Reinstated employees are entitled to continuity of service and seniority benefits under Fundamental Rule 54-A.

The applicants were appointed as Postal/Sorting Assistants in the Department of Posts

Their services were terminated in 2015-2018 based on expert opinions alleging signature mismatches and malpractice in the recruitment examination, conducted without a formal departmental inquiry

Following a protracted legal battle, the Hon’ble Supreme Court in Monu Tomar v. Union of India (2017) ruled that the entire examination was not vitiated and directed the reinstatement of candidates not suspected of malpractice with consequential benefits and 50% back wages

Consequently, the respondents reinstated the applicants in early 2025

However, the impugned order dated 20.01.2025 (Clause 3) denied the applicants seniority, back wages, and arrears for the intervening period on the principle of "No Work No Pay"

The applicants challenged this denial, seeking full consequential benefits and notional seniority from their original appointment dates

1. Whether the respondents' denial of seniority, pay increments, and back wages based on the "No Work No Pay" principle is legally sustainable when the termination was set aside by judicial intervention

2. Whether the competent authority was mandated to regularize the period of absence and determine pay and allowances under the statutory framework of Fundamental Rule (FR) 54-A

Fundamental Rule (FR) 54-A, which mandates that when a dismissal is set aside by a court, the period of absence must be regularized and pay/allowances determined based on whether the exoneration was on merits or technical grounds

Precedent set by the Hon’ble Supreme Court in Monu Tomar & Ors v. Union of India (2017), which established that innocent candidates in this specific recruitment were entitled to 50% back wages and consequential benefits

M. Gopala Krishna Naidu v. State of Madhya Pradesh, asserting that orders under FR 54 are objective functions affecting a servant’s pecuniary rights and require due consideration of facts

Mahendra Prasad Agarwal v. Arvind Kumar Singh & Ors. (2026), which discouraged "consider jurisprudence" that avoids granting justified legal relief

The Tribunal observed that the applicants were reinstated only after the judiciary found their terminations unsustainable due to a lack of proper inquiry and reliance on unproved forensic reports

It held that the respondents failed to exercise their statutory duty under FR 54-A, which does not recognize the "No Work No Pay" principle as a valid ground to deny regularization when a termination is judicially set aside

The court reasoned that since the applicants were prevented from working by an illegal act of the employer, the "No Work No Pay" doctrine was inapplicable

Furthermore, the Tribunal noted that the lead judgment in Monu Tomar had already determined that 50% back wages were appropriate for this class of employees

Therefore, denying notional seniority and pay fixation would be inequitable and contrary to the "consequential benefits" directed by higher courts

The court held that the applicants are entitled to continuity of service from their initial appointment for all purposes, including seniority and notional pay fixation

The respondents were directed to: (i) grant notional seniority and carry out re-fixation of pay; (ii) pay arrears of pay and allowances restricted to three years preceding the filing of the OAs; and (iii) comply within three months, failing which interest at GPF rates would apply