Kerala High Court rules in favor of increment entitlement of retired government servant

Kerala High Court rules in favor of increment entitlement of retired government servant

Cites the judgment of the Supreme Court in similar previous cases

The Kerala High Court has observed that a government servant, who retired on the last working day of the preceding month and whose annual increment is due in the succeeding month, is entitled to the increment.

The bench comprising Justice A. Muhamed Mustaque and Justice Shoba Annamma Eapen allowed the writ petition citing the judgment in the Vijayan P.R vs. Union Of India OP (CAT) NO. 65 OF 2023 case, related to a batch of petitions wherein the court ruled in favor of the government workforce.

In the previous case, the petitioners had retired from their respective establishments on attaining superannuation age. On the date of their retirement, they earned an annual increment, which, however, was due and payable only the very next day.

Thus, Justice Mustaque and Justice Eapen noted, “The original petition is allowed, and the impugned order is set aside. The petitioner be entitled to similar benefits as applicable in the light of the previous judgment”.

Importantly, the issue had received different interpretations and rulings by various high courts.

It was, however, settled by the apex court in the Director (Admn. and HR) KPTCL and Others vs. C.P. Mundinamani and Others 2023 SCC OnLine SC 401 case. The top court recognized the claim of the retired employees on an interpretation of the relevant statutory rule and accepted the views of the high courts of Allahabad, Gujarat, Madhya Pradesh, Orissa, and Madras. It had disapproved the contrary views and judgments of a full bench of the Andhra Pradesh High Court, a division bench of the Kerala High Court, and the Himachal Pradesh High Court.

The Ernakulam Bench of the Central Administrative Tribunal had dismissed the original applications by the common impugned order.

The tribunal relied on judgments by various high courts, which considered the relevant Rule, contemplating the grant of an annual increment on the first of July or January to arrive at a conclusion. It stated that employees concerned must continue with the said date to claim the benefit of the annual increment, wherefore, an employee, who stood retired on the previous day, was not entitled to it.

However, the petitioners relied on the judgment of the Supreme Court in the KPTCL case.

The relevant statutory rule was Regulation No.40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997, on ‘Drawals and postponements of increments.’

The Regulation stated that an increment accrued from the day following the day on which it was earned. An increment accrued shall ordinarily be drawn unless it was withheld. An increment may be withheld from an employee by the competent authority, if his conduct was not good, or his work was unsatisfactory. In ordering the withholding of an increment, the authority shall state the period for which it was withheld, and whether the postponement shall have the effect of postponing future increments.

The argument raised against the plea was that the annual increment was in the form of good service, an incentive for the concerned employee to serve effectively, and to render good service. The facility did not apply to an employee who was not in service.

In its judgment, the Supreme Court had explained, “A government servant is granted annual increment based on his good conduct while rendering one year service. Increments are given annually to officers with good conduct unless such increments are withheld as a measure of punishment or linked with efficiency. Therefore, the increment is earned for rendering service with good conduct in a year/specified period.

It further held, “The moment a government servant has rendered service for a specified period with good conduct, he is entitled to the annual increment. It can be said that he earned the increment for rendering the specified period of service with good conduct. Therefore, he is entitled to the benefit of the annual increment on the eventuality of having served for a specified period (one year) with good conduct efficiently. Merely because he retired on the very next day, how can he be denied the annual increment, which he earned and/or is entitled to for rendering the service with good conduct and efficiently in the preceding year."

Thus, the high court judges ruled that denying the benefit earned by an employee for the reason of not being in service on the date on which it accrues, would lead to arbitrariness and unreasonableness.

The bench directed the respondent to grant one notional increment to the petitioner. It also ordered the authorities to revise his retirement benefits after including the annual increment.

While advocate Vivek A.V. appeared for the petitioner, the respondent was represented by advocate Achuth Krishnan R.