Retiring employees are entitled to one notional increment for pensionary purposes upon completing one year of qualifying service.

The applicant, Subhash Chandra, a retired Junior Works Manager (JWM/NT), retired from service on 30th June after completing a full year of service.

He was denied the annual increment falling due on 1st July on the grounds that he was no longer in service on the date the increment became payable.

The applicant approached the Tribunal seeking the benefit of one notional increment for the purpose of pensionary benefits, relying on Supreme Court precedents.

1. Whether an employee who retires on 30th June or 31st December is entitled to the benefit of an annual increment that falls due on the immediately succeeding 1st July or 1st January for the purpose of pensionary benefits

The Tribunal applied the principle established by the Hon’ble Supreme Court in Director (Admn. and HR) KPTCL v. C.P. Mundinamani (2023), which held that an increment earned for past Year’s service with good conduct must be granted even if the employee retires a day before it is technically payable.

It further integrated the interim directions from Union of India v. M. Siddaraj [SLP(C) No. 4722/2021] and the subsequent Department of Personnel and Training (DoPT) OM No.19/116/2024-Pers.Pol.(Pay(Pt.) dated 14.10.2024, which mandate the grant of notional increments for pension calculation while restricting the date of financial effect.

The Tribunal reasoned that since the applicant rendered service for the full preceding year with "satisfactory work and good conduct," the right to the increment had already been earned.

Following the Supreme Court's clarification in the M. Siddaraj matter, the Tribunal noted that the Union of India’s review petition was dismissed on 20.02.2025, removing any remaining legal impediment to granting the relief.

The Tribunal reconciled the entitlement with the Supreme Court’s temporal restrictions, noting that while the increment is added notionally to calculate pension, actual financial "enhanced pension" is only payable from 01.05.2023 onwards for third parties (those not part of the original KPTCL litigation).

The Respondents were directed to re-fix the applicant's pension within 60 days. However, following the Supreme Court's mandate, the holding specified that the enhanced pension is payable only from 01.05.2023, and no arrears for the period prior to 30.04.2023 shall be paid.