Madhya Pradesh HC: Permanently Classified Employees Cannot Be Reverted to Daily-Wager Status to Deny Pay Revision Benefits

The Madhya Pradesh High Court has held that employees once classified as permanent cannot be denied the benefits of pay revisions under various Pay Commissions through subsequent administrative actions that attempt to revert them to daily-wager status. Justice Jai Kumar Pillai, while presiding over a batch of petitions, emphasized that vested rights accrued through long service and valid classification remain protected under the Constitution of India.

Justice Jai Kumar Pillai heard the matters involving identical legal questions regarding the denial of pay scale benefits to employees who had served for over three decades. The Court observed that the respondents' attempt to classify these workers as daily-rated employees following conditional reinstatements could not extinguish their prior status as permanent skilled employees.

Court's Rationale on Vested Rights and Article 14

The Court, in its reasoning, observed: "Applying the aforesaid binding dictum to the present facts, the petitioners, having been classified as permanent employees by the department, cannot be arbitrarily stripped of the resulting financial benefits, including the periodic revisions in pay. The denial of these benefits is fundamentally unjust and contrary to the mandate of Article 14 of the Constitution of India."

The Court placed heavy reliance on the precedent set in Rakesh Kumar Charmakar & Ors versus The State of Madhya Pradesh & Ors ( "2025 INSC 136, decided on January 31, 2025, in SLP (C) NOS. 8613-8614 OF 2022": 2025 CaseBase(SC) 153), noting that the legal position regarding the extension of pay-scale benefits to such classified employees is no longer res integra. The Court found the respondents' defense based on subsequent administrative terminations and conditional reinstatements to be legally untenable as it sought to bypass established service benefits.

Directions Issued to State Authorities

The Court has the following directions:

"The respondents are directed to extend the benefits of the 5th, 6th, and 7th Pay Commission reports to the petitioners with respect to the revision of pay at the lowest level of the pay-scale of a skilled employee. The respondents shall calculate the arrears and extend the financial benefits to the petitioners from the effective date such revisions were made applicable to other similarly situated employees. This exercise, including the actual disbursement of arrears, shall be completed within a period of 90 days from the date of receipt of a certified copy of this order."

Background:

The petitioners had been working as Chowkidars and other staff for more than 30 years. Having rendered more than 20 years of service, they were classified as permanent employees and recommended for the pay scale of skilled employees. However, the State authorities later issued impugned orders declining them the benefits of the 5th, 6th, and 7th Pay Commissions. The State's defense rested on the fact that the petitioners had faced terminations for alleged indiscipline in 2021 and were subsequently reinstated only as daily-rated employees. The respondents argued that under prevailing State memorandums, dismissed permanent employees could not be re-employed in a permanent capacity.

Rejecting this argument, the High Court noted that such administrative actions could not extinguish vested rights. Quashing the impugned orders, the Court allowed the petitions and directed the immediate calculation and disbursement of arrears.

Case Details:
Case No.: W.P. No. 2294/2024
NeutralCitation: 2026:MPHC-IND:16830
Case Title: MUNNALAL Versus THE STATE OF MADHYA PRADESH AND OTHERS
Appearances:
For the Petitioner(s): Shri Kuldeep Bhargava - Advocate
For the Respondent(s): Shri Kushagra Singh (Dy.GA.)

Source: 2026 CaseBase(MP) 65