In a significant judgment, the Madhya Pradesh High Court at Gwalior quashed an illegal recovery of Rs. 1,32,999 made from the retiral benefits of a deceased government employee. The order, passed by Hon’ble Justice Anand Singh Bahrawat on August 11, 2025, reinforced legal protections for low-ranking employees and their families against unjust recoveries.
Background of the Case
The petitioner, Smt. Snehilata Sharma, challenged the recovery initiated by the state authorities from her late husband’s pension. Her husband, a Class III timekeeper, retired on February 28, 2005, and passed away on February 3, 2011. The recovery pertained to an alleged excess payment made due to wrongful salary fixation between October 30, 1999, and February 2003.
The petitioner’s counsel argued that:
- Recovery after the employee’s death was impermissible.
- The excess payment resulted from administrative error, not fraud by the employee.
- The recovery included interest, which was unjust.
The state, however, defended the action, claiming entitlement to recover erroneously paid amounts
Legal Precedents Cited
The High Court relied on two landmark judgments:
- State of M.P. vs. Jagdish Prasad Dubey (2024):
The Full Bench ruled that recoveries from pensionary benefits or salaries require valid undertakings or indemnity bonds. Forced undertakings are unenforceable, and recoveries must account for employee hardship.
"Recovery can be effected from pensionary benefits only if based on a voluntary undertaking. No recovery is permissible for decades-old pay refixation errors."
- State of Punjab vs. Rafiq Masih (2015):
The Supreme Court outlined scenarios where recovery is barred, including:- Recoveries from Class III/IV employees.
- Recoveries from retired employees or those nearing retirement.
- Excess payments made over five years prior to recovery orders.
"Recovery would be iniquitous if it far outweighs the employer’s right to reclaim funds."
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Justice Bahrawat held that:
- The deceased was a Class III employee, and the recovery violated Rafiq Masih guidelines.
- No show-cause notice or hearing was provided, violating natural justice.
- The recovery order dated June 15, 2005, was set aside, and the state was directed to refund Rs. 1,32,999.
- Interest at 6% per annum was granted from the petition filing date (January 12, 2012) until payment.
Case Title: Smt. Snehilata Sharma vs. State of Madhya Pradesh & Others
Case No.: Writ Petition No. 450 of 2012
