Recovery of Rs. 6.74 lakh from retired Head Constable's pension quashed; Court directs refund with interest and pension fixation on last pay drawn
In a significant judgment delivered on September 29, 2026, the Allahabad High Court has held that recovery of excess salary from a retired Class-III government employee on account of erroneous pay fixation is impermissible in the absence of fraud or misrepresentation. The case arose from Suraj Singh, a retired Head Constable of the Uttar Pradesh Police, who challenged the post-retirement refixation of his pay scale and the subsequent recovery of Rs. 6,74,404 from his pension.
The petitioner retired on July 31, 2021, and had furnished an undertaking at the time of retirement agreeing to refund any excess payments made. However, the State authorities, relying on an internal audit, claimed that from July 1, 2016, Suraj Singh's pay scale had been wrongly fixed at Rs. 41,600 instead of Rs. 40,400, leading to the alleged excess payment. Consequently, the authorities revised his pay scale retrospectively from February 24, 2010, and recovered the excess amount from his pension computation.
Rejecting the State's stand, the Court referred to crucial Government Orders dated January 16, 2007, and May 7, 2007, which restrict correction of pay fixation mistakes to a period not exceeding 34 months prior to retirement and mandate that pension fixation authorities cannot reopen pay fixation beyond this period after retirement. The Court noted that the alleged erroneous pay fixation dated back over 12 years and the recovery was made almost two years after the petitioner's retirement, thus violating these provisions.
The Court further relied on the Supreme Court precedents, including the landmark judgments in Sushil Kumar Singhal v. Pramukh Sachiv and State of Punjab v. Rafiq Masih, which establish that recovery of excess payments from retired employees of Class-III and Class-IV services is generally not permissible unless there is fraud or misrepresentation. The undertaking submitted at retirement was held insufficient to override this legal position, especially since the undertaking in Jagdev Singh relied upon by the State was given at the time of pay fixation revision, not at retirement.
Moreover, the Court observed that the respondents failed to provide any notice or opportunity of hearing to the petitioner before initiating pay refixation and recovery, violating the principle of natural justice as mandated by the Government Order dated May 7, 2007.
In view of these findings, the Allahabad High Court quashed the orders dated July 27, 2022 (pay scale refixation), August 22, 2022 (revised pay scale order), and February 24, 2023 (recovery order). The State was directed to refund the recovered amount of Rs. 6,74,404 to the petitioner along with 8% interest within eight weeks. The petitioner's pension and other retiral benefits were to be fixed based on the last pay drawn at the time of retirement.
This judgment reinforces the principle that pension and retiral benefits should be stabilized on the last pay drawn and that post-retirement corrections and recoveries should be made cautiously, respecting statutory limitations and procedural fairness.
Bottom Line:
Service Law - Recovery of excess salary from retired Class-III employee on account of wrong pay fixation, and post-retirement refixation of pay/pension, is impermissible in absence of fraud or misrepresentation - Undertaking obtained at the time of retirement for release of retiral dues does not attract principle laid down in Jagdev Singh - Pension and retiral benefits to be fixed on basis of last pay drawn.
Statutory provision(s):
Government Orders dated 16.01.2007, 07.05.2007; Principles under Service Law relating to pay fixation and pension; Articles 136, 141, 142 of the Constitution of India (as interpreted in cited Supreme Court judgments)
Suraj Singh v. State of U.P., (Allahabad) : Law Finder Doc Id # 2999283
