Recovery from retired Class III employees is impermissible in the absence of a voluntary undertaking.

The petitioner was appointed as an Assistant Teacher in 1995 and retired from service on July 31, 2022.

Upon retirement, the District Pension Officer objected to the wage increments and pay fixation previously granted to the petitioner. Specifically, it was alleged that two increments granted for passing the D.Ed. Examination on February 25, 2006, resulted in an excess payment.

Consequently, the respondent department issued a recovery chart (Annexure P-1) seeking to recover Rs. 81,733/- from the petitioner's terminal benefits without providing a show-cause notice or a hearing.

The petitioner challenged this recovery, asserting that as a retired Class III employee, such recovery is impermissible under established law.

1. Whether the recovery of excess payments from a retired Class III employee is permissible in the absence of any fraud or misrepresentation by the employee.

2. Whether an undertaking given by an employee regarding pay refixation is enforceable if it is considered 'forced' or not given voluntarily at the time of the grant of benefit.

The Court primarily applied the principles laid down by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which prohibits recovery from Class III/IV employees or retired employees when the payment was made mistakenly.

It relied on the Full Bench decision of the M.P. High Court in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that "forced" undertakings are unenforceable unless given voluntarily.

Furthermore, the court referred to Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, regarding the necessity of providing an opportunity for a hearing before recovery.

The Court observed that the petitioner was a Class III employee (Assistant Teacher) who had already retired.

The alleged wrong pay fixation occurred between 1998 and 2011, and the recovery was initiated over a decade later without any show-cause notice or hearing, violating principles of natural justice.

Relying on Jagdish Prasad Dubey, the Court noted that the State failed to produce any specific undertaking furnished by the petitioner at the time the benefits were originally extended in 2009.

Even if an undertaking existed, the Court clarified that under current jurisprudence, such undertakings are often considered "forced" and thus legally unenforceable against the employee.

Since there was no evidence of fraud or misrepresentation by the petitioner, the court found the recovery to be iniquitous and prohibited under the Rafiq Masih guidelines.

It held that recovery from a retired Class III employee for excess payments made due to the department's own error is impermissible.

The respondents were directed to refund the recovered amount of Rs. 81,733/- to the petitioner with 6% interest per annum from the date of retirement until the actual payment.

The Court ordered this exercise to be completed within 90 days, stipulating that failure to comply would result in an increased interest rate of 12% per annum.