Holding

A person is not entitled to a retrospective pay revision unless the recommendation is accepted and brought into force by the employer; consequently, the appellant’s claim fails.

Issues considered

Whether a person who has resigned from service is entitled to the benefit of a pay revision with retrospective effect.
Whether the Office Memorandum dated 19 July 1995 was brought into force in Kerala and thus capable of conferring any benefit on a former employee.
Whether a legal right to a revised pay scale exists independent of the State’s acceptance of the recommendation.

Subjects

pay revisionretrospective effectresignationservice lawpolicy decisionOffice Memorandumentitlementlegal rightpublic sector undertakingKerala

Judgment

[2008] 15 S.C.R. 694

A CHANDRASHEKAR A.K.
v.
STATE OF KERALA & ANR.
(Civil Appeal No. 6573 of 2008)

NOVEMBER 7, 2008
B
[S.B .. SINHA AND CYRIAC JOSEPH, JJ.]

Service Law - Pay revision with retrospective effect - ,..
Entitlement to, after resignation from service - Representation
c claiming the benefit - Denial of by authorities concerned on
the ground that the same had not come into force - Courts
below denying the benefit on the ground that on the date of
issuance of Notification revising the pay, the employee was
not in service - On appeal, held: Since the recommendation
D for revision of pay was not accepted by the employer,
entitlement to the benefit not made out - Revision of Pay
Scale is a matter of policy decision for the State .:... No legal 1-.
right exists in a person to get a revised pay scale.

Appellant-employee of respondent No. 2 (an
E
undertaking of respondent No. 1) resigned from services
on 23.5.1995. Government of India, subsequently issued
an Office Memorandum (OM) dated 19.7.1995 revising the
pay scales w.e.f. 1.1.1992. Appellant made two
representations dated 1.1.1996 and 14.2.1996 which were ~
F ~
turned down by the authorities concerned by letters
dated 3.1.1996 and 30.7.1996 respectively, on the ground
that the OM has not come into force in the State.

Appellant filed writ petition. Single Judge of High
G Court held that the appellant was not entitled to the pay
revision because he was not in service on the date when
the OM was issued. In intra-court appeal, Division Bench
of High Court confirmed the order of Single Judge. Hence )>......
the present appeal.
H 694
CHANDRASHEKAR AK. v. STATE OF KERALA & ANR. 695

Dismissing the appeal, the Court A
,A,
HELD:1. In view of the merit of the matter in its
entirety, no case has been made out for interference with
the impugned judgment. In the instant case, there is
nothing on record to show that the Office Memorandum
B
was brought into force. It may be true that the contention
of the State that the Notification has been given effect to
on and from 1.04.1997 was not the premise on which the
High Court dismissed the writ petition, but, there cannot
---I
be any doubt whatsoever that the Notification revising the
scale of pay must be brought into force. Unless the c
Notification is given effect to, the question of deriving any
legal benefit in terms thereof by a former employee of
,-
respondent No. 2 did not and could not arise. [Paras 13
and 19] [701-H; 702-A, B]
D
2. The Central Government as also the State
. . . r- Government categorically stated that the Notification had
not come into force on the dates on which the
representations of the appellant dated 1.01.1996 and
14.02.1996 were rejected by them in terms of their letters E
dated 31.01.1996 and 30.07.1996, respectively. In this view
of the matter, it cannot be said that the benefit of
recommendation of his pay revision committed stood
implemented on the day on which appellant resigned.
[Para 14] [702-C, D] F
~
~
State of Tamil Nadu v. Seshachalam 2007 (11) SCALE
239, referred to.

3. The question as to whether the scale of pay would
be revised or not is a matter of policy decision for the G
State. No legal right exists in a person to get a revised
scale of pay implemented. It may be recommended by a
body but ultimately it has to be accepted by the employer
_,.,..i..
or by the State,. who has to bear the financial burden.
[Para 16] [703-H; 704-A] H
696 SUPREME COURT REPORTS [2008] 15 S.C.R.

A HEC Voluntary Retd. Employees Welfare Society and
Another v. Heavy Engineering Corpn. Ltd. and Ors. 2006 (3) -~.
sec 708,. ~elied on ..
I
....
Life Insurance Corporation of India and Others v. Retired
B
LIC Officers Associatfon ~nd Ors. 2008 (3) ~cc 321 and UCO
Bank and Ors. v. Sanwar Mal 2004 (4)SCC 412, referred to.

Case· Law Reference:
•
r

2007 (11) SCALE 239 Referred to. Para 15 ,....
c 2006 (3) sec 708 Relied on. Para 17
2008 (3) sec 321 Referred to. Para 17
~
2004 (4) sec 412 Referred to. Para 18
}=
D CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6573 of 2008.
'f,.
From the final Judgment and Order dated 11.1.2006 of the
High Court of Kerala at Ernakulam in Writ Appeal No. 2004 of ~

F
2005(A).
E
K. Vishwanathan and Nikilesh Ramachandran for the
Appellant.

A Raghunath and G. Prakash for the Respondents.
F The Judgment of the Court was delivered by
•
S.B. SINHA, J. 1. Leave granted.

2. Whether a person who has resigned from service is
G entitled to the benefit of revision of scale of pay with
retrospective effect is the question involved in this appeal which
arises out of a judgment and order dated 11.01.2006 passed ·
by the Division Bench of the Kerala High Court in Writ Appeal
No: 2004 of2005:

H 3. Appellant herein was employed as Director (Finance)
CHANDRASHEKAR AK. v. STATE OF KERALA & ANR. 697
[S.S. SINHA, J.]

in the respondent No. 2 company which is an undertaking of A
respondent No. 1. He was a full time employee. He resigned
from services on 23.05.1995.

4. The Government of India subsequently issued an office
memorandum (OM) dated 19.07 .1995 whereby and
8
whereunder the scales of pay for the top posts, i.e., 'executives
holding board level posts' were revised with .effect ,from
1.01.1992. We are concerned herein with Schedule 'C' posts
in respect whereof existing scale of pay of Rs. 7500-200-8500
was revised to Rs. 10000-400-12000.
c
Para 8 of the said OM dated 19.07 .1995, which is material
for our purpose, reads as under:

"8. The administrative Ministries are requested to fix the
pay of the incumbents of the Board level posts who were 0
in employment in their enterprises as on 1.1.92 in the
.,.'r manner indicated above and forward their files to the OPE
for vetting as required under the existing instructions
contained in BPE's DO letter No. 1/1 /89-BPE (S&A) Cell
dated 14.2.89 and DOPT's OM No. 27(14)/C0/89(ACC) E
dated 6.12.89, and as per procedure indicated in
Annexure -IV."

5. On or about 1.01.1996, appellant made a
representation requesting payment of arrears of pay revision
.. inter alia on the ground that he, having been in service on F
1.01.1992, was entitled to the benefit of the said OM dated
19.07.1995. The said prayer was rejected by respondent by
an order dated 31.01.1996, stating:

"This has reference to your letter dated 1.1.96 requesting G
for making the pay revision w.e.f. 1.1.92 applicable to you
while you were in the service of the Corporation. Please
note that the Office Memorandum dated 19.7.95 issued
by the Secretary to Government of India directing the
revision of scales of pay of Scheduled posts w.e.f. 1.1.92 H
698 SUPREME COURT REPORTS [2008] 15 S.C.R.

A specifically contains a clause that all the Administrative
~:'
.Ministries/ Departments are required to issue presidential .

directives to the concerned ·Public Sector Enterpris~s
under its administrative control to give effect to the said
·revision. Please note that the Industries Department of the
B BPE of Kerala State Government has not issued any
specific directive to the Public Sector Undertakings in
.
t

Kerala for making the above revision effective. Hence, we
are unable·to consider your request."

6. Appellant made .another representation before
C respondent No. 1on14.02.1996 which has been turned down
by the Government of Kera la by a letter dated 30.07 .1996,
stating:
"I
"I am to invite your attention to the letter cited and to inform f
I
D that the State Government have not yet adopted the revised
I
Central BPE schedules in respect of SLPES. As such, ~
Government regrets their inability to concede to your Y-.
request." .

7. Appellant filed a writ petition upon serving a legal notice
E
on the respondents.

By reason of a judgment and order dated 23.03.2005, a
leamed Single Judge of the said High Court dismissed the said
writ petition stating that as appellant was not in service when
F the said OM dated 19.07.1995 was issued, he was not entitled
to any relief.

An Intra-court appeal preferred thereagainst has been
dismissed by a Division Bench of the said Court by reason of
G the impugned judgment, directing:

"2. There was no response, and the original petition had
come to be filed. The matter had been looked into by the
lea~ned Judge and he found no reasons to encourage the ~.
application as according to him, it suffers from laches and '
H it is not as if settled rights automatically are there in favour
•

CHANDRASHEKAR A.K. v. STATE OF KERALA & ANR. 699
[S.B. SINHA, J.]

of the appellant. We find no error in the reasoning so as A
to interfere with the findings as above."

8. Mr. K. Vishwanathan, learned counsel appearing on
behalf of the appellant, submitted that the High. Court comr_nitted
a serious error in passing the impugned judgment insofar as it 8
failed to take into consideration that in view of the lang·uage
used in the OM dated 19.07.1995, the revised scare of pay
stood incorporated with effect from 1.01.1992 and as appellant
was in service on that day, there was no reason as to why the
benefit of the revised scale of pay should be denied to him. In ! C
any event, the OM dated 19.07.1995 does not contain any
clause in terms whereof the claim of appellant stands excluded.

9. Mr. A Raghunath, learned counsel appearing on behalf
of respondent No. 2 and Mr. G. Prakash, learned counsel
appearing on behalf of respondent No. 1, on the other hand, D
urged that as the State had adopted the aforementioned OM
dated 19.07.1995 only with effect from 1.04.1997, the said OM
is not applicable in the case of appellant. In any event, appellant
having resigned from the service, was not entitled to the benefit
thereof. E
10. Appellant was not in a pensionable service. He
resigned voluntarily. The reason for tendering resignation by him
is not known.

11. Whether appellant after submitting his resignation had F
been working in the better scale of pay is also not known.

12. Ordinarily, a person retiring from service on
pensionable post would obtain the benefit of the revision in the
scale of pay. This was so held in U.P. Raghavendra Acharya G
and Ors. v. State of Karnataka and Ors. (2006) 9 SCC 630] I .

wherein this Court opined:

.r4 "19. The fact that the appellants herein were treated to be
at par with the holders of similar posts in Government
H
700 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Colleges is neither denied nor disputed. The appellants
indisputably are governed by the UGC scales of pay. They
are entitled to the pensionary benefits also. They had been
.. given the b'e"riefits of the revision of scales of pay by 10th
. · P~y Revi~ioh Committee w.e.f. 1.1.1986. The pensionary
B . benefits payable to them on attaining the age of
superannuation or death were also stated to be at par with
the employees of the State Government. The State of
Karnataka, as noticed hereinbefore, for all intent and
purport, has treated the teachers of the Government Aided
c Colleges and the Regional Engineering Colleges on the
one hand and the teachers of the colleges run by the State
itself on the other hand at par. Even the financial rules were
made applicable to them in terms of the notifications,
applying the rule of incorporation by reference. Although
Rule 296 of the Rules per se may not be applicable so far
D
as the appellants are concerned, it now stands admitted
that the provisions thereof have been applied to the case
of the appellants also for the purpose of computation of
pensionary benefits ... "

E The services of the appellant being not a pensionable one,
in our opinion, U.P. Raghavendra Acharya (supra) has no
application to the fact of the present case. In that case, the
amount of pension was to be calculated. On what basis, the
same was required to be done was considered in the following
F terms: .
"22. The State while implementing the new scheme for
·payment of grant of pensionary benefits to its employees,
may deny the same to a class of retired employees who
were governed by a different set of rules. The extension
G
of the benefits can also be denied to a class of employees
if the same is permissible in law. The case of the
appellants, however, stands absolutely on a different
footing'. They had been enjoying the benefit of the revised
scales of pay. Recommendations have been made by the
H
I
'
CHANDRASHEKAR A.K. v. STATE OF KERALA & ANR. 701
[S.B. SINHA, J.]
Central Government as also the University Grant A
.... . """' Commission to the State of Karnataka to extend the
benefits of the Pay Revision Committee in their favour. The
pay in their case had been revised in 1986 whereas the
pay of the employees of the State of Karnataka was
revised in 1993. The benefits of the recommendations of B
the Pay Revision Committee w.e.f. 1.1.1996, thus could not
have been denied to the appellants.

23. The stand of the State of Karnataka that the pensionary
-'"" benefits had been conferred on the appellants w.e.(
1.4.1998 on the premise that the benefit of the revision of
c
scales of pay to its own employees had been conferred
from 1.1.1998, in our opinion, is wholly misconceived.
Firstly, because the employees of the State of Karnataka
and the appellants, in the matter of grant of benefit of
revised scales of pay, do not stand on the same footing D
as revised scales of pay had been made applicable to
,.-y their cases from a different date. Secondly, the appellants
had been given the benefit of the revised scales of pay
w.e.f. 1.1.1996. It is now well settled that a notification can
be issued by the State accepting the recommendations of E
the Pay Revision Committee with retrospective effect as
it was beneficent to the employees. Once such a
retrospective effect is given to the recommendations of the
Pay Revision Committee, the concerned employees
t- despite their reaching the age of superannuation in F
·~
between the said dates and/or the date of issuance of the
notification would be deemed to be getting the said scal~s
of pay as on 1.1.1996. By reason of such notification as
the appellants had been derived of a vested right, they
could not have been deprived therefrom and that too by G
reason of executive instructions."

13. In the instant case, there is nothing on record to show
I _,._.4. that the said Office Memorandum was brought into force. It may
be true that the contention of the State that the notification has
H
'°'
.. .
702 SUPREME COURT REPORTS [2008] 15 S.C.R.

A been gi.ven effect to on and from 1.04.1997 was not the
premise on which the High Court dismissed the writ petition,
-,but, there cannot be any doubt whatsoever that the notification
·r~~ising the scale of pay 'must be brought into force. Unless the
notificatiohis given effect to, the question of deriv!ng any legal
B be11efit in terms thereof by a former employee of respondent
No. 2 did not and could not arise.

14. We have noticed hereinbefore that both the Central
Government as als~ the State cif Kerala categorically stated that -,.-- :

., the notification had riot come into fore~ on the dates on which
C the representations of the appellant dated 1.01.1996 and
14.02.1996 were rejected by them in terms of their letters dated
31.01.1996 and 30.07.1996, respectively. In this view of the
matter, it is difficult to agree with the contention of the learned
counsel for appellant that. the benefit of recommendation of his
D pay revision committed stood implemented on the day on which
~ppellant resigned.

15. This aspect of the matter has also been considered
in State of Tamil Nadu v. Seshachalam, [2007 (11) SCALE
E 239], stating:
~

"10. It is one thing to say that the State had come up with
a policy decision which is beneficial to all the employees
. irrespective of the fact as to whether they had reached the
age of superannuation or not, the only criteria being that
F they were recruited to the Tamil Nadu Secretariat Service
on or before 28.1.1994 but it is another thing to say that
the claim petitions filed by the responders were based on
the success of their colleagues before the Administrative
Tribunal in the year 1994. The employees working in the
G Finance Department had been promoted long back. We
have noticed hereinbefore that some of them retired as
Additional Secretaries whereas the respondents retired as
merely Assistants. Presumably, promotions to the
employees of the Finance Department were given
H systematically over a long period of time but no such
'

.
ll' _....
CHANDRASHEKAR A.K. v. STATE OF KERALA & ANR.
[S.B. SINHA, J.]

grievance was made nor any application was filed before
the appropriate forum. Such grievance, in our opinion,
703

A

should have been raised or proper application before the
' Tribunal should have been filed long long back. It was in
the aforementioned situation, the Tribunal was of the
opinion that their applications were barred by limitation. B
Assuming that the cause of action for filing such
applications arose in view of the observations made by the
Tribunal in its order dated 16.4.1993 passed in Original
Application No. 166of1990, but then in terms of the Act
'""' and the Rules, the respondents were required to file a 0
proper application within a period of one year only. It is
borne out from the records that, in fact, 62 such
applications were already pending when GOMs No. 126
was issued."

Therein U.P. Raghavendra Acharya (supra) was distinguished, D
;--Y stating:

"20. Reference has also been made by Mr. Venkataramani
to a decision of this Court in U.P. Raghavendra Acharya
and Ors. v. State of Karnataka and Ors. 2006 (6) SCALE E
23 wherein it was held that pension is not a bounty and it
is a deferred salary. This Court is not concerned herein
with such a situation. In the said decision, this Court was
concerned with a case where an employee retiring on a
)· particular date was to receive 50% of the pension on the F
·~ enhanced salary. In the fact situation obtaining therein that
as the revision of pay and consequent revision in pension
had come into force and by reason of a notification, the
modality of computing the pension was required to be
determined, those who had fulfilled the conditions laid
G
down therein were held to be entitled to the benefits
provided for thereunder holding that the concerned
(_,.A employees had a vested right therein."

16. The question as to whether the scale of pay would be
revised or not is a matter of policy decision for the State. No H
704 SUPREME COURT REPORTS [2008] 15 S.C.R.

A legal right exists in -a person to get a revised scale of pay
implemented. It may be recommended by a body but ultimately
)...
c
it has to be accepted by the employer or by the State, who has
to bear the financial burden.

17. This a$pect of the matter has been considered by this
B
Court in HEC Voluntary Retd. Employees Welfare Society and
Another v. Heavy Enginewing Corpn. Ltd. and Others, [(2006)
3 sec 708] stating:
y-
"19. It is not in dispute that the effect of such voluntary
c retirement scheme is cessation of jural relationship
between the employer and the employee. Once an
employee opts to retire voluntarily, in terms of the contract
he cannot raise a claim for a higher salary unless by
reason of a statute he becomes entitled thereto. He may
D also become entitled thereto even if a policy in that behalf
is formulated by the Company."
Y,
[See also Life Insurance Corporation of India and Others v.
Retired UC Officers Association and Others, (2008) 3 SCC
321]
E
18. We may furthermore notice that a distinction has been
made by a Division Bench of this Court between the terms
"retirement" and "resignation" in UCO Bank and Others v.
Sanwar Mal [(2004) 4 SCC 412]. stating:
F -f ___ .,.
"9. We find merit in these appeals. The words "resignation"
and "retirement" carry different meanings in common
parlance. An employee can resign at any point of time,
even on the second day of his appointment but in the case
G of retirement he retires only after attaining the age of
superannuation or in the case of voluntary retirement on
completion of qualifying service. The effect of resignation
and retirement to the extent that there is severance of
}._,
employment but in service jurisprudence both. the
expressions are understood differently. Under the
H
CHANDRASHEKAR A.K. v. STATE OF KERALA & ANR. 705
[S.B. SINHA, J.]

Regulations, the expressions "resignation" and A
"retirement" have been employed for different purpose and
carry different meanings ... "

19. Mr. Vishwanathan is correct in his submission that the
Division Bench committed a serious illegality insofar as it held B
that the learned Single Judge has dismissed the writ petition
on the ground of delay and !aches. It did not do so. as it was
not so, but having considered the merit of the matter in its
entirety, we are of the opinion that no case has been made out
for interference with the impugned judgment.
c
The appeal is dismissed accordingly. In the facts and
circumstances of the case, however, there shall be no order as
to costs.

K.K.T. Appeal dismissed. o

-