Recovery of erroneously paid salary is impermissible from a deceased Class III employee.

The petitioner, widow of Late Jugdeesh Prasad Pandey, challenged an order dated 7 October 2015 directing recovery of ₹19,96,521, including interest, allegedly paid in excess due to erroneous pay fixation.

Her husband had served as Subedar (M) in the office of the Superintendent of Police, Sagar, a Class III post, and died in service on 1 July 2015.

He had been granted an ad hoc salary increase of ₹70 pursuant to litigation concerning similarly situated employees, although he himself had not instituted such proceedings.

The petitioner contended that neither her husband nor she had committed any misrepresentation, that the recovery was ordered without notice or hearing, and that the recovery could not be made from the retiral benefits of a deceased Class III employee.

The State maintained that the petitioner had acknowledged the excess payment in her representation dated 29 September 2015 and had executed an indemnity bond dated 24 September 2015 permitting recovery from pensionary and retiral benefits.

The Court noted, however, that the recovery order did not clearly disclose the head or period for which the alleged excess amount of ₹13,48,085 had been paid, and that the State relied principally on the indemnity bond.

Whether recovery of alleged excess salary paid due to erroneous pay fixation could be effected from the retiral benefits of the deceased husband of the petitioner, who held a Class III post and died in service?

Whether the indemnity bond and undertaking relied upon by the State authorised such recovery despite the principles laid down in State of Punjab v. Rafiq Masih and State of M.P. v. Jagdish Prasad Dubey?

Whether the impugned recovery order was legally sustainable in the absence of adequate particulars regarding the alleged excess payment and proof that the undertaking was voluntarily given?

The Court applied the principle in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, that recovery of excess payments is impermissible, inter alia, from Class III and Class IV employees, retired employees, and in cases where recovery would be inequitable, harsh or arbitrary.

It relied on the Full Bench decision in State of M.P. v. Jagdish Prasad Dubey, I.L.R. 2024 M.P. 575 (FB), which held that recovery may be made on the basis of a prior undertaking or indemnity bond only subject to the applicable hardship principles and time limits; an undertaking obtained at the stage of retiral benefits for pay refixation undertaken decades earlier cannot be enforced, and an undertaking given as a condition for financial benefit is a forced undertaking unless shown to be voluntary.

The Court also relied on Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156, concerning the unenforceability of unconscionable or forced undertakings absent proof of voluntariness.

The Court further followed the coordinate Bench and Division Bench decisions in Ramrao Bhimte and the connected appellate proceedings, in which recovery from a retired Class III ministerial employee was held impermissible.

The Court held that the case fell squarely within the protective categories identified in Rafiq Masih: the deceased employee held a Class III post, the alleged excess payment arose from departmental pay fixation rather than fraud or misrepresentation by the employee, and recovery was sought after his death from pensionary or retiral benefits.

The petitioner’s indemnity bond did not alter the result because, under Jagdish Prasad Dubey, an undertaking obtained in connection with pay refixation or retiral settlement cannot automatically authorise recovery; the State had not established that the undertaking was voluntarily given.

The Court also found that the State had failed to substantiate the alleged excess payment by specifying the relevant payment head and period, relying instead primarily on the bond.

In these circumstances, recovery of the alleged excess amount was considered legally impermissible and incapable of surviving judicial scrutiny.

It directed the respondents to pay the petitioner the entire amount sought to be recovered, or already recovered, pursuant to that order within three months from production of a certified copy of the judgment.

The writ petition was accordingly disposed of.