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J SIVASANKARA PILLAI v. ASSISTANT GENERAL MANAGER CENTRAL BANK OF INDIA
Summary of Judgment — Central Administrative Tribunal, Ernakulam Bench (14 February 2023)
Factual and Procedural Background
J. Sivasankara Pillai (the applicant) retired as a Telecom Technical Assistant from the office of the 5th respondent (BSNL, Kollam) on 30.06.2005. On retirement he was granted a pension (initially Rs.4,739/month, later revised to Rs.10,643 and then to Rs.11,236). Pension payments were disbursed through the 3rd respondent, Central Bank of India, Maruthady Branch.
The applicant noticed an anomaly in the revised pension and made a representation to the Banking Ombudsman (Annexure A4). The Ombudsman replied indicating that an inquiry showed the applicant had received excess payments totalling Rs.2,25,602. The 1st respondent communicated (Annexure A6) that this excess had been drawn and recovery had commenced in monthly instalments; Annexure A7 set out details of the alleged excess. The applicant filed this Original Application seeking a declaration that no amount was due for recovery, a direction to Respondents 1 and 3 to refund Rs.30,390 (amount already recovered as per Annexures A9, A11 and A13) with interest at 12%, and quashing of Annexures A6 and A7.
The matter was heard by the Tribunal on 9 January 2023 and the order was delivered on 14 February 2023.
Legal Issues Presented
- Whether the recovery steps initiated by the respondents for alleged excess pension payments amounting to Rs.2,25,602 are liable to be interdicted by the Tribunal.
- Whether Annexures A6 and A7 (the communication and statement of alleged excess payment and recovery) should be quashed.
- Whether the amounts already recovered (specifically Rs.30,390 as identified in Annexures A9, A11 and A13) should be refunded to the applicant, and if so with interest.
Arguments of the Parties
Applicant's Arguments
- The recovery action by Respondents 1 and 3 is illegal and arbitrary.
- Reliance on Annexure A14 (OM No.18/03/2015-Estt.(Pay1) dt.2.3.2016) and the Supreme Court decision in State of Punjab & Others v. Rafiq Masih (White Washer), AIR 2015 SC 696, which — according to the applicant — prohibits such recovery in relevant circumstances.
- Invoked the decision of the Nagpur Bench of the Bombay High Court in Naini Gopal v. Union of India, Ministry of Defence, arguing that recovery was unsustainable and that the dictum should apply to these facts.
- Sought declaration that no amount is due, refund of amounts already recovered (Rs.30,390) with interest at 12%, and quashing of Annexures A6 and A7.
Respondents 1–3 (Central Bank of India) — Main Contentions
- Denied the applicant's contentions and charged that the applicant had "unclean hands" — i.e., he was aware of the excess payment but did not disclose it and enjoyed it.
- Asserted that the excess payment arose because the applicant, who was entitled to pension computed on IDA (Industrial Dearness Allowance), had been paid pension on CDA (Central Dearness Allowance) rates incorrectly.
- Stated that Rs.2,25,602 was drawn in excess between May 2012 and October 2020 and that recovery at Rs.10,130 per month was being effected pursuant to Reserve Bank of India circulars/standing instructions (Annexure R1(c)).
- Prayed for dismissal of the Original Application.
Respondents 4 & 6
- Filed replies consistent with Respondents 1–3, admitting a calculation mistake (granting CDA-based pension instead of IDA-based pension) and asserting that recovery of the quantified excess is warranted.
- Contended that the Bombay High Court decision in Naini Gopal is not applicable to these facts.
Respondent 5 (BSNL)
- Also filed a reply stating that the excess payment arose from a mistake in pension calculation and supported dismissal of the Original Application.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of Punjab & Others v. Rafiq Masih (White Washer), AIR 2015 SC 696 | The Supreme Court summarised situations in which recoveries by employers for mistakenly paid amounts would be impermissible, including: (i) recovery from Class-III & Class-IV employees; (ii) recovery from retired employees or those due to retire within one year; (iii) recovery where excess payments were made for a period in excess of five years prior to the recovery order; (iv) recovery where an employee was wrongfully required to discharge higher duties; and (v) any case where recovery would be iniquitous, harsh or arbitrary. | The Tribunal applied the first three categories to the applicant (who was a Class-III employee, retired, and had allegedly received excess payments for a period exceeding five years) and concluded that recovery was impermissible under the Supreme Court's dictum. This formed the primary legal basis for restraining recovery and ordering refund of amounts already recovered. |
| Naini Gopal v. Union of India, Ministry of Defence (Nagpur Bench, Bombay High Court) | In that case the High Court found recovery unsustainable where the pension had been unilaterally slashed by the pension payment agency without involvement or knowledge of the pension sanctioning authority; the High Court awarded compensatory costs against the bank. | The Tribunal considered this decision but held the facts in the present case were dissimilar (here the pension sanctioning authority and respondents uniformly acknowledged a mistake in grant of pension and asserted recovery was warranted). Consequently, the Tribunal held that Naini Gopal was not applicable to the present facts and did not rely upon it to deny relief to the applicant. |
Court's Reasoning and Analysis
The Tribunal proceeded on the basis that the factual matrix was not in dispute: the applicant had retired as a Class-III employee; pension payments had been made from 01.07.2005 onwards; at some point an anomaly was detected and, following inquiries, respondents concluded that the applicant had been paid pension calculated on CDA rates instead of IDA rates, resulting in an alleged excess payment of Rs.2,25,602 for the period May 2012 to October 2020. The respondents stated recovery pursuant to RBI instructions.
The Tribunal examined two principal lines of contention: (a) respondents' contention that the applicant knew about and consciously retained the excess payments (i.e., acted dishonestly), and (b) the applicant's reliance on legal authorities and government instructions allegedly prohibiting recovery.
The Tribunal found no material on record showing any misrepresentation, fraud or active role by the applicant in producing the calculation mistake; there was nothing to establish that the applicant knowingly caused or contributed to the mistake. Consequently the allegation that the applicant had "unclean hands" or acted dishonestly did not stand on the record.
On the applicable law the Tribunal relied on the Supreme Court decision in State of Punjab v. Rafiq Masih (White Washer), which delineates categories where recovery of mistaken payments would be impermissible. The Tribunal identified that the applicant's circumstances fall squarely within the first three categories summarized by the Supreme Court: (i) the applicant is a Class-III employee; (ii) he is retired; and (iii) the excess payments relate to a period exceeding five years prior to the order of recovery. Applying those principles, the Tribunal concluded that recovery was impermissible in law.
The Tribunal considered the Naini Gopal decision cited by the applicant but distinguished it on the facts: in Naini Gopal the pension paying agency had unilaterally reduced pension without the sanctioning authority's involvement, whereas in the present case the pension sanctioning authority and other respondents uniformly acknowledged the mistake in pension grant and sought recovery under standing instructions. Thus Naini Gopal was not treated as applicable.
On that analysis the Tribunal held that attempts to recover the alleged excess were contrary to the Supreme Court's dictum and therefore impermissible in the present circumstances.
Holding and Implications
HOLDING: The Original Application is allowed. The Tribunal held that any attempt to recover the excess pension paid to the applicant is illegal and contrary to the decision of the Hon'ble Supreme Court. Accordingly, Annexures A6 and A7 are interfered with and the respondents are restrained from proceeding with the recovery. Amounts already recovered shall be refunded to the applicant within three months, without any interest. The Tribunal also observed that any attempt to quantify and recover portions of pension drawn prior to May 2012 would be idle. No costs were awarded.
Implications: The direct effect of the decision is to stop the ongoing recovery of Rs.2,25,602 (and related instalments) from the applicant, to quash the specific communications that initiated recovery (Annexures A6 and A7) and to require refund of amounts already recovered (without interest) within three months. The Tribunal framed its ruling as an application of the Supreme Court's categories in State of Punjab v. Rafiq Masih; it did not state that it was creating new legal precedent beyond applying that Supreme Court dictum to these facts.
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CENTRAL ADMINISTRATIVE TRIBUNAL
ERNAKULAM BENCH
Original Application No.180/00684/2021 Tuesday, this the 14th day of February, 2023
C O R A M :
Hon'ble Mr. Justice K. Haripal, Judicial Member
J. Sivasankara Pillai, S/o Late Janardhanan Pillai, aged 76 years, Telecom Technical Assistant (Retd), Office of the GM BSNL, Kollam, Kuttikkattu Krishna Vilasam,
Kureepuzhacherry, Kavanad P.O., Kollam-691 003. - Applicant
(By Advocate: Shri.C.S. Gopalakrishnan Nair)
V E R S U S
1. Assistant General Manager, Central Bank of India, (Central Pension Processing Centre), Central Bank Building, M.G. Road, Fort,
Mumbai-400 001.
2. Senior Regional Manager, Central Bank of India, Regional Office, CSI Building, 2ndFloor, M.G. Road, Thiruvananthapuram-695 001.
3. The Branch Manager, Central Bank of India, Maruthady Branch, Kavanad, Rest House Junction, Kollam-691 001.
4. Controller of Communication Accounts, Kerala Circle, Thiruvananthapuram-695 033.
5. General Manager, BSNL, Telecom Department, Vellayattambalam,
Kollam-691 012.
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6. Union of India, Represented by the Secretary, Department of Pension & Pensioners' Welfare, Lok Nayak Bhawan, Khan Market,
New Delhi-110 003. - Respondents (By Advocates:M/s Mathew B. Kurian, Sunil N & Neethu Lishba Alexander - R1 to R-3; Smt. O.M. Shalina, SCGSC - R4 & R6, Mr. Thomas Mathew Nellimoottil, SPC- R-5)
This Original Application having been heard on 9thJanuary, 2023, the Tribunal on 14thFebruary, 2023 delivered the following :
O R D E R
The applicant has retired as Telecom Technical Assistant from the office of the 5thRespondent on 30.06.2005. He had put in more than 32 years of service, in recognition of the same by Annexure A1 pension payment order, he was granted a monthly pension of Rs.4739/-. Later, it was revised to Rs.10,643/- and than to Rs.11,236/-. The pension is being disbursed through the 3rdrespondent, Central Bank of India, Maruthady Branch. When he noticed an anomaly in revised pension he made Annexure A4 representation to the Banking Ombudsman. But in reply the Ombudsman informed that, on inquiry it came out that he had drawn an excess payment of Rs.2,25,602/-. The applicant also received Annexure A6 communication stating that he has already drawn an excess amount of Rs.2,25,602/-, which was started recovering in monthly instalment. Annexure A7 is the details of that excess, communicated to him. Even though he made a representation it did not work. Therefore, he has
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approached this Tribunal for a declaration that no amount is due to be recovered from the applicant towards the alleged excess payment and to direct Respondents 1 and 3 to refund Rs.30,390/- already recovered as per Annexures A9, A11 and A13 with interest at the rate of 12% and quash Annexures A6 and A7.
2. According to the applicant the action of the Respondents 1 and 3 in recovering the alleged excess payment is illegal and arbitrary, under Annexure A14 of OM, the 6thRespondent has prohibited recovery from pensioners, based on the judgement of the Hon'ble Supreme Court, that recovery of the alleged excess payment is bad as per the decision of the Hon'ble Supreme Court in State of Punjab and Others v. Rafiq Masih (White Washer) reported in AIR 2015 SC 696. Moreover, referring to the decision of the Nagpur Bench of the Bombay High Court in Naini Gopal v. Union of India, Ministry of Defence, he said that recovery was unsustainable and the case was disposed of by the Bombay High Court awarding a compensatory cost of Rs.50,000/- against the bank and in favour of the pensioner. So the applicant wants to state that the said dictum is to be applied to the facts of the case.
3. On behalf of Respondents 1 to 3 the Regional Head of the Central Bank of India filed counter affidavit denying the contentions of the applicant. According to her, the applicant had approached this Tribunal
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with unclean hands. Even though he was aware that he was paid excess amount as pension he never did point it out, but enjoyed the same and now his intention is dishonest. He wants to prevent the recovery of the amount being done as per Annexure R1(c) circular issued by the Reserve Bank of India. According to the respondents the applicant was entitled to draw Industrial Dearness Allowance (IDA), but was drawing pension with Central Dearness Allowance (CDA), which was wrong. By the time the mistake was noticed, an amount of Rs.2,25,602/- was drawn in excess between May 2012 and October 2020. That was sought to be recovered from the pension at monthly rate of Rs.10,130/- which cannot be called in question by the applicant. Therefore the application is sought to be dismissed.
4. On behalf of Respondents 4 and 6 also a reply was filed, which goes in conformity with the reply of the 3rdRespondent. In the reply statement of Respondents 4 & 6 it is stated that there was calculation mistake in granting pension to the applicant. Instead of granting pension at IDA rate he was granted pension in the category of CDA employees and that resulted in payment of excess pension. On realizing the mistake, the excess payment was sought to be recovered and that alone is done, there is nothing to quash Annexures A6 and A7. According to the Respondents the decision of the Bombay High Court is not applicable to the facts of the case.
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5. Similarly the 5thRespondent also filed reply stating that the recovery of excess amount necessitated owing to the mistake in the calculation of pension. He also canvassed for dismissal of the original application.
6. The facts of the case are not in dispute. The applicant had retired from service of the 5threspondent as Telecom Technical Assistant on 30.06.2005. From 01.07.2005 onwards he was granted pension. Pointing out some anomaly in the amount, he approached Respondents 1 to 3 seeking to rectify the same. Thereafter, he approached the Banking Ombudsman. At this stage only it was realised that he was drawing excess pension. According to the respondents this mistake was known to the applicant from the very beginning, but he never pointed it out to the respondents and thus between May 2012 and October 2020 an amount of Rs.2,25,602/- was paid in excess. Thus from September 2021 onwards that amount was sought to be recovered in monthly instalments at Rs.10,130/-. The respondents say that they are going in accordance with the circulars and standing instructions issued by the Reserve Bank of India and are entitled to recover the excess amount already paid to the applicant.
7. All the respondents in different reply statements or counter affidavit have stated in uniform terms that the applicant had been drawing excess payment due to the wrong application of the principle for drawing D.A. He was paid pension granting CDA instead of IDA, which was wrong. Thus the
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quantified excess amount is Rs.2,25,602/- for the period from May 2012 and October 2020. The statement of the 5thRespondent further indicates that steps are being taken for quantifying the excess pension paid prior to May 2012 and that also requires to be recoved from the pension of the applicant. Thus there is consistency in the version of respondents that there was calculation mistake in the estimation of pension. In fact this contention is not disputed by the applicant. He did not file any rejoinder nor has disputed the said contention that he was granted pension awarding CDA, which he was not entitled , that he was entitled to get only IDA.
8. That means the question confines to whether the steps initiated for recovery of Rs.2,25,602/- is liable to be interdicted.
9. It is the clear case of the applicant that he had retired from service as a Class-III employee. This aspect is not disputed by the respondents. Any how, huge amount has been paid to him in excess of what was actually due to him. Similarly the respondents submitted that he had drawn excess amount consciously that he was aware of this calculation mistake, it was not pointed out and now he wants to take advantage of the mistake committed by the respondents. In fact, there is no material to say that there was any role on the part of the applicant in the mistake in estimation of the pension. There is nothing on record to say that he had committed any mis-representation or act of fraud, which permitted the respondents to
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pay excess payment. Therefore, the contention that he had acted dishonestly drawn excess fully conscious of the fact, does not stand to reason.
10. In the decision quoted above, the Hon'ble Supreme Court after making detailed evaluation of the circumstances of similar cases has laid down as follows:-
"12. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
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The applicant's case comes within first three categories. He was a Class-III employee, retired from service and that from the very inception of grant of pension he has been paid excess pension on wrong assumption. He was paid pension with CDA instead of IDA. That means, recovery is sought for the excess payment made for a period exceeding five years. So the case of the applicant falls within the first three categories; as laid down by the Apex Court, such a recovery is impermissible.
11. After going through the decision in Naini Gopal case, I have no doubt that the facts are dissimilar, as pointed out by the learned counsel for the respondents. There the pension of the petitioner was unilaterally slashed by the pension payment agency without any signal from the pension sanctioning authority. It is evident that pension sanctioning authority had disowned any role and submitted before the High Court that they were not aware of the slashing of the pension. Here all the respondents uniformally have stated that the applicant was given pension in excess of what was due to him and that recovery is warranted as per the standing instructions. Therefore, the decision of Naini Gopal case cannot be applied to the facts of the case.
12. After considering the records and hearing counsel on both sides, I hold that any attempt to recover excess pension granted to the applicant is
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illegal and against the dictum of the decision of the Hon'ble Supreme Court and therefore, Annexure A6 & A7 are liable to be interfered with. Therefore the respondents are restrained from proceeding with the recovery of excess pension paid to the applicant. Moreover, amount already recovered will be refunded, within three months, without any interest. It goes without saying that any attempt to quantify and recover portion of the pension drawn by the applicant prior to May 2012 also would be idle.
13. The OA is allowed as above. No costs. (Dated this the 14thday of February, 2023)
Justice K. Haripal Judicial Member
va
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List of Annexures
Annexure A1- True copy of the PPO No.3564/DOT/KRL Annexure A2- True copy of the Revised PPO issued on 19.12.2011 issued by the 4thRespondent
Annexure A3- True copy of the PPO No.Pen(IDA) Pre-2007/3564/DOT/KRL Dated 23.12.2016
Annexure A4- True copy of the complain dt.23.06.2021 issued to the Banking Ombudsman
Annexure A5- True copy of the letter No.OPER/THIRRO/2021-22 dt. 3.9.2021 issued by the 2ndrespondent
Annexure A6- True copy of the letter No.CBI/CPPCOO/2021-22 dt. 3.09.2021 issued by the 1strespondent
Annexure A7- True copy of the Statement of alleged excess payment issued by the 1strespondent
Annexure A8:- True copy of the letter No.OB(T) CMS 2021 22015001973/2021-22 dt.30.09.2021
Annexure A9- True copy of the Pension Pay Slip for the month of September 2021
Annexure A10- True copy of the letter dt.4.10.2021 to the 1strespondent Annexure A11- True copy of the Pension Pay Slip for the month of October
2021
Annexure A12- True copy of the letter dt.1.11.2021 issued to the 1st respondent
Annexure A13- True copy of the Pension Pay Slip for the month of November 2021
Annexure A14:- True copy of the OM No.18/03/2015-Estt.(Pay1) dt.2.3.2016 issued by the 6threspondent
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Annexure R1(a)- True copy of the Pension Payment order Annexure R1(b)- True copy of notice dated 3.08.2020 Annexure R1(c)- True copy of the master circular 01.07.2020 issued by the Reserve Bank of India
Annexure R5(a)- A true copy of the revised pension calculation submitted from BSNL, Kollam to CCA, Trivandrum
Annexure R5(b)- A true copy of the revised pension calculation sheet of the applicant submitted from BSNL Kollam to CCA, Trivandrum
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