Recovery from Retired Class-III and IV Employees Is Legally Impermissible Absent Evidence of Misrepresentation or Fraud

Applicant No. 1 sought the fixation of his pension in terms of SRO-59, while Applicant No. 2 challenged the ongoing illegal recovery/deductions from his pension.

Applicant No. 2 had previously obtained a stay on recoveries in O.A. No. 1531/2021, yet the respondents allegedly continued deductions without a formal order or hearing.

The respondents contended that SRO-59 of 1990 was withdrawn in 1996 and maintained their authority to correct erroneous pay fixations.

1. Whether the respondents can legally effect recoveries from the pension of retired Group ‘C’ and ‘D’ employees due to an alleged error in pay fixation.

2. Whether the respondents are required to process the fixation of pension in accordance with applicable SROs and circulars without violating principles of natural justice.

Principle established by the Hon’ble Supreme Court in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which prohibits recovery from retired employees or Class-III/IV employees when excess payment was not due to the employee's fraud or misrepresentation.

Sita Ram & Ors. v. UT of J&K (2025) and Deshbir Singh v. UT of J&K (2022), which affirm that while the State may re-fix or correct a pay/pension error, it cannot recover amounts already paid to such employees.

The Tribunal examined the settled legal position that recovery from retired personnel is impermissible in law if the excess payment resulted from a departmental error rather than employee misconduct.

The court noted that even though the State possesses the power to review and re-fix pension/pay to correct technical errors, this power does not extend to retrospective recovery of disbursed funds from vulnerable groups like retirees.

The Tribunal found that the applicants' case fell squarely within the protective ambit of Rafiq Masih, as the respondents failed to show any misrepresentation by the applicants.

The Tribunal disposed of the O.A. by directing the respondents to treat the application as a representation and pass a reasoned order within eight weeks, ensuring no further recovery is effected from Applicant No. 2's benefits and finalizing Applicant No. 1's pension fixation in accordance with the law.