Annual Increment Cannot Be Denied to Retiring Government Employees: Patna High Court: Patna, Bihar – In a significant ruling for government employees, the Patna High Court has declared that annual increments cannot be denied on mere technical grounds if a full year of service has been completed. A bench led by Justice Satyavrat Verma held that government employees retiring on June 30 are entitled to receive the annual increment due on July 1, provided they have completed one full year of service since their last increment. This decision overturns the previous practice of denying the benefit simply because retirement occurred one day before the official increment date.
Brief Facts of the Case
The petitioners in this case were government employees who retired on June 30 in various years between 2009 and 2019. Each had completed a full year of service since their last annual increment, which was typically granted on July 1 of the preceding year. However, they were denied the increment for their final year of service because their retirement date fell just one day before the next increment date, July 1.
This denial was based on a resolution issued by the Bihar Finance Department on January 21, 2010, which stipulated that employees who had completed at least six months in their current pay scale by July 1 would receive the annual increment. Since these petitioners retired on June 30, they were deemed ineligible.
The core of the dispute lay in a technical rule derived from the 6th and 7th Pay Commission guidelines, which stated that the annual increment is only granted to employees “in service” on July 1. This meant that even if an employee had completed 364 days of service after their last increment and retired on June 30, they would become ineligible. July 1 was treated as a fixed date for assessing eligibility, without fully considering the completion of a full year’s work.
Retired One Day Prior to Annual Increment Date
The petitioners argued that having completed a full year of service from their last increment date (July 1 of the previous year) until their retirement on June 30, they had effectively earned the annual increment due on July 1. They contended that denying this increment solely due to retirement one day prior was arbitrary and unfair. They cited the Allahabad High Court’s ruling in Nand Vijay Singh & Ors. vs. Union of India & Ors., which held that denying an earned benefit without valid reason is arbitrary, a judgment later upheld by the Supreme Court. The petitioners emphasized that the pay scheme should be interpreted holistically to protect earned rights from being lost due to technicalities.
Conversely, the respondent State argued that the petitioners were not entitled to the increment because they were not “in service” on July 1, as per the established Pay Commission rules. The State also referenced a Supreme Court judgment dated September 6, 2024, which stated that enhanced pension benefits, including the additional increment, would apply only from April 30, 2023, onwards. Based on this, the Bihar government had issued a resolution on July 22, 2024, granting the increment benefit to employees retiring on June 30 or December 31, but only with effect from April 11, 2023. Therefore, the State contended that since the petitioners retired before this cut-off date, their claims lacked legal merit.
Court’s Findings and Order
The High Court observed that a Supreme Court judgment dated April 11, 2023, had already ruled that government employees retiring on June 30 or December 31 are indeed entitled to one additional increment in their pension. This judgment further clarified that those who filed their cases before May 1, 2023, are eligible to receive this benefit for three years prior to their filing date.
Applying this, the Patna High Court noted that since the petitioners filed their case on May 17, 2019, they are entitled to the increment benefit from May 17, 2016. The Court explicitly rejected the State’s objection regarding retirement dates, asserting that the Supreme Court’s clarification overrides any such restrictions.
Consequently, the Court ordered that petitioners who retired between June 30, 2009, and June 30, 2016, are entitled to the increment from July 1, 2016. For petitioners who retired after June 30, 2016, the benefit will apply from July 1 of their respective retirement year.
Furthermore, the Court quashed the Bihar Finance Department’s resolution dated July 22, 2024, which had granted notional benefits to retiring government servants but with a restrictive effective date. The State government has been directed to add the increment to the last drawn pay of the petitioners and revise their pension benefits accordingly within four months.
With these observations, the writ petition was allowed, marking a significant victory for the retired government employees.