Pension and retirement benefits must reflect the corrected last basic pay, with excess recoveries refunded.

The petitioner was appointed as a Health Worker (Female) on 17 March 1988 and received financial upgradations during her service.

After noticing that a junior colleague was drawing higher pay, she obtained pay stepping-up.

She was later granted ad hoc promotion and retired on 30 November 2023.

At retirement, the State calculated her last basic pay as ₹64,500 and released leave encashment and provisional pension on that basis.

The Accountant General subsequently proposed refixing her last basic pay at ₹59,000 and recovering the alleged excess payment, contending that stepping-up was not admissible because the junior had received three upgradations while the petitioner had received only two.

The State later revised its calculation, stating that the petitioner was entitled to a last basic pay of ₹66,400 after the applicable financial upgradations.

Whether the petitioner’s pension and retirement benefits were to be calculated on a last basic pay of ₹66,400 rather than ₹64,500 or ₹59,000.

Whether the impugned proposed recovery of excess leave salary, and the related pay-refixation communication, could stand in light of the State’s revised calculation.

The judgment cites no statute, rule, or judicial precedent as the basis for its decision.

The Court resolved the dispute on the State respondents’ revised pay-fixation calculation, which stated that the petitioner was entitled to a last basic pay of ₹66,400, and directed that her pension and related retirement benefits be determined accordingly.

The Accountant General had objected to the earlier pay stepping-up, but the State respondents subsequently revisited the petitioner’s pay fixation and submitted that her correct last basic pay was ₹66,400.

The parties’ submissions supported disposing of the petition on that revised basis.

Accordingly, the Court directed the respondents to fix pension using ₹66,400 as the last basic pay, release any arrears of leave encashment and gratuity, return any amount already recovered, and make no further recovery.

Any amount already recovered was to be returned, and no further recovery was permitted.

Respondent No. 5 was directed to issue a fresh PPO, with the exercise to be completed within two months of receiving the judgment.

The Accountant General’s letter dated 6 August 2024 and the CMO’s memorandum dated 29 November 2025 were quashed.