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2026 Supreme(Online)(Tel) 15906

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD


THE HON’BLE SRI JUSTICE PULLA KARTHIK


WRIT PETITION (Tr) No.913 OF 2017


Dated 24th APRIL, 2026


BETWEEN:

S.E. Peeran & two others … Petitioners

v.

The Principal Secretary,

HM & FW Dept, Secretariat,

Hyderabad & others … Respondents

Advocates:
For the Appellants/Petitioners: M.R. Tagore
For the Respondents: Government Pleader for Services-I

Recovery of excess salary from the retirement gratuity of a retired employee is impermissible where the employee continued in service under the cover of court-ordered interim stay and did not indulge in any misrepresentation or fraud.

Headnote:(A) Payment of Gratuity Act, 1972 - Section 4(6) - Recovery of excess salary from gratuity - Employees continued in service till 60 years of age based on tribunal interim orders - Subsequent dismissal of original applications lead to treatment of overstayal (58 to 60 years) as re-employment - Supreme Court guidelines in State of Punjab v. Rafiq Masih prohibit recovery from retired employees absent misrepresentation - Statutory provisions of Section 4(6) of Gratuity Act do not permit forfeiture of gratuity for overstayal. (Paras 9, 11, 12, 13)

Facts of the case:
The petitioners, who were employed as Foremen, were initially ordered to retire at 58. They challenged this through administrative tribunal proceedings and obtained interim orders to continue in service until 60. After they retired, the tribunal dismissed the applications. Consequently, the government treated their two-year overstayal as re-employment and ordered recovery of the salary received during that period from their gratuity.

Findings of Court:
The court found that the petitioners did not misrepresent facts to continue in service; they did so under judicial interim orders. Recovery from retired employees is impermissible under existing legal standards.

Issues: Whether the respondents were justified in treating the service period between 58 and 60 years as re-employment and recovering the excess salary from the petitioners' retirement gratuity.

Ratio Decidendi: The court ruled that as there was no fraud or misrepresentation by the employees in continuing their service, and because the Payment of Gratuity Act does not provide for the forfeiture of gratuity for such instances, the recovery proceedings were illegal.

Result: Writ petition allowed in part.

ORDER:

Seeking to declare the action of the respondents in issuing the impugned Memo No.139/H2/2011, dated 16.07.2012, and consequential orders passed vide proceedings Rc.No.7147/Y1A/ 2012, dated 31.01.2013, directing respondent No.2 to recover excess amount from retirement gratuity in lumpsum as illegal, arbitrary, discriminatory and contrary to law and consequently to set aside the same, the present Writ Petition is filed.

2) The case of the petitioners, in brief, is that basing on the date of birth of the petitioners, respondent No.3 has issued proceedings Rc.No.Y1A/7232/2007 dated 27.02.2008 informing the petitioners that they will retire on 30.06.2008, 31.05.2008 and 30.11.2008 respectively on attaining the age of superannuation. Aggrieved by the same, the petitioners have filed O.A. Nos.2277 of 2008 and 2633 of 2008 before the Andhra Pradesh Administrative Tribunal seeking a direction to the respondents to continue the petitioners in service till attaining the age of 60 years by setting aside the proceedings dated 27.02.2008 wherein the respondents have directed the petitioners to retire at the age of 58 years instead of 60 years as the petitioners were working as Foremen. Initially, at the time of admission of the OAs, the Tribunal has granted interim direction to the respondents to continue the petitioners in service till the age of 60 years. In compliance of the said interim orders of the Tribunal, the Government has issued G.O.Rt.No.531, dated 22.04.2008, permitting the petitioners to continue in service till attaining the age of 60 years. Thereafter, the OAs were finally dismissed vide order dated 07.12.2011 i.e. after one and half year of the retirement of the petitioners and now basing on the dismissal order passed by the Tribunal, respondent No.1 has issued the impugned memo No.139/H2/2011, dated 16.07.2012, fixing the pensionary benefits upto the age of 58 years and treating the two years period as overstayal and regularized the said period as re-employment and issued consequential order in proceedings Rc.No.7147/ Y1A/2012 dated 31.01.2013. Aggrieved by the same, the petitioners are before this Court.

3) Heard Sri Mr.M.R. Tagore, learned counsel for the petitioners, and learned Government Pleader for Services-I appearing for the respondents.

4) Learned counsel for the petitioners has submitted that the petitioners were initially appointed as Foremen on 08.11.1969 and 05.06.1975 respectively at the office of respondent No.3 and their date of birth, as per the records, is 01.07.1950, 01.06.1950 and 08.11.1950 respectively. Further, relevant amendment to the Rules was made on 20.11.2009 i.e. after issuance of G.O.Rt.No.531, dated 22.04.2008, and its consequential proceedings dated 20.07.2009 by respondent No.3 and basing on the interim orders passed by the Tribunal and the petitioners were allowed to continue till attaining the age of 60 years. Therefore, the petitioners were rightly continued in service till attaining the age of superannuation and they cannot be find fault with for continuing in service upto the age of 60 years without any influence on the authorities or misreprenting the facts. Further, the Tribunal has dismissed the OAs on 07.12.2011 i.e. after retirement of the petitioners. Therefore, the subsequent orders of the Tribunal cannot be implemented with retrospective effect and the same caused great hardship on the retirement of the petitioners. However, now respondent No.1 has issued the impugned proceedings dated 16.07.2012 wherein he directed respondent No.1 to take into account the services of the petitioner till attaining the age of 58 years only but not 60 years for fixation of pensionary benefits and gratuity and also directed the period of overstayal in service beyond the age of superannuation of 58 years may also be regularized as re-employment and pay during the above overstayal period shall be fixed in terms of the Act 521 CSRS and G.O.No.341, dated 14.12.1987 and excess pay, if any, paid

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