"Excess Pension Was Paid From Public Money": Patna High Court Denies Widow's Plea, Upholds Bank's Recovery Of Overpaid Pension

"Excess Pension Was Paid From Public Money": Patna High Court Denies Widow's Plea, Upholds Bank's Recovery Of Overpaid Pension

Bhavya Singh

9 Sept 2024 5:00 PM

The Patna High Court recently ruled in favour of the State Bank of India's right to recover an excess amount of Rs. 8.63 Lakhs that was mistakenly paid to a widow pensioner over several years.

The woman's late husband had retired as an Auditor in 1998, and she had been receiving an enhanced family pension since his death in 2002. The State Bank of India (SBI) later discovered that she had received excess pension payments for several years.

Justice Harish Kumar presiding over the case, noted, “So far the contention of the petitioner that she has been getting enhanced pension or family pension, soon after demise of her husband w.e.f. 27.09.2002 and now at this belated stage, after sixteen years any alleged excess amount ought not be recovered, does not find force as the payment of excess pension is a recurring/successive wrong, which gives rise to a distinct and separate cause of action and the wrong or illegality cannot get sanctity or legalized by mere passage of time.”

“This Court is also not oblivious of the fact that the petitioner is a hapless widow. She has been getting enhanced pension and thereafter family pension since long and at this stage, any deduction from the family pension would certainly cause hardship but at the same time this fact could not be ignored that the excess payment paid to the petitioner is a public money which belongs neither to the officers who effected overpayment nor to the recipient,” Justice Kumar added.

Background

The petitioner argued that the overpayment was due to the Bank's mistake and should not be recovered after 16 years. However, the Court rejected this contention, emphasizing that the wrongful payment of pensions is a recurring issue that does not gain legitimacy over time. Justice Harish Kumar, presiding over the case, remarked that although the petitioner is a widow and the recovery would cause hardship, the excess pension paid is public money and must be returned.

The petitioner's late husband retired voluntarily in 1998 due to health reasons after working for the government since 1965. Upon his death in 2002, the petitioner started receiving an enhanced family pension, which was supposed to continue for seven years, after which she was entitled to a reduced pension. However, the Bank continued to pay both her husband's pension and the family pension, resulting in the excess payment.

In 2019, the Bank informed the petitioner about the overpayment and started deducting Rs. 4,400/- per month from her family pension to recover the excess amount. The petitioner claimed that she was unaware of the mistake and should not be held responsible for the Bank's error, but the Bank maintained that she had submitted her husband's life certificates even after his death, leading to the overpayments.

The question for adjudication before the Court was whether, at this late stage, she was empowered to recover an excess amount paid to the petitioner from her family pension, which had been allegedly overpaid.

In its judgement, the Court referred to the Payment of Defence Pension Instruction, 2013, noting that recovery of excess pension is permitted but must be ordered by the Principal Controller of Defence Accounts (Pensions) if the overpayment is detected more than 12 months after the first erroneous charge. The Court also cited provisions from the Master Circular issued by the Reserve Bank of India, which the Bank, acting as a Pension Disbursing Authority, was required to follow.

The Court remarked, “the pension is paid to the petitioner by the Bank under the scheme for payment of pension by Public Sector Banks; on being acceded, at the request of the pensioner to credit to saving/current account in single name of the pensioner payable to him from time to time.”

“As it falls due for the said purpose, the pensioner executes an undertaking to refund or make good to the Bank any amount to which the pensioner is not entitled or any excess amount which may be credited to the account over that to which the pensioner would be entitled and agrees that the amount, when demanded by the Bank and as due and payable to the Bank shall be conclusive and binding on the pensioners,” the Court added.

The Court also noted that the pensioner had bound herself and her legal heirs to indemnify the Bank for any loss, damage, or expenses incurred due to overpayment of her pension, authorising the Bank to recover any such amount from her account or other deposits with the Bank.

The Court referred to the Master Circular, which stipulates that whenever any excess or overpayment is detected, the entire amount should be credited to the government account in lump sum immediately, particularly if the excess payment was due to an error by the Agency Bank. In cases where the error was caused by the Government, the Court observed that the Bank may take up the matter with the relevant Government Departments to resolve the issue promptly.

The Court further observed that the relationship between the petitioner and the Bank did not fall within the typical employer-employee dynamic, as the Bank was acting as a Pension Disbursing Authority, disbursing pension pursuant to the Pension Payment Order issued by the Government of India, PCDA (Pension), Allahabad. As an agency, the Bank was bound by its Master Circular and the guidelines issued by the Reserve Bank of India, which had not been questioned in this case.

In light of these findings, the Court concluded that there was no merit in the writ petition and dismissed it. However, the Court granted the petitioner liberty to file an application before the Centralised Pension Processing Centre if she was dissatisfied with the Bank's calculation or the re-fixation of monthly instalments. The Court instructed that the Centre should consider the matter sympathetically, in accordance with the Master Circular of the S.B.I., and pass necessary orders promptly.

Appearance :

For the Petitioner/s : Mr. Shardanand Mishra, Advocate Mr. Bishnu Kant Dubey, Advocate

For the UoI : Ms. Kanak Verma, CGC

For the SBI : Mr. Abbas Haider, Advocate Mr. Wasi Mohammad, Advocate

Case Title: Lalita Mishra vs The Union of India and Ors

LL Citation: 2024 LiveLaw (Pat) 70