Recovery of excess payments from retired Class-III/IV employees or those due to retire within one year is impermissible in law, unless the payment was obtained through fraud or misrepresentation.

ORDER

The challenge is to an order contained in Annexure P/1 dated 09/01/2026 by which the representation of the petitioner has been turned down by the respondent concerned.

It is contended by the counsel that previously also the petitioner had approached this Court vide WP No.41351/2024 by which the petitioner had questioned the recovery after retirement. The said writ petition was disposed of with a direction to respondent to take decision on the petitioner's grievance in the light of the decision of the Apex Court in the case of State of Punjab and others vs Rafiq Masih and others reported in 2015 (4) SCC 334 as well as in view of decision of the Full Bench of this Court in W.A. No. 815 of 2017 ( State of M.P. and others Vs. Jagdish Prasad Dubey ) vide order dated 06.03.2024.

It is contended by the counsel that the decision vide Annexure P/1 has been taken and the Authority has failed to interpret the directions issued by the Apex Court in the case of Rafiq Masih (Supra). The case of the petitioner despite being identical, the recovery is being sought to be treated as justified. It is thus contended by the counsel that the impugned orders deserve to be set aside.

Counsel for the State has opposed the aforesaid payer and submits that excess payment was made to the petitioner during service career on account of incorrect fixation and therefore the said mistake was rectified and at the time of issuance of PPO, the order of recovery was passed.

Having considered the submissions and perused the record reflects that the order of recovery is being assailed in the petition. The issue pertaining to recovery from employees who were holding the post of Class-III employees, after retirement, came up for hearing before the Apex Court in the case of Rafiq Masih (Supra) wherein the Apex Court held in paragraph 18 as under:

"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 following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."

Again, the controversy came up for consideration before the Full Bench of this Court in W.A. No. 815 of 2017 (State of M.P. & others Vs. Jagdish Prasad Dubey), wherein, by order dated 06.03.2024, the Full Bench of this Court formulated the following three questions for consideration:

"1. Whether the recovery can be ordered to be affected from the pensionary benefits or from the salary in view of an undertaking or Indemnity Bond taken by the employer before the grant of benefit of pay refixation.

2. Whether the recovery on account of excess payment to an employee can be made in exercise of power conferred under Rule 65 of M.P Civil Services Pension Rules, 1976 .

3. Whether the undertaking sought at the time of grant of financial benefits on account of refixation of pay is a forced undertaking and thus not enforceable in light of judgment of Supreme