Can't have different DA hikes for staff and pensioners: Supreme Court

NEW DELHI: Observing that inflationary pressures do not discriminate between a serving employee and a pensioner, hitting the two equally, Supreme Court Friday held that fixing differential rates of enhancement of inflation-linked dearness benefits for the two categories is arbitrary and cannot be allowed.

A bench of Justices Manoj Misra and Prasanna B Varale disapproved of Kerala govt's decision to raise dearness allowance (DA) by 14% for state road transport corporation employees when the dearness relief (DR) for its retired employees was raised by just 11%.

"...The Govt Order in question increases the rate of DA by 14% and DR by 11% even though the increase is to serve a common object, which is to mitigate the hardship faced by the serving employees and pensioners on account of inflation. Indisputably, inflation hits both serving and retired employees with equal force... Differentiating the two qua the rate of increase of DA and DR, in our view, has no rational nexus to the object sought to be achieved," Justice Misra said, accepting the plea of senior advocates V Chitambaresh and Vipin Nair.

The state had contended that serving and retired employees belonged to different categories and differential rates for them did not violate the right to equality. Financial reasons alone could justify the same, it said.

The bench said, "No doubt a financial crunch might be a guiding factor to defer disbursement of certain benefits or may justify separate dates for implementation of beneficial schemes. But once a decision is taken to provide certain allowances, as also to increase them ...fixing a higher rate of increase for the ones who are serving than the ones who have retired, would be arbitrary and violative of Article 14 of the Constitution."