In a significant judgment, the Supreme Court has held that government employees cannot be denied the annual increment merely because they are to retire on the very next day of earning the increment.
A bench comprising Justices M R Shah and C T Ravikumar was deciding the issue raised by the Karnataka Power Transmission Corporation "whether an employee is entitled to the annual increment just a day before retirement.
In this case, the Karnataka Power Transmission Corporation Ltd (KPTCL) denied annual increments to employees on the ground that they have retired the next day.
The bench dealt in detail with the Regulation 40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997 and analysed the object and purpose of grant of annual increment.
Senior Advocate Huzefa Ahmadi, appearing for the appellant, argued that increment is in the form of an "incentive" to encourage the employee to perform well the next year and no purpose of increment if he is no longer in service.
Court rejects appellants' argument
The court rejected the argument, holding that the increment is a benefit earned by the employee on account of his service in the preceding year and the same can be denied only as a penalty after a duly held disciplinary inquiry.
The bench categorically rejected the argument that an increment is a form of "incentive" as this will not apply if an employee earns the increment three days before the due retirement.
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