Recovery of excess payment from retired employee due to decade-old pay fixation error held impermissible.

The petitioner, initially appointed as an Inspector in the Commercial Tax Department in 1979 and later promoted to Commercial Tax Officer, retired from service on 31.07.2014.

Post-retirement, a 90% provisional pension was sanctioned. During the process of issuing the Pension Payment Order (PPO), a No Objection Certificate (NOC) was issued on 10.06.2015.

On 13.04.2016, the respondents issued an order withholding the PPO and directing a recovery of ₹1,86,235/- based on an alleged excess payment resulting from a wrong additional increment of ₹50/- granted thirty years prior, in 1986.

The petitioner challenged this recovery by filing a writ petition under Article 226 of the Constitution of India.

1. Whether the recovery of excess payments made due to administrative error can be effected from a retired employee after a significant lapse of time.

2. Whether the impugned order dated 13.04.2016 directing recovery and withholding the PPO is legally sustainable.

The Court primarily applied the principles laid down by the Hon’ble Supreme Court in State of Punjab & Others v. Rafiq Masih (White Washer) & Others (2015), which established that recovery from retired employees or recovery of payments made in excess of five years before the recovery order is impermissible in law.

It further relied on the Full Bench decision of the Madhya Pradesh High Court in State of M.P. & Others v. Jagdish Prasad Dubey (2024), which held that recoveries cannot be made from pensionary benefits for increments granted decades ago, and that "forced undertakings" obtained at the time of pay refixation are unenforceable.

The Court observed that the excess payment originated from a 1986 increment, nearly 30 years prior to the recovery order.

It noted that there was no allegation of fraud or misrepresentation on the part of the petitioner; the error was solely committed by the respondents in pay fixation.

Applying the Rafiq Masih criteria, the Court found that the petitioner fell under protected categories: he was a retired employee (Clause ii) and the excess payment sought to be recovered was made more than five years prior to the order (Clause iii).

Under the Jagdish Prasad Dubey precedent, the Court reasoned that recovery after such a long duration is iniquitous and arbitrary, outweighing the employer's right to recover.

The Court quashed the order dated 13.04.2016 (Annexure-P/4) and directed the respondents to refund any amount already recovered and pay all due pensionary benefits within three months.