Recovery of overpaid salary from retired Group ‘C’ employees without fraud or misrepresentation is legally impermissible.

The applicant, a Group 'C' employee (Pointsman) in the Hubballi Division of South Western Railway, retired on superannuation on 31.07.2024

On 23.07.2024, one week prior to his retirement, the respondents reviewed his service register and retrospectively revised his pay downwards effective from 01.03.1993

Based on this revision, the respondents recovered Rs. 2,17,641 from the applicant’s Gratuity to account for alleged overpayments

The applicant challenged this recovery, asserting that no show-cause notice was issued, the overpayment was not due to his fault, and the action violated established legal precedents regarding recoveries from retiring employees

1. Whether the recovery of overpaid allowances from a Group 'C' employee at the time of retirement is permissible under law

2. Whether the recovery was in violation of the guidelines issued by the Supreme Court and subsequent government circulars

The Tribunal primarily applied the principles laid down by the Hon’ble Supreme Court in State of Punjab & Ors v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which summarized situations where recovery is impermissible, including: (i) recovery from Class-III/IV (Group C/D) employees; (ii) recovery from retired employees or those retiring within one year; and (iii) recovery for payments made in excess of five years before the recovery order

The Tribunal further relied on the DoPT Office Memorandum dated 02.03.2016 and Railway Board RBE No. 72/2016, which adopted the Rafiq Masih ruling for railway employees

The Tribunal found that the overpayment resulted from administrative pay fixation errors at the time of promotion in 1993 and was not the result of fraud or misrepresentation by the applicant

Since the applicant was a Group 'C' employee and the recovery was initiated immediately prior to his retirement, his case was directly protected by the criteria established in Rafiq Masih

The Tribunal noted that the Railway Board had specifically adopted these protections via RBE No. 72/2016, making the respondents' action a violation of their own internal regulations

Consequently, the recovery from the settlement benefits was deemed unsustainable in the eye of law

The refund must be executed within 12 weeks of the order's receipt. Should the respondents fail to comply within the stipulated timeframe, the amount will carry interest at the prevailing GPF rate. The application was disposed of with no order as to costs