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

The petitioner, a Class IV employee who retired as a Peon on 31 October 2019, challenged recovery of ₹1,02,029 for alleged excess pay arising from a fixation made from 1 January 2006 to 31 October 2019.

He contended that the recovery was ordered without notice or a hearing and that the incorrect fixation was not attributable to him.

The State relied on an undertaking by the petitioner agreeing to repay excess amounts.

The petitioner sought quashing of the recovery and repayment with interest.

The Court considered the Full Bench ruling in State of Madhya Pradesh v. Jagdish Prasad Dubey, the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer), and related authorities.

1. Whether recovery of alleged excess pay could be made from the petitioner after retirement, given that he was a Class IV employee and the excess payments related to a period exceeding five years.

2. Whether the undertaking relied upon by the State was sufficient to permit recovery when the State had not established that it was given voluntarily.

3. Whether recovery ordered without notice or an opportunity of hearing was sustainable.

Article 226 of the Constitution provides the basis for the Court’s judicial review of the recovery order.

In Rafiq Masih, the Supreme Court identified circumstances in which recovery of mistaken excess payments is impermissible, including recovery from Class III/IV employees, retired employees, and cases involving payments made more than five years before the recovery order.

The Full Bench in Jagdish Prasad Dubey held that an undertaking given when pay is refixed is not enforceable unless shown to have been voluntary; it also required consideration of hardship and the time limits stated in Rafiq Masih.

The Court also relied on Jogeswar Sahoo, which treated recovery as unsustainable where retired employees had received no hearing and the record disclosed no fraud or misrepresentation.

The principles in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly informed the treatment of undertakings obtained in circumstances of unequal bargaining power or coercion.

The petitioner’s recovery fell within the protections identified in Rafiq Masih: he was a Class IV employee, had retired before the recovery, and the alleged excess payments extended over a period beginning in 2006.

Although the State relied on an undertaking, it did not establish that the petitioner had given it voluntarily; under the Full Bench rule, the undertaking therefore could not support recovery.

The recovery was also initiated without a show-cause notice or hearing, a circumstance reinforcing its unsustainability in light of Jogeswar Sahoo.

It directed the respondents to refund that amount with interest at 6% per annum from the date of retirement until payment; if the direction was not complied with within the prescribed period, interest at 12% per annum would apply from the date of entitlement until payment.

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