One Year's Service Completion Sufficient For Pension Benefits, Orders Arrears With Interest; MP HC

Background

The petitioners were retired employees or legal heirs of such employees who had completed one year of service before retirement but were denied the annual increment, which typically becomes due on either 1st July or 1st January. The State had refused the increment, citing technicalities surrounding the precise retirement date. The petitioners, however, argued that the completion of one year's service entitles them to an increment under established law, and the refusal deprived them of corresponding pensionary benefits.

Arguments

The petitioners relied heavily on the Supreme Court's ruling in HR KPTCL v. C.P. Mundinamani (2023 SCC OnLine SC 401), which held that the entitlement to receive an increment crystallizes when a government servant completes the requisite period of service with good conduct, and it becomes payable the next day. The petitioners also cited a circular issued by the Madhya Pradesh Finance Department dated 15.03.2024, which directed departments to grant annual increments to employees who retired on 30th June or 31st December, provided the increment became due on the following day.

The State, through its counsel, submitted that the issue was under review, and the cases were being processed. The State admitted that the petitioners had completed their one year of service before superannuation but sought to argue that the legal issue was still under scrutiny.

Court's Reasoning

Firstly, the court accepted the petitioners' argument, referring to the Supreme Court's ruling in Mundinamani, which made it clear that annual increments, earned through a full year of service, should not be withheld simply due to the employee's retirement on the eve of the increment's due date. The Court acknowledged that pension and increment rights are intertwined, and denying the increment adversely impacts post-retirement benefits.

Secondly, the Court discussed the applicability of the Rushibhai Jagdishchandra Pathak v. Bhavnagar Municipal Corporation (2022 SCC OnLine SC 641) ruling, in which the Supreme Court restricted arrears for delayed petitions to three years. However, in cases where employees timely filed petitions, the Mundinamani ruling mandated that they should receive full arrears dating from the due date of the increment. The court also highlighted the Supreme Court's order dated 06.09.2024 in Union of India & Anr. v. M. Siddaraj, which clarified the effective date for increments and pension enhancements. For employees who filed writ petitions, the judgment would operate as res judicata, making it mandatory to pay arrears based on the one-year increment. Finally, the court rejected any argument concerning delays in implementation, stating that the benefits should be processed promptly. Thus, the Court ruled that the State must grant the annual increments due to the petitioners as of 1st July or 1st January, depending on their retirement dates. Arrears were to be paid from 1st May 2023 with interest at 7% per annum. The State was directed to process the payments within six weeks, ensuring compliance with the Supreme Court's directives in M. Siddaraj.

Decided on: 15-10-2024

Citation: 2024:MPHC-JBP:51542

Counsel for the Petitioners: Shri Taman K. Khadka, Shri Vijay Kumar Narwariya

Counsel for the Respondents: Smt. Janhavi Pandit, Additional Advocate General

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