This appeal before the Supreme Court of India arose out of a dispute regarding the entitlement to an annual increment accruing on the day immediately following an employee’s retirement (1st July), along with consequential pensionary arrears. The Single Judge of the Gujarat High Court granted the increment and arrears relying on established precedents. However, a Division Bench of the High Court reversed the decision after the State argued for the first time that the employees were daily-wagers and thus ineligible for increments applicable to regular employees. The Supreme Court set aside the Division Bench’s order, holding that daily-wagers who were conferred permanent status under the Government Resolution dated 17.10.1988 are entitled to annual increments and modified pensionary benefits.
- Background and High Court Proceedings:
- The appellants retired on 30th June of various years after completing over 30 years of service in the Irrigation Department of the State of Gujarat. They were initially denied the increment that fell due on 1st July.
- A Single Judge of the Gujarat High Court ruled in favor of the appellants, directing the State to grant the increment, re-calculate retiral benefits, and pay arrears.
- On appeal (LPA No. 100 of 2025), the Division Bench quashed the Single Judge’s order on an oral plea raised by the State that daily-wagers were not entitled to increments extended to regular employees.
- Applicability of Government Resolution (17.10.1988):
- The Supreme Court highlighted the Government Resolution dated 17.10.1988, which stipulated that daily-wage skilled workers completing 10 or more years of service as of 01.10.1988 were to be treated as permanent employees.
- Because these workers were placed in regular running pay scales, granted allowances, retiral benefits, and pensionable status, the Supreme Court rejected the State’s argument that they were merely daily-wagers excluded from increment benefits.
- Application of Precedents on Notional Increment (C.P. Mundinamani & M. Siddaraj):
- The Court observed that the entitlement to a single earned increment after retirement is governed by C.P. Mundinamani as modulated by orders in Union of India v. M. Siddaraj.
- Under the modified Clause (d) established in M. Siddaraj (dated 20.02.2025), retired employees who filed writ petitions/applications prior to the decision are entitled to enhanced pension (including one increment) for a period of 3 years prior to the month in which the writ petition was filed.
- Relief and Directions:
- Arrears Eligibility: Since the appellants filed their writ petition in 2022, they are covered under modified Clause (d) and are entitled to enhanced pension arrears for 3 years prior to the month of filing.
- Extension to Proforma Respondents: The benefits of the order were extended to proforma respondents (co-petitioners who did not join as primary appellants).
- Interest on Arrears: Following Madhya Pradesh Purv Kshetra Vidyut Vitran Co. Ltd. v. Vidyut Mandal Pension Samaj, no interest is payable on the historical arrears.
- Timebound Execution: The authorities were directed to verify individual records and release the due amounts within 30 days. Failure to disburse within 30 days will attract interest at 6% per annum from the date of default until realization.
2026 INSC 1088
Chhaganbhai Kohyabhai Pateliya and others v. The State of Gujarat and others (D.O.J. 06.10.2026)



