Retrospective pay scale revisions must be extended to similarly situated employees as judgments in rem.

The eleven applicants, who served as Inspectors and Superintendents in the Central Excise and Customs Department between 01.01.1996 and 21.04.2004, sought the retrospective application of revised pay scales (Rs. 6500–10500 for Inspectors and Rs. 7500–12000 for Superintendents) effective from 01.01.1996, the implementation date of the 5th Central Pay Commission (CPC)

While the government eventually upgraded these scales via Office Memoranda in 2004, the benefits were made effective only from 21.04.2004

Several Benches of the Tribunal and High Courts (including Hyderabad, Kolkata, and Jaipur) had previously directed the department to grant these benefits notionally from 01.01.1996, which were affirmed by the Supreme Court

The respondents opposed the OA, arguing that the claims were barred by limitation under Section 21 of the Administrative Tribunals Act, 1985, and that the applicants were "fence-sitters" seeking to benefit from judgments in cases where they were not parties

1. Whether the applicants are entitled to notional fixation of the upgraded pay scales with effect from 01.01.1996 and consequential monetary benefits from 21.04.2004 on par with similarly situated employees

2. Whether the Original Application is barred by limitation or the doctrine of "fence-sitters"

3. Whether the judicial precedents granting retrospective pay fixation in this matter operate in rem or in personam

The Tribunal primarily applied the principle of equality under Article 14 of the Constitution of India, emphasizing that similarly situated persons must be treated similarly

It relied on the service jurisprudence established in State of Karnataka v. C. Lalitha, which postulates that benefits granted to one set of employees should extend to others similarly placed

The court also considered Section 21 of the Administrative Tribunals Act, 1985, regarding limitation, but balanced it against the doctrine of "recurring cause of action" in pay fixation matters as seen in Union of India v. Tarsem Singh (implied) and cited K.L. Shephard v. Union of India to hold that non-litigants should not be penalized for not litigating earlier

Furthermore, it noted the recommendations of the Special Anomaly Committee constituted under the Department of Revenue

The Tribunal observed that the Department of Revenue (encompassing both CBDT and CBIC) had already implemented notional pay fixation from 01.01.1996 for numerous employees following the recommendations of a Special Anomaly Committee constituted per the Kolkata High Court's directions

It rejected the respondents' plea of limitation, noting that once the government accepts CPC recommendations, it cannot arbitrarily restrict actual benefits to a later date for a specific group

The Tribunal held that pay fixation constitutes a recurring cause of action, and the delay was explained by the fact that the final recommendations of the Special Anomaly Committee were only issued in late 2023

Crucially, the Bench determined that previous judgments on this specific pay anomaly were judgments in rem, as they addressed a general policy defect; thus, the department could not unilaterally treat them as in personam to exclude the applicants

Restricting the benefit to only those who approached the court earlier would be discriminatory and violative of Article 14

It held that the applicants are entitled to the upgraded pay scales notionally from 01.01.1996 and on an actual monetary basis from 21.04.2004

The respondents were directed to refix the applicants' pay in the grades of Inspector and Superintendent accordingly and grant all consequential benefits, including arrears and pensionary adjustments, within two months

No order was made as to costs