Recovery of mistaken overpayments from retired Group C employees is impermissible absent fraud or misrepresentation.

The applicant, a retired TBOP Postal Assistant (Group C), voluntarily retired from service on 30.09.2011.

Residing 5.5 km from the CGHS Wellness Centre in Trichy, he was granted a Fixed Medical Allowance (FMA) of ₹1,000 per month pursuant to a Ministry of Health and Family Welfare Office Memorandum dated 06.04.2018.

In September 2024, the respondents stopped the FMA, asserting that the applicant’s residence fell within the CGHS coverage area based on his pincode.

On 06.03.2025, following an internal audit objection, the 2nd respondent ordered the recovery of ₹60,000 in monthly installments of ₹3,000 from the applicant’s pension.

The applicant challenged this recovery, noting he had not misrepresented facts and was not served a show-cause notice prior to the order.

1. Whether the recovery of alleged excess FMA from a retired employee is sustainable in law when there was no misrepresentation or fraud by the employee and no prior notice was afforded.

2. Whether the applicant, as a retired Group C employee, is protected from recovery under the equitable principles established by the Supreme Court.

The court primarily relied on the principles established in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from retired employees or Group C/D service members when excess payments were made by the employer's mistake.

It further applied Sahib Ram v. State of Haryana (1995), holding that if a higher pay scale or allowance was granted due to the authority's wrong construction of rules rather than the employee's misrepresentation, the amount is not recoverable.

Additionally, the court cited Thomas Daniel v. State of Kerala (2022) to affirm that relief against recovery is granted in equity to prevent hardship.

The Tribunal observed that the applicant retired in 2011 and belongs to a non-gazetted Group C cadre.

The records did not indicate any fraud or misrepresentation on the part of the applicant in receiving the FMA; rather, the payment resulted from the respondents' own application of departmental circulars.

Furthermore, the respondents violated principles of natural justice by failing to issue a show-cause notice or provide an opportunity for a hearing before initiating recovery in 2025—fourteen years post-retirement.

Applying the Rafiq Masih criteria, the Tribunal found that recovery from a retired Group C employee is "iniquitous, harsh, and arbitrary," outweighing the employer's right to recover.

It held that the recovery was unsustainable and unjustifiable under established legal precedents.

The impugned order dated 06.03.2025 was set aside, and the respondents were directed to refund any amount already recovered from the applicant’s pension, without interest, within two months. No order as to costs was made.