Recovery of excess payments from retired Group C employees without misrepresentation is impermissible.

The applicant, B. Chitra Leka, a retired Postal Assistant LSG, voluntarily retired on February 21, 2005.

She resided more than 5 km from the CGHS Wellness Centre, Trichy, and thus received a Fixed Medical Allowance (FMA) of ₹1,000 per month as per an Office Memorandum dated April 6, 2018, issued by the Ministry of Health and Family Welfare.

The second respondent, however, stopped her FMA payment from September 1, 2024, citing a letter dated December 18, 2019, from the first respondent which indicated her residential pincode fell within CGHS coverage.

Despite this, the applicant maintained that her residence was beyond the 5 km radius, making her eligible for FMA.

Subsequently, on March 12, 2025, the second respondent issued an order to recover ₹60,000 as alleged excess FMA, at a rate of ₹3,000 per month from her pension starting March 2025, based on an objection during an Inspection in 2024.

The applicant contended that she made no misrepresentation, no show cause notice was issued, and the recovery violated Supreme Court guidelines.

The respondents argued that pensioners in CGHS-covered areas cannot opt out for FMA if eligible for CGHS enrolment.

Whether the excess payment of Fixed Medical Allowance (FMA), allegedly paid by the respondents, can be recovered from the applicant when there was no misrepresentation or fraud on the part of the applicant and no prior notice or opportunity of hearing was afforded to her before making such recovery, especially when the applicant is a retired employee.

The court primarily relied on precedents from the Hon'ble Apex Court regarding the recovery of excess payments made to employees.

Specifically, it applied the principle established in Sahib Ram v. State of Haryana that if excess payment was not due to misrepresentation or fraud by the employee, but due to the employer applying a wrong principle or interpretation later found erroneous, such payments are not recoverable.

The court further cited State of Punjab v. Rafiq Masih (White Washer) case which deemed recovery impermissible for retired employees or those due to retire within one year, or for Group C and Group D service employees, or in cases where recovery would be iniquitous, harsh, or arbitrary.

The court analyzed the case based on established Supreme Court precedents concerning recovery of overpayments.

It noted that the applicant, a Group "C" employee who retired voluntarily in 2005, did not misrepresent her eligibility for FMA, and there was no evidence of fraud on her part.

The court emphasized that the payment was made based on an official memorandum, and the subsequent decision to recover was due to a re-interpretation of rules by the respondents.

Crucially, the court found that no prior opportunity of hearing was given to the applicant before the recovery order was issued in 2025.

Applying the principles from State of Punjab v. Rafiq Masih, which disallows recovery from retired employees and Group C employees where there is no misrepresentation, and where recovery would cause undue hardship, the court concluded that the recovery from the applicant, a retired Group C employee, without misrepresentation or fraud, and without prior notice, was unsustainable and unjustifiable.

The court held that the recovery of Fixed Medical Allowance (FMA) from the applicant is unsustainable and unjustifiable.

The impugned order dated March 12, 2025, ordering the recovery of FMA, is set aside.

The interim order dated August 19, 2025, passed by the Tribunal regarding recovery, is made absolute.

The respondents are directed to refund any amount already recovered from the applicant without interest, within a period of two months from the date of receipt of this order.