Recovery of excess payments from retired employees is impermissible under settled law.

The petitioner, an Agriculture Development Officer (Cadre-III), retired from service on 31 October 2005.

His pension was initially fixed on the basis of his last pay drawn at ₹6,250, and a PPO was issued on 8 November 2006.

Subsequently, he was granted the benefit of time-scale/Kramonnati with effect from 1 March 1984, and his pay was fixed in the scale of ₹4,500–125–7,000.

Pursuant to the Fifth Pay Commission, his pay was thereafter fixed at ₹5,200 + ₹264 personal pay with effect from 1 June 1998.

When the petitioner sought consequential monetary and pensionary benefits, the respondents, by orders dated 23 and 24 September 2016, cancelled the earlier fixation, refixed the pay at ₹5,200 + ₹115 personal pay, and directed recovery of the alleged excess payment from his pension.

The petitioner challenged these orders, principally on the ground that recovery was ordered after retirement and without notice or hearing.

Whether the respondents could order recovery of alleged excess payment from the petitioner after his retirement.

Whether the impugned orders dated 23 and 24 September 2016 directing cancellation of the earlier pay fixation and recovery of the alleged excess amount were legally sustainable.

The Court exercised its jurisdiction under Article 226 of the Constitution of India.

It primarily applied the Supreme Court’s decision in State of Punjab & Others v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which holds that recovery of excess payments is impermissible in specified situations, including recovery from retired employees or employees due to retire within one year of the recovery order, and where recovery would be inequitable, harsh, or arbitrary.

The Court treated the prohibition on recovery from retired employees under paragraph 18(ii) of Rafiq Masih as directly applicable to the petitioner’s case.

Although the State contended that the earlier pay fixation was erroneous and that recovery merely followed its correction, the Court focused on the petitioner’s status as a retired employee at the time of recovery.

The petitioner had retired on 31 October 2005, whereas the impugned recovery orders were issued on 23 and 24 September 2016, more than a decade later.

This brought the case squarely within category (ii) identified in paragraph 18 of Rafiq Masih, which prohibits recovery from retired employees.

Consequently, the alleged correctness or otherwise of the revised pay fixation could not justify recovery from the petitioner’s pension in the circumstances of the case.

The respondents were directed to refund any amount already recovered within three months from production of a certified copy of the judgment.

In case of delay beyond that period, the refunded amount would carry interest at 6% per annum.