The Madhya Pradesh High Court has affirmed a foundational principle in government service law: the right to an annual increment crystallizes on the last day of service, making it payable from the very next day. This ruling resolves long-standing ambiguity for retired employees and reinforces the non-discretionary nature of earned financial benefits under service rules.
Background & Facts
The Dispute
Mohan Kumar Shukle, a government servant, superannuated from service on 30 June 2023. He claimed entitlement to the annual increment due on 1 July 2023, which the Department of Culture, Government of Madhya Pradesh, refused to grant. The petitioner argued that the increment, earned through a full year of good conduct and efficiency, becomes a vested right upon completion of service and must be paid retroactively.
Procedural History
- 30 June 2023: Petitioner retired after completing requisite service.
- Post-retirement: Request for increment denied by administrative authorities.
- January 2026: Petitioner filed Writ Petition No. 280 of 2026 before the Madhya Pradesh High Court seeking direction for payment of arrears and interest.
Relief Sought
The petitioner sought a writ of mandamus directing the state to grant the annual increment from 1 July 2023, along with arrears and interest for the delay.
The Legal Issue
The central question was whether the right to an annual increment crystallizes on the last day of service, thereby becoming payable from the next day, even if the employee is no longer in service on the effective date.
Arguments Presented
For the Petitioner
Shri Anshul Mundra relied on Director (ADMN) and HR KPTCL v. C.P. Mundinamani (2023 SCC Online SC 401), where the Supreme Court held that an increment earned through a year of good service becomes a vested right upon superannuation and must be paid from the next day. He further cited Union of India v. M. Siddaraj (Civil Appeal No. 3933 of 2023), emphasizing that the increment is not a discretionary benefit but a statutory entitlement.
For the Respondent/State
Shri Sudeep Bhargava, Deputy Advocate General, conceded the existence of Circular No. 15.03.2024 but argued that the petitioner’s delay in approaching the Court barred him from claiming arrears and interest. He contended that the benefit should be granted prospectively only, and that the Supreme Court’s ruling in M. Siddaraj limited retrospective relief to cases filed before the judgment.
The Court's Analysis
The Court examined the Supreme Court’s judgment in Union of India v. M. Siddaraj (20 February 2025), particularly Clause (a), which clarified that for employees retiring on 30 June, the increment shall be granted from 1 May 2023, but no arrears shall be paid for periods prior to 30 April 2023. The Court noted that the petitioner’s case fell squarely within the scope of this ruling.
"The direction in (b) will not apply, where the judgment has not attained finality, and cases where an appeal has been preferred, or if filed, is entertained by the appellate court."
The Court held that the petitioner’s entitlement was not contingent on the timing of his petition but on the crystallization of the increment on the last day of service. The state’s circular of 15 March 2024 confirmed this principle across departments. The Court rejected the state’s argument that delay defeats the substantive right, distinguishing between procedural delay and the accrual of a vested right.
The Court further clarified that while the petitioner was not entitled to arrears before 1 May 2023 under M. Siddaraj, he was entitled to the increment from that date onward, and the state must implement it without further delay.
The Verdict
The petitioner succeeded. The Madhya Pradesh High Court held that the right to an annual increment crystallizes on the last day of service, and the state must grant the benefit from 1 May 2023, as per Union of India v. M. Siddaraj. The Court directed the petitioner to file a representation within 30 days, after which the authority must implement the increment without further litigation.
What This Means For Similar Cases
Crystallization Is Automatic, Not Discretionary
- Practitioners must argue that annual increments are not administrative favors but vested rights under service rules.
- Denial of increment post-retirement on grounds of delay or administrative oversight is legally untenable.
- The date of superannuation, not the date of application, determines entitlement.
Retrospective Relief Is Limited But Defined
- Arrears cannot be claimed for periods before 1 May 2023 for employees retiring on 30 June, per M. Siddaraj.
- However, the increment must be applied from 1 May 2023 onward, even if the petition was filed later.
- This creates a clear, predictable window for claims: increment from 1 May 2023, no arrears before that.
Procedural Compliance Is Mandatory
- Government departments must act on circulars like the one dated 15 March 2024 without waiting for court orders.
- Petitioners should file representations first, as directed by the Court, to preserve rights and avoid procedural dismissal.
- Failure to implement the increment after representation triggers a fresh writ petition with stronger grounds.
