Annual Increment Can't Be Denied To Government Employees On Mere Technical Grounds If A Year Of Service Completed : Patna HC

Background Facts

The petitioners were government employees who retired on 30th June in different years between 2009 and 2019. They had worked for a full year after their last annual increment, which was given on 1st July of the previous year. But they did not receive the increment for their last year of service because they retired just one day before the next increment date, which was 1st July. According to a resolution issued by the Bihar Finance Department on 21 January 2010, employees who had completed at least 6 months in their current pay scale by 1st July would get the annual increment. Since these petitioners retired on 30th June, the day before the increment date, they were denied the benefit.

The employees were denied the increment because of a technical rule in the pay revision system. According to the 6th and 7th Pay Commission rules, the annual increment is only granted to employees who are in service on 1st July. Even if an employee has completed 364 days of service after the last increment and retires on 30th June, they become ineligible for the increment simply because they are not on the rolls on 1st July. Therefore, 1st July was treated as the fixed date for assessing eligibility, without considering the fact that the employee has completed a full year of work. As a result, those who retire on 30th June, just one day before the increment date, miss out on the increment.

Aggrieved by the same, the petitioners filed writ petition for a direction upon the respondent to treat the date of retirement of the petitioners to be 1st July and to grant them all consequential benefits including the pensionary benefits. Further they requested to grant annual increment for their last year of service.

It was contended by the petitioners that they had completed a full year of service from the last increment date (1st July of the previous year) until their retirement on 30th June, and thus had earned the annual increment due on 1st July. Denying them this increment solely because they retired one day before the increment date was arbitrary and unfair. It was further contended by the petitioners that in the case of Nand Vijay Singh & Ors. vs. Union of India & Ors., Allahabad High Court held that once a government employee becomes entitled to a benefit like an increment, its denial without valid reason is arbitrary. Further this judgment was upheld by the Supreme Court. It was contended by the petitioners that the scheme must be interpreted as a whole, ensuring earned rights are protected and not lost due to technicalities.

On the other hand it was contended by the respondent state that the petitioners were not entitled to the annual increment because they retired on 30th June, a day before the official increment date of 1st July, as per the 6th and 7th Pay Commission rules. Therefore, they did not qualify for the increment. It was further contended that the Supreme Court judgment dated 6 September 2024, held that enhanced pension benefits, including the additional increment, would apply only from 30 April 2023 onwards. Based on this, the Bihar government issued a resolution on 22 July 2024, granting the increment benefit to employees retiring on 30th June or 31st December, but only with effect from 11 April 2023. Therefore it was contended by the State that since the petitioners retired before this cut-off date, they were not eligible for the benefit, and any claim for increment prior to that lacks legal merit.

Findings of the Court

It was observed by the court that the Supreme Court in its judgment dated 11-4-2023 ruled that government employees retiring on 30th June or 31st December are entitled to one additional increment in their pension. It further clarified that those who filed their cases before 1 May 2023 are eligible to receive this benefit for three years before the date of filing.

It was further observed by the court that since the petitioners filed their case on 17 May 2019, they are entitled to the increment benefit from 17 May 2016. The court rejected the State's objection regarding retirement dates and held that the Supreme Court's clarification overrides any such restrictions.

It was ordered by the court that the petitioners who retired between 30 June 2009 and 30 June 2016 are entitled to the increment from 1 July 2016. Whereas, the petitioners who retired after 30 June 2016 will get the benefit from 1 July of their retirement year. Further the resolution dated 22-7-2024 issued by the Department of Finance, which granted notional benefits to the government servant retiring on 30th June/31st December, was quashed by the court. The state was directed by the court to add the increment to the last drawn pay and revise pension benefits within four months.

With the aforesaid observations, the writ petition was allowed.

Case Name : Shio Jee Rai & Ors v. State of Bihar & Ors

Case No. : 12575 of 2019

Counsel for the Petitioner : Tej Bahadur Singh, Sr. Adv; Brisketu Sharan Pandey, Adv

Counsel for the Respondents : Ram Vinay Pd. Singh, AC to GA-12