Recovery of excess pay from retired Class III employees is impermissible despite undertakings furnished at retirement.

The petitioner, who retired from the post of Head Constable, challenged an order dated 24-03-2025 and a recovery chart issued by respondent no. 3.

The respondents sought to recover an excess amount of Rs. 2,21,566/- from the petitioner’s retiral dues, claiming the sum was paid erroneously due to a wrong pay re-fixation.

The state argued that the recovery was permissible because the petitioner had voluntarily signed an undertaking for recovery of excess payments while his pension papers were being prepared.

1. Whether the recovery of excess pay from a retired Class III employee is permissible under the principles of equity and law.

2. Whether an undertaking for recovery given at the time of retirement/pension processing is legally enforceable to recover payments made decades prior.

The Court applied the principles from State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from Class III/IV employees or retired employees when it causes inordinate hardship.

The Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, 2024(2) M.P.L.J. 198, which held that undertakings given at the stage of retiral dues are "forced" and unenforceable unless proven to be voluntary.

The court also noted State of M.P. v. Ramrao Bhimte (W.A. No.1657/2025), which quashed similar recoveries where undertakings were not given at the time the benefit was first extended.

The Court observed that the petitioner was a retired employee, and the recovery targeted payments made long ago due to a mistake by the department, not the petitioner.

Regarding the state's reliance on an undertaking, the Court found that the document was signed only during the retirement process and not at the time the pay-fixation benefit was originally granted.

Following the Jagdish Prasad Dubey precedent, the Court reasoned that such an undertaking is a "forced undertaking" rather than a voluntary one, as the State failed to prove otherwise.

Consequently, the Court determined that recovering a significant sum from a retired Class III staff member’s pension after years of service is iniquitous and violates the guidelines set by the Apex Court.

The Court held that the undertaking furnished at retirement was ineffective for recovering long-past excess payments.

The Court ordered the respondents to refund any recovered amount with 6% interest per annum within three months, failing which a 12% interest rate would apply.

The actual re-fixation of the petitioner’s pay (for prospective calculation) was upheld.