Allahabad High Court Imposes ₹50K Cost On Centre, Railways For Denying Notional Increment To Employees Retiring A Day Before July 1

The Allahabad High Court has imposed a cost of Rs. 50,000 on the Union of India and various departments of Indian Railways for denying the benefit of notional increment to employees retiring on 30^th June, despite the decision of the Supreme Court in Director (Administration and Human Resources) KPTCL and others v. C.P. Mundinamani and others and Union of India & Ors. Vs M. Siddaraj.

Twelve employees of the Railway Protection Force, petitioners, retired on 30^th June of different years. Retiring on 30^th June, they were denied the annual increment which accrues on the 1^st July of each year as they were not in service on 1^st July. Petitioners challenged this denial of increment on grounds that they had worked for an entire year from 1^st July to 30^th June and were entitled to the increment even though they retired on 30^th June. It was prayed that basic pay and retiral benefits also need to be revised after grant of increment.

Petitioners relied on Director (Administration and Human Resources) KPTCL and others v. C.P. Mundinamani and others, where the Supreme Court had held that a government employee retiring on 30^th June ought to be granted notional increment and the retiral benefits are to be calculated after granting the increment.

The Court called for the personal affidavit of Director General, RPF, Railway Board, New Delhi to explain why the notional increment to employees was not granted in view of the Supreme Court judgment. In the affidavit, it was stated that since the policy for grant of benefits and notional increment had not been updated after the judgment of the Supreme Court, the benefit of increment accruing on 1^st July could not be granted to the petitioners after their retirement on 30^th June.

It was further stated that the Ministry of Railways was not authorised to unilaterally take a decision on extending the benefit of notional increment under the Govt. of India (Transaction of Business) Rules, 1961. While the matter was under consideration before the nodal department viz. Department of Personnel & Training (DOP&T), various employees of the railways approached various courts seeking notional increment which was granted to them.

It was stated that since the number of employees who received favourable orders was huge, there was problem in implementation and payment of dues. Contempt petitions were also filed against the Railways. Problems arose regarding implementation of court orders and extending benefits to various employees due to which Railways moved a clarification application in Union of India & Ors. v. M. Siddaraj seeking, inter alia, stay on the implementation of judgment granting notion increment to the employees retiring on 30^th June.

Further, in the affidavit it was stated that DOP&T also filed an intervention application in the aforesaid case seeking a chance to place its arguments regarding grant of notional increment and also seeking a stay on the Apex Court order as around 19718 favourable judgments had already been passed by various Courts in the country in favour of the retired employees. The Apex Court passed an order on the clarification allowing the respondents to file additional documents.

Basis this, the Director General, in his personal affidavit stated that the matter was sub-judice before the Supreme Court and the issue of grant of notional increment had not attained finality.

Justice J.J. Munir observed that when the judgment was not stayed or set aside, mere pendency of clarification application could not a ground to deny the benefit of the same to the employees. It observed that while seeking clarification of a judgment is right of the parties, pendency of the application will not mean that the respondent authorities will refuse to carry out the orders of the writ Court passed in pursuance of order of the Supreme Court.

“The Government of India cannot sit in judgment on a writ of the Court, once issued. A writ stops only if it is stayed in competent proceedings, like an appeal, if allowed from the order or a review or a clarification or some such proceedings. An order cannot be disregarded by a sundry officer of the government, saying that he will disregard the law laid down by a Constitutional Court in a judgment, and more than that, a writ inter partes awaiting a policy decision of the Government. It is all the more contumacious on the part of the Director General, RPF, Railway Board to say in paragraph No. 8 of the personal affidavit that he is “not in a position to extend benefit of one notional increment to the petitioners who retired on the 30th June as per the judgment”.”

Though the Court noted that contempt notices should have been issued against the Director General, however, it refrained from doing so and cautioned Manoj Yadav, Director General, Railway Protection Board, Railway Board, New Delhi, who had filled the personal affidavit, of being careful of the pleadings being made in the personal affidavit.

The Court observed that the Supreme Court had passed an interim order granting benefit of the judgment in C.P. Mundinamani and M. Siddaraj to the non-parties only after 01.05.2023. The Apex Court further directed that where judgments had already been passed, the principle of res-judicata would apply and benefit of an enhanced pension by taking one increment would have to be paid. It was further directed that where appeals against judgments were pending, the aforesaid principle would not apply. Subsequently, the interim order was given finality by the Supreme Court with slight modification which did not affect the petitioner.

“The effect would be that the petitioners and each of them would be entitled to receive notional increments for the respective years in which they superannuated on the 30th of June, but they would be paid pension on the basis of their revised emoluments with the notional increments added with effect from 1st May, 2023,” held Justice Munir.

Accordingly, the Court directed that petitioners' pensions be revised and they be paid the arrears from 01.05.2023 with a period of 3 months from the date of communication of the order to various concerned departments. While allowing the petition, the Court also imposed a cost of Rs. 50000 payable to the petitioner.

Case Title: R.K. Prasad and others v. Union of India and others [WRIT - A NO. 13305 OF 2024]

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