Recovery of any excess amount paid earlier is legally prohibited, rules Armed Forces Tribuna

he Armed Forces Tribunal (AFT) has ruled that pay and pension can be reduced if it comes to light that it had been fixed incorrectly by the authorities earlier, though recovery of any excess amount paid earlier is legally prohibited.

A Navy sailor who had retired in 2014 had approached the AFT averring that his pension had been reduced after nine years and the excess amount paid earlier had been recovered from his pension.

He had contended that no opportunity or show-cause notice was afforded to him before passing the recovery order and as such the authorities concerned had violated the principles of natural justice.

“While the recovery of benefits mistakenly granted to an employee is prohibited on the principle of equity to prevent undue hardship, this does not grant the employee a vested right to receive such benefits in perpetuity. An employee has no legal entitlement to continue receiving erroneous benefits in the future once the error is identified,” the Tribunal’s Bench comprising Justice Suresh Kumar Gupta and Lt Gen Anil Puri observed in their order of May 13.

“We further hold that the mistake/error in fixing the pay, which was erroneously done due to inadvertence, the same can be rectified by the respondents at any stage when it came into light,” the Bench added while referring to Supreme Court and High Courts judgments on the subject.

The authorities had argued that government policy states that immediate corrective action must be taken as and when cases where the excess payment in excess of entitlement come to notice, and an undertaking was given by the sailor at the time of his retirement to the effect that as and when the excess payment made to him, the same would be recovered.

On the issue of recovery, the Bench held that according to law no such action can be undertaken against Group-C and Group-D. “The relief against the recovery is granted by the courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered,” the Bench observed.

Upholding the decision to reduce the sailor’s pension to its correct scale, the Bench directed the authorities to refund the excess amount that had been recovered from him within a period of three months.