Revised Pay Scales Must Apply Notionally From Date of Implementation to Ensure Parity Among Similarly Situated Employees

The Applicant joined the Customs Department as an Appraiser in 1993 and was promoted to Assistant Commissioner in 2002.

Following the 5th Central Pay Commission (CPC) recommendations, pay scales for Inspectors and Superintendents/Appraisers were revised to Rs. 6500-10500 and Rs. 7500-12000, respectively. However, the government made these scales effective from 21.04.2004 instead of the implementation date of the 5th CPC, which was 01.01.1996.

The Applicant sought retrospective notional fixation from 01.01.1996 citing parity with several judicial precedents and the recommendations of a Special Anomaly Committee implemented for the Central Board of Direct Taxes (CBDT).

The respondents rejected the claim via an order dated 20.06.2025, primarily on grounds of limitation and that previous judgments were in personam.

1. Whether the applicant is entitled to notional fixation of the revised pay scale with effect from 01.01.1996 and actual monetary benefits from 21.04.2004 on par with similarly situated employees.

2. Whether the claim is barred by the doctrine of "fence-sitters" and the law of limitation under Section 21 of the Administrative Tribunals Act, 1985.

The Court applied the principle of equality under Article 14 of the Constitution of India, holding that similarly situated employees must be treated uniformly.

Service benefits granted to one set of employees should be extended to all similarly placed persons to avoid discrimination, as held in State of Karnataka v. C. Lalitha.

There is no justification to penalize employees for not having litigated earlier if the judgment is intended to be in rem, referencing K.L. Shephard Others v. Union of India.

The Court applied the doctrine of "recurring cause of action" in matters of pay fixation, as held in the Delhi High Court judgment in W.P. (C) No. 15760/2023.

The Tribunal reasoned that since the Department of Revenue houses both CBDT and CBIC, the findings of the Special Anomaly Committee (which granted retrospective notional fixation to CBDT employees) must apply across the entire Department to maintain parity.

It rejected the respondents' plea of limitation, noting that pay fixation is a continuous wrong and that the Special Anomaly Committee’s report was only submitted on 22.09.2023, providing a fresh context for the claim.

The Tribunal observed that the respondents had already implemented similar orders for over 1,500 other applicants across various Benches, making the denial to the present Applicant arbitrary and a violation of Article 14.

The Court concluded that once a judicial decision resolves a systemic pay anomaly, it becomes a judgment in rem, and the "model employer" should extend the benefit without forcing every employee to litigate.

It held that the judgments delivered by various High Courts and the Supreme Court on this matter operate in rem.

The respondents were directed to re-fix the Applicant's pay notionally with effect from 01.01.1996 and grant actual monetary arrears from 21.04.2004, including all consequential pensionary benefits, within two months.