Bhavnagar Municipal Corporation Employees' Pay Scale Dispute: Supreme Court’s Final Verdict image for SC Judgment dated 18-05-2022 in the case of Rushibhai Jagdishchandra Patha vs Bhavnagar Municipal Corporatio
| |

Bhavnagar Municipal Corporation Employees’ Pay Scale Dispute: Supreme Court’s Final Verdict

The Supreme Court of India recently delivered a crucial judgment concerning the dispute between employees of Bhavnagar Municipal Corporation and their employer regarding the revision of their pay scales. The case revolved around whether the corporation could withdraw a higher pay scale that was initially granted to employees under a financial upgradation scheme. The verdict clarifies the legal position on such pay revisions and provides significant insight into the doctrine of delay and laches in service matters.

Background of the Case

The dispute originated from the implementation of a higher pay-scale scheme by the Government of Gujarat, which aimed to provide financial upgradation to employees who had limited promotional opportunities. The Bhavnagar Municipal Corporation adopted this scheme with modifications, granting eligible employees an upgraded pay scale. However, in 2010, the corporation revised its stance, withdrawing the previously granted pay scale, citing an error in its application. This led to financial losses for the affected employees, who approached the Gujarat High Court seeking restoration of the higher pay scale and payment of arrears.

Key Issues in the Case

  • Whether the withdrawal of the higher pay scale granted under the scheme was justified.
  • Whether the employees were entitled to arrears from 2010.
  • Whether the doctrine of delay and laches applied to the employees’ claims.
  • The applicability of previous judicial precedents regarding recurring cause of action in service matters.

Arguments by the Employees (Appellants)

The employees, represented by their counsel, made the following arguments:

  • They had been lawfully granted a higher pay scale under the scheme, which was later unjustly withdrawn.
  • The revision of pay scales was done arbitrarily, causing financial hardship to employees who had relied on the corporation’s initial decision.
  • Similar cases had been decided in favor of employees, particularly the case of Mukeshbhai Jaswantrai Joshi, where the Gujarat High Court had upheld the right to a higher pay scale.
  • Since salary is a recurring right, the cause of action was continuous, and the claim was not barred by delay and laches.

Counterarguments by Bhavnagar Municipal Corporation (Respondent)

The Bhavnagar Municipal Corporation defended its actions by arguing that:

  • The initial grant of a higher pay scale was erroneous and resulted in an undue financial burden on the municipal administration.
  • The revised pay scales were in line with the actual scheme framework, which prescribed only a limited financial upgradation.
  • The employees delayed approaching the court for seven years, making their claims untenable under the doctrine of delay and laches.
  • Arrears should not be awarded retrospectively, as it would cause administrative difficulties and financial strain.

Supreme Court’s Observations

The Supreme Court examined the issue in depth, considering judicial precedents and principles related to service law. The court noted:

“The doctrine of delay and laches, or for that matter statutes of limitation, are considered to be statutes of repose and statutes of peace… The courts have expressed the view that the law of limitation rests on the foundations of greater public interest for three reasons: (a) that long dormant claims have more of cruelty than justice in them; (b) that a defendant might have lost the evidence to disprove a stale claim; and (c) that persons with good causes of action (who are able to enforce them) should pursue them with reasonable diligence.”

Read also: https://judgmentlibrary.com/supreme-court-upholds-government-order-on-forest-guard-training-and-promotion/

The court emphasized that while delay is an important factor, service-related matters such as salary and pension involve a continuing cause of action. Referring to the case of Tarsem Singh, the court observed:

“A belated service-related claim will generally be rejected due to delay and laches, but exceptions exist, particularly where the issue involves recurring financial loss such as salary or pension. Relief may still be granted, but it is generally restricted to a reasonable period, such as three years before the claim.”

Final Judgment

The Supreme Court delivered a balanced verdict that partially favored both parties:

  • The employees were entitled to the higher pay scale of Rs. 5,000-8,000/- as per the Gujarat government scheme.
  • However, arrears were restricted to a period of three years before the filing of the writ petition.
  • Interest at 7% per annum was awarded on the arrears, payable from September 1, 2017.
  • The demand for refund of amounts already recovered from employees was rejected.

The court directed Bhavnagar Municipal Corporation to implement these changes within four months.

Impact of the Judgment

This verdict has significant implications for service jurisprudence:

  • Clarity on Pay Scale Disputes: The ruling confirms that employees are entitled to the pay scale of the next promotional post, provided they meet eligibility criteria.
  • Guidance on Delay and Laches: The judgment reinforces that while delay can limit retrospective claims, employees suffering recurring financial losses can still seek relief.
  • Government and Employer Accountability: The ruling stresses that once a judicial precedent is set, authorities must apply it uniformly to avoid unnecessary litigation.
  • Fair Compensation Principle: The court’s approach balances employer financial constraints with the need to ensure justice for affected employees.

Overall, this ruling strengthens employee rights in service matters while ensuring that administrative bodies follow fair and legally sound practices in revising pay scales.


Petitioner Name: Rushibhai Jagdishchandra Pathak.
Respondent Name: Bhavnagar Municipal Corporation.
Judgment By: Justice Sanjiv Khanna, Justice Ajay Rastogi.
Place Of Incident: Bhavnagar, Gujarat.
Judgment Date: 18-05-2022.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: rushibhai-jagdishcha-vs-bhavnagar-municipal-supreme-court-of-india-judgment-dated-18-05-2022.pdf

Directly Download Judgment: Directly download this Judgment

See all petitions in Employment Disputes
See all petitions in Promotion Cases
See all petitions in Public Sector Employees
See all petitions in Judgment by Sanjiv Khanna
See all petitions in Judgment by Ajay Rastogi
See all petitions in partially allowed
See all petitions in Modified
See all petitions in supreme court of India judgments May 2022
See all petitions in 2022 judgments

See all posts in Service Matters Category
See all allowed petitions in Service Matters Category
See all Dismissed petitions in Service Matters Category
See all partially allowed petitions in Service Matters Category

Similar Posts