Recovery of excess pension payments from retired Group ‘C’ employees is impermissible absent fraud or misrepresentation.

The applicant was appointed as an Apprentice Assistant Driver in 1992 and was subsequently promoted to various posts, ultimately serving as Chief Loco Inspector.

His voluntary retirement was accepted with effect from 30.04.2024.

At the time of retirement, his pensionary benefits were calculated by applying 30% of the pay element, and PPO No. 20247320400093 was issued on 18.06.2024.

The respondents later contended that, under the applicable Railway Board instructions, the pension should have been calculated by applying 21% of the pay element because the applicant had completed seven years as Chief Loco Inspector.

The PPO was accordingly revised, and the respondents alleged that an excess amount of ₹1,97,317 had been paid.

By letter dated 03.04.2025, issued after the applicant’s retirement, the respondents directed him to deposit the alleged excess amount and threatened recovery from his pension in default.

The applicant challenged the recovery under Section 19 of the Administrative Tribunals Act, 1985, contending that the excess payment resulted from the respondents’ clerical error and involved no fraud, misrepresentation, or concealment on his part.

1. Whether the respondents could recover ₹1,97,317 from the applicant’s pension or pensionary benefits when the excess payment was allegedly caused by the respondents’ clerical error and there was no fraud, misrepresentation, or concealment by the applicant.

2. Whether recovery was impermissible in view of the applicant’s status as a retired Group ‘C’ employee.

3. Whether the respondents could rely on High Court of Punjab and Haryana v. Jagdev Singh to sustain the recovery in the absence of a specific undertaking by the applicant to refund any excess payment.

The Tribunal exercised jurisdiction under Section 19 of the Administrative Tribunals Act, 1985.

It applied the principles in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, under which recovery of excess payments is generally impermissible from Group ‘C’ and Group ‘D’ employees, retired employees, or where recovery would be inequitable, harsh, or arbitrary, particularly when the excess payment resulted from the employer’s mistake and not from the employee’s fraud or misrepresentation.

It further relied on Thomas Daniel v. State of Kerala, (2022) 5 SCC 470, which holds that excess payments caused by the employer’s wrong method of calculation or erroneous interpretation of rules are ordinarily not recoverable absent fraud or misrepresentation, subject to the court’s equitable discretion where the employee knew of the excess or the error was corrected within a short period.

The Tribunal distinguished High Court of Punjab and Haryana v. Jagdev Singh, (2016) 14 SCC 267, which permits recovery where the employee had furnished a specific undertaking to refund excess payments.

The Tribunal found that the applicant had retired on 30.04.2024, whereas the recovery order was issued on 03.04.2025, and that he belonged to Group ‘C’ service.

The respondents themselves attributed the excess payment to a clerical error in calculating the pensionary benefits; there was no allegation or evidence that the applicant had made any misrepresentation, concealed facts, participated in the calculation, or knew that the payment was excessive.

Applying Rafiq Masih and Thomas Daniel, the Tribunal held that recovery from a retired Group ‘C’ employee, where the overpayment resulted solely from the employer’s mistake, would cause undue hardship and would be inequitable.

Although the respondents could correct the pension calculation prospectively in accordance with the Railway Board instructions, those instructions did not independently authorise recovery of amounts already paid in circumstances covered by the Supreme Court’s equitable restrictions.

Jagdev Singh was held inapplicable because that case involved a specific refund undertaking and concerned a Group ‘A’/‘B’ officer, whereas no such undertaking was established against the applicant.

The Original Application was allowed, and the order dated 03.04.2025 was quashed.

The respondents were restrained from recovering the amount from the applicant’s pension or pensionary benefits.

If any amount had already been recovered, it was directed to be refunded within three months; failure to do so would attract simple interest at 6% per annum from expiry of the three-month period until payment.

The respondents were, however, permitted to investigate the administrative error and fix responsibility against the officials concerned in accordance with law and after following the prescribed procedure.

There was no order as to costs.