This judgment from the Patna High Court, Civil Writ Jurisdiction Case No. 19435 of 2019, addresses a poignant issue faced by many pensioners and their families: the recovery of alleged "excess" pension payments, often years after they have been received. The case, presided over by Honourable Mr. Justice Harish Kumar and delivered on September 3, 2024, delves into the complexities of pension disbursal, the role of banks as disbursing agencies, and the delicate balance between recovering public money and preventing hardship to vulnerable individuals. Ultimately, the Court dismissed the petition, allowing the recovery to proceed, but with a crucial caveat for sympathetic consideration.
The Petitioner's Plight: A Widow's Unexpected Debt
The petitioner, Lalita Mishra, is the widow of Late Bhuban Mohan Mishra, who had served as an Auditor and took voluntary retirement on medical grounds in 1998. Upon his superannuation, Mr. Mishra was granted a pension of Rs. 3502/- per month for life, and his wife, Lalita Mishra, was entitled to a family pension at an enhanced rate for seven years after his death, followed by a normal family pension.
Tragically, Mr. Mishra passed away on September 27, 2002. Following his demise, the concerned Sri Krishnapuri Branch of the State Bank of India (SBI) endorsed his death in the Pension Payment Order (PPO) and began paying the enhanced family pension to Lalita Mishra for seven years, and thereafter, the normal family pension. She had been receiving this pension regularly for over 16 years.
However, in a shocking turn of events, on January 11, 2019, Lalita Mishra received a letter from the Assistant General Manager, Centralized Pension Processing Centre (CPPC), SBI, informing her that she had been paid an excess amount of Rs. 8,63,388/-. The letter stated that this amount was recoverable by the Bank and needed to be refunded to the government, as it constituted public money. A legal notice followed, threatening recovery from her account.
The Bank's Stance: Misrepresentation and Public Money
The Bank's primary contention was that the excess payment occurred because the petitioner had allegedly not reported her husband's death and had, on the contrary, submitted his life certificate every year, leading to the continued payment of his regular pension until December 2018, instead of the family pension. Consequently, the Bank initiated recovery, deducting Rs. 4,400/- monthly from her family pension starting January 2019.
The Petitioner's Defense: Bank's Carelessness and Legal Precedents
Lalita Mishra, through her advocate, denied the Bank's allegations, asserting that she had always submitted her own life certificate along with her Aadhaar Card and other required documents, and that the alleged excess payment, if any, was due to the Bank's "sheer carelessness." She also pointed out anomalies in the Bank's calculation of the excess amount.
Crucially, the petitioner relied on Clause 103.2 of the Payment of Defence Pension Instruction, 2013, which states:
"Overpayments of pensions not detected within 12 months of the date of the first erroneous charge should not be recovered from the pensioner's dues without the orders of the Principal Controller of Defence Accounts (Pensions)."
She further cited a decision of the Patna High Court in Kalawati Devi v. The Union of India and Others (CWJC No. 4050 of 2019), which, relying on the Supreme Court's landmark judgment in State of Punjab v. Rafiq Masih (2015), had quashed a similar recovery order. The Rafiq Masih case generally provides protection against the recovery of excess payments from employees, especially those who have retired, unless there was fraud or misrepresentation on their part.
Additionally, the petitioner invoked Paras Nath Singh v. The State of Bihar and Others (2009), which suggested a lenient view in cases of illiterate persons not understanding undertakings, particularly in the absence of fraud.
The Bank's Counter-Arguments: Master Circulars and Undertakings
The State Bank of India, through its counsel, defended its actions by citing Master Circular No. RBI/2018-19/1 DGBA.GBD.No.-1/31.02.007/2018-19 dated July 2, 2018, and other instructions from the Reserve Bank of India (RBI). They argued that these circulars clearly stipulate provisions for the recovery of excess/wrong payments. The Bank emphasized that the excess amount was "public money" and that the Bank, acting as a "Pension Disbursing Agency," was bound to follow RBI instructions.
The Bank also highlighted that a retiring government servant/pensioner is required to submit an undertaking before pension commencement, agreeing that any excess payment can be recovered. In this context, they cited the Supreme Court's decision in Court of Punjab and Haryana and Others v. Jagdev Singh (2016), which held that if an officer was clearly put on notice about potential recovery of excess payments and furnished an undertaking, they are bound by it.
The Bank further distinguished the Kalawati Devi case, stating that the relevant Master Circulars and RBI instructions were not brought to the Court's attention in that instance. They also referred to other High Court decisions that supported the recovery of excess payments.
The High Court's Deliberation: Balancing Equity and Public Money
Honourable Mr. Justice Harish Kumar meticulously examined the arguments and the relevant legal provisions and precedents.
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Interpretation of Instruction, 2013: The Court first analyzed Clause 103.2 of the Payment of Defence Pension Instruction, 2013. It observed that this clause "does not forbid the recovery rather it prescribes the provision for recovery, but after the order of the Principal Controller of Defence Accounts (Pensions), if the overpayments is not detected within 12 months of the date of first erroneous charge." This implied that while an order from the PCDA (Pensions) is required for recovery of overpayments not detected within 12 months, the recovery itself is not prohibited.
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Role of the Bank: The Court clarified that the Bank's role is limited to drawing and disbursing pension based on authority letters. There is no employer-employee relationship between the Bank and the pensioner. The Bank's functions are governed by Master Circulars issued by higher authorities, which empower it to recover excess amounts paid due to mistake or miscalculation, after proper notice.
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Supreme Court Precedents on Recovery: The Court then delved into the Supreme Court's pronouncements on recovery of excess payments, particularly Rafiq Masih (supra) and Thomas Daniel v. State of Kerala and Others (2022). It noted that the Supreme Court's mandate against recovery is primarily based on equity, especially when the excess payment was not due to misrepresentation or fraud by the employee, or when it was made due to the employer's mistake in applying a wrong principle or interpreting a rule, and where recovery would be iniquitous, harsh, or arbitrary.
However, the Court also cited paragraphs 13 and 14 from Chandi Prasad Uniyal (supra), which emphasized that the concept of fraud or misrepresentation is not always necessary for recovery. This judgment highlighted that "excess payment of public money... belongs neither to the officers who have effected overpayment nor to the recipients." It stated that "Any amount paid/received without the authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment.”
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The Undertaking: The Court found that the petitioner, like other pensioners, had furnished an undertaking to refund any excess amount paid. Relying on Jagdev Singh (supra), the Court stated that if a pensioner is put on notice about potential recovery and provides an undertaking, they are bound by it.
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RBI and Master Circulars: The Court affirmed that the Master Circulars and RBI instructions, which obligate Pension Disbursing Authorities (Banks) to recover excess payments, are binding. It noted that the Principal Controller of Defence Accounts (Pensions) had also consented to the recovery in accordance with RBI instructions and the Jagdev Singh judgment.
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Recurring Wrong: Addressing the petitioner's argument of delayed recovery after 16 years, the Court held that "the payment of excess pension is a recurring/successive wrong, which gives rise to a distinct and separate cause of action and the wrong or illegality cannot get sanctity or legalized by mere passage of time."
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Hardship vs. Public Money: While acknowledging the petitioner's status as a "hapless widow" and the hardship caused by the deduction, the Court reiterated that "the excess payment paid to the petitioner is a public money which belongs neither to the officers who effected overpayment nor to the recipient." The Court further clarified that the relationship between the petitioner and the Bank is not that of employer-employee, but rather the Bank acts as a Pension Disbursing Authority bound by its Master Circular and RBI instructions.
The Verdict: Petition Dismissed with a Sympathetic Rider
In conclusion, the High Court found no merit in the writ petition and dismissed it. However, recognizing the hardship to the petitioner, the Court provided a crucial liberty: if the petitioner is not satisfied with the Bank's calculation or the re-fixation of monthly installments, she may file an appropriate application before the Assistant General Manager, CPPC, SBI (Respondent No. 3), who "shall look into the matter sympathetically in terms of the provision of the Master Circular of the S.B.I. and pass necessary order forthwith."
This judgment underscores the judiciary's commitment to protecting public funds while also acknowledging the human element in such cases. While the legal framework supports the recovery of overpayments, the Court's directive for sympathetic consideration offers a glimmer of hope for pensioners facing similar predicaments.
Read the full judgement Below;
https://patnahighcourt.gov.in/viewjudgment/MTUjMTk0MzUjMjAxOSMxI04=-kyO6echlljc=
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