Administrative resolutions cannot be applied retrospectively to deny higher pay scale benefits accrued before their issuance.

The petitioner was entitled to the first higher pay scale (HPS) effective from 03.06.2002, which was formally granted by the respondent on 05.05.2009.

Between the date of entitlement and the formal grant, the petitioner was subjected to a departmental inquiry resulting in a major penalty on 28.11.2008, later modified by the Appellate Authority on 01.05.2009 to a reduction in pay for one year.

On 22.04.2010, the respondent withdrew the HPS benefit citing the penalty.

The petitioner previously challenged this withdrawal in SCA No. 6996 of 2010, where the Court remanded the matter, observing that no chargesheet was pending on the date the entitlement accrued (03.06.2002).

Upon remand, the respondent issued a fresh order dated 02.11.2010, reiterating the withdrawal by relying on Government Resolution (GR) dated 31.03.2005, which restricts HPS benefits for employees facing departmental proceedings or penalties.

1. Whether the withdrawal of the first higher pay scale benefit via the impugned order dated 02.11.2010 is legally sustainable given that the entitlement accrued prior to the issuance of the 2005 Government Resolution.

2. Whether administrative instructions or Government Resolutions can be applied retrospectively to deny benefits that accrued before such instructions were issued.

The Court applied the settled principle that administrative instructions, circulars, or resolutions operate prospectively and cannot be applied retrospectively to divest an employee of rights or entitlements that accrued under a prior regime.

The Court specifically relied on the precedent in Dinesh Amrutlal Solanki v. Gujarat Water Supply and Sewerage Board (SCA No. 17080 of 2018), which held that a Government Resolution not in existence on the date an employee becomes entitled to a higher pay scale cannot be applied to deny said benefit.

The Court observed that the petitioner’s entitlement to the first HPS undisputedly accrued on 03.06.2002.

At that specific time, no departmental inquiry or chargesheet was pending against him.

The respondent’s reliance on the GR dated 31.03.2005 to withdraw the benefit was found to be legally flawed because the GR was issued nearly three years after the petitioner’s right to the HPS had already vested.

The Court reasoned that since the penalty was imposed in 2008/2009 for an inquiry initiated long after the 2002 entitlement date, the subsequent policy (GR 2005) could not be invoked to retroactively disqualify the petitioner.

Furthermore, the Court noted that the respondent failed to adhere to the observations made in the previous remand order, which highlighted the absence of any inquiry at the time of entitlement.

It restored the order dated 05.05.2009, which originally granted the first higher pay scale benefit.

The respondents were directed to calculate and pay the arrears to the petitioner by 30.06.2026.

However, the Court clarified that such payment is subject to the outcome of a de novo inquiry authorized in a related matter (SCA No. 16329 of 2010), allowing the respondent to recover amounts if a future penalty so justifies.