Banks may recover excess family pension payments made due to their own administrative error.

Late Shivnath Tantubai, a Railway employee, died in service on 08.02.2006. His first wife had predeceased him, leaving two unmarried daughters; he subsequently married the applicant, Smt. Alpana Tantubai, in 1994, and had another daughter, Anita, from that marriage.

After his death, enhanced family pension was distributed between the applicant and the surviving unmarried daughter of the first wife. When the elder daughter entered Railway service, her share was transferred to her younger sister, Sunita Tantubai.

After Sunita’s marriage on 26.02.2019, the applicant sought sanction of the full family pension. The applicant and Sunita surrendered their earlier PPOs, after which the Bank of India detected alleged excess payments of Rs. 4,42,258/- to the applicant and Rs. 3,60,927/- to Sunita, and initiated recovery proceedings.

Sunita deposited Rs. 2,43,255/-, whereas the applicant declined to refund the alleged excess amount.

The Tribunal had earlier restrained further recovery from the applicant’s pension pending adjudication.

Whether the Bank of India could recover the alleged excess family pension of Rs. 4,42,258/- paid to the applicant due to an error in pension processing.

Whether the principles laid down in State of Punjab v. Rafiq Masih prohibited recovery of the excess family pension from the applicant.

Whether the applicant was entitled to the claimed full family pension, arrears, interest, and refund/non-recovery of deductions.

The Tribunal applied the principles in State of Punjab & Ors. v. Rafiq Masih, which identify circumstances in which recovery of excess payments is impermissible, including recovery from Class III/Class IV employees, retired employees or those nearing retirement, recovery relating to payments made for more than five years, and recovery that is inequitable, harsh, or arbitrary.

The Tribunal held that those principles were directed against recovery by Government departments and did not govern the present case, where the excess payment was made by the Bank of India due to its own processing error.

It further applied the principle that a pensioner who has received an amount exceeding her lawful entitlement may be required to refund it, particularly where she has not voluntarily returned the excess amount.

The Tribunal distinguished Rafiq Masih on the ground that the impugned recovery was not an administrative recovery by the Railway authorities from an employee’s salary or pension, but recovery by the Bank of India of an excess amount paid by the Bank itself due to an error.

The applicant had received Rs. 4,42,258/- beyond her entitlement and had not voluntarily refunded it, unlike Sunita, who had made a partial deposit.

Accordingly, the hardship-based restrictions on recovery in Rafiq Masih were held inapplicable, and the Bank was considered entitled to recover the excess amount from the applicant’s family pension.

The Tribunal did not grant the applicant’s separate claim for full family pension, arrears, interest, or refund of deductions, and dismissed the application in its entirety.

The Bank of India was permitted to recover Rs. 4,42,258/- from the applicant’s family pension.

The Original Application, including the claims for full family pension, arrears, interest, and refund/non-recovery of deductions, was dismissed without costs.