Revised Pay Fixation Benefits Cannot Be Arbitrarily Withheld Based on Non-Partisanship in Precedent Cases

The applicant, a Superintendent in the Customs Department at Varanasi, sought the release of arrears amounting to ₹1,58,364/- plus interest following his grant of Non-Functional Selection Grade (NFSG).

Although the respondents had issued a pay fixation order on 20.08.2019 granting the NFSG benefit in light of the M. Subramaniam case, the Pay and Account Officer (Respondent No. 5) subsequently denied the payment of arrears via an order dated 11.09.2025.

The denial was based on a Board clarification dated 07.04.2021 and the fact that the applicant was not a specific party to the original court orders.

The applicant approached the Tribunal arguing that as a similarly situated employee, he was entitled to the same benefits as decreed by the Hon’ble Madras High Court and affirmed by the Hon’ble Supreme Court.

1. Whether the applicant is entitled to the consequential arrears of pay following the grant of Non-Functional Selection Grade (NFSG) of ₹5400/- in PB-2, despite not being a named party in the original M. Subramaniam litigation.

2. Whether the denial of arrears based on a subsequent departmental clarification is legally sustainable when the underlying entitlement has already been recognized and implemented via pay fixation.

The court primarily relied on the legal principles established by the Hon’ble Madras High Court in M. Subramaniam v. Union of India, which held that officers are entitled to the NFSG of ₹5400/- in PB-2 after completing four years of regular service in the grade pay of ₹4800/-.

This principle was affirmed by the Hon'ble Supreme Court.

The Tribunal applied the doctrine of parity for similarly situated employees as previously upheld in its own decision in O.A. No. 392 of 2026 dated 08.04.2026.

The Tribunal noted that the issue of entitlement to NFG/NFSG is no longer res integra (an unsettled point of law) due to the finality of the M. Subramaniam judgment.

The court observed that the respondents had already acknowledged the applicant's eligibility by issuing the revised pay fixation order on 20.08.2019.

The Tribunal reasoned that once an employee is granted the revised pay scale in compliance with judicial precedents, the withholding of consequential arrears based on a later departmental clarification or the "non-party" status of the employee is arbitrary and discriminatory.

Since the facts of the present case were identical to O.A. No. 392 of 2026, the Tribunal determined that the applicant must be extended the same relief mutatis mutandis.

The respondents were directed to decide upon the applicant’s representation and, upon finding him similarly situated, extend the benefits of NFSG of ₹5400/- in PB-2 along with all consequential benefits (arrears) within eight weeks.

No order was made as to costs.