Recovery of excess payments from retired Group C employees is impermissible absent fraud or misrepresentation.

The applicant, a retired Assistant Post Master (Group ‘C’ employee), superannuated on 30.06.2012

Following her retirement, she received a Fixed Medical Allowance (FMA) of ₹1,000 per month as she resided more than 5 km from a CGHS Wellness Centre, per a 2018 Ministry of Health OM

However, the 2nd respondent stopped the FMA in September 2024 and, via an order dated 15.03.2025, directed the recovery of ₹60,000 in monthly installments of ₹3,000 from her pension

This recovery was based on an internal audit objection claiming the applicant’s residential pincode fell within the CGHS coverage area

The applicant challenged the recovery, noting she had not engaged in misrepresentation and was not served a show-cause notice prior to the order

1. Whether the respondents can recovery alleged excess payments of Fixed Medical Allowance (FMA) from a retired employee in the absence of fraud, misrepresentation, or prior notice.

The court primarily relied on the principles established by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from employees belonging to Class III/IV (Group C/D), retired employees, or when excess payment was made for over five years

It further applied the doctrine from Thomas Daniel v. State of Kerala (2022) and Jogeswar Sahoo v. District Judge, Cuttack (2025), holding that excess payments made due to an employer’s wrong interpretation of rules, without employee fraud, are not recoverable based on equity and judicial discretion

The court also noted the procedural necessity of show-cause notices under principles of natural justice

The Tribunal observed that the applicant was a retired Group ‘C’ employee who had superannuated in 2012, long before the recovery was initiated in 2025

Crucially, the record contained no evidence of fraud or misrepresentation on the part of the applicant in receiving the FMA; rather, the payment was made based on the department’s interpretation of existing OMs

The court found that the respondents failed to afford the applicant an opportunity of hearing or a show-cause notice before ordering the deduction from her pension

By applying the Rafiq Masih criteria—specifically the prohibitions against recovery from retired staff and Group C employees—the court determined that the recovery would be iniquitous and harsh, outweighing the employer's right to reclaim the funds

While the court did not rule on the future entitlement to FMA, it held that the recovery of past payments was unsustainable and unjustifiable

The respondents were directed to refund any recovered amounts to the applicant without interest within two months of receipt of the order