1. The petitioner retired from the Indo-Tibetan Border Police1 in
1999. On the basis of the pay scale of ₹12,000-375-16,500/-, which
was being drawn by him at that time, he was sanctioned pension @
₹8,523/- w.e.f. 1 November 1999. We deem it appropriate to provide a
screen shot of the Pension Payment Order2 issued by the respondents
thus:
2. Subsequently, in 2006, consequent on the recommendation of
the 6th Central Pay Commission, the petitioner's pension was revised
to ₹20,955/-.
3. The petitioner continued to be paid the revised pension till
2016. In 2016, the respondents claim to have realised that, while re-
fixing his pension in 2006, the petitioner's pay scale have been
erroneously fixed, by treating his pay scale as ₹14,300-400-18,300/-
instead of ₹12,000-375-16,500/-. Accordingly, a decision was taken to
downwardly revise the petitioner's pension. Though no
communication was addressed to the petitioner by the respondents, the
respondents wrote to the Manager, Centralised Pension Processing
Centre, State Bank of India, on 21 September 2016, thus:
Last Pay Draw: NIL Qualifying Service (Y-M-D): 29-9-15
Name of spouse: PANDEY SMT JANKI Date Of Birth (Spouse):
12/07/1950
Revised Pension (Per Month)
1. REVISED BASIC PENSION: Rs.19264/- W.E.F.
01/JAN/2006
(Rupees Nineteen Thousand Two Hundred Sixty Four Only)
2. REVISED PENSION COMMUTED: Rs. 3409/-
(Rupees Three Thousand Four Hundred Nine Only)
3. REVISED REDUCED PENSION: Rs.15855/- W.E.F.:
01/JAN/2006
(Rupees Fifteen Thousand Eight Hundred Fifty Five Only)
4. AMOUNT OF DIFFERENTIAL COMMUTATION
PAYABLE: NO CHANGE
5. ADDITIONAL DEATH/RETIREMENT GRATUITY
PAYABLE: NO CHANGE
6. ADDITIONAL PENSION (80 YEARS AND ABOVE): AS
APPLICABLE
7. CONSTANT ATTENDANT ALLOWANCE: NIL
8. REVISED FAMILY PENSION
AT ENHANCED RATE: Rs.19264/- FROM: To: 07/NOV/2011
(Rupees Nineteen Thousand Two Hundred Sixty Four Only) AT
NORMAL RATE: Rs.12714/- FROM 08/NOV/2011 TO: TILL
DEATH/REMARRIAGE
(Rupees Twelve Thousand Seven Hundred Fourteen Only)
Note:
(a) Reduced Pension as per col. 3 will take effect from the date
CVP paid by PAO & differential commuted value is/was credited
into the pensioner's account by the bank. Commuted value of
pension will be restored after 15 years from the date of credit by
the Abnk or date of payment made by PAO.
(b) Pension/Provisional Pension, DA Relief etc., if paid may be
adjusted suitably.
(c) D.R to be allowed as admissible from time to time for people
who are not re-employed.
(d) 100% Pension/Family Pension arrear as per GOI order based on
6th CPC is payable. Revised Gratuity/Commutation Amount
should be paid in full based on this revision authority.
(e) Please see reverse for other guidelines for banks and
pensioners.
(f) None
Yours Faithfully
Pay & Accounts Officer"
4. Aggrieved by the aforesaid communication, the petitioner has
approached this Court by means of the present writ petition. As it
transpires, even before the writ petition was filed, an amount of
₹1,71,500/- had already been recovered from the petitioner. A further
amount of ₹1,64,922/- was also recovered from the petitioner.
Consequent to order dated 9 January 2018, the amount of ₹1,64,922/-
stands returned to the petitioner with interest. An amount of
₹1,71,500/- which was recovered prior to the petitioner approaching
the Court is still remaining with the respondents.
5. The petitioner, in the writ petition, has challenged the decision
of the respondents to effect recoveries from the petitioner's pension.
6. We have heard Mr. Sudeep Singh, learned Counsel for the
petitioner and Ms. Sangeeta Rai, learned Senior Panel Counsel for the
Union of India at some length.
7. The issue in controversy is no longer res integra, as it stands
settled by the judgment of the Supreme Court in State of Punjab v
Rafiq Masih (White Washer)3. Prior to the decision in Rafiq Masih,
the department have been effecting recoveries on the basis of the
earlier judgment of the Supreme Court in Chandi Prasad Uniyal v
State of Uttarakhand4. The Supreme Court took into account the said
decision as well as several other judgments, including Shyam Babu
Verma v UOI5, Sahib Ram v State of Haryana6, and ultimately
identify certain situations in which recoveries would not be
permissible. Para 18 of the judgment of the Supreme Court in Rafiq
Masih, which so holds reads as under:
"18. It is not possible to postulate all situations of hardship
which would govern employees on the issue of recovery, where
payments have mistakenly been made by the employer, in excess
of their entitlement. Be that as it may, based on the decisions
referred to hereinabove, we may, as a ready reference, summarise
the following few situations, wherein recoveries by the employers,
would be impermissible in law:
(i) Recovery from the employees belonging to Class III and
Class IV service (or Group C and Group D service).
(ii) Recovery from the retired employees, or the employees
who are due to retire within one year, of the order of
recovery.
(iii) Recovery from the employees, when the excess
payment has been made for a period in excess of five years,
before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully
been required to discharge duties of a higher post, and has
been paid accordingly, even though he should have
rightfully been required to work against an inferior post.
(v) In any other case, where the court arrives at the
conclusion, that recovery if made from the employee,
3 (2015) 4 SCC 334
4 (2012) 8 SCC 417
5 (1994) 2 SCC 521
6 1995 Supp (1) SCC 18
would be iniquitous or harsh or arbitrary to such an extent,
as would far outweigh the equitable balance of the
employer's right to recover."
8. The rigour of para 18 of the judgment of Rafiq Masih has
subsequently been diluted in High Court of Punjab and Haryana v
Jagdev Singh7, on which Ms. Rai relies. Ms. Rai has drawn our
attention to paras 10 and 11 of the judgment in Jagdev Singh, which
read thus:
"10. In State of Punjab v. Rafiq Masih this Court held that while
it is not possible to postulate all situations of hardship where
payments have mistakenly been made by an employer, in the
following situations, a recovery by the employer would be
impermissible in law:
(i) Recovery from employees belonging to Class III and
Class IV service (or Group C and Group D service).
(ii) Recovery from retired employees, or employees who
are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment
has been made for a period in excess of five years, before
the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully
been required to discharge duties of a higher post, and has
been paid accordingly, even though he should have
rightfully been required to work against an inferior post.
(v) In any other case, where the Court arrives at the
conclusion, that recovery if made from the employee,
would be iniquitous or harsh or arbitrary to such an extent,
as would far outweigh the equitable balance of the
employer's right to recover.
(emphasis supplied)
11. The principle enunciated in Proposition (ii) above cannot
apply to a situation such as in the present case. In the present case,
the officer to whom the payment was made in the first instance was
clearly placed on notice that any payment found to have been made
7 (2016) 14 SCC 267
in excess would be required to be refunded. The officer furnished
an undertaking while opting for the revised pay scale. He is bound
by the undertaking."
9. Clearly, from paras 10 and 11 of Jagdev Singh, the Supreme
Court has carved out an exception to the proposition (ii) in para 18 of
Rafiq Masih, which dealt with permissibility of recovery from retiral
benefits. The Supreme Court has held that, in a case in which the
officer concerned was put on notice, at the time of the allegedly
erroneous fixation of pay, recovery might be possible at a subsequent
stage if the fixation was found to be erroneous, or where the officer
subscribed to an undertaking to the said effect at that point of time,
recovery would be permissible and the officer would not be protected
by clause (ii) in para 18 of the decision in Rafiq Masih.
10. The only other circumstance in which the rigour of Rafiq Masih
is diluted is where the officer is itself complicit in ensuring that higher
pay, which was not due to him, was drawn by him, and is therefore
guilty of fraud, which exception has been noticed in Thomas Daniel v
State of Kerala8 which otherwise reiterates Rafiq Masih.
11. Ms. Rai seeks to rely on the undertaking in the PPO of which
the screenshot has been provided in para 1, to contend that recovery
from the petitioner was permissible.
12. We are unable to agree with Ms. Rai for more than one reason.
13. Firstly, the undertaking largely comprises of blanks. There is no
8 2022 SCC OnLine SC 536
mention of the amount involved. All that is contained is a signature at
the foot of the undertaking. The undertaking, therefore, is no
undertaking at all in the eyes of law.
14. Secondly, even if it were to be presumed that the aforesaid
undertaking was valid, it applies only at the stage when the pension of
the petitioner was fixed in 1999. It does not operate in perpetuity. The
petitioner never gave an undertaking that, for all times to come
thereafter, if any re-fixation of pension took place and was found to be
erroneous, he would be agreeable to recoveries.
15. Thirdly, at the time when the allegedly erroneous re-fixation of
pension took place in 2006, the petitioner did not subscribe to any
such undertaking. Para 11 of Jagdev Singh is clear. It applies only
where at the time of re-fixation of pay, the employee concerned
subscribes to an undertaking expressing his consent to recovery in the
event of the fixation being found to be erroneous at a later point in
time.
16. For all these reasons, we are of the opinion that the respondents
cannot rely on the decision in Jagdev Singh to justify its decision to
effect recoveries from the petitioner.
17. The case, therefore, squarely falls within circumstance (ii) in
para 18 of Rafiq Masih.
18. The petitioner is, therefore, entitled to succeed.
19. Accordingly, the decision to effect recoveries from the
petitioner's pension and the communication dated 21 September 2016
addressed to the Bank by the respondents in that regard are quashed
and set aside.
20. The amount of ₹1,71,500/- if not paid within a period of four
weeks from today shall entail interest at the rate of 8% per annum
from the date on which it was recovered till the date of actual
payment.
21. The writ petition stands allowed in the aforesaid terms.
C. HARI SHANKAR, J.
AJAY DIGPAUL, J.
APRIL 28, 2025/aky
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