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

The petitioner was appointed as a Peon with effect from 13 January 1982 and was later promoted as Assistant Grade-III on 20 March 2013. He retired on 30 September 2017.

During scrutiny of his service book and pension papers, the authorities allegedly found that his pay had been wrongly fixed, resulting in excess payment of ₹2,35,914 for the period from 13 January 1982 to 13 January 1994. The amount was ordered to be recovered from his retiral dues.

The petitioner challenged the recovery on the grounds that it was made without notice or hearing, related to a Class III employee, and concerned payments made several decades earlier.

The State relied on an undertaking allegedly given by the petitioner consenting to recovery of any excess payment.

1. Whether recovery of alleged excess salary paid between 1982 and 1994 could be made from the petitioner’s retiral dues after his retirement from a Class III post.

2. Whether the undertaking allegedly given by the petitioner at the stage of preparation of pension papers authorised such recovery.

3. Whether recovery ordered without issuing a show-cause notice or affording an opportunity of hearing was legally sustainable.

The Court applied the principles in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, under which recovery is ordinarily impermissible from Class III/Class IV employees, retired employees, and in respect of excess payments made for more than five years before the recovery order, particularly where recovery would be harsh or inequitable.

It relied on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that recovery based on an undertaking may be permissible where the undertaking was given before grant of the financial benefit, but an undertaking obtained only at the stage of retiral dues concerning a decades-old refixation cannot ordinarily be enforced; an undertaking must also be voluntary and not forced.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, concerning the impermissibility of recovery from retired, non-gazetted employees in the absence of fraud or misrepresentation and hearing.

The principles of natural justice required notice and an opportunity of hearing before imposing the recovery.

The alleged excess payment arose from pay fixation undertaken between 13 January 1982 and 13 January 1994, whereas recovery was initiated only after the petitioner’s retirement in 2017.

The petitioner was a Class III employee and there was no allegation of fraud or misrepresentation on his part.

Applying Rafiq Masih and Jagdish Prasad Dubey, the Court held that recovery of payments made decades earlier was inequitable and fell within categories of recovery impermissible in law.

The undertaking relied upon by the State was not shown to have been given at the time of the original pay fixation in 1982; the record contained no specific undertaking from that period.

An undertaking allegedly furnished at the stage of preparation of retiral papers could not validate recovery relating to an old pay fixation, particularly when its voluntary nature was not established.

The absence of a show-cause notice and hearing further rendered the recovery procedurally unsustainable.

The impugned recovery was set aside.

The respondents were directed to refund ₹2,35,914, with interest at 6% per annum from the date of retirement until actual payment, provided the amount had in fact been recovered from the retiral dues.

The exercise was to be completed within 90 days from submission of the certified copy of the order, and the writ petition was accordingly disposed of.