Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 739

SUPREME COURT OF INDIA
SANJIV KHANNA, BELA M. TRIVEDI, JJ.
Union of India and Others – Appellants
Versus
Ex. HC/GD Virender Singh – Respondent
Civil Appeal Nos. 5545 of 2022, 1592, 1597, 1600, 1603-1609 of 2021, Arising Out Of Special Leave Petition (Civil) Nos..........42, 307, 370, 377-378, 381, 491, 932, 959, 4279, 5580, 6053-6054, 7196, 8598, 9056, 9118, 9678, 9704, 9795, 9796, 9797, 12240, 12241, 13440, 13441 of 2022, 3766, 3775, 3830, 3833, 4011, 4012, 4015, 4033, 4065, 4118, 4216, 4392, 4407, 4493, 4598, 4995, 5018, 5075, 5086, 5168, 5269, 5750, 6031, 6057, 6082, 6094, 6440, 6694, 6858, 7136, 7392, 7523, 7553, 7960, 8126, 8683, 8700, 8721, 8722, 8723, 8724, 8725, 8726, 8727, 8728, 8729, 8874, 8936, 10921, 10922, 10923, 11019, 11048, 11419, 11532, 11542, 11568, 11681, 11682, 11700, 11910, 12030, 12031, 12495, 13493, 13803, 15093, 16065, 16179, 16411, 16442, 19129, 19290, 20257 of 2021 of 2021, 11603, 11663, 11679, 11738, 11858, 11899, 11924, 12092, 12110, 12597, 13066 of 2020, Diary Nos. 4311, 4350, 4357, 4362, 4359, 4405, 4918, 4920, 4921, 4926, 4928, 4933, 4938, 4966, 4975, 5031, 5041, 5916, 5954, 8333, 4972, 4934, 4993, 4924, 4989, 8463, 5039, 6848, 15751, 15705, 15714, 15700, 15702, 15713, 15759, 15712, 15532, 15756, 15694, 15697, 18800, 26989 of 2021, 14322, 16220, 17489, 19614, 19618, 19905, 26590 of 2020, Writ Petition (Civil) No. 561 of 2022
Decided On : 22-08-2022

Advocates appeared:
For the parties :Madhvi G. Divan, Vikramjit Banerjee, ASG Rajesh K Singh, Vimla Sinha, Seema Bengani, Amit Sharma, Prashant Singh, Shymal Kumar, Vaishali Verma, Varun Chugh, Arvind Kumar Sharma, Nachiketa Joshi, Merusagar Samantray, Nidhi Khanna, Aishan Narain, Seema Bengani, Renjith B. Marar, Lakshmi N.Kaimal, M. J. Santhosh, Arun Poomulli, Aswathi S Kumar, K. K. Sharma, Rupali Sharma, Prashant Bhushan, Om Prakash Agarwal, Jatin, Manjeet Chawla, Sanjay Mani Tripathi, Gauri Karuna Das Mohanti, Pawan Kumar Sharma, Prakhar Sharma, Ali Jethmalani, V. Elongovan, Suraj Singh, Kamal Kant Tiwari, Anu Gupta, Manoj V. George, Vignesh Ram, Akriti Seth, Renjit V. Philip, Ram Sankar, A.K. Trivedi, Vaibhav Trivedi, Anand Kumar V., Aditya Kishor Tyagi, Sujatha Bagadhi, M/S. Ram Sankar & Co, B. V. Balaram Das, Shilpa Liza George, Amit Gaurav Singh, E. C. Vidya Sagar, Advocates

IMPORTANT POINTS
(1) Financial upgradation is personal, does not amount to regular or actual functional promotion and does not require creation of a new post – It has no relevance to seniority position and principles of reservation are not applicable.
(2) Prescription of pay scales and incentives are a matter of decision taken by Government which, when based upon recommendation of an expert body like Central Pay Commission, should carry weight and courts should be reluctant to substitute policy with their own views on what would be more equitable and just.
(3) MACP Scheme, being a part of pay structure and having effect on grade pay of employees, cannot be said to be part of allowances.

Headnote:
(A) Service Law – Promotion – Financial upgradation in terms of MACP Scheme – [Section 1, Part A of the First Schedule to Central Civil Services (Revised Pay) Rules, 2008] – MACP Scheme, like ACP Scheme, is an incentive scheme devised with object of ensuring that employees who have stagnated for lack of adequate promotional avenues are given benefit in form of financial upgradation – Financial upgradation is personal, does not amount to regular or actual functional promotion and does not require creation of a new post – It has no relevance to seniority position and principles of reservation are not applicable – Financial upgradation is granted to only those employees who have not received actual or functional promotion even after completion of requisite service period, though otherwise, they fulfil prescribed conditions for promotion – ACP Scheme and MACP Scheme differ significantly – Under ACP Scheme, a government servant is entitled to financial upgradation on completion of 12 and 24 years of her/his regular service, to pay scale of next promotional post in hierarchy – Under MACP Scheme, an employee is entitled to three financial upgradations on completion of 10, 20 and 30 years of regular service to next higher grade pay in hierarchy of pay bands and grade pay as given in Section 1, Part A of First Schedule of Central Civil Services (Revised Pay) Rules, 2008 – MACP Scheme has been implemented after due deliberation and on consideration of recommendations made by Sixth Central Pay Commission to bring systematic changes in erstwhile ACP Scheme so that all employees, irrespective of existing hierarchical structure in their organisations/cadres, get identical financial benefit of next immediate grade pay instead of pay/grade pay applicable to next promotional post – MACP Scheme puts an end and rectifies problem arising from inter-departmental disparities in re pay scales of next promotional post. (Paras 3 and 4)
(B) Service Law – Pay scale – Prescription of pay scales and incentives are a matter of decision taken by Government which, when based upon recommendation of an expert body like Central Pay Commission, should carry weight and courts should be reluctant to substitute policy with their own views on what would be more equitable and just – MACP Scheme is not irrational, unjust and prejudicial to a section of employees, but a well-considered decision which has taken all material and relevant factors into consideration – In fiscal matters, including pay fixation and terms of service, several factors like prevailing financial position, capacity to bear additional liability are relevant and courts do tread carefully as interference may have serious impact on public exchequer and have grave financial implications. (Paras 5 and 6)
(C) Service Law – Modified Assured Career Progression Scheme (MACP) – MACP Scheme, being a part of pay structure and having effect on grade pay of employees, cannot be said to be part of allowances – Grant of financial upgradation under MACP Scheme is not a matter of pay structure, but an incentive scheme brought into force to relieve stagnation which operates on its own terms – Resolution of Central Government dated 30th August 2008 cannot be read as conferring any right on government employees – Resolution was not notified and enforced to confer a legal right – Liberal, pragmatic and ameliorative approach is required to succour genuine grievances of personnel doing duty for nation, owing to which they forgo participation in pre-promotional courses – Impugned Judgment modified. (Paras 8, 9, 11 and 12)
Facts of the case:
Points in issue are :
(a) Whether the MACP Scheme is applicable and to be implemented with effect from 1st January 2006, the date from which the Central Civil Service (Revised Pay) Rules, 2008 were enforced, or in terms of O.M. dated 19th May 2009 with effect from 1st September 2009?
(b) Whether under the MACP Scheme the respondents are entitled to financial upgradation equivalent to the pay scale/grade pay of the next promotional post in the hierarchy, or the immediate next grade pay in hierarchy of the pay bands as stated in Section 1, Part A of the First Schedule to Central Civil Services (Revised Pay) Rules, 2008?
(c) Whether the respondents, who belong to the Central Armed Police Forces, are entitled to grant of financial upgradation under the MACP Scheme, if for administrative reasons they were unable to fulfil the pre-proportional norms?
Findings of Court:
Pay scales are fixed and revised by the rules which are enacted in exercise of powers conferred by the proviso to Article 309 and clause (5) of Article 148 of the Constitution of India. Therefore, vide Notification dated 29th August 2008, Central Civil Services (Revised Pay) Rules, 2008 were enacted vide G.S.R. No. 622(E). Rule 1(2) states that the Rules, as enacted, shall be deemed to have come into force on 1st January 2006.
Result : Appeals Partly allowed.

JUDGMENT :

SANJIV KHANNA, J.

1. Delay is condoned and leave is granted.

2. These appeals by way of special leave raise three issues, all of which are connected and relate to the Modified Assured Career Progression Scheme¹ [for short the ‘MACP Scheme’] namely:

(a) Whether the MACP Scheme is applicable and to be implemented with effect from 1st January 2006, the date from which the Central Civil Service (Revised Pay) Rules, 2008 were enforced, or in terms of O.M. dated 19th May 2009 with effect from 1st September 2009?

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

(c) Whether the respondents, who belong to the Central Armed Police Forces, are entitled to grant of financial upgradation under the MACP Scheme, if for administrative reasons they were unable to fulfil the pre-proportional norms?

3. The second question is covered by a three Judge Bench decision of this Court in Union of India and Others vs. M.V. Mohanan Nair, (2020) 5 SCC 421 which judgment explicates the similarities and the difference between the Assured Career Progression Scheme² [for short the ‘ACP Scheme’] the erstwhile scheme which was replaced by the MACP Scheme. In a nutshell, it can be stated that the MACP Scheme, like the ACP Scheme, is an incentive scheme devised with the object of ensuring that the employees who have stagnated for lack of adequate promotional avenues are given benefit in the form of financial upgradation. The financial upgradation is personal, does not amount to regular or actual functional promotion, and does not require creation of a new post. It has no relevance to the seniority position and principles of reservation are not applicable. Financial upgradation is granted to only those employees who have not received actual or functional promotion even after completion of the requisite service period, though otherwise, they fulfil the prescribed conditions for promotion³ [For upgradation under the MACP Scheme, the benchmark of ‘good’ and ‘very good’ is applicable till the grade pay of Rs. 6600/- in pay band 3 and for grade pay of Rs. 7600/- and above, respectively]. Having said so, the ACP Scheme and the MACP Scheme differ significantly. Under the ACP Scheme, a government servant is entitled to financial upgradation on completion of 12 and 24 years of her/his regular service, to the pay scale of the next promotional post in the hierarchy. Under the MACP Scheme, an employee is entitled to three financial upgradations on completion of 10, 20 and 30 years of regular service to the next higher grade pay in the hierarchy of the pay bands and grade pay as given in Section 1, Part A of the First Schedule of the Central Civil Services (Revised Pay) Rules, 2008.

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

“29......Under the MACP Scheme, financial upgradations are granted at three regular intervals on completion of 10-20-30 years of service without p

Click Here to Read the rest of this document