Recovery of erroneous pay fixation is impermissible from retired Class III employees absent a voluntary undertaking.

The petitioner was appointed as a Telephone Operator in 1989 and retired on 28 February 2021.

Following scrutiny of his service book, the respondents alleged that his pay had been incorrectly fixed from 31 October 1989 until retirement and ordered recovery of ₹12,50,403.

The petitioner challenged the recovery, stating that he had received no show-cause notice or hearing, was a Class III employee, and was not responsible for the alleged error.

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

The Court noted that no undertaking from the time of the original pay fixation was on record and that the State had not established that the later undertaking was voluntary.

1. Whether recovery of alleged excess pay could be made from a retired Class III employee where the payments related to a period exceeding five years and the employee had not been given an opportunity to be heard.

2. Whether the undertaking relied on by the State authorised recovery, and whether the petitioner was entitled to repayment with interest if recovery had been made from his retiral dues.

Under State of Punjab v. Rafiq Masih (White Washer), recovery is impermissible in specified cases, including recovery from Class III/IV employees, retired employees, and employees where the excess payment was made more than five years before the recovery order.

The Full Bench in State of Madhya Pradesh v. Jagdish Prasad Dubey held that an undertaking given before grant of a pay benefit may permit recovery, subject to hardship and the Rafiq Masih principles; an undertaking given at the stage of retiral dues for a decades-old refixation cannot be enforced, and an undertaking given at the time of a benefit is unenforceable unless voluntary.

The Court also referred to Jogeswar Sahoo v. District Judge, Cuttack, applying the protection against recovery to retired ministerial employees where there was no fraud or misrepresentation and no hearing.

Article 226 was the jurisdiction invoked for the challenge.

The alleged excess payments covered the period from 31 October 1989 to the petitioner’s retirement in 2021, and the petitioner was a retired Class III employee.

Those circumstances brought the recovery within the categories protected by Rafiq Masih.

The State could not rely on the undertaking: there was no undertaking on record from the time of the 1989 pay fixation, and the State had not shown that the later undertaking was voluntary.

The recovery was also ordered without notice or an opportunity to be heard.

Applying these principles, the Court found the recovery impermissible.

The amount is to carry interest at 6% per annum from the date of retirement until payment; if payment is not made as directed, interest is to be 12% per annum for that period.

The exercise must be completed within 90 days of submission of a certified copy of the order, and the petition was disposed of.