Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2471 OF 2023
(@ SLP (C) No. 6185/2020)
The Director (Admn. and HR) ..Appellant(s)
KPTCL & Ors.
Versus
C.P. Mundinamani & Ors. …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the
impugned judgment and order passed by the
High Court of Karnataka at Bengaluru in Writ
Appeal No. 4193/2017, by which, the
Division Bench of the High Court has allowed
Signature Not Verified
Digitally signed by
Neetu Sachdeva
Date: 2023.04.11
16:36:55 IST
Reason:
the said appeal preferred by the employees -
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respondents herein by quashing and setting
aside the judgment and order passed by the
learned Single Judge and directing the
appellants to grant one annual increment
which the respondents had earned one day
prior to they retired on attaining the age of
superannuation, the management – KPTCL
has preferred the present appeal.
2. The undisputed facts are that one day earlier
than the retirement and on completion of one
year service preceding the date of retirement
all the employees earned one annual
increment. However, taking into
consideration Regulation 40(1) of the
Karnataka Electricity Board Employees
Service Regulations, 1997 (hereinafter
referred to as the Regulations), which
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provides that an increment accrues from the
day following that on which it is earned, the
appellants denied the annual increment on
the ground that the day on which the
increment accrued the respective employees –
original writ petitioners were not in service.
The writ petition(s) filed by the original writ
petitioners claiming the annual increment
came to be dismissed by the learned Single
Judge. By the impugned judgment and order
and following the decision of the Andhra
Pradesh High Court in the case of Union of
India and Ors. Vs. R. Malakondaiah and
ors. reported in 2002(4) ALT 550 (D.B.) and
relying upon the decisions of other High
Courts, the Division Bench of the Karnataka
High Court has allowed the appeal and has
directed that the appellants to grant one
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annual increment to the respective
employees-respondents by observing that the
respective employees as such earned the
increment for rendering their one-year service
prior to their retirement.
2.1 Feeling aggrieved and dissatisfied with the
impugned judgment and order passed by the
Division Bench of the High Court, the
management – KPTCL has preferred the
present appeal.
3. Shri Huzefa Ahmadi, learned Senior Advocate
has appeared on behalf of the appellants and
Shri Mallikarjun S. Mylar, learned counsel
has appeared on behalf of the respective
employees – respondents.
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3.1 Shri Ahmadi, learned Senior Advocate
appearing on behalf of the appellants has
vehemently submitted that the decision of the
Andhra Pradesh High Court in the case of R.
Malakondaiah (supra) which has been relied
upon by the Division Bench of the High Court
while passing the impugned judgment and
order has been subsequently overruled by the
Full Bench of the Andhra Pradesh High Court
in the case of Principal Accountant-General,
Andhra Pradesh and Anr. Vs. C. Subba Rao
reported in 2005 (2) LLN 592 .
3.2 It is further submitted by Shri Ahmadi,
learned Senior Advocate appearing on behalf
of the appellants that there are divergent
views of different High Courts on the issue. It
is submitted that the Madras High Court, the
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Delhi High Court, the Allahabad High Court,
the Madhya Pradesh High Court, the Gujarat
High Court have taken a contrary view than
the view taken by the Full Bench of the
Andhra Pradesh High Court, the Kerala High
Court and the Himachal Pradesh High Court.
It is submitted that various High Courts
taking the contrary view have as such
followed the decision of the Madras High
Court in the case of P. Ayyamperumal Vs.
The Registrar and Ors. (W.P. No.
15732/2017 decided on 15.09.2017) .
3.3 On merits, Shri Ahmadi, learned Senior
Advocate appearing on behalf of the
appellants has vehemently submitted that the
words used in Regulation 40(1) of the
Regulations are very clear and unambiguous.
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It is submitted that it categorically provides
that “an increment accrues from the day
following that on which it is earned.” It is
submitted that therefore, when the right to
get the increment is accrued the employee
must be in service. It is submitted that in the
present case when the right to get the
increment accrues in favour of the respective
respondents they were not in service but on
their superannuation retired from the
services. It is submitted that therefore, they
shall not be entitled to the annual increment
which might have been earned one day earlier
i.e., on the last day of their service.
3.4 It is further submitted by Shri Ahmadi,
learned Senior Advocate appearing on behalf
of the appellants that the annual increment is
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in the form of a good service and it is an
incentive so that the concerned employee may
serve effectively and may render good
services. It is submitted that therefore, when
the concerned employees are not in service
due to their retirement there is no question of
grant of any annual increment which as such
is in the form of incentive to encourage the
employee for better performance.
3.5 Shri Ahmadi, learned Senior Advocate
appearing on behalf of the appellants has also
taken us to the definition of the word “accrue”
in the Law Lexicon (the encyclopaedic law
dictionary) and the definition of the word
“increment.” It is submitted that as per the
Law Lexicon, “increment” means a unit of
increase in quantity or value. It means a
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promotion from a lower grade to a higher
grade. As per the definition “increment”
means an upward change in something. It is
submitted that as per the Law Lexicon the
word “accrue” means to come into existence
as an enforceable claim or right. It is
submitted that therefore, on true
interpretation of Regulation 40(1) of the
Regulations, an increment accrues from the
day following that on which it is earned. It is
submitted that therefore, the Division Bench
of the High Court has materially erred. It is
submitted that therefore, the view taken by
the Division Bench of the High Court and
other High Courts that the concerned
employees shall be entitled to the benefit of
one annual increment which they earned one
day prior to their retirement is erroneous and
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is on mis-interpretation of the relevant
statutory provisions. Making the above
submissions, it is prayed to allow the present
appeal.
4. Learned counsel appearing on behalf of the
respective employees – respondents, has
heavily relied upon the decision of the Madras
P. Ayyamperumal
High Court in the case of
(supra) and the decisions of the Gujarat High
Court, the Delhi High Court, the Allahabad
High Court, the Madhya Pradesh High Court
and the Orissa High Court taking the view
that the concerned employees who earned the
annual increment for rendering one year
service prior to their retirement they cannot
be denied the benefit of the annual increment
which they actually earned, solely on the
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ground that they retired on attaining the age
of superannuation on the very next day. It is
submitted that therefore, the Division Bench
of the High Court has not committed any
error in allowing one annual increment in
favour of the respective employees which they
actually earned.
4.1 Making the above submissions, it is prayed to
dismiss the present appeal.
5. We have heard learned counsel appearing on
behalf of the respective parties.
6. The short question which is posed for the
consideration of this Court is whether an
employee who has earned the annual
increment is entitled to the same despite the
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fact that he has retired on the very next day
of earning the increment?
6.1 In the present case, the relevant provision is
Regulation 40(1) of the Regulations which
reads as under: -
“ Drawals and postponements of
increments
40(1) An increment accrues from the day
following that on which it is earned. An
increment that has accrued shall ordinarily
be drawn as a matter of course unless it is
withheld. An increment may be withheld
from an employee by the competent
authority, if his conduct has not been good,
or his work has not been satisfactory. In
ordering the withholding of an increment,
the withholding authority shall state the
period for which it is withheld, and whether
the postponement shall have the effect of
postponing future increments.”
6.2 It is the case on behalf of the appellants that
the word used in Regulation 40(1) is that an
increment accrues from the day following that
on which it is earned and in the present case
the increment accrued on the day when they
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retired and therefore, on that day they were
not in service and therefore, not entitled to
the annual increment which they might have
earned one day earlier. It is also the case on
behalf of the appellants that as the increment
is in the form of incentive and therefore, when
the employees are not in service there is no
question of granting them any annual
increment which as such is in the form of
incentive.
6.3 At this stage, it is required to be noted that
there are divergent views of various High
Courts on the issue involved. The Full Bench
of the Andhra Pradesh High Court, the
Himachal Pradesh High Court and the Kerala
High Court have taken a contrary view and
have taken the view canvassed on behalf of
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the appellants. On the other hand, the
Madras High Court in the case of P.
Ayyamperumal (supra); the Delhi high Court
in the case of Gopal Singh Vs. Union of
India and Ors. (Writ Petition (C) No.
10509/2019 decided on 23.01.2020) ; the
Allahabad High Court in the case of Nand
Vijay Singh and Ors. Vs. Union of India and
Ors. (Writ A No. 13299/2020 decided on
29.06.2021) ; the Madhya Pradesh High
Court in the case of Yogendra Singh
Bhadauria and Ors. Vs. State of Madhya
Pradesh ; the Orissa High Court in the case of
AFR Arun Kumar Biswal Vs. State of
Odisha and Anr. (Writ Petition No.
17715/2020 decided on 30.07.2021) ; and
the Gujarat High Court in the case of State
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of Gujarat Vs. Takhatsinh Udesinh Songara
(Letters Patent Appeal No. 868/2021) have
taken a divergent view than the view taken by
the Full Bench of the Andhra Pradesh High
Court and have taken the view that once an
employee has earned the increment on
completing one year service he cannot be
denied the benefit of such annual increment
on his attaining the age of superannuation
and/or the day of retirement on the very next
day.
6.4 Now so far as the submission on behalf of the
appellants 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 is concerned, the
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aforesaid has no substance. 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 is not to be accepted.
6.5
Now, so far as the submission on behalf of
the appellants that as the increment has
accrued on the next day on which it is earned
and therefore, even in a case where an
employee has earned the increment one day
prior to his retirement but he is not in service
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the day on which the increment is accrued is
concerned, while considering the aforesaid
issue, the object and purpose of grant of
annual increment is required to be
considered. A government servant is granted
the annual increment on the basis of his good
conduct while rendering one year service.
Increments are given annually to officers with
good conduct unless such increments are
withheld as a measure of punishment or
linked with efficiency. Therefore, the
increment is earned for rendering service with
good conduct in a year/specified period.
Therefore, 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
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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. In the
case of Gopal Singh (supra) in paragraphs
20, 23 and 24, the Delhi High Court has
observed and held as under: -
(para 20)
“Payment of salary and increment to a
central government servant is regulated
by the provisions of F.R., CSR and
Central Civil Services (Pension) Rules.
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Pay defined in F.R. 9(21) means the
amount drawn monthly by a central
government servant and includes the
increment. A plain composite reading of
applicable provisions leaves no
ambiguity that annual increment is
given to a government servant to enable
him to discharge duties of the post and
that pay and allowances are also
attached to the post. Article 43 of the
CSR defines progressive appointment to
mean an appointment wherein the pay
is progressive, subject to good behaviour
of an officer. It connotes that pay rises,
by periodical increments from a
minimum to a maximum. The increment
in case of progressive appointment is
specified in Article 151 of the CSR to
mean that increment accrues from the
date following that on which it is earned.
The scheme, taken cumulatively, clearly
suggests that appointment of a central
government servant is a progressive
appointment and periodical increment in
pay from a minimum to maximum is
part of the pay structure. Article 151 of
CSR contemplates that increment
accrues from the day following which it
is earned. This increment is not a matter
of course but is dependent upon good
conduct of the central government
servant. It is, therefore, apparent 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 thus an integral part of
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progressive appointment and accrues
from the day following which it is
earned.”
(para 23)
“Annual increment though is attached to
the post & becomes payable on a day
following which it is earned but the day
on which increment accrues or becomes
payable is not conclusive or
determinative. In the statutory scheme
governing progressive appointment
increment becomes due for the services
rendered over a year by the government
servant subject to his good behaviour.
The pay of a central government servant
rises, by periodical increments, from a
minimum to the maximum in the
prescribed scale. The entitlement to
receive increment therefore crystallises
when the government servant completes
requisite length of service with good
conduct and becomes payable on the
succeeding day.”
(para 24)
“In isolation of the purpose it serves the
fixation of day succeeding the date of
entitlement has no intelligible differentia
nor any object is to be achieved by it.
The central government servant retiring
on 30th June has already completed a
year of service and the increment has
been earned provided his conduct was
good. It would thus be wholly arbitrary if
the increment earned by the central
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government 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.”
“In the case of a government servant
retiring on 30th of June the next day on
which increment falls due/becomes
payable looses significance and must
give way to the right of the government
servant to receive increment due to
satisfactory services of a year so that the
scheme is not construed in a manner
that if offends the spirit of
reasonableness enshrined in Article 14
of the Constitution of India. The scheme
for payment of increment would have to
be read as whole and one part of Article
151 of CSR cannot be read in isolation
so as to frustrate the other part
particularly when the other part creates
right in the central government servant
to receive increment. This would ensure
that scheme of progressive appointment
remains intact and the rights earned by
a government servant remains protected
and are not denied due to a
fortuitous circumstance.”
6.6 The Allahabad High Court in the case of Nand
Vijay Singh (supra) while dealing with the
same issue has observed and held in
paragraph 24 as under: -
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“24. Law is settled that where
entitlement to receive a benefit
crystallises in law its denial would be
arbitrary unless it is for a valid reason.
The only reason for denying benefit of
increment, culled out from the scheme is
that the central government servant is
not holding the post on the day when
the increment becomes payable. This
cannot be a valid ground for denying
increment since the day following the
date on which increment is earned only
serves the purpose of ensuring
completion of a year’s service with good
conduct and no other purpose can be
culled out for it. The concept of day
following which the increment is earned
has otherwise no purpose to achieve. In
isolation of the purpose it serves the
fixation of day succeeding the date of
entitlement has no intelligible differentia
nor any object is to be achieved by it.
The central government servant retiring
on 30th June has already completed a
year of service and the increment has
been earned provided his conduct was
good. It would thus be wholly arbitrary if
the increment earned by the central
government 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. In the
case of a government servant retiring on
30th of June the next day on which
increment falls due/becomes payable
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looses significance and must give way to
the right of the government servant to
receive increment due to satisfactory
services of a year so that the scheme is
not construed in a manner that if
offends the spirit of reasonableness
enshrined in Article 14 of the
Constitution of India. The scheme for
payment of increment would have to be
read as whole and one part of Article
151 of CSR cannot be read in isolation
so as to frustrate the other part
particularly when the other part creates
right in the central government servant
to receive increment. This would ensure
that scheme of progressive appointment
remains intact and the rights earned by
a government servant remains protected
and are not denied due to a fortuitous
circumstance.”
6.7 Similar view has also been expressed by
different High Courts, namely, the Gujarat
High Court, the Madhya Pradesh High Court,
the Orissa High Court and the Madras High
Court. As observed hereinabove, to interpret
Regulation 40(1) of the Regulations in the
manner in which the appellants have
understood and/or interpretated would lead
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to arbitrariness and denying a government
servant the benefit of annual increment
which he has already earned while rendering
specified period of service with good conduct
and efficiently in the last preceding year. It
would be punishing a person for no fault of
him. As observed hereinabove, the increment
can be withheld only by way of punishment
or he has not performed the duty efficiently.
Any interpretation which would lead to
arbitrariness and/or unreasonableness
should be avoided. If the interpretation as
suggested on behalf of the appellants and the
view taken by the Full Bench of the Andhra
Pradesh High Court is accepted, in that case
it would tantamount to denying a government
servant the annual increment which he has
earned for the services he has rendered over a
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year subject to his good behaviour. The
entitlement to receive increment therefore
crystallises 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.
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.
We are in complete agreement with the view
taken by the Madras High Court in the case
of P. Ayyamperumal (supra); the Delhi High
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Court in the case of Gopal Singh (supra) ; the
Allahabad High Court in the case of Nand
Vijay Singh (supra) ; the Madhya Pradesh
High Court in the case of Yogendra Singh
Bhadauria (supra) ; the Orissa High Court in
the case of AFR Arun Kumar Biswal (supra) ;
and the Gujarat High Court in the case of
Takhatsinh Udesinh Songara (supra) . We do
not approve the contrary view taken by the
Full Bench of the Andhra Pradesh High Court
in the case of Principal Accountant-General,
Andhra Pradesh (supra) and the decisions of
the Kerala High Court in the case of Union of
India Vs. Pavithran (O.P.(CAT) No.
111/2020 decided on 22.11.2022) and the
Himachal Pradesh High Court in the case of
Hari Prakash Vs. State of Himachal
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Pradesh & Ors. (CWP No. 2503/2016
decided on 06.11.2020) .
7.
In view of the above and for the reasons
stated above, 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. We are in complete agreement with
the view taken by the Division Bench of the
High Court. Under the circumstances, the
present appeal deserves to be dismissed and
is accordingly dismissed. However, in the
facts and circumstances of the case, there
shall be no order as to costs.
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I.A. No. 149091/2022 stands disposed of
in terms of the above.
………………………………….J.
[M.R. SHAH]
………………………………….J.
[C.T. RAVIKUMAR]
NEW DELHI;
APRIL 11, 2023
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