Employee entitled to notional increment earned before superannuation despite retiring next day; benefit for third parties prospective from 01.05.2023 per Supreme Court clarification.

ORDER

Per: Mr. Shri Krishna, Member (Administrative)

The applicant has retired on superannuation on 30th June, 2017. He has filed this OA seeking direction to the respondents to grant notional increment from 01st July, 2017 on the basis of judgment of Hon’ble The Director (Admn. Supreme Court in the case of And HR) KPTCL & Ors. Vs. C.P. Mundinamani & Ors., 2023 SCC OnLine SC 401. He submits that he has made representation to the respondents on the last day of his retirement i.e. on 30.06.207 to grant him notional increment from 01st July, 2017. However, the copy of the same has not been placed on record.

2. Learned counsel for the applicant submits that the applicant does not have any evidence of submitting the representation dated 30th June, 2017 and he has made this submission on the basis of applicant’s oral submission. Subsequently, he has made representation to the respondents vide his letter dated 20th October, 2023 followed by another application dated 12th January, 2024. The respondents vide impugned communication dated 07th February, 2024 have informed him that the Railway Board has sought direction from the DoPT which has not been received so far and Ministry is persistently following up the matter with the DoPT. Therefore, his case will be considered after receipt of necessary clarification/guidelines from the Railway Board.

3. We have considered the submissions of learned counsel for the applicant.

4. We are of the view that as per the judgement of the Hon’ble Supreme Court in the The Director (Admn. And HR) KPTCL & case of Ors. Vs. C.P. Mundinamani & Ors. (supra), the applicant is entitled to notional increment. The observations of the Supreme Court in the The Director (Admn. And HR) KPTCL & case of Ors. Vs. C.P. Mundinamani (supra) are as under:-

“6. The short question which is posed for the consideration of this Court is whether an employee who has earned the annual increment is entitled to the same despite the fact that he has retired on the very next day of earning the increment?

6.1 In the present case, the relevant provision is Regulation 40(1) of the Regulations which reads as under: -

“Drawals and postponements of increments

1. An increment accrues from the day following that on which it is earned. An increment that has accrued shall ordinarily be drawn as a matter of course unless it is withheld. An increment may be withheld from an employee by the competent authority, if his conduct has not been good, or his work has not been satisfactory. In ordering the withholding of an increment, the withholding authority shall state the period for which it is withheld, and whether the postponement shall have the effect of postponing future increments.”

6.2 It is the case on behalf of the appellants that the word used in Regulation 40(1) is that an increment accrues from the day following that on which it is earned and in the pre- sent case the increment accrued on the day when they re- tired and therefore, on that day they were not in service and therefore, not entitled to the annual increment which they might have earned one day earlier. It is also the case on be- half of the appellants that as the increment is in the form of incentive and therefore, when the employees are not in ser- vice there is no question of granting them any annual in- crement which as such is in the form of incentive.

6.3At this stage, it is required to be noted that there are divergent views of various High Courts on the issue involved. The Full Bench of the Andhra Pradesh High Court, the Himachal Pradesh High Court and the Kerala High Court have taken a contrary view and have taken the view canvassed on behalf of the appellan