The Supreme Court of India has ruled that employees whose date of retirement is extended to the afternoon of the last day of the month in which they attain the age of superannuation are considered to be “in service” on that day. Consequently, they are entitled to pay revision benefits applicable to employees in service on that specific date.
The judgment was delivered by a Bench comprising Justice Ahsanuddin Amanullah and Justice K. Vinod Chandran in the case of Mukut Das v. The Assam Power Generation Corporation Ltd. & Ors. (Civil Appeal No. 14559 of 2025). The Court set aside the decision of the Division Bench of the High Court and restored the order of the learned Single Judge, allowing the appeals.
Background of the Case
The controversy centered on whether the appellants, who retired on March 31, 2016, were entitled to the pay revision introduced by the ‘Assam State Electricity Board and its Successor Companies Revised Pay Rules, 2017’ (hereinafter referred to as ‘the Rules of 2017’).
Both appellants attained the age of superannuation (60 years) in March 2016, prior to the last day of the month. By operation of Fundamental Rule (FR) 56(a), their retirement was extended to the afternoon of the last day of the month, i.e., March 31, 2016.
The learned Single Judge had held that since the Rules of 2017 applied to employees in service on March 31, 2016, the appellants were entitled to the benefits. However, the Division Bench of the High Court reversed this finding, prompting the appellants to approach the Supreme Court.
Arguments of the Parties
Mr. K.N. Choudhury, learned Senior Counsel for the appellants, argued that FR 56(a) specifically extends the date of retirement to the last day of the month in which the employee attains the age of 60. Therefore, the appellants were legally in service as of March 31, 2016. He contended that the Rules of 2017 specifically provided for the revision to apply to those “in service as on 31.03.2016.”
Mr. B.K. Sharma, learned Senior Counsel for the respondents, vehemently opposed the claim. He argued that the pay revision rules were intended for those appointed and continuing on or after April 1, 2016. He further submitted that the revised pension was not applicable to persons who had retired on or before March 31, 2016, citing specific fitment benefit rules for pensioners. The respondents relied on the Supreme Court’s decision in K. J. George and Ors. v. Chief General Manager, Telecom, BSNL & Anr. (2008) and the Delhi High Court’s decision in Union of India and Ors. v. G.C. Yadav (2018).
Court’s Analysis and Observations
The Supreme Court distinguished the present case from the judgments cited by the respondents.
Addressing K. J. George, the Court noted that the respondents in that case had retired prior to the date the pay revision came into effect (January 1, 1996). Regarding G.C. Yadav, the Court observed that the employee therein was born on the first day of the month, and under the proviso to FR 56(a), he retired on the last day of the preceding month, thus disabling him from claiming benefits effective from the first day of the retirement month.
The Bench disagreed with the finding in K. J. George that the extension under FR 56(a) is merely for the purpose of pay and allowances. The Court observed:
“We are unable to agree with the said finding, especially in the context of FR 56(a) not providing any such rigour of continuance only for the purpose of pay and allowance.”
The Court relied on the Constitution Bench decision in S. Benerjee v. Union of India and Others (1989), where it was held that the date of retirement is treated as a working day. The Bench also cited Rule 5(2) of the Central Civil Services (Pension) Rules, 1972, stating:
“The day on which a Government servant retires or is retired or is discharged or is allowed to resign from service, as the case may be, shall be treated as his last working day.”
Applying these principles, the Court held:
“The FR does not provide for such extension to be merely for the purpose of pay and allowances nor can there be a deemed legal termination of employer-employee relationship be found on the date of attaining the age of 60 years. The rule of superannuation is clear and unambiguous that any person who attained the age of superannuation in a month will retire only on the last day of that month.”
The Court analyzed the text of the Rules of 2017, which explicitly stated:
“All employees who were in services on 31st March 2016 or who may have been appointed on or after 1st April 2016 shall draw pay in revised pay structure…”
Rejecting the respondents’ reliance on Rule 32 of the Rules of 2017 (regarding pensioners), the Court clarified that those provisions were enabling clauses to ensure minimum pension for those not covered by the revision. The Court stated:
“It cannot be said that the appellants who were in service on 31.03.2016 would not be entitled to the revised pay scales as on 31.03.2016 by virtue of a provision enabling those who are not entitled to the revision to a minimum basic pension.”
Decision
The Supreme Court allowed the appeals, setting aside the Division Bench judgment. The Court directed:
- The appellants are entitled to the pay revision as on 31.03.2016.
- Their pay for March 2016 shall be determined in the revised scales.
- Such revised pay shall be reckoned for computing the pension payable.
- Arrears of pay and pension must be paid within six months.
- Revised pension shall commence from February 2026.
The Court further ordered that if the arrears are not paid within the stipulated six months, they shall carry interest at the rate of 6% per annum, which the respondent Corporation would be entitled to recover from the officers responsible for the delay.
