Recovery of excess payment from Class-III employee without notice is impermissible under the Rafiq Masih principles.

The petitioner was appointed as a Constable on January 21, 1985.

Over his tenure, he received benefits under the 5th Central Pay Commission, Kramonnati, and Time Scale of Pay, eventually being promoted to ASI in 2016.

In 2022, the Treasury Department raised an objection regarding an alleged wrong pay fixation dating back to January 23, 1999.

Consequently, the respondents issued an amended pay fixation and recovery order (Annexure P/1) without providing a show-cause notice or an opportunity for a hearing.

An amount of Rs. 75,000/- was subsequently recovered based on undertakings previously signed by the petitioner in 1998 and 2017.

The petitioner challenged these orders as illegal and violative of natural justice.

1. Whether the recovery of excess payments from a Class-III employee, relating to an error occurring over five years prior, is legally permissible.

2. Whether the recovery order passed without notice or hearing violates the principles of natural justice.

3. Whether an undertaking given by an employee under unequal bargaining power can authorize the recovery of payments made due to the employer's mistake.

The court primarily applied the principles established by the Supreme Court in State of Punjab & Others v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from Class-III/IV employees and in cases where excess payment was made more than five years prior to the recovery order.

It further relied on Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly (1986) 3 SCC 156, regarding the enforceability of contracts/undertakings involving unequal bargaining power.

The coordinate bench ruling in Ravindra Kumar Joshi v. State of M.P. (W.P. No. 17831/2019), which mandates that the State prove an undertaking was voluntary rather than forced.

The Court observed that the petitioner is a Class-III employee and the alleged pay fixation error began in 1999, far exceeding the five-year limit established in Rafiq Masih.

The Court found that the respondents admitted to issuing the recovery order without a show-cause notice, thereby violating the principles of natural justice.

Regarding the undertakings (dated 1998, 2009, and 2013), the Court noted they did not specifically relate to the 1999 pay fixation.

Furthermore, applying the Brojo Nath Ganguly doctrine, the Court held that such undertakings are often obtained through coercion or unequal bargaining power; since the State failed to prove the undertaking was voluntary, it was deemed "forced" and legally unenforceable for the purpose of recovery.

The Court held that recovery from a Class-III employee for a decades-old error without following natural justice is impermissible.

The respondents were directed to refund the recovered Rs. 75,000/- with 6% interest per annum.

While the recovery was quashed, the Court granted the State liberty to refix the petitioner's pay strictly in accordance with law after providing him a fair hearing.