MACP Scheme Has Noting To Do With Next Promotional Post; Employee Merely Entitled To Immediate Next Higher Grade Pay : Supreme Court

The Supreme Court has observed that Modified Assured Career Progression (MACP) Scheme has nothing to do with the next promotional post and what the employee would be entitled would be the immediate next higher grade pay in the hierarchy of the recommended revised pay bands.

The bench of Justices MR Shah and Sanjiv Khanna was considering a civil appeal assailing Kerala High Court's order dated October 23, 2019 ("impugned judgment").

In the impugned judgment, the High Court while setting aside Central Administrative Tribunal's order declared that the respondents are entitled to grade pay of Rs 6600 on their third financial upgradation as per the MACP Scheme and thereby be paid the pension accordingly with effect from April, 2015.

While allowing the appeal, the bench in The Director, Directorate of Enforcement & Anr. v. K. Sudheesh Kumar & Ors said,

"By the impugned judgment and order and while granting grade pay of Rs.6600 to respondent Nos.1 & 2 virtually, the High Court has modified the MACP Scheme which has been framed by the Government on the recommendations of the expert body like the pay commission and its recommendations for the MACP Scheme. As observed and held by this Court in the case of M.V. Mohanan Nair (supra) the ACP which is now superseded by MACP Scheme is a matter of Government policy and interfering with the recommendations of the expert body like the pay commission and its recommendations for the MACP Scheme would have serious impact on the public exchequer. It is further observed that the recommendations of the pay commission for the MACP Scheme have been accepted by the Government and implemented. It is further observed that therefore the High Court has no jurisdiction to interfere with the Government policies in the form of MACP Scheme which was after accepting the Sixth Central Pay Commission. In view of the above and for the reasons stated above and the binding decision of this Court in the case of M.V. Mohanan Nair (supra) with which we also agree, the impugned judgment and order passed by the High Court granting grade pay of Rs.6600 to respondent Nos.1& 2 is unsustainable and deserves to be quashed and set aside."

Factual Background

The Government of India – Ministry of Personnel, Public Grievance and Pensions (Department of Personnel and Training) notified the MACP Scheme for the Central Government Civilian Employees. The Scheme provided for clause 8.1 as per which, consequently upon the implementation of Sixth CPC's recommendations, grade pay of Rs.5400 was supposed to be paid in two pay bands viz., PB­2 and PB­3. It further provided for treating grade pay of Rs.5400 in PB­2 and Rs.5400 in PB­3 as separate grade pay for the purpose of grant of upgradation under MACP Scheme.

While granting third financial upgradation vide order dated November 17, 2009 the respondents who were appointed as Assistant Enforcement Officer in 1976 and 1977 were granted the grade pay of Rs.6600 for PB­3 under MACP Scheme, though as per clause 8.1 PB­3 carried the grade pay of Rs.5400. However, on the objection being raised by the Audit Department their grade pay (GP) of Rs.6600 in PB­3 was modified/corrected as GP of Rs.5400 as per clause 8.1.

Therefore, respondent(s) approached the Central Administrative Tribunal, Ernakulam Bench praying to continue the GP of Rs.6600 as per the earlier order and not to make any recovery. The Tribunal, relying upon clause 8.1 of the MACP Scheme, dismissed the original application (OA).

Aggrieved, the respondents approached the High Court. The High Court on October 23, 2019 while ignoring clause 8.1 of the MACP Scheme allowed the petition by observing that the next promotion post of Assistant Director which was in the PB­3 would be that of Deputy Director which carried a grade pay of Rs.6600, when the third financial upgradation was due to an employee, it had to be of the next promotional post in the hierarchy as per the Recruitment Rules.

Aggrieved by the High Court's judgment, the Directorate of Enforcement ("Department") approached the Top Court.

Submission Of Counsels

Appearing for the Department, Additional Solicitor General Madhavi Divan submitted that the Top Court on the interpretation of MACP Scheme had observed that the employees are entitled to the grade pay as provided under the MACP Scheme which has been framed on the recommendations of the pay commission. She further contended that the High Court's decision was contrary to the Delhi High Court's judgment in National Council of Educational Research & Training & Anr. Vs. Anita Gupta & Anr. 2016 SCC OnLine Del 4720 and Top Court's decision in Union of India and others Vs. M.V. Mohanan Nair (2020) 5 SCC 421. It was also ASG's contention that by the impugned judgment and order and directing to grant grade pay of Rs.6600 the High Court modified the MACP Scheme and granted the benefit of three steps upward.

She also contended that while interpreting MACP Scheme, the Top Court had observed that MACP Scheme envisaged 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 and had nothing to do with the next promotional post.

Opposing ASG's submission, Senior Advocate Mathai Paikaday for the respondents submitted that the employee shall be entitled to the next higher pay and the High Court has rightly directed to grant grade pay of Rs.6600.

Supreme Court's Analysis

To adjudicate on the issue, the bench in the judgment authored by Justice MR Shah relied on the Top Court's judgment in Union of India and others v. M.V. Mohanan Nair (2020) 5 SCC 421 in which it was observed and held that under the MACP Scheme employees are entitled to the immediate next higher grade pay as given in Section 1, Part A of the First Schedule of the CCS (Revised Pay) Rules, 2008.

"It is specifically observed and held by this Court in the aforesaid decision that MACP has nothing to do with the next promotional post and what the employee would be entitled would be the immediate next higher grade pay in the hierarchy of the recommended revised pay bands and grade pay as given in the CCS (Revised Pay) Rules, 2008," bench further said while referring to MV Mohanan's decision.

While setting aside the High Court's judgment, the bench said,

"As per clause 8.1 of the MACP Scheme 'consequently upon the implementation of Sixth CPC's recommendations, grade pay of PB­2 and PB­3 would be Rs.5400. It specifically provides that the grade pay of Rs.5400 in PB­2 and Rs.5400 in PB­3 shall be treated as separate grade pays for the purpose of grant of upgradations under the MACP Scheme'. Therefore, respondent Nos.1 &2 as PB­2 shall be entitled to the next grade pay of Rs.5400 as per clause 8.1 and as per Section 1, Part A of the First Schedule of the CCS (Revised Pay) Rules, 2008. The High Court has allowed the grade pay of Rs.6600 by considering the next promotion post of Assistant Director i.e., Deputy Director which carries a grade pay of Rs.6600. However, the aforesaid interpretation would be contrary to the MACP Scheme. On considering the relevant clauses of the MACP Scheme, it appears that the MACP Scheme envisages 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 High Court has committed a grave error in allowing the grade pay of Rs.6600 ­the grade pay which was available to the next promotional post as Deputy Director."

Case Title: The Director, Directorate of Enforcement & Anr. v. K. Sudheesh Kumar & Ors.| Civil Appeal No.442 OF 2022

Coram: Justices MR Shah and Sanjiv Khanna

Citation:  2022 LiveLaw (SC) 99

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