UNION OF INDIA & ORS.versusN.M. RAUT & ORS.

        [2024] 12 S.C.R. 1517 : 2024 INSC 1042

                   Union of India & Ors.
                             v.
                    N.M. Raut & Ors.
               (Civil Appeal No. 14380 of 2024)
                      12 December 2024
    [Sanjiv Khanna, CJI and Sanjay Kumar, JJ.]


                    Issue for Consideration
Issue arose as regards interpretation and implementation of the
Modified Assured Career Progression Scheme, 2008, and the
financial upgradations granted under the MACPS.

                           Headnotes†
Service Law – Central Civil Services (Revised Pay) Rules,
2008 – Modified Assured Career Progression Scheme, 2008 –
Financial upgradation – Non-functional financial upgradation –
Counting of, to determine eligibility for financial upgradation
under the MACPS – On implementation of the Revised Rules,
some of the respondents working as Pharmacists in the
Ordnance Factory, and Superintendents in the Central Board
of Excise, became entitled to non-functional upgradation, on
completion of two or four years of service respectively – One
of them 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 – Correctness:
Held: Is clearly erroneous – Incumbent eligible Government
employee should not take the benefit of both the timebound
promotion scheme or in-situ promotion scheme as well as the benefit
of financial upgradation under the MACPS – Respondents 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 Rules have to be
accounted for and will be treated as financial upgradations earned
for reckoning the 10-year intervals and the three assured financial
upgradations, in terms of Grade Pay, under the MACPS – 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 – Financial upgradation granted, after two or four years
1518                                                        [2024] 12 S.C.R.

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    of service, to Pharmacists or Superintendents, would indicate that
    they availed financial upgradation, which cannot be ignored for
    deciding the entitlement to the next financial benefit under the
    MACPS – To ignore the same would be contrary to the intent and
    purpose of the scheme, the language employed – In their cases,
    because of service conditions, the Government thought it proper to
    grant them such financial upgradation after they completed two or
    four years of service in the lower pay-scale/Grade Pay – Not the
    intention of the Government to ignore the said upgradation under
    the CCS RP Rules – Doing so, would be granting them additional
    benefits beyond what was envisaged and stated in the MACPS –
    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 –
    Anomalies arising because of the ACPS and MACPS operated
    during different periods cannot be a ground and reason to re-write
    or ignore the language and the intent and purpose behind the
    scheme – MACPS implemented and executed by granting benefits
    to the respondents and, later on, recoveries initiated – Recovery
    not to be effected from the retirees or those who retiring within one
    year from the date of the judgment – Recoveries may be made
    after issuing notice to the employee concerned – No interest to
    be charged on the amount to be recovered – Pension and the pay
    scale to be re-determined on the basis of the said judgment and
    to apply prospectively wef 01.01.2025 – Impugned judgments set
    aside. [Paras 11, 13-25]

    Service Law – Modified Assured Career Progression Scheme,
    2008-MACPS – Interpretation and implementation – Financial
    upgradation under – Criteria of eligibility – Explanation:
    Held: Objective purpose of the MACPS is that an employee should
    not remain stagnant in the same pay scale/Grade Pay for periods
    of 10, 20 or 30 years – Employee would be entitled to financial
    upgradation to the immediate next higher Grade Pay, as mentioned
    in Section 1, Part-A of the first Schedule to the CCS RP Rules –
    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. [Paras 12, 13]
[2024] 12 S.C.R.                                                             1519

                Union of India & Ors. v. N.M. Raut & Ors.


     Service law – Modified Assured Career Progression Scheme,
     2008 – Assured Career Progression Scheme – Difference –
     Explanation:
     Held: Assured Career Progression Scheme-ACPS was introduced
     with effective from 09.08.1999 and continued to remain till
     31.08.2008 – ACPS envisaged financial upgradations on completion
     of 12 years and 24 years of regular service without one or two
     promotions – Modified Assured Career Progression Scheme-
     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 – Financial
     upgradation under the ACPS was to the pay scale of the next
     higher promotional post in the service – 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 the implementation of CCS RP Rules, 2008. [Para 3]

                              Case Law Cited
     Union of India and Others v. M.V. Mohanan Nair [2020] 7 SCR
     851 : (2020) 5 SCC 421; State of Punjab and Others v. Rafiq
     Masih (White Washer) and Others [2014] 13 SCR 1343 : (2015)
     4 SCC 334 – relied on.
     Union of India v. R.K. Sharma and Others (2021) 5 SCC 579;
     Director, Directorate of Enforcement and Another v. K. Sudheesh
     Kumar and Others [2022] 2 SCR 720 : (2022) 3 SCC 649; Union
     of India and Others v. Ex.HC/GD Virender Singh [2022] 10 SCR
     215 : (2022) SCC OnLine SC 1058; Union of India and others v.
     Balbir Singh Turn and another [2017] 12 SCR 421 : (2018) 11
     SCC 99 – referred to.

                                 List of Acts
     Central Civil Services (Revised Pay) Rules, 2008.

                              List of Keywords
     Modified Assured Career Progression Scheme, 2008; Assured
     Career Progression Scheme, 1999; Non-functional financial
     upgradation; Time-bound promotion scheme; In-situ promotion
     scheme; Financial upgradation to next higher promotional post;
     Financial upgradation to next higher grade pay; Merger of pay scales;
     Financial upgradation; Schemes not run concurrently with MACPS.
1520                                                     [2024] 12 S.C.R.

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                          Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14380 of 2024
    From the Judgment and Order dated 30.04.2020 of the High Court of
    Madhya Pradesh Principal Seat at Jabalpur in MP No.6012 of 2018
    With
    Civil Appeal Nos.14378-14379, 14376-14377, 14374-14375, 14372-
    14373, 14370-14371, 14368-14369, 14366-14367, 14364-14365,
    14362-14363, 14360-14361, 14359, 14358, 14353, 14354, 14355,
    14356 and 14357 of 2024

                       Appearances for Parties
    Ms. Aishwarya Bhati, Satya Darshi Sanjay, A.S.Gs., P. S. Patwalia,
    R Balasubramanian, V. Giri, Sr. Advs., Arjun Garg, Vikas Mehta,
    D.J. Bhanage, Nishant Anshul, Ms. Deveshi Chand, A Velan, Ms.
    Navpreet Kaur, Nilay Rai, Prince Singh, Ms. Shreya Jain, Ms.
    BLN Shivani, Mukesh Kumar Maroria, Shyam Gopal, Chinmayee
    Chandra, Siddhant Kohli, Pratyush Shrivastava, Siddhartha
    Dharmadhikari, R. Balasubranian, Gurmeet Singh Makker, Ms.
    Nidhi Khanna, Ms. Vimla Sinha, Ms. Aakanksha Kaul, Santosh
    Kumar, Annirudh Sharma-ii, Ms. Ruchi Kohli, Amit Sharma- B,
    Harshad Sundar, Mayank Kshirsagar, Ms. Kriti Gupta, Ms. Sagun
    Srivastava, Brahma Prakash Soni, Ponnam Mahesh Babu, Pratik
    R. Bombarde, Jitendra Kumar, Subhash Kumar, Ms. Kirti Anand,
    Rohit Verma, Samir Malik, Ankit Vashisht, Rajat Joseph, Ankur
    Chhibber, Hrishikesh S. Chitaley, Vijay Kari Singh, Kaustubh D.
    Kadasne, Chandra Prakash, Ms. Anuradha Mishra, Arvind Kumar,
    Abhay Kumar Mishra, Ankit Kumar Vats, Advs. for the appearing
    parties.

               Judgment / Order of the Supreme Court

                               Judgment

    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
[2024] 12 S.C.R.                                                      1521

                         Union of India & Ors. v. N.M. Raut & Ors.


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, 2008,1 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 Scheme,3 which was
      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, 2008.4
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 Others;5 (ii) “Director, Directorate of Enforcement
      and Another v. K. Sudheesh Kumar and Others”;6 and (iii) “Union of
      India and Others v. Ex.HC/GD Virender Singh.”7
5.    In K. Sudheesh Kumar (supra), this Court had specifically dealt
      with Clause 8.1 of the MACPS and observed that the next financial


1    For short, “MACPS.”
2    (2020) 5 SCC 421.
3    For short, “ACP.”
4    CCS RP Rules.
5    (2021) 5 SCC 579.
6    (2022) 3 SCC 649.
7    (2022) SCC OnLine SC 1058.
1522                                                         [2024] 12 S.C.R.

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       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 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
       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


8    For short, “PB”.
9    (2018) 11 SCC 99.
[2024] 12 S.C.R.                                                    1523

                Union of India & Ors. v. N.M. Raut & Ors.


     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 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:
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        “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 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
[2024] 12 S.C.R.                                                      1525

                Union of India & Ors. v. N.M. Raut & Ors.


                      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 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
1526                                                  [2024] 12 S.C.R.

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        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 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
[2024] 12 S.C.R.                                                         1527

                 Union of India & Ors. v. N.M. Raut & Ors.


          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 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).
1528                                                     [2024] 12 S.C.R.

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         (iii) However, if he gets 2nd promotion after 5 years of
               further service in the pay PB-II in the Grade Pay of
               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 higher Grade Pay,
    as mentioned in Section 1, Part-A of the first Schedule to the CCS
[2024] 12 S.C.R.                                                     1529

                Union of India & Ors. v. N.M. Raut & Ors.


     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 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
1530                                                      [2024] 12 S.C.R.

                         Supreme Court Reports


     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 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
[2024] 12 S.C.R.                                                       1531

                    Union of India & Ors. v. N.M. Raut & Ors.


      be entitled to the next financial benefit under the MACPS. To ignore
      the financial upgradation granted on completion of two or 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 Others,10 we deem it appropriate to direct that the 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


10   (2015) 4 SCC 334
1532                                                     [2024] 12 S.C.R.

                             Supreme Court Reports


     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.

     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.

     Result of the case: Appeals disposed of.



     †
         Headnotes prepared by: Nidhi Jain