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Judgment
Shri Ashish Srivastava, learned counsel for the applicant and Shri Manoj Kumar Sharma, learned counsel for the respondents, were present at the time of hearing on admission.
The instant original application has been filed with following relief:
“i.This Hon’ble Tribunal may be pleased to quash and set aside the impugned order dated 01.06.2026 passed by respondent No 3 (Annexure No A-1)
ii.This Hon’ble Tribunal may be pleased to direct the respondents to not to make any recovery on implementation of the boards order dated 16.03.2004 in pursuance of orders dated 24.01.2023 and 26.06.2023 passed by respondent No 3.
iii.This Hon’ble Tribunal may be pleased to direct the respondents to not to make any recovery of allege excess payment and the applicants may be refunded back the recovered amount with interest.
iv.Any other relief, which this Hon’ble Tribunal may deem fit and proper in the circumstances of the case may be given in favour of the applicants.
v.Award the costs of the original application in favour of the applicant.”
The brief facts of the case as narrated in the OA are that the applicants are challenging the order dated 01.06.2026 passed by the respondent no 3 whereby the respondents have denied the applicants the benefit of extension of relief allowed by the Tribunal in Original Application No 611 of 2023 and Original Application No 746 of 2023 which the applicants claimed to be filed for the same cause of action as is operative in the instant case. The applicants are seeking quashing of the order dated 24.01.2023 and 26.06.2023 through which recovery of alleged overpayment / wrong payment made to the applicants by the respondents was initiated. Applicants have claimed that their case is covered by several judicial pronouncements and Circulars issued by DoPT from time to time and thus by way of this OA, they seek quashing of the aforesaid impugned orders thereby directing the respondents to not make any further recovery and refund the recovered money to the applicants along with interest.
Heard learned counsel for the parties on the issue of admission.
Disclosing a brief history of the case, learned counsel for the applicants submitted that the pursuant to the Railway Board letter dated 21.06.1990, the Section Engineers / Senior Section Engineers, supervising the staff working on the floor shop were allowed incentive bonus at a flat rate of 15% of their basic pay. Applicants are deployed in shop floor under different engineering departments and are allowed the incentive bonus in terms of the aforesaid Railway orders on the basis of their basic pay. Learned counsel argued that suddenly in the month of December 2021, some of the applicants learned through their respective pay slip(s) that a lump-sum amount of Rs. 5000/- recovered from their pay and allowances as over payment of incentive bonus. Respondents continued with the recovery and as such on 19.07.2022, a representation was submitted before the respondent no. 2 to stop the recovery of alleged excess payment. On 24.01.2023, the APO on behalf of respondent no. 2 issued letter informing that the recovery against the applicants / SSEs has been effected in compliance to board's letter dated 16.03.2004 towards excess payment of incentive bonus. In the meantime, a letter dated 26.06.2023 was also issued by the respondents for calculating the days for recovery against the applicants from 01.03.2004 to 30.06.2017.
Learned counsel for the applicants further argued that Railway board vide their letter dated 16.03.2004 laid down criteria for payment of incentive bonus which was effective from 01.03.2004. However, the BLW, an independent production unit of Indian railway has implemented the aforesaid board order only in the month of June 2021 and thus data of excess payment from July 2017 to May 2021 were collected and recovery for this period was imposed. Thus, there is no legitimacy in the action of the respondents for recovery from 01.03.2004 to 30.06.2021.
Learned counsel for the applicants further argued that no opportunity of hearing was granted to the applicants by the respondents before imposing such a recovery upon them. Further, the applicants belong to Group – C category of employees and therefore they are covered under the protection from recovery of alleged excess payment in view of the law laid down by the Apex Court in the case of Rafiq Masih reported in (2015) 2 Supreme Court cases (L&S) 33. Learned counsel further argued that in order to avail the benefit of incentive bonus, the applicants had not misrepresented or committed any fraud and even if there was an overpayment, the same was done on the part of the respondents for which the applicants cannot be held guilty and made to suffer at this belated stage. To substantiate their case further, learned counsel for the applicants placed reliance upon the judgment passed by the Hon'ble Supreme Court in the case of Rafiq Masih (supra), Judgment passed by the Hon'ble Supreme Court in the case of Amrit Lal Berry Vs CCE reported in 1975 2 SCC 714, and Judgment passed by the Hon'ble Supreme Court in the case of GC Ghosh Vs Union of India (1992) 19 ATC 94 SC dated 20.07.1988 and further argued to admit and allow the OA at this stage itself by setting aside the impugned orders.
Learned counsel for the respondents vehemently opposed the prayer of the applicants' counsel and argued that the recovery of the incentive bonus was made from the applicants after following the procedure prescribed under the law. Before initiating the recovery, the competent authority followed all the procedure, and vigilance department vide its letters dated 01.04.2021 and 07.04.2021 gave directions to the competent authority to follow the procedure and impose the recovery. Learned counsel further argued that it was incumbent upon the respondents to have recovered the excess amount paid to the applicants on account of overpayment and since all the requisite steps were taken at the end of the respondents, no illegality, infirmity or perversity can be attributed to this exercise. Learned counsel further argued the calculation sheet(s) in respect of all the applicants were made available to them and therefore, it cannot be said that the applicants were not in knowledge of this exercise. All the applicants were well aware of the fact that they have been erroneously overpaid and in all likelihood, recovery was inevitable. Learned counsel further argued that the case laws relied upon by the applicants' counsel do not hold any bearing to the instant controversy and no benefit whatsoever can be granted to the applicants in support of the same. Thus, prayer was made to dismiss the OA being devoid of merits.
I have considered the rival contentions and carefully perused the records as well as case laws relied upon.
Having carefully perused the records and considering the pleadings exchanged across the Bar, it is an admitted fact that no opportunity of hearing was given to the applicants before enforcing the order of recovery upon them. Further, no explanation was called from them nor were they properly handed over the calculation sheet(s) which may disclose that on what basis the recovery was made and other specifications with regard to the same. This was both inappropriate and uncalled for at the end of the respondents. Further, it is not disputed that the applicants belong to Group 'C' class of employees and thus there exists very little scope of recovering any amount from them which is alleged to be given as overpayment. Also, to avail the benefit of incentive bonus, the applicants had not misrepresented nor committed any fraud and the amount was paid to them by the respondents. Thus, there was no error committed on the part of the applicants for receiving the amount of incentive bonus and therefore, at this belated stage, they cannot be inflicted with a punishment of recovery especially when they belong to Group 'C' class of employees. This argument finds support from ratio laid down by the Apex Court in the case of Rafiq Masih (Supra) wherein it was held that:
"As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the concerned employee. If the effect of the recovery from the concerned employee would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i)Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii)Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii)Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv)Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v)In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
Thus, in view of the aforesaid quotation, it is evident that no recovery whatsoever was liable to be made from the applicants and respondents have erred in doing so. Thus, it would be in the fitness of things if this original application is allowed at this stage itself. Accordingly, OA No. 769 of 2026 is allowed at this stage itself for the discussions made above. The impugned orders dated 01.06.2026, 24.01.2023 and 26.06.2023 are quashed and set aside to the extent that Respondents are hereby directed to not make any recovery from the applicants consequent to the issuance of the aforesaid impugned orders and any amount which has already been recovered from the applicants shall be refunded to them within a period of three months from the date of receipt of certified copy of this order failing which the aforesaid payment shall attract simple interest @ GPF rate from the due date.
All associated MAs stand disposed of. No costs.