Recovery of excess pay is impermissible from retired Class III employees for payments made over five years earlier.

The petitioner was appointed as a Head Constable in 1965 and retired as a Sub-Inspector on 31 August 2006. During preparation and scrutiny of his pension papers, the authorities allegedly found that his pay had been wrongly fixed under the Fifth Pay Commission, resulting in excess payment from 1 January 1996 until retirement. A recovery was consequently ordered.

The petitioner alleged that the recovery was imposed without a show-cause notice or opportunity of hearing and that, as a retired Class III employee, recovery of excess salary paid without fraud or misrepresentation was impermissible.

The State contended that the pension authorities had identified excess payment of Rs. 42,806, along with Rs. 1,635 relating to withholding of an increment, and that the petitioner had consented to recovery through an undertaking furnished during preparation of his pension papers.

The petitioner relied principally on State of M.P. v. Jagdish Prasad Dubey , the Full Bench decision of the Madhya Pradesh High Court.

The Court found that the record established recovery of Rs. 44,441, not the Rs. 1,76,963 claimed in the petition.

1. Whether recovery of excess salary paid pursuant to an alleged erroneous pay fixation could be made from the retiral dues of a retired Class III employee, where the excess payment related to the period from 1996 to 2006 and was not alleged to have resulted from fraud or misrepresentation.

2. Whether an undertaking furnished by the petitioner at the time of retirement or preparation of pension papers authorised recovery of the excess payment, despite the absence of an undertaking at the time of the original pay fixation and the absence of proof that the undertaking was voluntary.

3. Whether recovery was vitiated by failure to issue a show-cause notice or provide an opportunity of hearing.

The Court applied the principles in State of Punjab v. Rafiq Masih (White Washer) , (2015) 4 SCC 334, which ordinarily prohibit recovery of mistakenly paid excess amounts from Class III/Class IV employees, retired employees, and where the excess payment relates to a period exceeding five years, particularly where recovery would be harsh or inequitable.

It relied on the Full Bench ruling in State of Madhya Pradesh v. Jagdish Prasad Dubey , (2024) 2 M.P.L.J. 198, holding that recovery may be made pursuant to a valid undertaking or indemnity, subject to considerations of hardship and the limitations in Rafiq Masih ; that an undertaking given at the stage of retirement for a pay refixation made decades earlier cannot ordinarily be enforced; and that recovery under Rules 65 and 66 of the 1976 Rules requires compliance with the prescribed procedure.

The Full Bench further held that an undertaking given at the time of grant of pay benefits is unenforceable if forced, unless shown to have been given voluntarily.

The Court also relied on Jogeswar Sahoo v. District Judge, Cuttack , 2025 (3) M.P.L.J. (S.C.) 25, where recovery from retired non-gazetted employees, absent fraud or misrepresentation and without a hearing, was held unsustainable.

The decision in Ravindra Kumar Joshi v. State of Madhya Pradesh , W.P. No. 17831 of 2019, was applied for the proposition that the State must establish that the undertaking was voluntarily given before relying upon it.

The Court held that the alleged excess payment arose from pay fixation carried out on 1 January 1996 and continued until the petitioner’s retirement on 31 August 2006.

The petitioner had not furnished any undertaking when the pay benefit was originally extended; the undertaking relied upon by the State was furnished only at the time of retirement while pension papers were being processed.

Applying Rafiq Masih and Jagdish Prasad Dubey , the Court found that recovery from a retired Class III employee, in respect of payments made more than five years earlier and without any allegation of fraud or misrepresentation, was impermissible.

The State also failed to establish that the undertaking was voluntary, and therefore it could not be used to sustain the recovery.

The recovery was additionally procedurally defective because it was initiated without a show-cause notice or opportunity of hearing.

Finally, the Court distinguished between the amount claimed in the petition and the amount actually supported by the record, finding that only Rs. 44,441 had been ordered for recovery.

The respondents were directed to refund Rs. 44,441 to the petitioner with interest at 6% per annum from the date of filing of the writ petition until actual payment.

This relief was made conditional: if no amount had in fact been recovered from the petitioner’s retiral dues, he would not be entitled to the refund or interest.

The respondents were directed to complete the exercise within 90 days from submission of a certified copy of the order, and the writ petition was accordingly disposed of.