🔍 Notional Increment for Whom ?
The concept of Notional Increment has been a subject of legal scrutiny and debate in India, especially concerning its implications on pensionary benefits. While the Central Government has resisted granting this increment post-retirement, several High Courts and the Supreme Court have made landmark rulings favoring retirees.
📚 What is a Notional Increment?
A notional increment refers to an assumed salary increase that a government employee would have received had they continued in service. This increment, though not financially disbursed, is crucial for calculating retirement benefits such as pension and gratuity.
🧑⚖️ Key Legal Judgments
1. Supreme Court Judgment – P.Ayyamperumal v. UOI (2019)
- Facts: Ayyamperumal retired on 30th June, a day before the increment day (1st July).
- Claim: He had completed one full year of service and deserved the increment.
- Ruling: Supreme Court held that he was entitled to a notional increment for pension purposes, as he had rendered a full year of service.
- Impact: Became a reference point for similar petitions across India.
2. Madras High Court – G.Shanmugam & Others v. UOI
- Ruled in favor of granting notional increment for pensioners retiring on 30th June.
- Cited the Ayyamperumal judgment as precedent.
3. Delhi High Court – Gopal Singh v. UOI (2022)
- Supported the view that retirees completing 12 months of service should be entitled to notional increment, despite retirement before the official increment date.
The Government of India has consistently:
- Denied the notional increment on the ground that no employee can claim salary for a day not worked.
- Filed Special Leave Petitions (SLPs) against favorable High Court orders.
- Argued that the Ayyamperumal ruling was case-specific and not applicable universally.
⚖️ Supreme Court Clarification – Nagarajan Case (2023)
In a crucial 2023 ruling:
- The Supreme Court clarified that pensionary benefits must consider service rendered, not just calendar dates.
- Directed DoPT and MoF to re-examine their policy considering earlier rulings.
✅ Key Takeaways
| Point | Explanation |
|---|---|
| 🎯 Eligibility | Employees retiring a day before the increment date (e.g., 30 June or 31 December) after completing 12 months of service. |
| ⚖️ Legal Support | Courts generally support pension calculations using notional increment. |
| 📄 Administrative Conflict | Government continues to resist, citing administrative and legal limitations. |
📝 Conclusion
The issue of Notional Increment continues to evolve. While courts favor pensioners based on service completion, the Government maintains its strict interpretation. Pensioners affected by this issue are advised to:
- File representations based on favorable rulings.
- Seek legal advice or support from pensioners’ associations.
- Keep an eye on further Supreme Court rulings or government circulars for clarity.