Recovery of excess pay from retired Class III employees is impermissible absent fraud or misrepresentation.

The petitioner was appointed as a Compounder (a Class III post) in 1981 and retired from service on December 31, 2016

Upon retirement, the Joint Director of Treasury, Accounts and Pension Department reviewed his service book and raised objections regarding wage increments and pay fixation

Consequently, Respondent No. 6 issued an order for the recovery of Rs. 40,058/- from the petitioner’s retiral dues

This recovery was initiated without providing a show-cause notice or an opportunity for a hearing

The petitioner challenged the recovery under Article 226 of the Constitution, citing his status as a retired Class III employee

1. Whether the recovery of excess payments from a retired Class III employee is permissible in the absence of a show-cause notice or an opportunity for hearing?

2. Whether an undertaking given by an employee at the time of pay refixation is enforceable for recoveries made post-retirement?

The Court primarily relied on the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer), which prohibited recoveries from Class III/IV employees, retired employees, or when the excess payment was made for a period exceeding five years

It also applied the Full Bench decision of the Madhya Pradesh High Court in State of Madhya Pradesh v. Jagdish Prasad Dubey, which held that undertakings given at the stage of pay refixation are often "forced undertakings" and are unenforceable unless proven voluntary

Furthermore, the Court cited Jogeswar Sahoo v. District Judge, Cuttack, emphasizing that recovery from superannuated ministerial staff without a hearing is unsustainable

The Court observed that the petitioner was a Class III employee (Compounder) who had already retired when the recovery was initiated

It found that the respondents failed to assign any specific reasons for the recovery and violated the principles of natural justice by denying the petitioner an opportunity for a personal hearing

Applying the Rafiq Masih criteria, the Court determined that recovery from a retired Class III employee is legally impermissible

Regarding the issue of an undertaking, the Court noted that no such undertaking was present in the record; even if one existed, based on Jagdish Prasad Dubey and Ravindra Kumar Joshi, it would be treated as "forced" unless the State proved it was voluntary, which they failed to do

It held that recovery from a retired Class III employee without following due process is unsustainable in law

The respondents were directed to refund the recovered amount of Rs. 40,058/- to the petitioner with 6% interest per annum from the date of retirement until the actual date of payment

The Court ordered the exercise to be completed within 90 days from the submission of the certified copy of the order