Recovery from retired Class-III employee for wrong pay fixation without prior undertaking is impermissible.

The petitioner retired as a Lady Health Visitor (L.H.V.), a Class-III post, from the Community Health Centre, Gohad, on 31.08.2016

Following her retirement, the respondents issued a Pension Payment Order (PPO) dated 02.05.2018 and an order dated 27.04.2018 directing the recovery of Rs. 1,09,095/- from her gratuity

This recovery was based on an alleged wrong pay fixation dating back to 01.01.1986, discovered by the District Pension Officer in 2016

The State justified the recovery by producing an undertaking (Annexure R-1) signed by the petitioner at the time of retirement, consenting to the recovery of excess payments

The petitioner challenged the recovery on the grounds that it was initiated post-retirement without a show-cause notice and violated established legal precedents regarding recoveries from Class-III employees

1. Whether the recovery of excess salary paid due to wrong pay fixation can be effected from a retired Class-III employee after a significant lapse of time

2. Whether an undertaking furnished at the time of retirement, rather than at the time of pay fixation, validates the recovery of excess payments made decades prior

State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from Class-III/Group C employees and retired employees when excess payment was made for a period exceeding five years

Full Bench decision in State of M.P. v. Jagdish Prasad Dubey (2024) 2 M.P.L.J. 198, which held that an undertaking given at the stage of payment of retiral dues cannot be enforced for refixation done decades ago, and that "forced" undertakings are unenforceable

Jogeswar Sahoo v. District Judge, Cuttack (2025) 3 M.P.L.J. (S.C.) 25 regarding the necessity of affording an opportunity of hearing before recovery

The Court observed that the petitioner was a Class-III employee and the recovery was initiated after her retirement for an alleged error that commenced in 1986—nearly 30 years prior

Applying the Rafiq Masih guidelines, the court found the recovery impermissible as it fell under prohibited categories: recovery from a retired employee and recovery for payments exceeding five years

Regarding the State's reliance on the petitioner's undertaking, the Court determined that since no undertaking was furnished at the time of the original pay fixation in 1986, the undertaking obtained at the time of retirement was "forced" and legally ineffective for recovering decades-old arrears

Furthermore, the Court noted a violation of natural justice as no show-cause notice or hearing was provided before the Recovery Order

The impugned recovery orders (Annexures P/1 and P/2) were set aside and respondents were directed to refund the amount of Rs. 1,09,095/- to the petitioner's legal representatives with interest at 6% per annum from the date of retirement until actual payment, to be completed within 90 days