Recovery of excess payments from retired employees or those nearing retirement is impermissible.

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

Subsequently, they were granted a revised pay in Pay Band-2 with Grade Pay of Rs. 5400/- on a functional basis and, having completed 30 years of service and received two promotions, became eligible for and were granted the 3rd financial upgradation under the Modified Assured Career Progression (MACP) Scheme to the immediate next higher Grade Pay of Rs. 5400/- by an order dated 25.06.2010

This order was later withdrawn by the 4th respondent on 20.09.2010, leading to directives from the 5th respondent for recovery of the pay and arrears already granted, which was subsequently effected from the applicants

The applicants in OA Nos. 1537, 1539, and 1012 of 2016 had retired in 2011 and 2012, while the recovery orders were passed in 2013, 2014, and 2015

The applicant in OA No. 1583/2016 had the recovery order passed in 2013, while she was still in service, retiring thereafter in 2017

The applicants contended that recovery was arbitrarily selective, as many similarly placed officers had not faced recovery

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

Whether the recovery made from the applicant in OA No. 1583 of 2016, who was in service when the recovery order was passed, warrants interference

The Tribunal primarily applied the principles laid down by the Hon’ble Supreme Court regarding the impermissibility of recovery of excess payments from employees.

Specifically, it cited Thomas Daniel Vs. State of Kerala and Others (Civil Appeal No. 7115 of 2010, dated 02.05.2022) which established that recovery from retired employees or those due to retire within one year is not justifiable, and that excess payments not due to misrepresentation or fraud by the employee are generally not recoverable in equity

Further reliance was placed on State of Punjab v. Rafiq Masih (White Washer), which outlined specific situations where recoveries by employers would be impermissible, including recovery from retired employees or employees due to retire within one year

The judgment in Union of India v. N.M. Raut & Ors. (dated 12.12.2024) was also referenced, which directed against recovery of arrears from retirees or those retiring within one year from the date of judgment

The court applied the precedent from Thomas Daniel and Rafiq Masih to the facts.

It noted that the applicants in OA Nos. 1537, 1539, and 1012 of 2016 had retired in 2011 and 2012, respectively, before the recovery orders were passed in 2013, 2014, and 2015

This situation directly fell under the Supreme Court's pronouncement that recovery from retired employees is impermissible in law

The court found that the recoveries effected from these applicants were illegal and unsustainable

However, regarding the applicant in OA No. 1583 of 2016, the recovery order was passed in 2013 while she was still in service, and she retired only in 2017

Based on the specific ratio laid down in N.M. Raut, which differentiates between retirees and serving employees for recovery purposes (where recovery from serving employees is permissible), the court concluded that the recovery in her case did not warrant interference

The Tribunal underscored the discriminatory nature of the recovery, noting that other similarly placed officers were allowed to retain the benefit

The Tribunal further held that no such relief could be granted to the applicant in OA No. 1583 of 2016, as the recovery was made while she was in service, in line with the law laid down in N.M. Raut

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