Shortfall In Service, Excess Pension Paid Due To Factual Errors; Madras HC Upholds Recovery After Retirement

The Madras High Court bench comprising Justice A.D. Maria Clete held that excess pension paid due to a clerical or mechanical mistake in pay fixation to the factually ineligible employee can be recovered post-retirement. Further the protection against recovery laid down in Rafiq Masih case does not apply when eligibility itself is lacking. Background Facts The petitioner was employed as a Lecturer (Selection Grade) at Arulmigu Palaniandavar College of Arts and Culture, Palani. It was an aided private institution governed by the Hindu Religious and Charitable Endowments Department. After his retirement, he was granted pension based on the UGC scale applicable to Lecturers in Selection Grade with three years of service. However, upon audit it was found that the petitioner had rendered only 2 years and 7 months of service in the Selection Grade. He was falling short of the required 3 years. It was held that he had been wrongly granted a higher pension. Therefore, recovery proceedings were initiated by the Assistant Treasury Officer through proceedings dated 19.07.2016. Aggrieved by the same, the petitioner filed the writ petition. It was submitted by the petitioner that the recovery proceedings were initiated without affording any prior notice or opportunity of hearing. The petitioner contended that neither at the stage of audit nor at the time of revising the pensionary benefits was any communication issued to the petitioner, nor was a copy of the audit objection furnished, depriving him of the chance to offer an explanation or clarification regarding the alleged excess payment. The petitioner further relied upon the judgments of the Supreme Court in State of Punjab v. Rafiq Masih and Thomas Daniel v. State of Kerala, to submit that recovery of excess amounts from retired employees, particularly when no fraud or misrepresentation is attributed to them, would be arbitrary and unsustainable in law. It was also submitted that G.O.(Ms.) No.286 Finance (Pension) Department, dated 28.08.2018 issued by the State Government discourages recovery in cases of bona fide mistake after retirement. On the other hand, it was submitted by the respondents that the petitioner was not entitled to receive the higher pension granted under the UGC scales, as he had not completed the minimum required service of three years in the Selection Grade. It was submitted that the petitioner had served only 2 years and 7 months in that post. It was contended that the pension was wrongly calculated as if the petitioner belonged to the category of “Lecturer Selection Grade with three years and above”, which was factually incorrect. It was submitted that this was not a matter of interpretation but a question of eligibility, and that the recovery initiated upon audit was legally sound and justified. Findings of the Court It was observed by the Court that the mistake in pay fixation was purely mechanical. The Court held that the petitioner had served only 2 years and 7 months in the Selection Grade and thus was factually ineligible for the pension. The error was not interpretational but an objectively verifiable shortfall in qualifying service, therefore, there was no need for subjective assessment. It was further observed that the absence of prior notice amounted to procedural irregularity but it did not cause any real prejudice to the petitioner. It was observed by the court that since the pension was erroneously fixed based on inapplicable criteria, the petitioner was not entitled to the higher benefits granted to him. The case was distinguished by the court from decisions in State of Punjab vs Rafiq Masih and State of Kerala vs Thomas Daniel, where the Supreme Court had restrained recovery on the ground of injustice or hardship to retired employees. It restrained particularly in cases which involved long-standing payments and no fault of the employee. However, in this case the core issue was of eligibility, and not hardship or equitable considerations. Further the case of Chandi Prasad Uniyal v. State of Uttarakhand was relied upon wherein the Supreme Court held that public funds wrongly paid due to bona fide mistake and without fraud must be recovered. Further allowing the recipient to retain such funds from government exchequer would amount to unjust enrichment. It was held that any amount paid without authority of law is recoverable, unless exceptional hardship is there. It was held by the Court that the petitioner was not legally entitled to the higher pension, therefore the recovery initiated by the department was justified. With the aforesaid observations, the writ petition was dismissed. Case Name: P. Ganga Parameshwaran vs. The Government of Tamil Nadu & OthersCitation: 2025 LiveLaw (Mad) 251 Case No.: W.P.(MD) No.14857 of 2016 Counsel for the Petitioner: M. Saravanan Counsel for the Respondents: T. Amjad Khan,...

Shortfall In Service, Excess Pension Paid Due To Factual Errors; Madras HC Upholds Recovery After Retirement

Namdev Singh

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Namdev Singh

Shortfall In Service, Excess Pension Paid Due To Factual Errors; Madras HC Upholds Recovery After Retirement

Namdev Singh

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Namdev Singh

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