1. Appeal by daily-wage workers denied increment on retirement — issue of entitlement to benefit and arrears. (Para 3 , 6 )
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2026 Supreme(SC) 1218
SUPREME COURT OF INDIA
SANJAY KUMAR, SANJEEV SACHDEVA, JJ.
Chhaganbhai Kohyabhai Pateliya and Others – Appellants
versus
The State of Gujarat and Others – Respondents
Civil Appeal No. of 2026 (@ SLP (C) No. 26129 of 2025)
Decided On : 06-10-2026
Advocates appeared:
For the Petitioner(s): Mr. C.B. Gururaj, Adv. Ms. Pragya Smriti, Adv. Mr. Hari Abishek P., Adv. Ms. Srishti, Adv. Mr. Naveen Chandrashekar, Adv. Mr. K.P. Singh, Adv. M/s. Gururaj & Nayak- 3630, AOR
For the Respondent(s): Ms. Archana Pathak Dave, A.S.G. Ms. Deepanwita Priyanka- 2618, AOR Ms. Priyal Sheth, Adv.
For the Petitioner(s): Mr. C.B. Gururaj, Adv. Ms. Pragya Smriti, Adv. Mr. Hari Abishek P., Adv. Ms. Srishti, Adv. Mr. Naveen Chandrashekar, Adv. Mr. K.P. Singh, Adv. M/s. Gururaj & Nayak- 3630, AOR
For the Respondent(s): Ms. Archana Pathak Dave, A.S.G. Ms. Deepanwita Priyanka- 2618, AOR Ms. Priyal Sheth, Adv.
Employees treated as permanent for pay and pension purposes under government resolutions cannot be denied increments for pension revision based on their status as daily wagers. Such benefits are payable, with arrears limited to three years prior to the filing of the claim.
Headnote:(A) Service Law - Pension and Retiral Benefits - Grant of Increment - Right to be paid an increment is a legitimate right of an employee upon successful completion of a year of employment (Para 3) - Where a government resolution treats daily-wage skilled workers as permanent for the purposes of payscale, allowances, pension, and retiral benefits, such employees cannot be denied the benefit of an increment solely on the ground that they were daily wagers (Para 7).
(B) Pension - Calculation of Arrears - For retired employees who filed writ petitions, enhanced pension by including one increment is payable for the period of three years prior to the month in which the petition was filed (Para 11).
(C) Interest on Arrears - Generally, no interest is payable on arrears of pension; however, failure by the concerned authorities to disburse the due amounts within the stipulated timeframe would entail payment of interest from the date of default (Para 11).
Facts of the case:
Appellants, who served in a government department for over 30 years, were denied increments that fell due on the day following their retirement. A single judge initially granted the increment and arrears, but a division bench overturned the decision, ruling that as daily wagers, they were not entitled to the benefits extended to regular employees. The appellants contended that a government resolution had already granted them permanent status for the purposes of pay, allowances, and pension.
Findings of Court:
The court found that the appellants fell within the category of workers treated as permanent for the purpose of payscale and pension under the applicable government resolution. Consequently, the argument that they were ineligible for increments due to their status as daily wagers was unsustainable.
Issues: Whether employees treated as permanent for the purpose of pay and pension under a government resolution can be denied increments based on their status as daily wagers, and the determined period for which arrears of the enhanced pension are payable.
Ratio Decidendi: The court held that when a government resolution extends the benefits of permanence for pay and pension to specific categories of daily-wage workers, they are entitled to the same increments as regular employees for pension calculation. In accordance with modified judicial directions, such employees who filed petitions are entitled to enhanced pension for a period of three years prior to the filing of their application.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Respondents argued daily wagers ineligible for increment; appellants claimed entitlement based on permanence and precedent. (Para 5 , 7 )
3. Daily-wage workers treated as permanent under Government Resolution; entitled to increment; arrears payable per modified directions. (Para 6 , 7 , 8 , 9 , 10 , 11 )
4. Daily-wage workers deemed permanent under government resolution are entitled to retirement increment with pension arrears. (Para 7 , 10 , 11 )
5. Appeal allowed; authorities to compute and release amounts within 30 days, failing which interest at 6% p.a. (Para 12 )
6. Are daily-wage workers entitled to increment on retirement if treated as permanent under a government resolution?
Yes, daily-wage workers treated as permanent under the Government Resolution are not barred from claiming increment; the precedent applies to them. (Para 7 )
7. What is the effective date for payment of enhanced pension and arrears to retired employees?
Enhanced pension is payable for three years prior to filing of writ petition; no interest on arrears if paid timely. (Para 9 , 10 , 11 )
8. Are authorities liable to pay interest on delayed disbursement of arrears?
Authorities must pay within stipulated time; failure attracts interest at 6% p.a. from date of default. (Para 11 , 12 )
JUDGMENT
SANJAY KUMAR, J
1. Leave granted.
2. Successful before a learned Judge of the Gujarat High Court, the appellants met with failure before a Division Bench of that Court, when the appeal filed by the respondents was allowed, vide oral order dated 09.01.2025. Assailing the said order, they are before this Court.
3. The grievance of the appellants before the learned Judge was that they had retired on the 30th of June of various years but were denied the benefit of the increment which fell due on the 1st of July of those years. By order dated 26.09.2023, the learned Judge accepted the appellants’ claim as the issue was no longer res integra in view of the judgment of this Court in Director (Administration and Human Resources), KPTCL, and others vs. C.P. Mundinamani and others, (2023) 14 SCC 411 decided on 11.04.2023. However, it was contended by the respondents, the State and its authorities, that the appellants would not be entitled to arrears upon grant of the increment. Thereupon, the learned Judge noted that, in Pravinbhai Khemabhai Patel vs. State of Gujarat , Special Civil Application. No. 13489 of 2022 , decided on 20.07.2022 in a similar situation, a Co-ordinate Bench had directed payment of benefits along with arrears. This decision stood confirmed in appeal by a Division Bench on 07.08.2023. Reference was also made by the learned Judge to other precedents and it was held that, as the right to be paid an increment was the legitimate right of an employee upon successful completion of a year of employment, the contention to the contrary could not be countenanced and the authorities would be required to pay arrears also.
4. However, as the learned Judge was dealing with a batch of cases, involving several employees, appropriate directions were issued for the purpose of verification. The petitioners therein were directed to make applications for grant of the increment, which had accrued in their favour on the day after their retirement, within a timeframe and upon receipt of such applications, the authorities were directed to verify their details and then pay the increment due. The authorities were also directed to revise the pension and disburse other retiral benefits, including consequential benefits and arrears. This exercise was to be completed in a timeframe, failing which the petitioners in those cases were held entitled to interest @ 6% from the date the amount fell due till the date of payment.
5. The order dated 26.09.2023 was subjected to appeal in LPA No. 100 of 2025 by the State and its authorities, insofar as it pertained to Special Civil Application No. 20921 of 2022 filed by Chhaganbhai Kohyabhai Pateliya and 18 others. Strangely, before the Division Bench, a new ground was urged by the State and its authorities. They contended that the respondents in the appeal were daily wagers and were not entitled to claim the benefit of an increment on the basis of the decision of this Court in C.P. Mundinamani (supra). The Division Bench accepted this plea and held, by its oral order dated 09.01.2025, that the respondents in the appeal, being daily wagers, were not entitled to the benefit of an increment, which would be extended to regular employees. The order of the learned Judge holding to the contrary was, accordingly, quashed. The validity of this oral order is called in question before us by Chhaganbhai Kohyabhai Pateliya and 11 others.
6. It is an admitted fact that all the appellants rendered service in the Irrigation Department of the State of Gujarat in excess of 30 years. In this regard, Government Resolution dated 17.10.1988 assumes importance. By the said Resolution, the Government decided to accept the recommendations made by the Committee chaired by the Minister of the Roads and Buildings Department and resolved to grant pay and facilities to daily-wage skilled workers serving in different departments of the State Government. For the purposes of this case, we may note that one of the reliefs granted under
