Post-retirement recovery of excess salary paid for over five years is impermissible absent a voluntary undertaking.

The petitioner was appointed as an Upper Division Teacher in 1981 and retired on 31 March 2018 as a Lecturer, a Class-II post.

During scrutiny of her service records by the District Pension Office, the respondents alleged that her pay had been wrongly fixed, resulting in excess payment from 7 January 1993 to 31 December 2015.

On that basis, an order dated 7 November 2024 directed recovery of ₹1,78,245 from the petitioner.

The petitioner challenged the recovery under Article 226 of the Constitution, contending that it was ordered after retirement, without notice or hearing, and without any fraud, misrepresentation, or valid voluntary undertaking on her part.

Whether recovery of alleged excess salary paid due to erroneous pay fixation could be made from the petitioner after her retirement, particularly when the excess payment related to a period exceeding five years before the recovery order?

Whether the recovery order was sustainable when it was passed without issuing a show-cause notice or affording an opportunity of hearing?

Whether the undertaking relied upon by the State authorised recovery, despite the absence of proof that it was voluntarily furnished at the time of the original pay fixation?

The Court exercised jurisdiction under Article 226 of the Constitution and 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 and where excess payment has been made for a period exceeding five years before the recovery order.

It 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 recovery based on an undertaking may be permissible only subject to hardship considerations and the limitations in Rafiq Masih; an undertaking given at the stage of retiral dues for a benefit granted decades earlier cannot be enforced, and an undertaking must be shown to be voluntary.

The Court also relied on Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156, concerning undertakings obtained under unequal bargaining power or coercion.

Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, held recovery unsustainable where retired employees were not heard and the payment was not attributable to fraud or misrepresentation.

The principles of natural justice required prior notice and an opportunity of hearing before imposing the recovery.

The Court found that the alleged excess payment arose from departmental pay fixation and was not shown to have resulted from fraud or misrepresentation by the petitioner.

The relevant payments had been made between 1993 and 2015, whereas recovery was initiated only after the petitioner’s retirement in 2018; thus, both the retired-employee and five-year limitations in Rafiq Masih applied, irrespective of her status as a Class-II employee.

The State also failed to produce or establish any undertaking given by the petitioner at the time of the original pay fixation on 7 January 1993.

Any later undertaking relied upon by the respondents was not proved to have been voluntarily furnished, and therefore could not override the protection against recovery recognised in Jagdish Prasad Dubey and Ravindra Kumar Joshi v. State of Madhya Pradesh.

The recovery was additionally vitiated because it was ordered without a show-cause notice or hearing.

The respondents were directed to refund ₹1,78,245 to the petitioner, with interest at 6% per annum from the date of retirement until actual payment, subject to the clarification that no such refund would be payable if the amount had not in fact been deducted from her retiral dues.

The respondents were directed to complete the exercise within 90 days of receiving the certified copy of the order; failure to do so would attract interest at 12% per annum on the refundable amount until actual payment.

The writ petition was accordingly disposed of.