Recovery of excess payment of allowances from Group 'C' or Class III employees is impermissible if such payment was made due to the employer's mistake and not due to any fraud or misrepresentation on the employee's part.

(Division Bench)

(Hon’ble Shri Justice Sanjay S. Agrawal

Hon'ble Shri Justice Amitendra Kishore Prasad)

Order On Board

24.03.2026

Per; Amitendra Kishore Prasad, Judge

1. The present petition has been preferred by the Petitioners challenging the order dated 31.01.2025 passed by the learned Central Administrative Tribunal, Jabalpur in O.A. No. 203/688/2023, whereby the Tribunal has quashed the recovery orders dated 11.08.2018 and 02.03.2023 and has further directed the Petitioners to refund the recovered amount to the Respondent along with interest at the rate of 6% per annum. The Petitioners have assailed the said order on the ground that the Tribunal failed to appreciate that the Respondent had obtained House Rent Allowance (HRA) by misrepresentation despite being ineligible, as the official accommodation provided at Sub Post Office, Takhatpur was residential in nature, and the recovery initiated by the department pertained to public money wrongly disbursed, which was lawful and justified. Hence, the present petition seeking following reliefs :

“a. This Hon'ble Court may kindly be pleased to call for entire records pertaining to the case of the respondent for perusal of this Hon'ble Court.

b. This Hon'ble Court may kindly be pleased to quash the Order dated 31.01.2025 passed by the learned Presiding members, Central Administrative Tribunal, Jabalpur in O.A 203/688/2023 so far as quashing the order dated 11-08-2018 and 02-03-23 and directing petitioner herein to refund the entire recovered amount to the respondent herein with interest of 6% per annum from the date of recovery being illegal, arbitrary and without jurisdiction.

c. Cost of proceedings.

d. Any other relief as this Hon'ble Court may be pleased to grant.”

2. Facts of the case, in brief, is that the Petitioner is a governmental institution responsible for providing postal and allied services, wherein employees are provided with two categories of accommodation depending upon the nature of the post and place of posting. The first category comprises residential premises attached to Sub-Post Offices, including accommodation for the Sub Postmaster, in which case the employee is not entitled to receive House Rent Allowance (HRA). The second category pertains to non-residential premises, where no such accommodation is provided and, consequently, the employee becomes entitled to HRA. As per Rule 4(b)(i) of the Fundamental Rules and Supplementary Rules (FR & SR), Part IV, HRA is not admissible to an employee who occupies Government accommodation or to whom such accommodation has been offered, regardless of whether the employee chooses to reside therein or not. It is further the case of the Petitioner that a premise can be treated as non-residential only upon a formal declaration by the competent authority in accordance with the prescribed rules. In absence of such declaration, no employee can claim HRA merely on the ground that the accommodation is unsuitable or inconvenient. Even if an employee voluntarily opts to reside elsewhere, the entitlement to HRA does not arise unless the accommodation provided by the department is officially declared non-residential. In the present case, the Respondent was transferred and posted as Sub Postmaster at Sub-Post Office Takhatpur and discharged his duties there from 19.09.2013 to 01.07.2017. The said Post Office was functioning from a privately rented building, for which rent was being duly paid by the Petitioner Department. Importantly, the said building included residential accommodation