Advance increments granted under an incentive scheme must count toward pension despite incomplete formal absorption.

The applicant, a retired Group ‘C’ Railway employee, exercised his option under the Railway Board’s incentive scheme dated 25 February 2009 for joining the Rail Coach Factory, Rae Bareli, which offered three advance increments to eligible non-gazetted staff.

He joined the Rail Coach Factory on option basis and was granted the three advance increments.

He was subsequently posted at Kishanganj, Delhi, but contended that this did not affect his entitlement under the scheme.

Although the applicant’s last pay, including the increments, was stated to be ₹25,630, the respondents finalised his pensionary benefits on a lower pay by excluding those increments.

The respondents relied on the fact that the applicant’s formal absorption in the Rail Coach Factory had not been completed before his superannuation.

The applicant challenged the relevant PPO/orders dated 4 April 2013, 6 October 2017 and 13 October 2017 under Section 19 of the Administrative Tribunals Act, 1985.

1. Whether the applicant was entitled to have the three advance increments granted under the Railway Board’s incentive scheme reckoned for determining his pensionary benefits, notwithstanding that his formal absorption in the Rail Coach Factory was not completed before superannuation?

2. Whether the respondents could deny the consequential pensionary benefit on the technical ground of non-completion of formal absorption when no fault or impediment was attributable to the applicant?

The Tribunal applied Section 19 of the Administrative Tribunals Act, 1985, concerning the Tribunal’s jurisdiction to adjudicate service-related grievances.

It relied on the terms and object of the Railway Board’s incentive scheme dated 25 February 2009, under which eligible Railway employees opting to join the Rail Coach Factory, Rae Bareli, were offered three advance increments.

The Tribunal applied the principles of legitimate expectation and fairness in public administration, holding that an employee who acted upon an official representation and was granted the promised benefit should not ordinarily be deprived of its consequential effect because of an administrative delay not attributable to him.

It also followed the coordinate Bench decisions in Pratha Sarathy Sen Gupta (Dead) v. Union of India, OA No. 332/2014 (CAT, Lucknow Bench, 4 September 2024), and B. Durga Prasada Rao v. Ministry of Railways, OA No. 20/2016 (CAT, Hyderabad Bench, 14 September 2021), which recognised the entitlement to reckon such advance increments for pensionary purposes.

The Tribunal found that the applicant had exercised the prescribed option, joined the Rail Coach Factory on that basis, and had actually been granted the three advance increments under the incentive scheme.

His subsequent posting at Kishanganj did not undo the fact that he had acted upon the respondents’ representation.

The respondents produced no material showing that the applicant’s formal absorption remained incomplete because of any act, omission, disciplinary proceeding, vigilance issue or other impediment attributable to him.

On the contrary, correspondence dated 15/17 February 2012 showed that his absorption was still under consideration by the authorities.

Applying the principles of legitimate expectation and administrative fairness, the Tribunal held that the applicant could not be made to suffer for the respondents’ failure to complete the absorption process.

The absence of formal absorption before retirement was therefore treated as an insufficient technical ground for withdrawing the pensionary consequences of increments already granted under the scheme.

The PPO/orders dated 4 April 2013, 6 October 2017 and 13 October 2017 were quashed and set aside.

The respondents were directed to revise the applicant’s pension by taking his last pay as ₹25,630, including the three advance increments, and to release the consequential pensionary arrears.

Interest at the applicable GPF rate was directed on the arrears from the dates on which the amounts became due until actual payment.

The entire exercise was to be completed within eight weeks of receipt of a certified copy of the order, without requiring any further representation from the applicant.

The OA was allowed with no order as to costs.