Recovery of excess payments from retired Class-IV employees is impermissible in the absence of fraud.

The petitioner, Rama Shankar Saket, was a Class-IV employee (Pump Attender) who superannuated on December 31, 2020

Approximately four years after his retirement, the State issued recovery orders dated May 3, 2024, and August 9, 2024, seeking to reclaim ₹2,78,736.00 allegedly paid in excess during his service tenure

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

1. Whether the State is permitted to recover excess payments from a retired Class-IV employee after their superannuation

2. Whether such recovery, initiated several years after the alleged excess payment and retirement, is sustainable in light of established judicial precedents

State of Punjab and others v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from employees belonging to Class-III/Class-IV service or from retired employees

State of M.P. and others v. Jagdish Prasad Dubey (W.A. No. 815 of 2017), which held that undertakings for recovery cannot be enforced for pay re-fixations done decades prior

Jogeswar Sahoo & Ors. v. The District Judge, Cuttack & Ors. (2025) INSC 449, which established that recovery from ministerial staff after retirement without a hearing and in the absence of fraud is unsustainable

The court observed that the petitioner was a retired Class-IV employee, falling squarely within the protected categories defined in Rafiq Masih

The recovery was initiated in 2024, nearly four years after the petitioner’s retirement in 2020, for payments made during his service

The court noted the absence of any allegation of fraud or misrepresentation on the petitioner's part

Following the Full Bench ruling in Jagdish Prasad Dubey, the court reasoned that recovery from a retired employee of this cadre is "iniquitous" and "harsh"

The court concluded that the State’s action was contrary to settled law, as the right to recover is outweighed by the hardship caused to a retired ministerial employee

The Court held that recovery from a retired Class-IV employee is legally impermissible

The respondents were directed to refund the already recovered amount to the petitioner with interest at 6% per annum within 60 days of the production of the certified copy of the order