Continuous Cause of Action in Service Matters: Legal Principles and Landmark Judgments
In service law disputes, the concept of continuous cause of action plays a crucial role, especially in cases involving claims of pay fixation, pension, or allowances.
Courts have consistently held that where a wrong is recurring or continuous, each repetition of that wrong gives rise to a fresh cause of action.
This principle ensures that employees are not denied legitimate entitlements merely due to procedural delays or lapse of time, provided no third-party rights are adversely affected.
1. What is Continuous Cause of Action?
The term “continuous cause of action” refers to a situation where the wrongful act of an employer or authority is not a one-time event but continues to affect the employee periodically, for example, every month when salary or pension is paid incorrectly. This differs from a “one-time action” like dismissal or termination, where the cause of action arises only once and must be challenged within the prescribed limitation period.
Key Distinction
- One-time action: An order like dismissal or compulsory retirement, which if not challenged promptly, becomes final.
- Continuous wrong: Ongoing denial of correct pay, pension, or allowances, which constitutes a recurring grievance, allowing the employee to claim correction and future benefits.
2. Supreme Court in M.R. Gupta v. Union of India (1995)
In M.R. Gupta v. Union of India, (1995) 5 SCC 628, the Supreme Court laid down the foundation of the doctrine of continuing wrong in pay-related disputes.
The case involved incorrect pay fixation, and the employee approached the Central Administrative Tribunal (CAT) after a delay of 11 years. The Tribunal dismissed the case as time-barred. However, the Supreme Court held otherwise.
Key Observations:
- The incorrect pay fixation was a continuing wrong, giving rise to a fresh cause of action every month when salary was paid on the wrong basis.
- While the employee could not claim arrears beyond the limitation period, the right to seek proper pay fixation was not barred.
- The Court emphasized that service benefits like salary must be correctly computed throughout the tenure of service.
“So long as the appellant is in service, a fresh cause of action arises every month when he is paid a salary which is not computed in accordance with the rules.” – M.R. Gupta (1995).
3. Union of India v. Tarsem Singh and Subsequent Cases
The principle was further reinforced in Union of India v. Tarsem Singh, (2008) 8 SCC 648, where the Supreme Court clarified that:
- Continuous wrongs (e.g., underpayment of salary, denial of pension) are not defeated by delay or laches.
- However, arrears are normally restricted to three years prior to the filing of the claim.
This principle has been consistently followed in later cases, including Asger Ibrahim Amin v. LIC, (2016) 13 SCC 797.
4. Asger Ibrahim Amin v. LIC (2016): Pension Claims
In Asger Ibrahim Amin, the appellant approached the court after nearly 14 years seeking pension benefits. The Supreme Court, relying on Tarsem Singh, held:
- Pension claims are recurring and are not barred by limitation as long as the employee remains entitled to pension.
- However, arrears were restricted to three years before the date of the petition due to the extraordinary delay in approaching the court.
“Claim to pension recurs month to month and would not stand extinguished merely because legal remedy for the time-barred part of it has become unavailable.” – Asger Ibrahim Amin (2016).
5. Yogendra Shrivastava Case: Allowances and Pay
In State of M.P. v. Yogendra Shrivastava, (2010) 12 SCC 538, the dispute involved non-practising allowance (NPA) for medical officers. The Court held that:
- Denial of allowances like NPA is a continuing wrong, as it impacts the salary each month.
- Employees are entitled to arrears for three years before the date of filing but can claim prospective correction of the allowance.
“Denial of benefit of higher allowance or pay is a continuing wrong and cause of action arises every month at the time of payment of salary.” – Yogendra Shrivastava (2010).
6. Rushibhai Jagdishbhai Pathak (2022): Pay Scale Matters
The Supreme Court in Rushibhai Jagdishbhai Pathak v. Bhavnagar Municipal Corporation, (2022) 18 SCC 144, clarified the approach to delay and continuous wrong:
- Only the date of filing the claim is relevant for examining delay, not the date of the court’s decision.
- Employees were granted arrears for three years prior to filing the writ petition but not beyond that due to the doctrine of laches.
“In cases of continuing wrongs such as salary or pension, the relevant date for limitation is the date of raising the claim in the judicial forum, not the date of decision by the forum.” – Rushibhai Pathak (2022).
7. Practical Implications of Continuous Cause of Action
7.1 When It Applies
- Cases of pay anomalies (e.g., wrong fixation, grade pay disputes).
- Pension claims or arrears of retirement benefits.
- Allowances like HRA, NPA, or DA where denial is ongoing.
7.2 Limitations
- Arrears are generally limited to three years from the date of filing (as per Tarsem Singh).
- If third-party rights (e.g., promotions or seniority of others) are affected, courts may refuse relief due to laches.
8. Doctrinal Basis
The concept of continuing wrong in service matters arises from:
- Equitable principles – Courts avoid allowing employers to benefit from their own wrongful acts.
- Public policy – Employees should receive correct pay/pension during their service or post-retirement, without being penalized for technical delays.
9. Key Takeaways from Judgments
- M.R. Gupta (1995): Pay fixation disputes create a recurring cause of action.
- Tarsem Singh (2008): Continuous wrong doctrine; arrears limited to three years.
- Asger Ibrahim Amin (2016): Pension is a recurring right; delay does not extinguish entitlement.
- Yogendra Shrivastava (2010): NPA and allowances linked to pay constitute continuous wrongs.
- Rushibhai Pathak (2022): Only the date of filing claim matters for examining delay.
10. Conclusion
The principle of continuous cause of action serves as a lifeline for employees facing persistent denial of their rightful benefits.
While courts discourage stale claims, they recognize that ongoing wrongs such as wrong pay fixation or denial of pension cannot be nullified by delay.
However, to maintain balance, arrears are generally confined to a three-year window preceding the legal action.
This doctrine ensures that employees are not unjustly deprived of entitlements that recur periodically, aligning legal remedies with the principles of fairness and justice.