Case Background
This case concerns three retired teachers from colleges under Magadh University, Bodh Gaya. Two retired as Professors from A.N. College, Patna and one retired as Associate Professor from B.S. College, Danapur.
Their dates of retirement were 30.06.2015, 30.06.2017 and 30.06.2017. All three were drawing their last basic salary on 30 June, and under the Central Civil Services (Revised Pay) Rules, 2008, annual increment for such employees falls on 1 July every year.
After retirement, the teachers received pension and, in the case of petitioner nos. 2 and 3, gratuity of Rs. 10 lakhs each. They felt that two mistakes had been made: first, that one last increment due on 1 July was not counted for fixing their pension; and second, that petitioner nos. 2 and 3 did not get enhanced gratuity up to Rs. 20 lakhs, though they retired after 01.04.2017, the date from which a higher ceiling was provided in a State notification.
They therefore filed Civil Writ Jurisdiction Case No. 2496 of 2021 before the Patna High Court, seeking directions to the State of Bihar and Magadh University authorities to correctly compute and pay their retiral dues.
What the Court Examined and Decided
The petitioners’ basic prayer, as recorded by the Court, was for:
(a) payment of pension after adding one increment in their last basic pay; and
(b) payment of additional gratuity to petitioner nos. 2 and 3 in terms of the Education Department notification dated 06.03.2019 (Memo No. 592).
On the increment issue, the petitioners relied on an Office Memorandum dated 30.08.2008 issued by the Joint Secretary to the Government of India, Ministry of Finance. Clause 2(iii) of that memorandum, framed under the CCS (RP) Rules 2008, fixes a uniform date of annual increment as 1st July of each year after the revised pay structure came into force.
The memorandum explains that where the next increment falls on 01.01.2006, that increment is to be drawn in the pre-revised scale, and then pay is fixed in the revised scale by including that increment. After that, the next increment in the revised pay is to be drawn on 1st July, 2006. This shows the general rule: increment is earned for the work done in the previous year and becomes due on the common increment date.
To support their argument, the petitioners also relied on the Supreme Court judgment in The Director (Admn. and HR) KPTCL & Ors. vs. C.P. Mundinamani & Ors., Civil Appeal No. 2471 of 2023, decided on 11.04.2023. In that case, the Supreme Court framed a specific question: whether an employee who has earned the annual increment is entitled to it even if he retires on the very next day when the increment becomes due.
The Supreme Court answered this in the affirmative. It held that if an employee has rendered services for the full preceding year with good behaviour and efficiency, he earns the increment. The fact that he retires the next day does not take away his right to that increment.
The Patna High Court applied this reasoning to the three petitioners. It noted that they had retired on 30.06.2015 and 30.06.2017, after serving for a full year from the last date when increment was granted, i.e., from 1st July of the previous years. Thus, they had already put in the eligible service period from 1st July 2014 to 30th June 2015, and from 1st July 2016 to 30th June 2017.
The Court framed the key question: whether employees who have already retired on 30 June and are no longer in service can still be paid an increment for the services rendered in the preceding year. Following the Supreme Court’s decision in C.P. Mundinamani, the Court held that such employees are entitled to the increment for that last year of service.
On the other side, the State government (respondent nos. 2 and 3) opposed the claim. In their counter affidavit, they referred to a case from Karnataka, Union of India & Anr. vs. M. Siddaraj, where the Karnataka High Court had decided in favour of the employee. They pointed out that the Union of India had challenged that decision before the Supreme Court in SLP (C) No. 4722 of 2021. They also stated that the Supreme Court had stayed the operation of the Karnataka High Court’s order and ordered that retiral dues be paid on the basis of last pay drawn on the date of retirement.
On this basis, the State pleaded that the issue of one notional increment for employees retiring on the eve of the increment date was still pending before the Supreme Court, and therefore the claim of the petitioners in Patna was premature.
However, the petitioners placed on record a later order of the Supreme Court in the same M. Siddaraj matter. By order dated 19.05.2023, the Supreme Court stated that the issue raised in that appeal was squarely covered by the judgment in C.P. Mundinamani (Civil Appeal No. 2471 of 2023) decided on 11.04.2023. In other words, the Supreme Court had already settled the law in favour of the employees by then.
After examining this later order, the Patna High Court held that the only objection raised by the State – that the issue was still under consideration by the Supreme Court – no longer survived. The Supreme Court had already decided the issue, and the State did not raise any other objection on facts or law.
As for the University authorities (respondent nos. 4 to 6), their stand was that grant of an additional increment from 1st July of each year was a policy matter for the State Government. They said they were bound to follow State decisions and statutes, and had not independently opposed the entitlement of the petitioners.
In view of the settled law and undisputed facts, the Patna High Court concluded that the petitioners were entitled to one additional increment for the services rendered in the year immediately before retirement. The Court directed that their pension be revised accordingly.
On the second issue of gratuity, the focus was on the Education Department notification dated 06.03.2019 (Memo No. 592), issued by the Special Secretary, Government of Bihar. Clause 7(iv) of that notification provides that Rs. 20 lakhs shall be the upper ceiling limit of gratuity for employees who have retired after 01.04.2017.
Petitioner nos. 2 and 3 had already received Rs. 10 lakhs each as gratuity. Their case was that since they retired on 30.06.2017, which is after 01.04.2017, they should be entitled to the benefit of the higher ceiling, and therefore to additional gratuity.
The State’s counter affidavit took the stand that all petitioners had retired before 01.04.2017 and hence were not entitled to the Rs. 20 lakhs ceiling. This statement was factually incorrect for petitioner nos. 2 and 3, as their retirement date of 30.06.2017 was admitted elsewhere in the record.
The Court noted that there was no dispute over the actual retirement dates. Because petitioner nos. 2 and 3 clearly retired on 30.06.2017, the Court rejected the State’s plea that they had retired prior to 01.04.2017. The Court therefore found the denial of enhanced gratuity on this ground unjustified.
The University, in its counter affidavit, did not deny the entitlement of petitioner nos. 2 and 3 to enhanced gratuity. It stated that the University had requested the State Government to release additional grant for payment of the difference in gratuity to those who retired in 2017 and 2018, including the petitioners. It stated that payment would be made after such grant was released.
Since the applicability of the 06.03.2019 notification to petitioner nos. 2 and 3 was not denied by the State, and the only State objection was based on an incorrect retirement date, the Court held that the petitioners were entitled to additional gratuity up to the enhanced ceiling.
Finally, the Court issued clear directions. First, the respondents were directed to pay an additional one year’s increment to the petitioners for services rendered in the year preceding their retirement, and to revise their pension accordingly. Second, the respondents were directed to pay petitioner nos. 2 and 3 additional gratuity in terms of the 06.03.2019 notification.
The Court directed that all such payments be made within three months from the date the authorities receive a certified copy of the order, along with admissible interest, if any. With these directions, the writ petition was disposed of.
Why This Judgment Matters
This judgment is important for retired government and university employees in Bihar whose increment date is 1 July and who retired on 30 June.
The Patna High Court has clearly followed the Supreme Court’s ruling that such employees earn the increment for the previous year, even if they retire the day before the uniform increment date. This increment can significantly affect the amount of pension they receive for the rest of their lives.
The judgment also corrects a practical issue around gratuity. It confirms that when a government notification raises the maximum gratuity limit from a certain date, employees retiring after that date cannot be denied the benefit by wrongly treating them as retired earlier.
For teachers and other staff of Magadh University and similar institutions under the State, the ruling means that they can demand correct calculation of pension and gratuity where their retirement and increment dates fall in this pattern and the relevant notification applies.
Legal Issues and Answers
- Issue: Are employees who retire on 30 June entitled to one additional annual increment that falls due on 1 July for the purpose of fixing pension, when they have worked for the full preceding year?
Answer: Yes. Following the Supreme Court’s decision in C.P. Mundinamani, the Patna High Court held that such employees earn the increment for the services rendered in the preceding year and are entitled to have their pension calculated after adding this increment. - Issue: Are employees who retired on 30.06.2017 entitled to the higher gratuity ceiling of Rs. 20 lakhs introduced by the Education Department notification dated 06.03.2019 with effect from 01.04.2017?
Answer: Yes. Since petitioner nos. 2 and 3 retired after 01.04.2017, the Court held that they fall within the class of employees covered by the notification and must be paid additional gratuity up to the enhanced ceiling. - Issue: Can the State refuse these benefits on the ground that the legal issue of notional increment was pending before the Supreme Court or by incorrectly asserting that the petitioners retired before 01.04.2017?
Answer: No. The Court found that the Supreme Court had already settled the increment issue in C.P. Mundinamani, and the State’s objection of pendency no longer survived. The Court also rejected the State’s incorrect factual assertion about the retirement dates.
Cases Cited by the Court
- The Director (Admn. and HR) KPTCL & Ors. vs. C.P. Mundinamani & Ors., Civil Appeal No. 2471 of 2023, Supreme Court of India, decided on 11.04.2023.
- Union of India & Anr. vs. M. Siddaraj, SLP (C) No. 4722 of 2021, Supreme Court of India, disposed of on 19.05.2023 (issue held to be covered by C.P. Mundinamani).
Case Details
Case Number: Civil Writ Jurisdiction Case No. 2496 of 2021
Case Title: Prof. (Dr.) Chandrawati Kumari & Ors. vs. The State of Bihar & Ors.
Citation: 2024 (2) PLJR 447
Court: High Court of Judicature at Patna
Coram: Hon’ble Mr. Justice Nani Tagia
Date of Judgment: 15.04.2024
Advocates:
- For the Petitioners: Mr. Shashi Bhushan Singh, Advocate
- For the State Respondents: Mr. Madhaw Prasad Yadaw, GP-23
- For Magadh University: Md. Faiz Ahmed, Advocate
Nature of the Case: Writ petition (civil) seeking directions for correct computation and payment of retiral dues, including pension and gratuity.
Link to Judgment: Full text of judgment on Patna High Court website
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