1. Government employees sought pay stepping-up to rectify salary anomalies where juniors, having received personal pay upgradations under a career policy, drew higher pay than senior counterparts. (Para 3 , 6 , 8 , 9 )
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2026 Supreme(Online)(Ker) 68029
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Devan Ramachandran, Basant Balaji, JJ
Bharat Sanchar Nigam Ltd – Appellant
Versus
Prasad Ka – Respondent
OP (CAT) NO. 196 OF 2023|OP (CAT) NO. 202 OF 2023|OP (CAT) NO. 58 OF 2024|OP (CAT) NO. 168 OF 2024|OP (CAT) NO. 181 OF 2024
Important Points
Seniors are entitled to have their pay stepped up to match juniors when the disparity stems from a junior's personal, time-bound upgradation. Such anomalies constitute a continuing cause of action and are not extinguished by the 'full and final settlement' clauses of voluntary retirement schemes.
Subject
Service Law - Pay Fixation and Promotion
Act Referred
Headnote
(A) Fundamental Rules - Rule 22 (FR 22) - Stepping up of pay - Anomaly where junior draws more pay than senior - Senior is entitled to stepping up of pay to match that of the junior if the junior's higher pay is the result of a personal, time-bound upgradation and not based on merit or selection (Paras 19-23).
(B) Service Law - Continuous cause of action - A pay anomaly that persists throughout a career, where the disparity fluctuates but remains present, does not become stale and is not hit by the rigour of limitation (Para 29).
(C) Voluntary Retirement Scheme (VRS) - Effect of 'full and final settlement' clause - A clause in a voluntary retirement scheme stating that benefits are in full and final settlement of all claims does not render judgments or orders of Courts or Tribunals devoid of value, nor does it extinguish the right to seek judicial relief for pay anomalies (Paras 27-28).
Facts of the case:
Senior employees were functionally promoted to the post of Telecom Mechanics. Juniors to these employees, who continued as Group D employees longer, received pay scale upgradations under a non-executive promotion policy. This personal upgradation resulted in the juniors drawing higher pay than the seniors upon their subsequent promotion to the same post. The employer refused to step up the pay of the seniors, arguing that the pay scales of the lower and higher posts were not identical due to the policy benefits enjoyed by the juniors.
Findings of Court:
The court found that the pay upgradation under the non-executive policy was personal to the employee and not attached to the post. Since the underlying pay scales of the posts were the same, the conditions for stepping up pay under FR 22 were satisfied. It was further held that the voluntary retirement scheme did not bar the implementation of the Tribunal's order and that the pay disparity constituted a continuous cause of action.
Issues: Whether a senior is entitled to have their pay stepped up under FR 22 when a junior draws more pay due to a personal time-bound upgradation; whether such a claim is barred by limitation; and whether the acceptance of a voluntary retirement scheme settles all claims including those arising from judicial orders.
Ratio Decidendi: When a junior draws higher pay than a senior in the same cadre due to a personal upgradation (not based on merit), the senior's pay must be stepped up to remove the anomaly. SuchPersonal benefits do not change the nature of the post's pay scale for the purpose of applying FR 22. Furthermore, a voluntary retirement settlement does not override the legal obligations created by court orders, and pay anomalies represent a continuing cause of action.
Result: Original Petitions dismissed.
(B) Service Law - Continuous cause of action - A pay anomaly that persists throughout a career, where the disparity fluctuates but remains present, does not become stale and is not hit by the rigour of limitation (Para 29).
(C) Voluntary Retirement Scheme (VRS) - Effect of 'full and final settlement' clause - A clause in a voluntary retirement scheme stating that benefits are in full and final settlement of all claims does not render judgments or orders of Courts or Tribunals devoid of value, nor does it extinguish the right to seek judicial relief for pay anomalies (Paras 27-28).
Facts of the case:
Senior employees were functionally promoted to the post of Telecom Mechanics. Juniors to these employees, who continued as Group D employees longer, received pay scale upgradations under a non-executive promotion policy. This personal upgradation resulted in the juniors drawing higher pay than the seniors upon their subsequent promotion to the same post. The employer refused to step up the pay of the seniors, arguing that the pay scales of the lower and higher posts were not identical due to the policy benefits enjoyed by the juniors.
Findings of Court:
The court found that the pay upgradation under the non-executive policy was personal to the employee and not attached to the post. Since the underlying pay scales of the posts were the same, the conditions for stepping up pay under FR 22 were satisfied. It was further held that the voluntary retirement scheme did not bar the implementation of the Tribunal's order and that the pay disparity constituted a continuous cause of action.
Issues: Whether a senior is entitled to have their pay stepped up under FR 22 when a junior draws more pay due to a personal time-bound upgradation; whether such a claim is barred by limitation; and whether the acceptance of a voluntary retirement scheme settles all claims including those arising from judicial orders.
Ratio Decidendi: When a junior draws higher pay than a senior in the same cadre due to a personal upgradation (not based on merit), the senior's pay must be stepped up to remove the anomaly. SuchPersonal benefits do not change the nature of the post's pay scale for the purpose of applying FR 22. Furthermore, a voluntary retirement settlement does not override the legal obligations created by court orders, and pay anomalies represent a continuing cause of action.
Result: Original Petitions dismissed.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: George Kuruvilla
For the Respondents: M.R. Hariraj, Sharon Williams, Kala T. Gopi, T.C. Govindaswamy
For the Appellants/Petitioners: George Kuruvilla
For the Respondents: M.R. Hariraj, Sharon Williams, Kala T. Gopi, T.C. Govindaswamy
Table of Contents
2. Employer contended pay stepping-up is inapplicable under existing rules or is barred by limitation and voluntary retirement scheme terms, while employees insisted on principles of seniority and pay parity. (Para 10 , 11 , 12 , 13 , 14 )
3. The court found pay anomaly caused by juniors receiving personal upgradations necessitates rectification, rejecting contentions that such personal benefits preclude applying pay-stepping principles to protect senior employees' salary seniority. (Para 16 , 18 , 19 , 20 , 22 , 23 , 24 , 25 )
4. A senior officer is entitled to pay stepping-up when a junior draws higher pay due to personal upgradation schemes, provided the underlying posts and pay scales remain identical. (Para 19 , 20 , 23 , 24 )
5. The original petitions filed by the employer were dismissed, confirming the validity of the relief granted to the respondents regarding pay stepping-up. (Para 29 )
6. Does the grant of personal pay upgradation to a junior officer create an entitlement for a senior officer to seek stepping-up of pay?
Yes, pay anomalies created where a junior receives higher pay due to personal upgradation schemes, while holding the same post as a senior, allow the senior to seek stepping-up of pay to match the junior's emoluments. (Para 18 , 19 , 20 , 24 )
7. Does acceptance of a Voluntary Retirement Scheme (VRS) automatically waive an employee's right to pursue pending legal claims for pay anomalies?
No, a general clause in a retirement scheme regarding full and final settlement of all claims does not inherently extinguish valid court-ordered relief or ongoing litigation unless explicitly stated and insisted upon before retirement. (Para 26 , 27 , 28 )
8. Is a pay anomaly caused by personal pay scale upgradations of juniors considered a continuous cause of action for limitation purposes?
Yes, as long as the anomaly of a senior drawing less than a junior persists, the discrepancy is treated as a continuous cause of action, preventing the claim from being dismissed as stale or barred by limitation rules. (Para 12 , 29 )
JUDGMENT
[OP (CAT) Nos.196/2023, 202/2023, 58/2024, 168/2024 & 181/2024]
Devan Ramachandran, J.
All these Original Petitions have been filed by the Bharat Sanchar Nigam Ltd. (BSNL), assailing the final orders of the learned Central Administrative Tribunal, Ernakulam Bench (‘Tribunal’ for short).
2. Since the issues impelled and projected in these matters are analogous, if not similar; and since the submissions made are also common, we have heard them together and are disposing them of through this judgment.
3. The learned Tribunal has allowed the Original Applications filed by the respondents herein, granting them the benefit of upgradation of pay through stepping-up, so that the anomaly projected – of them drawing lesser pay than their juniors – be rectified.
4. The BSNL, however, takes the stand that such a stepping up is not possible within the ambit of Fundamental Rule 22 (FR 22); and asserts that, therefore, the learned Tribunal has erred in having allowed such claims.
5. A look at the essential facts first will be necessary.
6. Admittedly, the respondents were working as Group D employees in the Department of Telecom, prior to the BSNL having been formed. Once the BSNL came into existence, the employees of the said Department were given the option to either continue there, or to move on to the latter.
7. It is admitted that the respondents exercised the option to be with the BSNL; and that they were thus drafted into its services.
8. While so, after they were so absorbed by the BSNL, the respondents were functionally promoted as ‘Telecom Mechanics’, reckoning their seniority to be including the period they spent in the services of the Telecom Department.
9. At this time arose the genesis of the controversy in these matters because, the persons who were admittedly junior to the respondents – who were continuing as Group D employees – obtained benefits under the Non- Executive Promotion Policy (NEPP), to be thus awarded an additional increment resultant and pay scale upgradation. When such persons were, thereafter, appointed as Telecom Mechanics, even though they were junior to the respondents herein, they came to enjoy higher pay; which then made the latter to move the authorities for stepping up of their pay; and when it was rejected, to file the Original Applications before the learned Tribunal. The learned Tribunal found favour with the respondents, adverting to various precedents and also to the provisions of ‘FR 22’.
10. Sri.George Kuruvilla – learned Standing Counsel for the BSNL, argued that the provisions of ‘FR 22’ would not apply in a case like this, where admittedly, the juniors were enjoying a different scale of pay in the lower post on account of the NEPP. He argued that when the scales of pay of the juniors in the lower posts have been altered and enhanced on account of NEPP alone, the provisions of ‘FR 22’ will not be attracted because, it renders it clear that it will come to apply only in the case when “the scales of pay of the lower and higher posts in which they are entitled to draw pay should be identical” (sic). He then added that, if it is to be alternatively taken that the benefits of pay upgradation is entitled to the respondents on account of the various precedents cited, even then, the learned Tribunal could not have granted relief since the claim would stand hit by limitation – it being of the year 2005 or earlier; and it not being a continuous cause of action. He concluded, impelling a third contention, namely that, since the respondents have accepted retirement under the Voluntary Retirement Scheme, they cannot make any claim based on the final order of the learned Tribunal, or through any other litigation, owing to the specific clauses in the said scheme – a copy of which is on record as Annexure R1(e) – particularly Clause 8(viii) thereof. He prayed that these Original Petitions be, therefore, dismissed.
11. Sri.M.R.Hariraj, learned Senior Counsel, instructed by Sri.Sharon Williamz – learned counsel for
