Even a day before retirement, govt employees entitled to annual increment: SC

The Supreme Court on Tuesday ruled that government employees are eligible for annual increment, even if they superannuate a day after earning the benefit.

A bench of Justices M.R. Shah and C.T. Ravikumar said: "The Division Bench of the High Court has rightly directed the appellants to grant one annual increment which the original writ petitioners earned on the last day of their service for rendering their services preceding one year from the date of retirement with good behaviour and efficiently."

Agreeing with Karnataka High Court's view in the matter, the apex court dismissed the appeal of the state government-owned Karnataka Power Transmission Corporation Ltd (KPTCL) challenging the high court judgment.

The bench noted that entitlement to receive increment crystallises when the government servant completes requisite length of service with good conduct and becomes payable on the succeeding day. It added that in the present case, the word "accrue" should be understood liberally and would mean payable on the succeeding day. "Any contrary view would lead to arbitrariness and unreasonableness and denying a government servant legitimate one annual increment though he is entitled to for rendering the services over a year with good behaviour and efficiently and therefore, such a narrow interpretation should be avoided," it said.

The top court refused to accept the KPTCL's submissions that the annual increment is in the form of incentive and to encourage an employee to perform well and therefore, once he is not in service, there is no question of grant of annual increment.

The top court dealt with the Regulation 40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997 and analysed the purpose of grant of annual increment.

"In a given case, it may happen that the employee earns the increment three days before his date of superannuation and therefore, even according to the Regulation 40(1) increment is accrued on the next day in that case also, such an employee would not have one year service thereafter. It is to be noted that increment is earned on one year past service rendered in a time scale. Therefore, the aforesaid submission (made by KPTCL) is not to be accepted."

The bench said 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 and it can be said that he has earned the annual increment for rendering the specified period of service with good conduct.

"Therefore, as such, he is entitled to the benefit of the annual increment on the eventuality of having served for a specified period (one year) with good conduct efficiently. Merely because, the government servant has retired on the very next day, how can he be denied the annual increment which he has earned and/or is entitled to for rendering the service with good conduct and efficiently in the preceding one year," it said.

Initially, a single judge bench of the high court ruled in favour of KPTCL, however the decision was set aside by the high court's division bench.