Recovery of excess payment from retired Class III employees is impermissible absent a prior voluntary undertaking.

The petitioner was appointed as an Assistant Teacher in 1982 and retired on May 31, 2018, from a Government Primary School in Bhind

Upon retirement, the District Pension Officer audited the petitioner’s service book and concluded that an erroneous kramonnati (career progression) benefit granted on February 25, 2006, had resulted in excess salary payments

Consequently, the respondent department initiated a recovery of ₹2,42,714 (noted as ₹2,04,806 in the State’s reply)

The petitioner challenged the recovery, asserting that he was a Class III employee, that no show-cause notice or hearing was provided prior to the recovery, and that he was not responsible for the alleged wrong fixation

1. Whether the recovery of excess payments made due to erroneous pay fixation is legally permissible from a retired Class III employee after their superannuation

2. Whether an undertaking for recovery of excess payments is enforceable if it was not submitted voluntarily at the time the financial benefit was initially granted

The court primarily relied on the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer) (2015), which prohibited recoveries from Class III/IV employees and retired employees where payments were mistakenly made by the employer

It further applied the Full Bench decision of the Madhya Pradesh High Court in State of M.P. v. Jagdish Prasad Dubey (2024), which held that recoveries are only permissible if a voluntary undertaking was provided at the time of pay refixation, noting that undertakings given at the time of retirement or those deemed "forced" are unenforceable

The court also cited Jogeswar Sahoo v. District Judge, Cuttack (2025) regarding the necessity of following natural justice principles before initiating recovery

The court found that the petitioner served in a Class III capacity as an Assistant Teacher and had already retired by the time recovery was initiated

The erroneous pay fixation spanned from 2006 to 2016, yet the record contained no evidence of a specific undertaking furnished by the petitioner at the time the benefits were originally extended in 2006

Following the principles in Jagdish Prasad Dubey, the court determined that in the absence of a voluntary undertaking at the grant stage, the recovery was unauthorized

Furthermore, the court observed that the respondents failed to provide a show-cause notice or an opportunity for a hearing, violating the principles of natural justice

Applying the Rafiq Masih criteria, the court concluded that recovery from a retired Class III employee for payments made over five years prior is iniquitous and legally impermissible

It held that the recovery was unsustainable under the law governing retired Class III employees

The respondents were directed to refund the recovered amount of ₹2,04,806 to the petitioner with 6% interest per annum from the date of retirement until the actual payment

The court ordered the exercise to be completed within 90 days, failing which the interest rate would increase to 12% per annum