REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2016   OF 2020 (Arising out of SLP(C) No.21803 of 2014)

UNION OF INDIA AND OTHERS                      ...Appellants

VERSUS

M.V. MOHANAN NAIR                                …Respondent WITH

CIVIL APPEAL NO.  2017   OF 2020 (Arising out of SLP(C) No.22181 of 2014)

CIVIL APPEAL NO.  2018  OF 2020 (Arising out of SLP(C) No.23335 of 2014)

CIVIL APPEAL NO.  2019   OF 2020 (Arising out of SLP(C) No.23333 of 2014)

CIVIL APPEAL NO. 2020  OF 2020 (Arising out of SLP(C) No.18227 of 2015)

CIVIL APPEAL NO. 2021   OF 2020 (Arising out of SLP(C) No.31125 of 2016)

CIVIL APPEAL NO. 2022  OF 2020 (Arising out of SLP(C) No.33706 of 2016)

CIVIL APPEAL NO(s). 2044-2045   OF 2020 (Arising out of SLP(C)No(s). 5917-5918 of 2017

@ SLP(C)Diary No.6042 of 2017)

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. The instant batch of appeals have been filed assailing the

orders  of  various  High Courts  dismissing  petitions filed  by the

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appellants,  thereby  upholding  decisions  rendered  by  different

Benches  of  Central  Administrative  Tribunal  granting  financial

upgradation of  grade pay in the next  promotional  hierarchy by

placing reliance upon  Union of India and others v. Raj Pal and

another  CWP  No.19387  of  2011  dated  19.10.2011.  In  these

batch  matters,  we  are  concerned  with  the  question  whether

MACP Scheme entitles financial  upgradation to the next grade

pay or to the grade pay of the next promotional hierarchy.   

3. In  all  these  appeals,  almost  all  the  High  Courts  have

followed the Raj Pal and Ved Prakash’s case and granted relief

as prayed for by the respondents. Being aggrieved, the appellant-

UOI has filed these appeals.

4. The  main  questions  falling  for  consideration  in  these appeals are:-  

(i) Whether MACP scheme entitles financial  upgradation of

pay to the next grade pay or to the grade pay of the next

promotional post as envisaged under the ACP scheme?

Whether  MACP  Scheme  envisages  grant  of  financial

upgradation  in  Grade  Pay  Hierarchy  and  not  in

promotional hierarchy?

(ii) As contended by the respondents, whether MACP scheme

is  disadvantageous  to  the  employees  in  comparison  to

ACP  scheme  as  long  as  the  financial  upgradation  is

granted in hierarchy of grade pay under MACP scheme?  

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(iii) Whether respondents are entitled to stepping up of their

grade pay to be at par with grade pay of their juniors who

were  getting  the  higher  grade  pay  on  account  of

implementation of MACP Scheme?

Appeals relating to Issue No.III were ordered to be de-tagged and

listed separately.

5. At  the  outset,  it  is  to  be  pointed  out  that  almost  all  the

Tribunals/High Courts have only relied upon Raj Pal’s case for

grant  of  financial  upgradation  on  promotional  hierarchy  and

rejected  the  stand  of  the  appellant-UOI  that  under  MACP

scheme, the employees are entitled to financial  upgradation of

the  next  grade pay only.  Since the  matter  was  considered on

merits  and  since  the  issue  involves  impact  on  the  public  ex-

chequer and also interest of the staff of various establishments,

we  requested  learned  Senior  counsel,  Mr.  Jaideep  Gupta  to

assist  the  Court  as  amicus  curiae  which  the  learned  Senior

counsel  has  readily  consented.  Mr.  Kunal  Chatterji,  learned

counsel has agreed to assist the learned Senior counsel-amicus.

Assured Career Progression (ACP) Scheme:-

6. The  Government  of  India  with  a  view  to  “deal  with  the

problem  of  genuine  stagnation  and  hardship  faced  by  the

employees  due  to  lack  of  adequate  promotional  avenues”,

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introduced the Assured Career Progression (ACP) Scheme with

effect  from  09.08.1999  vide  its  Office  Memorandum  dated

09.08.1999.  To mitigate the hardship in cases of acute stagnation

in a cadre or in an isolated post, it has been decided to grant two

financial upgradations under the ACP Scheme to Group ‘B’, ‘C’

and ‘D’ employees on completion of 12 and 24 years of regular

service.  As per ACP Scheme, isolated post in Group ‘A’, ‘B’, ‘C’

and ‘D’ cadres which have no promotional avenues also qualify

for similar benefits.   The financial  upgradations under the ACP

Scheme  is  placement  in  the  higher  Pay  Scale  and  financial

benefits in the higher Pay Scale without regular promotion. Under

the  financial  upgradation,  grant  of  financial  benefits  under  the

ACP  Scheme  to  the  government  servants  concerned  is  on

personal  basis.  Such  financial  upgradation  neither  amounts  to

regular promotion nor require creation of new post. Some of the

salient features of the ACP Scheme are as follows:-

 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;

 Under the ACP Scheme, two financial upgradations shall be allowed to

Group ‘B’, ‘C’ and ‘D’ employees on completion of 12 years and 24 years

of his/her regular service.   

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 As per para 5.1 of Annexure-1 – conditions for grant of benefits under

the ACP Scheme, it is stipulated that two financial upgradations would

be available only if no regular promotion during the prescribed period (12

and 24 years) was granted to an employee.  If an employee has already

received one regular promotion, he/she would qualify for second ACP

only on completion of 24 years of regular service.  However, in case if

two regular promotions have been received by an employee, no further

benefit under the ACP Scheme would accrue in favour of the employee.   

 As per para 3.1 of the Office Memorandum dated 09.08.1999, the grant

of financial upgradations under the ACP Scheme shall be subject to the

conditions mentioned in the Annexure-I annexed thereon to the Office

Memorandum dated 09.08.1999.

7. Para  No.8  of  the  Annexure  provides  that  the  financial

upgradations shall be purely personal to the employee and would

have no relevance to his/her seniority position.  In other words,

there would be no additional financial upgradations for the senior

employee on the ground that  the junior  employee has got  the

higher  pay  scale  under  the  ACP  Scheme.  Para  No.12  of

Annexure-I provides that the ACP Scheme contemplates merely

placement  on  personal  basis  in  the  higher  pay  scale/grant  of

financial benefits only and shall not amount to actual functional

promotion of the employees concerned. We may usefully refer to

the  relevant  features  of  the  ACP  Scheme  as  stipulated  in

Annexure-I  to  the  Office  Memorandum  dated  09.08.1999-

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Conditions for Grant of Benefits under the ACP Scheme, which

reads as under:-

Conditions for grant of benefits under the ACP Scheme:-

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;

………

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

………

8. The financial upgradation under the ACP Scheme 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 employee on the ground that the junior employee in the grade has got higher pay-scale under the ACP Scheme;

……….

12. The proposed ACP Scheme contemplates merely placement on personal basis in the  higher  pay-scale/grant  of  financial  benefits  only  and  shall  not  amount  to actual/functional promotion of the employees concerned. Since orders regarding reservation  in  promotion  are  applicable  only  in  the  case  of  regular  promotion, reservation orders/roster shall not apply to the ACP Scheme which shall extend its benefits uniformly to all  eligible SC/ST employees also. However, at the time of regular/functional (actual) promotion, the Cadre Controlling Authorities shall ensure that all reservation orders are applied strictly;

……...”

8. ACP Scheme  was  replaced  by  Modified  Assured  Career

Progression  (MACP)  Scheme  which  became  operational  with

effect from 01.09.2008. The Sixth Central Pay Commission has

recommended the adoption of MACP Scheme primarily to rectify

the problems arising from inter-departmental disparities:-

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(i) ACP Scheme led to creation of certain disparities within

the  employees  in  different  organisations/departments

who were directly recruited in the same pay scale who

received different financial upgradations under the ACP

Scheme because of  existence of  different  promotional

hierarchical  structure  and  different  promotional  pay

scales in different organisations/departments;

(ii) Another adverse consequence in the implementation of

the ACP Scheme was that the benefit of a higher pay

scale was not available if the next post in the hierarchy

also existed in the identical pay scale.

9. In order to bring systematic changes in the existing scheme

of ACP so that all employees irrespective of existing hierarchical

structure in their organisations/cadre get the same benefit, MACP

was recommended by the Sixth Central Pay Commission which

was accepted by the Government with certain modifications vide

its  Office  Memorandum  dated  19.05.2009.   Under  the  Sixth

Central  Pay  Commission,  revised  pay  structure  has  been

implemented  with  effect  from 01.01.2006;  whereas  benefits  of

ACP  Scheme  have  been  allowed  till  31.08.2008.  Vide  Office

Memorandum  dated  19.05.2009,  the  Government  of  India

introduced  the  MACP  Scheme,  in  supersession  of  the  ACP

Scheme  w.e.f.  01.09.2008.  There  shall  be  no  change  in

distinction,  classification  or  higher  status  on  grant  of  financial

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upgradation under MACP as the upgradation is purely personal

and merely placement in the next higher Grade Pay.

Modified Assured Career Progression (MACP) Scheme:-  

10. Under the MACP Scheme, three financial upgradations are

made available in the next grade pay to an employee who has

completed 10, 20 and 30 years of regular service in the same

post  without  getting  any  promotion.  The  benefit  would  be

available at  the  next higher grade pay.   Some of  the salient

features of the MACP Scheme are as follows:-

 Para No.2 of  the MACP Scheme provides that  the “MACP

Scheme envisages merely  placement  in  the  immediate

next  higher  grade  pay in  the  hierarchy  of  the

recommended revised pay bands and grade pay”.   

 As  per  para  No.10  of  the  MACP  Scheme  –  Office

Memorandum dated 19.05.2009,  no stepping up of pay in

the pay band or grade pay would be admissible with regard

to junior getting more pay than the senior on account of pay

fixation under the MACP Scheme.   

 As  per  para  No.11  of  the  said  memorandum  dated

19.05.2009,  the  differences  in  pay  scales  on  account  of

financial  upgradations  under  the  ACP Scheme and  MACP

Scheme would not be construed as anomaly.   

11. Para  (19)  of  MACP  Scheme  contemplates  merely

placement  on  personal  basis  in  the  immediate  higher  grade

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pay/grant  of  financial  benefits  only  and  shall  not  amount  to

actual/functional promotion of the employees concerned. As per

para (20) of the MACP Scheme, financial upgradations shall be

purely personal to the employee and shall have no relevance to

the  seniority  position.   As  such,  there  shall  be  no  additional

financial upgradation for the senior employees on the ground that

the junior employees in the grade have received higher grade pay

under  MACP  Scheme.  We  may  usefully  extract  the  relevant

portion  of  Annexure-I  of  the  Office  Memorandum  dated

19.05.2009, which reads as under:-

ANNEXURE-I

MODIFIED ASSURED CAREER PROGRESSION SCHEME (MACPS)

1. There shall be three financial upgradation s 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 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.  

…………  

17. The financial upgradation would be on non-functional basis subject to fitness, in the hierarchy of grade pay within the PB-1.Thereafter for upgradation under the MACPS the benchmark of 'good' would be applicable till  the grade pay of Rs. 6600/- in PB-3. The benchmark will be 'Very Good' for financial upgradation to the grade pay of Rs. 7600 and above.

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 employees also. However, the

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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.  

………….

25. lf a regular promotion has been offered but was refused by the employee before becoming entitled to a financial upgradation, no financial upgradation shall  be allowed  as  such  an  employee  has  not  been  stagnated  due  to  lack  of opportunities.  If,  however,  financial  upgradation  has  been  allowed  due  to stagnation and the employees subsequently refuse the promotion, it shall not be a ground to withdraw the financial upgradation. He shall, however, not be eligible to be considered for further financial upgradation till he agrees to be considered for promotion again and the second the next financial upgradation shall also be deferred to the extent of period of debarment due to the refusal.

……………”

12. Clause  28  contains  illustrations  as  to  grant  of  financial

upgradation under MACP. The illustrations in Clause 28 of  the

Scheme  can  easily  be  understood  by  referring  to  the  First

Schedule, Part-A of Section 1 of Central Civil Services (Revised

Pay) Rules, 2008 which gives a comparison of the scale of pay

under the 5th Pay Commission and the 6th Pay Commission as

under:-

THE FIRST SCHEDULE (SEE RULES 3 & 4)

PART – A SECTION I

Revised Pay Bands and Grade Pays for posts carrying present scales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except posts for which different revised scales are notified separately.

Present Scale Revised Pay Structure Sl.No. Post/Grade Present Scale Name of Pay

Band/Scale Corresponding

Pay Bands/Scales Corresponding

Grade Pay (1) (2) (3) (4) (5) (6) 1. S-1 2550-55-2660-60-3200 -1S 4440-7440 1300 2. S-2 2610-60-3150-65-3540 -1S 4440-7440 1400 3. S-2A 2610-60-2910-65-3300-  70-

4000 -1S 4440-7440 1600

Present Scale Revised Pay Structure Sl.No. Post/Grade Present Scale Name of Pay

Band/Scale Corresponding

Pay Bands/Scales Corresponding

Grade Pay 4. S-3 2650-65-3300-70-4000 -1S 4440-7440 1650 5. S-4 2750-70-3800-75-4400 PB-1 5200-20200 1800

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6. S-5 3050-75-3950-80-4590 PB-1 5200-20200 1900 7. S-6 3200-85-4900 PB-1 5200-20200 2000 8. S-7 4000-100-6000 PB-1 5200-20200 2400 9. S-8 4500-125-7000 PB-1 5200-20200 2800 10. S-9 5000-150-8000 PB-2 9300-34800 4200 11. S-10 5500-175-9000 PB-2 9300-34800 4200 12. S-11 6500-200-6900 PB-2 9300-34800 4200 13. S-12 6500-200-10500 PB-2 9300-34800 4200 14. S-13 7450-225-11500 PB-2 9300-34800 4600 15. S-14 7500-250-12000 PB-2 9300-34800 4800 16. S-15 8000-275-13500 PB-2 9300-34800 5400 17. New Scale 8000-275-13500  (Group  A

Entry) PB-3 15600-39100 5400

18. S-16 9000 PB-3 15600-39100 5400 19. S-17 9000-275-9550 PB-3 15600-39100 5400 20. S-18 10325-325-10975 PB-3 15600-39100 6600 21. S-19 10000-325-15200 PB-3 15600-39100 6600 22. S-20 10650-325-15850 PB-3 15600-39100 6600 23. S-21 12000-375-16500 PB-3 15600-39100 7600 24. S-22 12750-375-16500 PB-3 15600-39100 7600 25. S-23 12000-375-18000 PB-3 15600-39100 7600 26. S-24 14300-400-18300 PB-4 37400-67000 8700 27. S-25 15100-400-18300 PB-4 37400-67000 8700 28. S-26 16400-450-20000 PB-4 37400-67000 8900 29. S-27 16400-450-20900 PB-4 37400-67000 8900 30. S-28 14300-450-22400 PB-4 37400-67000 10000

Present Scale Revised Pay Structure

Sl.No. Post/Grade Sl.No. Post/Grade Sl.No. Post/Grade 31. S-29 18400-500-22400 PB-4 37400-67000 10000 32. S-30 22400-525-24500 PB-4 37400-67000 12000 33. S-31 22400-600-26000 HAG + Scale 75500  (annual

increment @ 3 %) - 80000

Nil

34. S-32 24050-650-26000 HAG + Scale 75500  (annual increment @ 3 %) - 80000

Nil

35. S-33 26000 (Fixed) Apex Scale 80000 (Fixed) Nil 36. S-34 30000 (Fixed) Cab. Sec. 90000 (Fixed) Nil

Comparison of ACP and MACP Scheme:-

13. For  grant  of  financial  upgradation  under  ACP Scheme, a

Screening  Committee  shall  be  constituted  for  the  purpose  of

processing  the  cases  for  grant  of  benefits  under  the  ACP

Scheme.   In  terms  of  Clause  6.2  of  the  ACP  Scheme,  the

composition of the Screening Committee shall  be the same as

that of Departmental    Promotion Committee (DPC) prescribed

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under the relevant recruitment/service rules for regular promotion

to  the  higher  grade  to  which  financial  upgradation  is  to  be

granted. The requirement that the composition of the Screening

Committee  shall  be  the  same  as  that  of  DPC,  under  ACP

Scheme, the consideration for financial upgradations are stringent

and  the  government  servant  has  to  satisfy  the  norms  for

promotion.  Fulfilment  of  normal  promotional  norms  like

benchmark,  departmental  examination,  seniority-cum-fitness  (in

case of Group ‘D’ employees) are the requirement for grant of

financial upgradation under ACP Scheme.

14. Per contra, under the MACP Scheme, financial upgradation

is granted in the next higher Grade Pay in the hierarchy of the

recommended Pay Bands and Grade Pay as given in Section-1,

Part-A of the First Schedule of CCS (Revised Pay) Rules, 2008.

Under the MACP Scheme, the financial upgradation would be on

non-functional basis subject to fitness in the hierarchy of Grade

Pay. MACP Scheme 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  (vide  para  (19)  of  the  MACP

Scheme).  In  terms  of  para  (20)  of  MACP  Scheme,  financial

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upgradation under the MACP Scheme shall be purely personal to

the  employees  and  shall  have  no  relevance  to  the  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/higher Grade

Pay under MACP Scheme (vide para (20) of the MACP Scheme).

15. The  distinction  between  the  ACP  Scheme  and  MACP

Scheme can be well understood by reference to the Pay Scale

under  the  Fifth  Central  Pay  Commission  and  the  revised  pay

structure  under  the  Sixth  Central  Pay  Commission  and  the

corresponding Grade Pay thereon as stated in Section-1, Part-A

of the First Schedule of CCS (Revised Pay) Rules, 2008.

THE FIRST SCHEDULE (SEE RULES 3 & 4)

PART – A SECTION I

Revised Pay Bands and Grade Pays for posts carrying present scales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except posts for which different revised scales are notified separately.

Present Scale Revised Pay Structure Sl.No. Post/Grade Present Scale Name of Pay

Band/Scale Corresponding

Pay Bands/Scales Corresponding

Grade Pay (1) (2) (3) (4) (5) (6) 5. S-4 2750-70-3800-75-4400 PB-1 5200-20200 1800 6. S-5 3050-75-3950-80-4590 PB-1 5200-20200 1900 7. S-6 3200-85-4900 PB-1 5200-20200 2000 8. S-7 4000-100-6000 PB-1 5200-20200 2400 9. S-8 4500-125-7000 PB-1 5200-20200 2800 10. S-9 5000-150-8000 PB-2 9300-34800 4200 11. S-10 5500-175-9000 PB-2 9300-34800 4200 12. S-11 6500-200-6900 PB-2 9300-34800 4200 13. S-12 6500-200-10500 PB-2 9300-34800 4200 14. S-13 7450-225-11500 PB-2 9300-34800 4600 15. S-14 7500-250-12000 PB-2 9300-34800 4800

13

16. Upon implementation of the Sixth Central Pay Commission,

the Pay Scale of 3050-75-3950-80-4590 was kept in Pay Band-1

i.e. Rs.5200-20200 with Grade Pay of Rs.1900/-.  Likewise, the

Pay Scale of 3200-85-4900 was kept in Pay Band-1 i.e. 5200-

20200 with Grade Pay of Rs.2000/-.  Pay Scale of Upper Division

Clerk 4000-100-6000 was also kept in the same Pay Band-1 i.e.

5200-20200 but  with  Grade Pay of  Rs.2400/-.  Under  the  ACP

Scheme, the Government employee who was working as Lower

Division  Clerk  in  the  Pay  Scale  of  3050-75-3950-80-4590,  on

completion  of  12  years  of  service,  would  be  entitled  to  the

financial upgradation in the next promotional hierarchy i.e. in the

cadre of UDC i.e. Pay Scale of 4000-100-6000 while working in

the same capacity as LDC. Whereas under the MACP Scheme,

the Government servant who is Lower Division Clerk in the Pay

Band-1  i.e.  Rs.5200-20200/-  with  Grade  Pay  of  Rs.1900/-,  on

completion  of  10  years  of  service  upon  grant  of  financial

upgradation, would be getting the immediate next higher Grade

Pay of Rs.2000/- and not the grade pay on promotional hierarchy.

Following  the  erstwhile  ACP  Scheme  (as  per  which  financial

upgradation  was  granted  in  promotional  hierarchy),  the

respondents are claiming the benefit of Grade Pay of Rs.4200/-

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(which  is  in  the  next  promotional  hierarchy).   While  the

respondents  are  granted  financial  upgradations  as  per  the

prevailing  rules  of  MACP  Scheme,  they  can  only  claim  the

immediate next higher Grade Pay and not the Grade Pay in the

next promotional hierarchy.  

17. As noted above, under the Sixth Pay Commission, scales of

pay  of  various  hierarchies  namely  Lower  Division  Clerk  and

Upper  Division  Clerk  are  all  placed  in  the  Pay  Band-I  i.e.

Rs.5200-20200, of course with different Grade Pay.  When the

respondents  are  enjoying  the  benefit  of  the  Sixth  Pay

Commission by getting higher pay scale, they should go by the

Scheme in accepting what it gives on the financial upgradation;

but the respondents are claiming the best of the benefits from

both  the  ACP  and  MACP  Schemes.  The  respondents  have

already been granted the beneficial pay upgradation as per the

prevailing rules of MACP Scheme on the recommendation of the

Sixth Central Pay Commission. The previous ACP Scheme was

withdrawn and superseded by MACP Scheme with  effect  from

01.09.2008 based on the recommendation of the Sixth Central

Pay Commission. Under MACP Scheme, the respondent can only

15

claim  immediate  next  Grade  Pay  and  not  the  corresponding

Grade Pay in promotional hierarchy.

18. As  discussed  earlier,  in  the  ACP Scheme,  there  was no

Grade Pay but only fixed Pay Scales and fixed increments were

there.  After  the  Sixth  Central  Pay  Commission,  various  Pay

Scales  have  been  clubbed  together  and  there  is  revised  Pay

Scale with corresponding Pay Bands and corresponding Grade

Pay.  As  discussed  earlier,  the  norms  for  grant  of  ACP  were

stringent and the government servant has to satisfy the norms for

promotion.   Whereas  under  the  MACP  Scheme,  for  financial

upgradation, the rigour of screening is diluted. For upgradation

under the MACP Scheme, the benchmark of  “Good” would be

applicable till  the Grade Pay of  Rs.6600/-  in  Pay Band-3.  The

benchmark will  be “Very Good” for financial  upgradation to the

Grade Pay of Rs.7600/- and above.

Contentions:-

19. Ms.  Madhvi  Divan,  learned  ASG  appearing  on  behalf  of

Union of India has taken us through the salient features of both

ACP and MACP schemes and submitted that  ACP and MACP

schemes shall  be subject to the conditions mentioned thereon.

16

Learned ASG has submitted that Sixth Central Pay Commission

took the view that ACP led to disparities within the employees in

different organisations/departments and recommended adoption

of the modified scheme which was accepted by the Government

and Sixth Central Pay Commission and MACP scheme are being

implemented. It was submitted that under the ACP scheme, the

employee is  entitled  to  financial  upgradations  (two times – on

completion  of  12  and  24  years  of  regular  service)  as  per

promotional  hierarchy.  Whereas  under  the  MACP scheme,  the

financial upgradations (three times – on completion of 10, 20 and

30 years of regular service) are fixed on the basis of immediate

next  grade  pay  and  therefore,  ACP and  MACP schemes  are

significantly  different  in  terms  of  the  effect  and  benefit  to  the

employees.  Learned  ASG  submitted  that  the  previous  ACP

scheme  was  withdrawn  and  it  is  superseded  by  the  MACP

scheme w.e.f. 01.09.2008 and the respondents while enjoying the

benefits  of  revised  pay  structure  under  the  Sixth  Central  Pay

Commission,  cannot  cherry-pick  the  benefit  of  financial

upgradation in the next promotional hierarchy under the erstwhile

ACP scheme. Learned ASG has further submitted that it is the

prerogative of the Government to provide any financial benefit to

17

its employees and so long as such scheme is not discriminatory

or  arbitrary,  the  Court  may  not  interfere  with  schemes  of

Government fixing pay scales and granting incentives.  

20. Mr. Vinay Kumar Garg, learned Senior counsel appearing

on  behalf  of  some  respondents  has  submitted  that  pay  band

includes a bracket of erstwhile pay scale and the grade pay and

the  concept  of  grade  pay  is  a  fitment  benefit  applicable  to

different  pay.  Learned  Senior  counsel  submitted  that  when  a

person is to be given benefit, pay, allowance or upgradation of the

pay has to be given and in such a case, the upgradation has to

be in the next hierarchy of promotional position i.e. grade pay in

the  next  promotional  position.  It  was  submitted  that  pay,

allowance and financial  upgradation  granted  to  the  employees

are the “conditions of service” and the same cannot be altered at

the  will  of  the  employer-Government.  Learned  Senior  counsel

further  submitted  that  MACP  scheme  envisages  merely

placement in the immediate next higher grade pay and the word

“hierarchy”  cannot  be  dissected  from  the  “recruitment”  and

“conditions of service”. It was submitted that as per Rule 3(7) of

Central Civil  Services (Revised Pay) Rules, 2008,  “revised pay

structure” in relation to any post specified in column (2) of the

18

First  Schedule  means  the  pay  band and  grade  pay specified

against that post or the pay scale specified in column (5) and (6)

thereof. It was submitted that while granting financial upgradation

under MACP scheme, the same has to be in the “higher grade

pay  in  the  next  promotional  hierarchy  and  not  merely  in  the

hierarchy of grade pay”.  

21. Mr.  Jaideep  Gupta,  learned  amicus  assisted  by  Kunal

Chatterji submitted that the object and purpose of the 1999 ACP

was to mitigate hardship in case of acute stagnation either in a

cadre or in an isolated post and MACP scheme of 2009 is also for

the same purpose and grant of financial upgradation under MACP

scheme is only continuation of the existing scheme with certain

modifications.  Learned  amicus  further  submitted  financial

upgradation  which  is  granted  under  the  ACP and  MACP both

involve fixation/refixation of pay and allowance which become the

basis of  the fixation of  pay and allowances for  the rest  of  the

career of the employee concerned and such financial upgradation

is not merely a special allowance which can be granted or taken

back at the will of the employer. Learned  amicus  has submitted

that MACP scheme linked to the grade pay should not be taken

into consideration and MACP scheme should be interpreted to

19

mean that financial upgradation has to be granted to the grade

pay of the next promotional post and not to the next grade pay in

the  Schedule  I  to  the  CCS (Revision  of  Pay)  Rules.  Learned

amicus urged the Court to adopt a purposive interpretation of the

MACP  scheme  to  grant  financial  upgradation  in  the  next

promotional  hierarchy as in  the erstwhile  ACP scheme. It  was

contended that if financial upgradation is granted in the hierarchy

of grade pay then MACP scheme would lead to a discriminatory

treatment violating Article 14 of the Constitution of India. In this

regard, learned  amicus  has drawn the attention of the Court to

the  discussion  of  the  Joint  Committee  of  MACP scheme held

under  the  Chairmanship  of  the  Joint  Secretary  (E)  of  the

Department of Personnel and Training on 06.10.2010.  

22. Mr.  C.K.  Sasi,  learned  counsel  appearing  for  the

respondents in SLP(C) No.21803 of 2014 and SLP(C) No.29605

of  2017  has  submitted  that  when  the  Pay  Commission  and

incentive scheme is introduced, the employee’s interest has to be

kept  in  view and the  same cannot  be  disadvantageous to  the

employees when compared to the erstwhile scheme. In support of

his contention, learned counsel  has drawn our attention to the

20

comparative  chart  which  he  has  filed  along  with  his  written

submission.  

23. Reiterating the submissions of learned amicus and the other

submissions, Ms. Prabha Swami, learned counsel appearing for

the  respondents  in  SLP(C)  No.31125  of  2016  has  taken  us

through  the  facts  and  submitted  that  if  the  ACP  had  been

continued after  the  completion of  twenty-four  years  of  service,

respondents (SLP(C) No.31125 of 2016) would have been in the

grade pay of Rs.5400/- in Pay Band-3 whereas due to MACP, the

respondents were placed in grade pay of Rs.4600/- in Pay Band-

2 and this has caused discrimination and financial hardship to the

respondents. Learned counsel has also drawn our attention to the

comparative  chart  and  submitted  that  MACP  scheme  has

operated to the disadvantage of the respondents.

24. Mr.  M.K.  Bhardwaj,  learned  counsel  representing  the

intervenors has drawn our attention to the Record Note of the

meeting of the Joint Committee on MACP scheme held under the

Chairmanship of the Joint Secretary, DOP&T on 15.09.2010 and

submitted  that  the  Committee  had  taken  note  of  various

anomalies and also as to how the implementation of MACP has

resulted  as  a  disadvantage  to  the  Government  servants.  Mr.

21

Bhardwaj has drawn our attention to various anomalies noted by

the Committee and submitted that in Raj Pal’s case, the Record

Note of the third meeting of MACP scheme held on 15.03.2011

was taken note by the High Court and the High Court rightly held

that Raj Pal is entitled to financial upgradation in the grade pay

based on the next promotional hierarchy. It was submitted that if

the financial upgradation is to be granted on the basis of next

grade pay, it would be greatly disadvantageous to the employees.

Discussion and findings:-

25. Though various contentions have been raised assailing the

MACP Scheme viz. “financial upgradation in the next Grade

Pay” and  “no stepping up of pay on the ground that junior

getting more pay”,  be it  noted that  the clauses of the MACP

Scheme including the clause providing the financial upgradation

in  the  next  Grade  Pay  have  not  been  challenged  by  the

respondents.  In  the  impugned  judgments,  the  Tribunals/High

Courts have only relied upon Raj Pal’s case and not gone into the

MACP Scheme  vis-à-vis  erstwhile  ACP Scheme  and  also  not

considered the merits of the contention of the respondents. We

have therefore, considered the MACP Scheme vis-à-vis erstwhile

22

ACP  Scheme  in  the  light  of  the  contentions  raised  by  the

respondent.

26. As pointed out earlier, both ACP and MACP Schemes are in

the  nature  of  incentive  schemes  devised  with  the  object  of

ensuring that the employees who are unable to avail of adequate

promotional opportunities, get some relief from stagnation in the

form of  financial  benefits.  Under  the  MACP Scheme,  financial

upgradations are granted at three regular intervals on completion

of 10-20-30 years of service without promotion.  Hence, it is also

intended  to  ensure  that  the  employees  are  adequately

incentivised to work efficiently despite not getting promotion for

want of promotional avenue. The change in policy brought about

by supersession of the ACP Scheme with the MACP Scheme is

after well-deliberated and well-documented recommendations of

the  Sixth  Central  Pay  Commission.  Considering  the  various

issues  in  the  implementation  of  the  ACP  Scheme,  the  Pay

Commission expressed its views “the only other way is to bring

systematic changes in the existing Scheme of ACP so that all the

employees irrespective of the existing hierarchy structure in their

organisations/cadres,  get  some  benefit  under  it”.  The

Commission therefore, recommended that the existing Scheme of

23

ACP be continued with the modifications indicated thereon in the

Report  that  the  financial  upgradation  has  to  be  in  the  next

immediate Grade Pay.  One of the reasons for the expert body

recommending  the  MACP Scheme was  that  there  were  inter-

departmental disparities where several departments had varying

promotional hierarchies. As a result, the working of ACP Scheme

under  which  an  employee  who  stagnated  for  12  years,  was

entitled to pay in the Pay Scale of the next promotional post, led

to inter-departmental anomalies. The Pay Commission therefore,

recommended MACP Scheme with a view to putting an end to

the problem ensuing from inter-departmental disparities.

27. The learned amicus and the learned counsel appearing for

the  respondents  urged  the  court  to  adopt  a  “purposive

interpretation” that the words “immediate next higher Grade Pay”

to be interpreted as “Grade Pay of the next promotional post” in

the hierarchy. MACP Scheme envisages merely placement in the

immediate  next  higher  Grade  Pay.  By  perusal  of  the  MACP

Scheme extracted earlier, it is seen that the words used in the

Scheme are “placement  in  the  immediate next higher Grade

Pay in the hierarchy of the recommended revised pay bands”.

The  term  “Grade  Pay  in  the  next  promotional  post”  is

24

conspicuously absent in the entire body of the MACP Scheme.

The  argument  of  the  respondents  that  the  benefit  of  MACP

Scheme is referable to the promotional post, is de hors the MACP

Scheme  and  cannot  be  accepted.  Though  ACP  and  MACP

Schemes are intended to provide relief against stagnation, both

the Schemes have different features. Pay scales under the Sixth

Pay Commission and the MACP Scheme are stated to be more

beneficial since it  extends to the employees with time intervals

with  higher  pay  bands  and  various  facilities  which  were  not

available  under  the  ACP Scheme including  the  three  financial

upgradations in shorter time span.  In any event, MACP Scheme

has  not  been  challenged  by  the  respondents.  As  rightly

contended  by  the  learned  ASG,  the  respondents  cannot  be

permitted  to  cherry-pick  beneficial  features  from  the  erstwhile

ACP Scheme and also take advantage of the beneficial features

in the MACP Scheme.   

28. The object  behind the MACP Scheme is to provide relief

against the stagnation.  If the arguments of the respondents are

to be accepted, they would be entitled to be paid in accordance

with the grade pay offered to a promotee; but yet not assume the

responsibilities of a promotee. As submitted on behalf of Union of

25

India, if the employees are entitled to enjoy Grade Pay in the next

promotional hierarchy, without the commensurate responsibilities

as a matter of routine, it would have an adverse impact on the

efficiency of administration.

29. The change in policy brought about by supersession of ACP

Scheme with the MACP Scheme is after consideration of all the

disparities and the representations of the employees.  The Sixth

Central  Pay  Commission  is  an  expert  body  which  has

comprehensively examined all the issues and the representations

as also the issue of stagnation and at the same time to promote

efficiency in the functioning of the departments.  MACP Scheme

has been introduced on the recommendation of the Sixth Central

Pay Commission which has been accepted by the Government of

India.  After accepting the recommendation of the Sixth Central

Pay Commission, the ACP Scheme was withdrawn and the same

was  superseded  by  the  MACP  Scheme  with  effect  from

01.09.2008.  This  is  not  some  random  exercise  which  is

unilaterally done by the Government, rather,  it  is based on the

opinion of the expert body – Sixth Central Pay Commission which

has  examined  all  the  issues,  various  representations  and

disparities.  Before  making  the  recommendation  for  the  Pay

26

Scale/Revised  Pay  Scale,  the  Pay  Commission  takes  into

consideration the existing pay structure,  the representations of

the government servants and various other factors after which the

recommendations  are  made.  When  the  expert  body  like  Pay

Commission has comprehensively examined all  the issues and

representations  and  also  took  note  of  inter-departmental

disparities  owing  to  varying  promotional  hierarchies,  the  court

should not interfere with the recommendations of the expert body.

When the government has accepted the recommendation of the

Pay  Commission  and  has  also  implemented  those,  any

interference by  the  court  would  have a  serious  impact  on  the

public exchequer.

30. Observing that it is the function of the Government which

normally acts on the recommendations of the Pay Commission

which is the proper authority to decide upon the issues, in Union

of India and another v. P.V. Hariharan and another (1997) 3 SCC

568, it was held as under:-

“5. ….. It is the function of the Government which normally acts on

the recommendations of a Pay Commission. Change of pay scale

of  a  category  has  a  cascading  effect.  Several  other  categories

similarly situated, as well as those situated above and below, put

forward  their  claims  on  the  basis  of  such  change.  The  Tribunal

should realise that interfering with the prescribed pay scales is a

27

serious matter. The Pay Commission, which goes into the problem

at great depth and happens to have a full picture before it, is the

proper authority to decide upon this issue. Very often, the doctrine

of  “equal  pay  for  equal  work”  is  also  being  misunderstood  and

misapplied, freely revising and enhancing the pay scales across the

board.  We  hope  and  trust  that  the  Tribunals  will  exercise  due

restraint in the matter. Unless a clear case of hostile discrimination

is made out, there would be no justification for interfering with the

fixation  of  pay scales.  We have come across orders  passed by

Single Members and that too quite often Administrative Members,

allowing such claims. These orders have a serious impact on the

public  exchequer  too.  It  would  be  in  the  fitness  of  things  if  all

matters relating to pay scales, i.e., matters asking for a higher pay

scale or an enhanced pay scale, as the case may be, on one or the

other ground, are heard by a Bench comprising at least one Judicial

Member. ….”

31. Observing that the decision of expert bodies like the Pay

Commission is not ordinarily subject to judicial review, in State of

U.P. and Others v. U.P. Sales Tax Officers Grade II Association

(2003) 6 SCC 250, the Supreme Court held as under:-  

“11. There can be no denial of the legal position that decision of

expert bodies like the Pay Commission is not ordinarily subject to

judicial  review  obviously  because  pay  fixation  is  an  exercise

requiring going into various aspects of the posts held in various

services and nature of the duties of the employees…...”.

32. In  Secretary,  Government  (NCT  of  Delhi)  and  others  v.

Grade-1 Officers Association and others (2014) 13 SCC 296, the

Supreme Court refused to interfere with the ACP Scheme as it

28

would  violate  government  policy  and  since  exercise  of  judicial

review would not  be proper,  upheld the ACP Scheme and the

conditions therein.

33. In State of Tamil Nadu v. S. Arumugham (1998) 2 SCC 198,

the Supreme Court has observed that the government has the

right  to  frame  a  policy  to  ensure  efficiency  and  proper

administration and to provide to suitable avenues for promotion to

officers working in different department.  The Supreme Court has

further observed that the Tribunal cannot substitute its own views

for the views of the government or direct new policy based on the

views of Tribunal.

34. Observing  that  fixation  of  pay  and  determination  of

responsibilities is a complex matter which is for the executive to

take a decision, the courts should approach such matters with

restraint,  in  State  of  Haryana  and  Another  v.  Haryana  Civil

Secretariat  Personal  Staff  Association  (2002)  6  SCC  72,  the

Supreme Court held as under:-

“10. It is to be kept in mind that the claim of equal pay for equal

work is not a fundamental right vested in any employee though it

is  a  constitutional  goal  to  be  achieved  by  the  Government.

Fixation  of  pay  and  determination  of  parity  in  duties  and

responsibilities is a complex matter which is for the executive to

29

discharge. While taking a decision in the matter, several relevant

factors,  some  of  which  have  been  noted  by  this  Court  in  the

decided case, are to be considered keeping in view the prevailing

financial position and capacity of the State Government to bear

the additional liability of a revised scale of pay……… That is not

to say that the matter is not justiciable or that the courts cannot

entertain  any  proceeding  against  such  administrative  decision

taken  by  the  Government.  The  courts  should  approach  such

matters with restraint and interfere only when they are satisfied

that the decision of the Government is patently irrational, unjust

and prejudicial  to a section of employees and the Government

while taking the decision has ignored factors which are material

and relevant for a decision in the matter. Even in a case where

the  court  holds  the  order  passed  by  the  Government  to  be

unsustainable then ordinarily a direction should be given to the

State  Government  or  the  authority  taking  the  decision  to

reconsider the matter and pass a proper order. The court should

avoid giving a declaration granting a particular scale of pay and

compelling  the  Government  to  implement  the  same……”.

[Underlining added]

35. The prescription of Pay Scales and incentives are matters

where  decision  is  taken  by  the  Government  based  upon  the

recommendation of the expert bodies like Pay Commission and

several relevant factors including financial implication and court

cannot substitute its views.  As held in Haryana Civil Secretariat

Personal  Staff  Association (2002)  6  SCC 72,  the  court  should

approach such matters with restraint and interfere only when the

court is satisfied that the decision of the Government is arbitrary.

30

Even in a case where the court takes the view that order/Scheme

passed by the Government is not an equitable one, ordinarily only

a  direction  could  be  given  to  the  State  Government  or  the

authority for consideration of the matter and take a decision. In

the present batch of cases where the respondents are claiming

financial upgradation in the grade pay of promotional hierarchy,

no  grounds  are  made  out  to  show  that  the  MACP  Scheme

granting financial upgradation in the next grade pay is arbitrary

and unjust;  warranting  interference.  The implementation  of  the

MACP Scheme is claimed to have led to certain anomalies; but

as  pointed  out  earlier,  MACP  Scheme  itself  is  not  under

challenge.

36. Raj Pal’s Case – Whether could have been taken as a

precedent:-  In almost all the cases, the High Courts have relied

upon Raj Pal’s case only on the basis that Raj Pal’s case was

dismissed by the Supreme Court. Even at the outset, it is to be

pointed out  that  Raj  Pal’s  case, SLP (C) No. ……CC 7467 of

2013  was  dismissed  by  the  Supreme  Court  vide  order  dated

15.04.2013 on the ground that there was no sufficient explanation

to condone the delay in refiling the Special Leave Petition which

is a default in the manner in which the case was prosecuted and

31

not a dismissal on merits.  Be that as it may, since various High

Courts have relied upon Raj Pal’s case, it is necessary to refer to

the  facts,  findings  thereon  and  whether  it  could  have  been

followed as precedent.

37. Raj  Pal  was  working  in  the  post  of  Photocopier  w.e.f.

12.10.1986  in  the  pay  scale  of  Rs.3050-4590/-  in  the  Central

Administrative  Tribunal,  Chandigarh  Bench,  Chandigarh.   The

post of Photocopier is an isolated post. Upon introduction of the

ACP Scheme in the year 1999, on completion of twelve years of

regular service, Raj Pal was granted the next higher scale in the

hierarchy  of  pay  scales  i.e.  Rs.3200-4590/-  vide  order  dated

12.10.1999.   At  that  point  of  time,  Raj  Pal  claimed parity  with

other posts like Hindi Typist/LDC which was also in the equivalent

pay scale of Rs.3050-4590/- and had been placed in the scale of

Rs.4000-6000/- on the grant of 1st financial step up on completion

of  twelve  years  of  regular  service.  He  also  claimed  that  on

completion  of  twenty-four  years  of  regular  service  in  second

financial step up, he should be placed in the scale of Rs.5500-

9000/-.  In  the  earlier  round  of  litigation,  Raj  Pal  filed  O.A.

No.278/CH/2004  claiming  the  aforesaid  parity  with  posts  like

Hindi  Typist/LDC  and  the  same  was  allowed  by  Central

32

Administrative  Tribunal  by  its  order  dated  30.08.2004 whereby

Raj Pal was held entitled to the benefit of higher pay scale under

the ACP Scheme of 1999 as applicable for the similar posts i.e.

Hindi Typist/LDC. The order dated 30.08.2004 was challenged by

Union of  India before the High Court  in  CWP No.7356/CAT of

2005 and the same was dismissed vide order dated 23.05.2007.  

38. For proper appreciation of Raj Pal’s case, we may refer to

the relevant scales of pay with revised Pay Bands, which are as

under:-

Present Scale Revised Pay Structure Sl.No. Post/

Grade Present Scale Name of

Pay Band/Scale

Corresponding Pay Bands/Scales

Corresponding Grade Pay

 (1) (2) (3) (4) (5) (6) 6. S-5 3050-75-3950-80-4590 PB-1 5200-20200 1900

  7. S-6 3200-85-4900 PB-1 5200-20200 2000    8. S-7 4000-100-6000 PB-1 5200-20200 2400    9. S-8 4500-125-7000 PB-1 5200-20200 2800   10. S-9 5000-150-8000 PB-2 9300-34800 4200   11. S-10 5500-175-9000 PB-2 9300-34800 4200

Upon implementation of the Sixth Central Pay Commission, the

scale of Rs.3050-4590/- was kept in PB-1-Rs.5200-20200/- with

grade pay of Rs.1900/-. The scale of Rs.4000-6000/- was also

kept in PB-1 with grade pay of Rs.2400/-. The scale of Rs.5500-

9000/-  was  kept  in  PB-2-Rs.9300-34800/-  with  grade  pay  of

Rs.4200/-.  In  terms  of  MACP  Scheme,  by  the  order  dated

33

09.08.2010, Raj Pal was granted second financial upgradation in

the PB-1 of Rs.5200-20200/- with grade pay of Rs.2400/-.  

39. Raj Pal filed OA No. 1038/CH/2010 before CAT contending

that  his  pay  has  been  wrongly  fixed  in  PB-1  in  the  scale  of

Rs.5200-20200/- with Grade Pay of Rs. 2400/-.  He claimed that

he  was  entitled  to  be  fixed  in  PB-2  in  the  scale  of  Rs.9300-

34800/- with Grade Pay of Rs. 4600/-. Raj Pal relied on para (6)

of the MACP Scheme as per which in case of employees granted

financial  upgradations under ACP Scheme till  01.01.2006, their

revised pay will be fixed with reference to the pay scale granted

to them under ACP. The Tribunal vide its order dated 31.05.2011

noted that it is not disputed that the post held by Raj Pal has been

declared equivalent to the post of LDC/Hindi Typist etc. by the

Tribunal as well as the High Court in matters of grant of ACP and

these  pronouncements  have  attained  finality  and  also  stood

implemented.  The  OA was  allowed  and  the  appellants  were

directed to grant second financial upgradation in the promotional

hierarchy in PB-2 in the scale of  Rs.9300-34,800/-  with Grade

Pay of Rs.4,200/- to Raj Pal under the MACP from due date and

fix his pay in the hierarchy of posts decided in his case earlier.

The  appellants  filed  CWP No.19387  of  2011  before  the  High

34

Court assailing the aforesaid order. It was inter alia contended by

the appellants that the earlier ACP Scheme stood superseded by

the  MACP  scheme  and  both  the  schemes  cannot  run

concurrently.  The said  writ  petition was dismissed by the High

Court.  

40. The above judgment of the High Court was challenged in

the Supreme Court by filing SLP (C) No. ….CC 7467 of 2013.

The  SLP  was  filed  on  24.12.2011;  but  some  defects  were

observed  by  the  Court  Registry  and  returned  for  rectification

whereafter the SLP was refiled only on 21.03.2013. The SLP was

dismissed  by  the  Hon’ble  Chamber  Judge  vide  order  dated

15.04.2013 on the ground that sufficient explanation has not been

given to condone the delay in refiling the SLP.  

41. Insofar  as  Raj  Pal’s  case  is  concerned,  in  view  of  the

dismissal  of  the  earlier  writ  petition  i.e.  CWP No.7356/CAT of

2005,  Principal  Bench  of  the  Tribunal  issued  letter  dated

02.08.2007  directing  all  the  Benches  of  the  Tribunal  that  the

Photocopiers working in the respective Benches may be granted

1st financial upgradation under ACP Scheme in the scale of pay of

Rs.4000-6000/-  and  2nd financial  upgradation  in  the  scale  of

Rs.5500-9000/-. In Raj Pal’s case, taking note of the earlier round

35

of litigation i.e. O.A.No.278/CH/2004 and CWP No.7356/CAT of

2005 and the letter sent by the Principal Bench of the Tribunal

dated  02.08.2007  in  its  order  dated  31.05.2011  in  O.A.  No.

1038/CH/2010, the Tribunal held that Raj Pal having been placed

under ACP scheme – second financial upgradation in the scale of

Rs.5500-9000/- is entitled to PB-2 (Rs.9300-34800/- with grade

pay of Rs.4200/-). The relevant findings of the Tribunal in O.A.

No.1038/CH/2010 read as under:-

“4. The respondents took the matter to Punjab and Haryana High Court

by way of filing a CWP No.7356 CAT of 2005. The CWP was dismissed

vide order dated 23.05.2007, holding the applicant entitled to the benefit

of ACP at par with the LDC/Hindi Typist, etc. It was thereafter that the

Principal Bench of the Tribunal issued letter dated 02.08.2007, directing

all  the  Benches  of  the  Tribunal  that  the  Photocopiers  working  in

respective Benches may be granted 1  st   financial upgradation under ACP

Scheme  in  the  scale  of  pay  of  Rs.4000-6000  and  2  nd   financial

upgradation in the scale of Rs.5500-9000.

………..

12.  There  is  no  dispute  that  the  applicant  is  holding  the  post  of

photocopier, which is an isolated post, having no avenues for promotion.

It  is  also not  disputed that,  the post  held by the applicant  had been

declared equivalent to the post of LDC/Hindi Typist, etc. by the Tribunal

as well as the High Court by judicial pronouncement in matters of grant

of  ACP,  which  have  attained  finality  and  stands  implemented  also.

Accordingly, applicant was granted 1st ACP (under the old ACP) w.e.f.

09.08.1999 in the pay scale of Rs.4000-6000.” [Underlining added]

36

42. It  was  on  the  above,  the  Tribunal  held  that  the  post  of

Photocopier being an isolated post and in view of the letter dated

02.08.2007 sent by the Principal Bench and taking note of the

earlier  round of litigation, the Tribunal directed that  Raj  Pal be

granted PB-2-Rs.9300-34800/-  with  grade pay of  Rs.4200/-.  In

the case of Raj Pal, the post of Photocopier, being an isolated

post,  the  order  was  passed  in  the  peculiar  facts  and

circumstances  of  the  case.  Rajpal’s  case  did  not  go  into  any

details  in  respect  of  the  overall  features  of  the  new  MACP

Scheme and did not consider the recommendations of the expert

body which culminated in the new Scheme. The order passed in

Raj Pal’s case could not have been taken as a precedent in other

cases. This is all the more so when SLP (C) No.….CC 7467 of

2013  was  dismissed  by  the  Supreme Court  on  the  ground  of

delay in refiling the Special Leave Petition and no decision was

rendered on merits.  

Dismissal of case by the Supreme Court on the ground of delay in filing/non-filing, is not a binding precedent:-

43. As noted above, SLP preferred by Union of India against the

order dated 19.10.2011 passed by the High Court was dismissed

on the ground that the delay in refiling has not been satisfactorily

37

explained.  The question which arises for consideration is when

the SLP has been dismissed on the ground of delay in filing or of

refiling (like in the case of Raj Pal), whether it can be taken as a

binding precedent on the merits of the case as the “law declared

by the Supreme Court within the meaning of Article 141 of the

Constitution of India”. Raj Pal’s case having been dismissed on

the ground that no sufficient cause was shown for the delay in

refiling, in our considered view, Raj Pal’s case ought not to have

been quoted as a precedent of this Court by the High Courts.  

44. Article 141 of the Constitution of India provides that the law

declared by  the  Supreme Court  shall  be  binding  on  all  courts

within the territory of India, i.e. the pronouncement of the law on

the point shall operate as a binding precedent on all courts within

India. Law declared by the Supreme Court has to be essentially

understood as a principle laid down by the court  and it  is  this

principle  which  has  the  effect  of  a  precedent.  A principle  as

understood from the word itself is a proposition which can only be

delivered after examination of the matter on merits. It can never

be in a summary manner, much less be rendered in a decision

delivered on technical grounds, without entering into the merits at

all. A decision, unaccompanied by reasons can never be said to

38

be a law declared by the Supreme Court though it will bind the

parties inter-se in drawing the curtain on the litigation.  In Union

of India v. All India Service Pensioners’ Association and another

(1988) 2 SCC 580, the Supreme Court held that “when reasons

were made by the Supreme Court  for dismissing the SLP, the

decision  becomes  one  which  attracts  Article  141  of  the

Constitution which provides that the law declared by the Supreme

Court  shall  be  binding  on  all  the  courts  within  the  territory  of

India……”.

45. Observing that when a Special Leave Petition is dismissed

by a non-speaking order, by such dismissal, the Supreme Court

does not lay down any law as envisaged under Article 141 of the

Constitution  of  India  in  Supreme  Court  Employees  Welfare

Association v. Union of India and Others (1989) 4 SCC 187, this

Court held as under:-

“22. ….It is now a well-settled principle of law that when a special leave

petition is summarily dismissed under Article 136 of the Constitution, by

such dismissal this Court does not lay down any law, as envisaged by

Article 141 of the Constitution, as contended by the learned Attorney

General. In  Indian Oil Corporation Ltd. v.  State of  Bihar (1986) 4 SCC

146 it has been held by this Court that the dismissal of a special leave

petition in limine by a non-speaking order does not justify any inference

that, by necessary implication, the contentions raised in the special leave

petition on the merits of the case have been rejected by the Supreme

39

Court. It has been further held that the effect of a non-speaking order of

dismissal of a special leave petition without anything more indicating the

grounds or reasons of its dismissal must, by necessary implication, be

taken to be that the Supreme Court had decided only that it was not a fit

case where special leave petition should be granted. In Union of India v.

All India Services Pensioners’ Association (1988) 2 SCC 580 this Court

has given reasons for dismissing the special leave petition. When such

reasons are given, the decision becomes one which attracts Article 141

of the Constitution which provides that the law declared by the Supreme

Court shall be binding on all the courts within the territory of India.  It,

therefore,  follows  that  when  no  reason  is  given,  but  a  special  leave

petition is dismissed simpliciter, it cannot be said that there has been a

declaration of law by this Court under Article 141 of the Constitution.”

[underlining added]

Raj  Pal’s  case  having  been  dismissed  on  the  ground  that  no

sufficient cause was shown for the delay in refiling, Raj Pal’s case

ought not to have been quoted as precedent of this Court by the

High Courts.  

46. The learned counsel for the intervenors has referred to the

record note of the meetings of the Joint Committee of MACP held

under  the  chairmanship  of  JS(Establishment),  DoP&T  on

15.09.2010 and other dates and drawn our attention to various

items  viz.  Item  No.1-Provide  for  Grade  Pay  of  the  Next

Promotional Post under MACP; Item No.3-Option for Earlier ACP

Scheme; Item No.8-Anomaly on Introduction of MACP Scheme;

40

and Item No.29 - Modification in MACP Scheme.  In response to

the above submission, Union of India has filed additional written

submission referring to the decision in various meetings of the

Joint Committee on MACP held on various dates.  

47. 2nd Meeting of the Joint Committee dated 15.09.2010:- In

the 2nd Meeting of the Joint Committee held on 15.09.2010, it was

decided that organisations/cadres would be given the option to

choose either the ACP Scheme or the MACP Scheme. It was also

decided that individual options would not be permitted. Since the

ACP and  MACP Scheme were  fallback  options  for  stagnating

employees, it was therefore decided that process of completing

cadre  restructuring  in  a  time  bound  manner  would  solve  the

problem of stagnation.  It was further decided that cadre structure

had to be reviewed periodically to harmonise the functional needs

of the organisation and career progression of employees. (Vide

copy of O.M. dated 10.02.2011).  

48. 3rd Meeting of the Joint Committee dated 15.03.2011:- In

the 3rd Meeting of the Joint Committee held on 15.03.2011, the

staff side reiterated their demand that the MACP Scheme should

be granted in the promotional hierarchy of posts rather than in the

grade  pay  hierarchy.  The  official  side  had  suggested  that  the

41

Government  was  willing  to  consider  a  revision  in  the  MACP

Scheme to  the  effect  that  organisations/cadres  shall  have  the

option to choose either the ACP Scheme or the MACP Scheme.

But the staff side stated that such a dispensation would not be

practical and there was a need to explore other alternatives to

solve the issue. Therefore, it was agreed between the staff side

and the official side that there was no need to change the basic

structure of MACP Scheme, but there was a need to separately

examine  those  cases  where  MACP  Scheme  was  less

advantageous than the ACP Scheme (Vide the Minutes of the 3rd

Meeting of Joint Committee dated 15.03.2011). Pursuant to the

decision of the 3rd Meeting of Joint Committee, it was decided that

the official side would write to the Ministry of Railways, Defence,

Urban Development, Home Affairs and the Department of Posts

to  forward  information  in  respect  of  the  specific  categories  of

employees  where  the  MACP was less  advantageous than the

erstwhile  ACP  Scheme.  Accordingly,  these

Ministries/Departments  were  requested  to  send  specific  cases

wherein, it was less advantageous for employees under MACP

Scheme  as  compared  to  ACP  Scheme.  It  is  stated  that  no

42

Ministry/Department  other  than Ministry  of  Urban Development

had responded. (Vide Copy of Minutes dated 15.03.2011)

49. Meeting of the Joint Committee dated 27.07.2012:- In the

meeting of the Joint Committee held on 27.07.2012, the official

side stated that it was not possible to give individual options to

the employees to opt for erstwhile ACP Scheme in preference to

MACP Scheme for availing the benefit of financial upgradation.  

50. Letter dated 04.11.2013:- Pursuant to the Joint Committee

meeting held on 27.07.2012, a letter dated 04.11.2013 was sent

to the staff side making it clear that the solution lies in review of

cadre structure in a time bound manner with a view to mitigate

the problem of stagnation as the benefit of Modified Assurance

Career  Progression  Scheme have  been  granted  as  a  fallback

option in the event of promotions not taking place in time. With

regard  to  letter  dated  04.11.2013  which  relates  only  to  Postal

Department,  it  is  clarified that  in  the Department of  Posts,  the

erstwhile ACP Scheme was not operational for postal employees.

These  employees  were  covered  under  Time  Bound  One

Promotion (TBOP)/Biennial Cadre Review (BCR) Schemes. The

MACP  Scheme  for  Central  Government  employees  is  a

continuation of ACP Scheme.  Insofar as Department of Posts is

43

concerned, it was decided by the Department of Posts to adopt

MACP  Scheme  in  respect  of  postal  employees  also  w.e.f.

01.09.2008. Accordingly, O.M. No.4-7/(MACPS)/2009-PCC dated

18.09.2009  was  issued  by  Department  of  Posts  to  clarify  that

TBOP/BCR  Schemes  stand  discontinued  w.e.f.  01.09.2008

consequent  upon  introduction  of  MACPS  to  postal  employees

w.e.f.  01.09.2008.  The  O.M.  dated  1-20/2008-PCC  dated

04.11.2013 was issued to regulate the fixation of pay in respect of

postal employees during the period 01.01.2006 to 31.08.2008 i.e.

before the switch over to MACPS took place.  It is stated that the

O.M. dated 04.11.2013 was only in respect of postal employees

governed  under  TBOP/BCR  and  does  not  relate  to  Central

Government employees who were covered under erstwhile ACP

Scheme. Therefore, this O.M. has no bearing on the issue in the

said SLP pending before Hon’ble Supreme Court of India.

51. The  ACP  Scheme  which  is  now  superseded  by  MACP

Scheme is a matter of government policy.  Interference with the

recommendations of the expert body like Pay Commission and its

recommendations for the MACP, would have serious impact on

the  public  exchequer.   The  recommendations  of  the  Pay

Commission  for  MACP  Scheme  has  been  accepted  by  the

44

Government and implemented. There is nothing to show that the

Scheme  is  arbitrary  or  unjust  warranting  interference.  Without

considering  the  advantages  in  the  MACP  Scheme,  the  High

Courts  erred  in  interfering  with  the  government’s  policy  in

accepting  the  recommendations  of  the  Sixth  Central  Pay

Commission by simply placing reliance upon Raj Pal’s case.  The

impugned orders cannot be sustained and are liable to be set

aside.

52. In  the  result,  all  the  impugned  orders  in  these  batch  of

appeals  arising  out  of  SLP(C)  No.21803  of  2014,  SLP(C)

No.22181 of 2014, SLP(C) No.23335 of 2014, SLP(C) No.23333

of 2014, SLP(C) No.18227 of 2015, SLP(C) No.31125 of 2016

and SLP(C) Diary No.6042 of 2017 are set aside and the appeals

preferred  by  the  Union  of  India  are  allowed.    Consequently,

appeal arising out of SLP(C)No.33706 of 2016 is disposed of. No

costs.  

53. However, as pointed out earlier in para Nos. (47), (48) and

(49),  since  certain  anomalies  on  implementation  of  the  MACP

Scheme have been brought to the notice of the Joint Committee

in the various meetings of the Joint Committee, Union of India

45

and DoP&T to consider the same as they deem it appropriate and

take a decision in accordance with law.

54. We  record  our  appreciation  for  the  valuable  assistance

rendered  by  Mr.  Jaideep  Gupta,  learned  amicus  assisted  by

learned counsel  Mr. Kunal Chatterjee.

..…………………….J.       [R. BANUMATHI]

..…………………….J.        [A.S. BOPANNA]

..……………………….J.        [HRISHIKESH ROY]

New Delhi; March 05, 2020.

46