Recovery of excess salary from retired Class III employees is impermissible in the absence of voluntary undertaking.

The petitioners were appointed as Assistant Grade-III employees (Class III) between 1979 and 1984 and retired between September 2016 and March 2017

Post-retirement, during the verification of service books by the Treasury Department, it was alleged that their pay fixation carried out on April 1, 2006, was erroneous

Consequently, the respondents issued recovery orders (Annexures P/1 and P/2) for sums of ₹2,74,604, ₹1,68,977, and ₹3,25,448 respectively from the petitioners without prior show-cause notice

The State contended that the recovery was justified based on undertakings (Annexure R-3) provided by the petitioners at the time of preparing pension papers

1. Whether recovery of excess payments made due to wrong pay fixation can be effected from Class III employees after their retirement

2. Whether an undertaking given at the stage of retirement to refund excess payments can override the protections against recovery for mistakes made decades earlier

The court primarily applied the principles from State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from Class III/IV employees and retired employees when the excess payment spans over five years

It further relied on the Full Bench decision in State of Madhya Pradesh v. Jagdish Prasad Dubey (2024) 2 M.P.L.J. 198, which held that undertakings given at the stage of retiral dues for refixations done decades ago are "forced" and unenforceable unless proven voluntary

Additionally, the court cited Jogeswar Sahoo v. District Judge, Cuttack 2025 (3) M.P.L.J. (S.C.) 25, emphasizing that recovery without an opportunity of hearing violates natural justice

The Court found that the petitioners, as Assistant Grade-III employees, belonged to Class III, making them exempt from recovery under the Rafiq Masih guidelines

The court observed that the alleged wrong fixation occurred in 2006, more than ten years before retirement, and the recovery was initiated without any show-cause notice

Regarding the State's reliance on undertakings, the court noted that the respondents failed to prove that the undertakings were given voluntarily at the time the benefit was first extended in 2006; rather, they were obtained during the pension processing stage

Following the Jagdish Prasad Dubey precedent, such "forced" undertakings cannot be used to justify recovering payments made long ago due to the employer's own mistake

The court quashed the recovery orders and directed the respondents to refund the amounts of ₹2,74,604, ₹1,68,977, and ₹3,25,448 to the respective petitioners. The respondents were further ordered to pay interest at 6% per annum from the date of retirement until actual payment, with the exercise to be completed within 90 days