Retirement on 31 December does not bar entitlement to a notional increment due on 1 January, subject to eligibility.

Applicant No. 1 was an employee under the 506 Army Base Workshop, Jabalpur, and retired on 31 December 2016.

The husband of Applicant No. 2 was also a regular employee under the same establishment and retired on 31 December 2016; he subsequently died on 18 June 2024.

The applicants claimed the benefit of one annual increment falling due on 1 January immediately after their retirement, contending that the increment had been earned through satisfactory service during the preceding year but was denied solely because they were no longer in service on the date it became payable.

The respondents filed their reply, and the Tribunal considered the pleadings, documents, and submissions.

1. Whether an employee who retires on 31 December is entitled to the annual increment falling due on 1 January of the succeeding year, subject to verification of eligibility and service records?

2. Whether the benefit of the notional increment and the consequent enhancement in pension should operate retrospectively or only from 1 May 2023?

The Tribunal relied on the Supreme Court’s decision in Director (Admn. & HR), KPTCL v. C.P. Mundinamani, Civil Appeal No. 2471 of 2023, decided on 11 April 2023, which upheld the grant of one annual increment earned on the last day of service for an employee who had rendered the preceding year’s service with good behaviour and efficiency.

The Tribunal also considered the interim directions issued by the Supreme Court in Union of India v. M. Siddaraj, SLP (C) No. 4722/2021, under which the benefit of the increment was to operate from 1 May 2023 and not retrospectively.

Applying these principles, an employee retiring on 31 December may be considered for the notional increment due on 1 January, subject to factual verification and eligibility; however, the consequential pensionary benefit is payable only from 1 May 2023.

The Tribunal found that both relevant employees had retired on 31 December and were denied the increment because they were not technically in service on 1 January, despite having completed the preceding year of service.

Following Mundinamani, the Tribunal held that the increment could be treated as having been earned through service rendered during the preceding year.

It nevertheless made the relief conditional upon verification of the applicants’ service records and eligibility, in accordance with the Supreme Court’s directions in Siddaraj.

The Tribunal therefore directed the respondents to treat the Original Application as a representation and determine entitlement, while restricting any enhanced pensionary payment arising from the notional increment to the period commencing 1 May 2023.

If the applicants were found eligible upon verification of their service records, the respondents were directed to grant the increment and consequential benefits within 90 days of receiving the certified copy of the order.

The enhanced pension resulting from the notional increment was made payable only from 1 May 2023, with no retrospective effect.

No order as to costs was made.