Union Of India vs Rk Sharma on 28 April, 2021


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Supreme Court of India

Union Of India vs Rk Sharma on 28 April, 2021

Author: L. Nageswara Rao

Bench: L. Nageswara Rao, Vineet Saran

                                                    Non-Reportable

           IN THE SUPREME COURT OF INDIA
             CIVIL APPELLATE JURISDICTION
                 Civil Appeal No. 1579 of 2021
                 (@ SLP (C) No.15572 of 2019)

Union of India
                                                 .... Appellant(s)
                            Versus

R.K. Sharma & Ors.
                                             …. Respondent (s)
                             WITH

                 Civil Appeal No. 1583 of 2021
                  (@SLP (C) No.11599 of 2020)

                 Civil Appeal No. 1611 of 2021
                  (@SLP (C) No.1807 of 2021)

                 Civil Appeal No. 1644 of 2021
                  (@SLP (C) No.12665 of 2019)

                 Civil Appeal No. 1580 of 2021
                 (@SLP (C) No.28112 of 2019)

                 Civil Appeal No. 1616 of 2021
                  (@SLP (C) No.2068 of 2021)

                 Civil Appeal No. 1615 of 2021
                  (@SLP (C) No.1811 of 2021)

                 Civil Appeal No. 1610 of 2021
                  (@SLP (C) No.1806 of 2021)

                 Civil Appeal No. 1584 of 2021
                  (@SLP (C) No.11613 of 2020)

                 Civil Appeal No. 1601 of 2021
                  (@SLP (C) No.15773 of 2020)
                 Civil Appeal No. 1585 of 2021
                  (@SLP (C) No.11749 of 2020)




                                                              1 | Page
Civil Appeal No. 1581 of 2021
 (@SLP (C) No.11211 of 2020)

Civil Appeal No. 1582 of 2021
(@SLP (C) No.11337 of 2020)

Civil Appeal No. 1590 of 2021
 (@SLP (C) No.11939 of 2020)

Civil Appeal No. 1588 of 2021
 (@SLP (C) No.11849 of 2020)

Civil Appeal No.1612 of 2021
 (@SLP (C) No.1808 of 2021)

Civil Appeal No. 1586 of 2021
 (@SLP (C) No.11776 of 2020)

Civil Appeal No. 1602 of 2021
(@SLP (C) No.15774 of 2020)

Civil Appeal No. 1595 of 2021
(@SLP (C) No.12123 of 2020)

Civil Appeal No. 1593 of 2021
 (@SLP (C) No.12035 of 2020)

Civil Appeal No.1594 of 2021
(@SLP (C) No.12042 of 2020)

Civil Appeal No. 1613 of 2021
 (@SLP (C) No.1809 of 2021)

Civil Appeal No. 1598 of 2021
 (@SLP (C) No.13074 of 2020)

Civil Appeal No. 1591 of 2021
(@SLP (C) No.12021 of 2020)

Civil Appeal No.1596 of 2021
(@SLP (C) No.12463 of 2020)

Civil Appeal No. 1587 of 2021
(@SLP (C) No.11803 of 2020)




                                2 | Page
                   Civil Appeal No. 1589 of 2021
                    (@SLP (C) No.11903 of 2020)

                   Civil Appeal No. 1614 of 2021
                    (@SLP (C) No.1810 of 2021)

                          JUDGMENT

L. NAGESWARA RAO, J.

1. The short question that falls for consideration of this Court in

these Appeals is whether the Government of India is justified in

implementing the Modified Assured Career Progression Scheme (for

short, ‘MACPS’) for civilian employees of the Central Government in

Groups ‘A’, ‘B’, ‘C’, ‘D’ and officers in the All India Services,

Chairpersons, Members of the Regulatory Bodies (except the

Reserve Bank of India) with effect from 01.09.2008 and not from

01.01.2006. For the sake of convenience, we are referring to the

facts of Civil Appeal arising out of SLP (C) No.15572 of 2019.

2. The Respondent was appointed as Deputy Director in the

Bureau of Industrial Costs and Prices in Ministry of Industry,

Department of Industrial Policy and Promotion which was subsequently

merged with Tariff Commission. He was promoted as Director in grade

pay of Rs.3700-125-4700-50-5000 by an order dated 09.02.1994.

Certain recommendations were made by the 5th Central Pay

Commission relating to the Assured Career Progression Scheme (for

3 | Page
short, ‘ACPS’) for Central Government civilian employees in all the

Ministries/Departments which came into force w.e.f. 01.01.1996.

Department of Personnel and Training by a memorandum dated

09.08.1999 directed implementation of the recommendations of the 5 th

Pay Commission regarding ACPS in respect of Group ‘D’, ‘C’ and ‘B’

officers and those holding isolated posts in Group ‘A’. The relevant

conditions that were laid down for grant of benefits under the ACPS are

as under: –

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.

2. The highest pay-scale upto which the financial upgradation under
the Scheme was available was be Rs.14,300-18,300. Beyond this
level, there shall be no financial upgradation and higher posts
were filled strictly on vacancy based promotions.

4. The first financial upgradation under the ACP Scheme shall be
allowed after 12 years of regular service and the second financial
upgradation after 12 years of regular service from the date of the
first financial upgradation subject to fulfillment 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.

4 | Page
5.1. Two financial upgradation under the ACP Scheme in the entire
Government service career of an employee shall be counted
against regular promotions (including in-situ promotion and fast-
track promotions availed through limited Departmental
Competitive Examination) availed from the grade in which an
employee was appointed as a direct recruit. This shall mean that
two financial upgradation under the ACP Scheme shall be
available only if no regular promotions during the prescribed
periods (12 and 24 years) have been availed by the employee if
an employee has already got one regular promotion he shall
qualify for second financial upgradation only on completion of 24
years of regular service under the In case two prior promotions on
regular basis have already been received by an employee, no
benefit under the ACP Scheme shall accrue to him.

In respect of Organized Group ‘A’ services, the Government has
provided non-functional financial upgradation for the officers in
PB-3 and PB-4 who are senior by two years or more to IAS
officers (in particular grade) but have not so far been promoted to
that particular grade because of lack of promotional avenues in
Tariff Commission.

In respect of General Civil Service Group ‘A’ officers, whether
holding isolated post or not {and also for Group ‘B’ & ‘C’
employees), the Government has provided financial upgradation
by way of extending MACP to the officers who have not been
promoted because of lack of upgradation whenever a person has
spent 10 years continuously in the same grade. Further three
upgradations after 10, 20 and 30 years of service are allowed.

(II) The scheme for financial upgradation to Organized Group ‘A’
services is being implemented for the first time. Similarly, the
MACPs scheme will be applicable to him for the first time (he is

5 | Page
GCS Group ‘A’ officer holding a post which is not treated an
isolated post, the earlier ACP scheme covered only those GCS
Group ‘A’ officer who were on isolated posts).

3. The 6th Central Pay Commission submitted its report on 24 th

March, 2008 relating to the structure of emoluments, allowances,

conditions of services and retirement benefits of the Central

Government employees including those belonging to the Union

Territories, Members of All India Services, personnel belonging to the

Defence Forces, Officers and employees of the Audit and Accounts

Departments and Chairpersons and Members of Regulatory Bodies,

except the Reserve Bank of India. By a resolution dated 29 th August,

2008, recommendations of the Central Pay Commission concerning

civilian employees referred to above were accepted by the Central

Government with respect to revised scales of pay and dearness

allowances w.e.f. 01.01.2006. In so far as the revised allowances,

other than the dearness allowance, the effective date according to the

memorandum is 1st September, 2008.

4. The salient features of the MACPS recommended by the 6th

Pay Commission are that three increments shall be granted to the

employees on completion of 10, 20 and 30 years of service.

According to the scheme of MACP, financial upgradation will be

admissible on completion of 10 years of continuous service in the

same grade pay.

6 | Page

5. On 21.08.2009, a representation was made by the Respondent

pointing out the anomalies in the implementation of the MACPS. The

grievance of the Respondent was that he was denied the benefit of

the MACPS w.e.f. 01.01.2006. As the scheme was made applicable

for officers of the organized group ‘A’ services w.e.f. 01.01.2006, the

Respondent requested the Government to extend the benefit to him

as well. He preferred another representation on 22.03.2012

reiterating his request made in the earlier representation. There was

no response to the representations preferred by him seeking

implementation of the MACPS w.e.f. 01.01.2006. Therefore,

Respondent filed O.A. No.38 of 2014 in the Central Administrative

Tribunal, Principal Bench, New Delhi. The Tribunal dismissed the

O.A. filed by the Respondent by its judgment dated 21.02.2017

finding no merit in the claim of the Respondent for the financial

upgradation under the MACPS to be granted w.e.f. 01.01.2006. The

Respondent challenged the judgment of the Tribunal before the High

Court of Delhi by filing Writ Petition No.4760 of 2018. The High Court

allowed the Writ Petition and directed the Appellants to grant the

second financial upgradation to the Respondent under the MACPS

w.e.f. 01.01.2006 by relying upon a judgment of this Court in Union

of India & Ors. v. Balbir Singh Turn & Anr1.

1 (2018) 11 SCC 99

7 | Page

6. Ms. Madhavi Diwan, learned Additional Solicitor General of

India appearing for the Appellants submitted that this Court in Balbir

Singh Turn (supra) held that payment under the ACPS is a part of the

pay structure whereas in a later judgment in Union of India and Ors.

v. M.V. Mohanan Nair2 this Court was of the opinion that both ACP

and MACP schemes are in the nature of incentive schemes. These

Appeals deserves to be dismissed in terms of the judgment of this

Court in M.V. Mohanan Nair (supra). The contention of the Appellant

is that a policy decision was taken to implement the recommendation

of 5th Pay Commission in respect of revised scales of pay and

dearness allowance for civilian employees w.e.f. 01.01.2006 and that

revised allowance other than dearness allowance w.e.f. 1st

September, 2008. The learned Additional Solicitor General argued

that the Respondent is entitled to the incentive under ACP Scheme

which was in vogue till 31.08.2008. The Respondent cannot seek

applicability of MACPS w.e.f. 01.01.2006. According to the MACPS

the financial upgradation is in the higher grade pay in the same pay

band whereas financial upgradation as per ACP Scheme was to the

next grade pay of promotional post. The learned Additional Solicitor

General stated that revision of financial upgradation granted to civilian

officers by implementing MACPS from 01.01.2006 would be

2 (2020) 5 SCC 421

8 | Page
detrimental to the Respondent and other similarly situated persons as

huge amounts of money would have to be recovered from them.

7. For a better understanding of the dispute in these cases, it is

necessary to examine the judgments of this Court in Balbir Singh

Turn (supra) and M.V. Mohanan Nair (supra). The point that was

considered by this Court in Balbir Singh Turn (supra) relates to the

applicability of the benefit of MACPS from 01.01.2006. The

Respondents therein approached the Armed Forces Tribunal which

held that the benefit of ACP granted to an employee is part of the pay

structure which affects the pay and also his pension. The Armed

Forces Tribunal held that an ACP is not an allowance but a part of pay

and therefore, in terms of the Government resolution, the employees

were entitled for MACP w.e.f. 01.01.2006. This Court in Balbir Singh

Turn (supra) upheld the said finding recorded by the Armed Forces

Tribunal. Instructions issued on 30.05.2011 were found to be contrary

to the resolution dated 30.08.2008 as, according to the resolution

01.01.2006 was the effective date for implementation of MACPS in

matters relating to pay and dearness allowance.

8. In M.V. Mohanan Nair (supra) a three Judge Bench of this

Court considered the ACPS as well as the MACPS to hold that the

schemes are in the nature of incentive schemes which were brought

into force to relieve stagnation. This Court was of the considered

view that the Respondents therein were entitled only to the benefit of

9 | Page
next grade pay in the pay band and not to the benefit of grade pay of

next promotional post. As the MACPS is a matter of Government

policy pursuant to the recommendations made by the Pay

Commission, this Court refused to accept submissions of the

employees that MACPS should be made applicable w.e.f. 01.01.2006.

9. In view of the judgment of this Court in M.V. Mohanan Nair

(supra), the Respondents and other similarly situated employees are

entitled for financial upgradation under MACPS only to the next grade

pay and not to the grade pay of next promotional post. It is clear

from the resolution dated 30.08.2008 that the recommendation of the

6th Pay Commission was accepted by the Government and was made

effective from 01.01.2006 in respect of civilian employees with regard

to revised scales of pay and dearness allowances. In so far as the

revised allowances other than dearness allowance, recommendation

of the 6th Pay Commission were given effect from 01.09.2008. The

judgment in M.V. Mohanan Nair (supra) clinches the issue. Benefits

flowing from ACP & MACP Schemes are incentives and are not part

of pay. The resolution dated 29.08.2008 is made effective from

01.09.2008 for implementation of allowances other than Pay and DA

which includes financial upgradation under ACP & MACP Schemes.

Therefore, the Respondents and other similarly situated officers are

not entitled to seek implementation of the benefits of MACPS w.e.f.

01.01.2006 according to the resolution dated 29.08.2008. Moreover,

10 | P a g e
the implementation of MACPS by granting financial upgradation only

to the next grade pay in the pay band and not granting pay of the next

promotional post w.e.f. 01.01.2006 would be detrimental to a large

number of employees, particularly those who have retired. We find

force in the submission made by the learned Additional Solicitor

General that uniform implementation of MACPS for civilian employees

w.e.f. 01.01.2006 would result in large scale recoveries of amounts

paid in excess.

10. In view of the above, we set aside the judgment of the High

Court and allow these Appeals.

Civil Appeal No.1592 of 2021
(@SLP (C) No.12033 of 2020)
Civil Appeal No. 1597 of 2021
(@SLP (C) No.12640 of 2020)
Civil Appeal No. 1600 of 2021
(@SLP (C) No.15772 of 2020)
Civil Appeal Nos. 1603-1609 of 2021
(@SLP (C) Nos.913-919 of 2021)
Civil Appeal No. 1599 of 2021
(@SLP (C) No.15150 of 2020)

11. Apart from the issue relating to the date from which MACP has

to be given effect, other issues pertaining to the entitlement of the

Respondents to claim benefit under the ACP Scheme in the next

promotional post which is Sub-Inspector and not Assistant Sub-

Inspector arise for consideration. List these Appeals for further

hearing after summer vacation.

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Civil Appeal Nos.1625-1627 of 2021
(@SLP (C) Nos.10811-10813 of 2018)

12. The dispute in this Appeal relates to the claim of the

Respondents for payment of benefits under the ACP Scheme on

completion of 24 years of service between January and April, 2009.

List this matter for further hearing after summer vacation.

………………………………….J.
[ L. NAGESWARA RAO ]

……………………………….J.

[ VINEET SARAN ]

New Delhi,
April 28, 2021.

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