Recovery of excess pension from a retired employee is impermissible absent fraud or misrepresentation.

The applicant, a retired Charge Man of the West Central Railway, retired on 12 December 1991.

In March 2017, the Railway authorities informed his bank that he had been paid excess pension amounting to ₹1,22,898 and directed recovery of the amount in suitable instalments.

The alleged overpayment arose because an additional pension of ₹2,266 per month had been paid from October 2013, although the applicant’s date of birth in the Pension Payment Order was recorded as 7 December 1943, making him ineligible for the additional 20% pension.

The applicant contended that the excess payment resulted solely from departmental or bank error, without fraud, misrepresentation, concealment, or misconduct on his part, and that recovery from his pension would cause financial hardship.

The respondents relied, inter alia, on an undertaking allegedly given by the applicant authorising recovery of excess payments.

Recovery of the disputed amount was stayed during the proceedings.

1. Whether recovery of ₹1,22,898 from the applicant’s pension, representing alleged excess pension paid due to an administrative error, was legally permissible in the absence of fraud, misrepresentation, concealment, or misconduct by the applicant.

2. Whether recovery from a retired pensioner, particularly where the excess payment continued for several years and would cause undue financial hardship, was barred or rendered inequitable by the principles laid down in State of Punjab v. Rafiq Masih and Thomas Daniel v. State of Kerala.

The Tribunal applied the principles in State of Punjab & Ors. v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which recognise that recovery of excess payments may be impermissible in cases involving retired employees, payments continuing for more than five years, or recovery that would be harsh, inequitable, or disproportionate to the employer’s claim.

It further relied on Thomas Daniel v. State of Kerala & Ors., (2022) 1 SCC 260, which holds that excess pension paid due to an error attributable to the authorities should not ordinarily be recovered where the pensioner has not committed fraud or misrepresentation and recovery would cause undue hardship.

The governing principle is that an administrative or accounting error cannot ordinarily be shifted to an innocent pensioner where recovery would be inequitable.

The Tribunal found no material demonstrating that the applicant had furnished false information, suppressed any relevant fact, or misrepresented his entitlement.

The excess payment was made on the basis of the official pension records and resulted from an error attributable to the authorities or the disbursing bank.

Applying Rafiq Masih and Thomas Daniel, the Tribunal held that the applicant’s status as a retired pensioner, the prolonged period of excess payment since October 2013, and the absence of fraud or misrepresentation made recovery inequitable and unduly harsh.

The financial burden of the respondents’ error could not be imposed entirely upon the applicant merely because an undertaking concerning recovery had been obtained.

It quashed and set aside the recovery order dated 24 March 2017 directing recovery of ₹1,22,898 from the applicant’s pension.

The Original Application was accordingly allowed, with no order as to costs.