The court affirmed that pay protection benefits must be granted to direct recruits from PSUs regardless of recruitment through competitive examinations, rejecting arbitrary restrictions on eligibility.

JUDGMENT :

AMIT MAHAJAN, J.

1. The present petition has been field assailing the order dated 25.02.2025, passed by the learned Central Administrative Tribunal, Principal Bench, New Delhi (hereinafter ‘CAT’) in O.A. No. 1804/2023 whereby the Petitioner was directed to re-fix the basic of the Respondents by allowing the benefit of pay protection of the pay drawn by the them along with consequential benefits.

2. The quintessential facets governing the present dispute are that the Respondents are Direct Recruit Officers of the Military Engineer Services (‘MSE’) of different Batches, 18 of them are from Indian Defense Service of Engineers (‘IDSE’ Cadre and the other 3 belong to Quantity Surveying and Contracts (‘QS&C’) Cadre, recruited between 2003 to 2019, as Assistant Executive Engineers (‘AEE’) through the All India Engineering Services Examination by the Union Public Service Commission, within.

3. At the time of appearing for the examination, they were employed at various PSUs viz. BHEL, NTPC, IOCL, PGCIL, ONGC etc. and it has been alleged that they had overall suffered in terms of total salary while switching their employment from the PSUs to the Central Governments posts.

4. Hence, the Respondents made several representations seeking Pay Protection as per Pay Protection Guidelines issued by the Department of Personnel and Training, however, the said request was denied by the Department on the basis of the OM Dated 10.07.1998 vide Letter dated 15.05.2023 by stating that protection of pay is only available if the selection is through interview and not through an open competitive examination. The relevant extract reads as under: -

"l . Reference your letter No 1025/O.ffrs/41/CTLCC dated 24 Feb 2023 and this office letter No CRO/20/SB-l 0384/Gp-l dated 17 Mar 2023.

2. The contents of your representation has been perused by competent authority and the following are brought out for your kind info:-

(a) Govt of India Min of Personnel, Public Grievances & Pension (Department of Personnel & Training) letter No. 12/1/96-Estt {Pay-I) dated 10 Jul 1998 has issued guidelines for fixing of pay of candidate working in Public Sector Undertaking etc, recommended for appointment by the UPSC which states as under:-

"The benefit of pay protection is available to the Government servants on their recruitment by selection through UPSC, subject to fulfillment of certain conditions. Earlier benefit was extended to the candidates working in central PSUs/State PSUs/Universities/Semi- Government Institutions Autonomous Bodies etc. with a view to drawing talent, which is available in those organizations. The question whether the objective underlying the above orders could be achieved through open competitive examination in which the employees from Public Sector Undertaking etc, also appear has been considered. It is clarified that the benefit of pay protection under the above orders is available only if the selection is through interview and not through in open competitive examination. Wherever the protection under the above orders is to be given, the Commission will indicate in its recommendation letter to the Min concerned that pay of such candidates should be fixed as per the guidelines laid down in the above orders. Further, the benefit would be available to an officer coming from PSU etc only if the officer has completed the period of probation successfully for being regularized/confirmed in the post in the parent organization. "

b) Aftervard on receipt of certain cases seeking clarification on the exact scope and in the light of various Court Judgments, Govt of India Min of Personnel Public Grievances & Pension (Department of Personnel & Trainin