RECOVERY OF EXCESS PAYMENT OF PENSION BY PDAs

                **ALL PENSIONERS MUST MAKE A NOTE OF THIS POST**        

           Many cases have come to light where the Banks have made recoveries in one go on their own without any intimation to the pensioners or without their concurrence on the Excess Pension Payments made erroneously by their staff.

Such recoveries if made in bulk are illegal and against the instructions issued by the RBI and Govt of India.

(SUCH A DIFFICULT SITUATION IS AVOIDABLE IN CASE THE PENSIONERS KNOW THEIR PENSION ENTITLEMENTS FORM TIME TO TIME.  WE HAVE ENDEAVOURED IN OUR BLOG SITE TO GIVE OUT DETAILS OF THE ENTITLEMENTS OF ALL RANKS OF THE ARMED FORCES.)

The legal position on the case of recoveries of excess pension remitted by banks to pensioners is as follows:-

(a)   The Banks (PDAs) are not permitted to make such recoveries beyond one third of the


pension per month after intimation to the pensioner.
(b)   However,  in case they have faulted and have recovered the amount in excess of 1/3rd of the monthly pension they are required to make the refund. In case they still fail to do so the pensioner can take recourse from their jurisdictional High  Courts.

(c)   Before preferring to file the case in hon'ble High Courts the pensioners must first take up the case with their Banks, Regional Bank Officers and the Bank Head Offices and get a reply from them if need be by resorting to the  RTI Act 2005, for their reasons to debit the Pension Account without taking pensioner's consent. 
(d)  The pensioner must also ask the Bank if any orders were issued by the  Record Office or PCDA (Pensions) Allahabad to recover the excess  payments so made. A draft letter to the bank is placed below for ease of reference.
(e)  It may also be brought to their notice that previous have been judged in favour of the pensioners hon'ble Delhi High court in WP (C) 1079/2008 Wg Cdr SVS Gahlot Vs UOI, WP (C) nos 7522/2008 and 7525/2008 and WP (C) No: 8338/2008 (copy placed in the end of this post) not to recover any excess pension paid to the pensioner who did not falsify any data. 
(f)   The bank also must be informed the latest instructions from Govt of India Min of Home (PPP &G) letter No: F.No. 18/03/2015-Estt. (Pay-I) dated 02 Mar 2016 (copy placed at the end of this post).

   On receipt of a letter from the pensioner in most cases the Banks will make the refund however in case they still don't, within 30 days, the pensioner may take the legal recourse as a last resort only. 

    

DRAFT LETTER TO THE BANK TO REFUND THE EXCESS RECOVERIES MADE FROM PENSION ACOOUNT.

From 

Smt XXXX   W/O (Late) ------------                                     ADDRESS AND DATE 

To :

The Manager  

-----------------Bank

UNAUTHORISED RECOVERIES OF RS XXXX  MADE  FROM MY PENSION ACCOUNT WITHOUT MY CONSENT

Sir,

1    Please  refer to my pension acct no:                   in your bank.
2.   I am pained to learn that your bank has debited my pension account for Rs xxxx/- without any intimation or my consent which is not justifiable  or legal even on  account of the excess payment of pension by your bank erroneously by your staff. I am an old family pensioner of the deceased (rank and name). 

3.    You must be aware of the Govt rules that even if the PDAs have paid the pension in excess the recoveries can only be made with my consent limited to only one third of my pension per month. These rules have been thus violated by your bank. 
4.     May I therefore request you to refund the deductions so made within next 15 days before I approach your higher authorities. banking ombudsman for unilaterally debiting my account thereby causing me hardships. My letter may kindly be considered as a Notice for the Refund.

4.    I am aware of my rights as a pensioner as given in  instructions issued by Govt of India, Min of PPP &G and as given in the judgments of the  Hon'ble Supreme Court, where in it is vividly stated that in case  a pensioner had not falsified then any excess payment made to him/her can not be recovered.
5.    I am sure I shall soon get a positive response from your side.

With Regards,

                                       
Yours truly,

(Smt xxxxxx)

Copy to following for issue of necessary instructions :

1.   Chief Manager CPPC     -   

2.   Regional Manager      ----     (THE ADDRESSES ARE AVAILABLE ON THEIR 

3.   CMD    Bank            ----        BANK WEB SITES) 

       ____________________________________________________________

COPY OF THE JUDGEMENT ON A SIMILAR CASE

IN THE HIGH COURT OF DELHI AT NEW DELHI -    28.11.2008

  Present: Mr.Inderjit Singh, Advocate for the Petitioners.   Mr.Sewa Ram, Advocate for the Respondents.

    WP (C) No.8338/2008

  The petitioners were commissioned as pilot officers in Indian Air Force   between June, 1963 and June, 1968. The petitioners earned promotions over a   period of time up to the rank of Wing Commander and retired from service in that   rank. The re-fixation of the pension of all the petitioners took place with   effect from 01.01.1996 pursuant to the implementation of the recommendations of
  the 5th Pay Commission.
  The petitioners were re-employed after the retirement from Indian Air   Force by the Indian Air Force itself between the period September, 1991 to   July, 2000 on different dates and were given their pay and allowances as per the   rules and regulations for re-employed officers in the Indian Air Force.
  The petitioners are aggrieved by the receipt of recovery orders passed on   various dates in the year 2007 on account of alleged over payment for the period   of re-employment. The recoveries were directed to be made in the monthly  instalments of 1/3rd of pension until the full excess amount was liquidated.

  The details of the various petitioners are as under:

Petitioner	No.1	No.2	No.3	No.4	No.5
Date of Retirement	31.07.1994	31.03.1995	31.08.1991	31.08.1992	30.07.1993
Date of Commencement of re-employment	26.10.1996	04.04.1995	15.09.1991	14.11.1992	Sept.1997
Date of termination of re-employment	31.12.1999	28.02.197	01.08.1999	13.12.1999	31.07.2000
Amount of recovery (in Rs.)	51,112/-	33,651/-	99,844/-	65.071/-	25,346/-
Impugned Order Reference No.	08/14/A/REC /0204 of 2007	08/14/A/REC /0231 of 2007	08/14/A/REC /0022 of 2007	08/14/A/REC /0021 of 2007	08/14/A/REC /0121 of 2007

  The matter in issue is no more res integra in view of the judgment of   this Court in WP(C)1079/2008 as Wing Commander (Retd.) v. S.V.S.Gahlot v. Union   of India decided on 06.08.2008.
  In the aforesaid case, the pleadings showed that the recovery did not   include any element of interest and that there was no discrepancy in the pension   account of the petitioner. The case for waiver of recovery was taken up on   inter-service basis by the Ministry of Defence but the Ministry of Finance did   not agree. The over-payment was not due to any application/misrepresentation
  submitted by the petitioner. It was, thus, observed as under: ? The sum and substance of the recovery process initiated by the   respondents is that the petitioner had given certain undertakings and, thus, the    petitioner was aware of the possibility of such recovery. It is, thus pleaded   that the recovery is taking place in pursuance to such undertaking/declaration.   We have perused the undertaking and declaration signed by the petitioner.   These were signed on 08.11.1994 when the petitioner completed his initial tenure   of service before his re-employment. The declarations do not specify any amount   and, in fact, the amount has been left blank which itself shows that the   declarations are uncertain in respect of the amount. Not only that the   declarations are only in respect of any pension calculation, which may arise.   It is not in dispute that the recovery being made from the petitioner is not on    account of any pension calculation for which the declarations have been given.   The second declaration, in fact, is labeled ? Declaration for Provisional   Pension?.
  The result of the aforesaid is that no recovery can be made in pursuance
  to the declaration.
  The petitioner appearing in person has referred to the judgment of the   Apex Court in Shyam Babu Verma and Ors. Vs. Union of India and Ors., (1994) 2  SCC 521 where it has been held that higher pay-scales erroneously given due to   no fault of the employee should not result in recovery of the excess amount as   that would not be just and proper.

  We cannot lose sight of the fact that the petitioner is only on pension   since the year 1999. To  sustain a living in this age and time is itself  difficult on the meager pension amount. To face recovery of such pension amount   with rising inflation can be a nightmare. Such recovery is taking place in   pursuance to no undertaking and the respondents have not filed any proceedings
  in accordance with law for recovery of the amount. The circuitous method of   recovery from the pension cannot, thus, be permitted in the absence of any   undertaking or rule in that behalf.?
  In our considered view the aforesaid position squarely applies to the   facts of the present case and the petitioners are entitled to the same relief as   granted in that petition.   We have granted similar relief in WP(C) Nos.7522/2008 and 7525/2008, both   decided on 22.10.2008.

  A writ of mandamus is issued quashing the impugned order of recovery and   the amount, if any, recovered from the pension should be remitted to the   petitioners within a period of three months from today.   The petition is allowed leaving the parties to bear their own costs.   At this stage, learned counsel for the respondents pointed out that there   are a number of similarly situated officers who would be compelled to approach   this Court in view of the orders passed by us earlier and today.
  We see no reason why such an eventuality should arise when we have   settled the legal position in that behalf and in respect of all such officers,   who benefit from the orders passed by us.
  We thus direct that the concerned authorities of the respondents to   examine the cases of all such similarly situated officers and process their   cases according to the judgments rendered by us within a maximum period of three   months from today to obviate the necessity of such persons approaching this   Court which not only causes inconvenience to the petitioners and burdens the   docket of this Court but also results in unnecessary expenses of the respondents   as also of the petitioners.

SANJAY KISHAN KAUL, J.
MOOL CHAND GARG, J.

    NOVEMBER 28, 2008



_________________________________________________________________

GOVERNMENT ORDERS 
Recovery of wrongful / excess payments made to Government servants: DoPT Order

F.No. 18/03/2015-Estt. (Pay-I)

Government of India

Ministry of Personnel, Public Grievances & Pensions

Department of Personnel & Training

New Delhi, the 2nd March, 2016

OFFICE MEMORANDUM

Sub: Recovery of wrongful / excess payments made to Government servants.

The undersigned is directed to refer to this Department’s OM No.18/26/2011-Estt (Pay-I) dated 6th February, 2014 wherein certain instructions have been issued to deal with the issue of recovery of wrongful / excess payments made to Government servants in view of the law declared by Courts, particularly, in the case of Chandi Prasad Uniyal And Ors. vs. State of Uttarakhand And ors., 2012 AIR SCW 4 742, (2012) 8 SCC 417. Para 3(iv) of the OM inter-alia provides that recovery should be made in all cases of overpayment barring few exceptions of extreme hardships.

2. The issue has subsequently come up for consideration before the Hon’ble Supreme Court in the case of State of Punjab & Ors vs Rafiq Masih (White Washer) etc in CA No.1152 7 of 2014 (Arising out of SLP(C) No.11684 of 2012) wherein Hon’ble Court on 18.12.2014 decided a bunch of cases in which monetary benefits were given to employees in excess of their entitlement due to unintentional mistakes committed by the concerned competent authorities, in determining the emoluments payable to them, and the employees were not guilty of furnishing any incorrect information / misrepresentation fraud, which had led the concerned competent authorities to commit the mistake of making the higher payment to the employees. The employees were as innocent as their employers in the wrongfiil determination of their inflated emoluments. The Hon’ble Supreme Court in its judgment dated 18th December, 2014 ibid has, inter-alia, observed as under:

“7. Having examined a number of judgments rendered by this Court, we are of the view, that orders passed by the employer seeking recovery of monetary benefits wrongly extended to employees, can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer’s right to recover. In other words, interference would be called for, only in such cases where, it would be iniquitous to recover the payment made. In order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, “for doing complete justice in any cause would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court."

“10. In view of the afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of this country, has to be the basis of all governmental actions. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent, that the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer, to recover the amount. Or in other words, till such time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. Orders passed in given situations repeatedly, even in exercise of the power vested in this Court under Article 142 of the Constitution of India, will disclose the parameters of the realm of an action of recovery (of an excess amount paid to an employee) which would breach the obligations of the State, to citizens of this country, and render the action arbitrary, and therefore, violative of the mandate contained in Article 14 of the Constitution of India."

3. The issue that was required to be adjudicated by the Hon'ble Supreme Court was whether all the private respondents, against whom an order-of recovery (of the excess amount) has been made, should be exempted in law, from the reimbursement of the sameto the employer. For the applicability of the instant order, and the conclusions recorded by them thereinafter, the ingredients depicted in paras 2& 3 of the judgment are essentially indispensable.

4. The Hon'ble Supreme Court while observing that 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 has summarized the following few situations, wherein recoveries by the employers 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.

5. The matter has, consequently, been examined in consultation with the Department of Expenditure and the Department of Legal Affairs. The Ministries / Departments are advised to deal with the issue of wrongful / excess payments made to Government servants in accordance with above decision of the Hon'ble Supreme Court in CA No.11527 of 2014 (arising out of SLP (C) No.11684 of 2012) in State of Punjab and others etc vs Rafiq Masih (White Washer) etc. However, wherever the waiver of recovery in the above-mentioned situations is considered, the same may be allowed with the express approval of Department of Expenditure in terms of this Department's OM No.18/26/2011-Estt (Pay-I) dated 6th February, 2014.

6. In so far as persons serving in the Indian Audit and Accounts Department are concerned, these orders are issued with the concurrence of the Comptroller and Auditor General of India.

7. Hindi version will follow.

sd/-

(A.K. Jain)

Deputy Secretary to the Government of India

Source: www.persmin.nic.in
[http://ccis.nic.in/WriteReadData/CircularPortal/D2/D02est/18_03_2015-Estt.Pay-I-02032016.pdf]