Recovery of FMA from retired employees is impermissible if not based on misrepresentation.

The applicant, D. Banumathi, retired as a Sub Postmaster on May 31, 2012, and was residing 6 km from a CGHS Wellness Centre in Trichy.

In accordance with an Office Memorandum dated April 6, 2018, by the Ministry of Health and Family Welfare, she was regularly paid Fixed Medical Allowance (FMA) of ₹1,000 per month as her residence was beyond the 5 km radius from a CGHS Wellness Centre.

However, the 2nd respondent, without reference to a December 18, 2019 letter from the 1st respondent stating her pincode fell within CGHS coverage, stopped FMA payment from September 1, 2024.

The 2nd respondent subsequently issued an order on March 18, 2025, to stop FMA and recover ₹60,000 at ₹3,000 per month from her pension starting March 2025, based on an "IAIR objection during Inspection – 2024".

The applicant contended that she made no misrepresentation, and the recovery was arbitrary and illegal.

Whether the recovery of alleged excess payment of FMA from a retired employee is permissible when there was no misrepresentation or fraud on the part of the applicant and no prior notice or opportunity of hearing was afforded.

The Tribunal primarily applied the principles regarding recovery of excess payments from employees, as established by the Hon'ble Supreme Court in various judgments.

Key precedents cited include Sahib Ram vs. State of Haryana (1995) Supp (1) SCC 18, Shyam Babu Verma Vs. Union of India (1994) 2 SCC 521, Union of India Vs. M. Bhaskar (1996) 4 SCC 416, V. Gangaram Vs. Regional Jt. Director (1997) 6 SCC 139, Thomas Daniel Vs. State of Kerala & Ors (2022) SCC online SC 536 and State of Punjab v. Rafiq Masih (White Washer) (2015) AIR SCW 501.

These cases consistently hold that excess payments made due to the employer's wrong interpretation of rules, or calculation errors, without employee misrepresentation or fraud, are generally not recoverable in equity, especially from retired employees or Class III/IV employees.

The Tribunal analyzed the facts in light of Supreme Court precedents, particularly the White Washer case.

It noted that the applicant retired in 2012, and there was no evidence of fraud or misrepresentation on her part in receiving the FMA.

The alleged excess payment was made due to the employer's application of a rule that was later contested or re-evaluated.

Crucially, the applicant was not given any prior notice or opportunity of hearing before the recovery order was issued.

Considering the applicant was a retired Group "C" employee, the Tribunal found that the recovery would be iniquitous and harsh, echoing the situations where recovery is deemed impermissible by the Supreme Court.

While acknowledging that the applicant had not established her continuous entitlement to FMA, the Tribunal focused on the impermissibility of recovery under such circumstances.

Consequently, the impugned order dated March 18, 2025, directing recovery was set aside, and the interim order dated September 18, 2025, forbidding recovery was made absolute.

The respondents were directed to refund any amount already recovered from the applicant within two months from the date of the order, without interest.

The OA was allowed on these terms, with no order as to costs.