Recovery from retired employees based on undertakings signed at retirement for past erroneous pay fixations is legally impermissible.

The petitioner was appointed as a Surveyor on December 31, 1987, and retired as a Krishi Vikas Adhikari on September 30, 2016.

Post-retirement, the Joint Director of Treasury, Accounts, and Pension raised an objection regarding incorrect salary fixation and increments granted between January 1, 2006, and July 1, 2016.

Consequently, the State ordered a recovery of ₹3,73,306/- from the petitioner’s retiral dues without providing a show-cause notice or an opportunity for a hearing.

The State contended that the recovery was valid because the petitioner had voluntarily signed an undertaking (Annexure R-3) at the time of preparing his pension papers, agreeing to refund any excess payments.

1. Whether the recovery of excess payments from a retired employee is permissible under the law when the error in pay fixation occurred more than five years prior to the recovery order.

2. Whether an undertaking furnished at the time of retirement, rather than at the time of the initial grant of the financial benefit, is legally enforceable to effect recovery of past excess payments.

The court primarily applied the principles established by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from retired employees, Class-III/IV employees, or when the excess payment spans over five years.

It further relied on 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 pay fixations done decades earlier are "forced" and unenforceable unless proven to be voluntary.

Additionally, the court cited Jogeswar Sahoo v. District Judge, Cuttack (2025) regarding the necessity of affording an opportunity of hearing before recovery.

The court found that the petitioner retired from a ministerial post and that the alleged wrong pay fixation dated back to 2006, more than ten years before the recovery was initiated.

Applying the Rafiq Masih dictum, the court determined that recovery after retirement for payments made over five years ago is iniquitous.

Regarding the State's reliance on the petitioner's undertaking, the court noted that no undertaking was furnished in 2006 when the pay was fixed; the only undertaking on record was signed at the time of retirement in 2016.

Following the Jagdish Prasad Dubey precedent, the court concluded that an undertaking obtained at the time of retirement is considered "forced" and cannot be used to justify the recovery of long-standing excess payments.

Furthermore, the court observed that the State failed to follow the principles of natural justice, as no show-cause notice was issued prior to the recovery.

It held that the recovery was illegal as the petitioner was a retired employee and the undertaking provided at retirement was not voluntary.

The respondents were directed to refund the recovered amount of ₹3,73,306/- to the petitioner with 6% interest per annum from the date of retirement until the date of actual payment.

The court ordered the exercise to be completed within 90 days of receiving the certified copy of the order.