Benefits Flowing From Modified Assured Career Progression Scheme Are Incentives And Are Not Part Of Pay: Supreme Court

Benefits flowing from Assured Career Progression Scheme ('ACPS') and Modified ACPS (MACPS) are incentives and are not part of pay, the Supreme Court observed.

The Court allowed Centre's appeal against the Delhi High Court direction to grant the second financial upgradation to the employees under the MACPS w.e.f. 01.01.2006 by relying upon a judgment in Union of India & Ors. v. Balbir Singh Turn.

Before the Apex Court, Centre submitted that in Balbir Singh Turn (supra), it was held that payment under the ACPS is a part of the pay structure whereas in a later judgment in Union of India and Ors. v. M.V. Mohanan Nair, it was held both ACP and MACP schemes are in the nature of incentive schemes. It was contended that the employees are entitled to the incentive under ACP Scheme which was in vogue till 31.08.2008 and they cannot seek applicability of MACPS w.e.f. 01.01.2006.

"In view of the judgment of this Court in M.V. Mohanan Nair (supra), the Respondents and other similarly situated employees are entitled for financial upgradation under MACPS only to the next grade pay and not to the grade pay of next promotional post. It is clear from the resolution dated 30.08.2008 that the recommendation of the 6 th Pay Commission was accepted by the Government and was made effective from 01.01.2006 in respect of civilian employees with regard to revised scales of pay and dearness allowances. In so far as the revised allowances other than dearness allowance, recommendation of the 6th Pay Commission were given effect from 01.09.2008. The judgment in M.V. Mohanan Nair (supra) clinches the issue. Benefits flowing from ACP & MACP Schemes are incentives and are not part of pay. The resolution dated 29.08.2008 is made effective from 01.09.2008 for implementation of allowances other than Pay and DA which includes financial upgradation under ACP & MACP Schemes. Therefore, the Respondents and other similarly situated officers are not entitled to seek implementation of the benefits of MACPS w.e.f. 01.01.2006 according to the resolution dated 29.08.2008.", the bench comprising Justices L. Nageswara Rao and Vineet Saran observed while agreeing with Centre's contention.

Allowing the appeal, the Court also agreed with the Centre's stand that uniform implementation of MACPS for civilian employees w.e.f. 01.01.2006 would result in large scale recoveries of amounts paid in excess. 

Case: Union of India Vs. R.K. Sharma [CA 1579 of 2021]
Coram: Justices L. Nageswara Rao and Vineet Saran
Citation: LL 2021 SC 237

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