Retired Employee Can't Seek Annual Increment For Pension & Gratuity If It Falls Due A Day After Superannuation: Kerala HC

The Kerala High Court on Tuesday held that a Government servant who retires on the last working day of the preceding month and whose annual increment falls due on the first of the succeeding month is not entitled for sanction of annual increment for the purpose of pension and gratuity. 

The Division Bench comprising Justice A.K. Jayasankaran Nambiar and Justice Mohammed Nias C.P. passed the above order in a batch of petitions filed by Union of India against the order of Central Administrative Tribunal holding the retirees to be entitled to the same.

The respondent-applicants in the instant petitions had retired from their respective establishments on attaining the age of superannuation. It is noted that their next annual increment, had they continued in service, would have accrued to them on the very next day. They thus claimed the said increment had to be reckoned along with their last drawn pay for the purposes of their retirement benefits. They approached the the Central Administrative Tribunal when a favourable response in this regard was not forthcoming from the government. 

The Tribunal had followed the decision of the Madras High Court in P. Ayyamperumal v. Union of India & Ors. (2017), which held the applicants to be entitled to the grant of annual increment on their completion of one full year of service at the time of their retirement for the purposes of pensionary benefits. The Special Leave Petition against the the said decision of the Madras HC had also been dismissed by the Apex Court. 

The High Court herein perused the the Rules governing the issue, namely, the Fundamental Rules [F.R. 17, F.R. 24, F.R. 56(a) and the 1st proviso to F.R. 56(a)] and Rules 3, 5, 14, 33 and 34 of the CCS (Pension) Rules. 

The Court therefore noted that F.R. 17 and F.R. 24 made it clear that, 

"the twin conditions that must be satisfied for drawing an increment as per the Fundamental Rules are that (i) the Government servant must be in service on the date on which the increment falls due and (ii) he should have rendered satisfactory work and displayed good conduct during the one year period preceding the date on which the increment falls due". 

It added that in the instant case, 

"...while it may be a fact that the respondents had the requisite one year of satisfactory work with good conduct, they did not satisfy the primary condition of being in service on the date on which the increment fell due". 

The Court also took note of various precedents in this regard such as the Andhra Pradesh High Court Full Bench decision in Principal Accountant General & Ors. v. C. Subba Rao (2005), the Supreme Court decision in Achhaibar Maurya v. State of U.P. & Ors. (2008), which in turn was followed by the Kerala High Court in Union of India & Ors v. K.R. Sanal Kumar & Anr. (2008). In the Kerala High Court decision, it was observed that, the Apex Court decision in Achhaibar Muraya would apply to the case. "Their Lordships held that 'a person retires automatically on the day when he completes the age of superannuation. A person attains a specified age on the day next before the anniversary of his birth day or in other words, on the day preceding that anniversary'. It was therefore held that the appellant was not entitled for the benefit of special benefit of the next session commencing on 01/07/2003....We find that on the facts of this case, the said dictum will squarely apply here", it had been observed therein. 

Noting that the Madras High Court in P.Ayyamperumal takes a different view, which position has also since been followed by various other High Courts, the Court observed:

"We have chosen however to follow the Division bench judgment of our own Court, which, in our view, accords with the Scheme of the Fundamental Rules and the CCS (Pension) Rules, as enunciated by the Full Bench of the Andhra Pradesh High Court in Principal Accountant General & Ors v. C. Subba Rao – [2005 (2) ALT 25]". 

The impugned order of the Tribunal was thus set aside. 

Case Title: Union of India & Anr v. Pavithran K. & Anr and other connected cases 

Citation: 2022 LiveLaw (Ker) 611

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