Madhya Pradesh High Court Allows Recovery Of Excess Pension Paid To Retd Teacher, Says Not Notifying Bank Of Excess Amount Was Breach Of Trust

Recently, the Madhya Pradesh High Court allowed the State Bank of India, the disbursing authority, to recover excess payment of pension made to a retired teacher, based on the voluntary undertaking given by the teacher herself and her inherent obligation not to commit a breach of trust.

The single-judge bench of Justice Gurpal Singh Ahluwalia noted that the retired teacher, who is also a widow, had received the amount of commuted pension in advance and she is liable to make a refund of the excess payment back to the disbursing authority.

“In the present case, petitioner had already received the commuted portion of her pension and although She was under obligation to refund the same in easy installments of Rs.4946/- per month for a period of 15 years… This conduct of the petitioner also amounts to breach of trust because it was expected from the petitioner to bring it to the notice of the bank that excess payment is being paid to her for which she is not eligible”, the bench sitting at Jabalpur observed.

Referring to High Court of Punjab & Haryana & Ors. v. Jagdev Singh (2016) 14 SCC, the judge also opined that the retired employee was bound by the voluntary undertaking she made to the effect that she would refund any excess payment made to her in terms of retirement gratuity, leave encashment, pension including ad-hoc relief and other dues.

Though the counsel for the petitioner tried to rely on State of Punjab & Others v. Rafiq Masih (White Washer) (2015) 4 SCC 334 to assert that excess payment paid to an employee is not recoverable once she has retired, the court pointed out that the excess payment in this case was made not when she was in service. This instance can be distinguished because the payment was an excess payment of pension.

The court also took note of the fact that the employer, Kendriya Vidhyalaya Sangathan, had issued copies of a revised pension payment order to the Bank as well as the employee in 2014 itself after granting a total retirement benefit of Rs.13,17,260/- inclusive of Rs.4,86,331/ as commuted pension upon superannuation. Therefore, the court concluded that the disbursing authority, SBI, committed the error of making excess payment either because the revised order escaped its notice or it did not reach the authority, i.e., Manager (Pension), State Bank of India (Main Branch, New Delhi).

Reference was also made to Style (Dress Land) v. UT, Chandigarh (1999) 7 SCC 89 wherein the apex court held that even though the judgment debtor obtained a stay on the execution of a money decree, if the judgment debtor later loses the appeal, no exemption can be sought for payment of interest accrued thereon. Applying the same principle, the court made it clear that the employee is required to pay interest @ 6% p.a on the outstanding excess payment to be made on 22.05.2020. The employee had obtained an interim order in her favour for not making the payment of the excess amount on the above-mentioned date.

For further recovery of the outstanding excess amount, no interest needs to be charged, the court added.

The petitioner employee preferred the current writ petition against the order dated 09.03.2020 passed by the respondent bank demanding a refund of excess payment made to the employee to the tune of Rs.3,11,894/-. The Bank demanded the amount in one single instalment or easy monthly instalments of Rs 12,394/-. As per the Bank's version, the commuted portion of the pension should have been deducted from the pensioner's dues for 15 years since the year of payment, i.e., 2014. The employee would have been entitled to get the entire pension amount only after the lapse of the said 15 years.

The excess payment to the tune of Rs.3,11,894/- was inadvertently made by the Bank since the commuted instalment of Rs 4946/- per month was not deducted, argued the counsel for the respondent SBI.

“The petitioner was already in possession of the revised pension payment order. She knew the fact that she has commuted her pension and is not entitled for full pension in spite of that she did not bring it to the notice of the bank and was happily receiving the full pension”, the court further noted in the order.

Senior Advocate Brian D'Silva along with Advocate Sarabvir Singh Oberai appeared for the retired pensioner. Advocate Prabhanshu Shukla appeared for the respondent bank.

Case Title: Anugrah Kiran Das v. SBI & Ors.

Case No: W.P. No. 7407 of 2020

Citation: 2023 LiveLaw (MP)

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