Case Note & Summary
The writ petition was filed by Union of India under Article 226 of the Constitution of India challenging the order of the Central Administrative Tribunal, Chennai Bench, dated 21.08.2024 in O.A.No.413 of 2024, which had allowed the respondent's original application for grant of one notional increment. The respondent, S.Senthilnathan, retired from service in Southern Railway on 30.06.2020. His annual increment would have fallen due on 01.07.2020, but since he was not in service on that date, the department declined to grant the annual increment. Aggrieved, the respondent filed an Original Application before the Central Administrative Tribunal on 06.03.2024 seeking the notional increment. The Tribunal allowed the application on 21.08.2024. Union of India then filed the present writ petition seeking certiorari to quash the Tribunal's order as illegal, arbitrary, and without jurisdiction. The core legal issues before the High Court were whether an employee who has completed one year of service but retired before the annual increment date is entitled to the increment, and from which date the benefit should be granted to a third-party retired employee in light of the Supreme Court's judgment in Union of India v. M.Siddaraj and subsequent clarification. Union of India argued that the respondent was not in service on the increment date and hence not eligible, and that the CAT order was erroneous. The respondent's counsel, however, fairly submitted that the respondent is eligible to draw annual increment with effect from 01.05.2023 onwards. The Court noted that the law is well settled: an employee who has completed one year of service is eligible for annual increment even if not in service on the next day, because the increment is granted for completion of one year of service. This principle is no longer res integra. On the question of effective date, the Court referred to the Supreme Court's judgment in Union of India v. M.Siddaraj (Civil Appeal No.3933 of 2023, dated 19.05.2023) and the clarification in Miscellaneous Application Diary No.2400 of 2024 dated 20.02.2025, which held that third-party retired employees are entitled to the benefit of one increment with effect from the date of judgment in M.Siddaraj. In the present case, since the respondent filed the Original Application on 06.03.2024, after the M.Siddaraj judgment, the Court held that the respondent is eligible for the increment with effect from 01.05.2023, as agreed by his counsel. The Court accordingly directed the appellate authorities to grant annual increment to the respondent with effect from 01.05.2023, revise his pension and pensionary benefits, and settle arrears and all other monetary benefits admissible within a period of four weeks from the date of receipt of a copy of the order. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.
Headnote
A) Service Law - Annual Increment - Employee who completed one year of service is eligible for increment even if not in service on the next day - Constitution of India, 1950, Article 226 - The respondent retired on 30.06.2020 and his annual increment fell on 01.07.2020, but the department declined it. The Court relied on settled principle that increment is for completion of one year of service and not contingent on being in service on the next day. Held that the issue is no longer res integra and the respondent is eligible for one increment despite absence on the date increment falls due (Paras 2-3). B) Service Law - Date of Increment for Third-Party Retirees - Benefit to be granted from date of Supreme Court judgment in M.Siddaraj, not from retirement - Constitution of India, 1950, Article 226 - The Court considered the clarification by Supreme Court in Miscellaneous Application Diary No.2400 of 2024 in Civil Appeal No.3933 of 2023 dated 20.02.2025 that third-party retired employees get increment from the date of judgment in M.Siddaraj. However, since the respondent filed OA on 06.03.2024 after the M.Siddaraj judgment, the Court fixed effective date as 01.05.2023, as agreed by respondent's counsel. Held that increment to be granted from 01.05.2023 and pensionary benefits revised accordingly (Paras 4-6).
Issue of Consideration
Whether a retired employee who completed one year of service but retired before the annual increment date is entitled to the increment; and from which date the benefit should be granted to a third-party retired employee in light of the Supreme Court's clarification in M.Siddaraj case.
Final Decision
The High Court disposed of the writ petition with directions to the appellate authorities to grant annual increment to the respondent with effect from 01.05.2023, revise his pension and pensionary benefits, and settle arrears and all other monetary benefits admissible within four weeks from the date of receipt of a copy of the order. No costs. Connected miscellaneous petition closed.
Law Points
- Employee who completed one year service eligible for annual increment even if not in service on the next day
- third-party retired employees entitled to one increment from date of Supreme Court judgment in M.Siddaraj
- not from retirement
- effective date in present case fixed at 01.05.2023 as respondent filed OA after M.Siddaraj judgment
- pensionary benefits to be revised accordingly.
