Recovery of excess pay from retired employees based on post-retirement undertakings is impermissible and legally unenforceable.

The petitioner, an Inspector who retired from service, challenged the order dated 20-01-2021 and a recovery chart attached to his Pension Payment Order (PPO) directing the recovery of Rs. 4,36,931/-.

The respondents sought to recover this excess amount on the grounds of erroneous pay re-fixation conducted years prior.

The State contended that the recovery was justified as the petitioner had provided an undertaking/consent for recovery at the time of preparing his pension papers.

1. Whether the recovery of excess payments made due to erroneous pay fixation can be effected from a retired employee based on an undertaking provided at the time of retirement.

The court applied the principles established by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from retired employees or Class III/IV employees where payments were made mistakenly for over five years.

The Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey (2024), which held that an undertaking given at the stage of retirement regarding pay re-fixation done decades ago is a "forced undertaking" and is unenforceable.

The court also cited State of Madhya Pradesh v. Ramrao Bhimte (W.A. No. 1657/2025) regarding the impermissibility of recovery from retired officials.

The court found that the petitioner stood on the same footing as the litigants in the cited precedents where recovery was quashed.

The court reasoned that an undertaking must be voluntary to be legally binding; however, the State failed to prove the petitioner’s consent was voluntary.

Since the undertaking was furnished only at the time of retirement—and not at the time the actual salary benefits were extended—it was deemed a "forced undertaking" under the rule in Jagdish Prasad Dubey. Consequently, such an undertaking cannot be used to recover excess payments made "long back" as it would be iniquitous and harsh to the retired employee.

The court quashed the recovery orders and directed the respondents to refund any recovered amount with 6% interest per annum within three months, failing which a 12% interest rate would apply; however, the court upheld the revised pay fixation itself and the petition was disposed of accordingly.