Background

Under Central Government rules, annual increment is due on 1st January or 1st July. Employees who retired on 31st December or 30th June, despite completing one full year of qualifying service, were denied the increment because they were not in service on the increment date.

This led to multiple legal challenges culminating in a landmark Supreme Court judgment in Union of India & Anr. vs. M. Siddaraj and others.

⚖️ Legal Framework and Judgments

🟩 Key Case: C.A. No. 2471/2023

Date: 11 April 2023
Issue: Entitlement to notional increment for pension calculation when an employee retires one day before increment accrual.
Ruling: Denial of increment is arbitrary. The increment is earned through service and not merely presence on the increment date.

🟧 Review Petition by Union of India

Dismissed: 18 December 2024
Ground: No error apparent to warrant reconsideration.

🟥 Final Supreme Court Order

Date: 20 February 2025
Disposed: All related petitions including MA No. 2400/2024
Key Directions:

👥 Classification of Pensioners & Benefits

1. ✅ Successful Writ Petitioners (Litigants)

Those who filed and won court cases before the Siddaraj ruling.
Benefit: Full notional increment allowed for pension calculation.
Effective from: Date of their retirement (no cutoff).

Legal Basis: Principle of res judicata (matter already judged).

2. 🟨 Third Parties (Non-litigants)

Did not file any case or application.
Benefit: One notional increment only for pension calculation.
Effective from: 01 May 2023 onwards (no arrears before this date).

Clarified by: DoPT O.M. dated 14.10.2024 and Railway Board Clarification dated 19.02.2025.

3. 🟪 Intervenors / Impleaders (Filed Post-litigation Applications)

Filed intervention, impleadment, or writ in CAT/High Court/Supreme Court.
Benefit: Enhanced pension with notional increment for 3 years prior to the filing month.
Conditions: Application must have been filed before the Siddaraj judgment (i.e. before 11 April 2023).

4. 🟥 Applicants After Siddaraj Judgment (Post-11 April 2023)

Filed writs or applications after Supreme Court judgment.
Benefit: Treated as third party.
Effective date: Only from 01 May 2023 (same as general non-litigants).

📎 Administrative Instructions

● DOP&T OM dated 14.10.2024

Implemented SC’s interim order dated 06.09.2024.
Clarified benefit for different categories of pensioners.

● Railway Board Circular dated 19.02.2025

Clarified that “3rd party” refers to pensioners who are otherwise eligible but have not filed any legal case.

● Final SC Order (20.02.2025) – Key Takeaways:

Benefit only for pension, not for gratuity or leave encashment.
No recovery of arrears already paid.
All pending applications disposed as per final order.

Is Commutation of Pension Beneficial or Not? – A Detailed Analysis for Government Employees

🔍 Summary of Benefits

Category	Eligibility	Benefit	Arrears/Effective Date
Litigants (Winners)	Filed & won case	Full pension with increment	From date of retirement
Intervenors/Impleaders	Filed application pre-April 2023	Pension with increment	3 years prior to application
Non-litigants (3rd Party)	No litigation	Pension with increment	From 01 May 2023 only
Applicants post-SC Judgment	Filed after 11 April 2023	Treated as 3rd Party	From 01 May 2023 only

📝 Final Conclusion

The Supreme Court’s landmark decision has redefined pension justice for retirees who lost out on their rightful increment by a single day. The ruling:

Confirms that notional increment is earned, not merely granted by presence.
Establishes clear benefits for litigants, intervenors, and third parties.
Applies uniformly across Central Civil Services, Railways, and Armed Forces personnel under respective pension rules.

Note: All benefits are limited to pension computation only, not applicable to other pensionary perks.

So, if you are suffering and entitled, retired before 01.01.2023, may file a case in the tribunal. For details – Send your details through WhatsApp to 7980715639