Employees Entitled To Annual Increment On Last Day Of Service For Preceding Year Regardless Of Retirement Date : Punjab & Haryana High Court

Background Facts

The Petitioners challenged Rule 10 of the Haryana Civil Services (Revised Pay) Rules, 2008, (Rules) which established a uniform date of annual increment as 1st July of every year. They argued that this rule deprived employees who retired before this date of their earned increment for the preceding six months. Rule 10 stated that employees completing six months and above in the revised pay structure as of 1st July would be eligible for the increment. This meant that employees retiring before this date would not receive their increment for the preceding six months of service.

Aggrieved by the same, the petitioners filed the writ petitions.

The petitioners contended that the Rule 10, which established a uniform date of annual increment as 1st July of every year, was ultra vires to the Constitution. They contended that this rule deprived employees who retired before this date of their earned increment for the preceding six months. The petitioners argued that Rule 10 deprived employees of their rightful increment based on completed service periods. They argued that if an employee retired on 30th of June, they should still be entitled to the increment they had earned for the preceding six months of service.

On the other hand, it was contended by the Respondents (State of Haryana) that Rule 10, was enacted to ensure administrative efficiency and uniformity in the granting of increments to employees. They argued that the rule provided a clear and uniform framework for the granting of annual increments to employees, which was essential for the smooth functioning of the civil services.

The respondents further contended that the rule did not deprive employees of their rightful increments but instead established a fair and equitable system for the grant of increments based on completed service periods.

Findings of the Court

The Court held that denying increments to retiring employees based on their retirement date was unjust and unconstitutional. The court relied on the case of Director (Administration and HR) KPTCL and others vs. C.P. Mundinamani and others wherein the Supreme Court upheld the right of employees to receive annual increments even if they retired the day before its accrual. This ruling emphasized the importance of recognizing employees' rights based on completed service periods.

The Court declared Rule 10 invalid to the extent that it denied increments to retiring employees. The Court directed the respondents to revise the retiral benefits and pensions of affected employees accordingly within three months.

The Court further held that employees were entitled to one annual increment on the last day of their service for the preceding year, regardless of their retirement date.

With the aforesaid observations, the writ petitions were allowed.

Case No. : CWP-8201-2024 (O&M)

Case Name : Hum Bahadur vs. State of Haryana and others

Counsel for the Petitioners : Mr. Sandeep Panwar