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

The petitioner was appointed as a Constable in 1976, promoted as Head Constable in 1986, Assistant Sub-Inspector (Radio) in 2003, Sub-Inspector (Radio) in 2010, and Inspector (Radio) in 2015. He retired on 30 September 2017 from the Class-III post of Inspector (Radio).

During preparation of his pension papers, the respondents found that his pay had allegedly been wrongly fixed and ordered recovery of ₹4,46,571 for the period from 1 August 2003 to 1 July 2016.

The petitioner challenged the recovery on the grounds that it was made without a show-cause notice or hearing, that he was not responsible for the alleged overpayment, and that recovery from a retired Class-III employee was impermissible.

The State relied on undertakings allegedly given by the petitioner at the stage of preparation of his pension papers and contended that recovery was permissible.

Whether recovery of ₹4,46,571 from the petitioner, a retired Class-III employee, on account of alleged erroneous pay fixation was legally permissible, particularly when the recovery was ordered without notice or an opportunity of hearing.

Whether the undertakings furnished by the petitioner at the stage of preparation of pension papers authorised recovery, despite there being no undertaking shown to have been furnished voluntarily at the time of the original pay fixation.

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

The Court applied Article 226 of the Constitution and the principles governing recovery of excess salary payments.

Under State of Punjab v. Rafiq Masih (White Washer), recovery is ordinarily impermissible from Class-III/Class-IV employees, retired employees, and where excess payments have continued for more than five years, or where recovery would be inequitable, harsh, or arbitrary.

Relying on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, the Court held that recovery based on an undertaking may be made only where the undertaking was given voluntarily and in accordance with law; an undertaking obtained at the stage of retirement or payment of retiral dues, concerning benefits granted decades earlier, cannot ordinarily be enforced.

The Full Bench further held that recovery under Rules 65 and 66 of the 1976 Rules requires compliance with the prescribed procedure, and that a forced undertaking is unenforceable.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, which treated recovery from retired non-gazetted employees, made without an opportunity of hearing and absent fraud or misrepresentation, as unsustainable.

The Court also relied on Ravindra Kumar Joshi v. State of Madhya Pradesh, which required the State to establish that an undertaking had been voluntarily furnished.

The alleged excess payment arose from pay fixation made between 1 August 2003 and 1 July 2016, and there was no allegation of fraud or misrepresentation by the petitioner.

The petitioner had retired from a Class-III post, and the recovery was initiated after retirement without issuing a show-cause notice or providing an opportunity of hearing.

These facts directly attracted the categories identified in Rafiq Masih as ordinarily prohibiting recovery.

Although the State relied on undertakings contained in the pension papers, the record did not show that any undertaking had been furnished when the pay benefit was originally extended on 1 August 2003.

Nor did the State establish that the later undertakings were voluntary; consequently, they were treated as forced and unenforceable under Jagdish Prasad Dubey and Ravindra Kumar Joshi.

The recovery was therefore held to be legally impermissible.

The impugned recovery orders were set aside.

The respondents were directed to refund ₹4,46,571 with interest at 6% per annum from the date of retirement until actual payment, within 90 days from submission of the certified copy of the order; failing payment within that period, the amount would carry interest at 12% per annum from the date of entitlement until payment.

The Court clarified that the refund would not be payable if no recovery had in fact been made from the petitioner’s retiral dues.