SHASHI BHUSHAN vs EAST CENTRAL RAILWAY on 11 November 2026

O R D E R

Per: Kumar Rajesh Chandra, Member (A)

The applicant has approached this Tribunal under Section 19 of the Administrative Tribunals Act, 1985 praying for the following relief: “8.1 That your Lordships may graciously be pleased to quash and set aside the impugned order dated 22.01.2025 together with order dated 02.04.2025 as contained in Annexure A/1 and A/2 respectively in respect of recovery of overpayment amounting to Rs. 4,01,531/- recovered from DCRG towards wrong fixation of pay as on 27.07.1991. 8.2 That Your Lordships may graciously be pleased to issue an appropriate direction upon the respondents to refund the said recovered amount of Rs. 4,01,531/- along with 18% compound interest without any further delay. 8.3 Any other relief or reliefs including the cost of the proceeding may be allowed in favour of the applicant.”

2. For the sake of clarity, facts in the case as stated by the applicant in the OA, are discussed and delineated herein under:- The applicant superannuated from service on 31.01.2025 while holding the post of Chief Staff Welfare Inspector in Group-C, Level-8 of the 7th CPC, drawing a basic pay of Rs.86,100/-. He was initially appointed on 12.02.1985 to the post of Clerk Grade-II

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(Junior Clerk) and was subsequently promoted to the post of Clerk Grade-I (Senior Clerk) in the year 1991. Thereafter, the applicant was promoted to the post of Welfare Inspector Grade-III in the pay scale of Rs.5,000–8,000/- in the year 1999, followed by promotion to Welfare Inspector Grade- II in the pay scale of Rs.5,500–9,000/- in the year 2001 and Welfare Inspector Grade-I in the pay scale of Rs.6,500–10,500/- (Level-7, Grade Pay Rs.4,600/-) in the year 2004. Subsequently, in the year 2022, the applicant was granted upgradation to Level-8 under the 7th CPC. It is the case of the applicant that throughout his service career, his pay was duly fixed upon every promotion after verification of his service records and proper vetting by the Accounts Department. He was also granted annual increments from time to time without any objection or dispute being raised by the authorities. Further, upon implementation of the 4th, 5th, 6th and 7th Central Pay Commissions and on more than four occasions of transfer during his service, his pay was revised/fixed after due verification and scrutiny by the competent authorities and the Accounts Department. At no point during his nearly 40 years of service was any discrepancy in his pay fixation brought to his notice. Accordingly, as on 01.01.2025, the applicant was drawing a basic pay of Rs.86,100/- without any objection or dispute from the respondents.

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However, a few days prior to his superannuation, the applicant received a letter dated 20.01.2025 directing him to furnish clarification regarding four additional increments granted to him in the year 1991 on account of his Post Graduate Diploma in Personnel Management, which were alleged to have been granted erroneously in terms of Para-II(i) of RBE No.31/1990 and Para 6.3 of Master Circular No.46. It is submitted that the relevant Railway Board circular and Master Circular were not even supplied to the applicant along with the said communication. The applicant contends that the alleged discrepancy pertained to a pay fixation made in 1991, which had remained unquestioned for several decades and had subsequently undergone repeated scrutiny during his promotions, implementation of successive Pay Commissions and transfers. In response thereto, the applicant submitted his clarification on 21.01.2025, asserting that the four increments had been granted to him correctly and that his pay had been duly verified and accepted by the competent authorities throughout his service career. However, notwithstanding the applicant's explanation, the respondents issued an order dated 22.01.2025 whereby his basic pay was reduced from Rs.86,100/- to Rs.83,600/- on the allegation that his pay had been wrongly fixed on 27.07.1991. By the same

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Sonali Lal order, the respondents also directed recovery of the alleged excess payment made to him. Aggrieved thereby, the applicant submitted his objection on 27.01.2025 against the aforesaid order. The matter was thereafter referred to the competent authority under respondent No.2 at Hajipur for clarification vide communication dated 27.01.2025. In response thereto, the competent authority, namely respondent No.2, issued a clarification dated 28.01.2025, categorically confirming that no recovery was permissible from him. The applicant thereafter superannuated from service on 31.01.2025. However, despite the aforesaid clarification dated 28.01.2025, respondent No.6 issued the Pension Payment Order dated 02.04.2025, whereby a sum of Rs. 4,01,531/- was recovered from the applicant's Death-cum-Retirement Gratuity (DCRG) towards the alleged excess payment arising out of the purported wrong pay fixation. Further, the applicant's basic pay was taken as Rs.83,600/- instead of Rs.86,100/- for the purpose of calculation of his retirement benefits. The applicant contends that the aforesaid recovery is wholly arbitrary, illegal and unsustainable, particularly in view of the specific clarification dated 28.01.2025 issued by the competent authority expressly ruling out recovery. The action of the

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respondents is thus not only contrary to their own clarification but also violative of the principles of natural justice and settled principles governing recovery of alleged excess payments from retired Group-C employees. It is further submitted that, notwithstanding the clarification dated 28.01.2025 (Annexure A/7), the respondents proceeded to recover Rs.4,01,531/- from the applicant's DCRG. Consequently, his retiral benefits, including DCRG, pension, commuted value of pension and leave encashment, were also calculated and disbursed on the basis of the reduced basic pay of Rs.83,600/-, thereby causing substantial financial prejudice to the applicant. The applicant, however, makes it clear that the issue relating to reduction of his basic pay from Rs.86,100/- to Rs.83,600/- shall be agitated separately before this Hon'ble Tribunal and that the present Original Application is confined exclusively to the challenge against recovery of Rs.4,01,531/- from his DCRG and the consequential relief of refund thereof. The applicant further submits that the impugned recovery is directly contrary to the law laid down by the Hon'ble Supreme Court in State of Punjab & Ors. v. Rafiq Masih (White Washer), wherein the Hon'ble Apex Court laid down categories of cases in which recovery of excess payments made by the employer would be impermissible, including recovery from employees belonging to Group-C and Group-D services. The Railway Board, in pursuance

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Sonali Lal of the aforesaid judgment and the Department of Personnel and Training Office Memorandum dated 02.03.2016, also issued instructions dated 22.06.2016 regulating recovery of excess payments from railway employees. The applicant, being a retired Group-C employee, squarely falls within the category of employees protected against such recovery. It is further stated that the applicant submitted a representation dated 21.04.2025, followed by a reminder dated 20.05.2025, requesting the respondents to refund the amount of Rs.4,01,531/- recovered from his DCRG. However, no decision has been communicated on the said representations till date. The applicant also contends that the impugned recovery has been effected without initiating any disciplinary proceeding under the relevant provisions of the Railway Servants (Discipline & Appeal) Rules, 1968, including Rules 9 or 11, as applicable. It is his case that the respondents could not have imposed such a financial liability upon him by way of unilateral recovery, particularly after his retirement and in the absence of any finding of fraud, misrepresentation or concealment on his part. Having regard to the aforesaid facts and circumstances, the applicant submits that the impugned action of the respondents is arbitrary, unjust, contrary to the applicable Railway Board instructions and the law laid down by the Hon'ble Supreme Court. The applicant, having exhausted the available remedies by

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Sonali Lal submitting representations, has no efficacious alternative remedy except to approach this Hon'ble Tribunal for redressal of his grievance.

3. Per contra, Learned Counsel for the respondents, vide their written statement, vehemently opposes the prayer made in the Original Application and submits that the applicant, while serving as Clerk Grade-I, was entitled to only two advance increments on account of possessing a Post Graduate Diploma in Personnel Management. However, due to an administrative error, four increments were erroneously granted to him in the year 1991, resulting in excess payment of salary throughout his subsequent service. 3.1 Learned counsel for the respondents further submits that the applicant, having subsequently served as Welfare Inspector and being conversant with the applicable rules and regulations, ought to have brought the discrepancy to the notice of the administration. It is contended that the error came to light only during scrutiny of his service records at the time of retirement, whereupon his pay was correctly re-fixed from Rs.86,100/- to Rs.83,600/- and the excess amount of Rs.4,01,531/- was recovered from his retiral dues in accordance with the applicable rules and Railway Board instructions, particularly RBE No.31/1990 and Para 6.3 of Master Circular No.46.

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3.2 Learned counsel for the respondents submits that mere continuation of an erroneous pay fixation for several years, or its acceptance during subsequent promotions and pay revisions, does not confer any vested right upon the applicant to retain an inadmissible financial benefit. It is further contended that the clarification dated 28.01.2025 issued by the Principal Chief Personnel Officer cannot override the applicable Railway Board instructions or the findings of the Accounts Department, which is responsible for ensuring correctness of pay fixation and preventing wrongful disbursement of Government funds. 3.3 Learned counsel for the respondents also argues that the applicant's reliance upon the judgment of the Hon'ble Supreme Court in State of Punjab & Ors. v. Rafiq Masih (White Washer) is misplaced, as, according to the respondents, the applicant was holding the post of Welfare Inspector in a supervisory capacity and the case falls within the exceptions permitting recovery of excess payment. It is, therefore, submitted that the recovery of Rs.4,01,531/- from the applicant's DCRG was lawful and that his pensionary benefits have rightly been calculated on the basis of the corrected pay fixation.

4. Learned Counsel for the applicant, vide his rejoinder, reiterates the prayers made in the Original Application and prays that the impugned recovery be declared illegal and the

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Sonali Lal respondents be directed to refund the recovered amount in the interest of justice.

5. I have heard learned counsel for the applicant and learned counsel for the respondents, perused the pleadings available on record; and considered the matter in its entirety. 5.1 The controversy involved in the present Original Application is confined to the legality of recovery of Rs.4,01,531/- from the applicant's Death-cum-Retirement Gratuity (DCRG) on account of alleged excess payment arising out of grant of four additional increments in the year 1991, purportedly in excess of his entitlement. 5.2 The applicant's case is that the four additional increments were granted to him in the year 1991 and his pay fixation was subsequently scrutinised and verified by the competent authorities on several occasions during his nearly 40 years of service, including at the time of his promotions, transfers and implementation of successive Central Pay Commissions. No objection regarding the said increments was ever raised during his service career. It is further submitted that shortly before his retirement, when the respondents questioned the admissibility of the increments, the matter was referred to the competent authority, which, vide clarification dated 28.01.2025, confirmed that no recovery was permissible.

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5.3 Per contra, learned counsel for the respondents submits that the applicant was entitled to only two additional increments under RBE No.31/1990 and Para 6.3 of Master Circular No.46, whereas four increments had inadvertently been granted to him in the year 1991. It is contended that the error was detected during scrutiny of his service records at the time of retirement and that the respondents were duty-bound to rectify the erroneous pay fixation and recover the excess amount paid from public funds. Learned counsel for the respondents further submits that the clarification dated 28.01.2025 could not override the applicable Railway Board instructions and that the judgment in State of Punjab & Ors. v. Rafiq Masih (White Washer) is not applicable to the facts of the present case. 5.4 Upon consideration of the rival submissions, this Tribunal finds that the alleged excess payment originated from a pay fixation made in the year 1991. The applicant continued to receive his salary on the basis of the said fixation for several decades, during which his pay was subjected to repeated scrutiny by the departmental and Accounts authorities. There is no material placed before this Tribunal to establish that the applicant had procured the alleged additional increments by fraud, misrepresentation or concealment of any material fact.

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5.5 More importantly, the clarification dated 28.01.2025 issued by the Principal Chief Personnel Officer, ECR, Hajipur, assumes significance in the present matter. The said clarification was issued by the competent authority upon reference of the dispute with regard to the objection of the accounts department in connection with the case of recovery from this applicant and specifically records as follows: “Hence, in this instant case all settlement benefits on retirement be paid to the staff without any recovery pertaining to the above matter”. The respondents have not demonstrated before this Tribunal any subsequent order setting aside or modifying the aforesaid clarification. In such circumstances, the action of the respondents in proceeding with the recovery, without satisfactorily addressing the said clarification, cannot be sustained. 5.6 This Tribunal also finds merit in the applicant's contention that the impugned recovery is contrary to the principles laid down by the Hon'ble Supreme Court in State of Punjab & Ors. v. Rafiq Masih (White Washer), wherein the Hon'ble Apex Court has categorically held that recovery of excess payments from retired employees and employees belonging to Class-III and Class-IV services would be impermissible in the circumstances specified therein. The applicant, admittedly, belonged to Group-C service

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Sonali Lal and had already superannuated when the recovery was effected from his DCRG. The respondents have also failed to establish any fraud or misrepresentation on the part of the applicant which would justify such recovery. 5.7 It is well settled that an employer may rectify an erroneous pay fixation in accordance with the applicable rules; however, the right to correct such an error does not automatically confer an unrestricted right to recover the alleged excess payment from an employee, particularly when the payment has continued over several decades without any fault or misrepresentation on the part of the employee and the employee has already retired from service. The protection against such recovery, as recognised in Rafiq Masih, cannot be overlooked. 5.8 In view of the aforesaid facts and circumstances, this Tribunal is of the considered opinion that the recovery of Rs.4,01,531/- from the applicant's DCRG is unsustainable in law and is liable to be set aside. However, since the applicant has expressly confined the present Original Application to the issue of recovery and has reserved his challenge regarding reduction of basic pay from Rs.86,100/- to Rs.83,600/- for separate proceedings, this Tribunal refrains from expressing any opinion on the legality or correctness of the said pay fixation.

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5.9 Accordingly, the Original Application is allowed to the extent indicated above. The impugned action of the respondents insofar as it relates to recovery of Rs.4,01,531/- from the applicant's DCRG is hereby set aside. The respondents are directed to refund the aforesaid recovered amount to the applicant within a period of three months from the date of receipt of a certified copy of this order. 5.10 It is made clear that the question relating to reduction of the applicant's basic pay and consequential determination of his other retiral benefits has not been adjudicated upon in the present proceedings and shall remain open for consideration in appropriate proceedings, in accordance with law.

6. OA stands allowed in the aforesaid terms. No order as to costs.

Sd/-

(Kumar Rajesh Chandra)

Administrative Member

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