Judgment Allowing Govt Employees To Claim Increment Earned A Day Before Retirement Applies Prospectively To Third Parties : Supreme Court Clarifies

The Supreme Court recently confirmed its interim clarifications made with respect to its decision The Director (Admn and HR) KPTCL & Others vs CP Mundinamani , which held that government employees are entitled to the increment which they earned on the previous day of their retirement.

The Court clarified that the judgment in CP Mundinamani will apply to third parties from the date of the judgment, i.e, 11.04.2023. This means that pension by taking into account one increment will be payable on and after 01.05.2023. Enhanced pension for the period prior to 30.04.2023 will not be paid.

The bench of Justice Sanjiv Khanna(as he was then) and Sanjay Kumar had passed a slew of interim directions on September 6, 2024. The relevant directions were : 

(a) The judgment dated 11.04.2023 will be given effect to in case of third parties from the date of the judgment, that is, the pension by taking into account one increment will be payable on and after 01.05.2023. Enhanced pension for the period prior to 30.04.2023 will not be paid.

(b) For persons who have filed writ petitions and succeeded, the directions given in the said judgment will operate as res judicata, and accordingly, an enhanced pension by taking one increment would have to be paid.

(c) The direction in (b) will not apply, where the judgment has not attained finality, and cases where an appeal has been preferred, or if filed, is entertained by the appellate court.

(d) In case any retired employee has filed any application for intervention/impleadment in Civil Appeal No. 3933/2023 or any other writ petition and a beneficial order has been passed, the enhanced pension by including one increment will be payable from the month in which the application for intervention/impleadment was filed.

On February 20, 2025 the bench confirmed the directions (a), (b) and (c) and modified direction (d). 

The modified direction (d) reads : "(d) In case any retired employee filed an application for intervention/impleadment/writ petition/original application before the Central Administrative Tribunal/High Courts/this Court, the enhanced pension by including one increment will be payable for the period of three years prior to the month in which the application for intervention/ impleadment/ writ petition/ original application was filed.”

The bench further clarified that any retired government employee who filed a writ or original application or intervention before the CAT after the decision in Union of India & Anr. v. M. Siddaraj dated 19.05.2023 will be governed by direction (a) and not direction (d). 

It additionally stated that "in case any excess payment has already been made, including arrears, such amount paid will not be recovered." 

The Court also granted liberty to approach the concerned authorities in the first instance if anyone is aggrieved by the non-compliance of the present directions/ clarification. If required, the aggrieved party may then approach the Administrative Tribunal or High Court as per law. 

In M Siddaraj, the bench of Justice Krishna Murari and Justice Sanjay Kumar was dealing with a set of appeals raising the same issues in CP Mundinamani Case and held that the decision in CP Mundinamani squarely covers the appeals. 

In CP Mundinamani, the KPTCL denied annual increment to employees on the ground that they have retired the next day. Relying on Regulation 40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997, which state that an increment accrues from the day following that on which it is earned, the appellant argued that on the day when the increment actually accrued to the employees, they were not in service. After the High Court rejected this argument, KPTCL approached the Supreme Court.

The Apex Court held that government employees cannot be denied the annual increment merely because they are to retire on the very next day of earning the increment.

Case Details : UNION OF INDIA & ANR. v. M. SIDDARAJ| MISCELLANEOUS APPLICATION DIARY NO. 2400 OF 2024 IN CIVIL APPEAL NO. 3933 OF 2023 

Citation : 2025 LiveLaw (SC) 258

Click here to read the order