Add additional error checking

src/compiler/checker.ts

@@ -11684,7 +11684,10 @@ namespace ts {
 
             const hasExplicitReturn = func.flags & NodeFlags.HasExplicitReturn;
 
-            if (returnType && !hasExplicitReturn) {
+            if (returnType === neverType) {
+                error(func.type, Diagnostics.A_function_returning_never_cannot_have_a_reachable_end_point);
+            }
+            else if (returnType && !hasExplicitReturn) {
                 // minimal check: function has syntactic return type annotation and no explicit return statements in the body
                 // this function does not conform to the specification.
                 // NOTE: having returnType !== undefined is a precondition for entering this branch so func.type will always be present
@@ -14821,7 +14824,7 @@ namespace ts {
             if (func) {
                 const signature = getSignatureFromDeclaration(func);
                 const returnType = getReturnTypeOfSignature(signature);
-                if (strictNullChecks || node.expression) {
+                if (strictNullChecks || node.expression || returnType === neverType) {
                     const exprType = node.expression ? checkExpressionCached(node.expression) : undefinedType;
 
                     if (func.asteriskToken) {

src/compiler/diagnosticMessages.json

@@ -1751,6 +1751,10 @@
         "category": "Error",
         "code": 2533
     },
+    "A function returning 'never' cannot have a reachable end point.": {
+        "category": "Error",
+        "code": 2534
+    },
     "JSX element attributes type '{0}' may not be a union type.": {
         "category": "Error",
         "code": 2600