Recovery of excess pay from Class III employees is impermissible absent a voluntary undertaking.

The petitioner’s husband, an Ophthalmic Assistant and Class III employee, died in service on 16 May 2021.

During preparation of his pension and retiral benefits, the respondents alleged that excess payment had been made due to erroneous fixation of pay under the Sixth Pay Revision and ordered recovery of ₹2,93,397 from his retiral dues.

The petitioner challenged the recovery on the grounds that no show-cause notice or opportunity of hearing had been provided, that her husband was a Class III employee, and that no undertaking had been furnished at the time of the alleged pay refixation.

The undertaking relied upon by the State was obtained only while preparing the pension papers.

Whether recovery of alleged excess payment from the retiral dues of a deceased Class III employee was legally permissible in the circumstances of the case.

Whether recovery could be sustained on the basis of an undertaking obtained at the stage of preparation of pension papers, rather than at the time of pay refixation or grant of the financial benefit.

Whether the recovery order was vitiated for failure to issue notice or provide an opportunity of hearing.

The Court applied the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that recovery may be made from pensionary benefits where supported by a valid undertaking or indemnity, subject to the hardship principles in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334; however, an undertaking obtained at the stage of retiral payment for a pay refixation made years earlier cannot ordinarily be enforced, and an undertaking must be voluntary to be enforceable.

Rafiq Masih prohibits recovery, inter alia, from Class III/Class IV employees, retired employees, and where the excess payment relates to a period exceeding five years.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, recognising that recovery without hearing from retired non-gazetted employees, absent fraud or misrepresentation, is unsustainable.

The co-ordinate Bench decision in Ravindra Kumar Joshi v. State of Madhya Pradesh, W.P. No. 17831 of 2019, order dated 13 May 2024, further established that an undertaking is unenforceable unless the State proves that it was voluntarily furnished.

The alleged excess payment arose from pay fixation under the Sixth Pay Revision and not from any fraud, misrepresentation, or fault attributable to the petitioner’s husband.

The record contained no undertaking furnished at the time of pay fixation; the undertaking relied upon by the State was obtained only when the pension papers were prepared and therefore could not validate recovery relating to an earlier pay revision.

In any event, the employee was a Class III employee, and the recovery was made from retiral dues after his death, bringing the case within the categories identified in Rafiq Masih where recovery is impermissible.

The absence of notice and opportunity of hearing further rendered the recovery procedurally defective.

Accordingly, the State’s general entitlement to recover excess payment could not override the specific restrictions arising from the employee’s status, the nature and timing of the payment, the absence of a valid voluntary undertaking, and the requirements of natural justice.

The respondents were directed to refund ₹2,93,397 to the petitioner with interest at 6% per annum from the date of retirement until actual payment, subject to the clarification that no refund would be payable if the amount had not in fact been recovered from the retiral dues.

The directions were to be completed within 90 days from submission of a certified copy of the order.

The petition was accordingly disposed of.