“In Service on the Cut‑off Date”: Superannuation under FR 56(a), CCS (Pension) Rule 5(2) and Entitlement to Pay Revision – Commentary on Mukut Das v. Assam Power Generation Corporation Ltd.

1. Introduction

The Supreme Court’s decision in Mukut Das v. The Assam Power Generation Corporation Ltd. & Ors., Civil Appeal No. 14559 of 2025 (decided on 4 December 2025), deals with a seemingly narrow but practically important question in service and pension law:

When a pay revision scheme applies to employees “in service on” a particular cut‑off date, does an employee who retires on that very date (by virtue of Fundamental Rule 56(a)) qualify as “in service” for the purpose of that revision?

The Court answers this in the affirmative and, in doing so, (i) clarifies the legal effect of Fundamental Rule 56(a) and Rule 5(2) of the Central Civil Services (Pension) Rules, 1972 (“CCS (Pension) Rules”), (ii) distinguishes and partly departs from the earlier two‑Judge Bench ruling in K.J. George v. Chief General Manager, Telecom, BSNL, and (iii) interprets the Assam State Electricity Board and its Successor Companies Revised Pay Rules, 2017 (“2017 Rules”) in favour of employees superannuating on the cut‑off date.

Though marked “Non‑Reportable”, the judgment has clear ramifications for:

Central and State Government employees governed by FR 56(a) and CCS (Pension) Rules;
Employees of public sector undertakings (PSUs) and Boards that have adopted these provisions; and
Future design and interpretation of pay revision schemes using cut‑off dates tied to dates of retirement.

2. Factual and Procedural Background

2.1 The parties and context

Appellants: Two retired employees (including Mukut Das) of the erstwhile Assam State Electricity Board, subsequently serving under its successor, the Assam Power Generation Corporation Ltd. (“APGCL”).
Respondents: APGCL and other related authorities.

Both appellants:

Were governed by the Fundamental Rules and the CCS (Pension) Rules.
Attained the age of superannuation (60 years) in March 2016, on a date before 31 March 2016; but,
By operation of Fundamental Rule 56(a), their actual date of retirement stood extended to the afternoon of the last day of that month, i.e. 31 March 2016.

Paragraph 2 of the judgment incorrectly mentions “31.12.2016”; read in context with the rest of the order, this is clearly a typographical error and must be read as 31.03.2016.

2.2 The 2017 Pay Revision Rules

The controversy centres on the Assam State Electricity Board and its Successor Companies Revised Pay Rules, 2017 (“2017 Rules”). The key provision on applicability reads:

Application of the Revised Pay
(a) All employees who were in services on 31st March 2016 or who may have been appointed on or after 1st April 2016 shall draw pay in revised pay structure (Pay Band with Grade Pay) applicable to the posts/grades which they have been holding or to which they may have been appointed as the case may be.

The Rules also contain a separate segment titled “Fitment benefit/revision of pensioner/family pensioners”, which:

Provides a multiplication factor (2.48) to revise pension/family pension for those drawing such pension as on 31 March 2016; and
Fixes a minimum pension threshold for pensioners who retired on or before 31 March 2016 after stipulated qualifying service.

The textual architecture thus clearly distinguishes:

Serving employees “in services on 31st March 2016” or appointed on/after 1 April 2016, and
Pensioners/family pensioners already drawing pension on 31 March 2016, whose pension is to be revised by fitment factors and minimum pension safeguards.

2.3 Litigation trajectory

Single Judge (High Court):
The appellants filed a writ petition claiming benefit of the revised pay under the 2017 Rules. The Single Judge held:
- By virtue of FR 56(a), the appellants’ retirement stood on 31.03.2016.
- They were therefore “in service on 31.03.2016”.
- Consequently, they were entitled to the revised pay under the 2017 Rules.
Division Bench (High Court):
In intra‑court appeal (writ appeal), the Division Bench reversed the Single Judge and denied the benefit of the 2017 Rules to the appellants.
Supreme Court:
The appellants approached the Supreme Court by way of special leave petitions, which were granted, converting them into Civil Appeals Nos. 14559–14560 of 2025.

3. Issues Before the Supreme Court

The principal issue before the Court can be framed as:

Whether employees who attained the age of 60 years before 31 March 2016 but, by operation of FR 56(a), retired on the afternoon of 31 March 2016, are “employees who were in services on 31st March 2016” within the meaning of the 2017 Rules and hence entitled to the revised pay structure and consequential pensionary benefits.

This breaks down into sub‑issues:

What is the legal effect of Fundamental Rule 56(a) on the date of retirement?
How does Rule 5(2) of the CCS (Pension) Rules, 1972 treat the “day of retirement”?
How should the expression “in services on 31st March 2016” in the 2017 Rules be construed in light of these general service rules?
What is the relevance of the pension‑revision provisions in the 2017 Rules which refer to persons who retired on or before 31 March 2016?
What effect, if any, do earlier decisions such as K.J. George and G.C. Yadav have on this controversy?

4. Summary of the Judgment

The Supreme Court (Ahsanuddin Amanullah, J. and K. Vinod Chandran, J.; judgment authored by K. Vinod Chandran, J.) held:

FR 56(a) is decisive: For employees who attain the age of 60 years during a month, FR 56(a) mandates that they “shall retire from service on the afternoon of the last day of the month.” There is no basis to treat the earlier date (when 60 years is reached) as the “real” legal retirement date and the extended period as merely for pay and allowances.
Rule 5(2) CCS (Pension) Rules confirms that the last day is a working day: Under Rule 5(2), “the day on which a Government servant retires … shall be treated as his last working day.” Therefore, an employee is in service up to and including the day of retirement on superannuation.
Employees retiring on 31.03.2016 were “in service” on that date: The appellants, by operation of FR 56(a) and Rule 5(2), were in service on 31.03.2016, even though they had attained 60 years earlier in that month.
The 2017 Rules expressly cover such employees: The clause “All employees who were in services on 31st March 2016” squarely includes the appellants. The pension‑revision clauses (sub‑rules 1(a) and 1(b) of the relevant rule, referred to as Rule 32) are only enabling provisions for pensioners who had already retired and cannot be used to deprive serving employees of the main benefit.
Disagreement with K.J. George on FR 56(a): The Court declined to follow the earlier two‑Judge Bench decision in K.J. George, which had held that, even with FR 56(a), an employee “legally retires” on the date he attains the age of 60 years, and that the extension to the last day of the month is only for pay and allowances. The Court found this inconsistent with the text of FR 56(a) and also with a three‑Judge Bench decision in S. Banerjee v. Union of India.
Reliance on S. Banerjee (three‑Judge Bench): In S. Banerjee, despite a deeming provision that treated the date of voluntary retirement as a non‑working day, the Court had granted the benefit of pay commission recommendations that accrued on that date. This supported the broader view that benefits linked to a particular date can accrue to an employee who retires on that date.
Distinguishing G.C. Yadav: The Delhi High Court’s decision in Union of India v. G.C. Yadav was distinguished on facts, because in that case the employee retired before the date on which the pay revision came into effect (1 January 2016).
Relief: The Supreme Court:
- Set aside the Division Bench judgment;
- Restored the Single Judge’s decision;
- Directed that the appellants’ pay for March 2016 be fixed in the revised pay scales and this revised pay be used for computing their pension;
- Ordered payment of arrears of pay and pension within six months, with revised pension to commence from February 2026;
- Provided for interest at 6% per annum on arrears if payments are delayed beyond six months, with such interest being recoverable from the officers responsible for the delay.

5. Detailed Analysis

5.1 The Statutory and Regulatory Framework

5.1.1 Fundamental Rule 56(a)

The Court extracts FR 56(a) in full:

“F.R. 56 (a) Except as otherwise provided in this rule, every Government servant shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years:

Provided that a Government servant whose date of birth is the first of a month shall retire from service on the afternoon of the last day of the preceding month on attaining the age of sixty years.”

Key points:

The main rule mandates retirement on the afternoon of the last day of the month in which 60 years is attained.
The proviso carves out an exception where the date of birth is the 1st of a month: in that case, retirement occurs on the last day of the preceding month.

In the present case:

The appellants attained 60 years sometime in March 2016 (other than on 1 March).
Therefore, by the main limb of FR 56(a), they retired on 31 March 2016 (afternoon).

5.1.2 Rule 5(2) of the CCS (Pension) Rules, 1972

The Court then cites Rule 5(2):

“5(2) The day on which a Government servant retires or is retired or is discharged or is allowed to resign from service, as the case may be, shall be treated as his last working day. The date of death shall also be treated as a working day.”

The proviso to Rule 5(2) (relevant to premature/voluntary retirement) is not applicable to the present case, since the appellants retired on attaining superannuation age. Thus, for them:

The retirement date (31.03.2016) is a working day.
They were in service on that date.

This reading becomes crucial when juxtaposed with the expression “employees who were in services on 31st March 2016” in the 2017 Rules.

5.1.3 The 2017 Rules – Application and Pension Provisions

Two distinct sets of provisions in the 2017 Rules are important:

Application to employees (main clause):
Applies to:
- “All employees who were in services on 31st March 2016”; and
- Employees “appointed on or after 1st April 2016.”
Fitment/pension clauses (referred to as Rule 32 in the judgment):
These:
- Multiply the existing pension/family pension (as on 31.03.2016) by 2.48 w.e.f. 01.04.2016 for those already drawing pension/family pension on 31.03.2016; and
- Ensure that the revised basic pension is not less than 50% of the minimum of the pay in the pay band plus grade pay, for pensioners who retired on or before 31.03.2016 and had requisite qualifying service.

The interpretive conflict arose because the respondents argued that:

The pension provisions, by dealing with those who retired on or before 31.03.2016, implied that nobody retiring on that date could be treated as a serving employee entitled to pay revision; and
Only employees continuing in service beyond 31.03.2016 (or appointed on/after 01.04.2016) were intended to be covered by the revised pay structure.

The Supreme Court found this argument unsustainable once FR 56(a) and CCS Rule 5(2) are properly applied.

5.2 Precedents Cited and Their Influence

5.2.1 K.J. George & Ors. v. Chief General Manager, Telecom, BSNL & Anr. (2008) 14 SCC 699

In K.J. George, the Fifth Central Pay Commission (“5th CPC”) introduced a revised pension regime, effective from 01.01.1996, applicable to “Government servants who retired/died in harness on or after 01.01.1996.”

The employees in that case:

Attained superannuation age on 16.12.1995 and 03.12.1995 respectively;
By FR 56, continued in service until 31.12.1995;
Claimed entitlement to the 5th CPC benefits, arguing that the extension under FR 56 kept them in service through 31.12.1995, so they should be treated as retiring only on that date.

The Supreme Court in K.J. George rejected this and held, in essence, that:

Even though FR 56 extends the date of retirement to the last day of the month, legally the employee retires on the date he attains the age of superannuation.
The extension is only for the purpose of pay and allowances, not for all legal consequences.
Accordingly, the employees who attained superannuation age before 01.01.1996 but formally retired on 31.12.1995 were not entitled to the 5th CPC benefits effective from 01.01.1996.

In Mukut Das, the respondents sought to rely on this reasoning to argue that:

The appellants “legally” retired on the date they attained 60 years (earlier in March 2016), and;
Their continuation till 31.03.2016 was only for pay and allowances, not for pay revision eligibility.

The Supreme Court squarely rejects this characterization of FR 56(a), declaring that it is not supported by the text of FR 56(a) and is inconsistent with a larger Bench decision in S. Banerjee.

5.2.2 Union of India & Ors. v. G.C. Yadav, 2018 SCC OnLine Del 12191 (SLP dismissed 24.05.2024)

The Delhi High Court in G.C. Yadav addressed entitlement under the Seventh Central Pay Commission (7th CPC), which was implemented w.e.f. 01.01.2016 for pensioners retiring on or after that date.

The employee there:

Was born on 01.01.1956;
Under FR 56(a) proviso, attained the age of 60 years with effect from 31.12.2015 and retired on 31.12.2015 (the last day of the preceding month, December 2015);
Claimed 7th CPC benefits due from 01.01.2016.

The Delhi High Court (and the Supreme Court, by refusing leave) held that:

Since the employee retired on 31.12.2015, he was not in service on 01.01.2016;
FR 56(a) did not assist him, because the very rule (its proviso) fixed his retirement at 31.12.2015;
Therefore he could not claim the benefit effective from 01.01.2016.

In Mukut Das, the Supreme Court finds G.C. Yadav inapposite because:

There, the effective date of the pay revision was after the date of retirement (01.01.2016 vs 31.12.2015).
Here, the appellants’ retirement date (31.03.2016) is the same as the cut‑off date for coverage under the 2017 Rules (“in services on 31st March 2016”), not a date prior to it.

Thus, while G.C. Yadav remains sound on its own facts, it does not preclude benefits for employees who retire on the very cut‑off date itself.

5.2.3 S. Banerjee v. Union of India & Ors., 1989 Supp (2) SCC 486

This three‑Judge Bench decision is central to the Supreme Court’s reasoning in Mukut Das.

In S. Banerjee:

The issue concerned the Fourth Central Pay Commission (4th CPC), which provided that the entire dearness allowance drawn up to 31.12.1985 would be treated as “pay” for pensionary benefits for employees retiring between 01.01.1986 and 30.09.1986.
The appellant, a Deputy Registrar of the Supreme Court, retired voluntarily on 01.01.1986.
The proviso to Rule 5(2) of the CCS (Pension) Rules deemed the date of voluntary retirement to be a non‑working day.

Despite this deeming fiction, the three‑Judge Bench:

Treated the appellant as entitled to the benefit accruing on 01.01.1986 to those “in service” on that date; and
Granted the 4th CPC benefit, essentially ensuring that the cut‑off date did not operate to deprive someone retiring on that very date of the intended benefit.

In Mukut Das, the Court relies on S. Banerjee for two critical propositions:

Even when a rule (here, the proviso to Rule 5(2)) deems the date of retirement to be a non‑working day, the Court may still treat the employee as eligible for benefits that attach to that date when the scheme’s purpose so warrants.
A three‑Judge Bench authority prevails over a two‑Judge Bench, and a later Coordinate Bench decision (K.J. George) that ignored the earlier larger Bench ruling cannot be treated as binding when in conflict.

Consequently, the Court in Mukut Das feels justified in not referring the matter to a larger Bench, despite disagreeing with K.J. George, because it is in fact restoring consistency with the earlier three‑Judge Bench in S. Banerjee.

5.3 The Court’s Legal Reasoning

5.3.1 Interpretation of FR 56(a): no “two‑stage” retirement

The pivotal interpretive move is the Court’s refusal to accept that FR 56(a) creates a “fictional extension” where:

“Legal” retirement is deemed to occur the moment the employee attains 60 years, and
The continued service up to the end of the month exists only for limited purposes (salary etc.).

Instead, the Court adopts a straightforward textual reading:

FR 56(a) itself stipulates the retirement date as “the afternoon of the last day of the month” in which the employee attains 60 years (subject to the proviso).
No qualification is found in the rule that the continuation up to that date is only for pay and allowances.
There is thus no concept

From this, the Court concludes:

“The FR does not provide for such extension to be merely for the purpose of pay and allowances nor can there be a deemed legal termination of employer‑employee relationship be found on the date of attaining the age of 60 years.”

Therefore:

The appellants’ date of superannuation is 31.03.2016.
Until the afternoon of that date, they remain full employees for all legal purposes, unless a specific rule provides otherwise.

5.3.2 Rule 5(2) CCS (Pension) Rules: confirming “last working day”

Having fixed the retirement date by FR 56(a), the Court then brings in Rule 5(2) to clarify the legal character of that date:

The day of retirement is the “last working day”.
The employee is therefore in service during that day.
Only after that day concludes is the employee’s status transmuted from “servant” to “pensioner”.

As applied to the appellants:

31.03.2016 is their last working day.
They are in service on 31.03.2016.
They do not fall within the class of persons who retired “on or before 31.03.2016” and were already drawing pension as on that date.

5.3.3 Harmonious construction of the 2017 Rules

With this background, the Court interprets the 2017 Rules as follows:

Main coverage clause:
The phrase “All employees who were in services on 31st March 2016” plainly captures the appellants, because:
- They were in service throughout 31.03.2016 (their last working day).
- The rule does not condition coverage on continuation beyond 31.03.2016.
Pension fitment clauses (Rule 32(1), 32(1)(a), 32(1)(b)):
These provisions:
- Apply to “pensioners/family pensioners who were drawing pension/family pension on 31.03.2016” (sub‑rule (1)(a)); and
- Ensure minimum pension levels for “pensioners who retired on or before 31.03.2016” (sub‑rule (1)(b)).
The Court stresses that:
- The appellants were not pensioners as on 31.03.2016; they were still serving employees.
- These sub‑rules are enabling provisions to avoid hardship to pre‑revision pensioners; they do not limit the class covered by the main coverage clause.
The Court thus rejects the argument that because Rule 32 provides for revision of pension for pre‑31.03.2016 retirees, employees like the appellants must be excluded from the pay revision itself.

The interpretive approach is essentially harmonious construction:

Give full effect to the broader coverage for serving employees (those in service on 31.03.2016); and
Simultaneously preserve the intended benefit for pre‑revision pensioners (via fitment and minimum pension rules), without allowing the latter to diminish the former.

5.3.4 Treatment of K.J. George – an implicit per incuriam finding

The Court openly states its inability to agree with the key proposition in K.J. George that:

An employee “legally” retires on the date he attains the age of 60 years; and
The FR 56(a) continuation is only for pay and allowances.

While the Court does not explicitly use the term per incuriam, its reasoning implies that:

K.J. George failed to notice the earlier three‑Judge Bench in S. Banerjee;
To the extent it is inconsistent with S. Banerjee and with the unqualified language of FR 56(a), it cannot be treated as laying down a binding principle.

Ordinarily, a Coordinate Bench disagreeing with another Coordinate Bench would refer the matter to a Larger Bench. The Court acknowledges this but declines to refer because:

It is in fact aligning with a larger Bench (three‑Judge) decision; and
The contested aspect of K.J. George was rendered without considering that binding precedent.

Therefore, as of this judgment, the controlling law on FR 56(a) is:

Retirement occurs on the afternoon of the last day of the month (or preceding month per the proviso), and
There is no separate, earlier “legal retirement date” when 60 years is reached.

5.3.5 Distinguishing K.J. George and G.C. Yadav on facts

Even apart from the doctrinal disagreement with K.J. George, the Court points out a critical factual distinction:

Both K.J. George and G.C. Yadav involved employees who retired one day before the date on which the pay revision or pay commission recommendations came into effect.
In Mukut Das, by contrast, the date of retirement is the very date on which the revised scheme is anchored (“in services on 31.03.2016”).

Thus:

Employees in K.J. George retired on 31.12.1995; benefits started on 01.01.1996.
Employee in G.C. Yadav retired on 31.12.2015; benefits started on 01.01.2016.
Appellants here retired on 31.03.2016; benefits attach to those “in services on 31.03.2016.”

So, even if one accepted K.J. George on its facts, Mukut Das involves a different configuration: it is not about extending benefits from a future date back to a prior retiree, but about treating someone who retires on the cut‑off date as covered by that date‑based entitlement.

5.4 Impact and Future Implications

5.4.1 Clarification of “in service on [cut‑off date]”

The core precedent may be summarised as:

Where a pay revision or other service benefit is extended to employees “in service on” a specified date, an employee whose date of superannuation (determined under FR 56(a)) is that date is to be treated as in service on that date, and is entitled to the corresponding benefit, unless the relevant scheme expressly excludes such employees.

This has direct consequences for:

Pay revisions, dearness allowance mergers, or fitment schemes with cut‑off dates; and
Any benefit formulated to apply to employees “in service on” a particular date which also happens to be the retirement date of a cohort of employees under FR 56(a).

5.4.2 Strengthening the legal effect of FR 56(a) and CCS (Pension) Rule 5(2)

The judgment firmly entrenches the position that:

FR 56(a) is not a mere “salary formality” but the controlling rule on superannuation date;
Rule 5(2) of the CCS (Pension) Rules makes the retirement day a working day for all consequences (including entitlements that accrue on that day); and
Administrations cannot introduce, by interpretation, a distinction between “legal” and “practical” retirement dates where the rules themselves draw none.

5.4.3 Implications for similarly placed employees

Employees who:

Attained 60 years during a month;
Retired on the last day of that month by operation of FR 56(a); and
Were denied a benefit expressly extended to those “in service on” that last day,

may now invoke Mukut Das to assert that:

They were indeed “in service” on the cut‑off date; and
Any denial grounded on a theory of “legal retirement date” separate from the FR 56(a) date is unsustainable.

However, the judgment does not assist employees who:

Retired even a day before the effective date or cut‑off date of a scheme (e.g., retiring on 31 December where benefits start on 1 January), or
Retired on a date earlier than the scheme’s specified “in service on” date.

The ratio is limited to ensuring proper recognition of employees retiring on the cut‑off date.

5.4.4 Potential re‑examination of K.J. George in future cases

While Mukut Das does not formally overrule K.J. George, it:

Declares its disagreement with a key legal proposition therein, and
Anchors itself in the larger Bench decision of S. Banerjee.

Future Benches may:

Treat K.J. George as confined to its facts, or;
Formally declare it per incuriam if and when the precise issue re‑surfaces, especially in a case squarely turning on that particular interpretation of FR 56(a).

5.4.5 Administrative accountability for delay

The direction that:

Arrears must be paid within six months;
Failure will attract 6% interest per annum on arrears; and
Such interest will be recoverable from officials responsible for the delay,

reinforces an emerging trend where courts:

Reject bureaucratic inertia as a neutral factor; and
Impose personal financial consequences on errant officers for unjustified non‑compliance with judicial orders, particularly in service and pension matters.

6. Complex Concepts Simplified

6.1 Fundamental Rule 56(a)

FR 56(a) sets the standard rule for when a government servant must retire (“superannuate”):

If you turn 60 on any date other than the 1st of a month, you retire on the afternoon of the last day of that month. Example: Born 15.03.1956 → 60 years in March 2016 → retirement on 31.03.2016 (afternoon).
If you are born on the 1st of a month, you retire on the last day of the preceding month. Example: Born 01.01.1956 → deemed to turn 60 on 31.12.2015 → retirement on 31.12.2015 (afternoon).

There is no hidden “earlier” retirement date in law; the retirement date is the one fixed by FR 56(a).

6.2 Superannuation vs. Voluntary/Premature Retirement

Superannuation: Retirement automatically on attaining the prescribed age (e.g., 60 years under FR 56(a)).
Voluntary retirement: Employee opts to retire earlier than superannuation, subject to rules (e.g., after 20 years of service).
Premature retirement: Employer compels retirement earlier than superannuation, based on rules (e.g., in public interest).

The CCS (Pension) Rules sometimes treat voluntary/premature retirement differently (e.g., by deeming the retirement date as a non‑working day). But Mukut Das involves pure superannuation, so the main Rule 5(2) (retirement day as working day) applies.

6.3 “Cut‑off Date” in pay and pension schemes

A “cut‑off date” is the date from which a new benefit (like a pay revision, pension enhancement, or DA merger) becomes applicable. Typical formulations:

“Employees in service on 01.01.2016”;
“Pensioners retiring on or after 01.01.2016”;
“Those who retired between 01.01.2016 and 30.06.2016.”

Such dates are often challenged as arbitrary but are usually sustained if they are rational and uniformly applied. Mukut Das does not question the validity of the cut‑off date; instead, it clarifies who falls within it when read with FR 56(a) and Rule 5(2).

6.4 “Fitment” of pension

“Fitment” is the process of revising existing pay or pension to fit into a new structure:

Old pension × a multiplication factor (e.g., 2.48) = revised pension;
Or shifting to a new pay band + grade pay corresponding to the old scale.

In the 2017 Rules:

Fitment by a factor of 2.48 is given to existing pensioners (those already drawing pension on 31.03.2016);
Separate minimum pension protections are provided.

The controversy was whether such pension fitment rules implied exclusion of employees like the appellants from the main pay revision clause. The Court held: they do not.

6.5 “Non‑reportable” judgments

A judgment marked “Non‑reportable” means:

It is not selected for publication in the official law report (e.g., SCC, SCR) as a “leading” public precedent.
However, under Article 141 of the Constitution, the ratio decidendi of any Supreme Court decision, reported or not, is binding on all courts in India.

Thus, while Mukut Das may not appear in official reports, its reasoning on FR 56(a), CCS Rule 5(2), and the interpretation of “in service on [cut‑off date]” is legally authoritative.

6.6 Coordinate Benches and Larger Benches

Coordinate Bench: A bench of the same numerical strength (e.g., two‑Judge bench vs. another two‑Judge bench).
Larger Bench: A bench with more Judges (e.g., three‑Judge bench vs. two‑Judge; Constitution Bench of five or more).

Basic principles:

A Coordinate Bench should normally follow an earlier Coordinate Bench; if it disagrees, it should refer the matter to a Larger Bench.
A Larger Bench’s decision prevails over a smaller Bench’s, even if the smaller Bench is later in time.

In Mukut Das:

The Court notes that K.J. George (two‑Judge) failed to notice S. Banerjee (three‑Judge);
It therefore feels justified in not following K.J. George and instead applying the rule from the larger Bench.

7. Conclusion

Mukut Das v. Assam Power Generation Corporation Ltd. is a significant addition to Indian service and pension jurisprudence for at least three reasons:

It clarifies the legal status of employees on their retirement date.
By reaffirming the plain meaning of FR 56(a) and Rule 5(2) of the CCS (Pension) Rules, the Court holds that an employee retiring on the last day of a month is in service on that day for all legal purposes, unless a specific rule provides otherwise.
It resolves ambiguity around cut‑off dates and “in service” clauses.
Where a pay revision scheme applies to those “in service on” a certain date, employees whose retirement date (under FR 56(a)) coincides with that date must be treated as covered. Pension‑fitment provisions for pre‑revision retirees cannot be used to negate this entitlement.
It re‑aligns jurisprudence with a larger Bench precedent.
The Court distances itself from K.J. George’s narrower reading of FR 56(a), preferring the approach in S. Banerjee that favours inclusion rather than exclusion of employees whose retirement coincides with the effective date of beneficial schemes.

Beyond its immediate effect—granting revised pay for March 2016 and consequential higher pensions to the appellants—the judgment offers important guidance for administrators and courts when drafting and interpreting pay revision rules, especially where benefits are tied to a specific date and interact with superannuation provisions. It underscores that:

Service rules like FR 56(a) and CCS (Pension) Rule 5(2) cannot be informally overridden by administrative assumptions about “legal retirement dates”; and
Beneficial schemes with date‑based eligibility must be applied in a manner that respects the formal legal status of employees on that date.

In the broader legal context, Mukut Das strengthens a rights‑protective understanding of retirement and pay revision, ensuring that employees who serve until the very day a new scheme takes effect are not arbitrarily fenced out of its benefits.