Union Of India vs M.V. Mohanan Nair on 5 March, 2020


Supreme Court of India

Union Of India vs M.V. Mohanan Nair on 5 March, 2020

Author: R. Banumathi

Bench: R. Banumathi, A.S. Bopanna

                                                                   REPORTABLE
                                      IN THE SUPREME COURT OF INDIA
                                       CIVIL APPELLATE JURISDICTION
                                      CIVIL APPEAL NO. 2016 OF 2020
                                   (Arising out of SLP(C) No.21803 of 2014)
                         UNION OF INDIA AND OTHERS                      ...Appellants

                                                    VERSUS
                         M.V. MOHANAN NAIR                            …Respondent
                                                     WITH
                                      CIVIL APPEAL NO. 2017 OF 2020
                                   (Arising out of SLP(C) No.22181 of 2014)
                                      CIVIL APPEAL NO. 2018 OF 2020
                                   (Arising out of SLP(C) No.23335 of 2014)
                                      CIVIL APPEAL NO. 2019 OF 2020
                                   (Arising out of SLP(C) No.23333 of 2014)
                                       CIVIL APPEAL NO. 2020 OF 2020
                                   (Arising out of SLP(C) No.18227 of 2015)
                                      CIVIL APPEAL NO. 2021 OF 2020
                                   (Arising out of SLP(C) No.31125 of 2016)
                                       CIVIL APPEAL NO. 2022 OF 2020
                                   (Arising out of SLP(C) No.33706 of 2016)
                                  CIVIL APPEAL NO(s). 2044-2045 OF 2020
                                (Arising out of SLP(C)No(s). 5917-5918 of 2017
                                       @ SLP(C)Diary No.6042 of 2017)

                                                JUDGMENT

R. BANUMATHI, J.

Leave granted.

Signature Not Verified

Digitally signed by
MAHABIR SINGH
Date: 2020.03.05

2. The instant batch of appeals have been filed assailing the
14:46:58 IST
Reason:

orders of various High Courts dismissing petitions filed by the

1
appellants, thereby upholding decisions rendered by different

Benches of Central Administrative Tribunal granting financial

upgradation of grade pay in the next promotional hierarchy by

placing reliance upon Union of India and others v. Raj Pal and

another CWP No.19387 of 2011 dated 19.10.2011. In these

batch matters, we are concerned with the question whether

MACP Scheme entitles financial upgradation to the next grade

pay or to the grade pay of the next promotional hierarchy.

3. In all these appeals, almost all the High Courts have

followed the Raj Pal and Ved Prakash’s case and granted relief

as prayed for by the respondents. Being aggrieved, the appellant-

UOI has filed these appeals.

4. The main questions falling for consideration in these
appeals are:-

(i) Whether MACP scheme entitles financial upgradation of
pay to the next grade pay or to the grade pay of the next
promotional post as envisaged under the ACP scheme?
Whether MACP Scheme envisages grant of financial
upgradation in Grade Pay Hierarchy and not in
promotional hierarchy?

(ii) As contended by the respondents, whether MACP scheme
is disadvantageous to the employees in comparison to
ACP scheme as long as the financial upgradation is
granted in hierarchy of grade pay under MACP scheme?

2

(iii) Whether respondents are entitled to stepping up of their
grade pay to be at par with grade pay of their juniors who
were getting the higher grade pay on account of
implementation of MACP Scheme?

Appeals relating to Issue No.III were ordered to be de-tagged and

listed separately.

5. At the outset, it is to be pointed out that almost all the

Tribunals/High Courts have only relied upon Raj Pal’s case for

grant of financial upgradation on promotional hierarchy and

rejected the stand of the appellant-UOI that under MACP

scheme, the employees are entitled to financial upgradation of

the next grade pay only. Since the matter was considered on

merits and since the issue involves impact on the public ex-

chequer and also interest of the staff of various establishments,

we requested learned Senior counsel, Mr. Jaideep Gupta to

assist the Court as amicus curiae which the learned Senior

counsel has readily consented. Mr. Kunal Chatterji, learned

counsel has agreed to assist the learned Senior counsel-amicus.

Assured Career Progression (ACP) Scheme:-

6. The Government of India with a view to “deal with the

problem of genuine stagnation and hardship faced by the

employees due to lack of adequate promotional avenues”,

3
introduced the Assured Career Progression (ACP) Scheme with

effect from 09.08.1999 vide its Office Memorandum dated

09.08.1999. To mitigate the hardship in cases of acute stagnation

in a cadre or in an isolated post, it has been decided to grant two

financial upgradations under the ACP Scheme to Group ‘B’, ‘C’

and ‘D’ employees on completion of 12 and 24 years of regular

service. As per ACP Scheme, isolated post in Group ‘A’, ‘B’, ‘C’

and ‘D’ cadres which have no promotional avenues also qualify

for similar benefits. The financial upgradations under the ACP

Scheme is placement in the higher Pay Scale and financial

benefits in the higher Pay Scale without regular promotion. Under

the financial upgradation, grant of financial benefits under the

ACP Scheme to the government servants concerned is on

personal basis. Such financial upgradation neither amounts to

regular promotion nor require creation of new post. Some of the

salient features of the ACP Scheme are as follows:-

 The ACP Scheme envisages merely placement in the higher pay-

scale/grant of financial benefits (through financial upgradation) only to
the Government servant concerned on personal basis and shall,
therefore, neither amount to functional/regular promotion nor would
require creation of new posts for the purpose;

 Under the ACP Scheme, two financial upgradations shall be allowed to
Group ‘B’, ‘C’ and ‘D’ employees on completion of 12 years and 24 years
of his/her regular service.

4
 As per para 5.1 of Annexure-1 – conditions for grant of benefits under
the ACP Scheme, it is stipulated that two financial upgradations would
be available only if no regular promotion during the prescribed period (12
and 24 years) was granted to an employee. If an employee has already
received one regular promotion, he/she would qualify for second ACP
only on completion of 24 years of regular service. However, in case if
two regular promotions have been received by an employee, no further
benefit under the ACP Scheme would accrue in favour of the employee.
 As per para 3.1 of the Office Memorandum dated 09.08.1999, the grant
of financial upgradations under the ACP Scheme shall be subject to the
conditions mentioned in the Annexure-I annexed thereon to the Office
Memorandum dated 09.08.1999.

7. Para No.8 of the Annexure provides that the financial

upgradations shall be purely personal to the employee and would

have no relevance to his/her seniority position. In other words,

there would be no additional financial upgradations for the senior

employee on the ground that the junior employee has got the

higher pay scale under the ACP Scheme. Para No.12 of

Annexure-I provides that the ACP Scheme contemplates merely

placement on personal basis in the higher pay scale/grant of

financial benefits only and shall not amount to actual functional

promotion of the employees concerned. We may usefully refer to

the relevant features of the ACP Scheme as stipulated in

Annexure-I to the Office Memorandum dated 09.08.1999-

5
Conditions for Grant of Benefits under the ACP Scheme, which

reads as under:-

Conditions for grant of benefits under the ACP Scheme:-

1. The ACP Scheme envisages merely placement in the higher pay-scale/grant of
financial benefits (through financial upgradation) only to the Government servant
concerned on personal basis and shall, therefore, neither amount to
functional/regular promotion nor would require creation of new posts for the
purpose;

………

4. The first financial upgradation under the ACP Scheme shall be allowed after 12
years of regular service and the second upgradation after 12 years of regular
service from the date of the first financial upgradation subject to fulfilment of
prescribed conditions. In other words, if the first upgradation gets postponed on
account of the employee not found fit or due to departmental proceedings, etc. this
would have consequential effect on the second upgradation which would also get
deferred accordingly;

………

8. The financial upgradation under the ACP Scheme shall be purely personal to the
employee and shall have no relevance to his seniority position. As such, there shall
be no additional financial upgradation for the senior employee on the ground that
the junior employee in the grade has got higher pay-scale under the ACP Scheme;
……….

12. The proposed ACP Scheme contemplates merely placement on personal basis in
the higher pay-scale/grant of financial benefits only and shall not amount to
actual/functional promotion of the employees concerned. Since orders regarding
reservation in promotion are applicable only in the case of regular promotion,
reservation orders/roster shall not apply to the ACP Scheme which shall extend its
benefits uniformly to all eligible SC/ST employees also. However, at the time of
regular/functional (actual) promotion, the Cadre Controlling Authorities shall ensure
that all reservation orders are applied strictly;

………”

8. ACP Scheme was replaced by Modified Assured Career

Progression (MACP) Scheme which became operational with

effect from 01.09.2008. The Sixth Central Pay Commission has

recommended the adoption of MACP Scheme primarily to rectify

the problems arising from inter-departmental disparities:-

6

(i) ACP Scheme led to creation of certain disparities within
the employees in different organisations/departments
who were directly recruited in the same pay scale who
received different financial upgradations under the ACP
Scheme because of existence of different promotional
hierarchical structure and different promotional pay
scales in different organisations/departments;

(ii) Another adverse consequence in the implementation of
the ACP Scheme was that the benefit of a higher pay
scale was not available if the next post in the hierarchy
also existed in the identical pay scale.

9. In order to bring systematic changes in the existing scheme

of ACP so that all employees irrespective of existing hierarchical

structure in their organisations/cadre get the same benefit, MACP

was recommended by the Sixth Central Pay Commission which

was accepted by the Government with certain modifications vide

its Office Memorandum dated 19.05.2009. Under the Sixth

Central Pay Commission, revised pay structure has been

implemented with effect from 01.01.2006; whereas benefits of

ACP Scheme have been allowed till 31.08.2008. Vide Office

Memorandum dated 19.05.2009, the Government of India

introduced the MACP Scheme, in supersession of the ACP

Scheme w.e.f. 01.09.2008. There shall be no change in

distinction, classification or higher status on grant of financial
7
upgradation under MACP as the upgradation is purely personal

and merely placement in the next higher Grade Pay.

Modified Assured Career Progression (MACP) Scheme:-

10. Under the MACP Scheme, three financial upgradations are

made available in the next grade pay to an employee who has

completed 10, 20 and 30 years of regular service in the same

post without getting any promotion. The benefit would be

available at the next higher grade pay. Some of the salient

features of the MACP Scheme are as follows:-

 Para No.2 of the MACP Scheme provides that the “MACP
Scheme envisages merely placement in the immediate
next higher grade pay in the hierarchy of the
recommended revised pay bands and grade pay”.

 As per para No.10 of the MACP Scheme – Office
Memorandum dated 19.05.2009, no stepping up of pay in
the pay band or grade pay would be admissible with regard
to junior getting more pay than the senior on account of pay
fixation under the MACP Scheme.

 As per para No.11 of the said memorandum dated
19.05.2009, the differences in pay scales on account of
financial upgradations under the ACP Scheme and MACP
Scheme would not be construed as anomaly.

11. Para (19) of MACP Scheme contemplates merely

placement on personal basis in the immediate higher grade

8
pay/grant of financial benefits only and shall not amount to

actual/functional promotion of the employees concerned. As per

para (20) of the MACP Scheme, financial upgradations shall be

purely personal to the employee and shall have no relevance to

the seniority position. As such, there shall be no additional

financial upgradation for the senior employees on the ground that

the junior employees in the grade have received higher grade pay

under MACP Scheme. We may usefully extract the relevant

portion of Annexure-I of the Office Memorandum dated

19.05.2009, which reads as under:-

ANNEXURE-I

MODIFIED ASSURED CAREER PROGRESSION SCHEME (MACPS)

1. There shall be three financial upgradation s under the MACPS, counted from the
direct entry grade on completion of 10, 20 and 30 years service respectively.
Financial upgradation under the Scheme will be admissible whenever a person
has spent 10 years continuously in the same grade-pay.

2. The MACPS envisages merely placement in the immediate next higher grade
pay in the hierarchy of the recommended revised pay bands and grade pay as
given in Section 1, Part-A of the first schedule of the CCS (Revised Pay) Rules,
2008. Thus, the grade pay at the time of financial upgradation under the MACPS
can, in certain cases where regular promotion is not between two successive
grades, be different than what is available at the time of regular promotion. ln
such cases, the higher grade pay attached to the next promotion post in
the hierarchy of the concerned cadre/organisation will be given only at the
time of regular promotion.

…………

17. The financial upgradation would be on non-functional basis subject to fitness, in
the hierarchy of grade pay within the PB-1.Thereafter for upgradation under the
MACPS the benchmark of ‘good’ would be applicable till the grade pay of Rs.
6600/- in PB-3. The benchmark will be ‘Very Good’ for financial upgradation to
the grade pay of Rs. 7600 and above.

19. The MACPS contemplates merely placement on personal basis in the
immediate higher Grade pay /grant of financial benefits only and shall not
amount to actual functional promotion of the employees concerned.
Therefore, no reservation orders/roster shall apply to the MACPS, which shall
extend its benefits uniformly to all eligible SC/ST employees also. However, the

9
rules of reservation in promotion shall be ensured at the time of regular
promotion. For this reason, it shall not be mandatory to associate members of
SC/ST in the Screening Committee meant to consider cases for grant of financial
upgradation under the Scheme.

………….

25. lf a regular promotion has been offered but was refused by the employee before
becoming entitled to a financial upgradation, no financial upgradation shall be
allowed as such an employee has not been stagnated due to lack of
opportunities. If, however, financial upgradation has been allowed due to
stagnation and the employees subsequently refuse the promotion, it shall not be
a ground to withdraw the financial upgradation. He shall, however, not be eligible
to be considered for further financial upgradation till he agrees to be considered
for promotion again and the second the next financial upgradation shall also be
deferred to the extent of period of debarment due to the refusal.
……………”

12. Clause 28 contains illustrations as to grant of financial

upgradation under MACP. The illustrations in Clause 28 of the

Scheme can easily be understood by referring to the First

Schedule, Part-A of Section 1 of Central Civil Services (Revised

Pay) Rules, 2008 which gives a comparison of the scale of pay

under the 5th Pay Commission and the 6th Pay Commission as

under:-

THE FIRST SCHEDULE
(SEE RULES 3 & 4)

PART – A
SECTION I

Revised Pay Bands and Grade Pays for posts carrying present scales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except
posts for which different revised scales are notified separately.

                       Present Scale                                          Revised Pay Structure
Sl.No.          Post/Grade          Present Scale             Name of Pay       Corresponding       Corresponding
                                                              Band/Scale      Pay Bands/Scales       Grade Pay
(1)                  (2)                 (3)                      (4)                (5)                 (6)
1.                   S-1    2550-55-2660-60-3200                 -1S             4440-7440              1300
2.                   S-2    2610-60-3150-65-3540                 -1S             4440-7440              1400
3.                  S-2A    2610-60-2910-65-3300-      70-       -1S             4440-7440              1600
                            4000
                       Present Scale                                          Revised Pay Structure
     Sl.No.     Post/Grade          Present Scale             Name of Pay       Corresponding       Corresponding
                                                              Band/Scale      Pay Bands/Scales       Grade Pay
4.                  S-3      2650-65-3300-70-4000                 -1S             4440-7440             1650
5.                  S-4      2750-70-3800-75-4400                PB-1            5200-20200             1800


                                                                                                            10
6.             S-5        3050-75-3950-80-4590            PB-1        5200-20200              1900
7.             S-6        3200-85-4900                    PB-1        5200-20200              2000
8.             S-7        4000-100-6000                   PB-1        5200-20200              2400
9.             S-8        4500-125-7000                   PB-1        5200-20200              2800
10.            S-9        5000-150-8000                   PB-2        9300-34800              4200
11.            S-10       5500-175-9000                   PB-2        9300-34800              4200
12.            S-11       6500-200-6900                   PB-2        9300-34800              4200
13.            S-12       6500-200-10500                  PB-2        9300-34800              4200
14.            S-13       7450-225-11500                  PB-2        9300-34800              4600
15.            S-14       7500-250-12000                  PB-2        9300-34800              4800
16.            S-15       8000-275-13500                  PB-2        9300-34800              5400
17.          New Scale    8000-275-13500 (Group   A       PB-3        15600-39100             5400
                          Entry)
18.            S-16       9000                            PB-3        15600-39100             5400
19.            S-17       9000-275-9550                   PB-3        15600-39100             5400
20.            S-18       10325-325-10975                 PB-3        15600-39100             6600
21.            S-19       10000-325-15200                 PB-3        15600-39100             6600
22.            S-20       10650-325-15850                 PB-3        15600-39100             6600
23.            S-21       12000-375-16500                 PB-3        15600-39100             7600
24.            S-22       12750-375-16500                 PB-3        15600-39100             7600
25.            S-23       12000-375-18000                 PB-3        15600-39100             7600
26.            S-24       14300-400-18300                 PB-4        37400-67000             8700
27.            S-25       15100-400-18300                 PB-4        37400-67000             8700
28.            S-26       16400-450-20000                 PB-4        37400-67000             8900
29.            S-27       16400-450-20900                 PB-4        37400-67000             8900
30.            S-28       14300-450-22400                 PB-4        37400-67000             10000


                    Present Scale                                   Revised Pay Structure

  Sl.No.     Post/Grade             Sl.No.             Post/Grade         Sl.No.            Post/Grade
31.             S-29      18400-500-22400                PB-4          37400-67000            10000
32.             S-30      22400-525-24500                PB-4          37400-67000            12000
33.             S-31      22400-600-26000             HAG + Scale   75500      (annual          Nil
                                                                    increment @ 3 %)
                                                                    - 80000
34.            S-32       24050-650-26000             HAG + Scale   75500      (annual         Nil
                                                                    increment @ 3 %)
                                                                    - 80000
35.            S-33       26000 (Fixed)               Apex Scale       80000 (Fixed)           Nil
36.            S-34       30000 (Fixed)                 Cab. Sec.      90000 (Fixed)           Nil



       Comparison of ACP and MACP Scheme:-

13. For grant of financial upgradation under ACP Scheme, a

Screening Committee shall be constituted for the purpose of

processing the cases for grant of benefits under the ACP

Scheme. In terms of Clause 6.2 of the ACP Scheme, the

composition of the Screening Committee shall be the same as

that of Departmental Promotion Committee (DPC) prescribed

11
under the relevant recruitment/service rules for regular promotion

to the higher grade to which financial upgradation is to be

granted. The requirement that the composition of the Screening

Committee shall be the same as that of DPC, under ACP

Scheme, the consideration for financial upgradations are stringent

and the government servant has to satisfy the norms for

promotion. Fulfilment of normal promotional norms like

benchmark, departmental examination, seniority-cum-fitness (in

case of Group ‘D’ employees) are the requirement for grant of

financial upgradation under ACP Scheme.

14. Per contra, under the MACP Scheme, financial upgradation

is granted in the next higher Grade Pay in the hierarchy of the

recommended Pay Bands and Grade Pay as given in Section-1,

Part-A of the First Schedule of CCS (Revised Pay) Rules, 2008.

Under the MACP Scheme, the financial upgradation would be on

non-functional basis subject to fitness in the hierarchy of Grade

Pay. MACP Scheme contemplates merely placement on personal

basis in the immediate higher Grade Pay/grant of financial

benefits only and shall not amount to actual/functional promotion

of the employees concerned (vide para (19) of the MACP

Scheme). In terms of para (20) of MACP Scheme, financial

12
upgradation under the MACP Scheme shall be purely personal to

the employees and shall have no relevance to the seniority

position. As such there shall be no additional financial

upgradation for the senior employees on the ground that the

junior employee in the grade has got higher pay/higher Grade

Pay under MACP Scheme (vide para (20) of the MACP Scheme).

15. The distinction between the ACP Scheme and MACP

Scheme can be well understood by reference to the Pay Scale

under the Fifth Central Pay Commission and the revised pay

structure under the Sixth Central Pay Commission and the

corresponding Grade Pay thereon as stated in Section-1, Part-A

of the First Schedule of CCS (Revised Pay) Rules, 2008.

THE FIRST SCHEDULE
(SEE RULES 3 & 4)
PART – A
SECTION I
Revised Pay Bands and Grade Pays for posts carrying present scales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except
posts for which different revised scales are notified separately.

                     Present Scale                                          Revised Pay Structure
Sl.No.        Post/Grade          Present Scale             Name of Pay       Corresponding       Corresponding
                                                            Band/Scale      Pay Bands/Scales       Grade Pay
 (1)             (2)                   (3)                      (4)                (5)                 (6)
  5.            S-4        2750-70-3800-75-4400                PB-1            5200-20200             1800
  6.            S-5        3050-75-3950-80-4590                PB-1            5200-20200             1900
  7.            S-6        3200-85-4900                        PB-1            5200-20200             2000
  8.            S-7        4000-100-6000                       PB-1            5200-20200             2400
  9.            S-8        4500-125-7000                       PB-1            5200-20200             2800
  10.           S-9        5000-150-8000                       PB-2            9300-34800             4200
  11.           S-10       5500-175-9000                       PB-2            9300-34800             4200
  12.           S-11       6500-200-6900                       PB-2            9300-34800             4200
  13.           S-12       6500-200-10500                      PB-2            9300-34800             4200
  14.           S-13       7450-225-11500                      PB-2            9300-34800             4600
  15.           S-14       7500-250-12000                      PB-2            9300-34800             4800




                                                                                                          13

16. Upon implementation of the Sixth Central Pay Commission,

the Pay Scale of 3050-75-3950-80-4590 was kept in Pay Band-1

i.e. Rs.5200-20200 with Grade Pay of Rs.1900/-. Likewise, the

Pay Scale of 3200-85-4900 was kept in Pay Band-1 i.e. 5200-

20200 with Grade Pay of Rs.2000/-. Pay Scale of Upper Division

Clerk 4000-100-6000 was also kept in the same Pay Band-1 i.e.

5200-20200 but with Grade Pay of Rs.2400/-. Under the ACP

Scheme, the Government employee who was working as Lower

Division Clerk in the Pay Scale of 3050-75-3950-80-4590, on

completion of 12 years of service, would be entitled to the

financial upgradation in the next promotional hierarchy i.e. in the

cadre of UDC i.e. Pay Scale of 4000-100-6000 while working in

the same capacity as LDC. Whereas under the MACP Scheme,

the Government servant who is Lower Division Clerk in the Pay

Band-1 i.e. Rs.5200-20200/- with Grade Pay of Rs.1900/-, on

completion of 10 years of service upon grant of financial

upgradation, would be getting the immediate next higher Grade

Pay of Rs.2000/- and not the grade pay on promotional hierarchy.

Following the erstwhile ACP Scheme (as per which financial

upgradation was granted in promotional hierarchy), the

respondents are claiming the benefit of Grade Pay of Rs.4200/-

14
(which is in the next promotional hierarchy). While the

respondents are granted financial upgradations as per the

prevailing rules of MACP Scheme, they can only claim the

immediate next higher Grade Pay and not the Grade Pay in the

next promotional hierarchy.

17. As noted above, under the Sixth Pay Commission, scales of

pay of various hierarchies namely Lower Division Clerk and

Upper Division Clerk are all placed in the Pay Band-I i.e.

Rs.5200-20200, of course with different Grade Pay. When the

respondents are enjoying the benefit of the Sixth Pay

Commission by getting higher pay scale, they should go by the

Scheme in accepting what it gives on the financial upgradation;

but the respondents are claiming the best of the benefits from

both the ACP and MACP Schemes. The respondents have

already been granted the beneficial pay upgradation as per the

prevailing rules of MACP Scheme on the recommendation of the

Sixth Central Pay Commission. The previous ACP Scheme was

withdrawn and superseded by MACP Scheme with effect from

01.09.2008 based on the recommendation of the Sixth Central

Pay Commission. Under MACP Scheme, the respondent can only

15
claim immediate next Grade Pay and not the corresponding

Grade Pay in promotional hierarchy.

18. As discussed earlier, in the ACP Scheme, there was no

Grade Pay but only fixed Pay Scales and fixed increments were

there. After the Sixth Central Pay Commission, various Pay

Scales have been clubbed together and there is revised Pay

Scale with corresponding Pay Bands and corresponding Grade

Pay. As discussed earlier, the norms for grant of ACP were

stringent and the government servant has to satisfy the norms for

promotion. Whereas under the MACP Scheme, for financial

upgradation, the rigour of screening is diluted. For upgradation

under the MACP Scheme, the benchmark of “Good” would be

applicable till the Grade Pay of Rs.6600/- in Pay Band-3. The

benchmark will be “Very Good” for financial upgradation to the

Grade Pay of Rs.7600/- and above.

Contentions:-

19. Ms. Madhvi Divan, learned ASG appearing on behalf of

Union of India has taken us through the salient features of both

ACP and MACP schemes and submitted that ACP and MACP

schemes shall be subject to the conditions mentioned thereon.

16
Learned ASG has submitted that Sixth Central Pay Commission

took the view that ACP led to disparities within the employees in

different organisations/departments and recommended adoption

of the modified scheme which was accepted by the Government

and Sixth Central Pay Commission and MACP scheme are being

implemented. It was submitted that under the ACP scheme, the

employee is entitled to financial upgradations (two times – on

completion of 12 and 24 years of regular service) as per

promotional hierarchy. Whereas under the MACP scheme, the

financial upgradations (three times – on completion of 10, 20 and

30 years of regular service) are fixed on the basis of immediate

next grade pay and therefore, ACP and MACP schemes are

significantly different in terms of the effect and benefit to the

employees. Learned ASG submitted that the previous ACP

scheme was withdrawn and it is superseded by the MACP

scheme w.e.f. 01.09.2008 and the respondents while enjoying the

benefits of revised pay structure under the Sixth Central Pay

Commission, cannot cherry-pick the benefit of financial

upgradation in the next promotional hierarchy under the erstwhile

ACP scheme. Learned ASG has further submitted that it is the

prerogative of the Government to provide any financial benefit to

17
its employees and so long as such scheme is not discriminatory

or arbitrary, the Court may not interfere with schemes of

Government fixing pay scales and granting incentives.

20. Mr. Vinay Kumar Garg, learned Senior counsel appearing

on behalf of some respondents has submitted that pay band

includes a bracket of erstwhile pay scale and the grade pay and

the concept of grade pay is a fitment benefit applicable to

different pay. Learned Senior counsel submitted that when a

person is to be given benefit, pay, allowance or upgradation of the

pay has to be given and in such a case, the upgradation has to

be in the next hierarchy of promotional position i.e. grade pay in

the next promotional position. It was submitted that pay,

allowance and financial upgradation granted to the employees

are the “conditions of service” and the same cannot be altered at

the will of the employer-Government. Learned Senior counsel

further submitted that MACP scheme envisages merely

placement in the immediate next higher grade pay and the word

“hierarchy” cannot be dissected from the “recruitment” and

“conditions of service”. It was submitted that as per Rule 3(7) of

Central Civil Services (Revised Pay) Rules, 2008, “revised pay

structure” in relation to any post specified in column (2) of the

18
First Schedule means the pay band and grade pay specified

against that post or the pay scale specified in column (5) and (6)

thereof. It was submitted that while granting financial upgradation

under MACP scheme, the same has to be in the “higher grade

pay in the next promotional hierarchy and not merely in the

hierarchy of grade pay”.

21. Mr. Jaideep Gupta, learned amicus assisted by Kunal

Chatterji submitted that the object and purpose of the 1999 ACP

was to mitigate hardship in case of acute stagnation either in a

cadre or in an isolated post and MACP scheme of 2009 is also for

the same purpose and grant of financial upgradation under MACP

scheme is only continuation of the existing scheme with certain

modifications. Learned amicus further submitted financial

upgradation which is granted under the ACP and MACP both

involve fixation/refixation of pay and allowance which become the

basis of the fixation of pay and allowances for the rest of the

career of the employee concerned and such financial upgradation

is not merely a special allowance which can be granted or taken

back at the will of the employer. Learned amicus has submitted

that MACP scheme linked to the grade pay should not be taken

into consideration and MACP scheme should be interpreted to

19
mean that financial upgradation has to be granted to the grade

pay of the next promotional post and not to the next grade pay in

the Schedule I to the CCS (Revision of Pay) Rules. Learned

amicus urged the Court to adopt a purposive interpretation of the

MACP scheme to grant financial upgradation in the next

promotional hierarchy as in the erstwhile ACP scheme. It was

contended that if financial upgradation is granted in the hierarchy

of grade pay then MACP scheme would lead to a discriminatory

treatment violating Article 14 of the Constitution of India. In this

regard, learned amicus has drawn the attention of the Court to

the discussion of the Joint Committee of MACP scheme held

under the Chairmanship of the Joint Secretary (E) of the

Department of Personnel and Training on 06.10.2010.

22. Mr. C.K. Sasi, learned counsel appearing for the

respondents in SLP(C) No.21803 of 2014 and SLP(C) No.29605

of 2017 has submitted that when the Pay Commission and

incentive scheme is introduced, the employee’s interest has to be

kept in view and the same cannot be disadvantageous to the

employees when compared to the erstwhile scheme. In support of

his contention, learned counsel has drawn our attention to the

20
comparative chart which he has filed along with his written

submission.

23. Reiterating the submissions of learned amicus and the other

submissions, Ms. Prabha Swami, learned counsel appearing for

the respondents in SLP(C) No.31125 of 2016 has taken us

through the facts and submitted that if the ACP had been

continued after the completion of twenty-four years of service,

respondents (SLP(C) No.31125 of 2016) would have been in the

grade pay of Rs.5400/- in Pay Band-3 whereas due to MACP, the

respondents were placed in grade pay of Rs.4600/- in Pay Band-

2 and this has caused discrimination and financial hardship to the

respondents. Learned counsel has also drawn our attention to the

comparative chart and submitted that MACP scheme has

operated to the disadvantage of the respondents.

24. Mr. M.K. Bhardwaj, learned counsel representing the

intervenors has drawn our attention to the Record Note of the

meeting of the Joint Committee on MACP scheme held under the

Chairmanship of the Joint Secretary, DOP&T on 15.09.2010 and

submitted that the Committee had taken note of various

anomalies and also as to how the implementation of MACP has

resulted as a disadvantage to the Government servants. Mr.
21
Bhardwaj has drawn our attention to various anomalies noted by

the Committee and submitted that in Raj Pal’s case, the Record

Note of the third meeting of MACP scheme held on 15.03.2011

was taken note by the High Court and the High Court rightly held

that Raj Pal is entitled to financial upgradation in the grade pay

based on the next promotional hierarchy. It was submitted that if

the financial upgradation is to be granted on the basis of next

grade pay, it would be greatly disadvantageous to the employees.

Discussion and findings:-

25. Though various contentions have been raised assailing the

MACP Scheme viz. “financial upgradation in the next Grade

Pay” and “no stepping up of pay on the ground that junior

getting more pay”, be it noted that the clauses of the MACP

Scheme including the clause providing the financial upgradation

in the next Grade Pay have not been challenged by the

respondents. In the impugned judgments, the Tribunals/High

Courts have only relied upon Raj Pal’s case and not gone into the

MACP Scheme vis-à-vis erstwhile ACP Scheme and also not

considered the merits of the contention of the respondents. We

have therefore, considered the MACP Scheme vis-à-vis erstwhile

22
ACP Scheme in the light of the contentions raised by the

respondent.

26. As pointed out earlier, both ACP and MACP Schemes are in

the nature of incentive schemes devised with the object of

ensuring that the employees who are unable to avail of adequate

promotional opportunities, get some relief from stagnation in the

form of financial benefits. Under the MACP Scheme, financial

upgradations are granted at three regular intervals on completion

of 10-20-30 years of service without promotion. Hence, it is also

intended to ensure that the employees are adequately

incentivised to work efficiently despite not getting promotion for

want of promotional avenue. The change in policy brought about

by supersession of the ACP Scheme with the MACP Scheme is

after well-deliberated and well-documented recommendations of

the Sixth Central Pay Commission. Considering the various

issues in the implementation of the ACP Scheme, the Pay

Commission expressed its views “the only other way is to bring

systematic changes in the existing Scheme of ACP so that all the

employees irrespective of the existing hierarchy structure in their

organisations/cadres, get some benefit under it”. The

Commission therefore, recommended that the existing Scheme of

23
ACP be continued with the modifications indicated thereon in the

Report that the financial upgradation has to be in the next

immediate Grade Pay. One of the reasons for the expert body

recommending the MACP Scheme was that there were inter-

departmental disparities where several departments had varying

promotional hierarchies. As a result, the working of ACP Scheme

under which an employee who stagnated for 12 years, was

entitled to 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 to

the problem ensuing from inter-departmental disparities.

27. The learned amicus and the learned counsel appearing for

the respondents urged the court to adopt a “purposive

interpretation” that the words “immediate next higher Grade Pay”

to be interpreted as “Grade Pay of the next promotional post” in

the hierarchy. MACP Scheme envisages merely placement in the

immediate next higher Grade Pay. By perusal of the MACP

Scheme extracted earlier, it is seen that the words used in the

Scheme are “placement in the immediate next higher Grade

Pay in the hierarchy of the recommended revised pay bands”.

The term “Grade Pay in the next promotional post” is

24
conspicuously absent in the entire body of the MACP Scheme.

The argument of the respondents that the benefit of MACP

Scheme is referable to the promotional post, is de hors the MACP

Scheme and cannot be accepted. Though ACP and MACP

Schemes are intended to provide relief against stagnation, both

the Schemes have different features. Pay scales under the Sixth

Pay Commission and the MACP Scheme are stated to be more

beneficial since it extends to the employees with time intervals

with higher pay bands and various facilities which were not

available under the ACP Scheme including the three financial

upgradations in shorter time span. In any event, MACP Scheme

has not been challenged by the respondents. As rightly

contended by the learned ASG, the respondents cannot be

permitted to cherry-pick beneficial features from the erstwhile

ACP Scheme and also take advantage of the beneficial features

in the MACP Scheme.

28. The object behind the MACP Scheme is to provide relief

against the stagnation. If the arguments of the respondents are

to be accepted, they would be entitled to be paid in accordance

with the grade pay offered to a promotee; but yet not assume the

responsibilities of a promotee. As submitted on behalf of Union of

25
India, if the employees are entitled to enjoy Grade Pay in the next

promotional hierarchy, without the commensurate responsibilities

as a matter of routine, it would have an adverse impact on the

efficiency of administration.

29. The change in policy brought about by supersession of ACP

Scheme with the MACP Scheme is after consideration of all the

disparities and the representations of the employees. The Sixth

Central Pay Commission is an expert body which has

comprehensively examined all the issues and the representations

as also the issue of stagnation and at the same time to promote

efficiency in the functioning of the departments. MACP Scheme

has been introduced on the recommendation of the Sixth Central

Pay Commission which has been accepted by the Government of

India. After accepting the recommendation of the Sixth Central

Pay Commission, the ACP Scheme was withdrawn and the same

was superseded by the MACP Scheme with effect from

01.09.2008. This is not some random exercise which is

unilaterally done by the Government, rather, it is based on the

opinion of the expert body – Sixth Central Pay Commission which

has examined all the issues, various representations and

disparities. Before making the recommendation for the Pay

26
Scale/Revised Pay Scale, the Pay Commission takes into

consideration the existing pay structure, the representations of

the government servants and various other factors after which the

recommendations are made. When the expert body like Pay

Commission has comprehensively examined all the issues and

representations and also took note of inter-departmental

disparities owing to varying promotional hierarchies, the court

should not interfere with the recommendations of the expert body.

When the government has accepted the recommendation of the

Pay Commission and has also implemented those, any

interference by the court would have a serious impact on the

public exchequer.

30. Observing that it is the function of the Government which

normally acts on the recommendations of the Pay Commission

which is the proper authority to decide upon the issues, in Union

of India and another v. P.V. Hariharan and another (1997) 3 SCC

568, it was held as under:-

“5. ….. It is the function of the Government which normally acts on
the recommendations of a Pay Commission. Change of pay scale
of a category has a cascading effect. Several other categories
similarly situated, as well as those situated above and below, put
forward their claims on the basis of such change. The Tribunal
should realise that interfering with the prescribed pay scales is a

27
serious matter. The Pay Commission, which goes into the problem
at great depth and happens to have a full picture before it, is the
proper authority to decide upon this issue. Very often, the doctrine
of “equal pay for equal work” is also being misunderstood and
misapplied, freely revising and enhancing the pay scales across the
board. We hope and trust that the Tribunals will exercise due
restraint in the matter. Unless a clear case of hostile discrimination
is made out, there would be no justification for interfering with the
fixation of pay scales. We have come across orders passed by
Single Members and that too quite often Administrative Members,
allowing such claims. These orders have a serious impact on the
public exchequer too. It would be in the fitness of things if all
matters relating to pay scales, i.e., matters asking for a higher pay
scale or an enhanced pay scale, as the case may be, on one or the
other ground, are heard by a Bench comprising at least one Judicial
Member. ….”

31. Observing that the decision of expert bodies like the Pay

Commission is not ordinarily subject to judicial review, in State of

U.P. and Others v. U.P. Sales Tax Officers Grade II Association

(2003) 6 SCC 250, the Supreme Court held as under:-

“11. There can be no denial of the legal position that decision of
expert bodies like the Pay Commission is not ordinarily subject to
judicial review obviously because pay fixation is an exercise
requiring going into various aspects of the posts held in various
services and nature of the duties of the employees……”.

32. In Secretary, Government (NCT of Delhi) and others v.

Grade-1 Officers Association and others (2014) 13 SCC 296, the

Supreme Court refused to interfere with the ACP Scheme as it

28
would violate government policy and since exercise of judicial

review would not be proper, upheld the ACP Scheme and the

conditions therein.

33. In State of Tamil Nadu v. S. Arumugham (1998) 2 SCC 198,

the Supreme Court has observed that the government has the

right to frame a policy to ensure efficiency and proper

administration and to provide to suitable avenues for promotion to

officers working in different department. The Supreme Court has

further observed that the Tribunal cannot substitute its own views

for the views of the government or direct new policy based on the

views of Tribunal.

34. Observing that fixation of pay and determination of

responsibilities is a complex matter which is for the executive to

take a decision, the courts should approach such matters with

restraint, in State of Haryana and Another v. Haryana Civil

Secretariat Personal Staff Association (2002) 6 SCC 72, the

Supreme Court held as under:-

“10. It is to be kept in mind that the claim of equal pay for equal
work is not a fundamental right vested in any employee though it
is a constitutional goal to be achieved by the Government.

Fixation of pay and determination of parity in duties and
responsibilities is a complex matter which is for the executive to

29
discharge. While taking a decision in the matter, several relevant
factors, some of which have been noted by this Court in the
decided case, are to be considered keeping in view the prevailing
financial position and capacity of the State Government to bear
the additional liability of a revised scale of pay……… That is not
to say that the matter is not justiciable or that the courts cannot
entertain any proceeding against such administrative decision
taken by the Government. The courts should approach such
matters with restraint and interfere only when they are satisfied
that the decision of the Government is patently irrational, unjust
and prejudicial to a section of employees and the Government
while taking the decision has ignored factors which are material
and relevant for a decision in the matter. Even in a case where
the court holds the order passed by the Government to be
unsustainable then ordinarily a direction should be given to the
State Government or the authority taking the decision to
reconsider the matter and pass a proper order. The court should
avoid giving a declaration granting a particular scale of pay and
compelling the Government to implement the same……”.
[Underlining added]

35. The prescription of Pay Scales and incentives are matters

where decision is taken by the Government based upon the

recommendation of the expert bodies like Pay Commission and

several relevant factors including financial implication and court

cannot substitute its views. As held in Haryana Civil Secretariat

Personal Staff Association (2002) 6 SCC 72, the court should

approach such matters with restraint and interfere only when the

court is satisfied that the decision of the Government is arbitrary.

30
Even in a case where the court takes the view that order/Scheme

passed by the Government is not an equitable one, ordinarily only

a direction could be given to the State Government or the

authority for consideration of the matter and take a decision. In

the present batch of cases where the respondents are claiming

financial upgradation in the grade pay of promotional hierarchy,

no grounds are made out to show that the MACP Scheme

granting financial upgradation in the next grade pay is arbitrary

and unjust; warranting interference. The implementation of the

MACP Scheme is claimed to have led to certain anomalies; but

as pointed out earlier, MACP Scheme itself is not under

challenge.

36. Raj Pal’s Case – Whether could have been taken as a

precedent:- In almost all the cases, the High Courts have relied

upon Raj Pal’s case only on the basis that Raj Pal’s case was

dismissed by the Supreme Court. Even at the outset, it is to be

pointed out that Raj Pal’s case, SLP (C) No. ……CC 7467 of

2013 was dismissed by the Supreme Court vide order dated

15.04.2013 on the ground that there was no sufficient explanation

to condone the delay in refiling the Special Leave Petition which

is a default in the manner in which the case was prosecuted and
31
not a dismissal on merits. Be that as it may, since various High

Courts have relied upon Raj Pal’s case, it is necessary to refer to

the facts, findings thereon and whether it could have been

followed as precedent.

37. Raj Pal was working in the post of Photocopier w.e.f.

12.10.1986 in the pay scale of Rs.3050-4590/- in the Central

Administrative Tribunal, Chandigarh Bench, Chandigarh. The

post of Photocopier is an isolated post. Upon introduction of the

ACP Scheme in the year 1999, on completion of twelve years of

regular service, Raj Pal was granted the next higher scale in the

hierarchy of pay scales i.e. Rs.3200-4590/- vide order dated

12.10.1999. At that point of time, Raj Pal claimed parity with

other posts like Hindi Typist/LDC which was also in the equivalent

pay scale of Rs.3050-4590/- and had been placed in the scale of

Rs.4000-6000/- on the grant of 1st financial step up on completion

of twelve years of regular service. He also claimed that on

completion of twenty-four years of regular service in second

financial step up, he should be placed in the scale of Rs.5500-

9000/-. In the earlier round of litigation, Raj Pal filed O.A.

No.278/CH/2004 claiming the aforesaid parity with posts like

Hindi Typist/LDC and the same was allowed by Central
32
Administrative Tribunal by its order dated 30.08.2004 whereby

Raj Pal was held entitled to the benefit of higher pay scale under

the ACP Scheme of 1999 as applicable for the similar posts i.e.

Hindi Typist/LDC. The order dated 30.08.2004 was challenged by

Union of India before the High Court in CWP No.7356/CAT of

2005 and the same was dismissed vide order dated 23.05.2007.

38. For proper appreciation of Raj Pal’s case, we may refer to

the relevant scales of pay with revised Pay Bands, which are as

under:-

                       Present Scale                       Revised Pay Structure
      Sl.No.   Post/       Present Scale       Name of     Corresponding Pay Corresponding
               Grade                             Pay         Bands/Scales        Grade Pay
                                              Band/Scale
       (1)      (2)             (3)              (4)              (5)             (6)
        6.     S-5     3050-75-3950-80-4590     PB-1          5200-20200         1900
        7.     S-6     3200-85-4900             PB-1          5200-20200         2000
        8.     S-7     4000-100-6000            PB-1          5200-20200         2400
        9.     S-8     4500-125-7000            PB-1          5200-20200         2800
       10.     S-9     5000-150-8000            PB-2          9300-34800         4200
       11.     S-10    5500-175-9000            PB-2          9300-34800         4200



Upon implementation of the Sixth Central Pay Commission, the

scale of Rs.3050-4590/- was kept in PB-1-Rs.5200-20200/- with

grade pay of Rs.1900/-. The scale of Rs.4000-6000/- was also

kept in PB-1 with grade pay of Rs.2400/-. The scale of Rs.5500-

9000/- was kept in PB-2-Rs.9300-34800/- with grade pay of

Rs.4200/-. In terms of MACP Scheme, by the order dated

33
09.08.2010, Raj Pal was granted second financial upgradation in

the PB-1 of Rs.5200-20200/- with grade pay of Rs.2400/-.

39. Raj Pal filed OA No. 1038/CH/2010 before CAT contending

that his pay has been wrongly fixed in PB-1 in the scale of

Rs.5200-20200/- with Grade Pay of Rs. 2400/-. He claimed that

he was entitled to be fixed in PB-2 in the scale of Rs.9300-

34800/- with Grade Pay of Rs. 4600/-. Raj Pal relied on para (6)

of the MACP Scheme as per which in case of employees granted

financial upgradations under ACP Scheme till 01.01.2006, their

revised pay will be fixed with reference to the pay scale granted

to them under ACP. The Tribunal vide its order dated 31.05.2011

noted that it is not disputed that the post held by Raj Pal has been

declared equivalent to the post of LDC/Hindi Typist etc. by the

Tribunal as well as the High Court in matters of grant of ACP and

these pronouncements have attained finality and also stood

implemented. The OA was allowed and the appellants were

directed to grant second financial upgradation in the promotional

hierarchy in PB-2 in the scale of Rs.9300-34,800/- with Grade

Pay of Rs.4,200/- to Raj Pal under the MACP from due date and

fix his pay in the hierarchy of posts decided in his case earlier.

The appellants filed CWP No.19387 of 2011 before the High

34
Court assailing the aforesaid order. It was inter alia contended by

the appellants that the earlier ACP Scheme stood superseded by

the MACP scheme and both the schemes cannot run

concurrently. The said writ petition was dismissed by the High

Court.

40. The above judgment of the High Court was challenged in

the Supreme Court by filing SLP (C) No. ….CC 7467 of 2013.

The SLP was filed on 24.12.2011; but some defects were

observed by the Court Registry and returned for rectification

whereafter the SLP was refiled only on 21.03.2013. The SLP was

dismissed by the Hon’ble Chamber Judge vide order dated

15.04.2013 on the ground that sufficient explanation has not been

given to condone the delay in refiling the SLP.

41. Insofar as Raj Pal’s case is concerned, in view of the

dismissal of the earlier writ petition i.e. CWP No.7356/CAT of

2005, Principal Bench of the Tribunal issued letter dated

02.08.2007 directing all the Benches of the Tribunal that the

Photocopiers working in the respective Benches may be granted

1st financial upgradation under ACP Scheme in the scale of pay of

Rs.4000-6000/- and 2nd financial upgradation in the scale of

Rs.5500-9000/-. In Raj Pal’s case, taking note of the earlier round
35
of litigation i.e. O.A.No.278/CH/2004 and CWP No.7356/CAT of

2005 and the letter sent by the Principal Bench of the Tribunal

dated 02.08.2007 in its order dated 31.05.2011 in O.A. No.

1038/CH/2010, the Tribunal held that Raj Pal having been placed

under ACP scheme – second financial upgradation in the scale of

Rs.5500-9000/- is entitled to PB-2 (Rs.9300-34800/- with grade

pay of Rs.4200/-). The relevant findings of the Tribunal in O.A.

No.1038/CH/2010 read as under:-

“4. The respondents took the matter to Punjab and Haryana High Court
by way of filing a CWP No.7356 CAT of 2005. The CWP was dismissed
vide order dated 23.05.2007, holding the applicant entitled to the benefit
of ACP at par with the LDC/Hindi Typist, etc. It was thereafter that the
Principal Bench of the Tribunal issued letter dated 02.08.2007, directing
all the Benches of the Tribunal that the Photocopiers working in
respective Benches may be granted 1st financial upgradation under ACP
Scheme in the scale of pay of Rs.4000-6000 and 2 nd financial
upgradation in the scale of Rs.5500-9000.

………..

12. There is no dispute that the applicant is holding the post of
photocopier, which is an isolated post, having no avenues for promotion.
It is also not disputed that, the post held by the applicant had been
declared equivalent to the post of LDC/Hindi Typist, etc. by the Tribunal
as well as the High Court by judicial pronouncement in matters of grant
of ACP, which have attained finality and stands implemented also.
Accordingly, applicant was granted 1 st ACP (under the old ACP) w.e.f.
09.08.1999 in the pay scale of Rs.4000-6000.” [Underlining added]

36

42. It was on the above, the Tribunal held that the post of

Photocopier being an isolated post and in view of the letter dated

02.08.2007 sent by the Principal Bench and taking note of the

earlier round of litigation, the Tribunal directed that Raj Pal be

granted PB-2-Rs.9300-34800/- with grade pay of Rs.4200/-. In

the case of Raj Pal, the post of Photocopier, being an isolated

post, the order was passed in the peculiar facts and

circumstances of the case. Rajpal’s case did not go into any

details in respect of the overall features of the new MACP

Scheme and did not consider the recommendations of the expert

body which culminated in the new Scheme. The order passed in

Raj Pal’s case could not have been taken as a precedent in other

cases. This is all the more so when SLP (C) No.….CC 7467 of

2013 was dismissed by the Supreme Court on the ground of

delay in refiling the Special Leave Petition and no decision was

rendered on merits.

Dismissal of case by the Supreme Court on the ground of
delay in filing/non-filing, is not a binding precedent:-

43. As noted above, SLP preferred by Union of India against the

order dated 19.10.2011 passed by the High Court was dismissed

on the ground that the delay in refiling has not been satisfactorily

37
explained. The question which arises for consideration is when

the SLP has been dismissed on the ground of delay in filing or of

refiling (like in the case of Raj Pal), whether it can be taken as a

binding precedent on the merits of the case as the “law declared

by the Supreme Court within the meaning of Article 141 of the

Constitution of India”. Raj Pal’s case having been dismissed on

the ground that no sufficient cause was shown for the delay in

refiling, in our considered view, Raj Pal’s case ought not to have

been quoted as a precedent of this Court by the High Courts.

44. Article 141 of the Constitution of India provides that the law

declared by the Supreme Court shall be binding on all courts

within the territory of India, i.e. the pronouncement of the law on

the point shall operate as a binding precedent on all courts within

India. Law declared by the Supreme Court has to be essentially

understood as a principle laid down by the court and it is this

principle which has the effect of a precedent. A principle as

understood from the word itself is a proposition which can only be

delivered after examination of the matter on merits. It can never

be in a summary manner, much less be rendered in a decision

delivered on technical grounds, without entering into the merits at

all. A decision, unaccompanied by reasons can never be said to

38
be a law declared by the Supreme Court though it will bind the

parties inter-se in drawing the curtain on the litigation. In Union

of India v. All India Service Pensioners’ Association and another

(1988) 2 SCC 580, the Supreme Court held that “when reasons

were made by the Supreme Court for dismissing the SLP, the

decision becomes one which attracts Article 141 of the

Constitution which provides that the law declared by the Supreme

Court shall be binding on all the courts within the territory of

India……”.

45. Observing that when a Special Leave Petition is dismissed

by a non-speaking order, by such dismissal, the Supreme Court

does not lay down any law as envisaged under Article 141 of the

Constitution of India in Supreme Court Employees Welfare

Association v. Union of India and Others (1989) 4 SCC 187, this

Court held as under:-

“22. ….It is now a well-settled principle of law that when a special leave
petition is summarily dismissed under Article 136 of the Constitution, by
such dismissal this Court does not lay down any law, as envisaged by
Article 141 of the Constitution, as contended by the learned Attorney
General. In Indian Oil Corporation Ltd. v. State of Bihar (1986) 4 SCC
146 it has been held by this Court that the dismissal of a special leave
petition in limine by a non-speaking order does not justify any inference
that, by necessary implication, the contentions raised in the special leave
petition on the merits of the case have been rejected by the Supreme

39
Court. It has been further held that the effect of a non-speaking order of
dismissal of a special leave petition without anything more indicating the
grounds or reasons of its dismissal must, by necessary implication, be
taken to be that the Supreme Court had decided only that it was not a fit
case where special leave petition should be granted. In Union of India v.
All India Services Pensioners
’ Association (1988) 2 SCC 580 this Court
has given reasons for dismissing the special leave petition. When such
reasons are given, the decision becomes one which attracts Article 141
of the Constitution which provides that the law declared by the Supreme
Court shall be binding on all the courts within the territory of India. It,
therefore, follows that when no reason is given, but a special leave
petition is dismissed simpliciter, it cannot be said that there has been a
declaration of law by this Court under Article 141 of the Constitution.”
[underlining added]

Raj Pal’s case having been dismissed on the ground that no

sufficient cause was shown for the delay in refiling, Raj Pal’s case

ought not to have been quoted as precedent of this Court by the

High Courts.

46. The learned counsel for the intervenors has referred to the

record note of the meetings of the Joint Committee of MACP held

under the chairmanship of JS(Establishment), DoP&T on

15.09.2010 and other dates and drawn our attention to various

items viz. Item No.1-Provide for Grade Pay of the Next

Promotional Post under MACP; Item No.3-Option for Earlier ACP

Scheme; Item No.8-Anomaly on Introduction of MACP Scheme;

40
and Item No.29 – Modification in MACP Scheme. In response to

the above submission, Union of India has filed additional written

submission referring to the decision in various meetings of the

Joint Committee on MACP held on various dates.

47. 2nd Meeting of the Joint Committee dated 15.09.2010:- In

the 2nd Meeting of the Joint Committee held on 15.09.2010, it was

decided that organisations/cadres would be given the option to

choose either the ACP Scheme or the MACP Scheme. It was also

decided that individual options would not be permitted. Since the

ACP and MACP Scheme were fallback options for stagnating

employees, it was therefore decided that process of completing

cadre restructuring in a time bound manner would solve the

problem of stagnation. It was further decided that cadre structure

had to be reviewed periodically to harmonise the functional needs

of the organisation and career progression of employees. (Vide

copy of O.M. dated 10.02.2011).

48. 3rd Meeting of the Joint Committee dated 15.03.2011:- In

the 3rd Meeting of the Joint Committee held on 15.03.2011, the

staff side reiterated their demand that the MACP Scheme should

be granted in the promotional hierarchy of posts rather than in the

grade pay hierarchy. The official side had suggested that the
41
Government was willing to consider a revision in the MACP

Scheme to the effect that organisations/cadres shall have the

option to choose either the ACP Scheme or the MACP Scheme.

But the staff side stated that such a dispensation would not be

practical and there was a need to explore other alternatives to

solve the issue. Therefore, it was agreed between the staff side

and the official side that there was no need to change the basic

structure of MACP Scheme, but there was a need to separately

examine those cases where MACP Scheme was less

advantageous than the ACP Scheme (Vide the Minutes of the 3 rd

Meeting of Joint Committee dated 15.03.2011). Pursuant to the

decision of the 3rd Meeting of Joint Committee, it was decided that

the official side would write to the Ministry of Railways, Defence,

Urban Development, Home Affairs and the Department of Posts

to forward information in respect of the specific categories of

employees where the MACP was less advantageous than the

erstwhile ACP Scheme. Accordingly, these

Ministries/Departments were requested to send specific cases

wherein, it was less advantageous for employees under MACP

Scheme as compared to ACP Scheme. It is stated that no

42
Ministry/Department other than Ministry of Urban Development

had responded. (Vide Copy of Minutes dated 15.03.2011)

49. Meeting of the Joint Committee dated 27.07.2012:- In the

meeting of the Joint Committee held on 27.07.2012, the official

side stated that it was not possible to give individual options to

the employees to opt for erstwhile ACP Scheme in preference to

MACP Scheme for availing the benefit of financial upgradation.

50. Letter dated 04.11.2013:- Pursuant to the Joint Committee

meeting held on 27.07.2012, a letter dated 04.11.2013 was sent

to the staff side making it clear that the solution lies in review of

cadre structure in a time bound manner with a view to mitigate

the problem of stagnation as the benefit of Modified Assurance

Career Progression Scheme have been granted as a fallback

option in the event of promotions not taking place in time. With

regard to letter dated 04.11.2013 which relates only to Postal

Department, it is clarified that in the Department of Posts, the

erstwhile ACP Scheme was not operational for postal employees.

These employees were covered under Time Bound One

Promotion (TBOP)/Biennial Cadre Review (BCR) Schemes. The

MACP Scheme for Central Government employees is a

continuation of ACP Scheme. Insofar as Department of Posts is
43
concerned, it was decided by the Department of Posts to adopt

MACP Scheme in respect of postal employees also w.e.f.

01.09.2008. Accordingly, O.M. No.4-7/(MACPS)/2009-PCC dated

18.09.2009 was issued by Department of Posts to clarify that

TBOP/BCR Schemes stand discontinued w.e.f. 01.09.2008

consequent upon introduction of MACPS to postal employees

w.e.f. 01.09.2008. The O.M. dated 1-20/2008-PCC dated

04.11.2013 was issued to regulate the fixation of pay in respect of

postal employees during the period 01.01.2006 to 31.08.2008 i.e.

before the switch over to MACPS took place. It is stated that the

O.M. dated 04.11.2013 was only in respect of postal employees

governed under TBOP/BCR and does not relate to Central

Government employees who were covered under erstwhile ACP

Scheme. Therefore, this O.M. has no bearing on the issue in the

said SLP pending before Hon’ble Supreme Court of India.

51. The ACP Scheme which is now superseded by MACP

Scheme is a matter of government policy. Interference with the

recommendations of the expert body like Pay Commission and its

recommendations for the MACP, would have serious impact on

the public exchequer. The recommendations of the Pay

Commission for MACP Scheme has been accepted by the

44
Government and implemented. There is nothing to show that the

Scheme is arbitrary or unjust warranting interference. Without

considering the advantages in the MACP Scheme, the High

Courts erred in interfering with the government’s policy in

accepting the recommendations of the Sixth Central Pay

Commission by simply placing reliance upon Raj Pal’s case. The

impugned orders cannot be sustained and are liable to be set

aside.

52. In the result, all the impugned orders in these batch of

appeals arising out of SLP(C) No.21803 of 2014, SLP(C)

No.22181 of 2014, SLP(C) No.23335 of 2014, SLP(C) No.23333

of 2014, SLP(C) No.18227 of 2015, SLP(C) No.31125 of 2016

and SLP(C) Diary No.6042 of 2017 are set aside and the appeals

preferred by the Union of India are allowed. Consequently,

appeal arising out of SLP(C)No.33706 of 2016 is disposed of. No

costs.

53. However, as pointed out earlier in para Nos. (47), (48) and

(49), since certain anomalies on implementation of the MACP

Scheme have been brought to the notice of the Joint Committee

in the various meetings of the Joint Committee, Union of India

45
and DoP&T to consider the same as they deem it appropriate and

take a decision in accordance with law.

54. We record our appreciation for the valuable assistance

rendered by Mr. Jaideep Gupta, learned amicus assisted by

learned counsel Mr. Kunal Chatterjee.

..…………………….J.

[R. BANUMATHI]

..…………………….J.

[A.S. BOPANNA]

..……………………….J.

[HRISHIKESH ROY]
New Delhi;

March 05, 2020.

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