such recovery to be clearly impermissible in law, as these judgments explicitly disallow recovery from retired employees.

The Tribunal noted that the excess amount was not paid on account of any misrepresentation or fraud by the employees.

Conversely, for V. Vaithehi (OA No. 1583/2016), the recovery order was passed in 2013 while she was still in service, and she retired only in 2017.

Based on the clear ratio laid down in `N.M. Raut`, which distinguishes between retirees and serving employees for recovery purposes (allowing recovery from serving employees under certain conditions), the recovery in her case did not warrant interference.

The impugned orders of recovery for these applicants were set aside, and the respondents were directed to refund the recovered amounts, without interest, within three months from the date of receipt of the order.

However, no relief was granted to the applicant in OA No. 1583/2016, as the recovery was effected while she was still in service, in line with the pronouncements in `N.M. Raut`.

All applications were disposed of in these terms, with no order as to costs.