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Informist, Friday, Apr. 10, 2026

 

NEW DELHI – The Supreme Court Friday held that fixing different rates for an increase in dearness allowance for serving employees and dearness relief for retired personnel was discriminatory, arbitrary and not valid under the law. Once a decision is taken to provide certain allowances and to increase them based on inflation, fixing a higher rate of increase for those who are serving than the ones who have retired would be arbitrary and violative of Article 14 of the Constitution, the apex court said.

 

Indisputably, inflation hits both serving and retired employees equally and therefore differentiating the two has no rational nexus, a bench of Justice Manoj Misra and Justice Prasanna B. Varale said. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14, and it is also violative of Article 16 if it affects any matter relating to public employment.

 

Article 14 of the Indian Constitution guarantees that the state shall not deny any person equality before the law or equal protection of the laws within India's territory. Article 16 guarantees equality of opportunity in public employment, prohibiting discrimination on the grounds of religion, race, caste, sex, descent, place of birth, or residence.

 

The apex court upheld a Kerala High Court's 2022 order that rejected the Kerala State Road Transport Corporation's move to increase the dearness allowance of serving employees by 14% and the dearness relief of retired personnel by 11%. The Kerala transport corporation increased the rates of dearness allowance and dearness relief differently, even though the increase was to serve a common objective, which was to mitigate the hardship on account of inflation, the court said.

 

Retired employees of the Kerala State Road Transport Corporation had moved the high court, questioning why the lower rate fixed for the increase in dearness relief on pension was lower than that fixed for the increase in dearness allowance on salary. The state corporation had argued that retired employees and serving employees constitute different classes. Therefore, different rates for the two separate classes do not violate the right to equality. Besides, financial reasons can also justify different rates for two separate classes, it said.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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