Recovery of excess pay from retired Class III employees based on post-retirement undertakings is impermissible.

The petitioner retired from the post of Sub-Inspector.

Following his retirement, the respondents issued an order dated 13-01-2025 and a recovery chart (Annexure P/1) seeking to recover ₹81,371/- on the grounds of excess payment made due to erroneous pay re-fixation.

The State contended that the recovery was valid because the petitioner had voluntarily signed an undertaking consenting to the recovery of excess payments during the preparation of his pension papers.

The petitioner challenged this recovery, asserting that such deductions from retiral dues are impermissible under settled law.

1. Whether the respondents can recover excess payments made due to erroneous pay fixation from a retired Class III employee based on an undertaking provided at the time of retirement.

State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recoveries from retired employees or Class III/IV service members when the excess payment was made for over five years.

Full Bench judgment in State of Madhya Pradesh v. Jagdish Prasad Dubey, 2024(2) M.P.L.J. 198, which clarified that an undertaking seeking to recover payments made "decades ago" cannot be enforced if it was a "forced undertaking" obtained at the stage of retirement rather than when the benefit was first granted.

The court reasoned that since the petitioner was a retired employee, he fell within the categories protected by the Rafiq Masih guidelines.

Regarding the State's reliance on the undertaking, the court observed that the respondent failed to prove the undertaking was given voluntarily.

Applying the Jagdish Prasad Dubey precedent, the court noted that the undertaking was furnished only at the time of retirement and not when the initial pay benefits were extended years prior; such "forced" undertakings are legally unenforceable.

Consequently, the court found the recovery to be iniquitous and arbitrary, as the state cannot utilize post-retirement consents to rectify its own decades-old administrative errors.

The court set aside the recovery orders and directed the respondents to refund any amount already recovered to the petitioner with 6% interest per annum within three months, failing which a 12% interest rate would apply.

However, the court upheld the revised pay fixation.

The petition was disposed of in favor of the petitioner.