Additional increments must continue at the prescribed rate of 3% of basic pay.

The respondents, employees of the Airports Authority of India, sought continuation of their salary fixation dated 21 January 2011, including two additional increments calculated at 3% of basic pay.

The learned Single Judge allowed the writ petition in W.P. No. 5509 of 2014 and directed relief in favour of the employees.

The Airports Authority of India challenged that order by filing the present intra-court appeal under Clause 15 of the Letters Patent.

Before the Division Bench, the respondents relied on a similar decision of the Kerala High Court in W.A. No. 1680 of 2020, concerning the manner of calculation and continuation of additional increments.

1. Whether the respondents were entitled to continuation of the two additional increments calculated at 3% of their basic pay, as reflected in the salary fixation dated 21 January 2011.

2. Whether the Airports Authority of India could discontinue or alter the financial benefit of the additional increments without following the applicable principles governing reduction or withdrawal of an existing monetary benefit.

The Court applied the principle that an “increment” is an increase within the same pay scale and is distinct from promotion or revision of the pay scale, as stated in State Bank of India v. Presiding Officer, Central Government Labour Court, (1972) 3 SCC 595.

It further relied on State of Kerala v. P.V. Neelakandan Nair, (2005) 5 SCC 561, which held that an increment is a regular increase in salary within a fixed pay scale and is conceptually different from pay-scale revision.

The Court also referred to the Kerala High Court’s view that increments must be calculated at the rate applicable to the pay scale attached to the post held by the employee from time to time.

In addition, the Supreme Court, while dismissing the challenge to the Kerala judgment, relied on the principle in Bhagwan Shukla v. Union of India that an opportunity of hearing should ordinarily precede withdrawal of financial benefits, while leaving the broader question of law open.

The Division Bench found that the respondents’ claim concerned the continuation and method of calculation of additional increments within their existing pay structure, rather than a fresh promotion or an independent revision of the pay scale.

Applying the distinction between an increment and pay-scale revision recognised in State Bank of India and P.V. Neelakandan Nair, the Court accepted the reasoning adopted by the Kerala High Court that an increment must be calculated in accordance with the pay scale applicable to the employee at the relevant time.

The Court considered the Kerala decision materially analogous and noted that the Supreme Court had declined to interfere with it, although the question of law had been left open.

On that basis, the Court held that the writ court’s grant of relief to the respondents did not warrant interference.

The writ appeal filed by the Airports Authority of India was dismissed, with no order as to costs.

The connected miscellaneous petition was consequently closed.