An undertaking cannot justify recovery of excess pay from Class III employees after five years.

The petitioner was appointed as a Lower Division Clerk on compassionate grounds pursuant to the death-in-harness of his mother.

His appointment order dated 29 May 1998 and posting order dated 17 September 1998 did not expressly prescribe passing the Hindi Typing Test as a condition of appointment or grant of increments.

The petitioner passed the Hindi Typing Test on 11 August 2003.

Although he had received regular increments from the date of appointment, the respondents subsequently refixed his pay from the date on which he became eligible after passing the test and ordered recovery of the alleged excess payment by order dated 10 December 2019.

The petitioner challenged the refixation and recovery, alleging absence of notice, lack of fraud or misrepresentation, and violation of the principles laid down in State of Punjab v. Rafiq Masih.

1. Whether, under the applicable compassionate-appointment policy, passing the Hindi Typing Test was a prerequisite for the petitioner’s entitlement to increments and other monetary benefits, despite the appointment order not expressly containing such a condition.

2. Whether the respondents could refix the petitioner’s pay and order recovery of alleged excess payments without issuing notice or affording an opportunity of hearing.

3. Whether recovery was impermissible under the principles in State of Punjab v. Rafiq Masih, given that the petitioner was a Class-III employee and the alleged excess payments related to an earlier period.

4. Whether any undertaking or indemnity furnished by the petitioner at the time of pay fixation authorised recovery notwithstanding the restrictions applicable to recovery of excess payments.

The Court applied Clause 20 of the Madhya Pradesh Government’s compassionate-appointment policy dated 10 June 1994, under which children of deceased Government servants appointed on compassionate grounds were to be regularised only after passing the Hindi Typing Test or attaining 40 years of age, whichever was earlier.

Relying on the Full Bench decision in Manoj Kumar v. State of M.P., 2016 (1) MPLJ 451, the Court held that where the policy makes the Hindi Typing Test essential, entitlement to increments arises only after the test is passed, even if the appointment letter is silent on the requirement.

The Court further applied the principles of natural justice, requiring notice and an opportunity of hearing before an adverse pay-fixation and recovery order is passed.

Under State of Punjab v. Rafiq Masih (Whitewasher), (2015) 4 SCC 334, recovery is generally impermissible from Class-III or Group ‘C’ and ‘D’ employees and where the excess payment relates to a period exceeding five years before the recovery order.

The Court distinguished the principle in High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267, by applying the Full Bench decision in State of M.P. v. Jagdish Prasad Dubey, WA No. 815 of 2017, decided on 6 March 2024, which held that undertakings cannot override the hardship limitations and time restrictions recognised in Rafiq Masih, particularly where they were obtained at the time of pay refixation and were not shown to have been voluntarily furnished.

Rule 65 of the M.P. Pension Rules could not independently sustain recovery for an earlier pay revision without compliance with the applicable procedural safeguards.

The Court upheld the pay refixation because the petitioner’s appointment was governed by the 1994 compassionate-appointment policy, and the Full Bench ruling in Manoj Kumar made passing the Hindi Typing Test a condition for obtaining increments, notwithstanding the silence of the appointment order.

Since the petitioner passed the test only on 11 August 2003, the respondents were justified in granting increments from the date of eligibility and correcting the earlier pay fixation.

However, the recovery component was unsustainable.

The respondents had issued the adverse order without notice or hearing, and there was no allegation or proof that the petitioner had procured the excess payment through fraud, misrepresentation, or suppression of facts.

The petitioner was a Class-III employee, and the alleged overpayments had been made years before the recovery order; consequently, the case fell within categories (i) and (iii) of Rafiq Masih.

The undertaking relied upon by the State did not validate the recovery because the respondents failed to establish that it was voluntary, and the undertaking could not defeat the principles of natural justice and the limitations on recovery recognised in Jagdish Prasad Dubey.

The Court declined to interfere with the refixation of the petitioner’s pay and the grant of increments from the date he passed the prescribed Hindi Typing Test.

However, the direction for recovery of the alleged excess payment in the order dated 10 December 2019 was quashed.

The respondents were directed to refund any amount already recovered, or pay the amount sought to be recovered, within three months from production of a certified copy of the judgment.