Retired employees are entitled to one annual increment falling due the day after superannuation, restricted to prospective payment.

The petitioner, Neeraj Kumar Labhaniya, was an employee of the State of Madhya Pradesh who superannuated from service on 31.12.2020

The petitioner filed this writ petition under Article 226 of the Constitution of India seeking a writ of mandamus to direct the respondents to grant him the benefit of one annual increment that fell due on 01.01.2021 (the day after his retirement)

He further sought the consequent revision of his retiral dues and pension, including arrears and interest

The State contested the claim, arguing the matter is now governed by specific precedents from the Supreme Court regarding the accrual of increments post-retirement

1. Whether a government employee who retires on 31st December is entitled to the annual increment falling due on 1st January for the purpose of pensionary benefits

2. Whether the petitioner is entitled to interest on the arrears of retiral dues resulting from such increment

The court relied on the principles established by the Supreme Court of India in Union of India v. M. Siddaraj (Miscellaneous Application Diary No. 2400 of 2024 in Civil Appeal No. 3933 of 2023), which defined the temporal limits for claiming pensionary benefits based on post-retirement increments

It also applied the ruling in Madhya Pradesh Purv Kshetra Vidyut Vitran Company Ltd. v. Vidyut Mandal Pension Samaj & Ors. (SLP (C) No. 16679/2025), which clarified that while the increment benefit may be granted, the awarding of interest on such arrears is not contemplated and should be set aside

The High Court observed that the controversy regarding increments falling due the day after retirement is now settled by the Supreme Court. In M. Siddaraj, the Apex Court categorized claimants into distinct groups, holding that for third parties (those not part of the original litigation), enhanced pension based on the increment is payable only from 01.05.2023, without arrears for the period prior to 31.04.2023

for those who filed writ petitions, the enhanced pension is payable for a period of three years prior to the month of filing the petition

Regarding the claim for interest, the court noted that the Supreme Court in Vidyut Mandal Pension Samaj specifically set aside orders granting interest (e.g., at 7% per annum), establishing that such financial relief was not intended in these increment-related cases

the petitioner is entitled to the increment for pensionary purposes subject to the temporal restrictions on arrears defined by the Supreme Court (typically three years prior to filing the petition), but no interest shall be payable on the calculated arrears