Recovery of excess payments from retired Group C employees is impermissible under Rafiq Masih.

The applicant, Vinayan M., retired as a Station Superintendent from Southern Railway on July 31, 2020.

He began service as an Assistant Station Master in Palakkad Division on February 26, 1983, and was promoted to Station Master-III on February 7, 1986.

He transferred to Trivandrum Division on April 26, 1993, as an Assistant Station Master, with his pay protected.

He was promoted again to Station Master-III on April 26, 1993, and later to SM-II on August 17, 2005.

The applicant was granted 2nd MACP with GP 4600 (Level-7) from September 1, 2008, and 3rd MACP with GP 4800 (Level-7) from September 1, 2008.

The respondents, via Annexure-A1 communication dated October 12, 2020, informed him that there were irregularities in the grant of MACPs, specifically stating that the 2nd and 3rd MACPs were erroneous, as he was only eligible for 3rd MACP in GP 4600.

The respondents subsequently deducted Rs. 1,50,000/- from his DCRG (Death Cum Retirement Gratuity).

The applicant had previously filed O.A.1126/2012 regarding the withdrawal of MACP benefits, which was allowed by the Tribunal and upheld by the High Court, and is currently pending before the Supreme Court as SLP No.20199/2020.

In O.A.632/2019, involving similarly placed individuals, this Tribunal had rejected the challenge to the withdrawal of MACPs but restrained deductions from gratuity based on the Rafiq Masih case.

1. Whether the withdrawal of the applicant's 3rd financial up-gradation granted with effect from September 1, 2008, and the subsequent recovery of alleged overpayment, is valid?

2. Whether the recovery of Rs. 1,50,000/- from the applicant's DCRG after his retirement is legally permissible?

The Tribunal primarily applied the principles laid down by the Hon'ble Apex Court in State of Punjab and others v. Rafiq Masih [(2015) 4 SCC 334] regarding the impermissibility of recovering excess payments made to employees, particularly from Group-C employees and when the recovery is made after retirement or if the payments were made in excess of five years, and the employee had no role in the erroneous payment.

The rules regarding the Modified Assured Career Progression Scheme (MACPS), specifically the Department of Personnel and Training (DoPT) O.M. No. 35034/3/2008-Estt. (D) (Vol. II) dated October 4, 2012 (Annexure-A4) were also considered, which clarifies that past promotions in a previous organization are ignored for MACPS in a new organization if the employee was reverted to a lower post on request transfer to another organization.

The Tribunal also noted Railway Board clarifications RBE 81/2020 dated September 18, 2020, indicating that promotions earned in the new organization offset MACPS entitlements.

The Tribunal found the applicant's claim for 3rd MACP from September 1, 2008, after only approximately 25 years of service (having started on February 26, 1983), to be questionable and not in tune with the MACP scheme, which typically grants 3rd MACP after 30 years.

The Tribunal noted the respondents' "prevaricative stands" on how promotions in previous organizations should be accounted for regarding MACP entitlements, contrasting Annexure-A4 (DoPT O.M. ignoring past promotions on reversion due to voluntary transfer) with Annexure-A5 (reckoning promotions in previous organization) and Annexure-A7 (a later clarification).

Despite the earlier O.A.1126/2012 being decided in the applicant's favor and pending before the Supreme Court, the Tribunal upheld the decision to interfere with the erroneously granted MACP as consistent with its previous decision in O.A.632/2019.

However, regarding the recovery of Rs. 1,50,000/-, the Tribunal determined that the applicant, a Group-C employee, had no role in the alleged erroneous overpayment, which occurred over approximately 10 years (from 2008 onwards), and the recovery was made after his retirement.

Therefore, such recovery was arbitrary and inequitable under the Rafiq Masih dictum, which specifically precludes recovery from Group-C and Group-D employees, particularly when made years after the payment and without fault of the employee.

However, the Tribunal held that the recovery of Rs. 1,50,000/- from the applicant's DCRG was impermissible as it fell under the exceptions laid down in Rafiq Masih.

The Tribunal directed the respondents to refund the recovered amount of Rs. 1,50,000/- to the applicant within 90 days from the date of receipt of the order, with 8% interest per annum if not refunded within the stipulated period.

The Original Application was allowed to this extent.