Union Of India vs N.M. Raut

IN THE SUPREME COURT OF INDIA 2024 INSC 1042 CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 8015 OF 2022)

UNION OF INDIA & ORS. ..... PETITIONER(S)

VERSUS

N.M. RAUT & ORS. ..... RESPONDENT(S)

with

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 10457-10458 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 11342-11343 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 10475-10476 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 10642-10643 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 12354-12355 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 15188-15189 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 10693-10694 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 10272-10273 of 2022)

CIVIL APPEAL NOS. OF 2024 (arising out of SLP(C) NOS. 11119-11120 of 2022)

CIVIL APPEAL NOS. OF 2024 Signature Not Verified (arising out of SLP(C) NOS. 11207-11208 of 2022) Digitally signed by babita pandey Date: 2024.12.21 16:21:26 IST CIVIL APPEAL NO. OF 2024 Reason: (arising out of SLP(C) NO. 2995 of 2023)

CA @ SLP(C) No. 8015/2022 etc. 1 CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 2557 of 2023)

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 3197 of 2024)

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 3198 of 2024)

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 9604 of 2024)

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 12060 of 2024)

and

CIVIL APPEAL NO. OF 2024 (arising out of SLP(C) NO. 12261 of 2024)

J U D G M E N T

Civil Appeals @ SLP(C) Nos. 8015 OF 2022, 10457-10458 of 2022, 11342-11343 of 2022, 10475-10476 of 2022, 10642-10643 of 2022, 12354-12355 of 2022, 15188-15189 of 2022, 10693-10694 of 2022, 10272-10273 of 2022, 11119-11120 of 2022, 11207-11208 of 2022, 2995 of 2023 and 2557 of 2023

1. Leave granted.

2. This judgment decides the aforestated appeals, which are

concerned with the interpretation and implementation of the

Modified Assured Career Progression Scheme, 20081, applicable with

effect from 01.09.2008.

3. The MACPS was considered by a Bench of three Judges of this

Court in “Union of India and Others v. M.V. Mohanan Nair”2 and

other connected matters. This judgment elaborately compared the

MACPS with the Assured Career Progression Scheme3, which was

1 For short, “MACPS.” 2 (2020) 5 SCC 421.

3 For short, “ACP.”

CA @ SLP(C) No. 8015/2022 etc. 2 introduced with effect from 09.08.1999 and continued to remain in

force till 31.08.2008. In a nutshell, this Court held that the

MACPS differed from the ACPS on several aspects, including two

significant ones. First, the ACPS envisaged financial upgradations

on completion of 12 years and 24 years of regular service without

one or two promotions, as the case may be, whereas the MACPS

envisaged three financial upgradations after completion of regular

service of 10, 20, and 30 years without promotions and continuing

on the same Grade Pay for a decade. Second, the financial

upgradation under the ACPS was to the pay scale of the next higher

promotional post in the service whereas, under the MACPS, financial

upgradation was not with reference to the next higher promotional

post but to the next higher grade pay in the scale of pay, as

notified upon implementation of the Central Civil Services (Revised

Pay) Rules, 20084.

4. The decision in M.V. Mohanan Nair (supra) was subsequently

followed and elaborated upon by this Court in (i) “Union of India

v. R.K. Sharma and Others5; (ii) “Director, Directorate of

Enforcement and Another v. K. Sudheesh Kumar and Others6”; and

(iii) “Union of India and Others v. Ex.HC/GD Virender Singh7.”

5. In K. Sudheesh Kumar (supra), this Court had specifically dealt

with Clause 8.1 of the MACPS and observed that the next financial

upgradation in terms of Section 1, Part-A of the First Schedule to

the CCS RP Rules, was from Pay Band8-2 with Grade pay of ₹5400 to

4 CCS RP Rules.

5 (2021) 5 SCC 579.

6 (2022) 3 SCC 649.

7 (2022) SCC OnLine SC 1058.

8 For short, “PB”.

CA @ SLP(C) No. 8015/2022 etc. 3 PB-3 with Grade Pay of ₹5400. The argument that the pay-scale and

the Grade Pay of ₹5400 was common was rejected in view of the clear

stipulation in Clause 8.1 of the MACPS. The effect thereof would

be that a person given financial upgradation under the MACPS from

PB-2 with Grade Pay of ₹5400 to PB-3 with Grade Pay of ₹5400 will

be entitled to an increment at the rate of 3%.

7. In the case of Ex.HC/GD Virender Singh (supra), the issue

which had arisen was as to whether the MACPS was applicable and was

to be implemented with effect from 01.01.2006, the date on which

the CCS RP Rules, were enforced or was to be applied, in terms of

O.M. dated 19.05.2009.

8. Ex.HC/GD Virender Singh (supra), observes that the MACPS

would be applicable with effect from 01.09.2008. Upon considering

the reasoning in M.V. Mohanan Nair (supra), it was held that the

earlier decision of this Court in “Union of India and others v.

Balbir Singh Turn and another”9, was effectively overruled. It is

relevant to refer to this settled position, as the arguments in the

present cases primarily arise from the fact that the CCS RP Rules

were enforced with effect from 01.01.2006 and granted certain

benefits to the respondents in the form of revision or higher pay

scales after completion of two or four years of service, as the

case may be.

9. Ex.HC/GD Virender Singh (supra), following M.V. Mohanan Nair

(supra) reiterated that under the MACPS, the eligible Government

employees are entitled to financial upgradation equivalent to the

immediate next Grade Pay in the hierarchy of the Pay Bands, as

9 (2018) 11 SCC 99.

CA @ SLP(C) No. 8015/2022 etc. 4 stated in Section 1, Part-A of the First Schedule to the CCS RP

Rules.

10. In the present case, upon implementation of the CCS RP Rules,

some of the respondents who were working as Pharmacists in the

Ordnance Factory, and the others, who were working as

Superintendents in the Central Board of Excise, became entitled to

non-functional upgradation, on completion of two or four years of

service respectively, in PB-2 with Grade Pay of ₹4200 and PB-2 with

Grade Pay of ₹5400 respectively. The earlier pay scale, before the

grant of non-functional financial upgradation, was with the Grade

Pay of ₹2800 and ₹4800 respectively.

11. In order to appreciate the controversy, we would refer to the

factual position in the case of Devendra Saxena, one of the

respondents before us:

o He was appointed as an Inspector in the service on 16.09.1982.

At the time of induction, his pay scale was ₹425-800, which

was revised over time to ₹5500-9000.

o In 1999, he was granted the first financial upgradation under

the ACPS and he was given the promotional post scale of ₹6500-

10500 with Grade Pay of ₹4200.

o Pursuant to the Ministry’s letter dated 21.04.2004, he was

then moved to the higher Grade Pay of ₹₹4800. Subsequently, on

18.07.2000, he was promoted to Superintendent, but his pay was

not changed as he was already given the promotional scale of

pay due to the upgradation under the ACPS, a year earlier.

o Upon implementation of the CCS RP Rules, the post of

Superintendent carried two pay scales. The first pay scale was

CA @ SLP(C) No. 8015/2022 etc. 5 in PB-2 with Grade Pay of ₹4800 and the second was PB-2 with

Grade Pay of ₹5400. The Grade Pay of ₹5400 was applicable

after four years of service in that post. As Devendra Saxena

had already completed four years of service in the post of

Superintendent, he was given PB-2 with Grade Pay of ₹5400

w.e.f. 01.01.2006.

o Thereafter, on 16.09.2006, as he completed 24 years of

service, he was granted his second financial upgradation under

the ACPS by giving him the promotional post scale of ₹8000-

13500 in PB-3 with Grade Pay of ₹5400.

o In effect, he was given three financial upgradations in terms

of Grade Pay in less than 30 years of service but was again

granted a further upgradation on 16.09.2012, upon completing

30 years in service, by giving him the Grade Pay of ₹6600.

This was clearly erroneous.

12. It would be relevant to reproduce the relevant clauses of the

MACPS, which read as under:

“1. There shall be three financial upgradations 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

CA @ SLP(C) No. 8015/2022 etc. 6 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.

xxx xxx xxx

5. Promotions earned/upgradation granted under the ACP Scheme in the past to those grades which now carry the same grade pay due to merger of pay scales/upgradations of posts recommended by the Sixth Pay Commission shall be ignored for the purpose of granting upgradations under Modified ACPS.

Illustration-1 The pre-revised hierarchy (in ascending order) in a particular organization was as under:-

₹5000-8000, ₹5500-9000 & ₹6500-10500.

(a) A Government servant who was recruited in the hierarchy in the pre-revised pay scale Rs. 5000-

8000 and who did not get a promotion even after 25 years of service prior to 1.1.2006,in his case as on 1.1.2006 he would have got two financial upgradations under ACP to the next grades in the hierarchy of his organization, Le., to the pre- revised scales of Rs. 5500-9000 and Rs. 6500- 10500.

(b) Another Government servant recruited in the same hierarchy in the pre-revised scale of Rs. 5000-

8000 has also completed about 25 years of service, but he got two promotions to the next higher grades of Rs. 5500-9000 & Rs. 6500-10500 during this period.

In the case of both (a) and (b) above, the promotions/financial upgradations granted under ACP to the

CA @ SLP(C) No. 8015/2022 etc. 7 pre-revised scales of Rs. 5500-9000 and Rs. 6500-10500 prior to 1.1.2006 will be ignored on account of merger of the pre- revised scales of Rs. 5000- 8000, Rs. 5500-9000 and Rs. 6500- 10500 recommended by the Sixth CPC. As per CCS (RP) Rules, both of them will be granted grade pay of Rs.4200 in the pay band PB-2. After the implementation of MACPS, two financial upgradations will be granted both in the case of (a) and (b) above to the next higher grade pays of Rs. 4600 and Rs. 4800 in the pay band PB-2.

6. In the case of all the employees granted financial upgradations under ACPS till 01.01.2006, their revised pay will be fixed with reference to the pay scale granted to them under the ACPS.

6.1 xxx xxx xxx

6.2 In cases where financial upgradation had been granted to Government servants in the next higher scale in the hierarchy of their cadre as per the provisions of the ACP Scheme of August, 1999, but whereas as a result of the implementation of Sixth CPC’s recommendations, the next higher post in the hierarchy of the cadre has been upgraded by granting a higher grade pay, the pay of such employees in the revised pay structure will be fixed with reference to the higher grade pay granted to the post. To illustrate, in the case of Jr. Engineer in CPWD, who was granted 1st ACP in his hierarchy to the grade of Asstt. Engineer in the pre-revised scale of Rs.6500-10500 corresponding to the revised grade pay of Rs.4200 in the pay band PB-2, he win now be granted grade pay of Rs4600 in the pay band PB-2 consequent upon upgradation of the post of Asstt. Enggs. In CPWD by granting them the grade pay of Rs.4600 in PB-2 as a result of Sixth CPC's recommendation. However, from the date of implementation of the MACPS, all the financial upgradations under the Scheme

CA @ SLP(C) No. 8015/2022 etc. 8 should be done strictly in accordance with the hierarchy of grade pays in pay bands as notified vide CCS (Revised Pay) Rules, 2008.

xxx xxx xxx

9. 'Regular service' for the purposes of the MACPS shall commence from the date of joining of a post in direct entry grade on a regular basis either on direct recruitment basis or on absorption/re-employment basis. Service rendered on adhoc/contract basis before regular appointment on pre- appointment training shall not be taken into reckoning. However, past continuous regular service in another Government Department in a post carrying same grade pay prior to regular appointment in a new Department, without a break, shall also be counted towards qualifying regular service for the purposes of MACPS only (and not for the regular promotions). However, benefits under the MACPS in such cases shall not be considered till the satisfactory completion of the probation period in the new post.

xxx xxx xxx

13. Existing time-bound promotion scheme, including in-situ promotion scheme, Staff' Car Driver Scheme or any other kind of promotion scheme existing for a particular category of employees in a Ministry/Department or its offices, may continue to be operational for the concerned category of employees if it is decided by the concerned administrative authorities to retain such Schemes, after necessary consultations or they may switch-over to the MACPS. However, these Schemes shall not run concurrently with the MACPS.

xxx xxx xxx

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

CA @ SLP(C) No. 8015/2022 etc. 9 employees also. However, the 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.

20. Financial upgradation under the MACPS 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 employees on the ground that the junior employee in the grade has got higher pay/grade pay under the MACPS.

21. Pay drawn in the pay band and the grade pay allowed under the MACPS shall be taken as the basis for determining the terminal benefits in respect of the retiring employee.

xxx xxx xxx

28 Illustrations:

A. (i) If a Government servant (LDC) in PB-I in the Grade

Pay of Rs.1900 gets his first regular promotion (UDC) in the PB-I in the Grade Pay of Rs.2400 on completion of 8 years of service and then continues in the same Grade Pay for further 10 years without any promotion then he would be eligible for 2nd financial upgradation under the MACPS in the PB-I in the Grade Pay of Rs.2800 after completion of 18 years (8+10 years).

(ii) In case he does not get any promotion thereafter, then he would get 3rd financial upgradation in the PB-II in Grade Pay of Rs.4200 on completion of further 10 years of service i.e. after 28 years (8+10+10).

(iii) However, if he gets 2nd promotion after 5 years of further service in the pay PB-II in the Grade Pay of

CA @ SLP(C) No. 8015/2022 etc. 10 Rs.4200 (Asstt. Grade/Grade "C") i.e. on completion of 23 years (8+1O+5years) then he would get 3rd financial upgradation after completion of 30 years i.e. 10 years after the 2nd ACP in the PB-ll in the Grade Pay of Rs.4600.

B. If a Government servant (LDC) in PB-I in the Grade Pay of Rs.1900 is granted 1 st financial upgradation under the MACPS on completion of 10 years of service in the PB-l in the Grade Pay of Rs.2000 and 5 years later he gets 1 st regular promotion (UDC) in PB-I in the Grade Pay of Rs.2400, the 2nd financial upgradation under MACPS (in the next Grade Pay w.r.t. Grade Pay held by Government servant) will be granted on completion of 20 years of service in PB-I in the Grade Pay of Rs.2800. On completion of 30 years of service, he will get 3rd ACP in the Grade Pay of Rs. 4200. However, if two promotions are earned before completion of 20 years, only 3 rd financial upgradation would be admissible on completion of 10 years of service in Grade Pay from the date 2nd promotion or at 30th year of service, whichever is earlier.

C. If a Government servant has been granted either two regular promotions or 2nd financial upgradation under the ACP Scheme of August, 1999 after completion of 24 years of regular service then only 3rd financial upgradation would be admissible to him under the MACPS on completion of 30 years of service provided that he has not earned third promotion in the hierarchy.”

13. A careful reading of the aforesaid clauses/provisions

reflects the objective purpose of the MACPS, that is, that an

employee should not remain stagnant in the same pay scale/Grade Pay

for periods of 10, 20 or 30 years. In such cases, the employee

would be entitled to financial upgradation to the immediate next

CA @ SLP(C) No. 8015/2022 etc. 11 higher Grade Pay, as mentioned in Section 1, Part-A of the first

Schedule to the CCS RP Rules. Emphasis in clause 1 is on the

expression “Grade Pay”. Clause 2, similarly, states that the

benefit under the MACPS is available where the eligible employee

has not got regular promotion. In such cases, he/she will be given

financial upgradation. However, such financial upgradation is not

the same as a pay-scale/Grade Pay, which is applicable to the next

promotional post in the hierarchy of the concerned cadre/

organization.

14. Clause 5 states that the promotions earned/financial

upgradations granted under the ACPS in the past shall be taken into

account, but where there has been a merger of pay-

scales/upgradation of posts recommended by the Sixth CPC, they

shall be ignored for the purpose of granting upgradation under the

MACPS. This has been explained by given examples A and B, which we

have quoted above. At this stage, we would like to clarify that

clause 5 will not be applicable to the cases in question. This is

not a case of merger of pay-scales or upgradation of posts. On the

other hand, this is a case wherein non-functional higher Grade Pay

has been awarded to employees on completion of a certain length of

service in the lower pay-scale/Grade Pay. We would, therefore,

reject the contention of the respondents that, on implementation of

the CCS RP Rules, upgrading the pay of Pharmacists and

Superintendents, post the period of two or four years, would only

amount to re-fixation of pay or revision of pay, as incorrect and,

in essence, a wrong understanding of the CCS RP Rules.

15. Clause 6.2 specifically states that, where financial

CA @ SLP(C) No. 8015/2022 etc. 12 upgradation has been granted to the next higher pay-scale/Grade Pay

in the hierarchy in the cadre as per the provisions of the ACPS,

but as a result of the implementation of the Sixth CPC by grant of

higher pay-scale/Grade Pay, the pay of such employees has been

revised, such benefit will be given to the said employees.

However, from the date of implementation of the MACPS, all

financial upgradations would be done under the MACPS strictly in

accordance with the hierarchy of the Grade Pay in the Pay Band, as

notified vide CCS RP Rules. “Regular service” for the purpose of

MACPS, commences from the date of joining the post in the direct

entry grade on a regular service basis either on a direct

recruitment basis or on an absorption/re-employment basis.

16. Clause 13 of the MACPS states that any time-bound promotion

scheme, including in-situ promotion scheme, which is in force, may

continue to be in operation for the concerned category of employees

if it is decided by the concerned administrative authorities to

retain such schemes. However, such schemes cannot run concurrently

with the MACPS. The objective is clear. An incumbent eligible

Government employee should not take the benefit of both - the time-

bound promotion scheme or in-situ promotion scheme as well as the

benefit of financial upgradation under the MACPS. We have

specifically referred to clause 13 for, in our opinion, the

financial upgradation which is granted, after two or four years of

service, to Pharmacists or Superintendents, would indicate that

they availed financial upgradation. In their cases, because of

service conditions, the Government had thought it proper to grant

them such financial upgradation after they completed two or four

CA @ SLP(C) No. 8015/2022 etc. 13 years of service in the lower pay-scale/Grade Pay. It is not the

intention of the Government to ignore the said upgradation under

the CCS RP Rules. If we do so, we would be granting them additional

benefits beyond what was envisaged and stated in the MACPS. The

Revised Pay Rules, including a grant of financial benefits, and the

MACPS are not two watertight or separate compartments, each

conferring independent benefits without reference to the other.

Grant of financial upgradations as well as promotions are to be

duly accounted for and taken into consideration in the MACPS.

17. Clauses 19 and 20 specify that the financial upgradation is

purely personal and has no relevance to the seniority position.

Grade Pay/grant of financial benefits shall not amount to actual or

functional promotion of the employees concerned. Roster point etc.

will not be applicable.

18. Clause 21 states that the pay drawn in the Pay Band and Grade

Pay allowed under the MACPS shall be taken as the basis for

determining the terminal benefits in respect of the retiring

employees.

19. The illustrations in Clause 28 clearly affirm the view we

have taken and are in accord with what we have stated above.

20. In view of the aforesaid position of the MACPS, we fail to

understand how we can ignore the financial upgradation, which was

granted upon completion of two or four years of service in the

posts of Pharmacist or Superintendent, as the case may be, for the

purpose of deciding as to whether or not the Government employee

would be entitled to the next financial benefit under the MACPS.

To ignore the financial upgradation granted on completion of two or

CA @ SLP(C) No. 8015/2022 etc. 14 four years of service as Pharmacists or Superintendents, would be

contrary to the intent and purpose of the scheme, the language

employed as well as the examples/illustrations which have been

given. No doubt, certain anomalies may arise because of the fact

that the ACPS and MACPS did operate during different periods; the

nature of financial upgradations was different; and the time

periods specified for financial upgradation were different, but

this cannot be a ground and reason to re-write or ignore the

expressed language of the MACPS and the intent and purpose behind

the scheme. Read in this light, we have no difficulty in accepting

the present appeal and setting aside the impugned judgments.

Hence, we allow the present appeals.

21. In other words, the respondents would be entitled to the

benefits of the MACPS only after taking into consideration all the

financial upgradations earned by them, in terms of the CCS RP

Rules. Financial upgradations under the said Rules have to be

accounted for and will be treated as financial upgradations earned

for the purpose of reckoning the 10-year intervals and the three

assured financial upgradations, in terms of Grade Pay, under the

MACPS.

22. We are informed that, in the present case, the Government of

India had implemented and executed the MACPS by granting benefits

to the respondents and, later on, recoveries were initiated. As

many of the employees may have retired, in terms of the decision of

this Court in “State of Punjab and Others vs. Rafiq Masih (White

Washer) and Others10, we deem it appropriate to direct that the

10 (2015) 4 SCC 334

CA @ SLP(C) No. 8015/2022 etc. 15 Union of India will not effect any recovery of arrears from the

retirees or those who are retiring within one year from the date of

pronouncement of this judgment.

23. In other cases, the recoveries may be made after issuing

notice to the employee concerned, whose request for proportionate

recovery over a period of time not exceeding two years, may be

considered depending upon the quantum of recovery which is to be

made. We also deem it appropriate to direct that the appellant,

Union of India, will not charge interest on the amount to be

recovered as they themselves had made the payment and, the issue

being debatable, to ask the employees to pay interest at this

distant point of time may lead to difficulty both in calculation as

well as in payment.

24. However, it is clarified that the pension and the pay scale,

which are payable shall be re-determined on the basis of this

judgment and will apply prospectively with effect from 01.01.2025.

25. Where recoveries have been made from the retirees, the same

shall be refunded. However, in the case of serving employees,

where recoveries have been made, the same need not be refunded.

26. We also clarify that we have not made any comments or

observations on any petition/appeal which is filed challenging the

validity and legality of Clause 8.1 of the MACPS.

27. Pending application(s), including applications for

impleadment/intervention, if any, shall stand disposed of.

CA @ SLP(C) No. 8015/2022 etc. 16 Civil Appeals @SLP(C) Nos. 3197 of 2024, 3198 of 2024, 9604 of 2024, 12060 of 2024 and 12261 of 2024)

Leave granted.

The present appeals are disposed of in terms of the judgment

passed in Civil Appeal @ SLP (C) 8015/2022.

Pending application(s), including applications for

impleadment/intervention, if any, shall stand disposed of.

................CJI.

(SANJIV KHANNA)

..................J. (SANJAY KUMAR) NEW DELHI;

DECEMBER 12, 2024.

CA @ SLP(C) No. 8015/2022 etc. 17