Sheo Kumar Prasad Singh vs The Union Of India & Ors.

The applicant was initially appointed as a Postal Assistant in March 1973 and, after rendering more than 36 years of service, retired on 31.12.2008 from the post of Deputy Postmaster, Biharsharif Head Office. Upon retirement, he was paid a commuted value of pension amounting to Rs. 3,75,023/- on 16.07.2009, and a Pension Payment Order was issued showing the monthly deduction against this commutation amount as Rs. 3,814/-.

The applicant continued to receive his pension without any issue until April 2023, when he noticed a reduction in his monthly pension. While he had received Rs. 34,941/- in March 2023, only Rs. 31,071/- was credited in April 2023, reflecting a deduction of Rs. 3,870/-. Thereafter, approximately Rs. 3,000/- was deducted from his pension every month. The applicant, being more than 75 years of age, suffering from various medical ailments and having a family of ten persons dependent upon him, submits that the deductions have caused ^Bench considerable financial hardship.

The applicant was subsequently informed, vide letter dated 11.07.2024, that an alleged overpayment of Rs. 1,10,580/- had been Central Administrative Tribunal^{calculated on account of deduction of the commuted pension amount} at the rate of Rs. 904/- instead of Rs. 3,814/-. The respondents accordingly sought to recover the alleged excess payment from his pension. The applicant contends that the recovery was initiated only after the expiry of the 15-year period applicable to recovery of the commuted pension and, despite recovery having commenced in April 2023, no intimation was given to him until July 2024.

The applicant further submits that, pursuant to an RTI application, he obtained a reply dated 22.07.2024 enclosing an order dated 29.03.2022 issued by the Office of the General Manager (Finance), Postal Accounts, Bihar Circle, directing the Postmaster, Biharsharif HO to adjust the alleged overpaid amount from his future pension. However, despite the said order having been passed in March 2022, the applicant was neither informed of the proposed recovery nor afforded any opportunity to explain his position before deductions were commenced. The applicant therefore alleges violation of the principles of natural justice.

Reliance has been placed upon the Office Memorandum dated 06.02.2014 concerning recovery of wrongful payments made to Government servants, which contemplates issuance of a show-cause ^Bench notice and consideration of the employee's representation before recovery, particularly in cases involving hardship. The applicant also relies upon the judgment of the Hon'ble Supreme Court in State of Central Administrative Tribunal^{Punjab v. Rafiq Masih, (2015) 4 SCC 334, and the consequential} Office Memorandum dated 02.03.2016, contending that recovery from retired employees and in circumstances causing undue hardship is impermissible. It is asserted that the applicant neither made any misrepresentation nor played any role in the alleged erroneous calculation of pension.

In these circumstances, the applicant seeks a declaration that the deductions/recovery made from his pension are illegal and erroneous, along with a direction restraining the respondents from making any further recovery. He further seeks refund of the amounts already deducted from his pension, taking into account his advanced age, medical condition, financial dependence upon his pension and the absence of any misrepresentation or fraud on his part.

A. The respondents submit that the alleged overpayment of Rs. 1,10,580/- arose due to an incorrect deduction of the commuted ^Bench pension amount. According to the respondents, the applicant was requiredto have Rs. 3,814/- deducted on monthly basis towards commutation, but due to a technical issue following the Central Administrative Tribunal^{introduction of the new SAP software application, only Rs. 904/-}was being deducted from 01.02.2019 to 31.03.2023. The discrepancy was subsequently detected by the department during verification of pension data in April 2023, following which the amount of overpayment was calculated.

B. The respondents deny any deliberate or intentional attempt to make an excess payment to the applicant or to recover any amount wrongfully. It is stated that the erroneous payment occurred solely because of the technical issue arising upon introduction of the new software application. According to the respondents, the discrepancy came to the department's notice only during the process of checking and verification of pension cases in April 2023, and the subsequent action for recovery was therefore taken in discharge of official duties.

C. With regard to the applicant's contention concerning notice and opportunity of hearing, the respondents acknowledge that the applicant's statement regarding the absence of prior intimation is correct, but contend that the pensioner also had a responsibility to inform the department if he was receiving pension in excess of his entitlement. On this basis, the respondents allege that the applicant's ^Bench failure to intimate the department regarding the excess payment reflects an intention on his part that was not favourable to the department.

Central Administrative Tribunal^{D. The respondents further contend that the principles relied upon by} the applicant in relation to recovery from employees are not applicable in the present case, as the applicant is no longer an employee but a pensioner. Thus, according to the respondents, the applicant cannot claim the benefit of the exceptions relating to recovery from serving Government employees merely on the ground of his present status as a pensioner.

E. The respondents also submit that the recovery action cannot be termed illegal merely because the applicant was not personally responsible for the software-related error. It is stated that it is the duty of the Drawing and Disbursing Officer (DDO) to check and reconcile the accounts from time to time, and the action taken by the concerned departmental authority was in furtherance of such official responsibility. The respondents therefore maintain that the recovery was undertaken pursuant to detection of an excess payment and in performance of Government duty.

F. Accordingly, the respondents dispute the applicant's prayer for declaring the recovery illegal and for refund of the amounts already deducted. They assert that the applicant's allegations are baseless and incorrect, that the overpayment resulted from an inadvertent ^Bench technical/software-related error and applicant not informing the concerned authorities about this non-deduction despite being fully aware of the P.P.O. issued to him reflecting the proposed monthly Central Administrative Tribunal^{deduction of the commuted value of the pension.The departmental} authorities were justified in taking steps to recover the excess amount after the discrepancy was detected.

The applicant, in rejoinder to the written statement filed by the respondents, submits that the respondents have primarily confined their defence to explaining the alleged overpayment arising from the incorrect deduction of the commuted pension amount. According to the applicant, however, the respondents have failed to address the fundamental issues raised in the original application concerning the legality of the subsequent recovery and the manner in which such recovery was effected.

The applicant reiterates that two principal issues arise for consideration: first, whether recovery of the alleged excess payment from the applicant is legally permissible in the facts and circumstances of the case; and second, whether the respondents could initiate such recovery without first issuing a show-cause notice and affording the applicant an opportunity to explain or ^Bench contest the proposed recovery. The applicant submits that these issues have not been adequately answered by the respondents in their written statement.

Central Administrative Tribunal^{(iii) The applicant places reliance upon the judgments of the Hon'ble} Supreme Court in Chandi Prasad Uniyal v. State of Uttarakhand, (2012) 8 SCC 417 and State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, particularly in support of his contention regarding the impermissibility of recovery in appropriate circumstances and the protection available against recovery of erroneous payments. The applicant further emphasizes that the respondents failed to issue any show-cause notice or provide him an opportunity to represent his case before commencing deductions from his pension.

It is further contended that the recovery is wrongful in law, particularly because the alleged excess payment was not occasioned by any misrepresentation, fraud or wrongful conduct on the part of the applicant. The respondents themselves have attributed the excess payment to an error in the software/system resulting in deduction of an incorrect amount.

On this basis, the applicant submits that the respondents' justification regarding the cause of overpayment does not answer the legal challenge raised against the recovery itself. The fact that the excess payment occurred due to a departmental or technical ^Bench error, according to the applicant, cannot by itself justify recovery from him, particularly in the absence of any wrongdoing on his part and without following the principles of natural justice. The Central Administrative Tribunal^{applicant therefore contends that the defence raised by the} respondents is untenable and does not displace the grounds taken in the original application.

The applicant accordingly prays that the contentions raised by the respondents in their written statement be rejected and that the reliefs sought in the original application be allowed.

In essence, the applicant maintains that the alleged overpayment resulted from an error attributable to the departmental system and not from any misrepresentation or fraud on his part, and that the recovery initiated without prior notice and opportunity of hearing is liable to be set aside.

I. On consideration of the pleadings of the parties, the material placed on record and the rival submissions, the issue which arises for consideration is whether the respondents are justified in recovering the amount of Rs.1,10,580/- representing the commuted portion of pension which was not correctly deducted from the applicant's monthly pension ^Bench due to a technical error in the pension disbursement system.

II. The admitted position is that the applicant had opted for commutation of a portion of his pension and had received the commuted value of Central Administrative Tribunal^{pension amounting to Rs.3,75,023/- in the year 2009. The Pension} Payment Order specifically reflected the commutation deduction as Rs.3,814/- per month. However, due to introduction of the SAP software, only Rs.904/- was deducted instead of Rs.3,814/- during the period from 01.02.2019 to 31.03.2023. Consequently, the applicant continued to receive pension in excess of the amount actually payable to him. The respondents detected the discrepancy during verification of pension records in April 2023 and calculated the resultant excess payment at Rs.1,10,580/-. Thus, the excess payment is not disputed; rather, the applicant's principal objection is to its recovery.

III. The contention of the applicant that the recovery is impermissible merely because the mistake was attributable to the department cannot be accepted in the facts of the present case. The applicant was admittedly aware that he had commuted a portion of his pension, received the lump-sum payment of commutation value of the pension and the Pension Payment Order itself indicated the monthly commutation deduction. The excess payment was, therefore, not a case of an erroneous fixation of pay or grant of an additional benefit by the department, but a consequence of non-adjustment of the commuted portion of pension which the applicant had already received in lump ^Bench sum. The fact that the omission occurred due to a technical error in the software does not make the employer guilty. More so, when the pension is getting disbursed by the disbursing authority after the Central Administrative Tribunal^{retirement. It does not confer a right upon the applicant to retain an} amount which was never payable to him under the Pension Payment Order. The applicant has clearly been made aware of the deduction in the P.P.O. issued to him but he has chosen to remain silent when the amount getting deducted on this count was substantially lower than what was duly mentioned in the P.P.O. thus establishing this omission as concealment and misrepresentation to receive the amount that was not legally payable to him.

IV. The payment of commuted value of pension is a statutory benefit granted under the CCS (Commutation of Pension) Rules and is not an erroneous or gratuitous payment. The commuted portion is required to be adjusted against the pension in accordance with the statutory scheme. Where, owing to an omission in pension disbursement, the commuted portion is not deducted and the pensioner consequently receives pension in excess of the amount statutorily payable, the resulting liability is not analogous to an ordinary case of erroneous fixation or mistaken overpayment of salary. The applicability of the equitable protection enunciated in Rafiq Masih must therefore be examined in the context of the statutory commutation scheme and the circumstances in which the excess arose.

^Bench V. The reliance placed by the applicant upon State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, and the Office Memorandum dated 02.03.2016, therefore, does not automatically render the present Central Administrative Tribunal^{recovery impermissible. The exceptions carved out in Rafiq Masih are} founded upon considerations of equity and hardship as well as no fraud or misrepresentation on the part of the employee and cannot be applied mechanically without examining the nature and source of the excess payment. An action of the Respondents, 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, than the corresponding right of the employer, to recover the amount. In the present matter, the applicant had already received the commuted value and was thereafter required to allow the corresponding monthly adjustment in his pension. The continued payment of the unadjusted amount resulted in a financial benefit beyond his statutory entitlement as per CCS(commutation of pension) Rules. The recovery has been confined to the amount which was otherwise liable to be adjusted under the Pension Payment Order in easy instalments and without charging any interest.

VI. The applicant has relied upon the judgment of the Hon’ble High Court of Judicature at Bombay in Prasad Vinayak Sohoni v. Treasury Officer, Thane & Anr., Writ Petition No.1192 of 2021, decided on 12.01.2022 during the course of hearing. The learned ^Bench counsel for the applicant has stated that in that case also, the Bombay High Court considered recovery of excess pension consequent upon non-adjustment of commuted pension and granted relief by taking into Central Administrative Tribunal^{account the petitioner's status and financial hardship.} On the other hand, the respondents have relied upon the latest judgment of the Hon’ble High Court of Uttarakhand at Nainital in Govind Ballabh Pandey v. Directorate of Treasury Pension and Entitlement, Uttarakhand, Dehradun &Anr., Writ Petition (S/B) No. 85 of 2026, decided on 20.07.2026. The said case concerned an almost similar situation where, despite receipt of the commuted value of pension, the monthly commuted portion was inadvertently not deducted and the pensioner continued to receive the full pension. The Uttarakhand High Court held that the pensioner was also under an obligation to point out the obvious discrepancy and declined to interfere with the recovery. However, none of the two rival counsels have placed the certified copies of the aforesaid judgments as well as the facts of the two cases. A gainful reference can be drawn from Para 100 of the decision of Seven judges Bench of the Hon’ble Supreme Court of India in the L. Chandra Kumar vs Union Of India And Others on 18 March, 1997. This paragraph is being reproduced as below:

The Patna Bench of this Tribunal lies in the jurisdiction of the Hon‘ble Patna High Court and the Ranchi Bench of this Tribunal lies in the jurisdiction of the Hon‘ble Jharkhand High Court who will exercise judicial superintendence. Therefore, none of the two decisions of Hon’ble Bombay High Court dated 12.01.2022 cited by the learned Counsel for the applicant and the latest decision of Hon’ble Uttarakhand High Court dated 20.07.2026 cited by the learned Counsel for the Respondents will serve as the binding precedent. This instant O.A. will be decided on the basis of the facts of this particular case.

VII. As regards the applicant's plea of violation of natural justice, it is ^Bench established that the applicant has not disputed the fact that he had received the lump sum amount of the commuted value of his pension and Rs.3,814/- was required to be deducted on a monthly basis from Central Administrative Tribunal^{his pension towards adjustment of this lump sum amount. This was} clearly mentioned in the P.P.O. that was issued to the applicant making him fully aware of this statutory arrangement. The dispute is essentially regarding recovery of the amount which remained unpaid towards the commuted portion due to an inadvertent technical error in the software application but the applicant chose to remain quiet and went on receiving the amount that was supposed to be deducted from pension. Thus, there is no violation of the principle of natural justice.

VIII. The contention that the recovery was initiated after expiry of the period of 15 years also does not merit acceptance. The record indicates that the incorrect deduction continued only from 01.02.2019 to 31.03.2023 and the discrepancy was detected in April 2023 during the periodic verification of the pension accounts. The fact that the commutation period was approaching or had subsequently reached its scheduled conclusion does not extinguish the liability in respect of the commuted amount which had remained unadjusted during the preceding period. The recovery is thus relatable to the arrears arising from the period during which the applicant actually received pension in excess of his entitlement and cannot be treated as a fresh recovery of commutation after the statutory period.

^Bench IX. The applicant has also pleaded his advanced age, and financial hardship. These circumstances undoubtedly deserve sympathetic consideration; however, equitable considerations cannot be extended Central Administrative Tribunal^{to the extent of permitting the applicant to retain a statutory pension} benefit in the form of lump-sum amount commuted and not allow the respondents to put into effect the term of statutory deduction. It has been indicated by the respondents that recovery is being made in a reasonable manner without interest so as not to cause undue hardship. In fact, as apprised by the learned counsel for the Respondents during the course of hearing that sufficient care has been taken to avoid any hardship to the pensioner by liberal monthly deduction in instalments and without any interest thereby substantially reducing the liability because with passage of time the value of money and its purchasing power go down. So, an amount not deducted seven years ago is much greater in value than the same amount being taken back without any interest today.