Holding

The respondents are entitled to the revised pay scales w.e.f. 1 January 1986 notionally for retirement benefits, but no arrears of salary are payable.

Summary

The respondents, who were employed as assistants and later promoted to supervisors in the Printing and Stationery Department, claimed that the revised pay scales recommended by the Punjab Pay Commission should be applied retrospectively from 1 January 1986, the date of the Commission's report, and that they were entitled to arrears of the difference. The State Government had accepted the Commission's recommendations and, after an Anomaly Committee identified a mistake, fixed a higher pay scale prospectively from 14 February 1989. The High Court initially allowed the writ petition for retrospective fixation but the Division Bench limited the effect to retirement benefits, directing payment of arrears only for a limited period. On appeal, the Supreme Court examined the factual distinction between this case and earlier decisions, noting that the restructuring and higher scales were intended to operate prospectively. It held that the respondents are entitled to the revised pay scales notionally from 1 January 1986 for the purpose of calculating retirement benefits, but they are not entitled to arrears of salary from that date. Consequently, the civil appeal was allowed without an order as to costs.

Issues considered

Whether the revised pay scales for skilled and semi‑skilled staff in the Printing and Stationery Department are applicable retrospectively from 1 January 1986 or from 14 February 1989.
Whether the employees are entitled to arrears of salary for the period between the two dates.

Subjects

service lawpay revisionretrospective effectanomaly committeeretirement benefitscivil appealPunjab Pay Commission

Judgment

A STA TE OF PUNJAB AND ORS.
\'.

BHUPINDER SINGH AND ORS.

APRIL 2, 2004

B (V.N. KHARE, CJ., S.B. SINHA AND ~.H. KAPADIA, JJ.]

Service law: I-
l

Revision in scale ofpay consequent upon ace< ptance ofrecommendations
c of the Pay Commission by the State Governn ent-Anomaly Committee
recommending higher scales of pay for certain c11tegories of staff-Fixation
of higher scale of pay-Effective date and payn•ent of arrears-Challenge
to-Single Judge of the High Court directingflxati?n/payment with effect from
the date of recommendation (l. /.1986) by the Pav Commission-On appeal,
Held: The State Government re-structured cadres i~ its departments by making
D amendments in the service regulations and recomn •ended revised higher scales
of pay prospectively-Employees would be entit.'ed to revised scale of pay ..
retrospectively with effect from 1.1.1986 notionally for the purpose of retiral
benefits only and not for payment of arrears.

The main issue which arose for determin dion in this appeal was as
E
to whether the revised scale of pay in respect of skilled and semi-skilled
staff working in the Printing and Stationary department would be
applicable with effect from 1.1.1986, on which date the State Pay
Commission gave its report or with effect from 14.2.1989 on which date
the State Government accepted the recommendations of the Pay
F Commission for implementation.

It was contended by the appellant-State that it had recommended
restructuring of its departments and granted higher revised scale of pay
to the respondent-employees prospectively wit~ effect from 14.2.1989 and
that power of fixation of revised scale and its ,,ffective date lies within the
G discretion of the Government.

Respondents submitted that conseque 1t upon acceptance of the )!' •
recommendations of the State Pay Commission, appellant-State wrongly
placed them in the lower scale of pay; that the Anomaly Committee

H 718
STATE v.BHUPINDER SINGH [KAPADIA . .I.] 719

-"' recommended higher scales of pay; and that since the anomaly was A
accepted by the State Government, respondents/employees were entitled
to the fixation of revised scales and payment of arrears due to revision in
their pay scale with retrospective effect from t. 1.1986.

Allowing the appeal, the Court
B
HELD: I. Keeping in mind the recommendations of the Punjab Pay
Commission to rationalize recruitment, qualifications, designation and
restructuring of the cadres by amendments to the service regulations, the
Administrative Department of the State Government had made
recommendations for restructuring certain departments of the State C
Government and consequently, higher revised scales came to be granted
to the employees prospectively. The respondents would be entitled to
revised pay scales w.e.f. t.1.1986, notionally for calculation of retiral
benefits but they will not be paid arrears of the difference in the pay scales
from the date, claimed. 1721-B-D)
D
Bhagirath Ram v. State of Punjab, (C.W.P.No.6778 of 1993) decided
by Punjab & Haryana High Court on 26.7.1994, approved.

Ram Murti and Ors. v. State of Punjab, decided by Punjab & Haryana
High Court on 13.2.1996, held inapplicable.
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4432 of
1999.

From the Judgment and Order dated 11.2.1999 of the Punjab and
Haryana High Court in L.P.A. No. 79 of 1999.
F
H.S. Munjral and R.S. Suri for the Appellant.

K.G. Bhagat and Debasis Misra for the Respondents.

The Judgment of the Court was delivered by

KAPADIA, J. The short qu~stion which arises for determination in this G
civil appeal is - whether the revised pay-scales of skilled and semi-skilled
staff working in the Printing and Stationary department were applicable w .e.f.
1.1.1986 (when lllrd Punjab Pay Commission gave its report) or w.e.f.
14.2.1989 when the State Government issued its notification implementing
the recommendations of the Pay Commission. H
i
720 SUPREME COURT REPOR rs [2004] 3 S.C.R.
.,.._
A The facts lie within narrow compass. Respondents herein joined the
service as Assistants before 1978. Subsequently. they were promoted as
Supervisors. On 1.1.1986, report was submitted by the lllrd Punjab Pay
Commission which was accepted by the Government enacting Punjab Civil
Service (Revised Pay) Rules under which the pay Jf supervisor was fixed in
the grade of Rs.1500-2540. Respondents made a representation pointing that
B a serious anomaly had arisen on account of failure to prescribe a proper pay
scale for the said post. The said matter was referred to Anomaly Committee.
B.ealising its mistake, the government fixed the p1y scale of the supervisor •
in the grade of Rs.2000-3500 w.e.f. 28.3.1989. Aggrieved, respondents herein
I-
,....
filed Civil Writ Petition No.1383 of 1990 in the High Court claiming pay
c fixation w.e.f. 1.1.1986. By judgment and order dcted 21.4.1998, the learned
Single Judge allowed the Writ Petition in view of he earlier judgment of the
Division Bench of the High Court in the case of '3hagirath Ram v. State of
Punjab, dated 26. 7.1994 in Civil Writ Petition l'\o.6778 of 1993, directing
payment w.e.f. 1.1.1986. The appellant herein carried the matter in appeal
before the Division Bench of the High Court. Foll Jwing the above judgment
D in the case of Bhagirath Ram (supra), the Division Bench dismissed the writ
appeal, however, directed the appellant herein to pay arrears of salary for 3 ... '
years and 2 months prior to the date of filing of writ petition. Hence, this
civil appeal.

Shri H.S. Munjral, learned advocate for the appellant submitted that
E
keeping in mind the recommendations of the lllrd Punjab Pay Commission,
the Department of Administrative Reforms vide letter dated 26. l 0.1988
recommended restructuring of the departments ancl granting of higher revised
scales of pay and consequently the scales of pay of skilled and semi-skilled
staff of the Department of Transport were enhmced prospectively w.e.f.
F 3.11.1989. Similarly the scales of pay of skilled and semi-skilled staff of
Printing and Stationery Department were enhanced prospectively. It was urged
that fixation of the date for grant of revised pay scales is within the discretion
of the Government. It was urged that revised pay \las payable w.e.f. 1. l.1986,
notionally as held by the Division Bench of the High Court in the case of
Ram Murti and Ors. v. State of Punjab, dated 13.2.1996.
G
Per contra, Shri K.G. Bhagat, learned ad 1ocate for the respondents
submitted that the respondents had joined the service as Assistants before :;.- \
1978; that they were subsequently promoted to the post of supervisors; that
on 1.1.1986 the State Pay Commission recommrnded higher pay which the
H appellant accepted but wrongly fitted them in .he grade of Rs.1500-2540
STATE v.BHUPINDER SINGH [KAPADIA. J.] i21
It .A
which created an anomaly as the Assistants were fitted in the grade of Rs.1800- A
3200; that the appellant realized its mistake and fitted the supervisors in the
higher grade of Rs.2000-3500. Having accepted the anomaly, it was urged,
the respondents were entitled to the grade of Rs. 2000 3500 w.e.f. 1.1.1986
and not from 14.2.1989. Reliance in this connection was placed on the
judgment of the High Court in the case of Bhagirath Ram (supra).
B
We find merits in this civil appeal. Keeping in mind the
I
recommendations of the lllrd Punjab Pay Commission to rationalize
"""\
recruitment, qualifications, designation and restructuring of the cadres by
amendments to the service regulations, the Administrative Department made
proposals on 26. l 0.1988. In the light of these recommendations, certain
departments came in for restructuring and consequently, higher revised scales
c
came to be granted prospectively. Accordingly, scales of pay of semi skilled
and skilled staff of the Transport Department, Printing and Stationery
Department herein were enhanced w.e.f. 14.2.1989, which circumstance did
not exist in the case of Bhagirath Ram (supra). This factual aspect has been
;

Jost sight of by the High Court in the present case. In the case·of Ram Murti D
I _.,
(supra) the petitioners who were employees of Punjab Roadways prayed for
directions to grant them revised pay scales w.e. f. 1.1.1986 instead of 3.11.1989.
It was held that on 3.11.1988 the scales stood revised, and consequently, the
appellants were entitled to revised pay scales w.e.f. 1.1.1986, notionally, and
they were not to be paid the arrears of the difference of pay scales but they
E
would be entitled to all consequential benefits. In our view, learned advocate
for the appellant is right in his submission that the facts of the present case
are covered by the judgment of the High Court in the case of Ram .Murti
(supra), special leave petition against which has been dismissed. Accordingly,
we hold that the respondents herein would be entitled to revised pay scales
> w.e.f. 1.1.1986, notionally for calculation of retiral benefits but they will not F
be paid arrears of the difference in the pay scales from that date, as claimed.

For above reasons, this civil appeal stands allowed, with no order as to
costs.

S.K.S. Appeal allowed. G
)

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