Retirement-stage undertakings are unenforceable for recovering excess payments made decades prior due to erroneous pay fixation.

The petitioner, a retired Sub-Inspector, challenged an order dated 28-05-2025 issued by Respondent No. 3 seeking to recover an excess payment of Rs. 2,76,425/- from his retiral dues

The recovery was initiated following a re-fixation of the petitioner’s salary, which the respondents claimed was erroneously calculated during his service

The State argued that the recovery was valid because the petitioner had signed an undertaking/consent for recovery at the time his pension papers were prepared

1. Whether the respondents can recover excess payments made due to erroneous pay fixation from a retired employee based on an undertaking provided at the time of retirement

2. Whether the principle of "forced undertaking" applies to consents given by employees at the stage of receiving retiral dues

The court primarily applied the "hardship" test established 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 excess payment was made for more than 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 an undertaking given at the stage of retirement for pay re-fixation done decades ago is a "forced undertaking" and is unenforceable under the principles of Central Inland Water Transport Corporation Limited

The court observed that the petitioner stood on the same footing as the respondent in State of M.P. v. Ramrao Bhimte (W.A. No. 1657/2025), where a Division Bench quashed a similar recovery order

The court reasoned that since the State failed to prove the undertaking was given "voluntarily" during the initial grant of benefit, it must be treated as "forcefully obtained" at the time of retirement

Applying the Jagdish Prasad Dubey precedent, the court noted that an undertaking regarding pay increments or re-fixations done "decades ago" cannot be enforced if it is only sought during the preparation of pension papers

Consequently, the court found the recovery to be iniquitous and arbitrary, as it violated the protective guidelines for retired employees

The court set aside the recovery order and directed the respondents to refund the recovered amount of Rs. 2,76,425/- with 6% interest per annum within three months. If the payment is delayed, the interest rate shall increase to 12% per annum; however, the actual pay re-fixation (prospectively) was upheld