Recovery from retired employees is impermissible under specific conditions established in precedent cases.

JUDGMENT Sushrut Arvind Dharmadhikari, J The present Original Petition filed under Article 227 of the Constitution of India challenges the order dated 20.07.2022 in Original Application No.180/00563/2016 passed by the Central Administrative Tribunal, Ernakulam Bench, whereby the Tribunal disposed of the Original Application filed by the respondents herein challenging the pay fixation as well as the recovery of the amount.

2. The petitioners herein were the respondents in the Original Application, whereas the respondents herein were the applicants in the Original Application.

2.1 The respondents had filed the Original Application seeking a declaration that the recovery from their salary and the withholding of their DCRG and allowances were unjust, illegal, and without jurisdiction, and also prayed for a refund of the amounts recovered along with interest.

3. The brief facts of the case are that the respondents are retired employees of the Southern Railway who served as Chief Pharmacists in various railway hospitals under the Thiruvananthapuram Division of the Southern Railway and retired during different periods in 2015 and 2016. Prior to the implementation of the 6th Central Pay Commission with effect from 01.01.2006, they were holding the post of Pharmacist Grade- I in the pay scale of Rs. 5,500–9,000. Consequent upon the implementation of the 6th CPC, their pay was fixed in PB-2 (Rs. 9,300– 34,800) with a Grade Pay of Rs. 4,200 with effect from 01.01.2006. Thereafter, respondent Nos. 1 and 2 were promoted as Chief Pharmacists in the pre-revised scale of Rs. 6,500–10,500 (revised to PB-2, Rs. 9,300– 34,800 with Grade Pay of Rs. 4,600) with effect from 16.05.2008 and

18.02.2008, respectively.

3.1 Thereafter, the Railway Board issued a revised pay structure for the Pharmacists’ cadre. Pursuant to this, by way of financial upgradation, respondents 1 and 2 were granted the second MACP in the Grade Pay of Rs. 4,800 with effect from 01.09.2008. Respondents 3 and 4 were granted the first MACP in the Grade Pay of Rs. 4,600 and the second MACP in the Grade Pay of Rs. 4,800 with effect from 01.09.2008.

3.2 To the utter surprise of the respondents, in June 2015 they noticed that certain amounts had been recovered from their salary without any prior notice. When they demanded the details of the recovery in writing, further recovery was stopped. However, at the time of their retirement, certain amounts were withheld.

3.3 Aggrieved by these recoveries, the respondents submitted representations seeking a refund of the recovered amounts. As there was no response, they approached the Tribunal by filing Original Application No. 563/2016.

4. The learned Tribunal upheld the pay fixation of the respondents but quashed the recovery effected against them, relying on the judgment of the Hon’ble Supreme Court inState of Punjab and others v. Rafiq Masih (White Washer), 2015 (4) SCC 334 , which lays down parameters governing cases where recovery is impermissible. The Tribunal concluded that clause (ii) ofRafiq Masih (supra) was applicable since the respondents had already retired from service.

5. The learned Central Government Counsel for the petitioners submitted that the Tribunal erred in allowing the Original Application by relying onRafiq Masih (supra), as it failed to consider the judgment of the Hon’ble Supreme Court in Chandi Prasad Uniyal and others v. State of Uttarakhand and others, 2012 (8) SCC 417 , wherein the Apex Court held that even in the absence of any misrepresentation or fraud on the part of the employee, excess payments made due to a mistake on the part of the employer can still be recovered.

5.1 The Apex Court, in UT of Chandigargh