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Recovery of Overpayment of Pensions- Conflicting Provisions / Clarity Required



Good Evening Team,
Pardon the verbosity below. This may be useful for some members in a similar situation.
thank you.

The question is about conflicting provisions in the circulars issued by PCDA/ RBI/ and Apex court rulings. All pertaining to recovery of over-payments.

Requesting help- to whom / which public authority should I address these queries? 
Frank/ unbiased opinion as to whether it will be effective?

Humbly request you to please go through the attached documents please.
In case of recovery due to the over payment of Pensions by the bank, the following circulars are relevant.

1) RBI Circular RBI/2015-16/340 DGBA.GAD.No.2960 /45.01.001/2015-16 dated March 17, 2016
    Point C- Recovery can be made at the rate of 1/3rd the net pension amount

2) DPPI Circular: Point 103.2: 
    For recovery  where the over payment has been made for more than a year, bank must refer the case to PCDA- which will
    take the approval of competent sanctioning authority. Only then the bank can proceed with the recovery.

3) Circular 141 dated 7.12.2019 similar to RBI Circular above regarding recovery at the rate of one - third of nett pensions

4)  OM for letter of Undertaking: issued by GOI, DOPPW- dated 7th May, 2014
   This is regarding the letter of undertaking which every pensioner gives to the bank prior to the pension commencement.

S. No.    Case / Circular reference    Main Points
1    Defence Pensioners Payment Instructions - 2013    Pension recovery due to excess paid cannot be done if detected beyond 1 year of making erroneous payment without the sanction of the competent authority. Ref. Para: 101 & 103.2
2    State of Punjab and others Vs. Rafiq Masih reported in 2015 (4) SCC 334  (Apex Court Judgement)    Recoveries by the Employers would be impermissible in law when the excess payment has been made for a period in excess of five years, before the order of recovery is issued
3    ShyamBabu Verma Vs. Union of India reported in 1994 SC (2) 521 (Apex Court Judgement)    Three Judge Bench of the Supreme Court 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
4    Syed Abdul Qadir and others Vs. State of Bihar and others reported in (2009) 3 SCC 475    Three Judge Bench of the Supreme Court 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

Case: Regarding Illegal Recovery of over payment of Pensions by PNB.

--The Pensioner retired from Defense. The PSA (Pension Sanctioning Authority) is PCDA (Pensions) Allahabad.

--The PDA (Pension disbursal authority) is PNB.

--PNB is illegally deducting the Pension without the approval of the competent sanctioning authority.
This over payment continued for more than 10 years.

--PCDA (Pensions) is meanwhile looking the other way and is citing circulars in support of its action. The provisions in this circular(s)
are in opposition to the instructions in DPPI - Defence Pension Payment Instructions(2013) which is issued by PCDA (Pensions) - Allahabad
This DPPI is a guide book to be followed by all the banks in matter of pension disbursal.


1) In light of the several supreme court judgments which states that no recovery can be done beyond 5 years of over payments,
 does this circular ( OM for letter of Undertaking: issued by GOI, DOPPW- dated 7th May, 2014 ) loose its validity / become null and void?
  Does this OM give unfettered right to the banks to start recovery from the Pensioner citing the letter of undertaking?
2) Circular 141 issued by PCDA(Pensions) dated 7.12.2019 and RBI Circular dated March 17, 2016 - both green flag the recovery 
   of over payment at 1/3rd the nett of pensions. Whereas DPPI states that no recovery can be done if the error of over payment
   has been continuing beyond 1 year- without the approval of competent sanction authority. In the particular case, PCDA (P)
   is citing circular 141 in its support to allow the bank the recovery. Is the action of PCDA  valid/ legally tenable?

To whom should these queries be addressed to?

Thank you.


OM for Letter of Undertaking.pdf DPPI_pages_1,2,3,82,83_84-_only.pdf RBI Circular 17th March 2016.PDF Circular-141.pdf

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