Daily-Wage Origin No Bar to Post-Retirement Increment for Workers Made Permanent Under Gujarat Resolution: Supreme Court

Can a worker who began as a daily wager be denied an increment falling due immediately after retirement merely because of the original nature of engagement? The Supreme Court has answered this in the negative where the State’s own Resolution had subsequently conferred permanent status upon such workers along with corresponding pay, pension and retiral benefits.

On October 6, 2026, the Hon’ble Supreme Court in Chhaganbhai Kohyabhai Pateliya & Ors. v. State of Gujarat & Ors., [2026 INSC 1088; SLP (C) No.26129 of 2025], considered the claim of skilled workers in the Gujarat Irrigation Department who had served for over 30 years and retired on June 30 of different years. They were denied the increment falling due on July 1, immediately after retirement.

A Single Judge of the Gujarat High Court, by order dated September 26, 2023, allowed their petitions relying on Director (Administration and Human Resources), KPTCL v. C.P. Mundinamani [(2023) 14 SCC 411] and directed revision of pension and payment of arrears. The Division Bench, however, accepted the State’s contention that the employees, having initially been engaged as daily wagers, could not claim an increment applicable to regular employees and set aside the order on January 9, 2025.

The Supreme Court observed that the State’s contention, raised for the first time before the Division Bench, appeared to have been made ignoring the Gujarat Government Resolution dated October 17, 1988. Under the Resolution, daily-wage skilled workers with 10 years’ service or more as on October 1, 1988, were to be treated as permanent, placed in the running pay scale of the cadre and granted allowances and retiral benefits, including gratuity and provident fund. Their permanent service was pensionable, and their superannuation age was 60 years.

As the State did not dispute that the appellants fell within this category, the Court held that their permanent status and corresponding benefits could not be disregarded merely because they had originally entered service as daily wagers. Once they were treated as permanent employees for purposes of pay scale, allowances, pension and retiral benefits, the increment could not be denied solely on that basis.

On relief, the Court applied its orders of September 6, 2024 and February 20, 2025, passed on applications connected with Union of India v. M. Siddaraj (Civil Appeal No. 3933 of 2023). Under clause (d) of the February 2025 order, as modified, where a retired employee has filed an application for intervention or impleadment, a writ petition or an original application before the Central Administrative Tribunal, a High Court or the Supreme Court, enhanced pension, including one increment, is payable for the three years preceding the month of filing. Clause (d) does not apply to those who approached a forum after the judgment in M. Siddaraj (decided May 19, 2023); clause (a) governs such cases, under which the enhanced pension is payable only from May 1, 2023. As the appellants filed their writ petition in 2022, they were held covered by this clause. The benefit was also extended to the other petitioners in the original writ petition, who were proforma respondents. Under the February 2025 order, any excess payment already made, including arrears, is not to be recovered.

On interest, the Court referred to Madhya Pradesh Purv Kshetra Vidyut Vitran Company Ltd. v. Vidyut Mandal Pension Samaj & Ors. (C.A. No. 15097 of 2025), noting that no interest is payable on the arrears, though authorities that fail to disburse them within the time stipulated in the Court’s or Tribunal’s order are liable to pay interest from the date of default. The authorities were directed to examine the case of each appellant and proforma respondent with reference to their date of retirement, calculate the amounts payable under clause (d), and pay within 30 days from the date of the judgment, failing which interest at 6% per annum would be payable until payment.

The appeal was accordingly allowed. The ruling rests on the facts before the Court: the benefit in the present case flowed from the specific permanent status and corresponding pay, pension and retiral benefits conferred upon the appellants under the 1988 Government Resolution.