Eligible employees retiring before the increment date receive a notional increment solely for pension fixation.

The applicants were retired Central Government income-tax officials. Applicant No. 1 retired as Additional Commissioner of Income Tax on 30 June 2007, while Applicant No. 2 retired as Income Tax Officer on 30 June 2019.

Each completed the requisite year of service immediately before retirement but was not granted the annual increment falling due on 1 July of the relevant year.

They sought grant of one notional increment for pensionary purposes, consequential refixation of pension and pensionary benefits, arrears with interest, and costs under Section 19 of the Administrative Tribunals Act, 1985.

Their representations to the competent authority did not result in relief.

The respondents relied upon the Supreme Court’s directions in Director (Admn. & HR), KPTCL v. C.P. Mundinamani and the DoP&T Office Memorandum dated 20 May 2025, submitting that the benefit was subject to the prescribed eligibility conditions.

The O.A. was filed on 7 July 2025.

Whether a Central Government employee who retires on 30 June, having completed the requisite qualifying service with satisfactory work and good conduct, is entitled to one notional annual increment falling due on 1 July for the purpose of calculating pension?

Whether the applicants were entitled to consequential revision of their pension and issuance of revised Pension Payment Orders, subject to the eligibility conditions prescribed by the Supreme Court and the DoP&T Office Memorandum dated 20 May 2025?

Whether the benefit could be granted to the applicants in light of the temporal directions issued by the Supreme Court in Union of India v. M. Siddaraj?

The Tribunal applied Section 19 of the Administrative Tribunals Act, 1985 as the jurisdictional basis for the O.A.

Relying principally on Director (Admn. & HR), KPTCL & Ors. v. C.P. Mundinamani & Ors., Civil Appeal No. 2471 of 2023, decided on 11 April 2023, the Tribunal held that an annual increment is earned upon completion of the requisite period of service with good conduct and efficiency and becomes payable on the succeeding day; denying it merely because the employee retired on the preceding day would be arbitrary and unreasonable.

The Tribunal also applied the Supreme Court’s directions in Union of India & Anr. v. M. Siddaraj, including the rule that the benefit for third parties is governed by the date-related directions contained in the orders dated 6 September 2024 and 20 February 2025.

The DoP&T Office Memoranda dated 14 October 2024 and 20 May 2025 permit a notional increment on 1 July or 1 January for employees retiring on 30 June or 31 December, respectively, who have completed the qualifying service and maintained satisfactory work and good conduct; the increment is to be used only for calculating pension and not other pensionary benefits.

The applicants retired on 30 June, immediately before the annual increment became due on 1 July. Applying C.P. Mundinamani, the Tribunal treated the increment as having been earned through the applicants’ completed year of service, rather than as a benefit dependent solely upon their remaining in service on 1 July.

Since the O.A. was filed after 1 May 2023, the Tribunal applied the Supreme Court’s temporal directions concerning third-party claims and the subsequent DoP&T instructions.

It therefore found the applicants entitled to consideration for the notional increment, but expressly made the relief conditional upon fulfilment of the eligibility requirements relating to qualifying service, satisfactory work and good conduct under the Office Memorandum dated 20 May 2025.

The benefit was confined to pension calculation and did not extend to other pensionary benefits.

The respondents were directed to grant each applicant one notional increment falling due on 1 July of the relevant year and to issue revised PPOs after notional fixation of the increment within four months from receipt of the certified copy of the order.

The grant was expressly made subject to the applicants satisfying all eligibility conditions under the DoP&T Office Memorandum dated 20 May 2025.

No order was made as to costs.