‘No fault of hers’: Court directs SBI to refund widow’s pension cuts after Rs 3.6 lakh paid in excess due to bank error

‘Senior citizen dependent on family pension’

• It was placed on record that the petitioner’s husband, late Shiv Narayan, entered government service on October 15, 1980, as a lower division clerk. He died in harness on June 6, 2003, while serving as an upper division clerk in the election department under the sub-divisional magistrate.
• Following his death, a family pension was sanctioned in favour of the petitioner to be disbursed through the SBI.
• The pension payment order (PPO) record showed that the petitioner was entitled to a family pension at the enhanced rate of Rs 2,650 from June 7, 2003, to June 6, 2010, and thereafter at the normal rate of Rs 1,590 from June 7, 2010 till death or remarriage, whichever occurred earlier.

‘Wrong enhance date’

• The matter allegedly took a turn in 2017 when the petitioner noticed a substantial reduction in the pension credited to her account.
• Later, she learned from an SBI communication that an excess pension was paid due to a “wrong enhanced date” and quantified the excess at Rs 2.51 lakh.
• It also recorded that recovery was fed in the pension software at the rate of Rs 3,200 per month and asked the branch to recover the amount from the pensioner and inform her accordingly.
• Subsequently, after recalculation and revision linked to pension processing and the 7th Central Pay Commission exercise, the alleged excess amount was revised to over Rs 3.60 lakh, and the monthly deduction was increased to Rs 4,399.
• The woman challenged the recovery before the Delhi High Court, contending that the overpayment was entirely due to errors committed by the authorities and the SBI, and not because of any fraud, concealment or misrepresentation on her part.
• She also alleged that the deductions were initiated without prior notice and caused severe financial hardship as she was a senior citizen dependent solely on a family pension.

‘She has no role’

The court noted that the petitioner was not a serving employee who was choosing pay scales or benefits. She was the widow of the late employee and a recipient of a family pension.

The petitioner had no role in configuring the software or dates and had no independent means of checking the internal calculations, it was found. The court emphasised that even if the undertaking was taken at face value, it cannot be read in isolation from the rest of the record.

The judge found that the bank’s own documents showed that the error lay in its handling of the enhancement period and that overpayment continued for years.

Error at bank’s end

• The court found that there is nothing to suggest that the petitioner was informed, contemporaneously with the discovery of error, that a mistake had occurred, or that large sums were now sought to be recovered from her family pension.
• The overpayment arose from an error in pension processing at the bank’s end.
• There was no material to suggest fraud, misrepresentation or concealment by the petitioner.
• The overpayment continued for years before recovery was initiated, and recovery was then made from the family pension payable to the woman, the court noted.
• It was mentioned that the generic undertaking relied upon by SBI, obtained at the commencement of family pension, does not suffice to displace the equitable restraint recognised by the Supreme Court.
• The high court held that the petitioner is entitled both to cessation of further recovery and to a refund of the amounts already deducted from her family pension.
• It directed that the refund should be made within eight weeks, together with simple interest at 6% per annum, computed from the date of each deduction until the date of actual payment.

Arguments

Appearing for the petitioner, advocate Ch Rabindra Singh argued that the alleged excess payment resulted entirely from errors committed by the authorities and the bank and that recovery from a widow’s family pension after several years was legally unsustainable.

Representing the SBI, advocate Avnish Ahlawat submitted that the petitioner cannot invoke equity to resist repayment of money which was not lawfully due to her.

It contended that the payments were made from government funds, the excess came to light upon audit and recalculation, the recovery was structured through instalments, and the undertaking independently authorises such recovery.

According to SBI, the petitioner continued to receive family pension beyond what the system ought to have permitted, first because of the wrong enhancement date and later on account of revised pension processing.

On that basis, SBI submitted that it was bound to recover the excess and restore the amount to the government treasury.