Recovery of excess pay is impermissible from retired Class III employees for decades-old fixation errors.

The petitioner was appointed as a Constable on 1 January 1984 and retired as an Assistant Sub-Inspector (“ASI”), a Class III post, on 31 March 2025.

During scrutiny of his service records for pension fixation, the authorities alleged that his pay had been incorrectly fixed and ordered recovery of ₹1,90,009, relating to alleged excess payments made between January 1996 and December 2015.

The petitioner contended that the recovery was ordered without a show-cause notice or opportunity of hearing, that the excess payment resulted from departmental error, and that recovery from a retired Class III employee was impermissible.

The State relied on an undertaking allegedly given by the petitioner at the time of preparation of his pension papers and argued that recovery was therefore permissible.

The petitioner challenged the recovery order under Article 226 of the Constitution.

Whether recovery of alleged excess salary paid between January 1996 and December 2015 could be effected from the petitioner after his retirement as a Class III employee?

Whether an undertaking furnished by the petitioner at the time of retirement or preparation of pension papers could validate recovery of payments made pursuant to an earlier pay fixation?

Whether the recovery order was vitiated for having been passed without issuing a show-cause notice or affording an opportunity of hearing?

The Court applied the principles laid down in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, under which recovery is generally impermissible from Class III/Class IV employees, retired employees, and in cases where excess payment has continued for more than five years before the recovery order.

It relied on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey, (2024) 2 M.P.L.J. 198, which held that recovery based on an undertaking may be possible where the undertaking was given before the pay benefit was granted, but an undertaking obtained at the stage of payment of retiral dues for recovery of excess payments made decades earlier cannot be enforced; any applicable recovery procedure must also be followed.

The Court further relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 (3) M.P.L.J. (S.C.) 25, which held that recovery from retired, non-gazetted employees, without an opportunity of hearing, was unsustainable where the excess payment was not attributable to fraud or misrepresentation.

The Court also approved the principle in Ravindra Kumar Joshi v. State of Madhya Pradesh, W.P. No. 17831/2019, that an undertaking must be shown to have been given voluntarily; an undertaking obtained as a condition of service or retiral benefits cannot automatically support recovery.

The Court found that the alleged wrong pay fixation related to the period from January 1996 to December 2015 and that there was no undertaking given by the petitioner when the pay benefits were originally extended.

The undertaking relied upon by the State was furnished only after retirement, during preparation of pension papers, and therefore could not retrospectively authorise recovery of payments made decades earlier.

The petitioner had retired as a Class III employee, the recovery related to a period exceeding five years, and there was no allegation of fraud or misrepresentation. These circumstances squarely attracted the protective principles in Rafiq Masih.

Further, the recovery was ordered without notice or hearing, contrary to natural justice and the principle recognised in Jogeswar Sahoo.

Accordingly, the undertaking at retirement did not displace the prohibition against an inequitable and delayed recovery.

The impugned recovery was set aside.

The respondents were directed to refund ₹1,90,009 to the petitioner, with interest at 6% per annum from the date of retirement until actual payment, subject to the clarification that if no amount had in fact been recovered from the petitioner’s retiral dues, no refund would be payable.

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