Recovery from Class-IV employees for long-standing erroneous pay fixation is impermissible and forced undertakings are unenforceable.

The petitioner was appointed as a daily-rated Cleaner (Class-IV) on September 1, 1983, and regularized on June 11, 1984

Over his tenure, he was granted three higher pay scale benefits in 1993, 2003, and 2015 based on his years of qualifying service

On August 17, 2017, the respondents issued an order for the recovery of Rs. 3,97,114/- in 35 installments, citing an erroneous pay fixation dating back to June 2001

The petitioner challenged this recovery, asserting that as a Class-IV employee, he was not responsible for the miscalculation and that the recovery was initiated without a show-cause notice or a hearing

The respondents contended that the recovery was valid because the petitioner had signed an undertaking (Annexure R-4) during the preparation of his pension papers

The petitioner retired on July 29, 2022, during the pendency of the proceedings

1. Whether the recovery of excess payments from a Class-IV employee is permissible when the error in pay fixation was made by the employer over fifteen years prior

2. Whether an undertaking submitted by an employee at the time of retirement regarding pay refixation is legally enforceable to effect recoveries for past benefits

The court primarily relied on the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from Class-III and Class-IV employees, retired employees, or when the excess payment exceeds five years

It further applied the Full Bench decision of the Madhya Pradesh High Court in State of Madhya Pradesh v. Jagdish Prasad Dubey (2024), which held that undertakings given at the stage of retirement for decades-old pay fixations are "forced" and unenforceable unless proven voluntary under the principles of Central Inland Water Transport Corp. Ltd. v. Brojo Nath Ganguly (1986)

Finally, the court noted Jogeswar Sahoo v. District Judge, Cuttack (2025) regarding the necessity of providing an opportunity for a hearing before recovery

The court found that the petitioner, as a Class-IV Cleaner, fell squarely within the protected categories defined in Rafiq Masih, making any recovery for employer error impermissible

The court observed that the alleged wrong fixation occurred in June 2001, but recovery was only sought in 2017—a lapse of 16 years—violating the five-year limit for such actions

Regarding the respondents' reliance on the petitioner's undertaking, the court held that the State failed to prove the undertaking was voluntary

Following Jagdish Prasad Dubey, the court characterized the undertaking as "forced" because it was obtained at the time of retirement to secure retiral dues, rather than at the time the benefit was originally granted

Additionally, the court noted that the recovery violated principles of natural justice as no show-cause notice or hearing was provided prior to the impugned order

It held that recovery from a Class-IV employee for a long-standing pay fixation error is unsustainable, and a forced undertaking at retirement cannot validate such recovery

The respondents were directed to refund Rs. 3,97,114/- to the petitioner with 6% interest per annum from the date of retirement

If the payment is not made within 90 days, the interest rate increases to 12% per annum