Recovery of erroneous excess pay from a retired Class III employee is impermissible.

The petitioner, an Assistant Teacher, retired on 31 July 2017.

On review of his service book, the respondents found that an increment of ₹14,460 granted from 1 July 2009 had resulted in excess payment and ordered recovery of ₹1,73,569 through the service-book/PPO calculation

The petitioner challenged the recovery, asserting that he was a Class III employee, had not caused the erroneous fixation, and had received no show-cause notice or hearing before recovery was ordered

The State relied on an undertaking said to have been furnished by the petitioner

The Court found no specific undertaking given at the time of the pay fixation in the record

1. Whether recovery of excess pay was permissible from a retired Class III employee where the alleged excess arose from an earlier pay fixation and no hearing was afforded before recovery

2. Whether the State could rely on an undertaking to sustain recovery when no undertaking was shown to have been given at the time the pay benefit was granted

In State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, the Full Bench held that recovery based on an undertaking given before pay refixation may be permissible, subject to hardship and the principles in Rafiq Masih; an undertaking given later, at the stage of retiral dues, cannot validate recovery for an earlier refixation.

It also held that an undertaking given when financial benefits are granted is not enforceable unless voluntary.

Under State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, recovery is impermissible, among other cases, from Class III/IV employees, retired employees, and where the excess payment has continued for more than five years before recovery.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, concerning recovery without an opportunity of hearing from retired non-gazetted employees.

The coordinate Bench’s decision in Ravindra Kumar Joshi v. State of Madhya Pradesh, W.P. No. 17831/2019 (13 May 2024), applied the Full Bench’s rule that an undertaking is not enforceable unless shown to be voluntary.

The petitioner was a Class III Assistant Teacher who had retired before the recovery was challenged, and the disputed pay fixation dated to 2009.

The recovery was ordered without a show-cause notice or hearing.

The record contained no specific undertaking given when the pay benefit was granted; accordingly, the State could not rely on the alleged undertaking to avoid the protections identified in Rafiq Masih and Jagdish Prasad Dubey.

Applying those principles, the Court held the recovery impermissible.

In default, the amount was directed to carry interest at 12% per annum from the date of realization until payment.

The petition was disposed of.