UNION OF INDIA AND OTHERS versus EX. HC/GD VIRENDER SINGH on 22 August 2022

UNION OF INDIA AND OTHERS

v.

EX. HC/GD VIRENDER SINGH

(Civil Appeal No. 5545 of 2022)

AUGUST 22, 2022

[SANJIV KHANNA AND BELA M. TRIVEDI, JJ.]

Service Law – Central Civil Services (Revised Pay) Rules, 2008– Modified Assured Career Progression Scheme (MACP scheme) –This Court framed three questions for consideration – (i) Whetherthe MACP Scheme is applicable and to be implemented with effectfrom 1[st] January 2006, the date from which the Central Civil Service(Revised Pay) Rules, 2008 were enforced, or in terms of O.M. dated19[th] May 2009 with effect from 1[st] September 2008? – (ii)Whetherunder the MACP Scheme the respondents are entitled to financialupgradation equivalent to the pay scale/grade pay of the nextpromotional post in the hierarchy, or the immediate next grade paybands as stated in section 1, Part A of the First Schedule to theCentral Civil Services (Revised Pay) Rules, 2008? – (iii) Whetherthe respondents, who belong to the Central Armed Police Forces,are entitled to grant of financial upgradation under the MACPScheme, if for administrative reasons they were unable to fulfil thepre-proportional norms? Held: MACP Scheme is applicable witheffect from 1.9.2008 – Supreme Court in Union of India and Othersv. M.V. Mohanan Nair has already answered the second issue – Itwas held that under the MACP Scheme, financial upgradations aregranted at three regular intervals on completion of 10-20-30 yearsof service without promotion – MACP Scheme puts an end andrectifies the problem arising from inter-departmental disparities inre the pay scales of the next promotional post – It is seen that theterm “grade pay in the next promotional post” is conspicuouslyabsent in the entire body of the MACP Scheme – Under MACP theentitlement is to financial upgradation equivalent to immediate nextgrade pay and not to the immediate next promotional post – Thethird issue, which relates to the fulfilment of pre-promotional normsfor grant of financial upgradation, is decided against the appellant-Union of India to the extent that this would not be insisted in thecase of the Central Armed Forces personnel where, for

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Aadministrative or other reasons, they could not be sent or undergothe pre-promotional course.

Disposing of the appeals, the Court

HELD: 1.1 As rightly held in R.K. Sharma, the reasoninggiven in the case of Balbir Singh Turn, in opinion of this Court,Bhas not been accepted by the three Judge Bench decision in thecase of M.V. Mohanan Nair, which in clear terms holds grant offinancial upgradation under the MACP Scheme is not a matter ofpay structure, but an incentive scheme brought into force torelieve stagnation which operates on its own terms. This CourtCmay add that the pay scales are fixed and revised by the ruleswhich are enacted in exercise of powers conferred by the provisoto Article 309 and clause (5) of Article 148 of the Constitution ofIndia. Therefore, vide Notification dated 29th August 2008, theCentral Civil Services (Revised Pay) Rules, 2008 were enactedvide G.S.R. No. 622(E). Rule 1(2) states that the Rules, as enacted,Dshall be deemed to have come into force on 1st January 2006.The aforesaid Rules neither postulate nor have any provision forgrant of financial upgradation under the MACP Scheme. It is tobe further noted, and it is an accepted position of both parties,that the MACP Scheme, as implemented, postulates grant ofEfinancial upgradation after 10, 20 and 30 years of regular serviceand not after 8, 16 or 24 years of regular service, as was originallyenvisaged in terms of Government Resolution dated 30th August2008, or for that matter, 10 or 20 years of service, as wasrecommended by the Sixth Central Pay Commission. In ouropinion, the Resolution of the Central Government dated 30thFAugust 2008 cannot be read as conferring any right on thegovernment employees. The resolution was not notified andenforced to confer a legal right. The Office Memorandum dated19.05.2009 promulgates and operationalises the MACP Schemewith effect from 01.09.2008. The Office Memorandum states thatGfinancial upgradations as per the provisions of the earlier ACPScheme would be granted till 30.08.2008. Further, past caseswould not be re-opened and the difference in pay scales on accountof grant of financial upgradation under the old ACP Scheme andthe MACP Scheme shall not be construed as an anomaly. [Para9][228-B-G; 229-A]H

1.2 The counsel for the government employees, inspite ofbeing correct that M.V. Mohanan Nair does not refer to BalbirSingh Turn and does not overrule it specifically, misses the pointthat the entire ratio and reasoning given in M.V. Mohanan Nair,as rightly observed in R.K. Sharma, cannot be reconciled withthe ratio in Balbir Singh Turn. M.V. Mohanan Nair has examinedthe MACP Scheme in depth and detail to settle the controversy,inter alia holding that supersession of the ACP Scheme by theMACP Scheme is a matter of government policy, and that “afteraccepting the recommendation of the Sixth Central PayCommission, the ACP Scheme was withdrawn and the same wassuperseded by the MACP Scheme with effect from 1.9.2008.”The ACP Scheme and MACP Schemes were held to be in thenature of incentive schemes to relieve stagnation and not as apart of pay structure, which had revised the pay and the dearnessallowance with effect from 1.1.2006. In these circumstances, wedo not think a case for reference to a larger Bench of three Judgesto reconsider the ratio in the decision of R.K. Sharma is madeout. Therefore, the contention of the counsel for the respondents/government employees for reference of the matter is rejected.[Para 10][229-A-E]

1.3. On the third aspect, we should record the concessionrightly made by the Additional Solicitor General during the courseof the hearing that the personnel working in the Central ArmedForces would be granted financial benefit under the MACPScheme on completion of prescribed years of regular service byrelaxation in cases where, on account of administrative or otherreasons, they could not be sent for participation in pre-promotionalcourse. The appellant- Union of India has agreed to accept thedirections given by the Delhi High Court in the case of Ram AvtarSharma v. Director General of Border Security Force in thisregard. A liberal, pragmatic and ameliorative approach is requiredto succour genuine grievances of the personnel doing duty forthe nation, owing to which they forgo participation in pre-promotional courses. Accordingly, the third question is answeredagainst the appellant-Union of India. [Para 11][229-E-H]

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A2. In view of the aforesaid discussion, the appeals filed bythe Union of India are partly allowed and impugned judgments,to the extent they hold that the MACP Scheme applies with effectfrom 1.1.2006 and that under the MACP Scheme the employeesare entitled to financial upgradation equivalent to the nextpromotional post, are set aside. MACP Scheme is applicable withBeffect from 1.9.2008 and as per the MACP Scheme, theentitlement is to financial upgradation equivalent to the immediatenext grade pay in the hierarchy of the pay bands as stated inSection 1, Part A of the First Schedule to the Central CivilServices (Revised Pay) Rules, 2008. The third issue, whichCrelates to the fulfilment of pre-promotional norms for grant offinancial upgradation, is decided against the appellant-Union ofIndia to the extent that this would not be insisted in the case ofthe Central Armed Forces personnel where, for administrativeor other reasons, they could not be sent or undergo the pre-promotional course. [Para 12][230-A-D]D

Union of India and Others v. M.V. Mohanan Nair (2020)5 SCC 421 : [2020] 7 SCR 851; Union of India v. R. K.Sharma and Others (2021) 5 SCC 579 – relied on.

Union of India and Others v. Balbir Singh Turn andEAnother, (2018) 11 SCC 99 : [2017] 12 SCR 421;Bachhittar Singh v. State of Punjab & Another, AIR1963 SC 395 : [1962] Suppl. SCR 713; State of AssamEtc. v. Kripanath Sarma and Others Etc., AIR 1967 SC459 : [1967] SCR 499; Ram Avtar Sharma v. DirectorGeneral of Border Security Force W.P. (c) No. 5278 ofF2013 – referred to.

Case Law Reference

UNION OF INDIA AND OTHERS v. EX. HC/GD VIRENDERSINGH

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5545of 2022.

From the Judgment and Order dated 12.01.2021 of the High Courtof Delhi at New Delhi in Writ Petition (C) No. 402 of 2021.

With

SLP (C) D.No.14322 of 2020, SLP (C) Nos.16065, 16179 of 2021,SLP (C) No. 4279 of 2022, Civil Appeal No. 1592 of 2021, SLP (C)D.No. 19618 of 2020, Civil Appeal No.1600 of 2021, SLP (C) D.No.19905 of 2020, SLP (C) Nos. 11603, 12597, 11924, 11663 of 2020, CivilAppeal No. 1597 of 2021, SLP (C) Nos. 13066, 11899 of 2020, SLP (C)D.No. 26590 of 2020, SLP (C) D.No.15702 SLP of 2021, Civil AppealNos. 1603-1609 of 2021, SLP (C) D.Nos.16220, 17489 of 2020, SLP(C) Nos.11679, 12110, 12092, 11858 Of 2020, SLP (C) Nos.3775, 4012Of 2021, SLP (C) D.nos.4311, 4350, 4357, 4362, 4359, 4405 Of 2021,SLP (C) Nos.4118, 4065 Of 2021, SLP (C) D.Nos. 4918, 4920, 4921,4926, 4928, 4933, 4938 of 2021, SLP (C) No. 4011 of 2021, SLP (C)D.Nos. 4966, 4975 of 2021, SLP (C) Nos. 4407, 3833, 4493 of 2021,SLP (C) D.No. 5031 of 2021, SLP (C) No.3830 of 2021, SLP (C) D.No.5041 of 2021, SLP (C) Nos. 4015, 5018 of 2021, SLP (C) D.Nos. 5916,5954 of 2021, SLP (C) Nos. 5168, 4995 of 2021, SLP (C) D.No. 8333 of2021, SLP (C) No. 6057 of 2021, SLP (C) D.No. 4972 of 2021, SLP (C)No. 6082 of 2021, SLP (C) D.Nos. 4934, 4993 of 2021, SLP (C) No.4598 of 2021, SLP (C) D.Nos. 4924, 4989, 8463, 5039 of 2021, SLP (C)No. 4392 of 2021, SLP (C) D.No. 6848 of 2021, SLP (C) Nos. 5075,5086, 4033, 6031, 6094, 8726, 6694, 6440, 8727, 8722, 5750, 7392, 8723,6858, 8724, 7553, 7960, 7136, 8683, 8700, 8725, 8936, 8728 of 2021, SLP(C) No. 11738 of 2020, SLP (C) Nos. 10921, 7523, 4216, 5269, 3766,10923, 8126, 10922, 8729, 8874, 11910, 11419 of 2021, SLP (C) D.No.15753 of 2021, SLP (C) No. 12031 of 2021, SLP (C) D.Nos. 15751,15705, 15714, 15700, 15713 Of 2021, SLP (C) No. 11532 of 2021, SLP(C) D.No. 15759 of 2021, SLP (C) Nos. 11568, 11019, 11682, 11681,11700 of 2021, SLP (C) D.No. 15712 of 2021, SLP (C) Nos. 12030,11048 of 2021, SLP (C) D.Nos. 15532, 15756, 15694 of 2021, SLP (C)No. 11542 of 2021, SLP (C) D.No. 15697 of 2021, SLP (C) Nos. 12495,15093, 13493, 16411, 13803 of 2021, SLP (C) D.No. 18800 of 2021, SLP(C) No. 20257 of 2021, SLP (C) Nos. 307, 42 of 2022, SLP (C) D.No.26989 of 2021, SLP (C) No.19129 of 2021, SLP (C) Nos. 370, 491, 381,959, 377-378, 932 of 2022, SLP (C) Nos. 19290, 8721 of 2021, SLP (C)

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AD.No.19614 of 2020, SLP (C) Nos. 6053-6054, 9796, 9797, 5580, 9795,9704, 7196, 9056, 9678, 8598, 12240, 12241 of 2022, Writ Petition (C)No. 561 of 2022, SLP (C) Nos. 13440, 13441, 9118 of 2022.

Madhavi Divan, Vikramjit Banarjee, Ms. Aishwarya Bhati, ASGs,R. Balasubramanian, Sr. Adv., B. V. Balaram Das, Ms. Vimla Sinha,BRajesh K. Singh, Ms. Seema Bengani, Prashant Singh, Amit Sharma,B., Shyamal Kumar, Ms. Vaishali Verma, Varun Chugh, Ms. NiddiKhanna, Ms. Aishani Narain, Ms. Shubha Yadav, Ms. SwarupamaChaturvedi, Ms. Nachiketa Joshi, Ms. Swati Ghildiyal, Manvendra Singh,BLN Shivani, Ms. Shreya Jain, Merusagar Samantray, Yogesh Pachauri,P.V. Yogeswaran, Arvind Kumar Sharma, Sanjay Mani Tripathi, PawanCKumar Sharma, Prakhar Sharma, Ali Jethmalani, Ms. Anu Gupta, SantoshKumar, Ms. Ruchi Kohli, Amit Sharma, Anirudha Sharma, Aman Sharma,Ms. Shivika Mehra, Mukesh Kumar Maroria, Advs. for the Appellants.

Manoj V. George, Ms. Shilpa Liza George, K.M. Vignesh Ram,Akriti Seth, Renjith V. Philip, Nasib Masih, Ms. Richa Ojha, Satish Kumar,DMs. Lakshmi N. Kaimal, A.K. Trivedi, Vaibhav Trivedi, Dr. Ram Sankar,Ms. Suganthi R., G. Jai Singh, Ms. Usha Prabakaran, Ms. Sujatha Bagadhi,M/S. Ram Sankar & Co, Prashant Bhushan, Om Prakash Agarwal,Ms. Manjeet Chawla, Jatin Bhardwaj, Sansar Kumar, Rajesh Kumar,Amit Gaurav Singh, Ms. Rupali Sharma, K.K. Sharma, E. C. VidyaESagar, Arjun Garg, Shobhit Jain, Aakash Nandolia, Ms. Sagun Srivastava,Advs. for the Respondent.

The Judgment of the Court was delivered by SANJIV KHANNA, J.

The Judgment of the Court was delivered by SANJIV KHANNA, J.

FDelay is condoned and leave is granted.2. These appeals by way of special leave raise three issues, all ofwhich are connected and relate to the Modified Assured CareerProgression Scheme[1], namely:

(a) Whether the MACP Scheme is applicable and to beGimplemented with effect from 1[st] January 2006, the datefrom which the Central Civil Service (Revised Pay) Rules,2008 were enforced, or in terms of O.M. dated 19[th] May2009 with effect from 1[st] September 2008?

H1 For short, the ‘MACP Scheme’.

(b) Whether under the MACP Scheme the respondents areentitled to financial upgradation equivalent to the pay scale/grade pay of the next promotional post in the hierarchy, orthe immediate next grade pay in the hierarchy of the paybands as stated in Section 1, Part A of the First Schedule tothe Central Civil Services (Revised Pay) Rules, 2008?

(c) Whether the respondents, who belong to the Central ArmedPolice Forces, are entitled to grant of financial upgradationunder the MACP Scheme, if for administrative reasons theywere unable to fulfil the pre-proportional norms?

3. The second question is covered by a three Judge Bench decisionof this Court in Union of India and Others v. M.V. Mohanan Nair[2],which judgment explicates the similarities and the difference betweenthe Assured Career Progression Scheme[3], the erstwhile scheme whichwas replaced by the MACP Scheme. In a nutshell, it can be stated thatthe MACP Scheme, like the ACP Scheme, is an incentive scheme devisedwith the object of ensuring that the employees who have stagnated forlack of adequate promotional avenues are given benefit in the form offinancial upgradation. The financial upgradation is personal, does notamount to regular or actual functional promotion, and does not requirecreation of a new post. It has no relevance to the seniority position andprinciples of reservation are not applicable. Financial upgradation isgranted to only those employees who have not received actual orfunctional promotion even after completion of the requisite service period,though otherwise, they fulfil the prescribed conditions for promotion[4].Having said so, the ACP Scheme and the MACP Scheme differsignificantly. Under the ACP Scheme, a government servant is entitledto financial upgradation on completion of 12 and 24 years of her/hisregular service, to the pay scale of the next promotional post in thehierarchy. Under the MACP Scheme, an employee is entitled to threefinancial upgradations on completion of 10, 20 and 30 years of regularservice to the next higher grade pay in the hierarchy of the pay bandsand grade pay as given in Section 1, Part A of the First Schedule of theCentral Civil Services (Revised Pay) Rules, 2008.

2 (2020) 5 SCC 421

3 For short, the ‘ACP Scheme’

4 For upgradation under the MACP Scheme, the benchmark of ‘good’ and ‘very good’is applicable till the grade pay of Rs.6600/- in pay band 3 and for grade pay of Rs.7600/- and above, respectively.

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A4. The difference between the two Schemes, and in the form offinancial upgradation, has been lucidly explained by this Court in M.V.Mohanan Nair (supra) by observing that the MACP Scheme has beenimplemented after due deliberation and on consideration of therecommendations made by the Sixth Central Pay Commission to bringsystematic changes in the erstwhile ACP Scheme so that all employees,Birrespective of the existing hierarchical structure in their organisations/cadres, get identical financial benefit of the next immediate grade payinstead of the pay/grade pay applicable to the next promotional post.The MACP Scheme puts an end and rectifies the problem arising frominter- departmental disparities in re the pay scales of the next promotionalCpost. The objective of the change is analysed and decoded in M.V.Mohanan Nair (supra), in the following words:

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“29...Under the MACP Scheme, financial upgradations are grantedat three regular intervals on completion of 10-20-30 years of servicewithout promotion. Hence, it is also intended to ensure that theDemployees are adequately incentivised to work efficiently despitenot getting promotion for want of promotional avenue. The changein policy brought about by supersession of the ACP Scheme withthe MACP Scheme is after well- deliberated and well-documentedrecommendations of the Sixth Central Pay Commission.Considering the various issues in the implementation of the ACPEScheme, the Pay Commission expressed its views “the only otherway is to bring systematic changes in the existing Scheme ofACP so that all the employees irrespective of the existing hierarchystructure in their organisations/cadres, get some benefit under it”.The Commission therefore, recommended that the existing schemeFof ACP be continued with the modifications indicated thereon inthe report that the financial upgradation has to be in the nextimmediate grade pay. One of the reasons for the expert bodyrecommending the MACP Scheme was that there were inter-departmental disparities where several departments had varyingpromotional hierarchies. As a result, the working of ACP SchemeGunder which an employee who stagnated for 12 years, was entitledto pay in the pay scale of the next promotional post, led to inter-departmental anomalies. The Pay Commission therefore,recommended MACP Scheme with a view to putting an end tothe problem ensuing from inter- departmental disparities.

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30. By perusal of the MACP Scheme extracted earlier, it is seenthat the words used in the Scheme are “placement in the immediatenext higher grade pay in the hierarchy of the recommended revisedpay bands”. The term “grade pay in the next promotional post” isconspicuously absent in the entire body of the MACP Scheme.The argument of the respondents that the benefit of MACP Schemeis referable to the promotional post, is dehors the MACP Schemeand cannot be accepted. Though ACP and MACP Schemes areintended to provide relief against stagnation, both the schemeshave different features. Pay scales under the Sixth Pay Commissionand the MACP Scheme are stated to be more beneficial since itextends to the employees with time intervals with higher pay bandsand various facilities which were not available under the ACPScheme including the three financial upgradations in shorter timespan. In any event, MACP Scheme has not been challenged bythe respondents. As rightly contended by the learned ASG, therespondents cannot be permitted to cherry-pick beneficial featuresfrom the erstwhile ACP Scheme and also take advantage of thebeneficial features in the MACP Scheme.

31. The object behind the MACP Scheme is to provide relief againstthe stagnation. If the arguments of the respondents are to beaccepted, they would be entitled to be paid in accordance with thegrade pay offered to a promotee; but yet not assume theresponsibilities of a promotee. As submitted on behalf of Union ofIndia, if the employees are entitled to enjoy grade pay in the nextpromotional hierarchy, without the commensurate responsibilitiesas a matter of routine, it would have an adverse impact on theefficiency of administration.”

5. The judgment in M.V. Mohanan Nair (supra) defers to theSixth Central Pay Commission recommendations as an expert body thathad threadbare examined all the issues, disparities and even representationsby employees before making their proposal, which thereafter upon carefulconsideration was accepted by the government with modifications. Thecourts would not normally interfere with well deliberated decisions byexperts in the field, unless adoption is bad on account of statutory violation,the policy contravenes the overriding constitutional mandate of right toequality, is discriminatory, manifestly arbitrary or negates otherfundamental rights. The Executive, by the Constitution, has been AB

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Aconferred the right to choice as it has a duty to discharge, and isresponsible and accountable for their action. The court examines thevalidity challenge, albeit, while performing the constitutional duty andexercising the power of judicial review, does not substitute its views onthe choice of policy on merits. In fiscal matters, including pay fixationand terms of service, several factors like prevailing financial position,Bcapacity to bear the additional liability are relevant and, therefore, thecourts do tread carefully as interference may have serious impact on thepublic exchequer and have grave financial implications.

6. In M.V. Mohanan Nair (supra), the argument to adopt“purposive interpretation” or to apply the principle of ‘equal pay forCequal work’ for grant of financial upgradation to the pay in the nextpromotional post as under the ACP Scheme, viz. financial upgradationto the next grade pay in the hierarchical pay scale, was rejected as financialupgradation cannot be equated with promotion. On merits, it has beenheld that the financial upgradation envisaged as per the MACP Scheme Dis not a case of hostile discrimination. The MACP Scheme is not irrational,unjust and prejudicial to a section of the employees, but a well-considereddecision which has taken all material and relevant factors into consideration.Prescription of pay scales and incentives are a matter of decision takenby the government which, when based upon the recommendation of anexpert body like the Central Pay Commission, should carry weight andEthe courts should be reluctant to substitute the policy with their own viewson what would be more equitable and just. It is to be noted that theMACP Scheme postulates grant of three financial upgradations after aperiod of 10, 20 and 30 years, whereas the ACP Scheme had postulatedgrant of only two financial upgradations after a period of 12 and 24Fyears of regular service. Thus, the claim for grant of financial upgradationin the grade pay of the promotional hierarchy was rejected. Further,with effect from 1[st] September 2008, the ACP Scheme stands supersededby the MACP Scheme as a matter of government policy and hence, theemployees, on and from the date of implementation of the MACP Scheme, cannot claim any benefit of the ACP Scheme. To hold so, this CourtGreferred to the Joint Committee meetings held on 15[th] September 2010,15[th] March 2011 and 27[th] July 2012, which were followed by a letterdated 4[th] November 2013. Minutes of these meetings reveal that somealternatives, including giving of individual option to choose between theACP Scheme and MACP Scheme, were considered but not favoured asHimpracticable.

7. The first question has been answered by this Court in Union ofIndia v. R.K. Sharma and Others[5] in the following words:

“8. Ms Madhavi Divan, learned Additional Solicitor General ofIndia appearing for the appellants submitted that this Court in BalbirSingh Turn held that payment under the ACPS is a part of thepay structure whereas in a later judgment in Union of India v.M.V. Mohanan Nair this Court was of the opinion that both ACPand MACP Schemes are in the nature of incentive schemes. Theseappeals deserve to be dismissed in terms of the judgment of thisCourt in M.V. Mohanan Nair. The contention of the appellant isthat a policy decision was taken to implement the recommendationof the 5th Pay Commission in respect of revised scales of pay anddearness allowance for civilian employees with effect from 1-1-2006 and that revised allowance other than dearness allowancewith effect from 1-9-2008. The learned Additional Solicitor Generalargued that the respondent is entitled to the incentive under theACP Scheme which was in vogue till 31-8-2008. The respondentcannot seek applicability of MACPS with effect from 1-1-2006.According to the MACPS the financial upgradation is in the highergrade pay in the same pay band whereas financial upgradation asper the ACP Scheme was to the next grade pay of promotionalpost. The learned Additional Solicitor General stated that revisionof financial upgradation granted to civilian officers by implementingMACPS from 1-1-2006 would be detrimental to the respondentand other similarly situated persons as huge amounts of moneywould have to be recovered from them.

9. For a better understanding of the dispute in these cases, it isnecessary to examine the judgments of this Court in Balbir SinghTurn and M.V. Mohanan Nair. The point that was considered bythis Court in Balbir Singh Turn relates to the applicability of thebenefit of MACPS from 1-1-2006. The respondents thereinapproached the Armed Forces Tribunal which held that the benefitof ACP granted to an employee is part of the pay structure whichaffects the pay and also his pension. The Armed Forces Tribunalheld that an ACP is not an allowance but a part of pay and therefore,in terms of the government resolution, the employees were entitledfor MACP with effect from 1-1-2006. This Court in Balbir Singh AB

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Turn upheld the said finding recorded by the Armed ForcesTribunal. Instructions issued on 30-5- 2011 were found to becontrary to the Resolution dated 30-8-2008 as, according to theresolution 1-1-2006 was the effective date for implementation ofMACPS in matters relating to pay and dearness allowance.

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10. In M.V. Mohanan Nair a three-Judge Bench of this Courtconsidered the ACPS as well as the MACPS to hold that theschemes are in the nature of incentive schemes which were broughtinto force to relieve stagnation. This Court was of the consideredview that the respondents therein were entitled only to the benefitof next grade pay in the pay band and not to the benefit of gradepay of next promotional post. As the MACPS is a matter ofgovernment policy pursuant to the recommendations made by thePay Commission, this Court refused to accept submissions of theemployees that MACPS should be made applicable with effectfrom 1-1-2006.

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11. In view of the judgment of this Court in M.V. Mohanan Nair,the respondents and other similarly situated employees are entitledfor financial upgradation under MACPS only to the next gradepay and not to the grade pay of next promotional post. It is clearfrom the Resolution dated 30-8-2008 that the recommendation ofEthe 6th Pay Commission was accepted by the Government andwas made effective from 1-1-2006 in respect of civilian employeeswith regard to revised scales of pay and dearness allowances.Insofar as the revised allowances other than dearness allowance,recommendations of the 6th Pay Commission were given effectfrom 1-9-2008. The judgment in M.V. Mohanan Nair clinchesFthe issue. Benefits flowing from ACP and MACP Schemes areincentives and are not part of pay. The Resolution dated 29-8-2008 is made effective from 1-9-2008 for implementation ofallowances other than pay and DA which includes financialupgradation under ACP and MACP Schemes. Therefore, theGrespondents and other similarly situated officers are not entitled toseek implementation of the benefits of MACPS with effect from1-1-2006 according to the Resolution dated 29-8- 2008. Moreover,the implementation of MACPS by granting financial upgradationonly to the next grade pay in the pay band and not granting pay ofthe next promotional post with effect from 1-1-2006 would be E

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detrimental to a large number of employees, particularly those whohave retired. We find force in the submission made by the learnedAdditional Solicitor General that uniform implementation ofMACPS for civilian employees with effect from 1-1-2006 wouldresult in large-scale recoveries of amounts paid in excess.”

8. The aforesaid paragraphs refer to the decision by a three JudgeBench of this Court in M.V. Mohanan Nair (supra), which we havequoted and referred to above. It also refers to a two Judge Bench decisionin the case of Union of India and Others v. Balbir Singh Turn andAnother,[6] which holds that notwithstanding O.M. dated 19[th] May 2009stating that the MACP Scheme would be applicable with effect from1[st] September 2008, the MACP Scheme would be applicable with effectfrom 1[st] January 2006. The judgment in Balbir Singh Turn (supra)reasons that the Central Government, on 30[th] August 2008, had resolvedto accept the recommendations of the Sixth Central Pay Commissionwith regard to the personnel below the officer rank, subject to certainmodifications. Reliance was placed upon clause (i) of the Resolution ofthe Central Government dated 30[th] August 2008, which reads as under:

“(i) Implementation of the revised pay structure of pay bands andgrade pay, as well as pension, with effect from 1-1-2006 and revisedrates of allowances (except dearness allowance/relief) with effectfrom 1-9-2008;”

It also refers to clause (ix) of the Resolution which reads as follows:

“(ix) Grant of 3 ACP upgradations after 8, 16 and 24 years ofservice to PBORs;”

Thereafter, the judgment in Balbir Singh Turn (supra) says thatthe Sixth Central Pay Commission had recommended grant of benefit ofthe ACP Scheme after 10 and 20 years of service, but the CentralGovernment had decided to grant ACP Scheme after 8, 16 and 24 yearsof service. Lastly, it holds that perusal of clause (i) of the Resolutiondated 30[th] August 2008 indicates that the Central Government haddecided to implement the revised pay scales of pay bands and grade pay,as well as pension, with effect from 1[st ]January 2006. The second part ofthe said clause lays down that all allowances, except dearness allowance/relief, will be effective from 1[st] September 2008. The MACP Scheme,being a part of the pay structure and having effect on the grade pay of A

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Athe employees, cannot be said to be part of allowances. Benefit of MACPScheme, if given to employees, would affect their pension and therebyalso means that it has to be applied and given effect from 1[st] January2006 as it is a part of the pay structure.

9. As rightly held in R.K. Sharma (supra), the aforesaid reasoningBgiven in the case of Balbir Singh Turn (supra), in our opinion, has notbeen accepted by the three Judge Bench decision in the case of M.V.Mohanan Nair (supra), which in clear terms holds grant of financialupgradation under the MACP Scheme is not a matter of pay structure,but an incentive scheme brought into force to relieve stagnation whichoperates on its own terms. We may add that the pay scales are fixed andCrevised by the rules which are enacted in exercise of powers conferredby the proviso to Article 309 and clause (5) of Article 148 of theConstitution of India. Therefore, vide Notification dated 29[th] August 2008,the Central Civil Services (Revised Pay) Rules, 2008 were enacted videG.S.R. No. 622(E). Rule 1(2) states that the Rules, as enacted, shall beDdeemed to have come into force on 1[st] January 2006. The aforesaidRules neither postulate nor have any provision for grant of financialupgradation under the MACP Scheme. It is to be further noted, and it isan accepted position of both parties, that the MACP Scheme, asimplemented, postulates grant of financial upgradation after 10, 20 and30 years of regular service and not after 8, 16 or 24 years of regularEservice, as was originally envisaged in terms of Government Resolutiondated 30[th] August 2008, or for that matter, 10 or 20 years of service, aswas recommended by the Sixth Central Pay Commission. In our opinion,the Resolution of the Central Government dated 30[th] August 2008 cannotbe read as conferring any right on the government employees. TheFresolution was not notified and enforced to confer a legal right.[7] TheOffice Memorandum dated 19.05.2009 promulgates and operationalisesthe MACP Scheme with effect from 01.09.2008. The OfficeMemorandum states that financial upgradations as per the provisions ofthe earlier ACP Scheme would be granted till 30.08.2008. Further, past cases would not be re-opened and the difference in pay scales on accountG

7 See – Bachhittar Singh v. State of Punjab & Another, AIR 1963 SC 395, State ofAssam Etc. v. Kripanath Sarma and Others Etc., AIR 1967 SC 459, and other cases onthe aspect of when an order/resolution would confer a legal right. It is to be noted thatthe doctrine of legitimate expectation has not been invoked and has no application inHthe facts of this case.

of grant of financial upgradation under the old ACP Scheme and theMACP Scheme shall not be construed as an anomaly.

10. Learned counsel for the government employees, inspite ofbeing correct that M.V. Mohanan Nair (supra) does not refer to BalbirSingh Turn (supra) and does not overrule it specifically, misses the pointthat the entire ratio and reasoning given in M.V. Mohanan Nair (supra),as rightly observed in R.K. Sharma (supra), cannot be reconciled withthe ratio in Balbir Singh Turn (supra). M.V. Mohanan Nair (supra)has examined the MACP Scheme in depth and detail to settle thecontroversy, inter alia holding that supersession of the ACP Scheme bythe MACP Scheme is a matter of government policy, and that “afteraccepting the recommendation of the Sixth Central Pay Commission, theACP Scheme was withdrawn and the same was superseded by theMACP Scheme with effect from 1.9.2008.”[8] The ACP Scheme andMACP Schemes were held to be in the nature of incentive schemes torelieve stagnation and not as a part of pay structure, which had revisedthe pay and the dearness allowance with effect from 1.1.2006. In thesecircumstances, we do not think a case for reference to a larger Benchof three Judges to reconsider the ratio in the decision of R.K. Sharma(supra) is made out. Therefore, we reject the contention of the learnedcounsel for the respondents/government employees for reference of thematter.

11. On the third aspect, we should record the concession rightlymade by the Additional Solicitor General during the course of the hearingthat the personnel working in the Central Armed Forces would be grantedfinancial benefit under the MACP Scheme on completion of prescribedyears of regular service by relaxation in cases where, on account ofadministrative or other reasons, they could not be sent for participationin pre-promotional course. The appellant- Union of India has agreed toaccept the directions given by the Delhi High Court in the case of RamAvtar Sharma v. Director General of Border Security Force[9] in thisregard. A liberal, pragmatic and ameliorative approach is required tosuccour genuine grievances of the personnel doing duty for the nation,owing to which they forgo participation in pre-promotional courses.Accordingly, the third question is answered against the appellant-Unionof India.

8 See paragraph no. 32 in M.V. Mohanan Nair (supra) as reported in (2020) 5 SCC 421.

9 W.P. (c) No. 5278 of 2013 decided on 12th August 2014

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A12. In view of the aforesaid discussion, the appeals filed by theUnion of India are partly allowed and impugned judgments, to the extentthey hold that the MACP Scheme applies with effect from 1.1.2006 andthat under the MACP Scheme the employees are entitled to financialupgradation equivalent to the next promotional post, are set aside. MACPScheme is applicable with effect from 1.9.2008 and as per the MACPBScheme, the entitlement is to financial upgradation equivalent to theimmediate next grade pay in the hierarchy of the pay bands as stated inSection 1, Part A of the First Schedule to the Central Civil Services(Revised Pay) Rules, 2008. The third issue, which relates to the fulfilmentof pre-promotional norms for grant of financial upgradation, is decidedCagainst the appellant-Union of India to the extent that this would not beinsisted in the case of the Central Armed Forces personnel where, foradministrative or other reasons, they could not be sent or undergo thepre-promotional course.

All pending applications are disposed of.

D

Ankit Gyan

Appeals disposed of.

(Assisted by : Rahul Rathi, LCRA)

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