Recovery from retired Class-IV employees is impermissible absent voluntary undertaking or proof of fraud.

The petitioner was appointed as a Ward Boy (Class-IV post) in 1989 and retired from government service on August 31, 2022.

Upon retirement, the District Pension Officer objected to previous pay fixations, alleging that a wrong kramonnati (promotion scale) was granted effective November 15, 2001.

Consequently, the respondents issued a recovery order (Annexure P-1) for an excess payment of ₹97,764/- without providing a show-cause notice or a hearing.

The petitioner challenged this recovery, asserting that as a Class-IV employee, recovery after retirement for a mistake not attributable to him is impermissible.

1. Whether the recovery of excess pay from a retired Class-IV employee is permissible under law when the employee was not responsible for the erroneous pay fixation?

2. Whether an undertaking for recovery can be enforced if it was not given voluntarily at the time of the grant of the financial benefit?

Principles from State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, which prohibits recovery from Class-III/IV employees or retired employees when excess payment was made for over five years.

Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that "forced" undertakings given at the stage of pay refixation are unenforceable.

Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, regarding the necessity of principles of natural justice and the impermissibility of recovery from ministerial staff after retirement.

The court found that the petitioner was a Class-IV employee and the alleged excess payments spanned from 2001 to 2015, making the recovery attempt in 2022 highly belated.

Applying the Rafiq Masih criteria, the court noted that recovery from Group 'D' (Class-IV) staff and retired employees is "iniquitous and harsh".

The court observed that the respondents failed to produce any specific undertaking signed by the petitioner at the time the pay benefit was extended in 2006.

Following the Jagdish Prasad Dubey precedent, the court reasoned that even if an undertaking existed, it would be considered "obtained forcefully" in an employer-employee dynamic unless proven otherwise.

Since the petitioner played no role in the miscalculation and no notice was served prior to the recovery, the action violated the principles of natural justice.

The petition was disposed of with a direction to the respondents to set aside the recovery order and refund the amount of ₹97,764/- with 6% interest per annum from the date of retirement until the date of actual payment.

The court stipulated that this exercise must be completed within 90 days, failing which the interest rate would escalate to 12% per annum.