Recovery from retired Class III employees is impermissible despite undertakings obtained at the stage of retirement.

The petitioner was appointed as an Assistant Teacher in 1974 and retired as a Head Master (a Class III post) on June 30, 2017.

Following his retirement, the District Pension Officer re-calculated his service benefits and determined that erroneous pay fixations between June 30, 2007, and June 30, 2012, resulted in an excess payment of ₹99,373.

Consequently, the respondents issued a Pension Payment Order (PPO) on January 15, 2018, initiating recovery of the said amount without providing a show-cause notice or an opportunity for a hearing.

The State justified the recovery by citing an undertaking (Annexure A-1) signed by the petitioner at the time of retirement, agreeing to refund excess payments.

1. Whether the recovery of excess salary from a retired Class III employee is legally permissible under the established principles of equity and hardship.

2. Whether an undertaking furnished at the time of retirement validates the recovery of excess payments made more than five years prior to the recovery order.

The court primarily relied on the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer), which prohibits recovery from Class III/IV employees, retired employees, or when the excess payment was made more than five years before the recovery order.

It further applied the Full Bench decision of the Madhya Pradesh High Court in State of Madhya Pradesh v. Jagdish Prasad Dubey, which held that undertakings given at the stage of retiral dues for refixations done decades prior are "forced" and unenforceable unless proven to be voluntary.

Additionally, the court noted that recovery without a hearing is unsustainable, as per Jogeswar Sahoo v. District Judge, Cuttack.

The court found that the petitioner, as a retired Head Master, belonged to the Class III category, making him exempt from recovery under the Rafiq Masih guidelines.

The court observed that the erroneous payments occurred between 2007 and 2012, and the recovery was initiated in 2018—well beyond the five-year limit established by law.

Critically, the court noted that the petitioner had not provided any undertaking at the time the pay was actually fixed (2007–2012); the only undertaking available was signed at the time of retirement.

Following the Jagdish Prasad Dubey precedent, the court categorized this as a "forced undertaking" which cannot be used to recover payments made long ago.

The court also highlighted the procedural lapse where no show-cause notice or hearing was afforded to the petitioner, violating the principles of natural justice.

It directed the respondents to refund the amount of ₹99,373/- to the petitioner with 6% interest per annum from the date of retirement until the actual payment.

The court further ordered that if the payment is not made within 90 days, the interest rate shall increase to 12% per annum.