Post-retirement recovery of excess pay fixed decades earlier is impermissible absent a contemporaneous voluntary undertaking.

The petitioner joined government service in 1985 and retired on 31 July 2024 as an Acting Assistant Sub-Inspector, a Class III post.

During scrutiny of his service book and pension papers, the authorities alleged that his pay had been wrongly fixed from 1 January 2006, resulting in excess payment.

A recovery of ₹71,051 was consequently ordered.

The State contended that the recovery was valid because the petitioner had furnished an undertaking at the time of preparation of his pension papers agreeing to refund any excess payment.

Whether recovery of alleged excess salary paid due to erroneous pay fixation from a retired Class III employee is permissible, particularly where the excess payment relates to a period exceeding five years?

Whether an undertaking furnished by the employee at the time of retirement or preparation of pension papers authorises recovery of excess payments arising from pay fixation carried out years earlier?

Whether recovery could be ordered without issuing a show-cause notice or affording the petitioner an opportunity of hearing?

The Court exercised jurisdiction under Article 226 of the Constitution.

It applied the principles in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, under which recovery is ordinarily impermissible from retired employees, Group C/Class III and Group D/Class IV employees, and where excess payment has been made for more than five years before the recovery order.

The Court relied on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that an undertaking given at the time of pay refixation may permit recovery, subject to principles of hardship and the limitations in Rafiq Masih, but an undertaking obtained at the stage of retirement for recovery relating to a decades-old refixation cannot ordinarily be enforced; an undertaking is enforceable only if shown to have been given voluntarily.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, where recovery from retired non-gazetted employees, absent fraud or misrepresentation and without an opportunity of hearing, was held unsustainable.

The Court found that the alleged wrong pay fixation commenced on 1 January 2006 and that no undertaking had been furnished by the petitioner when the pay benefit was originally extended.

The undertaking relied upon by the State was executed only after retirement during preparation of pension papers and could not retrospectively validate recovery of payments made over many years.

Applying Rafiq Masih and Jagdish Prasad Dubey, the Court held that the petitioner’s status as a retired Class III employee and the fact that the alleged excess payment extended over more than five years independently rendered the recovery impermissible.

Further, the recovery order had been passed without notice or hearing, contrary to natural justice, and there was no allegation of fraud or misrepresentation by the petitioner.

The impugned recovery order was set aside, and the respondents were directed to refund ₹71,051, with interest at 6% per annum from 31 July 2024, the date of retirement, until actual payment, subject to the clarification that the refund relief would arise only if the amount had in fact been recovered from the petitioner’s retiral dues.

The exercise was directed to be completed within 90 days from submission of a certified copy of the order.

The writ petition was accordingly disposed of.