Recovery After Retirement Is Clearly Impermissible: Bombay High Court Shields Retired Teacher From ₹2.80 Lakh Salary Recovery

In a significant ruling balancing equity and statutory discipline in service law, the Bombay High Court has held that recovery of alleged excess salary from a retired primary teacher, in the absence of fraud or misrepresentation, is impermissible in law. However, the Court clarified that the employer is not barred from correcting pay fixation for the limited purpose of prospective pension re-fixation.

Division Bench comprising Justice Kishore C. Sant and Justice Sushil M. Ghodeswar partly allowed the writ petition, quashing the recovery of Rs.2,80,000/- directed from the petitioner’s pension.

The Court held that “recovery from retired employees… is clearly impermissible in law” in light of the Supreme Court’s judgment in State of Punjab v. Rafiq Masih and Shyam Babu Verma v. Union of India.

Objection Raised at the “Fag End of Service”

The petitioner, appointed as an Assistant Teacher in 1971 and having retired on 30.11.2005, had been granted pay revisions from time to time based on his qualifications and seniority. He completed B.A. in 1973 and D.Ed. in 1979, and was treated as a trained graduate primary teacher.

However, on 02.07.2005 — barely months before his superannuation — the Accounts Officer raised an objection that since his appointment was after 30.09.1970 and he had not acquired B.Ed. qualification within five years as contemplated under Government Resolution dated 14.11.1979, his pay scale required re-fixation and recovery.

Thereafter, by order dated 08.06.2007, recovery of Rs.2,80,000/- was directed from his pension on the ground of excess payment.

The petitioner challenged the recovery, contending that there was no fraud or misrepresentation on his part and that the objection had been raised after decades of service.

“Issue No Longer Res Integra” – Supreme Court Guidelines Applied

The High Court observed that the issue of recovery of excess payment is “no longer res integra.”

Relying upon State of Punjab v. Rafiq Masih (White Washer), the Court reproduced the Supreme Court’s guidelines which declare recovery impermissible in certain situations, including:

“Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.”

The Court also noted that recovery is impermissible when excess payment has been made for more than five years prior to the order of recovery.

Applying these principles, the Bench held that the petitioner had already retired, the objection was raised just months before retirement, and the recovery order was passed thereafter. Importantly, “there is no allegation of fraud or misrepresentation on the part of the petitioner.”

The Court observed that the alleged excess payment, if any, was made by the employer itself during the petitioner’s long service career. In such circumstances, directing recovery from pension would be arbitrary and contrary to settled law.

No Fraud, No Misrepresentation – Recovery Quashed

The Court emphasized that throughout the petitioner’s service tenure, no objection had been raised regarding his qualification or pay scale. The employer’s silence for decades could not be used to penalize a retired employee at the twilight of his career.

In unequivocal terms, the Bench held that recovery “suffers from arbitrariness” and is “clearly impermissible in law.”

Accordingly, the impugned order dated 08.06.2007 was quashed to the extent it directed recovery of alleged excess payment from the petitioner.

The respondents were restrained from effecting any recovery from amounts already paid during service or from pensionary benefits.

“Pension Is a Statutory Right” – But Incorrect Pay Cannot Continue

While granting relief against recovery, the Court carefully balanced equities.

It observed that pension is a statutory right governed by applicable Pension Rules and an employee cannot insist on continuation of an incorrect pay fixation contrary to statutory provisions.

The Bench clarified that although recovery is barred, “the respondents cannot be precluded from regulating and re-fixing the pension… strictly in accordance with the applicable Rules.”

Thus, liberty was granted to re-fix the petitioner’s pension prospectively within eight weeks. However, such re-fixation must operate prospectively and “shall not result in recovery of any amount already paid.”

Court Balances Equity and Legality

The judgment reflects a nuanced approach in service jurisprudence. While protecting retired employees from harsh recovery orders, especially in the absence of fault, the Court reiterated that public authorities retain the power to correct pay fixation errors for future disbursements.

The writ petition was accordingly partly allowed, the recovery direction was set aside, and Rule was made partly absolute with no order as to costs.

Date of Decision: 17/02/2026