Recovery of excess pay after retirement is impermissible where the undertaking was not proven voluntary.

The petitioner was appointed as a constable on 15 December 1984 and retired as an Assistant Sub-Inspector on 31 December 2024.

During scrutiny of his service book at the time of retirement, the Joint Director, Treasury, Accounts and Pension Department, objected to his pay fixation and concluded that he had received an excess payment of ₹1,01,702.

On that basis, respondent No. 3 issued an order dated 17 October 2025 directing recovery of the amount.

The alleged excess payment related to pay fixation between June 2011 and December 2015.

The petitioner contended that the recovery was ordered without a show-cause notice or opportunity of hearing, after his retirement, and without any fraud or misrepresentation on his part.

The State relied on an undertaking allegedly given by the petitioner agreeing to refund any excess payment.

Whether recovery of the alleged excess payment could be made from the petitioner after his retirement, particularly when the excess payment related to a period more than five years before the recovery order.

Whether the undertaking relied upon by the State authorised recovery, absent proof that it was given voluntarily.

Whether the recovery order was unsustainable for having been passed without issuing a show-cause notice or providing an opportunity of hearing.

The Court exercised jurisdiction under Article 226 of the Constitution of India.

Applying State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, it held that recovery is ordinarily impermissible from retired employees, Group C/Group D employees, and where the excess payment relates to a period exceeding five years before the recovery order, particularly where recovery would be harsh or inequitable.

Relying on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 MPLJ 198, the Court held that recovery based on an undertaking may be permissible in appropriate cases, but an undertaking given at the stage of retiral benefits concerning pay fixation made years earlier cannot ordinarily be enforced; an undertaking obtained as a condition for extending financial benefits is treated as forced unless the State establishes that it was voluntarily given.

The Court also relied on Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156, and Ravindra Kumar Joshi v. State of Madhya Pradesh, W.P. No. 17831 of 2019, to hold that an undertaking must be shown to be voluntary.

The principle of natural justice requires notice and an opportunity of hearing before an adverse recovery order is passed.

The Court further relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) MPLJ (SC) 25, where recovery was held unsustainable against retired non-gazetted employees in the absence of fraud, misrepresentation, and a hearing.

The Court found that the petitioner had retired before the recovery was initiated, belonged to the non-gazetted, Class III category, and that the alleged excess payment related to June 2011–December 2015, substantially more than five years before the recovery order.

There was no allegation or finding of fraud or misrepresentation by the petitioner.

The State relied on an undertaking but failed to establish that it had been given voluntarily; under Jagdish Prasad Dubey and Ravindra Kumar Joshi, the undertaking was therefore treated as a forced undertaking and could not independently sustain recovery.

The recovery was additionally vitiated because it was ordered without notice or an opportunity of hearing.

Applying the safeguards in Rafiq Masih and the principles of natural justice, the Court held that recovery from the petitioner would be legally impermissible and inequitable.

The Court directed the respondents to refund that amount to the petitioner with interest at 6% per annum from the date of his retirement until actual payment, within three months.

If the amount was not paid within that period, it would carry interest at 12% per annum from the date of expiry of the three-month period until realization.

The writ petition was accordingly disposed of, and any pending interlocutory application was also disposed of.