Covering Law & Justice.

Allahabad High Court Upholds Employee's Right to Annual Increment Despite Retirement on Due Date

Meerut, Uttar Pradesh – The Allahabad High Court has delivered a significant judgment affirming the right of an employee to receive an annual increment even if they retire on the day before it becomes due. Justice J.J. Munir presided over the case, ruling in favor of a retired employee, Shri Pal , against Nagar Nigam , Meerut. The court quashed an earlier order by Nagar Ayukt, Meerut, which had denied Shri Pal his increment for the period of 01.07.2018 to 30.06.2019, payable on 01.07.2019, because he retired on 30.06.2019.

Case Background: Denial of Increment Post-Retirement

Shri Pal , a retired Clerk from Nagar Nigam , Meerut, had diligently served until his retirement on June 30, 2019. He was denied his annual increment for the service period of 01.07.2018 to 30.06.2019, which was due on 01.07.2019. Nagar Nigam , Meerut, through its Nagar Ayukt, rejected his claim, citing that increments are only payable to employees in service and no government order permitted post-retirement increments. This decision prompted Shri Pal to file a writ petition in the Allahabad High Court.

Court's Intervention and Reliance on Supreme Court Precedent

Initially, the High Court, on August 22, 2023, took a strong stance, questioning the Nagar Ayukt's decision and highlighting its potential conflict with the Supreme Court’s ruling in Director (Admn. HR) KPTCL and others v. C.P. Mundinamani and others . The court directed the Nagar Ayukt to file an affidavit explaining why his order should not be quashed in light of the C.P. Mundinamani judgment.

Despite repeated adjournments and directions, the Nagar Ayukt failed to provide a satisfactory explanation, instead seeking direction from the Director, Local Bodies, U.P., a move strongly disapproved by the High Court. The court emphasized that the Nagar Ayukt was competent to decide the matter and should not have sought external instructions on a matter clearly governed by settled legal principles.

Arguments and Legal Principles Applied

The core legal question was whether an employee who has completed a year of service and earned an increment should be denied that increment simply because they retired the day before it was due. The High Court extensively referred to the Supreme Court's judgment in C.P. Mundinamani , which settled this very issue.

The Supreme Court in C.P. Mundinamani had observed:

> "Increment is earned on one year past service rendered in a time scale... the increment is earned for rendering service with good conduct in a year/specified period. Therefore, the moment a government servant has rendered service for a specified period with good conduct, in a time scale, he is entitled to the annual increment..."

The Allahabad High Court highlighted that various High Courts, including Madras, Delhi, Bombay, and itself in earlier judgments like Union of India and 3 others v. Shiv Balak and 2 others , have consistently held that employees retiring on 30th June are entitled to the increment due on 1st July. These judgments are based on the rationale that the increment is earned for the service rendered during the preceding year, and denying it solely based on the retirement date is arbitrary and unreasonable.

Court's Decision and Implications

The Allahabad High Court unequivocally sided with the petitioner, Shri Pal . It quashed the Nagar Ayukt's order dated 28.12.2019 and issued a mandamus directing the respondents to grant Shri Pal his annual increment notionally from 01.07.2019. The court further ordered the revision of his pension and payment of arrears within eight weeks, failing which the arrears would attract a 6% per annum interest. Costs of ₹10,000 were also imposed on Nagar Ayukt, Meerut, with liberty to Nagar Nigam to recover the same from the Nagar Ayukt personally.

Justice Munir firmly cautioned the Nagar Ayukt and the State Government against “pedantically following Government Orders” that contradict established judicial precedents. The judgment underscores the importance of adhering to the law laid down by higher courts and ensures that employees are not unjustly deprived of their rightful dues earned during their service period. This ruling serves as a clear directive for authorities to respect established legal principles over narrow interpretations of rules or government orders, reinforcing the rights of retiring employees to their rightfully earned increments.