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2025 DIGILAW 869 (HP)

Kaushalya Devi v. Punjab National Bank

2025-05-01

JYOTSNA REWAL DUA

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JUDGMENT : Jyotsna Rewal Dua, J. Petitioner’s husband late Sh. Durga Ram Tanwar was an employee of National Academy of Audit and Accounts, Chaura Maidan, Shimla, H.P. He retired as Senior Auditor on 30.04.2011 on attaining the age of superannuation. After retirement of the petitioner’s husband, respondent-Bank (respondents No. 1 to 4) released pension to him under aspecific PPO number. All due retiral benefits were also released in his favour. Sh. Durga Ram Tanwar died on 01.12.2017. Petitioner brought this fact to the notice of the respondent-Bank and also furnished death certificate of her husband. Respondent-Bank approved and granted family pension to the petitioner being legally wedded wife of late Sh. Durga Ram Tanwar under a specific PPO number. Pension was continuously paid to the petitioner till 31.10.2023. Petitioner’s grievance is that for no rhyme and reason, respondent-Bank stopped releasing pension in her favour from the month of November 2023 onwards. No notice was ever issued to the petitioner for stopping the family pension. Hence, this petition. 2. Learned counsel for the respondents, on the basis of reply, does not dispute employment of petitioner’s late husband and his superannuation on 30.04.2011 as also the fact that pension was being paid to him till his death on 01.12.2017. According to the respondents, petitioner as legally wedded wife of late Sh. Durga Ram Tanwar, was erroneously paid full pension instead of family pension due to her. Upon a detailed scrutiny conducted by the Central Pension Processing Centre, it was discovered that the petitioner was entitled only to family pension, but instead had been paid full pension, resultantly there was an overpayment of Rs.5,75,993/- to her as full pension amount. This discrepancy was communicated to the respondents on 04.07.2024; Petitioner was also informed about overpayment made to her. On this account, recovery of the overpaid pension was to be made from her; Petitioner had also furnished her written consent, authorizing respondent-Bank to recover excess amount paid to her from her future pension payment. It is for this reason, petitioner’s pension has been stopped; Recovery of overpayment of Rs.5,75,993/- is still being effected form her monthly pension; The pension can be paid to her only after recovery of the entire overpaid amount. 3. It is for this reason, petitioner’s pension has been stopped; Recovery of overpayment of Rs.5,75,993/- is still being effected form her monthly pension; The pension can be paid to her only after recovery of the entire overpaid amount. 3. Respondents have placed on record an office memorandum dated 16.05.2018 issued by the Government of India, Ministry of Finance, Department of Expenditure, Central Pension Accounting Office on the subject ‘Recovery of Excess Payment made to the pensioner’. This office memorandum, inter-alia states that:- (i) As soon as the excess/wrong payment made to a pensioner comes to the notice of the paying branch, the branch should adjust the same against the amount standing to the credit of the pensioner's account to the extent possible including lump- sum arrears payment; (ii) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension payments to be made to the pensioners. For recovering the over-payment made to pensioner from his future pension payment in instalments 1/3rd of net (pension plus relief) payable each month may be recovered unless the pensioner concerned gives consent in writing to pay a higher instalment amount. In view of office memorandum dated 16.05.2018 action of respondent-Bank’s decision to completely stop releasing monthly pension to the petitioner, cannot be justified. In the given facts and circumstances of the case, respondent-Bank should have considered the desirability for recovering the overpayment made to the petitioner from her future pension payment in installments as per office memorandum dated 16.05.2018 instead of outrightly and completely stopping her monthly pension. The respondents are directed to issue necessary instructions to all concerned quarters for adherence to the aforesaid office memorandum, which is admittedly applicable to them. 4. The Hon’ble Apex Court in Jogeswar Sahoo & Ors Vs. District Judge, Cuttack & Ors, SLP (C) No. 5918/2024, decided on 04.05.2025 has held that excess payment made to an employee cannot be recovered if such payments were not on account of any misrepresentation or fraud on part of the employee. Also excess payment to the employee due to wrong application of rules and incorrect calculation on the part of the employer is also not recoverable. Also excess payment to the employee due to wrong application of rules and incorrect calculation on the part of the employer is also not recoverable. Hon’ble Apex Court also held that on the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in-service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. Relevant paras from the judgment are as under:- “11. In Col. B.J. Akkara (Retd.) v. Government of India, (2006) 11 SCC 709 this Court considered an identical question as under: “27. The last question to be considered is whether relief should be granted against the recovery of the excesspayments made on account of the wrong interpretation/understanding of the circular dated 7-6- 1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled. (a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. (b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous. 28. Such relief, restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery. 29. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery. 29. On the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in-service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. The petitioners are not guilty of any misrepresentation or fraud in regard to the excess payment. NPA was added to minimum pay, for purposes of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that the respondents shall not recover any excess payments made towards pension in pursuance of the circular dated 7-6-1999 till the issue of the clarificatory circular dated 11-9-2001. Insofar as any excess payment made after the circular dated 11-9-2001, obviously the Union of India will be entitled to recover the excess as the validity of the said circular has been upheld and as pensioners have been put on notice in regard to the wrong calculations earlier made.” 13. In State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse the employer and disallowed the same, exempting the beneficiary employees from such recovery. It was held thus: “8. 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 employee concerned. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from the employee concerned 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. xxxxxxxxx 18. 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 hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service). (ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery. (iii) Recovery from the 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.” In the instant case, respondents do not allege that petitioner was guilty of any fraud or misrepresentation, rather it is an admitted position that the petitioner had informed the respondent about death of her husband and for that reason, respondent had issued separate PPO, sanctioning family pension in her favour. At the same time, the petitioner has also not disputed that instead of her entitlement to family pension, the respondents had actually released her full pension. At the same time, the petitioner has also not disputed that instead of her entitlement to family pension, the respondents had actually released her full pension. Therefore, for balancing the equity and in view of law laid down in Jogeswar Sahoo2, it is directed that respondents will pay the family pension to the petitioner from the date when pension was denied to her. The respondents are forthwith directed to pay pension to the petitioner from the date withheld by them as per her legal entitlement (family pension). No recovery henceforth shall be effected from the petitioner on account of overpayment of Rs.5,75,993/- paid to her as full pension. In case on account of recovery effected by the respondents, the bank account of the petitioner has been frozen, the same shall also be activated. The writ petition stands disposed of in the above terms, so also the pending miscellaneous application(s), if any.