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Government Employees Can't Be Denied Annual Increment Merely Because They Have Retired The Next Day Of Earning It : Supreme Court

Team SoOLEGAL 13 Apr 2023 4:48pm

Government Employees Can't Be Denied Annual Increment Merely Because They Have Retired The Next Day Of Earning It : Supreme Court

New Delhi: In a landmark decision, the Supreme Court ruled that government employees cannot be refused a yearly raise just because they will retire the day after receiving the raise.

In an appeal filed by the Karnataka Power Transmission Corporation Ltd, a bench comprising of Justices MR Shah and CT Ravikumar was deciding whether an employee who has earned the annual increment is entitled to the same despite the fact that he retired on the very next day of earning the increment.

In this case, the KPTCL withheld annual raises to employees since they had retired the next day. Based on Regulation 40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997, which states that an increment accrues from the day after the day on which it is earned, the appellant asserted that the employees were not in service on the day the increment was earned. Following the rejection of this argument by the High Court, KPTCL filed an appeal in the Supreme Court.

Senior Advocate Huzefa Ahmadi, appearing for the appellant, contended that the increment is in the form of a "incentive" to urge the employee to do well the next year, and that if the employee is no longer in service, the increment serves no purpose. This argument was rejected by the Supreme Court, which stated that increment is a benefit earned by employees based on their service in the preceding year and that it can only be withdrawn as a penalty following a properly conducted disciplinary hearing.

The court observed "The entitlement to receive increment therefore crystallizes when the government servant completes requisite length of service with good conduct and becomes payable on the succeeding day. In the present case the word “accrue” should be understood liberally and would mean payable on the succeeding day. 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 behavior and efficiently and therefore, such a narrow interpretation should be avoided".

The bench strongly rejected the appellant's claim that increment is a type of "incentive" and inquired whether an employee who earns the increment three days before the due retirement date should likewise be denied it if the appellant's argument is adopted.

Employees will be punished if the raise is denied to them and the raise can be withheld only if the employee has not fulfilled his duties efficiently. The bench stated that if the interpretation proposed by the appellants is accepted, it would be equivalent to depriving a government employee the annual increment he has earned for the services he has performed throughout the year subject to his good behaviour.



Tagged: Government Employee   Supreme Court  
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