A retirement-stage undertaking cannot justify recovery of decades-old excess pay from a retired employee.

The petitioner, a Principal in the School Education Department, retired on 31 January 2021.

On scrutiny of his service book, the respondents concluded that he had received excess pay due to an alleged incorrect fixation made between 22 September 1999 and 30 June 2010, and ordered recovery of ₹2,98,247.

The petitioner challenged the recovery, stating that it was ordered without notice or hearing and that he had not given an undertaking when the pay benefit was granted.

The State relied on an undertaking given during preparation of his pension papers and opposed the petition, including on grounds of delay.

Whether recovery of excess pay from a retired employee was permissible where the alleged overpayment arose from pay fixation made many years earlier and the employee had not given an undertaking when the benefit was granted.

Whether the petitioner was entitled to a refund with interest, and, if so, from what date.

Under Article 226 of the Constitution, the Court may grant relief against recovery that is impermissible in law.

In State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, the Supreme Court identified circumstances in which recovery of mistaken excess payments is impermissible, including recovery from retired employees and recovery where the excess payment was made more than five years before the recovery order.

The Full Bench in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, held that an undertaking given at the stage of retirement for decades-old pay refixation cannot be enforced; an undertaking given when a financial benefit is granted must also be voluntary to support recovery.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, concerning recovery from retired employees absent fraud or misrepresentation and a hearing opportunity.

The alleged excess payment related to pay fixation from 1999 to 2010, substantially more than five years before recovery was ordered, and the petitioner had retired before the recovery proceedings.

No undertaking had been given when the pay benefit was granted; the undertaking relied on by the State was furnished only at retirement and could not validate recovery for the earlier pay fixation.

Applying Rafiq Masih and the Full Bench ruling in Jagdish Prasad Dubey, the Court held that recovery was impermissible.

It also noted that recovery had been initiated without notice or an opportunity to be heard.

Because the petition was delayed, interest was limited to the period from the date of filing the petition.

The refund and interest were to be paid within 90 days of submission of a certified copy of the order.

The Court clarified that the petitioner would not receive this relief if no recovery had been made from his retirement dues.