Recovery from Pension Without Consent Violates Law, Dignity and Due Process: Punjab & Haryana High Court Slams Haryana Government and PNB

“When recovery is made from a pension account without notice or consent, it ceases to be a lawful action—it becomes an attack on the very dignity of post-retirement life,”  In a judgment that will resonate deeply with legal professionals and public servants alike, the Punjab & Haryana High Court came down heavily on the State of Haryana and Punjab National Bank, declaring that unilateral recovery from a retired employee’s pension account without prior notice or consent is legally untenable and constitutionally unsustainable.

The Court allowed the writ petition filed by Sajjan Kumar Goyal, a retired Executive Officer of Municipal Council, Kaithal, who had challenged the recovery of ₹6,63,688 debited from his pension account in 2021 without any prior show-cause, intimation, or consent. The deduction was made under the description “Recovery of Excess Pension” and later upheld by the Director, Urban Local Bodies. That action now stands quashed.

Justice Harpreet Singh Brar, delivering a speaking and reportable judgment, held that the recovery violated Rule 2.2(a) of the Punjab Civil Services Rules, Volume II, which clearly stipulates that “no recovery from pension already sanctioned shall be effected except with the express consent of the pensioner.”

The Court didn’t stop at that. It directed a refund of the recovered amount with 6% interest, and further instructed the Reserve Bank of India to issue binding directions to all agency banks, making it clear that no recovery from pension accounts shall be made by banks without legal authority, express consent, or prior notice.

“Service Rules Are Not Mere Formalities—They Are Shields Against Arbitrary Executive Action”

Beginning its analysis, the Court made a firm pronouncement: “When pension is deducted without even serving a notice or issuing a hearing opportunity, the action becomes not just a procedural wrong—it violates the core of Article 14 and 21 of the Constitution.”

The petitioner, who retired on February 29, 2016, was granted pension through a duly issued PPO. In April 2019, his pension was revised under the 7th Pay Commission. Allegedly due to a clerical error, he received additional Dearness Allowance, which the government later claimed was an “overpayment.” However, no explanation or prior communication was offered—instead, the entire amount was directly debited by Punjab National Bank on instructions from the authorities.

The Court emphasized that this recovery was contrary to the law laid down by the Hon’ble Supreme Court in State of Punjab v. Rafiq Masih, where it was held that “no recovery can be made from retired employees where there is no misrepresentation or fraud.” Reaffirming the principle, the High Court held:

“Even sums admittedly due to the Government cannot be recovered from pension in the absence of consent—this is not a discretion; it is a rule of law.”

“An Act Committed Without Notice Is an Act Committed Without Authority”

Drawing from M/s Daffodills Pharmaceuticals Ltd. v. State of U.P., the Court observed:

“If there is one constant lodestar that lights the judicial horizon in this country, it is this—that no one can be inflicted with an adverse order without being afforded a minimum opportunity of hearing and prior intimation.”

The Court took serious note of the bank’s conduct, terming it “arbitrary” and “unsupported by any statutory provision.” Relying on RBI Master Circular RBI/2025-26/05, it found that banks are required to credit overpaid amounts to the government only when the error is theirs, and where the error lies with the government, banks must seek instructions and not act unilaterally.

In a significant passage, Justice Brar wrote:

“Such conduct reflects procedural insensitivity and weakens the morale among both serving and retired employees, which often results in a lack of motivation to perform well. The absence of transparency and compassion diminishes the institution’s hard-earned ethical standing and public trust.”

“Pension Once Authorised Cannot Be Reopened Arbitrarily After Retirement”

Rejecting the government’s defence that the pension was revised under clerical mistake, the Court held that even if Rule 9.15 of PCS Rules or Rule 78 of Haryana Pension Rules permits refixation of pension under limited circumstances, such revision must always be “subject to Rule 2.2(a),” which requires written consent for any recovery.

“Wherever there is a conflict between the general power of revision and the specific condition of consent, the latter must prevail,” observed the Court.

Revisiting Sarabjit Kaur v. State of Punjab, the Court highlighted that pension fixation must be based on the last 24 months’ emoluments and the entire career cannot be reopened decades after retirement. It held that administrative errors cannot become legal grounds to punish a pensioner retrospectively.

“Recovery Without Consent Is Not Just Illegal—It’s an Assault on Retiree Dignity”

In one of the most powerful portions of the judgment, the Court lamented the administrative insensitivity of such abrupt actions:

“Such an action undermines the very object of providing pension to the retired employees, i.e., to secure the economic dignity and emotional stability in the post-retirement stage of life.”

“The absence of prior communication generates shock, anxiety, and a feeling of betrayal after long years of service.”

“Even where legal remedies exist, administrative prudence demands that any recovery from pension be preceded by due notice, consultation, and empathetic handling, consistent with the dignity of the retired employee.”

“Banks Are Not Collection Agents of the State—Their Role Is Regulated by Law, Not Letters”

In a notable move, the Court directed the Reserve Bank of India to issue clear instructions to all agency banks, clarifying that:

“No recovery of excess pension amount shall be effected without the pensioner’s knowledge and consent, or without the issuance of a prior notice.”

This direction comes in light of increasing instances where agency banks, often on verbal or informal instructions, act against pensioners’ financial security without any legal framework backing their actions.

“Law Is Not Blind to Human Consequence—And Neither Should Governance Be”

Allowing the petition, the Court set aside the order dated 16.11.2022 that justified the recovery and directed the State of Haryana to refund ₹6,63,688 with 6% interest, to be paid within three months from receipt of the order.

Summing up the spirit of the judgment, the Court held:

“Overall, the effect of such abrupt recovery extends beyond administrative error; it reflects on the sensitivity, fairness, and accountability of governance itself.”

This judgment will undoubtedly serve as a key precedent for advocates dealing with pension disputes, recovery challenges, and cases involving arbitrary executive conduct against retired government servants.

Date of Decision: November 4, 2025