Pension calculation based on last pay drawn; no recovery of excess payment without employee fault.

The applicants, Tallo Ram, Romesh Kumar, and Vijay Kumar, were employees of the Jal Shakti (Public Health Engineering) Department, Union Territory of Jammu and Kashmir.

Tallo Ram and Romesh Kumar (Applicant Nos. 1 & 2) retired on March 31, 2024, as Assistant Motormen, while Vijay Kumar (Applicant No. 3) retired on April 30, 2022, as an Assistant Lineman.

During their service, they were granted benefits under SRO 149 of 1973 and SRO 59 of 1990, leading to a last drawn pay of ₹52,600/- for Applicant Nos. 1 and 2, and ₹49,600/- for Applicant No. 3.

However, the respondents refixed their pension at a reduced rate (₹17,700/- for Applicant Nos. 1 & 2, and ₹16,700/- for Applicant No. 3), ignoring their last drawn pay.

The respondents claimed that the benefit of SRO 59 of 1990 was erroneously extended and later withdrawn per Government Order No. 277-F dated June 6, 2018.

Consequently, their pension was refixed based on "legally admissible" pay, and gratuity was withheld due to alleged excess payments made during service.

The respondents referred to S.O. 129 dated March 28, 2022, enabling verification of pay emoluments beyond the limitation period due to withdrawn SRO benefits.

Whether the respondents were justified in reducing the pension of the applicants and withholding their gratuity by refixing their pay at the stage of retirement on the ground that the benefit earlier granted to them under SRO 59 of 1990 was erroneous?

Recovery of excess payment from employees who have retired or are due to retire shortly is impermissible if the excess payment was not due to any misrepresentation by the employee, as such recovery would be extremely harsh and arbitrary.

Where excess payment occurred due to the employer's mistake without the employee's fault, recovery should not be ordered, especially for retired or soon-to-be-retired employees.

Public employees' pension is a valuable right, not a bounty, to be calculated on the last pay drawn.

Higher pay scales granted without employee misrepresentation cannot be withdrawn with recovery.

The Tribunal analyzed that the applicants were granted higher pay scales by the department and drew salaries based on these fixations throughout their service, without any alleged fraud or misrepresentation on their part.

Applying the precedents from the Supreme Court, it found that the respondents' action of reducing pension and withholding gratuity based on an alleged erroneous benefit of SRO 59 of 1990, given at the time of retirement, was contrary to settled law.

The Tribunal underscored that pension is a vested right based on the last pay drawn.

Since there was no fault or misrepresentation attributable to the applicants, the recovery of alleged excess payments and the consequential reduction in pension were deemed impermissible and unsustainable.

The impugned Pension Payment Orders, specifically those fixing the applicants' pension at a rate lower than what was admissible based on their last drawn pay, were quashed.

The respondents were directed to refix the applicants' pension based on their last drawn pay, release withheld gratuity and all other retiral benefits, and pay arrears of pension and other consequential benefits arising from such refixation.

Crucially, the Tribunal ordered that no recovery shall be effected from the applicants on account of alleged excess payments made during their service.

This exercise is to be completed within 12 weeks.