Recovery of mistaken excess payments from a retired employee is impermissible absent fraud or misrepresentation.

The applicant, a retired Railway employee, superannuated on 30 September 2024.

The respondents deducted ₹2,20,110 from his gratuity, alleging excess payment resulting from an erroneous MACP financial upgradation.

They stated that the upgradation had been granted despite the applicant having received four promotions, and attributed the error to an incorrect interpretation of Railway Board instructions.

The applicant disputed the recovery, which had been made without a hearing, and sought its refund.

After his representation was not redressed, he filed this application under Section 19 of the Administrative Tribunals Act, 1985.

1. Whether recovery of alleged excess pay from the applicant’s gratuity was permissible where he had retired and the excess payment was not attributed to fraud or misrepresentation on his part

2. Whether the applicant was entitled to a refund of the recovered amount and interest

Under State of Punjab v. Rafiq Masih (White Washer), AIR 2015 SC 696, recovery of excess payments is impermissible in specified hardship situations, including recovery from retired employees or employees due to retire within one year.

Thomas Daniel v. State of Kerala & Ors., Civil Appeal No. 7115 of 2010, decided 2 May 2022, reiterates these categories and applies the principle where excess payment resulted from the employer’s mistake rather than the employee’s fraud or misrepresentation.

The Tribunal applied these principles to recovery from a retired employee’s retiral dues.

The respondents acknowledged that the alleged excess payment arose from their erroneous interpretation of Railway Board instructions and did not allege fraud or misrepresentation by the applicant.

Since the applicant had retired and the recovery was made from his gratuity, the Tribunal held that the recovery fell within the category of recoveries impermissible under Rafiq Masih and Thomas Daniel.

The recovery was therefore unsustainable in law.

If payment was not made within that period, interest at the GPF rate would accrue.

No order as to costs was made; the request for 18% compound interest was not granted.