IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE VIVEK JAIN

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ON THE 16 OF OCTOBER, 2025 WRIT PETITION No. 969 of 2025 SURESH PAL Versus THE STATE OF M.P. AND OTHERS Appearance:

Shri Ashok Kumar Gupta - Advocate for the petitioner.

Shri Avnish Kharti - Panel Lawyer for the State.

Shri Jubin Prasad - Panel Lawyer for the respondent No.3.

ORDER By way of present petition, the petitioner is challenging the recovery ordered from the petitioner vide Annexure P/5 dated 12.12.2024 to the tune of Rs.2,17,581/- which is by way of withdrawal of erroneous grant of financial upgradation granted to the petitioner in the year 2004, which was detected in the year 2024, that is, after 20 years.

2. The case of the petitioner is that the petitioner is a Class-IV employee working as Keyman in Municipal Corporation, Khandwa and he was granted the erroneous financial upgradation without there being any misrepresentation or suppression or fraud on part of the petitioner. He continued to draw the erroneous benefit for 20 years and only when there was some audit in the year 2024, the amount has been ordered to be recovered. He contends that he is not aggrieved by the substantive reduction of pay as a consequence of withdrawal of financial upgradation, but is aggrieved by the recovery part.

3. Per contra, it is vehemently argued by the learned counsel for the respondent Corporation that the Full Bench of this Court in W.A. No.815 of 2017 (The State of Madhya Pradesh and others vs. Jagdish Prasad Dubey), has considered the case of retired employees only and, therefore, it has to be inferred that in case of serving employees the Full Bench has upheld the recovery to be made from such serving employees. By further referring to the judgement of State of Punjab and others vs. Rafiq Masih (white Washer) and others, (2015) 4 SCC 334, it is contended that the ratio of Rafiq Masih is being erroneously applied in all the cases, because the said ratio only applies to retired employees and wherever the employee is in service, then Rafiq Masih (supra) will not apply.

4. It is further argued that even if Rafiq Masih (supra) is deemed to apply to the present case, then as per para 18(iii) of the said judgement, the excess payment made for last preceding five years has to be upheld i.e. from 2019 to 2024 though at best, rest part can be set aside. It is further argued that there is an undertaking available with the Municipal Corporation, which is placed on record as Annexure R-3/2.

5. Upon hearing the rival parties, it is seen that undisputedly there was no misrepresentation or suppression or fraud on part of the petitioner in getting the erroneous benefit from the year 2004. So far as the undertaking Annexure R-3/2 is concerned, the said undertaking is in respect of fixation of the petitioner in Seventh Pay Commission Pay Scales w.e.f. 01.01.2016 and the said undertaking is totally irrelevant to the erroneous financial upgradation granted in the year 2004 and, therefore, reliance on the undertaking is utterly misplaced.

6. So far as the judgement of the Full Bench in Jagdish Prasad Dubey (supra) is concerned, the said judgement of the Full Bench nowhere permits recovery from Class-IV employees and nowhere creates a distinction that recovery from the serving Class-IV employees can be made and only recovery from retired Class-IV employees cannot be made.

7. On the same lines, the argument relating to judgement of the Hon'ble Apex Court in case of Rafiq Masih (supra) that the said judgement would only apply to retired employees, is also misplaced because in para 18 of the said judgement, following five categories have been carved out:-

"18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the fo