Recovery of overpayments from retirement gratuity is restricted to exceptions established by prior court rulings.

Basant Balaji J., The Union of India, along with two others, have filed this Original petition aggrieved by the decision made by the Central Administrative Tribunal, Ernakulam bench in O.A.No.180/00073/2019. The Original application was filed by a retired employee, the Respondent, who sought to declare recovery of ₹4,25,865/- from his retirement gratuity as illegal and arbitrary. This amount was recovered on the grounds of alleged over- payment during his service from 12 December 2007 to 31 December 2015. The Respondent also requested the release of this amount with an interest rate of 18% per annum from his retirement date until payment.

2. The Respondent's journey in Government service began on 12 December 1983, with the Chief Controller of Accounts, Department of Supply, New Delhi. He was then transferred to Doordarshan Kendra, Thiruvananthapuram, on 14 April 1987. Throughout his career, he received his 2^nd Assured Career Progression (ACP) on 12 December 2007, and his 3^rd Modified Assured Career Progression (MACP) on 12 December 2013. At the time of his 2^nd ACP, his salary was in the pre- revised scale of ₹4500-7000. Subsequently, his pay was adjusted to Pay Band 2 (PB2) with a grade pay of ₹4200/-, leading to an upgradation to the scale of ₹6500-10500. However, this revised pay fixation became a point of contention. The Auditor objected to it, claiming an excess payment had been made, and consequently, sought to recover this amount from the Respondent's gratuity.

3. The Petitioners argued that the overpayment resulted from a misinterpretation of the CCS (Revised Pay) Rules 2008, which were implemented based on the 6^th Central Pay Commission (CPC) recommendations. They contended that once this discrepancy was found during an audit, the recovery from the gratuity was a necessary step.

4. The Central Administrative Tribunal ruled in favour of the retired employee (the applicant), directing the Union of India and co-respondents to refund ₹4,25,865/- within 90 days. This decision heavily relied on the judgment of the apex court in the State of Punjab and others v. Rafiq Masih , [ [(2015) 4 SCC 334] ]. The Tribunal's reasoning was based on two crucial findings: first, the applicant was a Group 'C' employee, and second, the alleged excess payment dated back to a period more than five years before his retirement. These facts squarely align with the principles established in the Rafiq Masih (supra) judgment, which generally restrict the recovery of overpayments in such circumstances.

5. The Respondent, who retired as an Upper Division Clerk on 31 October 2017, faced a recovery order (Annex.A1) for alleged excess salary on 15 November 2017, after his retirement. This overpayment dated back to the period between 12 December 2007 and 31 December 2015. The recovery was initiated post-retirement for payments made several years prior. The Tribunal found it entirely justified to apply the principles laid down by the Supreme Court in Rafiq Masih (supra). This paved the way for the refund of the excess amount that had already been recovered from the Respondent's gratuity.

6. A Division Bench of this Court in O.P.(CAT) No.150 of 2019 on

18 January 2025, had ordered the refund of amounts recovered from another applicant's Death-cum-Retirement Gratuity (DCRG) under similar circumstances.

7. Considering these factors and the clear judicial precedents, we are of the view that there are no grounds to interfere with the Tribunal's findings. Consequently, the Original Petition (O.P.) stands dismissed, affirming the decision to return the recovered gratuity amount to the Respondent.