In a landmark decision, the Supreme Court of India has ruled that government employees are entitled to receive the increment they earned on the day preceding their retirement. The ruling clarifies a significant point of contention affecting the pension benefits of thousands of retired government employees across the country.
Background of the Case
The case, titled Union of India & Anr. vs. M. Siddaraj (Special Leave Petition (C) No. 4722/2021), revolved around the interpretation of the entitlement to an increment for government employees who retired the day after they were due for a salary increase. The Union of India challenged a decision that favoured the employees, arguing that increments should not be considered if they fall on the day of retirement.
The matter reached the Supreme Court after multiple writ petitions were filed by retirees and ongoing litigation across various courts had created confusion and inconsistency in the application of the relevant rules. The case was heard by a bench comprising Justice Sanjiv Khanna and Justice Sanjay Kumar.
Key Legal Issues Involved
The primary legal issue centered on whether government employees who were due for an increment on the day before their retirement were eligible to receive the benefit of that increment in their pension calculations. The case also touched upon broader principles of statutory interpretation, fairness, and the rights of employees who retire from public service.
Another significant aspect was the applicability of a prior judgment dated April 11, 2023, in the case of Director (Administration and HR), KPTCL and Others v. C.P. Mundinamani and Others. The current proceedings aimed to determine whether the principles laid down in that judgment would apply to third parties not directly involved in the original case.
Decision of the Supreme Court
The Supreme Court, in its interim order, has directed that:
– The judgment dated April 11, 2023, will be effective for all third parties from its date of delivery, i.e., the pension, including the benefit of one increment, will be payable from May 1, 2023. However, enhanced pension for periods prior to April 30, 2023, will not be disbursed.
– For employees who have already filed writ petitions and succeeded, the judgment will act as res judicata, meaning their cases will be considered final, and the enhanced pension with the additional increment will have to be paid accordingly.
– The above direction will not apply in cases where appeals are pending or have not reached finality in appellate courts.
– In cases where retired employees have filed applications for intervention or impleadment in Civil Appeal No. 3933/2023 or other writ petitions and have secured favorable orders, the enhanced pension, including one increment, will be effective from the month in which such an application was filed.
The interim order will remain in effect until further orders from the Court. Importantly, it was clarified that any individual who has already received an enhanced pension, including arrears, will not be affected by these directions.
Key Observations by the Court
Justice Sanjiv Khanna, writing for the bench, observed:
“The increment earned by an employee on the day before retirement forms a part of their legitimate salary and should not be arbitrarily withheld. The right to receive this increment, and its subsequent effect on pension, aligns with principles of fairness and justice, ensuring that government employees are not denied benefits they have rightly earned.”
Parties and Legal Representation
The Union of India was represented by a team of prominent lawyers, including Mr. Rajat Joseph (AOR), Ms. Shirin Khajuria (Senior Advocate), Ms. Ranu Purohit (AOR), Ms. Swati Tiwari (Advocate), and others. Mr. M. Siddaraj, the respondent, was represented by M/s. Nuli & Nuli (AOR) along with a team of advocates including Mr. Lather Mukul Kanwar Singh (AOR), Mr. Devesh Kumar Chauvia, and others.
