Notional increment benefits and arrears are governed by Supreme Court’s finalized directives on limited retroactive applicability.

The seven applicants are retired employees of the North Central Railway who retired on the 30th of June in various years

They filed O.A. No. 590/2024 seeking the grant of one notional increment (which would have fallen due on 1st July) for the purpose of calculating pensionary benefits.

On 29.05.2024, the Tribunal directed the respondents to issue the notional increment, revise the Pension Payment Orders (PPOs), and pay arrears with 6% simple interest within three months

The applicants subsequently filed this contempt petition under Section 17 of the Administrative Tribunal Act, 1985, alleging non-compliance

The respondents filed a compliance affidavit on 07.11.2025, asserting that revised PPOs had been issued in accordance with subsequent Supreme Court directives

The applicants contended that compliance was incomplete as interest had not been paid

1. Whether the respondents’ failure to pay interest constitutes contempt in light of the Supreme Court’s clarifying orders regarding the retroactive applicability of notional increments

Section 17 of the Administrative Tribunal Act, 1985, regarding the power to punish for contempt

Director (Admn. and HR) KPTCL v. C.P. Mundinamani (Civil Appeal No. 2471/2023), which established the entitlement to a notional increment for employees retiring on 30th June

clarifying interim order (06.09.2024) and final order (20.02.2025) passed by the Supreme Court in Union of India & Anr. v. M. Siddaraj (Diary No. 2400/2024), which restricted the payment of arrears for third parties to the date of the judgment (01.05.2023) or a maximum of three years prior to the filing of the application

The Tribunal examined whether the respondents' actions met the threshold of "substantial compliance."

While the original order dated 29.05.2024 mandated the payment of interest, the legal landscape shifted following the Supreme Court’s intervention in the M. Siddaraj matter

The Supreme Court specifically clarified that for retired employees who were "third parties" to the original litigation, the enhanced pension would be payable from 01.05.2023, and arrears for those who filed original applications would be restricted to three years prior to the filing date

The Tribunal reasoned that since the respondents had already issued revised PPOs granting the notional increment based on these Supreme Court mandates, the core of the Tribunal's direction was satisfied

The Tribunal determined that the respondents' adherence to the Apex Court's specific timelines and restrictions on arrears and interest superseded the general directions previously issued by the Tribunal

The Tribunal found no grounds to continue the contempt proceedings. The contempt petition was consigned to record, and the notices issued to the respondents were discharged. All associated Miscellaneous Applications (MAs) were also disposed of