Is it permissible to take money from the indebted person (gharim) – who had received it from zakat funds to pay off his debt – after his circumstances have improved, or must it be refused and he be informed that it was his, or should it be spent on other zakat beneficiaries?

The Zakat has been disbursed appropriately, and the givers of Zakat have been absolved of their obligation. This individual is not required to repay you the debt he owed, as his obligation has been fulfilled through the payment from Zakat funds. He received the money rightfully because he is among those eligible for Zakat. He is not obligated to return it, nor should anything be taken from him to be spent on other Zakat categories.