Retired Class III Amin’s ₹86,547 Recovery Order Quashed, Refund Only If Deducted From Retiral Dues: MP HC

The petitioner, appointed as an Amin in 1983, retired on 31 December 2017.

Following a Treasury Department objection to his pay fixation, the respondents ordered recovery of ₹86,547, relating to alleged excess payments made between 1 April 2006 and 1 December 2017.

The petitioner challenged the recovery, contending that it was ordered without notice or hearing, that he was a Class III employee who had retired, and that he had not caused the alleged erroneous fixation.

The State relied on an undertaking said to have been given by the petitioner to repay any excess payment.

Under State of Punjab v. Rafiq Masih (White Washer), recovery is generally impermissible from Class III/IV employees, retired employees (or those due to retire within one year), and employees where the excess payment was made more than five years before the recovery order; recovery may also be barred where it would be inequitable or harsh.

The Full Bench in State of Madhya Pradesh v. Jagdish Prasad Dubey held that recovery may be based on an undertaking given before the pay benefit, subject to the hardship principles in Rafiq Masih; an undertaking at the time of retirement concerning an old refixation cannot be enforced, and an undertaking given with a pay benefit is not enforceable unless voluntary.

The Court also referred to Jogeswar Sahoo v. District Judge, Cuttack, applying the protection against recovery to retired ministerial employees where there was no fraud or misrepresentation and no hearing before recovery.

The petitioner was a Class III employee who had retired, and the recovery related to payments made over a period exceeding five years before the recovery action. Those circumstances brought the case within the categories identified in Rafiq Masih.

The record contained no undertaking given at the time of the 2006 pay fixation, and the State had not established that the later undertaking relied upon was voluntary. The Court therefore held that the undertaking could not sustain recovery.

The recovery was also initiated without notice or an opportunity to be heard.

The respondents were directed to refund that amount with interest at 6% per annum from the date the petition was filed; if payment was not made as directed, the amount would carry interest at 12% per annum from that date until payment.

The direction to refund applies only if the amount had in fact been recovered from the petitioner’s retiral dues.

The respondents were directed to complete the exercise within 90 days of submission of a certified copy of the order, and the petition was disposed of.