Seniority-based pay anomaly must be rectified by stepping up pay when junior draws higher stagnation increments.

The respondent, Pulak Baran Chakrabarty, retired from Eastern Coalfields Limited (ECL) in 2012.

Following the 2007 pay revision, he identified a pay anomaly where a junior employee, Manoj Kumar, was drawing a higher basic pay.

The respondent claimed "stepping up" of pay based on an Office Order dated 06.09.2011, which was issued by Coal India Limited to remove such anomalies following recommendations by a Pay Anomaly Committee.

A subsequent Pay Anomaly Committee, constituted via court order, rejected the respondent's claim on 27.07.2022, asserting that the respondent did not fulfill the conditions of Clauses 5(a) and 5(c) of the 2011 order because by 01.01.2007, the junior was already drawing more.

A Single Judge of the High Court allowed the respondent’s writ petition, which ECL challenged in this intra-court appeal.

1. Whether the respondent satisfied the conditions stipulated in Clauses 5(a) and 5(c) of the Office Order dated 06.09.2011 for the removal of pay anomaly.

2. Whether the principles of stepping up of pay under Fundamental Rules (FR) 22 and 23 are applicable to the respondent organization to prevent mid-career pay inversion between seniors and juniors.

The court primarily applied the Office Order dated 06.09.2011 issued by Coal India Limited, which adopted the basic principles for removal of anomaly as laid down in Fundamental Rules (FR) 22 and 23.

It further relied on the constitutional guarantees of Articles 14 and 16 of the Constitution of India, which prohibit arbitrary pay disparities between seniors and juniors.

The court distinguished State of Andhra Pradesh v. G. Sreenivasa Rao (1989) 2 SCC 290, noting that pay differentiation is only permissible if based on intelligible criteria like different feeder cadres or qualifications.

The Court rejected the appellant's narrow interpretation of the 2011 Office Order and observed that the Office Order must be read as a whole and was intended to remove anomalies "uniformly" from "such day" the anomaly arose.

Factually, the respondent and his junior drew the same pay from 2003 to 2006; the anomaly arose on 01.04.2006 because the junior received a "stagnation increment" that was higher than the "annual increment" the respondent received upon his promotion to Grade M2 in 2004.

The Court found that since the respondent was seniority-wise superior and drew equal pay prior to the anomaly, he satisfied Clause 5(a) (drawing higher/same pay prior to 2007) and Clause 5(c) (drawing higher/same pay at the time of promotion).

The Court held that allowing a junior to draw more than a promoted senior solely due to the nature of increments violates Articles 14 and 16.

It affirmed the Single Judge's decision, concluding that the respondent fulfilled all necessary requirements under the Office Order dated 06.09.2011 and that the rejection of his claim by the Committee was unsustainable.

Under the principles of FR 22 and 23, the senior's pay must be stepped up to the level of the junior from the date the anomaly arose.