Indian Railways Clarifies Notional Increment Policy for Retired Employees

 Indian Railways Clarifies Notional Increment Policy for Retired Employees

Grant of notional increment (as due on 1st July/1st January) for the pensionary benefits to those employees who had retired on 30th of June/ 31st  of December before drawing the same — Clarification by Railway Board dated 07.10.2024 based on Supreme Court Interim Order dated 06.09.2024

MOST URGENT
COURT CASE

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
(RAILWAY BOARD)

No. PC-VI/2020/CC/13

New Delhi, dated: 07.10.2024

The General Managers/ Principal Financial Advisors,
All Zonal Railways & Production Units

Sub: Grant of notional increment (as due on 1st July/1st January) for the pensionary benefits to those employees who had retired on 30th of June/ 31st  of December before drawing the same — Clarification reg.

Ref: Board’s letter No. PC-VI/2023/Misc./03-Vol.II dated 27.08.2024.

Attention is invited to Board’s letter under reference (copy enclosed) whereby all Zonal Railways/PUs were advised the further course of action to be adopted in various cases related to grant of benefit of notional increment.

2. In continuation to above, it is further stated that the clarificatory petition filed by this Ministry before Hon’ble Supreme Court vide Dy. No. 2400/2024 (Union of India & Ors Vs M. Siddaraj) seeking clarification on their judgement dated 19.05.2024 pronounced in SLP (C) No. 4722/2021 was taken up for hearing by the Hon’ble Apex Court on 06.09.2024 wherein the Hon’ble Court had made certain important observations and directed as under (copy enclosed):

“To prevent any further litigation and confusion, by of an interim order we direct that: 

(a) The judgment dated 11.04.2023 will be given effect to in case of third parties from the date of the judgment, that is, the pension by taking into account one increment will be payable on and after 01.05.2023. Enhanced pension for the period prior to 31.04.2023. will not be paid. 

(b) For persons who have filed writ petitions and succeeded, the directions given in the said judgment will operate as res judicata, and accordingly, an enhanced pension by taking one increment would have to be paid. 

(c) 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. 

(d) In case any retired employee has filed any application for intervention/impleadment in Civil Appeal No. 3933/2023 or any other writ petition and a beneficial order has been passed, the enhanced pension by including one increment will be payable from the month in which the application for intervention/impleadment was filed. 

This interim order will continue till further orders of this Court. However, no person who has already received an enhanced pension including arrears, will be affected by we the directions in (a), (c) and (d).”

3, The aforesaid orders are being examined by the nodal Ministry ic. DOP&T in consultation with the concerned Ministries such as Deptt. of Expenditure, Ministry of Law etc and a policy/ clarification is yet to be issued. Once a policy / clarification is issued by the nodal Ministry, the same will be adopted by Ministry of Railways also.

4. Till such time, policy directions are issued by the nodal Ministry, keeping in view the important developments as explained above, all Zonal Railways/PUs are hereby advised that in fresh O.As/W.Ps filed on the issue of grant of benefit of notional increment and in cases which have been recently decided allowing the benefit of notional increment; a Misc. Application/ revised affidavit may be filed before the concerned Hon’ble Court/ Tribunal with a prayer as under:

4.1. Scenario — 1: In cases where fresh O.As have been filed.

(a) In such cases, a detailed affidavit may be filed before Hon’ble Tribunals/Courts . bringing the interim order dated 06.09.2024 pronounced by Hon’ble Supreme Court to their notice, stating that the issue of notional increment has not yet attained finality and the matter is still pending with Hon’ble Apex Court for adjudication. As such, the Hon’ble Tribunal/ Court may be requested to defer further proceedings in the case till the matter is finally adjudicated by the Hon’ble Apex Court.

(b) In case even after filing of the detailed affidavit, the Hon’ble Tribunal/ Court doesn’t defer/ adjourn the case proceedings and allows the O.A./ W.P. granting the benefit to the petitioner(s); the said order may be challenged before the higher judicial forum only if the same is in contravention to the directions issued by the Hon’ble Supreme Court vide order dated 06.09.2024. If not, further necessary action may be taken in terms of the directions contained in Hon’ble Apex Court’s order dated 06.09.2024.

 4.2. Scenario—2: In cases where the O.As have been allowed by granting the benefit – to the petitioner(s) irrespective of the fact whether any Contempt Petition has been filed or not. 

(a) In such cases, a Review Petition may be filed before the Hon’ble Tribunal/ Court stating that Hon’ble Apex Court vide their detailed order dated 06.09.2024 has issued various guidelines/ clarifications regarding the modalities to be adopted while implementing their order dated 11.04.2023 pronounced in CA No. 2471/2023 {The Director (Admn. And HR) KPTCL & Ors V C. P. Mundinamani & Ors}.

(b) The respective Tribunal/ Court may be apprised that the Hon’ble Apex Court vide their aforesaid order dated 06.09.2024 has specifically mentioned the cut-off date i.e. 01.05.2023 for applicability of their order dated 11.04.2023. As such, the benefit of notional increment can only be granted w.e.f. 01.05.2023 and not from a date prior to 01.05.2023, barring those cases which have already been decided/ settled prior to the date of interim order i.e. 06.09.2024.

(c) Considering the fact that the issue of notional increment is still pending before Hon’ble Supreme Court for final adjudication; Hon’ble Court/Tribunal may be requested to modify the orders to grant the benefit of notional increment w.e.f. 01.05.2023 and not from the 01st of July of the retirement year of the petitioner(s) and the implementation of orders may also be deferred till a final decision is pronounced by the Hon’ble Apex Court.

(d) In case, the Hon’ble Court/Tribunal still dismisses the Review Petition without revising/modifying their earlier order, then, the same may be challenged before the higher judicial forum only if the said order is in contravention to the directions issued by the Hon’ble Supreme Court vide order dated 06.09.2024. If not, further necessary action may be taken in terms of the directions contained in Hon’ble Apex Court’s order

In this regard, a revised affidavit is attached herewith for finalizing the same and filing ‘before the concerned Tribunal/ Court in consultation with the contesting Railway Counsel. This may kindly be accorded Top Priority. Action taken in the matter may also be apprised to this office.

DA: As above

(Sundeep Pal)
Executive Director, Pay Commission
Railway Board
Tel. No. 011-47845117
Email add: sundeep.p[at]gov.in

Supreme Court Interim Order

ITEM NO.23 COURT NO.2 SECTION IV-A
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
MISCELLANEOUS APPLICATION Diary No. 2400/2024
IN
SPECIAL LEAVE PETITION (C) NO. 4722/2021

UNION OF INDIA & ANR.

Petitioner(s)

VERSUS

M. SIDDARAJ

Respondent(s)

(IA No. 11504/2024 – CLARIFICATION/DIRECTION
IA No. 11514/2024 – CONDONATION OF DELAY IN FILING
IA No. 152780/2024 – EXEMPTION FROM FILING O.T.
IA No. 138880/2024 – EXEMPTION FROM FILING O.T.
IA No. 156900/2024 – INTERVENTION APPLICATION
IA No. 172293/2024 – INTERVENTION/IMPLEADMENT
IA No. 155003/2024 – INTERVENTION/IMPLEADMENT )

WITH

Diary No(s). 26733/2023 (IV-A)
(IA No. 126464/2023 – APPROPRIATE ORDERS/DIRECTIONS )
Diary No(s). 38437/2023 (IV-A)
Diary No(s). 38438/2023 (IV-A)
Diary No(s). 11336/2024 (IV-A)
Diary No(s). 20636/2024 (IV-A)
Date : 06-09-2024 These matters were called on for hearing today.

CORAM :

HON’BLE MR. JUSTICE SANJIV KHANNA
HON’BLE MR. JUSTICE SANJAY KUMAR

For Petitioner(s)

Mr. Rajat Joseph, AOR
Ms. Shirin Khajuria, Sr. Adv.
Ms. Ranu Purohit, AOR
Ms. Swati Tiwari, Adv.
Ms. Niharika Singh, Adv.
Mr. Gopal Singh, Adv.
Mr. K R Anand, Adv.
Mr. Kumar Mihir, AOR
Mr. Shreekant Neelappa Terdal, AOR
Mr. R Venkataramani, A G for India(N/P)
Mr. Vikramjit Banerjee, A.S.G.
Mr. Amit Sharma B, Adv.
Mr. Chitvan Singhal, Adv.
Mr. Abhishek Kumar Pandey, Adv.
Mr. Raman Yadav, Adv.
Mr. Nachiketa Joshi, Adv.
Mr. Amrish Kumar, AOR

For Respondent(s)

M/s. Nuli & Nuli, AOR
Mr. Lather Mukul Kanwar Singh, AOR
Mr. Devesh Kumar Chauvia, Adv.
Mr. Ashish Kumar Singh, Adv.
Mrs. Pratibha Singh, Adv.
Ms. Shirin Khajuria, Sr. Adv.
Ms. Ranu Purohit, AOR
Ms. Niharika Singh, Adv.
Ms. Swati Tiwari, Adv.
Mr. Rameshwar Prasad Goyal, AOR
Mr. Anubhav, Adv.
Mr. Yashwant Singh Yadav, Adv.
Mr. Vijay Pal, Adv.
Mr. Arvind, Adv.
Mr. Ravi Karahana, Adv.
Mr. Shivkumar Raghunath Golwalkar, Adv.
Applicant-in-person, AOR
Ms. Geeta Luthra, Sr. Adv.
Ms. Vidya Sagar, Adv.
Mr. Amolak, Adv.
Ms. Ishita Agrawal, Adv., Adv.
Mr. R. C. Kaushik, AOR
Mr. Venkita Subramoniam T.r, AOR
Mr. Rahat Bansal, Adv.
Mr. Varun Mudgal, Adv.
Mr. Rajat Joseph, AOR

UPON hearing the counsel, the Court made the following
ORDER

It is stated that the Review Petition in Diary No. 36418/2024 filed by the Union of India is pending.

The issue raised in the- present applications’ requires consideration, insofar as the date of applicability of the judgment dated 11.04.2023 in Civil Appeal No. 2471/2023, titled “Director (Admn. and HR) KPTCL and Others v. C.P. Mundinamani and Others”, to third parties is concerned.

We are informed that a large number of fresh writ petitions have been filed.

To prevent any further litigation and confusion, by of an interim order we direct that:

(a) The judgment dated 11.04.2023 will be given effect to in case of third parties from the date of the judgment, that is, the pension by taking into account one increment will be payable on and after 01.05.2023. Enhanced pension for the period prior to 31.04.2023 will not be paid.

(b) For persons who have filed writ petitions and succeeded, the directions given in the said judgment will operate as res judicata, and accordingly, an enhanced pension by taking one increment would have to be paid.

(c) 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.

(d) In case any retired employee has filed any application for intervention/impleadment in Civil Appeal No. 3933/2023 or any other writ petition and a beneficial order has been passed, the enhanced pension by including one increment will be payable from the month in which the application for intervention/impleadment was filed.

This interim order will continue till further orders of this Court. However, no person who has already received an enhanced pension including arrears, will be affected by the directions in (a), (c) and (d).

Re-list in the week commencing 04.11.2024.

(BABITA PANDEY )
COURT MASTER (SH)

(R.S. NARAYANAN)
ASSISTANT REGISTRAR

In a recent urgent communication, the Railway Board has issued clarification on the grant of notional increment for pensionary benefits to employees who retired on June 30 or December 31 before receiving their increment. This clarification follows a recent Supreme Court directive concerning multiple cases filed by retirees regarding notional increment benefits.

Key Highlights

Background on the Clarification

The clarification addresses the Railway Board’s letter (No. PC-VI/2023/Misc./03-Vol.II) dated August 27, 2024, which provided preliminary guidance on handling cases related to notional increments. Following this, the Ministry of Railways has sought further direction in light of a recent Supreme Court hearing on September 6, 2024, which tackled the complex issue of notional increments for pension calculation.

Supreme Court’s Interim Directions

The Supreme Court, in its interim order, made important observations to prevent future litigation and issued directives regarding the treatment of cases related to notional increments. These are the key directives:

1. Applicability of Judgment:
   • The April 11, 2023 judgment is effective from May 1, 2023, meaning that any enhanced pension benefits based on a notional increment apply only to retirees from this date forward.
2. Handling of Successful Petitions:
   • For retirees who won their cases, the Court stated that the enhanced pension, based on one increment, must be paid as per the earlier judgment, provided the case was resolved in favor of the petitioner.
3. Exclusions:
   • The directions from the April judgment do not apply to cases still under appeal or where the final decision is pending.
4. Pending Applications:
   • If any retirees have applications pending, they will only be eligible for enhanced pension benefits in the month of the application, and not retrospectively.

These directions are intended to standardize the approach for handling pension calculations involving notional increments, which has been a contentious issue.

Ministry Review and Next Steps

The nodal Ministry is currently reviewing these directives in consultation with the Department of Personnel and Training (DoP&T), Ministry of Law, and Ministry of Finance. The Ministry of Railways will adopt the guidelines once a policy clarification is issued by the nodal Ministry.

Until a final policy is established, the Railway Board has advised all Zonal Railways and Production Units to adhere to the following procedures:

Scenario 1: New Petitions

• In cases with new petitions, affidavits must be filed to highlight that the issue of notional increments is under review. Petitioners are advised to await final decisions before taking further action.

Scenario 2: Approved Benefits for Petitioners

• For cases where notional increment benefits were approved, review petitions may be filed to ensure compliance with the Supreme Court’s directive.

The Executive Director of the Pay Commission, Mr. Sundeep Pal, stressed the importance of complying with these guidelines, stating that “this matter is of top priority,” and has advised Zonal Railways to act accordingly.