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humhongeykamyaab

Illegal recovery of Pension Over-payment by Bank

Question

humhongeykamyaab
Posted (edited)

Hi,

Need some clarity on how to draft the RTI for the information asked; Alternatively, please advice what other course of action to pursue?

 
Background:-

Case of Illegal Recovery of Pension by Public Sector Bank  (thereafter referred as PSB)

1) The PSB, the pension disbursal bank mistakenly overpaid the pension to the pensioner for 10 years;

2) No connivance or misrepresentation from the Pensioner; solely a mistake done by the Bank. 
The over payment was detected via a CAG Audit, and the mistake of the bank as well was pointed out in the same audit

3)Now the PSB has started recovering the Pension since last 3 years, illegally.

4)No recovery order or show cause notice has been ever issued to the Pensioner by the bank or any competent authority

5)This recovery is illegal as per Apex Court judgement on Rafiq Masih's Case- 
which states that no recovery can be done after 5 years of continual overpayment

6) The Pensioner has been forced to go to the court to seek redressal. Case is stuck in the court for the last 3 years

An RTI Was filed in May 2018/ Information sought and response received are as under:-

Q-2) Provide the list of all officials and their designation who dealt with this pension matter during Dec 2006 to Dec 2007 at CPPC and PSB Branch

Q-3) Name the officer who responsible for sanctioning the excess pension

Q-5) Please provide number of cases in your bank wherein excess amount of pension is being recovered

Response received (for all three questions, above) from CPIO: As informed by the Branch Manager of your branch : Information is not available

Q-4) Name the officer who is recovering my excess pension

Response received : The excess pension has been detected by the Performance Audit Team  under CAG and adviced via audit memo 36 dated XX 
                     to recover the amount of 10 Lakhs which is over paid since  1. 1. 2007. As such bank is recovering now and refunding the authority.

My Comment on Q-4:

It doesn't give the name of the officer who is recovering excess. Plus: The Audit Memo from CAG does not talk about recovery at- all. This has also
been mentioned in the affidavit by the pension sanctioning authority in the court where it states that CAG has not issued any order of recovery. So this response is misleading.

Unfortunately I was not able to file the First Appeal to the above response.

Should I file another RTI ? Is re-drafting of the questions needed? The bank is hell bent on shielding its errant officials and protecting them.  Please feel free to advise me on any other course of action as deemed fit. 

Thank You,
Andy
 

Edited by humhongeykamyaab
Being a public forum, I do not want to mention the bank by its name. Hence removed it from the above draft. Thank You

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4 answers to this question

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Prasad GLN
Posted (edited)

Go for first appeal stating some health reason and pray for condoning the delay, and if FAA refuses to condone the delay then file fresh application.

While going for first appeal, seek personal hearing and depute a representative on your behalf.

You can consider the following:

FIRST APPEAL dt................under RTI.

Before: FAA,.........................State Bank of India,...........................

Against: CPIO,......................State Bank of India........................

Appellant:........................................................

Brief facts: Appellant has on...............solicited information as per RTI Application xeroxed on back of this appeal.  CPIO has responded vide his letter reference....................dt...............................

Grounds for Appeal:  CPIO has not provided correct and complete information as solicited.  Discussed in Annexure.

Condoning the delay:  Appellant could not file the First appeal in time within 30 days from date of receipt of the PIO response due to health reasons, and pray FAA for kindly condoning the delay, without giving scope for filing fresh RTI Application for incomplete information.

PRAYER:  Please permit for personal hearing and then deliver speaking orders directing CPIO to provide information as expeditiously as possible free of Cost.

 

Appellant.

 

Annexure

__________________________________________________________________________________________

Information solicited.............PROVIDED BY CPIO.............Specific information not provided by CPIO

__________1__________________2______________________________3-______________________

1

2

3

there on

_____________________________________________________________________________

 

 

With due respects, if a payment is made over and above eligibility, any one is having such rights to recover the amount paid by mistake.   It is not illegal.   Being a banker, if your cashier pays Rs.10000/- instead of paying Rs.1,000/- as a controlling officer, do you bring pressures on such payee to refund such excess amount or not.?  No one can benefit on mistakes and use it for unlawful gains.    Recovering the amount paid by mistake is not illegal.  However, bank should not recover from your account, once a credit is available in your account.  They have authority only to credit and not to debit for any other purposes without your consent as per SC Judgment  in Jammu and Kashmir bank case.

 

In this forum we always advise members to seek such information through which they can make further follow up to bring a logical conclusion to the issue.  Seek that information that helps you in the case, and by making such RTI applications on your own bank for their legitimate rights, do not spoil your image, reputation when the matter is already in court.

After all the errant officials  are your own colleagues and might committed mistake without expecting any unlawful gain.  Live and let live and focus on your issue.

Edited by Prasad GLN

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humhongeykamyaab
Posted (edited)

Check response submitted to quote

Edited by humhongeykamyaab
The same response has been posted as reference to quote. thank you

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humhongeykamyaab
23 hours ago, Prasad GLN said:

Go for first appeal stating some health reason and pray for condoning the delay, and if FAA refuses to condone the delay then file fresh application.

While going for first appeal, seek personal hearing and depute a representative on your behalf.

You can consider the following:

FIRST APPEAL dt................under RTI.

Before: FAA,.........................State Bank of India,...........................

Against: CPIO,......................State Bank of India........................

Appellant:........................................................

Brief facts: Appellant has on...............solicited information as per RTI Application xeroxed on back of this appeal.  CPIO has responded vide his letter reference....................dt...............................

Grounds for Appeal:  CPIO has not provided correct and complete information as solicited.  Discussed in Annexure.

Condoning the delay:  Appellant could not file the First appeal in time within 30 days from date of receipt of the PIO response due to health reasons, and pray FAA for kindly condoning the delay, without giving scope for filing fresh RTI Application for incomplete information.

PRAYER:  Please permit for personal hearing and then deliver speaking orders directing CPIO to provide information as expeditiously as possible free of Cost.

 

Appellant.

 

Annexure

__________________________________________________________________________________________

Information solicited.............PROVIDED BY CPIO.............Specific information not provided by CPIO

__________1__________________2______________________________3-______________________

1

2

3

there on

_____________________________________________________________________________

 

 

With due respects, if a payment is made over and above eligibility, any one is having such rights to recover the amount paid by mistake.   It is not illegal.   Being a banker, if your cashier pays Rs.10000/- instead of paying Rs.1,000/- as a controlling officer, do you bring pressures on such payee to refund such excess amount or not.?  No one can benefit on mistakes and use it for unlawful gains.    Recovering the amount paid by mistake is not illegal.  However, bank should not recover from your account, once a credit is available in your account.  They have authority only to credit and not to debit for any other purposes without your consent as per SC Judgment  in Jammu and Kashmir bank case.

 

In this forum we always advise members to seek such information through which they can make further follow up to bring a logical conclusion to the issue.  Seek that information that helps you in the case, and by making such RTI applications on your own bank for their legitimate rights, do not spoil your image, reputation when the matter is already in court.

After all the errant officials  are your own colleagues and might committed mistake without expecting any unlawful gain.  Live and let live and focus on your issue.

Namaskaram Prasad Ji.

Thank you for answering the original question pertaining to RTI. Also thank you for your valuable inputs. What you say makes complete sense and it esp. when you say that “After all the errant officials are your own colleagues and might committed mistake without expecting any unlawful gain.  Live and let live and focus on your issue”.  

The first step when a mistake is committed is to own it up. “To maintain a fault known is a double fault.” A genuine and inadvertent error can be condoned on compassionate grounds provided when such an error is brought to light, genuine intent is displayed to rectify the issue and contain the damage. Not otherwise.

The perspective that you have given is a valid one and finds resonance within me. It also gives me strength to file a detailed response so that the details of the case are known esp. to those who are in a similar situation. Please allow such a response.

This is a Pension Recovery Case, the rules governing the Pension Disbursal and Recovery are very well codified.

“If a payment is made over and above eligibility, any one is having such rights to recover the amount paid by mistake”.   It is not illegal. My comment:  Pension cannot be equated as Payment. Earlier the right to Pension was a fundamental right and also a property right. When property right was repealed as a fundamental right by the 44th Amendment, It became a Constitutional Right protected under Article 300 A enforceable by law.

“Recovering the amount paid by mistake is not illegal”- true; However, Recovering Pension Overpayment amount after continually making overpayment beyond 5 years is in direct contravention to several supreme court judgements and is not legally tenable. More so, in every case, due process of law must be followed. Recovery cannot be made arbitrarily.

 Pension overpayment and an overpayment by cashier may appear similar in terms of human behaviour- but it isn’t. These two scenarios are completely different. Cash overpayment on counter can purely be an inadvertent human error – but pension disbursal is a highly controlled well-defined process with multiple checks and balances. The probability of making such overpayment is highly minimized if correct inputs (such as: Date of retirement, Date of birth, PPO Number, DA, years of service, commuted amount etc) are fed in the process;

Bank has every right to induce pressure in case of un-intended benefits accrued by such a mistake to any beneficiary.  However, if you find a Pension overpayment that has happened for over 5 years, you will almost always find that either the Bank or the Pension Sanctioning Authority has overlooked and has been non-compliant to the well-defined sacrosanct procedures that are mandatorily to be followed. In such cases, it is no longer a case of innocuous human error but of wilful negligence. In our case the bank has completely overlooked the procedures mentioned as per Circular No. 57, Dt. 17, September, 2008, issued by PCDA (P); Specifically, Para 10 of the Circular directs the bank to share every case of pension consolidation done by the bank to the PCDA (P). This was never done. This observation comes from the stakeholders themselves: the CAG & PCDA (P).

 

I have gone through the case reference mentioned: Jammu & Kashmir Bank Ltd vs Attar-Ul-Nissa & Others on 7 October, 1966; this is not applicable in our case. I hope this is the one that you were referring to.  Without going into too much technical details here the overall process is: The Banks consolidate the Pension as per circulars issued by PCDA (P) and disburse the amount to the Pensioner. Later the Bank sends the advice of the payment made to the RBI and receives the reimbursement made only by the Central Accounts Section (CAS) of the RBI located at Nagpur.  So, let’s say the pension consolidation done by the bank indicates that the pensioner should receive 60,000 as pension amount. If there is a Pension Recovery happening- the bank would deduct 20,000 and disburse 40,000 to the Pensioner.  This recovery is as per the RBI authorization.  (Refer to the RBI Circular: RBI/2017-18/1 DGBA.GBD.No.-1/31.05.001/2017-18). So, the bank is not recovering from my account once the credit is available. They are deducting the recovery amount at source- pretty much the way the TDS (Tax deduction at source) works.

 “No one can benefit on mistakes and use it for unlawful gains”- Again in complete agreement with this. What you say is correct.  This is the exact question and perspective that has been looked into through several SC Judgements. The Rafiq Masih’s Case words this more cogently: Quote “ Merely on account of the fact, that the release of these monetary benefits was based on a mistaken belief at the hands of the employer, and further, because the employees had no role in the determination of the employer, could it be legally feasible, for the private respondents to assert, that they should be exempted from refunding the excess amount received by them”? Unquote

 However, as said earlier, this notion and perspective of unlawful gains has been covered many times in several SC judgements. These necessarily have to be mentioned here to dispel the highly over-simplified view of things and would need a detailed response.

 The SC provisions for such a recovery if it is found within the first 5 years of overpayment. Beyond that, it does not permit such recovery. The Pensioner has never been told about his correct entitlement of Pension; Neither by the PCDA (P) nor by the Bank. There is a complete blatant disregard again by the Bank in issuing of Pension Slips – please refer to RBI letter No. DGBA.GAD. No. H-10975/45.05.031/2006-07 dated January 9, 2007, in this regard. As per this the Pensioner must be issued a Pension Slip so that the Pensioner knows about his correct entitlement. The bank is in possession of these documents but the Pensioner has never been given / made known his correct entitlement. A case can be made stating that the Pensioner ought to make efforts to know the correctness of his Pension. In this case the Bank was asked for the Pension Slips- and it didn’t provide any. So- in such cases, whatever the amount accrued as Pension was taken as the correct entitlement. It can be argued whether such an excess was used for “Unlawful Gains”. However, the lapses and errors of omission and commission done by the bank cannot be ignored or condoned.  

However, the process of making such recovery cannot be arbitrary. Due process of law must be followed in case of any recovery. 

 All this and more perspectives have been completely though over in several judgments of the Supreme Court in cases of Pension Recovery due to Overpayment.  These are:-

a)     State of Punjab and others Vs. Rafiq Masih reported in 2015 (4) SCC 334 – wherein recoveries by the employers would be impermissible in law where the excess payment has been made for a period in excess of five years, before the order of recovery is issued. The OM issued by DOPT : F.No. 1 8/03/20 1 5-Estt. (Pay-I) has been issued citing this judgement and it clearly states that no recovery from pension can be made in violation of the Judgment of Rafiq Masih

 

b)     ShyamBabu Verma Vs. Union of India reported in 1994 SC (2) 521, wherein a three Judge Bench of SC held that no steps should be taken to recover or adjust any excess amount paid to the employees due to the fault of the respondents

 

 

c)     Syed Abdul Qadir and others Vs. State. Of Bihar and others reported in (2009) 3 SCC 475, where in  a three Judge Bench of the SC held that 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.

 

d)     The DPPI -2013 Instructions (Defence Pension Payment Instructions), section 103.2 issued by PCDA (P), Allahabad clearly prohibits the banks from initiating recovery of overpayment of pensions not detected within 12 months of the date of first erroneous charge without the orders of PCDA(P). Every case of overpayment detected should be reported to the PCDA(Pensions), which in turn shall decide himself or shall obtain orders of the competent authority, Govt. of India as the case may be. It further states that to avoid hardship to the pensioner, payment for the current period, however should be continued to the pensioner at the correct rate admissible.  Please note that the Pension Disbursing Bank is just an agent and is under direct instructions by the Pension Sanctioning Authority. It cannot act independently on its own.

Some parts of the Rafiq Masih’s Judgement need to be Quoted to give a complete perspective: -

 

“The Pensioner was not guilty of furnishing any incorrect information, which had led the concerned competent authority, to commit the mistake of making the higher payment to the employees. The payment of higher dues to the private respondents, in all these cases, was not on account of any misrepresentation made by them, nor was it on account of any fraud committed by them” – this is true in our case.

It further states:

“It will be our endeavour, to lay down the parameters of fact situations, wherein employees, who are beneficiaries of wrongful monetary gains at the hands of the employer, may not be compelled to refund the same. In our considered view, the instant benefit cannot extend to an employee merely on account of the fact, that he was not an accessory to the mistake committed by the employer; or merely because the employee did not furnish any factually incorrect information, on the basis whereof the employer committed the mistake of paying the employee more than what was rightfully due to him; or for that matter, merely because the excessive payment was made to the employee, in absence of any fraud or misrepresentation at the behest of the employee”.

“ Having examined a number of judgments rendered by this Court, we are of the view, that orders passed by the employer seeking recovery of monetary benefits wrongly extended to employees, can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. In other words, interference would be called for, only in such cases where, it would be iniquitous to recover the payment made. In order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, "for doing complete justice in any cause" would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court.”

 

“The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the concerned employee. If the effect of the recovery from the concerned employee would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover.”

 

 It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).

(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover.

That completes the reference to the Rafiq Masih’s Judgement by Apex Court.

Regarding Arbitrariness, as stated earlier-

1. No show cause notice was issued to the pensioner prior to commencing the recovery

2.  No order of recovery has been issued by any competent authority.

 

In the end the long detailed response may seem disproportionate keeping in mind the brevity of inputs received from you; However, this case is not an isolated one. This is just a tip of the iceberg. If you think the above response is exaggerated, you can check the report of the Comptroller and Auditor General of India  on Disbursement of Defence Pension for the year ended March 2016 (Performance Audit No. 26 of 2017). This Audit Report is submitted to the Presidents Office. It states “Deficiencies in the pension disbursement system:

We observed that the transmission errors as well as other mistakes in the banks, which account for nearly 75 per cent of the pension disbursements, had resulted in numerous cases of underpayments and overpayments”.

“As per records of the PCDA (P) Allahabad, there were 24, 61,651 defence pensioners as on 01/04/2015, which increased to 25,00,631 on 01/04/2016”. The mathematics can be done!

All the documents and references cited above are available in public domain.

Apologies, shall restrict further posts on matter pertaining to RTI only. Lest any specific questions are asked pertaining to the background of the case while filing the RTI.

Regards,

Andy

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Prasad GLN

Thanks for enlightening me on the subject.  Such feed back helps several members and purpose of the forum is served if message reaches large people, so that atleast one pensioner derives  ultimately benefits out of your posts.

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