New Delhi: The Supreme Court has held that daily-wage skilled workers of the Gujarat Irrigation Department, who were treated as permanent employees under a Government Resolution of 17.10.1988, are entitled to the annual increment that fell due on the day after their retirement, and to pension computed with it. The court set aside the Division Bench of the Gujarat High Court, which had denied the benefit only because the employees were daily wagers.
A Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva was hearing an appeal by Chhaganbhai Kohyabhai Pateliya and 11 others against the oral order dated 09.01.2025 of the Division Bench, which allowed the State's Letters Patent Appeal (LPA No. 100 of 2025). The judgment was authored by Justice Kumar.
The appellants had retired on 30 June of various years and were denied the increment due on 1 July. By order dated 26.09.2023, a Single Judge accepted their claim, holding the issue no longer res integra in view of the Supreme Court's decision in Director (Administration and Human Resources), KPTCL v. C.P. Mundinamani, (2023) 14 SCC 411, decided on 11.04.2023. The Single Judge also directed payment of arrears, relying on Pravinbhai Khemabhai Patel v. State of Gujarat, where a Co-ordinate Bench had granted benefits with arrears and a Division Bench had confirmed it on 07.08.2023. Because the Single Judge was dealing with a batch of cases, the petitioners were directed to apply, the authorities were to verify details, revise pension and pay arrears within a timeframe, failing which interest at 6%would run.
Before the Division Bench, the State raised a new ground: that the respondents were daily wagers and could not claim the benefit of Mundinamani. The Division Bench accepted this plea and quashed the Single Judge's order. The Supreme Court described this as a ground urged "strangely" at the appellate stage.
The court noted it was admitted that all the appellants served in the Irrigation Department for over 30 years. Under the Government Resolution dated 17.10.1988, daily-wage skilled workers who had completed ten years of service as on 01.10.1988 were to be considered permanent, kept in the running pay scale with allowances, and made entitled to retiral benefits, gratuity and provident fund. Their superannuation age was fixed at 60 years and their permanent service was to be treated as pensionable. The Additional Solicitor General did not dispute that the petitioners fell in this category.
The Bench therefore held that, since the workers were treated as permanent for pay scale, allowances, pension and retirement benefits, the contention that they were not entitled to the increment only because they were daily wagers cannot be countenanced. It said the argument had been made ignoring the Resolution and the benefits flowing from it, and that the plea that Mundinamani did not apply was also without merit.
The court then recorded how the law has been shaped since. Mundinamani was applied in Union of India v. M. Siddaraj (Civil Appeal No. 3933 of 2023, decided on 19.05.2023). Following miscellaneous applications, an interim order of 06.09.2024 was made final in part on 20.02.2025. Under it, the judgment takes effect for third parties only from its date, so enhanced pension is payable from 01.05.2023, while for persons who had filed writ petitions and succeeded, the directions operate as res judicata. Clause (d) was modified to provide that where a retired employee had filed a writ petition or application, enhanced pension including one increment is payable for the period of three years prior to the month of filing.
As the appellants filed their writ petition in 2022, the Bench held that they are covered by modified clause (d). It extended the benefit to the other petitioners in Special Civil Application No. 20921 of 2022 who had not joined the appeal and were impleaded as proforma respondent Nos. 5 to 11. On interest, it noted that none was granted in the 20.02.2025 order and that the Court had later held in Madhya Pradesh Purv Kshetra Vidyut Vitran Company Ltd. v. Vidyut Mandal Pension Samaj (C.A. 15097 of 2025, decided on 19.12.2025) that no interest is payable on such arrears. It added, however, that authorities must abide by time stipulations, and failure to do so entails interest from the date of default.
Declining to examine each individual case, the Bench left it to the authorities to examine the retirement date of each appellant and proforma respondent, work out the amounts under modified clause (d) and release the amounts within 30 days, failing which interest at 6% per annum will be payable thereafter until payment. The appeal was allowed, pending applications were disposed of, and the parties were left to bear their own costs.
Case Title: Chhaganbhai Kohyabhai Pateliya & Ors. vs. The State of Gujarat & Ors., Civil Appeal arising out of SLP (C) No. 26129 of 2025 [2026 INSC 1088]
