Police clerks must repay lakhs: MP HC says Rafiq Masih fails where courts stayed the recovery

A Division Bench at Jabalpur set aside five single-judge orders that had quashed recovery of an ad hoc pay increase from ministerial staff of the Madhya Pradesh Police. It held that recovery stalled for years under court stays, that the employees were unjustly enriched, and that none had pleaded hardship.

One retired Subedar was ordered to repay Rs 15,45,794. A Sub-Inspector had Rs 15,80,956 adjusted against his retirement dues. On 28 October 2026 the Madhya Pradesh High Court restored those recoveries, and three others, against ministerial staff of the State police.

A Division Bench of Justice Vivek Rusia and Justice Pradeep Mittal allowed five writ appeals by the State. The single judge had quashed recovery of the principal amount on 19 September 2025, relying on a Division Bench ruling in State of M.P. v. Ramrao Bhimte. The Division Bench held that line of authority did not apply here.

Its reason was the history. The State ordered recovery in 2005 and 2006, and courts stayed it until 2018. The bench said an employee cannot use the protection of State of Punjab v. Rafiq Masih when his own litigation held up the recovery.

A Rs 70 increase that was withdrawn

The employees belong to the ministerial establishment of the Madhya Pradesh Police. They were granted an ad hoc increase of Rs 70 in basic pay, given to the executive police force under the M.P. Revision of Pay Rules, 1983.

A communication of 25 March 2006 directed withdrawal of the benefit as erroneously granted, and recovery of the excess. The challenge went to the Tribunal, the High Court and the Supreme Court. The State says a Supreme Court judgment of 25 September 2018 held that ministerial staff are not entitled to parity with the executive force.

Recovery orders followed from 2020. In the leading appeal, the order of 8 December 2020 directed recovery with interest from the employee’s salary in instalments.

Interest waived, principal upheld, then a second petition

Mohammad Aslam, the respondent in the leading appeal, served as Subedar (Ministerial) in the Superintendent of Police office at PTS, Bhopal. He challenged the recovery in W.P. No. 10530/2021.

On 16 July 2021 the High Court quashed only the interest and upheld recovery of the principal. He did not appeal. A consequential order of 6 December 2024 then fixed recovery of the principal at Rs 15,45,794.

He went back to the High Court. The State says this was an attempt to reopen an issue already decided. The single judge allowed his petition and ordered refund of what had been recovered.

Four more employees, one pattern

Rajesh Kumar Mishra, a Constable (Ministerial) still in service, faced recovery of Rs 7,84,802 as principal and Rs 6,11,275 as interest. The High Court had quashed the interest and upheld the principal on 22 June 2021. He filed a second petition in 2024, arguing Class-III status, delay, and no hearing.

Ashok Kumar Dubey, a Sub-Inspector (Ministerial), had an order for Rs 15,80,956 passed on 6 December 2024. He retired on 31 January 2025, and the amount was adjusted from his retiral dues.

Smt. Anita Choudhari retired on 31 December 2023. Her recovery order of 8 December 2020 came when more than three years of service remained. D.R.S. Yadav, the fifth respondent, also had the amount recovered from retiral dues.

What the State argued

Government Advocate Darshan Soni appeared for the State. He argued that Mr Aslam and Mr Mishra had suppressed their earlier writ orders, in which recovery of principal had become final.

He relied on Division Bench rulings in State of M.P. v. Anita Basnet and State of M.P. v. Satyaveer Singh Yadav, which held that an employee who took partial relief on interest and accepted the principal could not return to challenge it.

He also relied on State of M.P. v. Smt. Shail Sahu, where Rafiq Masih was held inapplicable.

Several respondents, the State added, had given undertakings in 2009 or 2017 to refund excess payments. Advocate Atul Kumar Rai appeared for the employees, who relied on Rafiq Masih and a Full Bench ruling in State of M.P. v. Jagdish Prasad Dubey.

What the employees said

Mr Mishra argued that he was Class-III staff, that recovery came after long delay and without a hearing, and that Treasury authorities had approved his pay fixation. He added that he had given no declaration or indemnity bond when the increase was granted.

Mr Dubey and Ms Choudhari pointed to Rafiq Masih, and Mr Yadav added the Full Bench ruling in Jagdish Prasad Dubey. All said recovery after retirement could not stand. The State answered that recovery could not be completed while it stayed with the courts, and that a later Supreme Court clarification did not bar recovery beyond 17 November 2001.

Two Division Bench lines

The bench set out the rulings it had to reconcile. In Ramrao Bhimte (23 July 2025), a Division Bench held that Rafiq Masih applied squarely to a ministerial employee of the State police. The Supreme Court dismissed the State’s special leave petition on 1 December 2025.

In Shail Sahu (8 August 2016), an earlier Division Bench had reached the opposite result. The State had ordered recovery in 2006, but stays in pending cases blocked it until 11 April 2011, and recovery followed once those cases were decided. Applying Rafiq Masih there was an error, that bench held.

The Gwalior Bench rulings in Sanjay Naithani and Chandrasekhar Tripathi followed Ramrao Bhimte on the State’s concession. The court said neither added reasoning, though both show the ruling was consistently applied.

Why Ramrao Bhimte did not govern

The bench called Ramrao Bhimte distinguishable. There, recovery began seven years after retirement. In these cases, recovery was ordered in 2006, stayed by the Supreme Court and the High Court, and restarted in 2020 while the employees were in service.

These facts, it said, had not been placed before the earlier benches. The employees had also been parties to Writ Appeal No. 1760 of 2007, in which the Division Bench ordered recovery and the Supreme Court stayed that order.

On Madanlal Bardele, decided on 6 September 2016, the bench held that it came after Shail Sahu without considering it. It was therefore not a binding precedent, citing Jabalpur Bus Association. The Supreme Court’s dismissal of the State’s petition against it did not mean Shail Sahu had been disapproved.

The window the stays created

The court read the earlier decisions on the pay dispute closely. In Sushma Tiwari (2011), a Division Bench quashed recovery for 1 January 2000 to 17 November 2001, but held that the State could recover amounts paid after 17 November 2001 in instalments.

The Supreme Court affirmed that ruling in S.H. Baig. In a later clarification in Anita Chowdhry, it gave no direction against recovery after 17 November 2001, and only left the employees free to seek legal recourse.

Recovery, the bench said, was then held up by Supreme Court stay orders of 23 September 2011 and 17 October 2011. It held that recovery could not have been completed between 2006 and 2018. No order, it noted, had set the recovery aside after asking who was responsible for the money not being recovered.

More than 1,000 employees and a multi-crore loss

The bench called it unjust enrichment of a huge amount that the employees could not legally have withheld. It noted that an employee who is retired or about to retire receives gratuity, insurance and provident fund money higher than the recovery amount.

The department had already relaxed the interest, it said. Quashing the principal as well would let more than 1,000 similarly placed employees keep the money under the cover of court stays, and the Government would lose several crore rupees.

If a court has stayed recovery, it added, the question of recovery after retirement depends on the terms of that order and the final outcome of the case.

No hardship pleaded

The bench turned to the Supreme Court’s 2026 decision in Dr. M.K. Ravi Varma v. National Institute of Technology. That ruling says hardship has to be pleaded and proved in each case, and gives the example of excess pay spent on medical treatment.

An employee must also show the excess was not received through misrepresentation or fraud. The employee here had not said what hardship recovery would cause. Pointing to other people’s cases did not do the work, the bench held.

Second petitions and suppressed facts

The court treated Mr Mishra’s second petition as barred. His grounds, Class-III status and the period of excess payment, were open in 2021, and Rafiq Masih had been decided in 2015. No retirement or other event had intervened.

For Ms Choudhari, it said the 2005 recovery order, the challenges up to the Supreme Court and the stay had been suppressed. It held that Rafiq Masih did not apply to the cases and that Ramrao Bhimte and Madanlal were distinguishable.

The bench recorded its conclusion in these words:

“the judgment in Rafiq Masih is not applicable to the present cases” (para 25)

Order

The writ appeals were allowed and the orders of the single judge dated 19 September 2025 were set aside. The State may recover the principal amounts from the five employees. Interest has been relaxed.

The delay in filing the appeals was condoned, since public money was involved and a large class of employees was affected. A copy of the order is to be placed in connected cases. The court had heard the matter on 29 September 2026.