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

The petitioner, appointed as a Constable in 1984 and later promoted to Head Constable, retired on 30 November 2024 as Incharge Assistant Sub-Inspector.

During scrutiny of his service records, the authorities alleged erroneous pay fixation and ordered recovery of ₹2,33,334.

The petitioner challenged the recovery orders, stating that he had received no prior notice or hearing, that the alleged excess payment resulted from the employer’s pay fixation, and that he had retired from a Class III post.

The State relied on an undertaking allegedly given by the petitioner at the time of preparation of his pension papers.

The petition sought to set aside the recovery orders and obtain payment of gratuity with interest.

1. Whether recovery of alleged excess pay could be made from the petitioner’s retiral benefits on the basis of the undertaking relied on by the State.

2. Whether recovery was permissible given that the petitioner had retired from a Class III post and was not afforded notice or an opportunity of hearing.

3. Whether the petitioner was entitled to repayment of any amount recovered and to release of gratuity with interest.

Under State of Punjab v. Rafiq Masih (White Washer), recovery of mistaken excess payments is impermissible in specified situations, including recovery from Class III and IV employees, retired employees or those due to retire within one year, and where the excess payment relates to a period exceeding five years before the recovery order.

The Full Bench in State of Madhya Pradesh v. Jagdish Prasad Dubey held that recovery based on an undertaking may be made where the undertaking was given before the pay refixation benefit, but an undertaking given at the stage of retiral benefits concerning an earlier refixation cannot be enforced; an undertaking given at the time of grant of financial benefit is not enforceable unless voluntary.

The Court also referred to Jogeswar Sahoo v. District Judge, Cuttack, where recovery was held unsustainable in circumstances involving retired ministerial employees, no fraud or misrepresentation, and no hearing before the recovery order.

Recovery under Rules 65 and 66 of the Madhya Pradesh Civil Services (Pension) Rules, 1976 is subject to compliance with the prescribed procedure.

The State did not produce a pay-fixation chart or identify the period during which the alleged incorrect fixation occurred.

Although it relied on an undertaking, it failed to establish that the petitioner had given it voluntarily; the Court therefore treated it as non-voluntary and insufficient to sustain recovery.

The petitioner had retired from a Class III post, and the recovery was initiated without notice or an opportunity to be heard. Applying Rafiq Masih and the cited authorities, the Court found the recovery impermissible.

If ₹2,33,334 had been recovered, the respondents were directed to refund it with interest at 6% per annum from the date of retirement until payment; no refund or interest was due if no recovery had been made.

The respondents were also directed to release any unpaid gratuity with interest at 6% per annum from the date of entitlement until payment.

These directions were to be complied with within three months of receipt of the certified order; otherwise, the recovery and gratuity amounts would carry interest at 12% per annum from the date of entitlement until payment. The petition was disposed of accordingly.