The Supreme Court has ruled that states cannot differentiate between serving employees and pensioners when enhancing allowances to counter inflation.
In a significant judgment, the court upheld the right to equality for retirees, dismissing appeals filed by the State of Kerala and the Kerala State Road Transport Corporation (KSRTC).
The court stated that inflation affects both serving and retired employees with equal force and that fixing different rates of enhancement for dearness allowance and dearness relief is discriminatory and arbitrary.
The case originated from a 2021 Government Order by the Kerala government, which sanctioned an enhancement of Dearness Allowance (DA) for KSRTC employees by 14 per cent while limiting Dearness Relief (DR) for pensioners to only 11 per cent.
The Supreme Court's verdict affirms that equality is a dynamic concept and that the classification must satisfy twin tests: intelligible differentia and rational nexus with the object sought to be achieved.
