Recovery of excess payments made over five years earlier from retired Class III employees is impermissible.

The petitioner was appointed as a Head Master, subsequently promoted as a Lecturer, and later retired upon attaining the age of superannuation.

The respondents passed recovery orders dated 9 September 2013 and 15 January 2014, seeking recovery of ₹1,20,302 allegedly paid in excess during the period 1997–2005. The recovery was reflected in a Pension Payment Order dated 31 August 2018.

The petitioner contended that his pay was retrospectively reduced and recovery was ordered without prior notice or an opportunity of hearing, and that there was no allegation of fraud, misrepresentation, or suppression on his part.

The respondents justified the recovery on the basis of an objection raised by the District Pension Officer during scrutiny of the petitioner’s pension case.

Whether recovery of alleged excess payment from the petitioner’s retiral dues, after retirement and without issuing notice or affording an opportunity of hearing, violated the principles of natural justice.

Whether recovery of excess payment made during 1997–2005 was impermissible under the principles laid down in State of Punjab v. Rafiq Masih (White Washer), particularly where the petitioner was treated as a Class-III employee and the recovery was sought after retirement.

The Court applied the principles of natural justice, holding that an adverse order affecting retiral benefits cannot ordinarily be passed without notice and an opportunity of hearing.

It relied principally on State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which identifies circumstances in which recovery of excess payments is impermissible, including recovery from Class-III or Class-IV employees, recovery from retired employees or employees nearing retirement, and recovery of payments made more than five years before the recovery order; recovery is also barred where it would be inequitable, harsh, or arbitrary.

The Court further recognised that recovery may be sustainable where the employee obtained the benefit through fraud, misrepresentation, or suppression of material facts, but found no such circumstance in the present case.

The Court found that the petitioner had retired and that the respondents had retrospectively reduced his pay and ordered recovery of ₹1,20,302 without issuing any notice or granting a hearing.

There was no material showing that the petitioner had secured the alleged excess payment through fraud, misrepresentation, or suppression, nor was the excess payment attributable to any fault on his part.

Since the amount had allegedly been paid between 1997 and 2005, the recovery was sought several years after the payments, and the petitioner was treated by the Court as a Class-III employee who had already retired. The case therefore fell within categories (i), (ii), and (iii) of Rafiq Masih, making the recovery impermissible.

The absence of procedural fairness independently rendered the recovery orders unsustainable.

The respondents were directed to refund the entire amount sought to be recovered, or already recovered, within three months from the date of production of a certified copy of the judgment.

The writ petition was accordingly disposed of.