The Supreme Court held that employees retiring in March 2016 remained “in service” till 31 March under FR 56(a) and must receive revised pay benefits. The judgment overturns the Gauhati High Court decision and grants arrears with pension revision.
New Delhi: The Supreme Court of India has delivered an important ruling for employees of the Assam State Electricity Board and its successor companies, holding that all workers who reached their retirement age in March 2016 must receive the benefits of the revised pay scale under the Assam Electricity Board and its Successor Companies Revised Pay Rules, 2017.
The Court explained that Fundamental Rule 56(a) clearly states that an employee continues to remain in service until the last day of the month in which they attain the retirement age.
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Because of this rule, their service cannot be treated as ending on the exact date when they turn 60, nor can their continuation till the end of the month be seen as an extension given only for pay and allowances.
The case came before the Supreme Court after several retired employees filed civil appeals. Their requests for pay revision were earlier denied on the ground that they had technically retired before the cut-off date of 31 March 2016.
The Division Bench of the Gauhati High Court had accepted this argument and held that once an employee turned 60 during the month, their retirement must be treated as having taken effect on that day itself, which would mean they were not “in service” on the crucial date.
However, the Supreme Court disagreed with this view and examined the exact wording of Fundamental Rule 56(a).
A Bench of Justice Ahsanuddin Amanullah and Justice K. Vinod Chandran noted that the rule provides that retirement takes place only on the last day of that month, not on the day the employee turns 60.
While making this point, the Bench stated:
“The FR does not provide for such extension to be merely for the purpose of pay and allowances nor can there be a deemed legal termination of employer-employee relationship be found on the date of attaining the age of 60 years. The rule of superannuation is clear and unambiguous that any person who attained the age of superannuation in a month will retire only on the last day of that month.”
Senior Advocate K N Choudhury appeared for the appellants, while Senior Advocate B K Sharma argued for the respondents. The appellants were employees of the Assam Power Generation Corporation who turned 60 in March 2016.
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Under Fundamental Rule 56(a), their retirement date automatically became 31 March 2016. According to the 2017 Pay Rules, all employees “in service on 31.03.2016 or appointed on or after 01.04.2016” are entitled to the revised pay.
Based on this, the Single Judge had held that the employees could receive revised pay benefits. But the Gauhati High Court Division Bench reversed that ruling. Feeling aggrieved, the employees approached the Supreme Court, which analyzed the matter in detail.
The Supreme Court also looked into how earlier cases interpreted similar rules. It observed that pay revision exercises under the Central Pay Commission sometimes involve different thresholds, but in this case the Assam Rules very clearly included all employees still serving on 31 March 2016.
The Bench also pointed out that once Fundamental Rule 56(a) fixes the retirement on the afternoon of the last day of the month, this last day must be treated as a working day.
The Court rejected the idea that the employment relationship ends the moment an employee turns 60. It distinguished earlier rulings like K.J. George v. BSNL and the Delhi High Court judgment in G.C. Yadav, explaining that those cases involved employees retiring before the date when revised pay became effective. Here, in contrast, the Assam employees retired on the very day the revised pay rules took effect.
To support its reasoning, the Supreme Court relied on the three-judge bench decision in S. Benerjee v. Union of India, which recognised that the last day of retirement is to be treated as a working day and that benefits arising on that day must go to the employee.
The Court also cited Rule 5(2) of the CCS (Pension) Rules, which states that the last day of superannuation retirement must always be considered a working day for salary purposes.
The Bench rejected the respondents’ arguments based on Rule 32 of the 2017 Rules, which deals with minimum pension, saying this rule is only an enabling clause for those not covered under the main pay revision and cannot take away the rights of employees who were still in service on 31 March 2016.
After examining all materials and arguments, the Supreme Court allowed the appeal, set aside the judgment of the Division Bench, and restored the Single Judge’s ruling.
The Court held that the appellants were entitled to the revised pay as on 31 March 2016, and this revised pay must also be used to calculate pension.
The Supreme Court directed that the arrears of pay and pension be released within six months, and if there is any delay, interest at the rate of 6% per year must be paid.
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It also stated that if any liability arises because of delayed payment, it may be recovered from the officials responsible. All pending applications were disposed of.
The appellants were represented by Senior Advocates N Choudhury and Manish Goswami, assisted by Advocates Rongon Choudhury, Vipul Kumar (AOR), and Navneet Gautam.
The respondents were represented by Senior Advocate B.K. Sharma along with Advocates H.K. Das, Kaushik Choudhury, S.P Sharma, Saksham Garg, and Jyotirmoy Chatterjee.
Case Title:
Mukut Das v. Assam Power Generation Corporation Ltd. & Others (Neutral Citation: 2025 INSC 1403).
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