THE VICE CHAIRMAN DELHI DEVELOPMENT AUTHORITY versus NARENDER KUMAR & ORS on 8 March 2022

ORDER

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1. Special leave granted, in all these proceedings. With consent ofcounsel, this batch of appeals was heard finally.

2. In all these appeals, the common question which arises iswhether the reasoning adopted by the Delhi High Court to hold, anddirect that the Modified Assured Career Progression Scheme (“MACP”)had to be applied from 01-01-2006, is correct. The appellant, DelhiDevelopment Authority (hereafter called “DDA” or “the employer”) isprimarily aggrieved by the ruling of the Delhi High Court[1]. Some of thesuccessful petitioners (respondents in those proceedings, hereafter called G

1 Delivered on 9 January, 2020 in WP 5927/2018, WP 5932/2018 and WP 476/2019.

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A“the employees”), have also appealed to this court, contending that theHigh Court’s directions were not correct and seek a modification of therelief granted by the impugned judgment. The DDA has preferred anotherappeal against a subsequent order[2] which followed the previous order(dated 9th January, 2020).

BRelevant facts

3. The Government of India introduced the Assured CareerProgression Scheme (in short, ACP Scheme), by an office memorandum,in August, 1999[3], to remove stagnation. The salient features of the schemeare extracted below:

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“1. The ACP Scheme envisages merely placement in the higherpay scale/grant of financial benefits (through financial up-gradation) only to the government servant concerned onpersonal basis and shall, therefore, neither amount tofunctional/regular promotion nor would require creation ofnew posts for the purpose; D

2. The highest pay scale up to which the financial up-gradation under the Scheme was available was to be Rs14,300-18,300. Beyond this level, there shall be no financialup-gradation and higher posts were filled strictly on vacancy-based promotions; E

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4. The first financial up-gradation under the ACP Schemeshall be allowed after 12 years of regular service and thesecond financial up-gradation after 12 years of regularFservice from the date of the first financial up-gradationsubject to fulfilment of prescribed conditions. In other words,if the first up-gradation gets postponed on account of theemployee not found fit or due to departmental proceedings,etc. this would have consequential effect on the second up-gradation which would also get deferred accordingly; G

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5.1. Two financial up-gradations under the ACP Scheme inthe entire government service career of an employee shall be H

2 Dated 11.02.2020, in WP. 528/2017.

3 OM dated 09.08.1999, which came into force on 09.08.1999

counted against regular promotions (including in situpromotion and fast track promotions availed through LimitedDepartmental Competitive Examination) availed from thegrade in which an employee was appointed as a direct recruit.This shall mean that two financial up-gradations under theACP Scheme shall be available only if no regular promotionsduring the prescribed periods (12 and 24 years) have beenavailed by the employee. If an employee has already got oneregular promotion, he shall qualify for the second financialup-gradation only on completion of 24 years of regularservice under the ACP Scheme. In case two prior promotionson regular basis have already been received by an employee,no benefit under the ACP Scheme shall accrue to him;”

4. The Sixth Central Pay Commission submitted its report on 24-3-2008. These recommended the salary structure and allowances,conditions of service and retirement benefits of the Central Governmentemployees and other public bodies, personnel belonging to the DefenceForces, Officers and employees of the Audit and Accounts Departmentsand Chairpersons and Members of Regulatory Bodies, except ReserveBank of India. By a resolution dated 29-8-2008, the recommendationsof the Central Pay Commission concerning civilian employees wereaccepted by the Central Government with respect to revised scales ofpay and dearness allowances. It was resolved that these pay andallowances benefits would be applicable with effect from 01-01-2006.

5. The Central Government, in supersession of the ACP Scheme,introduced the MACP scheme, by an office memorandum in May, 2019[4].The MACP was made applicable from an earlier date, i.e. 1[st]September,2008, through a specific condition in that scheme. The respondentemployees had been appointed as regular Work Charged Malis, by theDDA, with effect fromvarious dates, beginning from 03.01.1985. Theywere granted the first financial up-gradation under the ACP Scheme,w.e.f. 03.01.1997, i.e., on completion of 12 years of regular service.Subsequently, they became eligible for grant of the second financial up-gradation under the ACP Scheme, w.e.f. 03.01.2009, i.e., upon completionof 24 years of service. This benefit was not given to them by DDA.There is no dispute that under the MACP Scheme, the employees were A

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Agranted the second MACP benefits- later. The employees’ grievancewas that the DDA introduced the MACP scheme with effect from (01/09/2008) by an order dated 06.10.2009 and according to them, as theireligibility (indeed, as claimed, their entitlement) to claim the second ACPbenefit had accrued to them earlier, they should have been granted thebenefit of second ACP. Consequently, they approached the CentralBAdministrative Tribunal (CAT) by filing original applications[5].

Proceedings before CAT

Procedure

6. Before CAT, the employee- respondents contended that theACP Scheme was more beneficial to them, in comparison with benefitsCunder the MACP Scheme. Therefore, as they had completed 24 yearsof service on various dates in January, 2009, before introduction of theMACP Scheme, (by OM dated 19.05.2009) they were entitled for thesecond financial up-gradation under ACP Scheme, even though theMACP Scheme was introduced with retrospective date, i.e., w.e.f.01.09.2008.D

7. The DDA contended that since the MACP scheme becomeoperative w.e.f. 01.09.2008, the employees were not qualified for thesecond ACP benefits, as they had not completed 24 years of serviceon that date. As a result, the grant of second ACP benefits w.e.f. January,2009 could not arise. The ACP Scheme was valid up-to 31.08.2008. ItEwas urged that the OM dated 19.05.2009 under which the MACP Schemewas introduced in supersession of ACP Scheme of 1999, whichcategorically stated that financial up-gradations in terms of the earlierACP Scheme would be granted till 31.08.2008. None of the respondentemployees challenged that provision of the MACP Scheme. As a result,Fthey could not claim that their case for granting of second financial up-gradation benefits under ACP Scheme had to be considered w.e.f.January, 2009. DDA also relied on Para 11 of the MACP scheme whichis as follows:

“11. It is clarified that no past cases would be re-opened.GFurther, while implementing the MACP Scheme, the differencesin pay scales on account of grant of financial up-gradationunder the old ACP Scheme (of August 1999) and under theMACP Scheme within the same cadre shall not be construedas an anomaly.”

H5 O.A.No.2005/2014; OA 1945/2014; OA 434/2016

8. The DDA’s contention was that the MACP scheme clearlyenvisioned a situation where past benefits, which had actually accruedand been granted to employees, under the ACP scheme, could not bewithdrawn; however, the MACP scheme contained nothing enabling theemployees to claim that, though it was introduced with effect from1[st]September 2008, yet since the memorandum was issued on 19.05.2009,they would be entitled to the benefits of the previous (i.e. ACP) scheme).

9. The CAT, after considering the submission of parties, noticedjudgments of the Delhi, Madras and Bombay High Court and was of theopinion that employees were entitled to the claim. Therefore, it allowedthe applications preferred by the employees and directed DDA to considertheir cases for granting of the financial up-gradations under the ACPScheme till 19.05.2009, i.e., the date of issuance of the MACP Scheme,if they were otherwise qualified and eligible, and to grant appropriatepay scales accordingly, with all consequential benefits. Arrears werehowever, denied to the employees.

Proceedings before the Delhi High Court

10. The DDA’s argument before the Delhi High Court, which itapproached, being aggrieved by CAT’s order, was that with effect from1st September, 2008, the MACP Scheme had become operational andthat the applicants- employees were no longer entitled to receive thebenefits under the (erstwhile) ACP scheme. It was contended that theACP scheme was valid only until 31[st] August, 2008. By that date theemployees had not completed 24 years of service. It was submitted thatsince the MACP scheme was introduced by the Office Memorandum(“OM”) dated 19th May, 2009, superseding the earlier ACP scheme, thequestion of granting any benefit under the ACP scheme after 31[st] August,2008 did not arise.

11. The High Court relied on the decision of this court, in Unionof India v. Balbir Singh Turn[6] where it was held that Armed ForcesPersonnel, had to be given the benefit of the MACP from the date of therecommendations of the 6th Central Pay Commission (‘CPC’) i.e. 1[st]January, 2006 and not from 1st September 2008, as decided by the CentralGovernment. Based on this logic, the High Court, in the impugned order,directed that MACP benefits should be extended to the employees ofDDA from 1[st] January, 2006.

6 (2018) 11 SCC 99

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AContentions of parties

12. It was argued by Mr. Kailash Vasudev, Senior Counsel forDDA that the MACP scheme came into effect on 01.09.2008 and thisshould be the criteria with respect to which applicability of whether theold ACP or the MACP should be decided. The employees completed 24Byears in January 2009 i.e. after the date of coming into force of theMACP, and hence were not entitled to up-gradation under the old ACP.It was argued that the decision in Balbir Singh(supra), relied on by theDelhi High Court, applied only to Armed Forces personnel and not civilestablishments like the DDA.

C13. Counsel urged that it has been 12 years since the MACPscheme was implemented and a decision such as the impugned judgmentwould constitute judicial interference in policy matters and result inenormous financial implications. The decision of this court in ChandiPrasad Uniyal v State of Uttarakhand[7]was cited to urge that excesspayments of public money cannot be permitted to be retained. It wasDcontended that the High Court failed to recognise that the respondentsbecame eligible for the second up-gradation only after the date of issuanceof the MACP and consequently were not entitled to an up-gradationunder the old ACP scheme.

14. It was emphasized, by citing this court’s judgment in State ofEU.P. & Ors. Vs. U.P. Sales Tax Officer Grade-II Officer[8], that :- “decision of expert bodies like the pay commission is notordinarily subject to judicial review, obviously because payfixation is an exercise requiring going into various aspectsof the posts held in various services and nature of the dutiesFof the employees.”

This court’s judgment in Secretary Government (NCT of Delhi)and Ors. Vs. Grade-I officers Associations & Ors[9], was also reliedon. The court had, in that judgment, refused to interfere with the ACPScheme as it would have violated the government’s policy and furtherGheld that exercise of judicial review would not be proper. The courtupheld the ACP Scheme and the conditions therein.

7 2012 (8) SCC 4178 2003 (6) SCC 250H9 2014 (13) SCC 296

15. Learned senior counsel also relied on State of Tamilnadu vArumugham[10] where it was observed that the state has the right toframe a policy to ensure efficiency and proper administration and toprovide the suitable avenues for promotion to officers working in differentdepartments. The court further observed that the Tribunal cannotsubstitute its own views for the views of the government or direct newpolicy based on the views of the tribunal. Likewise, the judgment inState of Haryana & Anr. v Haryana Civil Secretariat Personal StaffAssociation[11] was cited to urge that fixation of pay and determinationof responsibilities is a complex matter in the realm of executive decisionmaking and that the courts should approach such matters with restraint.The decision of this court in Union of India v. M.V. Mohanan Nair[12]was cited to urge that this court had, in its decision, outlined the nature ofthe MACP benefits, and also held that the scheme fell within the realmof executive decision making.

16. Mr. Saurabh Mishra, who also appeared on behalf of the DDA,relied on the later judgment of this court in Union of India v. R.K.Sharma[13], which held that the benefits from the MACP scheme couldnot be given from 01.01.2006, and could be availed of only from01.09.2008. Counsel also relied on Himachal RTC v. Retired EmployeesUnion[14 ]that in matters of pay structure or promotion, the choice of acut-off date, when the new policy regime has to operate, cannot lightlybe interfered with by courts.

17. Mr. M.K. Bhardwaj, learned counsel appearing for some ofthe employees, urged that the High Court’s direction to operate the MACPscheme from 01.01.2006 had not been sought by the employee-applicants.What they in fact, sought was the grant of ACP benefits, which were inforce, in January 2009, before the MACP scheme was launched – byan order dated 19 May, 2009, but with effect from 01-09-2008. In otherwords, the employees’ eligibility and entitlement was crystallized as inJanuary and February, 2009 when the MACP scheme had not beenpublished. It was argued that since on the date of the employees’ eligibility-or entitlement, they should be granted benefits in terms of the existing 10 (1998) 2 SCC 198

11 2002(6) SCC 72

12 (2020) 5 SCC 421

13 (2021) 5 SCC 579

14 (2021) 4 SCC 502

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Ascheme which were ACP benefits, - which in turn meant a higher orpromotional grade, that right could not be defeated on account of a policywhich was adopted later, albeit with effect from an anterior date.

18. Mr. Bhardwaj and other learned counsel stressed that theemployees’ claim for second ACP was warranted in accordance withBthe ACP scheme, because it is clearly postulated by the MACP schemeitself, which, by clause 9 stated as follows:

“9. Any interpretation/ clarification or doubt as to the scopeand meaning of the provisions of the MACP scheme shall begiven by the Department of Personnel and TrainingC(Establishment-I)). The scheme would be operational w.e.f.01.09.2008. In other words, financial up-gradations as perthe earlier ACP Scheme (of August, 1999) would be grantedtill 31-08-2008.”

19. It was further submitted by learned counsel that the right toDbe considered for the ACP benefits, was in the nature of a vested right,which had to be granted even after the coming into force, of the MACPscheme. In this regard it was argued that the rights which crystallize inaccordance with an old scheme, inure and can be enforced by thebeneficiary, regardless of the fact that a new scheme replaces it.EAnalysis and Conclusions

20. The original scheme, i.e. the ACP scheme, (introduced by theOM dated 9-8-1999) granted career progression to Central Governmentcivilian employees. Its intent was to extend relief for stagnation facedby employees’ due inadequate promotional probabilities. The ACP SchemeFwas introduced by the Central Government -with modifications- basedon the recommendations of the Fifth Central Pay Commission. Thatscheme, granted financial up-gradation after 12 years of regular serviceand a second, after 12 years of regular service from the date of the firstfinancial up-gradation, subject to fulfilment of prescribed conditions. Therelevant conditions, i.e. Nos. 5.1 and 10 are extracted below:G

“5.1. Two financial upgradation under the ACP Scheme inthe entire Government Service career of an employee shallbe counted against regular promotions (including in situpromotion and fast track promotion availed through limiteddepartmental competitive examination) availed from the grade H

in which an employee was appointed as a direct recruit. Thisshall mean that two financial up-gradation under the ACPScheme shall be available only if no regular promotion duringthe prescribed periods (12 and 24 years) have been availedby an employee. If an employee has already got one regularpromotion, he shall qualify for the second financialupgradation only on completion of 24 years of regular serviceunder the ACP Scheme. In case two prior promotions onregular basis have already been received by an employee, nobenefit under the ACP Scheme shall accrue to him.

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10. Grant of higher pay scale under the ACP Scheme shallbe conditional to the fact that an employee, while acceptingthe said benefit, shall be deemed to have given his unqualifiedacceptance for regular promotion on occurrence of vacancysubsequently. In case he refuses to accept the higher post onregular promotion subsequently, he shall be subject to normaldebarment for regular promotion as prescribed in the generalinstructions in this regard. However, as and when he acceptsregular promotion thereafter, he shall become eligible for thesecond upgradation under the ACP Scheme only after hecompletes the required eligibility service/period under the ACPScheme in that higher grade subject to the condition that theperiod for which he was debarred for regular promotion shallnot count for the purpose. For example, if a person has gotone financial upgradation after rendering 12 years of regularservice and after 2 years therefrom if he refuses regularpromotion and is consequently debarred for one year andsubsequently he is promoted to the higher grade on regularbasis after completion of 15 years (12+2+1) of regularservice, he shall be eligible for consideration for the secondup-gradation under the ACP Scheme only after rendering tenmore years in addition to two years of service already renderedby him after the first financial up-gradation (2+10) in thehigher grade i.e. after 25 years (12+12+1) of regular servicebecause the debarment period of one year cannot be takeninto account towards the required 12 years of regular servicein that higher grade.”

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A21. As is apparent, financial up-gradation under the ACP Schemewas available only if regular promotion during the stipulated intervals, 12years and 24 years, were not granted to an employee. A singular featureof the ACP scheme was that while the benefit was pay based, theemployee had to fulfil the prescribed criteria (i.e. qualifications,experience, and also possess the requisite service records) to be eligibleBfor the benefits. The ACP benefit was a promotional grade, divorcedfrom the existence or otherwise of any vacancy, and without necessarilybeing functional in the higher grade, with attendant responsibilities.

22. The MACP scheme, which replaced the ACP scheme, witheffect from 01-09-2008 (although the scheme was introduced onC19.05.2009) was preceded by the Sixth Central Pay Commission reportdated 24-3-2008. That report dealt with the pay-structure, allowances,conditions of services and retiral benefits of Central Governmentemployees, etc. By a Resolution dated 29-8-2008, recommendations ofthe Pay Commission concerning civilian employees were accepted byDthe Central Government regarding revised pay-scales and dearnessallowances with effect from 01-01-2006. As regards revised allowances,(excluding dearness allowance), the effective date designated by thememorandum is 1-9-2008.

23. The noticeable feature of the MACP Scheme- is that threeEincrements are to be granted to employees on completion of 10, 20 and30 years of service. According to the MACP scheme, financial up-gradation is admissible on completion of 10 years of continuous service-in the same grade pay. The distinction between the ACP and the MACPscheme is not only with respect to the number of benefits (i.e., twounder the ACP scheme, and three under the MACP scheme) but alsoFthat the former assured the promotional grade, where the latter (MACPscheme) only assured higher pay.[15]

15 Para 2 of the MACP scheme- through Annexure I to the Office Memorandum, statesas follows:G“The MACPS envisages merely placement in the immediate next higher grade payin the hierarchy of the recommended revised pay bands and grade pay as given inSection 1, Part-A of the first schedule of the CCS (Revised Pay) Rules, 2008. Thus, thegrade pay at the time of financial upgradation under the MACPS can, in certain caseswhere regular promotion is not between two successive grades, be different than whatis available at the time of regular promotion. ln such cases, the higher grade payattached to the next promotion post in the hierarchy of the concerned cadre/organisationHwill be given only at the time of regular promotion.”

24. The first issue which arises, is the correctness of the impugnedjudgment, in applying the reasoning in Balbir Singh. In that decision,the question which arose for consideration was the correct date fromwhich the MACP up-gradation scheme, was applicable to employees(below the rank of officer). This court held that the scheme had to beapplied from 01.01.2006, and not the date designated by the concernedorder (01.09.2008). The Armed Forces Tribunal (AFT) held that ACPbenefits granted to employees is part of the pay structure which not onlyaffects pay but also pension. ACP then ruled that it is not an allowancebut a part of pay relied on a Government Resolution to hold that theMACP scheme was payable w.e.f. 01.01.2006. This Court in BalbirSingh Turn (supra) upheld that finding recorded by the AFT. Instructionsissued on 30-5-2011 were found to be contrary to the Resolution dated30-8-2008 as, according to the resolution 1-1-2006 was the effectivedate for implementation of Macps in matters relating to pay and dearnessallowance. There is no such parallel, in the facts of this case.

25. In M.V. Mohanan Nair (supra) a three judge Bench of thiscourt held, in the context of a dispute, which asserted that MACP benefitswould result in regular promotional advancement, that:

“The change in policy brought about by supersession of ACPScheme with the MACP Scheme is after consideration of allthe disparities and the representations of the employees. TheSixth Central Pay Commission is an expert body which hascomprehensively examined all the issues and therepresentations as also the issue of stagnation and at the sametime to promote efficiency in the functioning of thedepartments. MACP Scheme has been introduced on therecommendation of the Sixth Central Pay Commission whichhas been accepted by the Government of India. After acceptingthe recommendation of the Sixth Central Pay Commission, theACP Scheme was withdrawn and the same was supersededby the MACP Scheme with effect from 01.09.2008. This is notsome random exercise which is unilaterally done by theGovernment, rather, it is based on the opinion of the expertbody – Sixth Central Pay Commission which has examinedall the issues, various representations and disparities. Beforemaking the recommendation for the Pay Scale/Revised PayScale, the Pay Commission takes into consideration the AB

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Aexisting pay structure, the representations of the governmentservants and various other factors after which therecommendations are made. When the expert body like PayCommission has comprehensively examined all the issues andrepresentations and also took note of inter-departmentaldisparities owing to varying promotional hierarchies, the courtBshould not interfere with the recommendations of the expertbody. When the government has accepted the recommendationof the Pay Commission and has also implemented those, anyinterference by the court would have a serious impact on thepublic exchequer.”C26. This court, in R.K. Sharma & Ors.[16], commented on the effectof M.V. Mohanan Nair (supra) on the MACP scheme, especially thedate from which it was operative. It was held that:

“The judgment in M.V. Mohanan Nair clinches the issue.Benefits flowing from ACP and MACP Schemes are incentivesDand are not part of pay. The Resolution dated 29-8-2008 ismade effective from 1-9-2008 for implementation ofallowances other than pay and DA which includes financialupgradation under ACP and MACP Schemes. Therefore, therespondents and other similarly situated officers are notentitled to seek implementation of the benefits of Macps withEeffect from 1-1-2006 according to the Resolution dated 29-8-2008. Moreover, the implementation of Macps by grantingfinancial upgradation only to the next grade pay in the payband and not granting pay of the next promotional post witheffect from 1-1-2006 would be detrimental to a large numberFof employees, particularly those who have retired.”27. It is therefore, quite clear that both Mohanan Nair(supra)and R.K. Sharma(supra), examined the MACP scheme; the latter,especially, ruled that the scheme was operable from 01-09-2008,and that the respondents “officers are not entitled to seekGimplementation of the benefits of Macps with effect from 1-1-2006according to the Resolution dated 29-8-2008”. Having regard to thisclearly enunciated principle, which, in this court’s opinion, stems from acorrect reading of the scheme, the reasoning of the High Court, that theMACP scheme is operative not from 01-09-2008, but from 01-01-2006, H16 (2021) 5 SCC 579

is untenable. The mere circumstance that the resolution of theGovernment which led to adoption of the MACP also contained theeffective date for implementation of the pay-benefits of the PayCommission recommendations, did not obliterate the fact that the datefrom which the scheme was to be made effective, was another one.

28. The submissions of the DDA, that the executive agency’sconsiderations, while extending a benefit or new regime such as thepromotion or career advancement program, is to be effective, involvesdecision making that is complex and nuanced, is justified. The date ofoperation of new pay scales cannot be per se the same when theoperation of another scheme (which may also involve pay benefits) neednot be the same. The shifting of dates (once settled by the executiveafter due deliberations) may seemingly have no consequences, butinevitably would have radical financial implications. Given these factors,it has been held, in previous decisions[17] that courts should in the absenceof any facially compelling reason disclosing arbitrariness desist fromstepping into the arena of decision making, and avoid directing their re-formulation or even requiring such schemes to be administered fromany anterior period.

29. The other reason why the High Court went wrong, in holdingwhat it did, is that DDA is an autonomous – a statutory – organization.No doubt, it largely follows the Central Government’s policies, in respectof pay and allowances, and other benefits for its employees. However,any revision of pay-structure or revision in other terms and conditions,of Central Government personnel cannot and do not automatically applyto the DDA; it has to consider the new or fresh scheme formulated bythe Central Government, and adopt it, if necessary, after appropriateadaptation, to suit its needs. Therefore, the Central Government’s MACPscheme did not apply to it automatically. The DDA decided to apply it,through an office order dated 06.10.2009.[18] The High Court hasoverlooked this aspect, and apparently assumed that the MACP schemeapplied automatically, upon its adoption by the Central Government, tothe DDA.

17 Govt of AP v N. Subbarayadu 2008 (14) SCC 702; Ami Lal Bhat v State of Rajasthan(1997) 6 SCC 614; State of Bihar v. Ramjee Prasad (1990) 3 SCC 368; Union ofIndia v. Sudhir Kumar Jaiswal (1994) 4 SCC 212 Union of India v. Shivbachan Rai(2001) 9 SCC 356 and Council of Scientific & Industrial Research v. Ramesh ChandraAgrawal (2009) 3 SCC 35

18 Establishment Order, dated 6 October, 2009

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A30. This brings the court to the next point, which is whether theemployees can assert what is termed as a vested right. The firstsubmission in this regard is that according to Para 9 of the MACP scheme,those who are in employment on the date when MACP scheme wasbrought into force and who are entitled to the ACP benefits, especiallythe second financial up-gradation had a right to insist that their secondBup-gradation should be granted in terms of the ACP scheme. In thiscontext, the argument advanced is that Rule 9 preserves and protectssuch a right (for entitlement) to be granted the ACP benefits even afterthe introduction of the MACP scheme.

31. Para 9 recognises the fact that if there is any ambiguity in theCinterpretation of the MACP scheme it would be resolved by theDepartment of Personnel and Training. It also clarifies in the last sentencethat financial up-gradation would be granted till 31.08.2008 (given thatthe MACP scheme itself became operative on 01.09.2008), althoughthe office memorandum was issued on 19.05.2009. In the opinion of thisDCourt the undue influence placed upon the last sentence cannot be metmuch of by the employees given that the ACP scheme itself ended on31.08.2008. This provision (i.e. Para 9) was made to cater to the situationswhere the grant of ACP benefits was under process, this would meanboth types of benefits i.e. the first and the second up-gradation.Doubtlessly, the first up-gradation under the ACP scheme was to beEgranted after 12 years. If Para 9 were to be considered in the context ofthe first up-gradation it is a clarification to the effect that the individualconcerned who has crossed 12 years’ service (and therefore becameeligible and whose case is under active consideration) would get theACP benefits. However, this provision cannot be understood as anFindependent transitional provision, enabling all employees awaiting theup-gradation to insist that the benefit of the ACP scheme shouldindefinitely continue despite its ceasing to exist after 31.08.2008.

32. The second aspect in this regard is the argument that a vestedright accrued in favour of the employees who had completed the eligibilityfor a financial up-gradation to insist that such up-gradation ought to beGonly under the ACP scheme and not under the MACP scheme.

33. The concept of “vested right” has arisen for considerationbefore this court in several contexts especially with respect to alterationof service condition of public employees. That the Central Governmentin the exercise of its legislative powers conferred under provision ofH

Article 309 of the Constitution can frame rules which has the force oflaw has been settled several decades ago. This court has also held thatsuch rules can be made to operate from anterior date by givingretrospective effect to them. The determination of an anterior date forthe operation of a rule which has the effect of nullifying or refacingintervening events or invalidating benefits which had been granted topublic employees was held to be unconstitutional in State of Gujarat vsRaman Lal Keshav Lal Soni[19]. Several previous judgments of this Courtdealing with the question that what is accrued or vested right wereconsidered in Chairman, Railway Board v. C.R. Rangadhamaiah[20]wherein the impugned rule in question sought to disturb the method ofcalculating the last pay drawn for the purposes of pension and relatedallowances. This impacted the pension disbursement of a large numberof employees who had retired much earlier. The court observed that theamendments applied to employees who had already retired and were nolonger in service on the date the impugned notifications were issued, andadversely impacted the pension they were drawing. In such context thecourt held as impermissible, those benefits which accrued or in otherwords had been actually enjoyed and were taken away by the devise ofgiving retrospective effect to the rule. The court observed as follows:

“22. In State of Gujarat v. Raman Lal Keshav LalSoni [(1983) 2 SCC 33] decided by a Constitution Bench ofthe Court, the question was whether the status of ex-ministerialemployees who had been allocated to the Panchayat serviceas Secretaries, Officers and Servants of Gram and NagarPanchayats under the Gujarat Panchayat Act, 1961 asgovernment servants could be extinguished by makingretrospective amendment of the said Act in 1978. Striking downthe said amendment on the ground that it offended Articles311 and 14 of the Constitution, this Court said:

“52. … The legislature is undoubtedly competent to legislatewith retrospective effect to take away or impair any vestedright acquired under existing laws but since the laws are madeunder a written Constitution, and have to conform to the do’sand don’ts of the Constitution, neither prospective norretrospective laws can be made so as to contravene 19 (1983) 2 SCR 287

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Fundamental Rights. The law must satisfy the requirements ofthe Constitution today taking into account the accrued oracquired rights of the parties today. The law cannot say,twenty years ago the parties had no rights, therefore, therequirements of the Constitution will be satisfied if the law isdated back by twenty years. We are concerned with today’srights and not yesterday’s. A legislature cannot legislate todaywith reference to a situation that obtained twenty years agoand ignore the march of events and the constitutional rightsaccrued in the course of the twenty years. That would be mostarbitrary, unreasonable and a negation of history.”

23. The said decision in Raman Lal Keshav Lal Soni (1983) 2SCR 287 of the Constitution Bench of this Court has beenfollowed by various Division Benches of this Court. ( K.C.Arora v. State of Haryana (1984) 3 SCR 623; T.R. Kapur v.State of Haryana [(1987) 1 SCR 584]; P.D. Aggarwal v. Stateof U.P. [(1987) 3 SCR 427] ; K. Narayanan v. State ofKarnataka [1994 Supp (1) SCC 44] ; Union of India v. TusharRanjan Mohanty [(1994) 5 SCC 450] and K. RavindranathPai v. State of Karnataka [1995 Supp (2) SCC 246).

24. In many of these decisions the expressions “vested rights”or “accrued rights” have been used while striking down theimpugned provisions which had been given retrospectiveoperation so as to have an adverse effect in the matter ofpromotion, seniority, substantive appointment, etc., of theemployees. The said expressions have been used in the contextof a right flowing under the relevant rule which was soughtto be altered with effect from an anterior date and therebytaking away the benefits available under the rule in force atthat time. It has been held that such an amendment havingretrospective operation which has the effect of taking away abenefit already available to the employee under the existingrule is arbitrary, discriminatory and violative of the rightsguaranteed under Articles 14 and 16 of the Constitution. Weare unable to hold that these decisions are not in consonancewith the decisions in Roshan Lal Tandon [ (1968) 1 SCR 185]B.S. Vedera [ (1968) 3 SCR 575] and Raman Lal Keshav LalSoni [(1983) 2 SCR 287] .

34. In the present context, none of the employees actually earneda second financial up-gradation. They undoubtedly became eligible forconsideration. However, the eligibility ipso facto could not, having regardto the terms of the ACP scheme translate into an entitlement. The eligibilitywas, to put it differently, an expectation. To be entitled to the benefits,the public employer (here DDA) had to necessarily review and considerthe employees’ records, to examine whether they fulfilled the eligibilityconditions and, based on such review individual orders had to be madeby DDA. In other words, second ACP up-gradation was not automaticbut dependant on external factors. Furthermore, as held by this Court inM.V. Mohanan Nair (supra), MACP benefits are only an incentivemeant to relieve stagnation – framed under the executive policy. Itscontinued existence cannot be termed as an enforceable right.

35. Such expectation is akin to a candidate being declared successfulin a recruitment process and whose name is published in the select list.That, such candidate has no vested right to insist that the public employermust issue an employment letter, has been held by a Constitution BenchJudgment of this Court in Shankarsan Dash vs Union Of India[21].Therefore, it is held that employees’ contention that they acquire a vestedright in securing the second ACP benefit is insubstantial.

36. The employees in this case approached the High Court,complaining that their vested right, which was the assumed entitlementto be given by second ACP, was taken away by the MACP, introducedwith effect from 01-09-2008, by an order dated 19-05-2009. No doubt,the MACP scheme is an executive order. Usually, such orders areexpressed to be prospective. However, the executive has the option ofgiving effect to such an order, from an anterior date; especially if itconfers some advantages or benefits to a sizeable section of itsemployees, as in this case. The nature of benefits- as emphasized bythis court earlier, were by way of incentives. They are not embodiedunder rules. In such circumstances, a set of employees, who mighthave benefitted from the then prevailing regime or policy, cannot in theabsence of strong and unequivocal indications in the later policy (whichmight be given effect to from an anterior date, like in this case), insistthat they have a right to be given the benefits under the supersededpolicy. It is noteworthy that a larger section of employees would benefitfrom the MACP benefits, because they are to be given after 10-, 20- AB

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Aand 30-years’ service (as compared with two benefits, falling due after12 and 24 years of service) and further that such benefits under MACPscheme are subjected to less rigorous eligibility requirements, than underthe ACP scheme.

37. The myriad intricate details which the executive has to consider,Bwhile framing a scheme applicable generally, to a large section of theemployees, may not always admit of one, or one set of solutions. Toinsist that a particular kind of benefit, hitherto applicable, should becontinued for a set of employees, while the others should be governedby another, new set or scheme, would be imposing a significant burdenon the administration, apart from swelling financial costs as well asCadministrative energies. Such directions would result in creating differenttime warps, rendering efficient administration of personnel policiesimpracticable. Sans palpable or facial arbitrariness, the courts should becircumspect in adding conditions, or tampering with such arrangements.In Ajoy Kumar Banerjee v Union of India[22] a five judge Bench of thisDcourt had emphasized this aspect in the following terms:

“46…. The legislature however is free to recognise the degreeof harm or evil and to make provisions for the same. Makingdissimilar provisions for one group of public sectorundertakings does not per se make a law discriminatory asEsuch. It is well-settled that courts will not sit as super-legislature and strike down a particular classification on theground that any under-inclusion, namely, that some othershave been left untouched so long as there is no violation ofconstitutional restraints…… The same principle was reiteratedby this Court in the case of State of Gujarat v. Shri AmbicaFMills Ltd., Ahmedabad [1974 (3) SCR 760]. In that case, thisCourt was of the view that in the matter of economic legislationor reform, a provision would not be struck down on the viceof under-inclusion, inter alia, for the reason that thelegislature could not be required to impose upon administrativeGagencies task which could not be carried out or which mustbe carried out on a large scale at a single stroke. It was furtherreiterated that piece meal approach to a general problempermitted by under-inclusive classifications, is sometimes justified when it is considered that legislatures deal with suchproblems usually on an experimental basis. It is impossible totell how successful a particular approach might be, whatdislocation might occur, and what situation might develop andwhat new evil might be generated in the attempt. Administrativeexpedients must be forged and tested. Legislators recognizingthese factors might wish to proceed cautiously, and courtsmust allow them to do so….”

This court is of the opinion that the same considerations apply inthe present case. That, some employees could have benefitted moreunder the ACP benefits, if the MACP scheme had not been introducedfrom an earlier date, is no ground to hold so and compel an executiveagency to grant the claimed benefits.

38. For the foregoing reasons, the impugned judgment and orderis set aside. The appeals filed by the DDA are hereby allowed. Duringthe pendency of the proceedings before the CAT, the benefits sought bythe employees were granted, under interim orders, but subject to thefinal outcome. In these circumstances, the benefits claimed by such ofthe applicant/employees, granted to them under the ACP scheme, canbe reversed by the DDA. However, where the applicants were givenMACP benefits by DDA, on its consideration that they were entitled toit, from later dates (such as from 2010-2011 or later dates) shall not bedisturbed. The appeals preferred by the employees claiming that theyought to be given ACP benefits from the date as claimed by them for thesame reasons are hereby dismissed. There shall be no order as to costs.

Devika Gujral

Appeals disposed of.

(Assisted by : Mahendra Yadav, LCRA)

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