Pandey said that he had returned the award to protest against attack on labourers by Ghanshyam, husband of a village head, in Era Kake village on January 14 last year.
He alleged that the incident occurred in presence of the police. Since then, "the administration had been working in a biased manner".
The award was given to Pandey for creating awareness about the Mahatma Gandhi National Rural Employment Guarantee Act for the year 2007-08 by Sonia Gandhi.
"I have returned the award, which included a citation and a cash reward of Rs 44,000 to the Union Rural Development Ministry," he said.