BSNL Retiree Keeps Pay-Recovery Refund; P&H HC Says Retirement Undertaking Covered Pension, Not Earlier Pay Fixation

Respondent No. 1’s pay was refixed downward shortly before his voluntary retirement on 31.01.2020, and the petitioners sought to recover alleged excess payments from his retiral benefits.

The benefit in question had been extended to him from 2002 and continued during his service; the pay was refixed without notice or an opportunity to be heard

The Central Administrative Tribunal held the recovery impermissible and directed refund of the amount recovered.

BSNL and the other petitioners challenged that order, relying, among other things, on an undertaking signed by respondent No. 1 at retirement.

The principles of natural justice require an employee to be afforded an opportunity of hearing before an adverse order affecting his financial interests is made; the Court relied on Chamoli District Co-operative Bank Ltd. v. Raghunath Singh Rana and M/s Daffodills Pharmaceuticals Ltd. v. State of U.P.

Under State of Punjab v. Rafiq Masih (White Washer), recovery of excess payments may be impermissible in specified circumstances, including where the employee is retired or near retirement.

Thomas Daniel v. State of Kerala states that, absent employee fraud or misrepresentation, recovery of excess payment made through the employer’s error is generally not permissible, subject to the court’s discretion on the facts.

The Court distinguished High Court of Punjab and Haryana v. Jagdev Singh and Dr. M.K. Ravi Verma v. National Institute of Technology, holding that the undertaking signed at retirement did not extend to service benefits previously paid; it applied to pensionary benefits if wrongly calculated and paid.

The pay refixation and proposed recovery adversely affected respondent No. 1’s financial interests, but the petitioners acted without giving him a hearing.

The benefit had been paid over a lengthy period, and the impugned action came shortly before retirement; the Court therefore upheld the Tribunal’s reliance on the rule against recovery from an employee who is retired or near retirement.

Further, the undertaking was furnished at retirement, not when the benefit was extended in 2002.

On its terms, it concerned wrongly calculated pensionary benefits and did not authorize recovery of prior service benefits through unilateral pay refixation.

The cited undertaking therefore did not bring the case within Jagdev Singh or Dr. M.K. Ravi Verma.

Finding no ground to interfere with the Tribunal’s order, the Court dismissed the writ petition; pending miscellaneous applications were also disposed of.