Union Of India vs Balbir Singh Turn

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL DIARY NO. 3744 OF 2016

Union of India and Ors. .… Appellant(s)

Vs.

Balbir Singh Turn & Anr. ….Respondent(s)

WITH

CIVIL APPEAL DIARY NO. 5183 OF 2017

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CIVIL APPEAL DIARY NO. 7888 OF 2017

CIVIL APPEAL DIARY NO. 18265 OF 2016

CIVIL APPEAL NO. 244 OF 2017

CIVIL APPEAL DIARY NO. 31768 OF 2016 Signature Not Verified

Digitally signed by MEENAKSHI KOHLI Date: 2017.12.08 CIVIL APPEAL DIARY NO. 38019 OF 2016 12:14:57 IST Reason:

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JUDGMENT

Deepak Gupta, J.

1. Applications for condonation of delay in filing and refiling

the appeals are allowed.

3

2. This bunch of appeals is being disposed of by a common

judgment since similar questions of law are involved.

3. The 6th Central Pay Commission was set up by the

Government of India to make recommendations in matters

relating to emoluments, allowances and conditions of service

amongst other things. The Pay Commission also made

recommendation with regard to armed forces personnel. On

30th August, 2008, the Central Government resolved by a

resolution of that date to accept the recommendation of the 6th

Central Pay Commission (‘CPC’ for short) with regard to the

Personnel Below Officer Rank (PBOR) subject to certain

modifications. Clause (i) of the Resolution reads as follows :-

“(i) Implementation of the revised pay structure of pay bands and grade pay, as well as pension, with effect from 01.01.2006 and revised rates of allowances (except Dearness Allowance/relief) with effect from 01.09.2008;”

Clause 9 of the Resolution reads as follows :-

“(ix) Grant of 3 ACP up-gradation after 8, 16 and 24 years of service to PBORs;” 4

4. Under the recommendations made by the 5th CPC there

was a provision for Assured Career Progression (ACP). Vide

this scheme, if an employee was not promoted he was entitled

to get the next higher scale of pay after completion of 12/24

years of service. The 6th CPC recommended the grant of

benefit of ACP after 10 and 20 years of service. The Union of

India, however decided to grant 3 ACP upgradations, after 8,

16 and 24 years of service to PBORs, as per Clause (ix)

extracted above. However, it would be pertinent to mention

that the 6th CPC did away with the concept of pay scales and

reduced the large number of pay scales into 4 pay bands and

within the pay bands there was a separate grade pay attached

to a post.

5. For the purpose of this judgment we are dealing with the

facts of Civil Appeal Diary No. 3744 of 2016. It would be

pertinent to mention that all the petitioners before the Armed

Forces Tribunal (‘AFT’ for short) who are respondents before

us are persons below officer rank. The respondents in this

case retired after 01.01.2006 but prior to 31.08.2008. They 5

claim that the benefit of the Modified Assured Career

Progression (‘MACP’ for short) was denied to them on the

ground that the MACP was made applicable only with effect

from 01.09.2008. The respondents approached the AFT

praying that they are entitled to the benefit of MACP w.e.f.

01.01.2006, i.e., the date from which the recommendation of

the 6th CPC with regard to pay and benefits were made

applicable. The stand of the Union of India was that the

MACP was applicable only w.e.f. 01.09.2008 and, therefore,

the respondents who had retired prior to the said date were

not entitled to the benefit of the MACP. The AFT vide the

impugned order dated 21.05.2014 held that the benefit of ACP

granted to an employee is part of the pay structure which not

only affects his pay but also his pension and, therefore, held

that the ACP is not an allowance but a part of pay and,

therefore, in terms of Clause (i) of the Government Resolution

the MACP was payable w.e.f. 01.01.2006.

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6. The question that arises for decision is whether the

benefit of MACP is applicable from 01.01.2006 or from

01.09.2008.

7. The answer to this question will lie in the interpretation

given to the Government Resolution, relevant portion of which

has been quoted hereinabove. A bare perusal of Clause(i) of

the Resolution clearly indicates that the Central Government

decided to implement the revised pay structure of pay bands

and grade pay, as well as pension with effect from 01.01.2006.

The second part of the Clause lays down that all allowances

except the Dearness Allowance/relief will be effective from

01.09.2008. The AFT held, and in our opinion rightly so, that

the benefit of MACP is part of the pay structure and will affect

the grade pay of the employees and, therefore, it cannot be

said that it is a part of allowances. The benefit of MACP if

given to the respondents would affect their pension also.

8. We may also point out that along with this Resolution

there is Annexure-I. Part-A of Annexure-I deals with the pay 7

structure, grade pay, pay bands etc., and Item 10 reads as

follows :-

10 Assured Career Progression Scheme for Three ACP PBORs. upgradation after The Commission recommends that the 8, 16 and 24 years time bound promotion scheme in case of of service has been PBORs shall allow two financial approved. The upgradations on completion of 10 and 20 upgradation will years of service as at present. The take place only in financial upgradations under the scheme the hierarchy of shall allow benefit of pay fixation equal Grade Pays, which to one increment along with the higher need not grade pay. As regards the other necessarily be the suggestions relating to residency period hierarchy in that for promotion of PBORs Ministry of particular cadre.

Defence may set up an Inter-Services Committee to consider the matter after the revised scheme of running bands is implemented (Para 2.3.34)

Part-B of Annexure-I deals with allowances, concessions &

benefits and Conditions of Service of Defence Forces

Personnel. It is apparent that the Government itself by placing

MACP in Part-A of Annexure-I was considering it to be the part

of the pay structure.

9. The MACP Scheme was initially notified vide Special

Army Instructions dated 11.10.2008. The Scheme was called

the Modified Assured Career Progression Scheme for Personnel

Below Officer Rank in the Indian Army. After the Resolution 8

was passed by the Central Government on 30.08.2008 Special

Army Instructions were issued on 11.10.2008 dealing with

revision of pay structure. As far as ACP is concerned Para 15

of the said letter reads as follows:-

“15. Assured Career Progression. In pursuance with the Government Resolution of Assured Career Progression (ACP), a directly recruited PBOR as a Sepoy, Havildar or JCO will be entitled to minimum three financial upgradations after 8, 16 and 24 years of service. At the time of each financial upgradation under ACP, the PBOR would get an additional increment and next higher grade pay in hierarchy.

xx xx xx”

Thereafter, another letter was issued by the Adjutant General

Branch on 03.08.2009. Relevant portion of which reads as

follows:-

“…….The new ACP (3 ACP at 8, 16 and 24 years of service) should be applicable w.e.f. 1 Jan 2006, and the old provns (operative w.e.f. the Vth Pay Commission) would be applicable till 31 Dec. 05. Regular service for the purpose of ACP shall commence from the date of joining of a post in direct entry grade.

xx xx xx” 9

Finally, on 30.05.2011 another letter was issued by the

Ministry of Defence, relevant portion of which reads as

follows:-

“5. The Scheme would be operational w.e.f. 1st Sep. 2008. In other words, financial up-gradations as per the provisions of the, earlier ACP scheme (of August 2003) would be granted till 31.08.2008.”

Therefore, even as per the understanding of the Army

and other authorities up till the issuance of the letter dated

30.05.2011 the benefit of MACP was available from

01.01.2006.

10. As already held by us above, there can be no dispute that

grant of ACP is part of the pay structure. It affects the pay of

the employee and he gets a higher grade pay even though it

may be in the same pay band. It has been strenuously urged

by Col. R. Balasubramanian, learned counsel for the UOI that

the Government took the decision to make the Scheme

applicable from 01.09.2008 because many employees would

have lost out in case the MACP was made applicable from

01.01.2006 and they would have had to refund the excess 10

amount, if any, paid to them. His argument is that under the

old Scheme if somebody got the benefit of the ACP he was put

in the higher scale of pay. After merger of pay scales into pay

bands an employee is only entitled to higher grade pay which

may be lower than the next pay band. Therefore, there may be

many employees who may suffer.

11. We are only concerned with the interpretation of the

Resolution of the Government which clearly states that the

recommendations of 6th CPC as modified and accepted by the

Central Government in so far as they relate to pay structure,

pay scales, grade pay etc. will apply from 01.01.2006. There

may be some gainers and some losers but the intention of the

Government was clear that this Scheme which is part of the

pay structure would apply from 01.01.2006. We may also

point out that the Resolution dated 30.08.2008 whereby the

recommendation of the Pay Commission has been accepted

with modifications and recommendations with regard to pay

structure, pay scales, grade pay etc. have been made

applicable from 01.01.2006. This is a decision of the Cabinet. 11

This decision could not have been modified by issuing

executive instruction. The letter dated 30.05.2011 flies in the

face of the Cabinet decision reflected in the Resolution dated

30.08.2008. Thus, administrative instruction dated

30.05.2011 is totally ultra vires the Resolution of the

Government.

12. Col. R. Balasubramanian, learned counsel for the UOI

relied upon the following three judgments viz. P.K.

Gopinathan Nair & Ors. v. Union of India and Ors. 1 ,

passed by the High Court of Kerala on 22.03.2017, Delhi

Urban Shelter Improvement Board v. Shashi Malik &

Ors.2, passed by the High Court of Delhi on 01.09.2016, K.K.

Anandan & Ors. v. The Principal Accountant General

Kerala (Audit) & Ors3 passed by the Central Administrative

Tribunal, Ernakulam Bench, Kerala on 08.02.2013. In our

view, none of these judgments is applicable because the issue

whether the MACP is part of the pay structure or allowances

were not considered in any of these cases.

1 WP(C) No.23465 of 2013(G) 2 LPA 405 of 2016 3 O.A. No. 541 of 2012 12

13. In this view of the matter we find no merit in the appeals,

which are accordingly disposed of. All pending applications

are also disposed of.

…………………………..J. (Madan B. Lokur)

……………………………J. (Deepak Gupta)

New Delhi December 08, 2017