Recovery from retired employees absent misrepresentation is arbitrary; statutory service rules prevail over executive instructions in determining benefits.

JUDGMENT :

(Per Hiten S. Venegavkar, J.)

1. Rule. Rule made returnable forthwith. Heard finally with the consent of the parties.

2. The present writ petition under Article 226 of the Constitution of India has been instituted by the petitioner seeking quashing and setting aside of (i) the order dated 10^th May, 2024 passed by respondent no.2 whereby the upgradation earlier granted to the petitioner was revised retrospectively and recovery of alleged excess payment was ordered, and (ii) the consequential order dated 6^th September, 2024 passed by respondent no.3 directing recovery of an amount of Rs.4,98,368/-. The petitioner further seeks a direction to the respondents to refund the amount already recovered and to issue a revised pension payment order by reckoning the petitioner’s correct pay scale of Rs.57,500/- instead of Rs.55,800/-, along with all consequential pensionary and retirement benefits.

3. The factual matrix, which is largely undisputed, reveals that the petitioner was appointed as an Auxiliary Midwife Nurse on 2^nd November 1992 with the respondent Municipal Corporation and continued to serve on the same post without interruption until her superannuation on 31^st May, 2023. At the time of her appointment and during the relevant period of service, the service conditions governing employees of the Municipal Corporation provided for grant of upgradation/higher pay scale upon completion of seven years of continuous service. In accordance with the said prevailing service rules and policy, the petitioner was granted the benefit of upgradation with effect from 4^th January 1999 by an order dated 26^th April, 2001. At that point of time, there was no dispute or objection raised by any authority, including the audit department, regarding the legality of such grant.

4. It is pertinent to note that after her marriage, the petitioner’s name came to be changed to Kalpana Chandrakanth Gorhe, and thereafter, upon completion of 24 years of service, her case was placed before the Selection Committee for grant of the next higher benefit. The Selection Committee, upon due consideration, approved the grant of benefits by an order dated 10^th April, 2019 with effect from 1^st January, 2016. The petitioner continued to draw salary accordingly till her retirement. Upon attaining the age of 58 years, the petitioner retired on 31^st May, 2023. However, her pension was not released immediately and was sanctioned only by an order dated 6^th September, 2024, i.e., almost one and a half years after her retirement.

5. Upon receipt of the said pension order, the petitioner was shocked to discover that a substantial amount of Rs.4,98,368/- had been ordered to be recovered from her pensionary benefits. On making inquiries, the petitioner came to know that such recovery was founded upon an earlier order dated 10^th May 2024, whereby the upgradation granted to her with effect from 4^th January, 1999 was retrospectively revised on the ground that the same was contrary to the Government Resolution dated 24^th November, 1999. It was stated therein that on account of such revision, the salary paid to the petitioner from 2^nd November 1999 till the date of her retirement was excessive and liable to be recovered.

6. The petitioner contends that at no point during her entire service tenure was any notice or show-cause issued to her alleging excess payment or proposing recovery. The impugned action was initiated unilaterally after her retirement, without affording her any opportunity of hearing, thereby violating the principles of natural justice. The petitioner has further