Employee Entitled To Second Kramonnati Benefit If Promotion To Higher Post Does Not Result In Higher Pay Scale: Madhya Pradesh High Court

"The entire purpose of the circular is that the benefit be extended in terms of monetary benefit not by way of mere nomenclature in the name of promotion." Madhya Pradesh High Court has ruled that an employee who is promoted to a higher post but continues to draw the same pay scale is entitled to the benefit of the 'Second Kramonnati' scheme.

A single-judge bench of Justice Deepak Khot observed that the objective of the state's time-bound promotion policy is to ensure that every government servant receives at least two higher pay scales during their service tenure, regardless of changes in post nomenclature.

The Court noted that a promotion which does not result in an actual advancement of the pay scale must be treated as stagnation. Consequently, the bench set aside the state's decision to withdraw the petitioner's pay advancement benefits, holding that a special pay allowance granted under the Fundamental Rules does not equate to a higher promotional pay scale.

The primary question before the Court was whether a promotion to a higher post without an accompanying advancement in the pay scale disqualifies an employee from receiving the 'Second Kramonnati' benefit under the State’s 1999 policy. The Court was also called upon to determine whether the grant of a 'special pay' under Rule 22-D of the Fundamental Rules constitutes an "advancement of pay scale" as contemplated by the scheme.

Purpose Of The Kramonnati Scheme Explained

The Court examined the Kramonnati Policy dated March 17, 1999, noting that it was designed to alleviate stagnation among government employees. The bench observed that the policy stipulates that if an employee has completed 24 years of service and has not been extended more than one higher pay scale, they are entitled to a second higher pay scale under the scheme.

The Court emphasized that the core objective is the provision of "minimum two higher pay scales" to employees during their entire service period, apart from the initial scale at the time of entry. This benefit is intended to be a monetary one, rather than a mere change in the title of the post the employee holds.

Mere Nomenclature Of Promotion Not Sufficient

The bench highlighted that the distinction between a promotion in rank and an advancement in pay scale is critical. Even if an employee is moved to a higher post, the policy remains applicable if they remain on the same pay scale. The Court held that "the appellant was promoted as Upper Division Teacher but without any monetary benefit then he was entitled for the benefit of aforesaid circular."

The Court rejected the state's argument that the petitioner's transition to the post of Accountant in 1998 barred his claim. It found that since the pay scale remained identical to what he received as a UDC, the petitioner was effectively stagnated in the same pay bracket since 1977.

Rule 22-D And Special Pay vs. Pay Scale Advancement

The Court specifically addressed the state's reliance on the special pay granted to the petitioner. It noted that the petitioner was given a special pay of ₹250 by granting the benefit of Rule 22-D of the Fundamental Rules because he was already in the same pay scale as the promotional post.

"Revision of pay scale would not amount to advancement of the pay scale. In fact the petitioner remained in the same pay scale as of 1977," the Court remarked. It clarified that a special allowance does not substitute for the grant of a higher promotional pay scale as mandated by the Kramonnati policy.

Precedent In Daulat Ram Rajak Upheld

Relying on the Division Bench judgment in Daulat Ram Rajak vs. State of M.P. (WA No. 252/2013), the Court noted that the law is well-settled. In that case, the High Court had held that the entire purpose of the beneficial circular would be frustrated if the state's narrow interpretation—counting promotions without pay hikes—was accepted.

The bench observed that the petitioner was required to be given the benefit of the second Kramonnati from the date the policy was given effect. It concluded that the impugned orders of recovery and withdrawal were violative of Clause 2(kha) of the Kramonnati policy dated April 19, 1999.

The Court quashed the impugned orders dated November 8, 2005, and December 11, 2014. It directed the respondents to release the amount recovered from the petitioner with applicable bank interest within three months. Furthermore, the authorities were directed to issue a revised Pension Payment Order (PPO) to the petitioner within a further period of three months.

Date of Decision: 06 July 2026