Recovery of excess payments from retiring employees is impermissible absent employee fraud or misrepresentation.

The applicant, an Assistant Accounts Officer (AAO) initially with the Department of Telecommunications, was absorbed into BSNL on October 1, 2000

He was subsequently promoted to Chief Accounts Officer (CAO) and retired on June 30, 2013

Upon retirement, BSNL alleged a pay fixation error occurred in 2009 regarding his AAO cadre salary from 2007, claiming his pay was fixed at Rs. 13,075 instead of Rs. 12,175

Consequently, BSNL revised his last drawn salary downward and recovered Rs. 3,77,522 from his leave encashment

The applicant previously challenged this in OA No. 56/2014, where the Tribunal set aside the recovery but granted the respondents liberty to issue a fresh notice

Following a fresh notice and rejection of the applicant's representation on June 8, 2016, the applicant filed the present Original Application seeking a refund and restoration of his last drawn pay for pensionary purposes

1. Whether the recovery of alleged excess payments from an employee at the verge of retirement is legally permissible when the error is attributable solely to the employer

2. Whether the retrospective refixation of pay beyond the 24-month period preceding retirement violates Rule 59(1)(b)(iii) of the CCS (Pension) Rules

The court primarily applied the legal principles established by the Hon’ble Supreme Court in State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from retired employees or those due to retire within one year of the recovery order, provided the payment was not obtained through fraud or misrepresentation

The court also relied on Rule 59(1)(b)(iii) of the CCS (Pension) Rules, which limits the examination of emoluments to the 24-month period immediately preceding retirement

The Tribunal observed that the alleged excess payment resulted from a fixation error committed entirely by the respondents, with no evidence of fraud or misrepresentation by the applicant

Applying the Rafiq Masih precedent, the Tribunal found that recovering a substantial sum (Rs. 3,77,522) from terminal benefits at the time of retirement caused "undue hardship and financial prejudice" to the superannuated employee

Furthermore, the Tribunal determined that the respondents' action of refixing the applicant’s pay retrospectively from 2007 violated Rule 59(1)(b)(iii) of the CCS (Pension) Rules, as the rule restricts such examinations to the 24 months prior to retirement

While the Tribunal found the recovery impermissible, it held that the applicant had no legal merit in claiming a restoration of the higher pay scale for future pensionary computations

It held that while the refixation of pay for future pension purposes could stand, the recovery of past excess payments was illegal

The respondents were directed to refund the recovered sum of Rs. 3,77,522 to the applicant with 6% interest per annum from the date of recovery until realization, to be completed within three months

The claim for restoration of the higher pay for pension re-computation was rejected