Dalip Kaur vs State Of Punjab & Ors.

Sandeep Moudgil, J

The jurisdiction of this Court has been invoked under articles 226/227 of the Constitution of India seeking quashing of the impugned notice dated 05.08.2005 (Annexure P-1) vide which the family pension of the petitioner has been stopped and an amount of Rs. 26,077/- has been ordered to be recovered from the petitioner with a further direction to the respondents to refund the already recovered amount to the petitioner.

The petitioner is the widow of a retired employee of the respondent department. Her husband joined government service as a Clerk on 15.04.1957, rendered more than 37 years of service and retired on 30.11.1994 while working as an Inspector. He died on 02.12.2000, leaving behind the petitioner as his widow. The petitioner was thereafter granted family pension at the rate of Rs.4,591/- per month.

In November 2024, when the petitioner approached the bank for withdrawal of her family pension, she was informed that the pension had not been received from the department. The petitioner states that the pension was not released thereafter and that she submitted a written request to the respondents for release of the same.

The petitioner received a notice dated 05.08.2005 stating that an excess amount of Rs.47,791/- had been paid to her, out of which Rs.21,714/- had already been recovered and the remaining Rs.26,077/- was sought to be recovered. The petitioner states that no prior notice or opportunity of hearing was afforded to her before the recovery and that the alleged excess payment was not made on account of any misrepresentation or fraud on her part.

The petitioner has challenged the notice dated 05.08.2005 and the recovery, seeking quashing thereof, refund of the amount already recovered and release of her family pension.

Learned counsel for the petitioner submits that the impugned notice dated 05.08.2005, whereby recovery of the alleged excess payment of Rs.47,791/-has been sought, is unsustainable as the petitioner was neither issued any prior notice nor afforded an opportunity of hearing before the recovery was effected. It is submitted that Rs.21,714/- has already been recovered by withholding the family pension, while the petitioner has been called upon to deposit the remaining amount of Rs.26,077/-. Such action, according to learned counsel, is arbitrary and contrary to the principles of natural justice.

It is further submitted that the alleged excess payment was not made on account of any misrepresentation or fraud attributable to the petitioner. The petitioner, being a family pensioner, had merely received the pension as sanctioned and paid by the respondents and cannot be made liable for any error committed in its calculation or disbursement. Learned counsel relies upon the settled principle that excess payments made without any fault on the part of the recipient ought not to be recovered, particularly where the recipient is dependent upon the pension for her livelihood.

Learned counsel further submits that the amount of Rs.21,714/-already recovered from the petitioner is liable to be refunded. It is contended that the continued withholding of the family pension and the proposed recovery have caused serious hardship to the petitioner, who is an elderly widow with no other stated source of livelihood. The impugned action, therefore, deserves to be set aside and the recovered amount restored to the petitioner.

Learned counsel appearing for the respondents submits that the petitioner was entitled to family pension only in terms of Rule 5.2 of Chapter VI of the Punjab Civil Services Rules, Volume II. It is contended that following the death of her husband on 02.12.2000, the petitioner was entitled to basic family pension of Rs.2,757/- plus dearness relief only up to 22.11.2001, and thereafter to basic family pension of Rs.1,863/- plus dearness relief. However, she continued to be paid family pension at the higher rate of Rs.2,757/- plus dearness relief from 23.11.2001 till November 2004, resulting in an excess payment of Rs.47,791/-, which was liable to be recovered.

It is further submitted that the petitioner had furnished an affidavit/undertaking expressly agreeing that any excess payment made to her as a family pensioner could be recovered. Consequently, the respondents proceeded to recover the excess amount from December 2004 to September 2005 and duly informed the petitioner of the recovery. According to learned counsel, the petitioner's challenge to the recovery is therefore without basis, particularly in view of the undertaking furnished by her.

Learned counsel for the respondents accordingly submits that no enforceable right of the petitioner has been infringed and that the recovery has been made strictly in accordance with the applicable rules and the undertaking furnished by the petitioner. The writ petition, therefore, deserves to be dismissed.

Having considered the submissions advanced by learned counsel for the parties and perused the material on record, this Court finds that the controversy lies within a narrow compass. The respondents do not dispute that the petitioner was paid family pension at the rate of Rs.2,757/- plus dearness relief from 23.11.2001 onwards, whereas, according to their own calculation, she was entitled to the said rate only up to 22.11.2001. The alleged excess payment was thus occasioned entirely on account of the manner in which the respondents themselves calculated and disbursed the family pension. There is neither any allegation nor any material to suggest that the petitioner furnished any incorrect particulars, misrepresented her entitlement or otherwise contributed to the erroneous payment.

The respondents would undoubtedly be entitled to correct the family pension prospectively in accordance with the applicable rules. However, the power to correct an erroneous fixation cannot, by itself, be construed as an unfettered right to recover the amounts already paid, particularly where the payment was made on account of an error attributable solely to the department. The petitioner had no role in determining the rate of family pension and received the amount as calculated and disbursed by the competent authority. A family pensioner cannot reasonably be expected to scrutinise the departmental calculation of pension and anticipate that the amount regularly credited to her account was in excess of her entitlement.

The law governing recovery of such excess payments is no longer res integra. In “State of Punjab and others v. Rafiq Masih (White Washer) and others”, (2015) 4 SCC 334, the Supreme Court held that although an employer may ordinarily have a right to recover an erroneous payment, such right cannot be exercised where recovery would be iniquitous, harsh or arbitrary and would cause hardship disproportionate to the employer's claim. The Court specifically recognised retired employees as a class from whom recovery would ordinarily be impermissible and also recognised the broader principle that recovery would be impermissible where the hardship caused to the employee outweighs the employer's equitable right to recover.

The present case falls within the aforesaid principle. The petitioner is an elderly widow and a family pensioner. The excess payment continued for nearly three years and was made in the ordinary course by the respondents without any contribution thereto by the petitioner. There is no allegation of fraud, misrepresentation or suppression of facts on her part. The amount having been paid as family pension and received by the petitioner in the ordinary course, its subsequent recovery from her pension would cause hardship wholly disproportionate to the benefit sought to be secured by the respondents. The error in payment being entirely attributable to the respondents, the consequence thereof cannot, in the facts of the present case, be permitted to fall upon an elderly family pensioner.

The undertaking relied upon by the respondents does not persuade this Court to take a different view. The same, being in the nature of a general stipulation regarding recovery of any excess payment, cannot be construed as an absolute authority to effect recovery in every circumstance. The respondents have failed to establish that, at the time of fixation or commencement of the family pension in question, the petitioner was specifically apprised of the alleged error or that the undertaking was furnished with reference to the particular payment now sought to be recovered. In the absence of any fraud or misrepresentation on the part of the petitioner, such general undertaking cannot be treated as a carte blanche to recover an amount paid on account of the respondents' own error, particularly when such recovery would result in undue hardship to the petitioner.

It is also significant that the respondents themselves continued to make payment at the higher rate from November 2001 till November 2004. Having permitted such payment to continue for a considerable period, the respondents cannot seek to recover the same from the petitioner, who had neither fixed the rate nor authorised the disbursement.

For the reasons recorded above, the impugned notice dated 05.08.2005, insofar as it seeks recovery of the alleged excess payment of Rs.47,791/- from the petitioner, is quashed. Consequently, the amount of Rs.21,714/- already recovered from the petitioner by withholding her family pension pursuant to the impugned recovery is also liable to be refunded. The respondents are directed to refund to the petitioner the sum of Rs.21,714/- already recovered from her by withholding her family pension, along with interest at 6% p.a. from the date it became due till it’s actual realisation, the same being illegally recovered, within a period of four weeks from the date of receipt of a certified copy of this order. However, the respondents shall remain at liberty to regulate the family pension payable to the petitioner prospectively in accordance with the applicable rules.

Accordingly, the present writ petition is allowed.

Pending application(s), if any shall disposed off.