June 30 Retirement No Bar To July 1 Annual Increment- Delhi High Court

A Division Bench of the Delhi High Court comprising Justice Anil Kshetarpal and Justice Amit Mahajan held that a government employee retiring on 30 June is entitled to increment due on 1 July, as the increment is earned for the completed year of service preceding retirement and cannot be denied merely because it becomes payable after retirement. Background Facts The employee (respondent) was working as an A.F.A. at Northern Railway, New Delhi. He superannuated from service on 30 June 2021. His annual increment was due on 1 July 2021, which was a day after his retirement. The department denied him the benefit of that increment on the ground that he was not in service on the date when the increment became payable. Aggrieved by the denial, he approached the Central Administrative Tribunal. The Tribunal allowed his application. The Tribunal directed the department to issue one notional increment to him along with revised Pension Payment Orders (PPOs). The Tribunal also granted him interest at 6% per annum. Aggrieved by the Tribunal's order, the Union of India and other railway authorities filed the writ petition before the Delhi High Court. It was argued by the Union of India that the employee had retired on 30 June 2021. The increment was due to him on 1 July 2021, which was one day after his retirement. The employee was not in service on the date the increment accrued, therefore, he was not entitled to it. On the other hand, the employee relied upon the Supreme Court's decision in The Director (Admn. And HR) KPTCL & Ors. v. C.P. Mundinamani & Ors. It was submitted that the employee had completed a full year of service preceding his retirement and had earned the increment. Findings of the Court The judgment in The Director (Admn. And HR) KPTCL & Ors. v. C.P. Mundinamani & Ors. was relied upon wherein it was held by the Supreme Court that the increment is earned for rendering the services with good conduct for one year preceding the date of retirement. It was held that just because the government servant has retired on the very next day, he cannot be denied the annual increment which he has earned for rendering the service with good conduct and efficiency in the preceding one year. Further in Gopal Singh v. Union of India, it was held by the court that central government employee earns increment on the basis of his good conduct for specified period i.e. a year in case of annual increment. Increment in pay is an integral part of progressive appointment and accrues from the day following which it is earned. It was observed that the central government employee retiring on 30th June has already completed a year of service and the increment has been earned. It would be arbitrary if the increment earned by the employee on the basis of his good conduct for a year is denied only on the ground that he was not in employment on the succeeding day when increment became payable. Therefore, employee should be given increment so that it does not offends the spirit of reasonableness. It was held by the court that the Department cannot deny the benefit which has already been earned by the employee, though payable on a subsequent date. It was also noted that in Union of India v. Kulbir Singh and Ors., the voluntary retirees were granted increments which accrued on the day following their retirement. It was further observed by the court that the word “accrued” should be understood liberally to mean that the benefit becomes payable on the succeeding day. It was held by the Division Bench that the employee had earned the increment for rendering his services in the period preceding his retirement. With the aforesaid observations, the Tribunal's order was upheld by the Division Bench. Consequently, the writ petition filed by the Union of India was dismissed by the Division Bench. Case Name : Union of India & Ors. v. Naresh Kumar GuptaCitation: 2026 LiveLaw (Del) 338 Case No. : W.P.(C) 12216/2024 Counsel for the Petitioners : Suruchi Mittal, SPC with Shubham Soni, Adv. Counsel for the Respondent : NoneClick Here To Read/Download Order

June 30 Retirement No Bar To July 1 Annual Increment- Delhi High Court

Namdev Singh

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