Extension in Service Is Continuation of Service, Not Re‑employment:
Entitlement to Increment, Primacy of the Personnel Handbook and Article 229 Autonomy
A Commentary on Prem Chand Verma v. State of Himachal Pradesh & Anr, CWP No. 15499 of 2024 (HP HC, 18.11.2025)

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1. Introduction

The Division Bench of the Himachal Pradesh High Court in Prem Chand Verma v. State of Himachal Pradesh & Another, CWP No. 15499 of 2024, decided on 18 November 2025, addresses a recurring but often misunderstood issue in service law: whether a government employee who is granted extension in service (as distinct from re‑employment) is entitled to annual increments and other consequential benefits during the extended period.

The judgment gains particular significance because:

• It re‑affirms and applies the distinction between “extension in service” and “re‑employment” as laid down in the Handbook on Personnel Matters, Vol. II (Himachal Pradesh).
• It asserts the primacy of the Personnel Handbook over a later Finance Department instruction (dated 23.06.2015) which sought to deny increments during extension.
• It reinforces the constitutional autonomy of the High Court under Article 229 of the Constitution to regulate service conditions of its staff.
• It follows and strengthens the earlier Division Bench ruling in State of Himachal Pradesh & Ors v. Rajinder Fishta, LPA No. 190 of 2022 (15.06.2023), thereby crystallising a clear rule for extension cases in Himachal Pradesh.

The petitioner, Prem Chand Verma, Principal Private Secretary to the Hon’ble Chief Justice, appeared in person and challenged the denial of his annual increment with effect from 01.11.2022 during the period of his extension in service. The respondents were:

• State of Himachal Pradesh – represented by the Deputy Advocate General.
• High Court of Himachal Pradesh (Registry) – represented by counsel.

The Bench, comprising Chief Justice G.S. Sandhawalia and Justice Jiya Lal Bhardwaj, allowed the writ petition, directing the grant of increment with all consequential benefits. The judgment is approved for reporting and therefore constitutes binding precedent within the State.

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2. Summary of the Judgment

2.1 Factual Matrix

• The petitioner was serving as Principal Private Secretary to the Chief Justice in the High Court Registry.
• He was due to retire on 31.08.2022 (A.N.) on superannuation.
• By order dated 25.08.2022, the then Hon’ble Chief Justice, exercising powers under Article 229 of the Constitution, granted him an extension of service for one year w.e.f. 01.09.2022. The order expressly provided that:

  “... is granted extension of service in the public interest for a period of one year w.e.f. 1st September, 2022, in the scale, pay, special pay and grade pay presently held by him with all consequential benefits as per law.”

• The petitioner was due to receive his next annual increment on 01.11.2022.
• The High Court Registry, uncertain due to apparently conflicting State instructions, wrote on 02.12.2022 to the Government (Home Department) seeking clarification whether the petitioner was entitled to an increment during the term of extension.
• The State responded (22.12.2022 and reiterated on 24.03.2023) by referring to Finance Department Instructions dated 23.06.2015, which stated that:
  • No increase in pay is admissible during extension in service beyond superannuation; and
  • The employee will continue to draw the same pay as on the date of superannuation, and pension will be based on that last pay drawn.
• The Registrar General of the High Court subsequently wrote to the Government (18/19.01.2023) pointing out:
  • The Chief Justice’s clear order granting extension with “all consequential benefits as per law”.
  • The request for Government concurrence to grant such benefits as a special case.
  However, the State merely reiterated the Finance Department instructions and did not positively decide the specific case.
• Meanwhile, at the request of the High Court, the Government created a supernumerary post of Additional Registrar for the period 01.09.2022–31.08.2023 to ensure that promotional avenues of juniors were not blocked by the extension.

Against this backdrop, the petitioner approached the Court under Article 226, seeking:

• Grant of annual increment w.e.f. 01.11.2022, and
• All consequential benefits (financial and pensionary) flowing therefrom.

2.2 Issues

The central questions before the Court were:

1. Whether an employee, whose service is extended in public interest, continues to be entitled to annual increments and consequential benefits during such extended period?
2. In case of conflict between:
   • Clause 22.2 of the Handbook on Personnel Matters, Vol. II (which favors increments during extension), and
   • Finance Department Instructions dated 23.06.2015 (which prohibit increments during extension),
   which should prevail?
3. What is the effect of the Chief Justice’s order under Article 229 granting extension with “all consequential benefits”? Could internal administrative queries or Finance Department advice curtail the operation of that order?

2.3 Holding

The Court held:

• The petitioner’s extension in service was a continuation of service, not re‑employment.
• Under Clause 22.2 of the Handbook on Personnel Matters, Vol. II, a person on extension is entitled to full pay, allowances and increments, and the period counts for pension and other retirement benefits.
• The Handbook prevails over the Finance Department’s instructions dated 23.06.2015.
• Once the Chief Justice exercised powers under Article 229 and granted extension with all consequential benefits, the petitioner was entitled to the annual increment; the subsequent query to the Government “was not required” and led to an “unsavoury situation”.
• Following the coordinate Bench ruling in State of HP & Ors v. Rajinder Fishta, the executive instructions in the Handbook are binding and supplement statutory rules; the State, as a model employer, cannot discriminate or deny benefits conferred by such instructions.

The writ petition was accordingly allowed, directing the respondents to:

• Grant the benefit of annual increment w.e.f. 01.11.2022 to the petitioner, and
• Release all consequential benefits within four weeks.

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3. Detailed Analysis

3.1 Constitutional and Normative Framework

3.1.1 Article 229 – Autonomy of High Courts in Service Matters

Article 229 of the Constitution vests the power of appointment and rule‑making concerning officers and servants of a High Court in the Chief Justice:

• Article 229(1): Appointments are made by the Chief Justice or a delegate.
• Article 229(2): Conditions of service are prescribed by rules made by the Chief Justice, subject to any State legislation and Governor’s approval for matters concerning salaries, allowances, leave and pensions.
• Article 229(3): Administrative expenses of the High Court – including all salaries, allowances and pensions of its staff – are charged upon the Consolidated Fund of the State.

The judgment emphasises that:

• The Chief Justice’s order of 25.08.2022 granting extension, passed under Article 229, is a self‑contained and self‑speaking order.
• It clearly provides for the same scale, pay, special pay, grade pay, “with all consequential benefits as per law”.
• Once such an order is passed, the Registry “was not required” to raise a further query with the State regarding increment entitlement.

This is a delicate but important assertion of judicial independence and institutional autonomy: while financial concurrence and budgetary impacts are within the State’s domain, the service conditions of High Court staff and interpretation of existing rules/instructions fall primarily within the authority of the Chief Justice under Article 229.

3.1.2 The Handbook on Personnel Matters, Vol. II – Clause 22.2

The Handbook on Personnel Matters, Vol. II (Edition 2021) is a comprehensive set of executive instructions governing service conditions of State Government employees, including High Court staff where applicable. Chapter 22 deals with “Superannuation, Extension and Re‑employment”.

The Court quotes and relies heavily on Clause 22.2, which draws a clear distinction between “extension in service” and “re‑employment”:

• Extension in service:
  • The officer does not actually retire on the date of superannuation.
  • The period of extension counts for qualifying service for pension, gratuity and other retirement benefits.
  • The incumbent is entitled to full pay, allowances and increments.
  • The officer remains a member of the service governed by the same service rules.
• Re‑employment:
  • It is fresh employment after actual superannuation.
  • Pay is fixed under special orders and pension is separately drawn.
  • The period of re‑employment generally does not count for pension in relation to the earlier service.

Clause 22.3 further cautions that extension or re‑employment should be granted only in “really exceptional circumstances”, noting that an extension to one officer often blocks promotions for several juniors and can cause frustration in the service.

3.1.3 Finance Department Instructions dated 23.06.2015

The State relied on a Finance Department communication dated 23.06.2015 which stated, in substance, that:

• No increase in pay will be admissible to an employee during the period of extension in service beyond superannuation.
• The employee will continue to draw the same pay as on the date of superannuation, and pensionary benefits will be determined on that basis.

These instructions were invoked to deny increment during the petitioner’s extended period of service. The respondents argued that these instructions governed the field and, therefore, no increment could be sanctioned.

3.2 Precedents Cited and Their Influence

3.2.1 State of Himachal Pradesh & Ors v. Rajinder Fishta, LPA No. 190 of 2022 (15.06.2023)

The coordinate Bench decision in Rajinder Fishta is central to this judgment. In that case:

• The respondent, a Tehsildar, was granted extension in service for one year by the Government itself.
• The extension notification explicitly stated that no benefits of additional increment/financial benefits would be admissible, except the last pay drawn.
• His representation for grant of increment was rejected; the Single Judge allowed his writ petition and directed grant of annual increment with consequential benefits.
• The State filed an LPA which was dismissed by the Division Bench.

Key holdings from Rajinder Fishta, as reproduced and relied upon in Prem Chand Verma, are:

• The Handbook on Personnel Matters, Vol. II contains executive instructions that are binding.
• Clause 22.2 specifically states that in cases of extension in service, the period counts for qualifying service and the employee is entitled to full pay, allowances and increment.
• Having framed such executive instructions, the State cannot deny the benefit of increment to an employee whose service was extended.
• Executive instructions of this nature supplement statutory rules and, in the absence of statutory rules, operate on their own, relying on the Supreme Court’s decision in State Of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210.
• The State, as a model employer, cannot discriminate among employees, granting the benefits under these instructions to some while denying them to others.

In Prem Chand Verma, the Court expressly states that it is “fortified” in its view by Rajinder Fishta and notes that no Special Leave Petition has been preferred against that judgment, thereby underscoring its finality (at least for the time being).

3.2.2 State Of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210

While Jitendra Kumar Srivastava is not directly about extension in service, it is cited in Rajinder Fishta (and by extension in the present judgment) for the proposition that:

• Executive instructions that fill in gaps or supplement statutory rules can be enforced, provided they are not inconsistent with any statutory provision.
• In the absence of statutory rules directly covering a point, such instructions may validly govern the field.

This principle underpins the Court’s approach in treating the Handbook on Personnel Matters as having norm‑creating force that the State must respect.

3.3 The Court’s Legal Reasoning

3.3.1 Characterisation of the Petitioner’s Position: Extension vs Re‑employment

The first crucial step in the Court’s reasoning is to characterise accurately the nature of the petitioner’s continuance in service:

• The petitioner did not retire and then get re‑appointed.
• He was granted a one‑year extension of service “in public interest” by the Chief Justice under Article 229.

By invoking Clause 22.2 of the Handbook, the Court emphasises that:

• Extension in service means the employee continues in the same service.
• The extended period forms part of his original service tenure.
• The period counts for pension, gratuity and other retirement benefits.
• He is entitled to full pay, allowances, and increments.

This classification is determinative: once the situation is identified as “extension” and not “re‑employment”, the Handbook leaves little room to deny increments.

3.3.2 Primacy of the Personnel Handbook Over Finance Department Instructions

The State relied heavily on the Finance Department’s 23.06.2015 instructions disallowing any increase in pay during extension. The Court, however, holds that:

• The Handbook on Personnel Matters, Vol. II – which explicitly grants increments during extension – must prevail.
• The Handbook is treated as the primary, comprehensive executive code on personnel matters, whereas the 2015 instructions are narrower and inconsistent with the Handbook’s scheme.
• The earlier decision in Rajinder Fishta has already construed Clause 22.2 as binding and enforceable.

Thus, where there is a conflict between:

• A general or later Finance circular seeking to restrict benefits, and
• A specific, structured, and previously accepted executive manual like the Handbook,

the Court prefers the Handbook, particularly when the Handbook has already been judicially recognised as binding and is consistent with constitutional principles of fairness and equality.

3.3.3 Effect of the Chief Justice’s Article 229 Order

The Court criticises the initial administrative step where, despite a clear extension order by the Chief Justice, the Registry sought a clarification from the Government on whether annual increment could be granted. According to the Court:

• “Once the order had been specifically passed, the query was not required to be made, which has led to the unsavoury situation.”
• The order of 25.08.2022, passed under Article 229, already provided that the petitioner would continue in the same scale, pay, special pay and grade pay with “all consequential benefits as per law”.
• The proper approach was to implement the order by applying the governing law (i.e., Clause 22.2 of the Handbook), not to seek an external “permission” to dilute its effect.

By holding that the petitioner is entitled to all benefits in view of the order under Article 229, the Court underscores:

• The binding character of the Chief Justice’s administrative orders for the Registry and the State, so long as they are consistent with law.
• The limited role of the State in such instances, especially since High Court administrative expenses are charged upon the Consolidated Fund of the State under Article 229(3).

3.3.4 Creation of Supernumerary Post – Its True Relevance

The respondents also highlighted that a supernumerary post of Additional Registrar had been created for the period of extension, suggesting that the extension was effectively offset and that there should be no further financial burden such as increment.

The Court rejects this line of reasoning, explaining:

• The creation of a supernumerary post was a separate administrative measure taken to:
  • Prevent blockage of promotions of juniors, and
  • Mitigate frustration in the cadre resulting from the extension.
• Clause 22.3 of the Handbook itself notes that extensions can defer promotions, and the Court requested creation of a supernumerary post precisely to address that effect.
• The supernumerary post was created on 14.10.2022, whereas the extension was already granted on 25.08.2022; thus the later measure cannot retroactively alter the nature or terms of the extension.
• The existence of a supernumerary post in fact reinforces that the extension is real, not nominal; promotions could continue in addition to the extended officer’s tenure.

Therefore, the existence of the supernumerary post has no bearing on the petitioner’s entitlement to increments during his own extension period.

3.3.5 The State’s Conduct and the “Model Employer” Principle

While the judgment in Prem Chand Verma does not repeat the full language of Rajinder Fishta on this point, it expressly aligns with it. The key themes are:

• The State has framed a Handbook which grants employees on extension the benefit of increments.
• It is presumed that the State has, in practice, granted such benefits to similarly placed employees whose services were extended.
• No reasonable explanation is offered as to why the petitioner alone should be denied this benefit.
• As a model employer and model litigant, the State:
  • Must treat employees uniformly when a benefit is conferred by applicable rules or instructions.
  • Cannot take inconsistent stands or arbitrarily pick and choose beneficiaries.

The court’s insistence on the State’s role as a fair and non‑discriminatory employer adds an important public law dimension to what might otherwise be seen as a narrow service matter.

3.4 Impact and Implications

3.4.1 For High Court Employees under Article 229

Within the Himachal Pradesh High Court establishment, the judgment has the following implications:

• Any officer or servant whose service is extended (and not re‑employed) by the Chief Justice under Article 229 is:
  • Deemed to continue in the same service, and
  • Entitled to full pay, allowances, and increments during the period of extension, unless and until a valid statutory rule or properly approved rule under Article 229(2) clearly provides otherwise.
• The Registry should be cautious in not undermining a clear Article 229 order by seeking external “clarifications” that contradict the legal framework and the Chief Justice’s directions.
• Administrative queries to the State should be confined to budgetary or mechanical issues, not to reopening settled questions of entitlement under existing rules/instructions.

3.4.2 For State Government Employees in Himachal Pradesh

Though the facts relate to a High Court employee, the Court’s reaffirmation of Rajinder Fishta and Clause 22.2 of the Handbook has broader consequences:

• For all State Government employees in Himachal Pradesh, extension in service (as per Clause 22.2) now clearly carries with it entitlement to increments, unless some valid legislation or rule with overriding effect is made.
• Finance Department instructions dated 23.06.2015 cannot unilaterally override Clause 22.2 of the Handbook, particularly when the latter has been judicially recognised as binding.
• Any denial of increments to employees on extension, purely on the basis of the 2015 instructions, will be vulnerable to challenge, especially if others similarly placed have received the benefit.

3.4.3 For Future Litigation and Administrative Practice

This judgment consolidates a line of cases that:

• Validate the enforceability of comprehensive executive manuals (such as the Handbook on Personnel Matters) when they fill gaps in statutory rules.
• Require the State to act consistently with such manuals, and not to use ad hoc or later department‑specific circulars to deny benefits conferred by the more general code.
• Stress that autonomous constitutional authorities (like High Courts under Article 229) enjoy primary competence in determining service conditions of their own staff, within the framework of the Constitution and law.

In practical terms, departments will now need to:

• Review any existing or proposed extension orders that purported to deny increments explicitly or implicitly.
• Harmonise departmental circulars with the Handbook or formally amend the Handbook with proper legality (and, where required, Governor’s approval).
• Move cautiously before issuing instructions that depart from an established, court‑endorsed executive code.

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4. Complex Concepts Simplified

4.1 Extension in Service vs Re‑employment

• Extension in Service:
  • The employee never actually retires on the original superannuation date.
  • His service is simply prolonged for a specified period.
  • The extended period counts fully for pension, gratuity and other retirement benefits.
  • He continues under the same service rules and gets normal pay, allowances, increments.
• Re‑employment:
  • The employee retires and begins to receive pension.
  • He is re‑hired, usually on contract or special terms.
  • Pay is often fixed differently, and the re‑employed period typically does not add to his earlier pensionable service.

In this case, the petitioner enjoyed an extension in service, not re‑employment, so he continued to accrue increments.

4.2 Supernumerary Post

A supernumerary post is an additional, usually temporary, post created:

• Not as a permanent addition to the cadre, but
• To accommodate a specific administrative requirement, such as:
  • Preventing stagnation or blockage of promotions when a senior officer is retained beyond normal retirement, or
  • Managing restructuring or redeployment of staff.

Here, a supernumerary post of Additional Registrar was created:

• To ensure that juniors could still receive their promotions despite the petitioner’s extension, and
• To avoid frustration in the cadre due to blocked promotional avenues.

This had no adverse effect on the petitioner’s entitlement to increment.

4.3 “Consequential Benefits”

When an order grants a right (like an increment), “consequential benefits” include:

• All financial sums that would have become payable as a result (arrears of salary, revised pay, etc.).
• Adjustments in pension, gratuity, leave encashment and other terminal benefits that depend on last pay drawn or length of service.
• Correction of service records to reflect the accurate position retrospectively.

4.4 Executive Instructions vs Statutory Rules

In Indian service law:

• Statutory rules are framed under a law (e.g., a State Civil Services Act) and have legal force equivalent to subordinate legislation.
• Executive instructions (like the Handbook) are issued under the executive’s administrative powers, not under a delegated legislative authority.

However:

• Executive instructions can validly supplement statutory rules where the rules are silent.
• They cannot contradict or override statutory provisions.
• Where there are no statutory rules on a point, consistent executive instructions can themselves govern, as recognised by the Supreme Court in Jitendra Kumar Srivastava.

The Court in this case treats the Handbook on Personnel Matters, Vol. II as the controlling executive code in the absence of any contradictory statutory rule, and therefore binding.

4.5 “Model Employer” and “Model Litigant”

Courts often describe the Government as a “model employer” and a “model litigant”, which implies that:

• It must deal with its employees fairly, reasonably, and without arbitrariness.
• It should not exploit technicalities or selectively apply rules to deny legitimate benefits.
• In litigation, it should assist the Court in arriving at the correct legal position, not adopt unsustainable or vexatious stands.

In the present context, once the Handbook conferred increment entitlement during extension, the State was expected to apply it uniformly to all similarly placed employees, including the petitioner.

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5. Conclusion: Key Takeaways and Broader Significance

The decision in Prem Chand Verma v. State of Himachal Pradesh & Anr cements a clear principle in Himachal Pradesh service jurisprudence: extension in service is a continuation of service and carries with it entitlement to full pay, allowances and increments, with the period counting for pension and other retirement benefits, unless a valid and overriding legal provision states otherwise.

Key takeaways include:

• Reaffirmation of Clause 22.2, Handbook on Personnel Matters:
  The Handbook is confirmed as a binding executive code; employees on extension are entitled to increments.
• Primacy of Article 229 in High Court Service Matters:
  The Chief Justice’s order granting extension with all consequential benefits, passed under Article 229, must be given full effect; internal administrative queries should not undermine this.
• Limitation of Finance Department Circulars:
  Department‑specific instructions (like those dated 23.06.2015) cannot negate rights granted under the Handbook and judicially affirmed precedents such as Rajinder Fishta.
• Model Employer and Non‑discrimination:
  The State must treat similarly placed employees alike and cannot selectively deny increments where the governing instructions confer them.
• Practical Guidance for Future Extensions:
  Wherever extension in service (as distinct from re‑employment) is granted to State or High Court employees, authorities must:
  • Apply Clause 22.2 of the Handbook, and
  • Sanction annual increments and associated benefits, unless a clear, valid, and duly approved rule provides otherwise.

In sum, the judgment is a strong affirmation of (a) constitutional autonomy of the High Court in managing its staff, (b) the enforceability of comprehensive executive personnel codes, and (c) the substantive rights of employees continued in service by way of extension. It will guide both administrative practice and judicial adjudication in extension of service cases across Himachal Pradesh and is likely to be a persuasive authority in other jurisdictions facing similar issues.