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

The petitioner was appointed as an Assistant Teacher in 1995 and retired from the post, a Class III position, on 31 August 2023.

Upon scrutiny of his service book by the Treasury and Accounts Department, the respondents alleged that his pay had been wrongly fixed and recalculated his service benefits, resulting in a recovery order dated 8 November 2023 for ₹1,88,381.

The alleged excess payment related to the period from July 2017 to August 2023.

The petitioner challenged the recovery under Article 226, contending that it was issued without a show-cause notice or hearing, that he had not misrepresented any facts, and that recovery from a retired Class III employee was impermissible.

The State defended the recovery on the basis of erroneous pay fixation and an undertaking allegedly furnished by the petitioner.

Whether recovery of excess salary from the petitioner, a retired Class III employee, was permissible in the circumstances of the case.

Whether the undertaking relied upon by the State authorised recovery, notwithstanding the absence of proof that it had been given voluntarily.

Whether the recovery order was invalid for having been issued without prior notice or an opportunity of hearing.

The Court applied Article 226 of the Constitution and the principles of natural justice, particularly the requirement of notice and hearing before imposing recovery.

Relying on State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, it held that recovery is ordinarily impermissible from Class III and Class IV employees, retired employees, employees nearing retirement, and where the excess payment relates to a period exceeding five years, or where recovery would be harsh or inequitable.

The Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, was applied to hold that recovery based on an undertaking may be made only where the undertaking is voluntarily given and applicable procedural safeguards are followed; an undertaking obtained as a condition for granting a financial benefit is treated as forced and is unenforceable.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, concerning recovery from retired, non-gazetted employees without notice.

The Court also relied on the co-ordinate Bench decision in Ravindra Kumar Joshi v. State of Madhya Pradesh, W.P. No. 17831 of 2019, decided on 13 May 2024.

The Court found that the alleged excess payment resulted from departmental pay fixation and that there was no allegation or proof of fraud or misrepresentation by the petitioner.

Although the State relied on an undertaking, it failed to establish that the undertaking had been furnished voluntarily; under Jagdish Prasad Dubey, such an undertaking was therefore treated as forced and could not independently sustain recovery.

The recovery was further objectionable because the petitioner had retired on 31 August 2023, held a Class III post, and the alleged excess payment extended over more than five years before the recovery order.

The respondents also issued the recovery without a show-cause notice or opportunity of hearing, violating natural justice.

These circumstances brought the case squarely within the categories identified in Rafiq Masih in which recovery is impermissible.

The respondents were directed to refund ₹1,88,381 with interest at 6% per annum from the petitioner’s date of retirement until actual payment, within three months; in default, the amount would carry interest at 12% per annum as directed by the Court.

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