Allahabad High Court Fines Centre & Railways ₹50,000 for Denying Notional Increment to Retired Employees

The Allahabad High Court has ordered the Central Government and Indian Railways to pay a penalty of ₹50,000 for refusing to grant notional increment benefits to employees who retired on June 30. The court ruled that the denial was unfair, especially since the Supreme Court had already settled the issue in previous cases.

What is the Notional Increment Issue?

In many government jobs, employees receive an annual salary increment on July 1. However, those who retire on June 30 miss out on this benefit, even though they have worked the entire year. Courts have ruled that such employees should still receive the increment for pension calculations. Despite these rulings, many government departments continue to deny this benefit.

The Case in Allahabad High Court

Several retired railway employees approached the Allahabad High Court after they were denied the notional increment. They argued that the Supreme Court had already ruled in favor of granting the increment in cases like Director (Administration and Human Resources) KPTCL & Others v. C.P. Mundinamani & Others and Union of India & Others v. M. Siddaraj.

The petitioners contended that they had worked for the entire year and should not be denied the increment simply because their retirement date was a day before the official increment date.

Court’s Ruling and Observations

The High Court agreed with the employees and strongly criticized the government for ignoring past Supreme Court judgments. The court noted that:

1. Denying notional increment violates employee rights – If an employee works for the full year, they are entitled to the salary increase, even if their retirement date falls just before the official increment date.
2. The government’s refusal is unjustified – Since the Supreme Court had already settled the matter, the government’s continued denial was seen as wrongful and unnecessary.
3. Wasting judicial resources – The court observed that repeated litigation on the same issue is a waste of time and public money.

Penalty Imposed

To discourage further delays and injustice, the High Court directed the Union of India and Indian Railways to pay ₹50,000 as a penalty. It also instructed the authorities to implement the Supreme Court’s decision and grant the notional increment to affected employees.

Impact of the Judgment

This ruling is significant for government employees who retire on June 30. It sets a strong precedent that notional increment must be granted and warns government departments against ignoring court orders. Employees who have been denied this benefit may now cite this judgment to claim their rightful dues.

This case highlights the importance of fair treatment for retirees and the role of courts in ensuring justice when government policies create financial disadvantages for employees.