Can an Employee, Who has Retired on the 31st of a Month, Claim the Benefit of an Increment which became Due on the 1st of the Next Month?

Can an employee, who has retired on the 31st of a month, claim the benefit of an increment which became due on the 1st of the next month?

The Himachal Pradesh High Court has ruled that an employee, who has retired on the 31st of a month, can’t claim the benefit of an increment which became due on the 1st of the next month, because, on that day, he holds the status a pensioner and not of an employee.

The date of increment falls due on the first day of the succeeding month after the retirement. Petitioner retired on the basic pay drawn by him on 31.3.2003 i.e. his date of retirement. His pension has to be determined accordingly. Petitioner had become a pensioner on 1.04.2003. He cannot be held entitled to any increment which may fall due to post his retirement. He is entitled only to those increments which fall due to him during the period of his service,” the judgment states.

Arguments of the petitioner

  • A Senior Hydrogeologist in the Department of Industries (Geological wing) filed a writ petition.  The petitioner had retired on March 31, 2003.
  • He contended that the Supreme Court had settled the legal position that the increment which falls due on the day immediately following the day of retirement, has to be granted to the employee on the ground that he had completed 12 months of service on the date of his retirement.
  • He further submitted that it is a well settled principle of law emerging from a catena of decisions of this Court, including Supreme Court Employees’ Welfare Association v. Union of India & Anr. (1989) 4 SCC 187 and State of Punjab v. Davinder Pal Singh Bhullar (2011) 14 SCC 770, that the dismissal of an S.L.P. in limine simply implies that the case before this Court was not considered worthy of examination for a reason, which may be other than the merits of the case. Such in limine dismissal at the threshold without giving any detailed reasons, does not constitute any declaration of law or a binding precedent under Article 141 of the Constitution”.
  • Reliance was also made to (2019) 6 SCC 270, titled State of Orissa and another Vs. Dhirendra Sunder Das and others, wherein it was the principle of law was reiterated that dismissal of an SLP in limine without giving any detailed reason does not constitute any declaration of law or a binding precedent under Article 141.
  • Reference was further placed on Khoday Distilleries Ltd & Ors. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd., Kollegal, (2019) 4 SCC 376.
  • Thus, the Petitioner had contended that the law in this regard is settled by the Supreme Court and must be applied in this case.
  • In support of his claim of the increment immediately falling due post-retirement, learned Counsel for the petitioner relied upon a judgment passed by the High Court of Judicature at Madras in P. Ayyamperumal v. Registrar, where it was held that on completing one year of service from 1.7.2012 to 30.6.2013, the petitioner therein became entitled to the benefit of increment, which accrued to him ‘during that period’ though the increment fell due on 1.7.2013 when he was not in service.
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Submission of State Counsel

  • On behalf of the State, learned Additional Advocate General placed reliance upon a decision rendered on 29.7.2020 by the Madhya Pradesh High Court in Madhav Singh Tomar & ors. vs. M.P. Power Management Co. Ltd. & ors., (WP No. 9940 of 2020) wherein relying upon an earlier order passed by a Division Bench of the High Court on 10.7.2017 in writ appeal No. 717 of 2016, the writ petition claiming next annual increment due immediately after retirement was dismissed keeping in view the Fundamental Rules governing service conditions of the petitioner.
  • Reliance was also placed by learned Additional Advocate General upon a Full Bench decision of Andhra Pradesh High Court delivered on 27.1.2005 in Principal Accountant General vs. C. Subba Rao 2005 Lab I.C. 1224 where the impugned order of the Tribunal holding the employee entitled to an annual increment that fell due on 1.1.2002 after his retirement on 31.12.2001 was quashed and set aside

Observations made by the Court

  • The Court however denied applying this principle, it noted that, “in the instant case, the order refusing Special Leave to Appeal is non speaking, therefore, it does not stand substituted in place of the order under challenge.
  • In the Case in hand, the Court referred to the Fundamental Rules (FR) that governs all general conditions of service of employees. It observed that in terms of FR 56(a), the day when the government employee retires has to be treated as his last working day. Further, FR 17(1) provides that an officer shall begin to draw pay and allowances attached to the post w.e.f. the date when he assumes duties of that post and shall cease to draw them as soon as he ceases to discharge those duties.
  • In view thereof, the Court held, “the petitioner was not on duty on 1.4.2003. The increment can be drawn only when an employee is on duty. The increment in terms of FR 24 & 26 did not become due during the period of service of the petitioner. Therefore, an increment on 1.4.2003 cannot be sanctioned in favour of petitioner on the ground that he had completed twelve months of continuous service.

Case Name: Hari Prakash v. State of Himachal Pradesh & Ors.

Citation: CWP No. 2503 of 2016 a/w CWPOA No. 663 of 2020

Coram: Justices Tarlok Singh Chauhan and Jyotsna Rewal Dua 

Can an employee, who has retired on the 31st of a month, claim the benefit of an increment which became due on the 1st of the next month?

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