1. Heard. Issue Rule, returnable forthwith. Heard Mr. K. S. Motwani, learned counsel for petitioner and Mr. Anand Deshpande, learned counsel for respondent. With consent of learned counsel for the parties, the petition is taken up for final hearing.
2. On 23.09.2026, following order was passed:
“On 15-9-2026, following order was passed.
“The respondent shall justify the issuance of impugned communication, particularly considering the law laid down by the Hon’ble Supreme Court in the case of State of Punjab Vs. Rafiq Masih (White Washer) [ASCW 2015(4) 334].
Stand over to 23-09-2026.”
In response, the respondent has filed an affidavit saying that the judgment referred to above may not apply to the facts of the case. According to the respondent’s counsel, the law laid down by the Division Bench of this Court at Aurangabad Bench in Writ Petition No. 13261/2023 (Jayshri w/o Sanjay Chandode Vs. The State of Maharashtra and ors.) dated 21-4-2026 will hold the field. The petitioner shall go through the judgment and make submissions.
Learned counsel for the respondent has invited our attention to Rule 134-A of the Maharashtra Civil Services (Pension) Rules, 1982, which, in a way, empowers the employer to recover and adjust the excess amount paid to the employees. Thus, according to him, there is a statutory provision enabling the respondent to recover the excess amount paid to the petitioner. Accordingly, the action taken by the respondent is being justified.
Learned counsel for the petitioner seeks time to have research on the point. Time granted.
Stand over to 30-9-2026.”
3. As could be seen, we had called upon the respondent to justify the recovery of excess amount paid to the petitioner, after his retirement, in terms of law laid down by the Hon’ble Supreme Court in the case of Rafiq Masih.
4. In response, the respondent has invited our attention to the judgment of the Division Bench of this Court at Aurangabad Bench, in Jayshri w/o Sanjay Chandode .Vs. The State of Maharashtra and Ors. [W.P.No.13261/2023]. The Division Bench considered the judgment in the case of Rafiq Masih. It also considered the judgment in High Court of Punjab and Haryana .Vs. Jagdev Singh; [(2016) 14 SCC 267], as also the provisions of the Maharashtra Civil Services (Revised Pay) Rules, 2009, wherein under clause 15.6, the employee is required to furnish undertaking. The Division Bench further relied upon Rules 132, 134-A and 143 of the Maharashtra Civil Services (Pension) Rules, 1982 (“Rules of 1982”), which provide for recovery of Government dues, excess payments and recoverable dues from retiral benefits and gratuity. Applying these provisions, the Division Bench held that statutory undertakings would distinguish the case from the situations identified by Rafiq Masih.
5. The learned counsel for petitioner sought time to have research on the point and has successfully done so. He cited a judgment of Division Bench of this Court at Principal Seat in Prakash Shivram Salvi Vs. The State of Maharashtra [W.P.No. 6446/2024, decided on 24.12.2025]. The law laid down in Rafiq Masih's case and other such judgments were considered. The findings rendered by the Division Bench covers the issue involved in the present case. The relevant portion reads as under:
“11. In case of Rafiq Masih (Supra), the Supreme Court, while dealing with the question of recovery of excess drawl by the employer, had laid down the following guidelines in paragraph 12, which reads as follows:
“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.”
12. As per the law laid down in the case of Rafiq Masih (Supra), the employees who come within any of the criteria laid down in paragraph 12 cannot be subjected to recovery of excess payment. Amongst the above noted criteria laid down by the Hon’ble Supreme Court, Clause-II refers to the retired employees which is regardless of the group or class of service to which they had retired from. Therefore, the Petitioner being a retired employee, the decision in Rafiq Masih (Supra) would undoubtedly be applicable in case of the Writ Petitioner. To that extent, we are of the considered view that the learned Tribunal was not correct in holding that the law laid down in the case of Rafiq Masih (Supra) would not be applicable to the Petitioner.
13. Following the decision of the Hon’ble Supreme Court in Rafiq Masih (Supra), the Government of India, Ministry of Personnel, Public Grievances & Pensions Department of Personnel & Training had issued an Office Memorandum dated 2nd March 2016 laying down that recovery from the employees would be impermissible in case of those categories of employees referred to in paragraph 12 of Rafiq Masih (Supra). The aforesaid OM was circulated among all concerned authorities, including all the Government of States and Union Territories. Therefore, it is evident that there is a conscious decision on the part of Governments to implement the law laid down by the Hon’ble Supreme Court in the case of Rafiq Masih (Supra) in case of all such employees who come within the ambit of the said decision. If that be so, since the Writ Petitioner comes within the group of category laid down in paragraph 12 of the said Judgment, regardless of Rule 134-A of the Maharashtra Civil Services (Pension) Rules 1982, he could not have been subjected to recovery of over payment after his retirement.”
6. Thus, the Division Bench took a view that in terms of the law laid down in Rafiq Masih's case read with Office Memorandum dated 02.03.2016, recovery from the employee would be impermissible in the case of the categories of employees referred to in paragraph 12 of Rafiq Masih. The Court also took note of the fact that Office Memorandum was circulated amongst all the concerned authorities, including all the Governments of States and the Union Territories and, therefore, is a conscious decision on the part of the Government to implement the law laid down in Rafiq Masih. The Court then held that in such an eventuality if the employee falls within the group or category stipulated in paragraph 12 of the judgment, regardless of Rule 134-A of the Rules of 1982, he could not be subjected to recovery of the excess payment after his retirement.
7. In the present case, the petitioner worked as a Peon and thus was a Class IV employee, who stood retired in October, 2023. The recovery post-retirement is thus, not permissible in terms of Rafiq Masih's case. The respondent, in such circumstances, is not entitled to take recourse to Rule 134-A of the Rules of 1982.
8. So far as judgment in the case of Jayshri Chandode is concerned, it is rendered per incuriam the judgment in Prakash Salvi. It is well settled that the judgment rendered earlier in point of time is binding on successive Courts. This position has been clarified by Division Bench of this Court in Shri Prakash Gobindram Ahuja .Vs. Ganesh Pandharinath Dhonde and ors. [2016 SCC OnLine Bom 8884]
9. Further, the Constitution Bench, in the case of National Insurance Co. Ltd. Vs. Pranay Sethi and Ors. [(2017) 16 SCC 680], held as under:
“27. We are compelled to state here that in Munna Lal Jain, the three-Judge Bench should have been guided by the principle stated in Reshma Kumari which has concurred with the view expressed in Sarla Verma or in case of disagreement, it should have been well advised to refer the case to a larger Bench. We say so, as we have already expressed the opinion that the dicta laid down in Reshma Kumari being earlier in point of time would be a binding precedent and not the decision in Rajesh.
28. In this context, we may also refer to Sundeep Kumar Bafna v. State of Maharashtra and another which correctly lays down the principle that discipline demanded by a precedent or the disqualification or diminution of a decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co-equal or larger Bench. There can be no scintilla of doubt that an earlier decision of co-equal Bench binds the Bench of same strength. Though the judgment in Rajesh’s case was delivered on a later date, it had not apprised itself of the law stated in Reshma Kumari but had been guided by Santosh Devi. We have no hesitation that it is not a binding precedent on the co-equal Bench.”
(Emphasis now)
10. The Constitution Bench held that the decision or judgment delivered prior in time is binding on the co-equal bench. The Court further held that the decision or judgment can only be per incuriam, if it is not possible to reconcile its ratio with that of previously pronounced judgment of a co-equal or Larger bench.
11. We may also take note of the judgment of the Full Bench of Madhya Pradesh High Court in Jabalpur Bus Operators Association and others .Vs. State of M.P. and others [2002 SCC OnLine MP 631] wherein, the Court held in paragraph 9 as under:
“9. Having considered the matter with broader dimensions, we find that various High Courts have given different opinion on the question involved. Some hold that in case of conflict between two judgments on a point of law, later decision should be followed; while others say that the Court should follow the decision which is correct and accurate whether it is earlier or later. There are High Courts which hold that decision of earlier Bench is binding because of the theory of binding precedent and Article 141 of the Constitution of India. There are also decisions which hold that single Judge differing from another single Judge decision should refer the case to larger Bench, otherwise he is bound by it. Decisions which are rendered without considering the decisions expressing contrary view have no value as a precedent. But in our considered opinion, the position may be stated thus—
With regard to the High Court, a single Bench is bound by the decision of another single Bench. In case, he does not agree with the view of the other single Bench, he should refer the matter to the larger Bench. Similarly, Division Bench is bound by the judgment of earlier Division Bench. In case, it does not agree with the view of the earlier Division Bench, it should refer the matter to larger Bench. In case of conflict between judgments of two Division Benches of equal strength, the decision of earlier Division Bench shall be followed except when it is explained by the latter Division Bench in which case the decision of latter Division Bench shall be binding. The decision of larger Bench is binding on smaller Benches… ”
12. Thus, the Full Bench held that the judgment of the earlier Division Bench is binding on the subsequent bench of equal strength. It further held that where there is conflict between judgments of two Division Benches of equal strength, decision of earlier Division Bench shall be followed, except when it is explained by the latter Division Bench in which case the decision of latter Division Bench shall be binding.
13. If the aforesaid principles are applied, it is evident that the Division Bench in Prakash Salvi, has not only considered the law laid down by the Supreme Court in Rafiq Masih, but also considered the provisions of the Rules of 1982, particularly Rule 134-A thereof. It also took into account the Office Memorandum issued by the Central Government which was circulated to all the State Governments. The Division Bench then held that the Government has taken a conscious decision to implement the law laid down in Rafiq Masih. Accordingly, it was held that regardless the provisions of Rule 134 of the Rules of 1982, an employee cannot be subjected to recovery of excess payments, after his retirement, if he falls within the group or category stipulated in paragraph 12 of the judgment.
14. In Jayshri Chandode’s, case though Division Bench considered Rafiq Masih’s case, it distinguished the same on account of provisions of Rules of 1982, which includes Rule 134-A. The Division Bench also referred to the Rules of 2009 and circular dated 29.04.2009 to take a view that recovery of excess payment made is permissible.
15. We are of the view that had judgment in Prakash Salvi been brought to the notice in the case of Jayshri Chandode, the Division Bench, in all probabilities, would have refrained from taking a view as has been taken. In any case, since the judgment in the earlier point of time, which was binding upon the subsequent Bench, having been not brought to the notice, the judgment in Jayshri Chandode, is rendered per incuriam the judgment in Prakash Salvi. In the circumstances, the law that will govern the field will be as laid down in Prakash Salvi. The recovery of excess amount is thus not permissible in the case of an employee covered under Rafiq Masih. The petitioner, being Class-IV employee, will fall in the category covered by Rafiq Masih.
16. The impugned communication dated 31.08.2023 issued by Municipal Council, Tumsar, district Bhandara calling upon the petitioner to deposit the alleged excess amount paid to him is, thus, bad in law and is unsustainable. The petition is accordingly allowed in terms of prayer clauses (i) and (ii), which read as under:
i) quash and set aside the impugned letter/communication dated 31.08.2023 issued by respondent-Municipal Council, Tumsar, District-Bhandara, through Chief Officer (Annex-3) and the recovery mentioned therein;
ii) direct the respondent-Municipal Council, Tumsar, District- handara, through Chief Officer to prepare the pension case of the petitioner and to pay him the retiral dues, without effecting any recovery, as alleged in the impugned letter/communication dated 31.08.2023 Annex-3).”
The benefit shall be extended to the petitioner as expeditiously as possible, preferably within sixteen weeks from today.
Rule is made absolute in the above terms. No order as to costs.
