Recovery of Excess Pay From Class-III Employee Without Voluntary Undertaking or Notice is Impermissible in Law

The petitioner, a Sub-Engineer (Class-III employee) in the Madhya Pradesh State Government, was granted the Samayman Pay Scale in 2008 after 20 years of service.

On 04.10.2018, based on an objection by the Assistant Pension Officer, the department initiated a recovery of "excess" payments by reducing his salary from ₹73,200 to ₹71,100 without prior show-cause notice or an opportunity for hearing.

The petitioner challenged the recovery on the grounds that the alleged excess resulted from a Departmental miscalculation rather than any fraud on his part.

1. Whether the State can recover excess payments made due to erroneous pay fixation from a Class-III employee without prior notice or a specific undertaking given at the time of grant?

2. Whether an undertaking obtained from an employee regarding pay re-fixation is legally enforceable if it is not proven to be voluntary?

The court primarily applied the principle of "Hardship" and "Iniquity" established by the Supreme Court in *State of Punjab v. Rafiq Masih (White Washer)*, which prohibits recoveries from Class-III/IV employees and cases where excess payment was made for over five years.

It relied on the Full Bench decision in *State of Madhya Pradesh v. Jagdish Prasad Dubey (2024)*, which held that a forced undertaking given at the time of re-fixation is unenforceable.

Further, the court applied the principles of Natural Justice relating to the necessity of a show-cause notice before adverse financial action, and cited *Jogeswar Sahoo v. District Judge, Cuttack (2025)* regarding the protection of ministerial staff from recovery after significant delays.

The court found that the petitioner was a Class-III employee, placing him directly under the protective umbrella of the *Rafiq Masih* guidelines.

The Bench observed that the State failed to produce any specific undertaking given by the petitioner at the time of the initial pay fixation to repay excess sums.

Relying on *Ravindra Kumar Joshi v. State of M.P.*, the court reasoned that even if an undertaking existed, it would be deemed "forcefully obtained" unless the State proved it was voluntary, rendering it legally non-binding.

Furthermore, the court noted a fatal procedural flaw: the respondents initiated the recovery without issuing a show-cause notice, thereby violating the principles of natural justice.

Since the petitioner was not responsible for the miscalculation, the recovery was deemed iniquitous and arbitrary.

The recovery order was quashed.

The respondents were directed to refund any amount already recovered prior to the stay order, along with interest at 6% per annum, within 90 days.

The petition was disposed of with no further costs.