Recovery From Class-IV Employees For Excess Payment Due To Erroneous Pay Fixation Is Impermissible.

The petitioner was appointed as a Peon (Class-IV employee) in 1990

Pursuant to a 2008 Circular providing for time-bound pay scales, he was granted his second higher pay scale effective 19-05-2010

Nine years later, the respondents passed an order (Annexure P/1) on 01-06-2019, modifying his pay fixation and ordering a recovery of ₹2,01,170/- in installments, alleging wrong fixation

The petitioner challenged the recovery on the grounds that it was initiated without notice, he was not responsible for any misrepresentation, and recovery from a Class-IV employee is legally impermissible

1. Whether the recovery of excess payments made due to wrong pay fixation is permissible from a Class-IV employee several years after the benefit was granted

2. Whether an undertaking given by an employee at the time of pay refixation allows the employer to bypass the protections against recovery in cases of hardship

Principles established by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer), which prohibits recovery from Class-III and Class-IV employees or when payments were made in excess of five years before the recovery order

Full Bench decision of the Madhya Pradesh High Court in State of M.P. v. Jagdish Prasad Dubey, which held that undertakings given at the time of pay fixation are often "forced" and unenforceable unless proven to be voluntary

The necessity of adhering to the principles of natural justice and the specific provisions of Rules 65 and 66 of the MP Civil Services (Pension) Rules, 1976

The Court observed that the petitioner is a Class-IV employee, making him categorically protected from recovery under the Rafiq Masih guidelines

The Court noted that the alleged wrong fixation occurred between 2006 and 2016, and the recovery was initiated in 2019 without any prior show-cause notice or hearing, violating natural justice

The State failed to produce evidence of a specific undertaking furnished by the petitioner at the time of the initial fixation in 2006

Following the logic in Jagdish Prasad Dubey, the Court reasoned that even if an undertaking existed, the State failed to prove it was voluntary rather than a "forced" condition of service

Consequently, since the petitioner played no role in the miscalculation (fraud/misrepresentation), the recovery was deemed iniquitous and harsh

The respondents were directed to refund the recovered amount to the petitioner with 6% interest per annum within three months

Regarding the downward revision of pay fixation, the Court set aside the order for lack of a hearing but granted the petitioner liberty to submit a fresh representation to the competent authority, who must decide the matter via a reasoned order after providing an opportunity for a hearing