A retiree's undertaking to refund excess pension received legally binds them to repayment; recovery is permissible despite prior overpayment judgments when the retiree was aware of their pension commutation.

ORDER :

G. S. Ahluwalia, J.

This petition under Article 226 of Constitution of India has been filed against order dated 9-3-2020 passed by respondent No. 1/State Bank of India by which petitioner has been informed that excess payment to the tune of Rs. 3,11,894/- has been paid and thus it was directed that either petitioner may refund the entire amount in one installment or else the excess amount shall be recovered in easy monthly installment of Rs. 12,394/-.

2. It is the case of petitioner that petitioner is a retired teacher. The petitioner is a widow and uses major amount of her pension towards medical treatment and the recovery of the excess payment made to petitioner has adversely affected her financial condition. It further submitted that in the light of judgment passed by Supreme Court in the case of State of Punjab and others vs. Rafiq Masih (White Washer), reported in (2015) 4 SCC 334, the recovery of excess payment made to the retired employee is not permissible. It is further submitted that in the impugned order it has already not been clarified that under what circumstances excess payment of her pension was made.

3. Per contra, the petition is vehemently opposed by counsel for respondents No. 1 and 2. The respondent No. 3 has also filed its return separately.

4. It is the case of respondents No. 1 and 2 that petitioner had commuted her pension and as such the commuted portion of pension was required to be reduced from her pension from the date of payment of commuted value of pension for the next 15 years and only thereafter the pensioner was entitled to get the full pension. In the present case, although the petitioner had commuted her pension but the commuted portion of her pension was not reduced from the pension, which was paid to the petitioner. The petitioner had claimed commutation of pension in the year 2014 and thus commutation installment of Rs. 4946/- was to be deducted for a period of 15 years. However, the commuted installment of Rs. 4946/- was not deducted. As a result, excess payment of Rs. 3,11,894/- was made to the petitioner, which is liable to be recovered. The Reserve Bank of India vide Circular No. RBI/2015-16/340 dated 17-3-2016 has clearly provided that as soon as the excess/wrong payment made to a pensioner comes to the notice of the paying branch, then the branch should adjust the same against the amount standing to the credit of pensioner’s account to the extent possible including lumpsum arrears payment. The petitioner had given an undertaking to refund or make good to the bank, any amount to which she was not entitled or any excess payment, which may be credited to her account. Although, the petitioner had claimed commutation of pension and she was fully aware of the fact that she is not entitled for the entire pension but still she did not bring it to the notice of the bank that excess pension is being made. The bank should have deducted the commuted portion of pension, whereas she was continuously receiving her full pension, which clearly indicates the dishonest intention of the petitioner.

5. Respondent No. 3 h