Retirement on Last Day of Month Under FR 56(a): Supreme Court Holds Employees in Service on Cut-Off Date Entitled to Pay Revision Benefits
Case Name: Mukut Das v. Assam Power Generation Corporation Ltd. & Ors.
Citation: 2025 INSC 1403
Date of Judgment/Order: 04 December 2025
Bench: Ahsanuddin Amanullah, K. Vinod Chandran
Held: The Supreme Court held that employees whose retirement is extended to the last day of the month under Fundamental Rule 56(a) are deemed to be in service on that date and are therefore entitled to pay revision benefits applicable on the cut-off date specified in the pay revision rules.
Summary: The appellants attained the age of superannuation in March 2016, but by operation of Fundamental Rule 56(a), their retirement stood extended to 31.03.2016. The Assam State Electricity Board Revised Pay Rules, 2017 granted revised pay scales to all employees who were in service on 31.03.2016. While the Single Judge allowed the benefit, the Division Bench denied it, relying on earlier judgments which treated post-attainment continuation as only for pay and allowances.
The Supreme Court undertook a detailed analysis of FR 56(a), Rule 5(2) of the CCS (Pension) Rules, and prior precedents including K.J. George, G.C. Yadav, and S. Banerjee. The Court distinguished cases where employees retired one day prior to the cut-off date and clarified that FR 56(a) does not create a legal severance of service on the date an employee attains the age of superannuation. Instead, the rule unequivocally provides that retirement occurs on the last day of the month, which is treated as a working day.
The Court further held that the pay revision rules were explicit in granting revised pay to all employees in service on 31.03.2016, and pension-related provisions for pre-2016 retirees could not be used to deny revision to employees who were still in service on the cut-off date.
Decision: The appeals were allowed. The Supreme Court set aside the Division Bench judgment and restored the Single Judge’s order. The appellants were held entitled to revised pay as on 31.03.2016, recalculation of pension on the revised pay, payment of arrears within six months, and interest at 6% per annum in case of delay.