Recovery from retired employees for excess payments made over five years prior is legally impermissible.

The petitioner retired from the post of Principal, Higher Secondary School No. 2, Datia on 31/01/2022

Following his retirement, the District Pension Officer proposed a recovery of Rs. 5,58,933/- in the Pension Payment Order (PPO) dated 27/04/2022

Consequently, the Block Development Officer issued an order on 23/05/2022 directing the recovery of said amount from the petitioner’s gratuity based on alleged excess payments made due to incorrect salary fixation dating back to 2014

The petitioner challenged this recovery on grounds of procedural irregularity and violation of established judicial precedents

Despite multiple opportunities, the State failed to file a reply

1. Whether the recovery of excess payments from the retiral benefits of a retired employee is permissible under the law

2. Whether the impugned recovery order is sustainable given the lack of prior notice and the fact that the underlying payments were made more than five years prior to the recovery order

The Court primarily applied the principles laid down by the Supreme Court in State of Punjab & Ors. v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recoveries from retired employees, or those due to retire within one year, and recoveries involving payments made in excess of five years before the order of recovery is issued

The Court also applied the Principle of Natural Justice, specifically the right to a fair hearing (audi alteram partem), regarding the necessity of serving notice before adverse actions

The Court observed that the respondents failed to issue a notice to the petitioner before directing the recovery, thereby violating the principles of natural justice

Applying the Rafiq Masih guidelines, the Court noted that the petitioner was a retired employee at the time of the order and the recovery related to payments starting from July 2014—approximately eight years prior to retirement—falling squarely within the prohibited categories specified by the Apex Court

Furthermore, the Court noted that the respondents failed to provide a clear justification or record showing how the "excess" occurred, rendering the recovery iniquitous and arbitrary

The respondents were directed to refund the recovered amount of Rs. 5,58,933/- to the petitioner with 6% interest per annum from 01/02/2022 until the date of payment, to be completed within 90 days. Additionally, the Court directed the Principal Registrar to report the negligence of the State officials in failing to file a reply to the Commissioner of School Education for necessary action