Employees Are Entitled To MACPS Benefits Only After Considering All Financial Upgradations Earned By Them In Terms Of CCS RP Rules: SC

The Supreme Court held that the employees are entitled to the benefits under the Modified Assured Career Progression Scheme, 2008 (MACPS) only after considering all the financial upgradations earned by them in terms of the Central Civil Services (Revised Pay) Rules, 2008 (CCS RP Rules).

The Court held thus in a batch of Civil Appeals which were concerned with the interpretation and implementation of the MACPS applicable with effect from September 1, 2008.

The two-Judge Bench of CJI Sanjiv Khanna and Justice Sanjay Kumar observed, “… 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.”

Case Background -

The MACPS was considered by a Bench of three Judges of the Apex Court in the case of Union of India and Others v. M.V. Mohanan Nair (2020) 5 SCC 421 and other connected matters. The Judgment elaborately compared the MACPS with the Assured Career Progression Scheme (ACPS), which was introduced with effect from August 9, 1999 and continued to remain in force till August 31, 2008. In a nutshell, the 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 CCS RP Rules.

The decision in M.V. Mohanan Nair case was subsequently followed and elaborated upon by the Court in (i) Union of India v. R.K. Sharma and Others (2021) 5 SCC 579; (ii) Director, Directorate of Enforcement and Another v. K. Sudheesh Kumar and Others (2022) 3 SCC 649; and (iii) Union of India and Others v. Ex.HC/GD Virender Singh (2022). In this case, upon implementation of the CCS RP Rules, some of the Respondents who were working as Pharmacists in the Ordnance Factory, and the others, who were working as Superintendents in the Central Board of Excise, became entitled to non-functional upgradation, on completion of two or four years of service respectively, in PB-2 with Grade Pay of 4200 and PB-2 with ₹ Grade Pay of 5400 respectively. The earlier pay scale, before the grant of non-functional financial upgradation, was with the Grade Pay of 2800 and 4800 respectively.

The Supreme Court in the above context of the case, remarked, “… we fail to understand how we can ignore the financial upgradation, which was granted upon completion of two or four years of service in the posts of Pharmacist or Superintendent, as the case may be, for the purpose of deciding as to whether or not the Government employee would be entitled to the next financial benefit under the MACPS.”

The Court added that, 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.

“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”, it noted.

The Court further directed 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 the Judgment.

“In other cases, the recoveries may be made after issuing notice to the employee concerned, whose request for proportionate recovery over a period of time not exceeding two years, may be considered depending upon the quantum of recovery which is to be made. We also deem it appropriate to direct that the appellant, Union of India, will not charge interest on the amount to be recovered as they themselves had made the payment and, the issue being debatable, to ask the employees to pay interest at this distant point of time may lead to difficulty both in calculation as well as in payment”, it also directed.

The Court clarified that the pension and the pay scale, which are payable shall be re-determined on the basis of the Judgment and will apply prospectively with effect from January 1, 2025.

“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”, it concluded.

Accordingly, the Apex Court allowed the Appeals and issued necessary directions.

Cause Title- Union of India & Ors. v. N.M. Raut & Ors. (Neutral Citation: 2024 INSC 1042)

Appearance:

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

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