Ratnam V. Menon v. Union Bank of India & Ors.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 24TH MAY 2010 / 3RD JYAISHTA 1932 WP(C).No. 21514 of 2009(H) -------------------------- PETITIONER(S): - --------------- RATNAM V.MENON, HOUSE NO.32/2099, 'ANUGRAHA', ANCHUMANA ROAD, MAMANGALAM. BY ADV. SRI.P.R.VENKETESH SRI.P.R.RAJA SRI.P.C.CHACKO(PARATHANAM) RESPONDENT(S): - --------------- 1. THE CHAIRMAN, UNION BANK OF INDIA, 239, VIDHAN BHAVAN MARG, NARIMAN POINT, MUMBAI-400 021. 2. THE CHIEF MANAGER, UNION BANK OF INDIA, COCHIN MAIN BRANCH, BAZAR ROAD, MATTANCHERRY, KOCHI. 3. THE CHIEF MANAGER (PSSD), NODAL REGIONAL OFFICE, UNION BANK BHAVAN, M.G.ROAD, ERNAKULAM. BY SC SRI.A.S.P. KURUP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 21514 of 2009 ## APPENDIX ## EXHIBITS EXT.P1TRUE COPY OF THE LETTER DATED 4.3.08 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER EXT.P2TRUE COPY OF THE REPLY DATED 4.3.08 GIVEN BY THE PETITIONER TO EXT.P1 EXT.P3TRUE COPY OF THE COMPLAINT TO THE 1ST RESPONDENT DATED 17.3.08 EXT.P4TRUE COPY OF THE LETTER DATED 25.3.08 FROM THE 2ND RESPONDENT TO THE PETITIONER EXT.P5TRUE COPY OF THE REPRESENTATION DATED 25.8.08 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXT.P6TRUE COPY OF THE REPLY DATED 16.9.08 FROM THE 3RD RESPONDENT EXT.P7TRUE COPY OF THE REPLY DATED 17.10.08 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER EXT.P8TRUE COPY OF THE COMPLAINT DATED 10.12.08 BEFORE THE BANKING OMBUDSMAN EXT.P9TRUE COPY OF THE REGISTERED LETTER DATED 11.12.08 ISSUED BY THE 2ND RESPONDENT EXT.P10TRUE COPY OF THE LETTER DATED 17.12.08 SENT BY THE PETITIONER TO THE 2ND RESPONDENT EXT.P11TRUE COPY OF THE LETTER DATED 23.12.08 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER EXT.P12TRUE COPY OF THE ENDORSEMENT ISSUED BY THE 2ND RESPONDENT TO SRI.M.MANOHARAN, DRAWEE OF THE CHEQUE DATED 2.1.09 ISSUED BY THE PETITIONER EXT.P13TRUE COPY OF THE 2ND COMPLAINT DATED 15.1.09 SUBMITTED BY THE PETITIONER BEFORE THE BANKING OMBUDSMAN EXT.P14TRUE COPY OF THE APPLICATION DATED 18.6.09 SUBMITTED BY THE PETITIONER UNDER THE RIGHT TO INFORMATION ACT, 2005, BEFORE THE CHIEF MANAGER, FAMILY PENSION SECTION, UNION BANK BHAVAN, MUMBAI EXT.P15TRUE COPY OF THE LETTER DATED 19.6.09 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER EXT.P16TRUE COPY OF THE LETTER DATED 26.6.09 ISSUED BY THE OFFICE OF THE BANKING OMBUDSMAN EXT.R2ATRUE COPY OF REPLY DATED 22.8.09 GIVEN BY THE RESPONDENT TO THE PETITIONER EXT.2BTRUE COPY OF STATEMENT OF ACCOUNT PREPARED BY THE RESPONDENT IN THE NAME OF THE PETITIONER WP(C).No. 21514 of 2009 -2- EXT.R2CCOPY OF PENSION PAYMENT ORDER DATED 1.4.00 ISSUED TO LATE VELAYUDHA MENON BY THE BANK EXT.R2DCOPY OF LETTER OF UNDERTAKING DATED 2.5.00 GIVEN BY LATE VELAYUDHA MENON TO THE BANK EXT.R2ECOPY OF LETTER DATED 12.6.00 GIVEN BY LATE VELAYUDHA MENON TO THE BANK EXT.R2FCOPY OF LETTER OF UNDERTAKING DATED 9.8.00 SIGNED BY PETITIONER & HER HUSBAND EXT.R2GCOPY OF PENSION CIRCULAR NO.7/C.D.R./1991 DATED 18.4.91 ISSUED BY RESERVE BANK OF INDIA REGARDING RECOVERY OF EXCESS/WRONG PAYMENTS MADE TO PENSIONERS (TRUE COPY) P.A TO JUDGE ## ANTONY DOMINIC, J ....................... W.P.(C).21514/2009 ....................... Dated this the 24[th] day of May, 2010 ## JUDGMENT Petitioner's husband Sri.N.Velayudha Menon was a Cashier in the respondent Bank. He retired from service on 31.3.2000. At that time, he was eligible for monthly pension at the rate of Rs.5000/- which was being credited in the joint account of the petitioner and her husband. Pension was subsequently revised to Rs.7802/-. Velayudha Menon expired on 6.7.2005 as a result thereof, petitioner was eligible for family pension at the rate of Rs.3392/-. However, Bank continued to credit the full amount of pension and this continued till April 2008. 2. On 4.3.2008, Bank issued Ext.P1 notice informing the petitioner that against her eligibility for family pension, she has been receiving excess amount and the Bank should be permitted to recover the amount. On receipt of Ext.P1, petitioner submitted Ext.P2 reply, accepting that excess payment was received, but however sought permission to repay the excess amount at the rate of Rs.500/- per month. Finally Bank issued W.P.(C).21514/09 2 Ext.P9 notice informing the petitioner that she has received an excess amount of Rs.1,39,986/- and that the same should be repaid with 16.75% interest. On its receipt, she disputed her liability by Ext.P10 reply. Thereafter by Ext.P11, she was informed by the 2[nd] respondent that recovery will be effected and aggrieved by this, the writ petition is filed. Learned counsel for the petitioner also submits that from January 2009, the entire amount of family pension is being withheld. 3. Learned counsel for the petitioner accepts that the eligibility of the petitioner is only to receive family pension as admissible under the Rules and that there has been certain excess payment. It is contended that the petitioner has not contributed to the said mistake and that in such circumstances, Bank is not entitled to effect recovery even if excess payment has been made by it. 4. On the other hand, the stand taken by the Bank is that as against the eligibility of the petitioner to be paid only family pension at the rate of Rs.3,392/- per month from July 2005, W.P.(C).21514/09 3 petitioner has received full amount of full pension till March 2008. It is stated that this payment was received by the petitioner despite being aware that her eligibility was only to receive family pension. It is also stated that in the pension payment order itself, the admissible amount of family pension was mentioned. They also have produced a letter of undertaking given by the pensioner late Velayudha Menon and Ext.R2(f) a joint undertaking given by both the deceased and the petitioner, wherein, according to the Bank, the petitioner and her husband have agreed to refund the excess payment if any, that was received by them. It is stated that the petitioner was knowingly receiving the amount and is liable to refund the excess amount. Bank also submits that having regard to the fact that the deceased has rendered long service in the Bank, taking a lenient view, Bank asked the petitioner only to refund the principal amount in reasonable instalments. It is stated that despite this offer made by the Bank, petitioner was not willing to increase the rate of instalment from Rs.500/- per month mentioned in Ext.P2 and it was therefore that the Bank had to issue the impugned orders. W.P.(C).21514/09 4 5. As far as the fact of excess payment is concerned, I do not think that there can be any dispute. From the records, it would appear that the family pension that was eligible to the petitioner was at the rate of Rs.3,392/- per month. As against this, petitioner has received full pension till April 2008. This excess payment has been quantified by the Bank in Ext.R2B which shows that till April 2008, petitioner has received an excess amount of Rs.1,39,986/-. The question is whether the petitioner has the liability to refund the amount. Learned counsel for the petitioner relied on the Apex Court judgment in Col. B.J.Akkara (Retd.) v. Government of India and Others (2006 (11) SCC 709). In paragraph 27, 28 and 29 of the judgment, it has been held thus- “The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 7.6.1999. This Court has consistently granted relief against recovery of excess W.P.(C).21514/09 5 wrong payment of emoluments/allowances from an employee. If the following conditions are fulfilled - (a).The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. (b).Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous. Such relief , restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment W.P.(C).21514/09 6 received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery. On the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in-service employees. Any attempt to recover excess wrong payment would cause undue hardship to them.” 6. Following this judgment, in Syed Abdul Qadir and Others v. State of Bihar and Others (2009 (3) SCC 475), it has been held thus- “This Court in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of W.P.(C).21514/09 7 the employee, and (b) if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous. The relief against recovery is granted by 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. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they W.P.(C).21514/09 8 were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter-affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.” 7. From the principles laid down by the Apex Court, it can be seen that a pensioner can successfully resist steps for recovery of excess payment provided excess payment was not made on account of misrepresentation on the part of the W.P.(C).21514/09 9 pensioner and where excess payment has made by the employer by applying a principle of calculation which principle was subsequently found to be erroneous. In this case, although the petitioner cannot be attributed any misrepresentation or fraud on her part, I do not think the second principle laid down by the Apex Court, that such excess payment should have been made by the employer applying a wrong principle for calculation which is subsequently found to be erroneous, applies to the facts of the case. This is for the reason that admittedly despite entitlement of the petitioner for family pension, full pension was erroneously credited in her account. Such wrong credit cannot be a payment made applying a wrong principle as there is no principle involved in such payment. If that be so, these judgments cannot come to the rescue of the petitioner and these judgments also cannot have nay application to the facts of the case. That apart, pension payment order itself show the monthly pension due to the retired employee and also the family pension that is due to the defendants. Evidently payment has been received much in excess of the family pension. If that be so, petitioner has been W.P.(C).21514/09 10 accepting payment despite having known that excess payment has been made. 8. Be that as it may, having regard to the fact that the petitioner is a pensioner who would have spend the amounts that have been received, I do not think that the Bank should recover the amount causing inconvenience and difficulties to the petitioner. But however, at the same time, it would be unreasonable to insist that the petitioner will repay the amount only at the rate of Rs.500/- per month. 9. Having regard to the above, I think it is appropriate that the Bank should be permitted to recover Rs.1,39,986/-, the principal amount, without any interest, at the rate of Rs.1000/per month from the family pension. 10. Having regard to the complaint of the petitioner that since January, 2009, family pension is withheld, it is directed that the recovery as the rate above will be effected from the amount due to the petitioner from January 2009 which is stated 11 W.P.(C).21514/09 to be withheld and after recovery at the rate of Rs.1000/- per month, the balance amount shall be returned. This shall be done within four weeks of production of a copy of this judgment. Writ petition is disposed of as above. ANTONY DOMINIC, Judge mrcs