Recovery of excess payments from retired Class III employees is impermissible absent fraud or misrepresentation.

The petitioner, who served as an Assistant Grade-III employee, superannuated from service on March 31, 2025

Nearly a year after his retirement, the respondent authorities issued impugned orders dated February 4, 2026, directing the recovery of Rs. 13,65,220/- from the petitioner’s gratuity and leave encashment

The respondents justified the recovery on the grounds that excess payments had been mistakenly made to the petitioner during his service tenure

The petitioner challenged these orders, seeking a refund of the recovered amount with interest

Whether the recovery of excess payments made during service is permissible from a retired Class III employee under the established principles of equity and law

Whether the impugned recovery orders issued post-retirement violate the guidelines set by the Apex Court and the Full Bench of the High Court

The court primarily applied the principles established by the Supreme Court in State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from retired employees or Class III/IV employees when such recovery would be iniquitous or harsh

It further relied on the Full Bench decision of the Madhya Pradesh High Court in State of M.P. v. Jagdish Prasad Dubey (W.A. No. 815 of 2017), which held that recovery cannot be made under Rule 65 of the M.P. Civil Services Pension Rules, 1976, for pay revisions extended much earlier, nor can "forced undertakings" be enforced

Additionally, the court cited Jogeswar Sahoo & Ors. v. The District Judge, Cuttack (2025) INSC 449, affirming that post-retirement recovery from ministerial staff without a hearing is unsustainable

The court observed that the petitioner was a Class III employee who had already retired when the recovery was initiated

Applying the Rafiq Masih criteria, the court found that the petitioner’s case fell squarely within the prohibited categories: he was both a retired employee and a member of Class III service

The court noted that the respondents failed to demonstrate any fraud or misrepresentation on the petitioner's part that led to the excess payment

Following the Full Bench ruling in Jagdish Prasad Dubey, the court reasoned that even if an undertaking existed, it could not be used to enforce recoveries for pay fixations done decades ago or at the stage of retirement

Consequently, the court determined that initiating recovery after the petitioner’s superannuation was legally impermissible and arbitrary

The court allowed the writ petition and quashed the impugned recovery orders dated February 4, 2026

The respondents were directed to refund the recovered amount of Rs. 13,65,220/- to the petitioner along with interest at the rate of 6% per annum within 30 days of the production of the certified order