Important Supreme court Judgement - MACP should be given effect from
01.01.2016
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL DIARY NO.3744 OF 2016
Union of India and Ors. - Appellant(s)
Vs.
Balbir Singh Turn
& Anr. - Respondent(s)
Deepak Gupta, J.
1. Applications for condonation of delay in filing and refiling the appeals
are allowed.
2. This bunch of appeals is being disposed of by a common judgment since
similar questions of law are involved.
3. The 6th Central Pay Commission was set up by the Government of India to
make recommendations in matters relating to emoluments, allowances and
conditions of service amongst other things. The Pay Commission also made
recommendation with regard to armed forces personnel. On 30th August,2008,
the Central Government resolved by a resolution of that date to accept the
recommendation of the 6th Central Pay Commission (CPC for short) with regard
to the personnel Below officer Rank (PBOR) subject to certain modifications
clause (i) of the Resolution reads as follows:
"(i) Implementation of the revised pay structure of pay bands and grade pay,
as well as pension, with effect from 01.01.2006 and revised rates of
allowances (except Dearness Allowance/Relief) with effect from
01.09.2008".
clause 9 of the Resolution reads as follows:-
"(ix) Grant of 3 ACP up-gradation after 8,16 and 24 years of service of
PBORs;"
4. Under the recommendations made by the 5th CPC there was a provision for
Assured Career Progression (ACP). Vide this scheme, if an employee was not
promoted he was entitled to get the next higher scale of pay after
completion of 12/24 years of service. The 6th CPC recommended the grant of
benefit of ACP after 10 and 20 years of service. The Union of India, however
decided to grant 3 ACP upgradations, after 8, 16 and 24 years of service to
PBORs, as per Clause (ix) extracted above. However, it would be pertinent to
mention that the 6th CPC did away with the concept of pay scales and reduced
the large number of pay scales into 4 pay bands and within the pay bands
there was a separate grade pay attached to a post.
5. For the purpose of this judgment we are dealing with the facts of civil
appeal diary No.3744 of 2016. It would be pertinent to mention that all the
petitioners before the Armed Forces Tribunal (AFT for short) who are
respondents before us are persons below officer rank. The respondents in
this case retired after 01.01.2006 but prior to 31.08.2008. They claim that
the benefit of the Modified Assured Career progression (MACP for short) was
denied to them on the ground that the MACP was made applicable only with
effect from 01.09.2008. The respondents approached the AFT praying that they
are entitled to the benefit of MACP w.e.f 01.01.2006, i.e., the date from
which the recommendation of the 6th CPC with regard to pay and benefits were
made applicable. The stand of the Union of India was that the MACP was
applicable only w.e.f. 01.09.2008 and, therefore, the respondents who had
retired prior to the said date were not entitled to the benefit of the MACP.
The AFT vide the impugned order dated 21.05.2014 held that the benefit of
ACP granted to an employee is part of the pay structure which not only
affects his pay but also his pension and, therefore, held that the ACP is
not an allowance but a part of pay and, therefore, in terms of Clause (i) of
the Government Resolution the MACP was payable w.e.f. 01.01.2006.
6. The question that arises for decision is whether the benefit of MACP is
applicable from 01.01.2006 or from 01.09.2008.
7. The answer to this question will lie in the interpretation given to the
Government Resolution, relevant portion of which has been quoted here in
above. A bare perusal of Clause(i) of the Resolution clearly indicates that
the Central Government decided to implement the revised pay structure of pay
bands and grade pay, as well as pension with effect from 01.01.2006. The
second part of the Clause lays down that all allowances except the Dearness
Allowance/relief will be effective from 01.09.2008. The AFT held, and in our
opinion rightly so, that the benefit of MACP is part of the pay structure
and will affect the grade pay of the employees and, therefore, it cannot be
said that it is a part of allowances. The benefit of MACP if given to the
respondents would affect their pension also.
8. We may also point out that along with this Resolution there is Annexure-
I. Part-A of Annexure-I deals with the pay structure, grade pay, pay bands
etc., and Item 10 reads as follows :
| 10 |
Assured Career Progression Scheme for PBORs.
The Commission recommends that the time bound promotion scheme in case of
PBORs shall allow two financial upgradations on completion of 10 and 20
years of service as at present. The financial upgradations under the scheme
shall allow benefit of pay fixation equal to one increment along with the
higher grade pay. As regards the other suggestions relating to residency
period for promotion of PBORs Ministry of Defence may set up an Inter-
Services Committee to consider the matter after the revised scheme of
running bands is
implemented (Para 2.3.34)
|
Three
ACP upgradation after 8, 16 and 24 years of service has been approved. The
upgradation will take place only in the hierarchy of Grade Pays, which need
not
necessarily be the hierarchy in that particular cadre.
|
Part-B of Annexure-I deals with allowances, concessions & benefits and
Conditions of Service of Defence Forces Personnel. It is apparent that the
Government itself by placing MACP in Part-A of Annexure-I was considering it
to be the part of the pay structure.
9.The MACP Scheme was
initially notified vide Special Army Instructions dated 11.10.2008. The
Scheme was called the Modified Assured Career Progression Scheme for
Personnel Below Officer Rank in the Indian Army. After the Resolution was
passed by the Central Government on 30.08.2008 Special Army Instructions
were issued on 11.10.2008 dealing with revision of pay structure. As far as
ACP is concerned Para 15 of the said letter reads as follows:
"15. Assured Career Progression. In pursuance with the Government
Resolution of Assured Career Progression (ACP), a directly recruited PBOR as
a Sepoy, Havildar or JCO will be entitled to minimum three financial
upgradations after 8, 16 and 24 years of service. At the time of each
financial upgradation under ACP, the PBOR would get an additional increment
and next higher grade pay in hierarchy.
Thereafter, another
letter was issued by the Adjutant General Branch on 03.08.2009. Relevant
portion of which reads as follows:-
“…….The new ACP (3 ACP at 8,
16 and 24 years of service) should be applicable w.e.f. 1 Jan 2006, and the
old provns (operative w.e.f. the Vth Pay Commission) would be applicable
till 31 Dec. 05. Regular service for the purpose of ACP shall commence from
the date of joining of a post in direct entry grade.
Finally, on 30.05.2011 another letter was issued by the Ministry of
Defence, relevant portion of which reads as follows:-
“5. The
Scheme would be operational w.e.f. 1st Sep. 2008. In other words, financial
up-gradations as per the provisions of the, earlier ACP scheme (of August
2003) would be granted till 31.08.2008.”
Therefore, even as per
the understanding of the Army and other authorities up till the issuance of
the letter dated 30.05.2011 the benefit of MACP was available from
01.01.2006.
10. As already held by us above, there can be no
dispute that grant of ACP is part of the pay structure. It affects the pay
of the employee and he gets a higher grade pay even though it may be in the
same pay band. It has been strenuously urged by Col. R. Balasubramanian,
learned counsel for the UOI that the Government took the decision to make
the Scheme applicable from 01.09.2008 because many employees would have lost
out in case the MACP was made applicable from 01.01.2006 and they would have
had to refund the excess amount, if any, paid to them. His argument is that
under the old Scheme if somebody got the benefit of the ACP he was put in
the higher scale of pay. After merger of pay scales into pay bands an
employee is only entitled to higher grade pay which may be lower than the
next pay band. Therefore, there may be many employees who may suffer.
11. We are only concerned with the interpretation of the Resolution
of the Government which clearly states that the recommendations of 6th CPC
as modified and accepted by the Central Government in so far as they relate
to pay structure, pay scales, grade pay etc. will apply from 01.01.2006.
There may be some gainers and some losers but the intention of the
Government was clear that this Scheme which is part of the pay structure
would apply from 01.01.2006. We may also point out that the Resolution dated
30.08.2008 whereby the recommendation of the Pay Commission has been
accepted with modifications and recommendations with regard to pay
structure, pay scales, grade pay etc. have been made applicable from
01.01.2006. This is a decision of the Cabinet.
This decision
could not have been modified by issuing executive instruction. The letter
dated 30.05.2011 flies in the face of the Cabinet decision reflected in the
Resolution dated 30.08.2008. Thus, administrative instruction dated
30.05.2011 is totally ultra vires the Resolution of the Government.
12. Col. R. Balasubramanian, learned counsel for the UOI relied upon the
following three judgments viz. P.K. Gopinathan Nair & Ors. v. Union of
India and Ors. 1 , passed by the High Court of Kerala on 22.03.2017, Delhi
Urban Shelter Improvement Board v. Shashi Malik & Ors.2, passed by the
High Court of Delhi on 01.09.2016, K.K. Anandan & Ors. v. The Principal
Accountant General Kerala (Audit) & Ors3 passed by the Central
Administrative Tribunal, Ernakulam Bench, Kerala on 08.02.2013. In our view,
none of these judgments is applicable because the issue whether the MACP is
part of the pay structure or allowances were not considered in any of these
cases.
13. In this view of the matter we find no merit in the
appeals, which are accordingly disposed of. All pending applications are
also disposed of.
…………………………..J.
(Madan B. Lokur)
……………………………J.
(Deepak
Gupta)
New Delhi
December 08, 2017
