Recovery of excess pay from a retired Class III employee is impermissible absent a contemporaneous undertaking.

The petitioner, initially appointed as a Teacher in 1982 and later promoted to Head Master, retired on 31 October 2023.

Following an objection by the Assistant Director, Treasury, Accounts and Pension Department, the respondents alleged that his pay had been incorrectly fixed from 9 July 2006 and ordered recovery of ₹4,24,174.

The petitioner challenged the recovery orders dated 20 December 2023 and 25 January 2024, contending that he had received no show-cause notice or hearing, was a Class III employee, and had not caused the erroneous fixation.

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

The Court found no record of an undertaking given when the pay benefit was granted in 2006.

Whether recovery of alleged excess pay from the petitioner, a retired Class III employee, was permissible where the excess payment related to a period beginning in 2006 and no undertaking was given when the benefit was granted.

Whether the petitioner was entitled to repayment of the amount recovered, with interest.

Under State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, recovery is generally impermissible in specified hardship situations, including recovery from Class III or IV employees, retired employees, and recovery relating to payments made more than five years before the recovery order.

The Full Bench in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, held that a pre-benefit undertaking may permit recovery, subject to hardship and the Rafiq Masih principles; an undertaking obtained at the time of retirement for benefits granted long earlier cannot be enforced, and an undertaking given when the benefit was granted must be voluntary to be enforceable.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, concerning recovery from retired ministerial employees where no fraud or misrepresentation was shown and no hearing was afforded.

The alleged overpayment arose from pay fixation dating back to 9 July 2006, while recovery was ordered in December 2023.

The petitioner had retired and held a Class III post, bringing the case within the hardship categories identified in Rafiq Masih.

The record did not establish that he had given an undertaking when the benefit was granted; the State’s reliance on an undertaking therefore did not displace those protections.

The recovery was also initiated without notice or an opportunity of hearing, and the Court considered these circumstances alongside the governing precedents.

It directed the respondents to refund ₹4,24,174, if recovered from the petitioner’s retiral dues, with interest at 6% per annum from the date of retirement until payment.

The refund was to be completed within 90 days of submission of a certified copy of the order; failing that, interest at 12% per annum would apply from the date of entitlement until payment.

If no recovery had been made from the retiral dues, the petitioner was not entitled to the refund relief.