Union Of India And Others vs M.V. Mohanan Nair

,,,,,

R. Banumathi, J",,,,,

Leave granted.,,,,,

The instant batch of appeals have been filed assailing the orders of various High Courts dismissing petitions filed by the appellants, thereby",,,,,

upholding decisions rendered by different Benches of Central Administrative Tribunal granting financial upgradation of grade pay in the next,,,,,

promotional hierarchy by placing reliance upon Union of India and others v. Raj Pal and another CWP No.19387 of 2011 dated 19.10.2011. In these,,,,,

batch matters, we are concerned with the question whether MACP Scheme entitles financial upgradation to the next grade pay or to the grade pay of",,,,,

the next promotional hierarchy.,,,,,

In all these appeals, almost all the High Courts have followed the Raj Pal and Ved Prakash’s case and granted relief as prayed for by the",,,,,

respondents. Being aggrieved, the appellant-UOI has filed these appeals.",,,,,

The main questions falling for consideration in these appeals are:-,,,,,

(i) Whether MACP scheme entitles financial upgradation of pay to the next grade pay or to the grade pay of the next promotional post as envisaged,,,,,

under the ACP scheme? Whether MACP Scheme envisages grant of financial upgradation in Grade Pay Hierarchy and not in promotional hierarchy?,,,,,

(ii) As contended by the respondents, whether MACP scheme is disadvantageous to the employees in comparison to ACP scheme as long as the",,,,,

financial upgradation is granted in hierarchy of grade pay under MACP scheme?,,,,,

(iii) Whether respondents are entitled to stepping up of their grade pay to be at par with grade pay of their juniors who were getting the higher grade,,,,,

pay on account of implementation of MACP Scheme?,,,,,

Appeals relating to Issue No.III were ordered to be de-tagged and listed separately.,,,,,

At the outset, it is to be pointed out that almost all the Tribunals/High Courts have only relied upon Raj Pal’s case for grant of financial",,,,,

upgradation on promotional hierarchy and rejected the stand of the appellant-UOI that under MACP scheme, the employees are entitled to financial",,,,,

upgradation of the next grade pay only. Since the matter was considered on merits and since the issue involves impact on the public ex-chequer and,,,,,

also interest of the staff of various establishments, we requested learned Senior counsel, Mr. Jaideep Gupta to assist the Court as amicus curiae which",,,,,

the learned Senior counsel has readily consented. Mr. Kunal Chatterji, learned counsel has agreed to assist the learned Senior counsel-amicus.",,,,,

Assured Career Progression (ACP) Scheme:-,,,,,

The Government of India with a view to “deal with the problem of genuine stagnation and hardship faced by the employees due to lack of,,,,,

adequate promotional avenuesâ€, introduced the Assured Career Progression (ACP) Scheme with effect from 09.08.1999 vide its Office",,,,,

Memorandum dated 09.08.1999. To mitigate the hardship in cases of acute stagnation in a cadre or in an isolated post, it has been decided to grant",,,,,

two financial upgradations under the ACP Scheme to Group ‘B’, ‘C’ and ‘D’ employees on completion of 12 and 24 years of",,,,,

regular service. As per ACP Scheme, isolated post in Group ‘A’, ‘B’, ‘C’ and ‘D’ cadres which have no promotional",,,,,

avenues also qualify for similar benefits. The financial upgradations under the ACP Scheme is placement in the higher Pay Scale and financial,,,,,

benefits in the higher Pay Scale without regular promotion. Under the financial upgradation, grant of financial benefits under the ACP Scheme to the",,,,,

government servants concerned is on personal basis. Such financial upgradation neither amounts to regular promotion nor require creation of new,,,,,

post. Some of the salient features of the ACP Scheme are as follows:-,,,,,

The ACP Scheme envisages merely placement in the higher pay-scale/grant of financial benefits (through financial upgradation) only to the,,,,,

Government servant concerned on personal basis and shall, therefore, neither amount to functional/regular promotion nor would require creation of",,,,,

new posts for the purpose;,,,,,

Under the ACP Scheme, two financial upgradations shall be allowed to Group ‘B’, ‘C’ and ‘D’ employees on completion of 12",,,,,

years and 24 years of his/her regular service.,,,,,

As per para 5.1 of Annexure-1 â€" conditions for grant of benefits under the ACP Scheme, it is stipulated that two financial upgradations would be",,,,,

available only if no regular promotion during the prescribed period (12 and 24 years) was granted to an employee. If an employee has already received,,,,,

one regular promotion, he/she would qualify for second ACP only on completion of 24 years of regular service. However, in case if two regular",,,,,

promotions have been received by an employee, no further benefit under the ACP Scheme would accrue in favour of the employee.",,,,,

As per para 3.1 of the Office Memorandum dated 09.08.1999, the grant of financial upgradations under the ACP Scheme shall be subject to the",,,,,

conditions mentioned in the Annexure-I annexed thereon to the Office Memorandum dated 09.08.1999.,,,,,

Para No.8 of the Annexure provides that the financial upgradations shall be purely personal to the employee and would have no relevance to his/her,,,,,

seniority position. In other words, there would be no additional financial upgradations for the senior employee on the ground that the junior employee",,,,,

has got the higher pay scale under the ACP Scheme. Para No.12 of Annexure-I provides that the ACP Scheme contemplates merely placement on,,,,,

personal basis in the higher pay scale/grant of financial benefits only and shall not amount to actual functional promotion of the employees concerned.,,,,,

We may usefully refer to the relevant features of the ACP Scheme as stipulated in Annexure-I to the Office Memorandum dated 09.08.1999-,,,,,

Conditions for Grant of Benefits under the ACP Scheme, which reads as under:-",,,,,

Conditions for grant of benefits under the ACP Scheme:-,,,,,

The ACP Scheme envisages merely placement in the higher pay-scale/grant of financial benefits (through financial upgradation) only to the,,,,,

Government servant concerned on personal basis and shall, therefore, neither amount to functional/regular promotion nor would require creation of",,,,,

new posts for the purpose;,,,,,

………,,,,,

The first financial upgradation under the ACP Scheme shall be allowed after 12 years of regular service and the second upgradation after 12 years,,,,,

of regular service from the date of the first financial upgradation subject to fulfilment of prescribed conditions. In other words, if the first upgradation",,,,,

gets postponed on account of the employee not found fit or due to departmental proceedings, etc. this would have consequential effect on the second",,,,,

upgradation which would also get deferred accordingly;,,,,,

………,,,,,

The financial upgradation under the ACP Scheme 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 employee on the ground that the junior employee in the grade has got higher pay-",,,,,

scale under the ACP Scheme;,,,,,

……….,,,,,

The proposed ACP Scheme contemplates merely placement on personal basis in the higher pay-scale/grant of financial benefits only and shall not,,,,,

amount to actual/functional promotion of the employees concerned. Since orders regarding reservation in promotion are applicable only in the case of,,,,,

regular promotion, reservation orders/roster shall not apply to the ACP Scheme which shall extend its benefits uniformly to all eligible SC/ST",,,,,

employees also. However, at the time of regular/functional (actual) promotion, the Cadre Controlling Authorities shall ensure that all reservation orders",,,,,

are applied strictly;,,,,,

……...â€​,,,,,

ACP Scheme was replaced by Modified Assured Career Progression (MACP) Scheme which became operational with effect from 01.09.2008.,,,,,

The Sixth Central Pay Commission has recommended the adoption of MACP Scheme primarily to rectify the problems arising from inter-,,,,,

departmental disparities:-,,,,,

(i) ACP Scheme led to creation of certain disparities within the employees in different organisations/departments who were directly recruited in the,,,,,

same pay scale who received different financial upgradations under the ACP Scheme because of existence of different promotional hierarchical,,,,,

structure and different promotional pay scales in different organisations/departments;,,,,,

(ii) Another adverse consequence in the implementation of the ACP Scheme was that the benefit of a higher pay scale was not available if the next,,,,,

post in the hierarchy also existed in the identical pay scale.,,,,,

In order to bring systematic changes in the existing scheme of ACP so that all employees irrespective of existing hierarchical structure in their,,,,,

organisations/cadre get the same benefit, MACP was recommended by the Sixth Central Pay Commission which was accepted by the Government",,,,,

with certain modifications vide its Office Memorandum dated 19.05.2009. Under the Sixth Central Pay Commission, revised pay structure has been",,,,,

implemented with effect from 01.01.2006; whereas benefits of ACP Scheme have been allowed till 31.08.2008. Vide Office Memorandum dated,,,,,

19.05.2009, the Government of India introduced the MACP Scheme, in supersession of the ACP Scheme w.e.f. 01.09.2008. There shall be no change",,,,,

in distinction, classification or higher status on grant of financial upgradation under MACP as the upgradation is purely personal and merely placement",,,,,

in the next higher Grade Pay.,,,,,

Modified Assured Career Progression (MACP) Scheme:-,,,,,

Under the MACP Scheme, three financial upgradations are made available in the next grade pay to an employee who has completed 10, 20 and 30",,,,,

years of regular service in the same post without getting any promotion. The benefit would be available at the next higher grade pay. Some of the,,,,,

salient features of the MACP Scheme are as follows:-,,,,,

Para No.2 of the MACP Scheme provides that the “MACP,,,,,

Scheme envisages merely placement in the immediate next higher grade pay in the hierarchy of the recommended revised pay bands and grade,,,,,

payâ€​.,,,,,

As per para No.10 of the MACP Scheme â€" Office Memorandum dated 19.05.2009, no stepping up of pay in the pay band or grade pay would be",,,,,

admissible with regard to junior getting more pay than the senior on account of pay fixation under the MACP Scheme.,,,,,

As per para No.11 of the said memorandum dated 19.05.2009, the differences in pay scales on account of financial upgradations under the ACP",,,,,

Scheme and MACP Scheme would not be construed as anomaly.,,,,,

Para (19) of MACP Scheme 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. As per para (20) of the MACP Scheme, financial upgradations shall",,,,,

be purely personal to the employee and shall have no relevance to the seniority position. As such, there shall be no additional financial upgradation for",,,,,

the senior employees on the ground that the junior employees in the grade have received higher grade pay under MACP Scheme. We may usefully,,,,,

extract the relevant portion of Annexure-I of the Office Memorandum dated 19.05.2009, which reads as under:-",,,,,

ANNEXURE-I,,,,,

MODIFIED ASSURED CAREER PROGRESSION SCHEME (MACPS),,,,,

There shall be three financial upgradation s 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.,,,,,

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.,,,,,

…………,,,,,

The financial upgradation would be on non-functional basis subject to fitness, in the hierarchy of grade pay within the PB-1.Thereafter for",,,,,

upgradation under the MACPS the benchmark of 'good' would be applicable till the grade pay of Rs. 6600/- in PB-3. The benchmark will be 'Very,,,,,

,Present Scale,,,Revised Pay Structure,

Sl.No.,Post/Grade,Present Scale,Name of Pay Band/Scale,Corresponding Pay Bands/Scales,Corresponding Grade Pay

(1),(2),(3),(4),(5),(6)

1.,S-1,2550-55-2660-60-3200,-1S,4440-7440,1300

2.,S-2,2610-60-3150-65-3540,-1S,4440-7440,1400

3.,S-2A,2610-60-2910-65-3300- 70- 4000,-1S,4440-7440,1600

,Present Scale,,,Revised Pay Structure,

Sl.No.,Post/Grade,Present Scale,Name of Pay Band/Scale,Corresponding Pay Bands/Scales,Corresponding Grade Pay

4.,S-3,2650-65-3300-70-4000,-1S,4440-7440,1650

5.,S-4,2750-70-3800-75-4400,PB-1,5200-20200,1800

6.,S-5,3050-75-3950-80-4590,PB-1,5200-20200,1900

7.,S-6,3200-85-4900,PB-1,5200-20200,2000

8.,S-7,4000-100-6000,PB-1,5200-20200,2400

9.,S-8,4500-125-7000,PB-1,5200-20200,2800

10.,S-9,5000-150-8000,PB-2,9300-34800,4200

11.,S-10,5500-175-9000,PB-2,9300-34800,4200

12.,S-11,6500-200-6900,PB-2,9300-34800,4200

13.,S-12,6500-200-10500,PB-2,9300-34800,4200

14.,S-13,7450-225-11500,PB-2,9300-34800,4600

15.,S-14,7500-250-12000,PB-2,9300-34800,4800

16.,S-15,8000-275-13500,PB-2,9300-34800,5400

17.,New Scale,8000-275-13500 (Group A Entry),PB-3,15600-39100,5400

18.,S-16,9000,PB-3,15600-39100,5400

19.,S-17,9000-275-9550,PB-3,15600-39100,5400

20.,S-18,10325-325-10975,PB-3,15600-39100,6600

21.,S-19,10000-325-15200,PB-3,15600-39100,6600

22.,S-20,10650-325-15850,PB-3,15600-39100,6600

23.,S-21,12000-375-16500,PB-3,15600-39100,7600

24.,S-22,12750-375-16500,PB-3,15600-39100,7600

25.,S-23,12000-375-18000,PB-3,15600-39100,7600

26.,S-24,14300-400-18300,PB-3,37400-67000,8700

27.,S-25,15100-400-18300,PB-3,37400-67000,8700

28.,S-26,16400-450-20000,PB-3,37400-67000,8900

29.,S-27,16400-450-20900,PB-3,37400-67000,8900

30.,S-28,14300-450-22400,PB-3,37400-67000,10000

,Present Scale,,,Revised Pay Structure,

Sl.No.,Post/Grade,Sl.No.,Post/Grade,Sl.No.,Post/Grade

31.,S-29,18400-500-22400,PB-4,37400-67000,10000

32.,S-30,22400-525-24500,PB-4,37400-67000,12000

33.,S-31,22400-600-26000,HAG + Scale,75500 (annual increment @ 3 %) - 80000,Nil

34.,S-32,24050-650-26000,HAG + Scale,75500 (annual increment @ 3 %) - 80000,Nil

35.,S-33,26000 (Fixed),Apex Scale,80000 (Fixed),Nil

36.,S-34,30000 (Fixed),Cab. Sec.,90000 (Fixed),Nil

,Present Scale,,,"Revised Pay

Structure",

Sl.No.,Post/Grade,Present Scale,Name of Pay,Corresponding,Corresponding

,,,Band/Scale,Pay Bands/Scales,Grade Pay

(1),(2),(3),(4),(5),(6)

5.,S-4,2750-70-3800-75-4400,PB-1,5200-20200,1800

6.,S-5,3050-75-3950-80-4590,PB-1,5200-20200,1900

7.,S-6,3200-85-4900,PB-1,5200-20200,2000

8.,S-7,4000-100-6000,PB-1,5200-20200,2400

9.,S-8,4500-125-7000,PB-1,5200-20200,2800

10.,S-9,5000-150-8000,PB-2,9300-34800,4200

11.,S-10,5500-175-9000,PB-2,9300-34800,4200

12.,S-11,6500-200-6900,PB-2,9300-34800,4200

13.,S-12,6500-200-10500,PB-2,9300-34800,4200

14.,S-13,7450-225-11500,PB-2,9300-34800,4600

15.,S-14,7500-250-12000,PB-2,9300-34800,4800

Mr. Jaideep Gupta, learned amicus assisted by Kunal Chatterji submitted that the object and purpose of the 1999 ACP was to mitigate hardship in",,,,,

case of acute stagnation either in a cadre or in an isolated post and MACP scheme of 2009 is also for the same purpose and grant of financial,,,,,

upgradation under MACP scheme is only continuation of the existing scheme with certain modifications. Learned amicus further submitted financial,,,,,

upgradation which is granted under the ACP and MACP both involve fixation/refixation of pay and allowance which become the basis of the fixation,,,,,

of pay and allowances for the rest of the career of the employee concerned and such financial upgradation is not merely a special allowance which,,,,,

can be granted or taken back at the will of the employer. Learned amicus has submitted that MACP scheme linked to the grade pay should not be,,,,,

taken into consideration and MACP scheme should be interpreted to mean that financial upgradation has to be granted to the grade pay of the next,,,,,

promotional post and not to the next grade pay in the Schedule I to the CCS (Revision of Pay) Rules. Learned amicus urged the Court to adopt a,,,,,

purposive interpretation of the MACP scheme to grant financial upgradation in the next promotional hierarchy as in the erstwhile ACP scheme. It was,,,,,

contended that if financial upgradation is granted in the hierarchy of grade pay then MACP scheme would lead to a discriminatory treatment violating,,,,,

Article 14 of the Constitution of India. In this regard, learned amicus has drawn the attention of the Court to the discussion of the Joint Committee of",,,,,

MACP scheme held under the Chairmanship of the Joint Secretary (E) of the Department of Personnel and Training on 06.10.2010.,,,,,

Mr. C.K. Sasi, learned counsel appearing for the respondents in SLP(C) No.21803 of 2014 and SLP(C) No.29605 of 2017 has submitted that",,,,,

when the Pay Commission and incentive scheme is introduced, the employee’s interest has to be kept in view and the same cannot be",,,,,

disadvantageous to the employees when compared to the erstwhile scheme. In support of his contention, learned counsel has drawn our attention to",,,,,

the comparative chart which he has filed along with his written submission.,,,,,

Reiterating the submissions of learned amicus and the other submissions, Ms. Prabha Swami, learned counsel appearing for the respondents in",,,,,

SLP(C) No.31125 of 2016 has taken us through the facts and submitted that if the ACP had been continued after the completion of twenty-four years,,,,,

of service, respondents (SLP(C) No.31125 of 2016) would have been in the grade pay of Rs.5400/- in Pay Band-3 whereas due to MACP, the",,,,,

respondents were placed in grade pay of Rs.4600/- in Pay Band-2 and this has caused discrimination and financial hardship to the respondents.,,,,,

Learned counsel has also drawn our attention to the comparative chart and submitted that MACP scheme has operated to the disadvantage of the,,,,,

respondents.,,,,,

Mr. M.K. Bhardwaj, learned counsel representing the intervenors has drawn our attention to the Record Note of the meeting of the Joint",,,,,

Committee on MACP scheme held under the Chairmanship of the Joint Secretary, DOP&T on 15.09.2010 and submitted that the Committee had",,,,,

taken note of various anomalies and also as to how the implementation of MACP has resulted as a disadvantage to the Government servants. Mr.,,,,,

Bhardwaj has drawn our attention to various anomalies noted by the Committee and submitted that in Raj Pal’s case, the Record Note of the third",,,,,

meeting of MACP scheme held on 15.03.2011 was taken note by the High Court and the High Court rightly held that Raj Pal is entitled to financial,,,,,

upgradation in the grade pay based on the next promotional hierarchy. It was submitted that if the financial upgradation is to be granted on the basis of,,,,,

next grade pay, it would be greatly disadvantageous to the employees.",,,,,

Discussion and findings:-,,,,,

Though various contentions have been raised assailing the MACP Scheme viz. “financial upgradation in the next Grade Pay†and “no,,,,,

stepping up of pay on the ground that junior getting more payâ€, be it noted that the clauses of the MACP Scheme including the clause providing the",,,,,

financial upgradation in the next Grade Pay have not been challenged by the respondents. In the impugned judgments, the Tribunals/High Courts have",,,,,

only relied upon Raj Pal’s case and not gone into the MACP Scheme vis-à -vis erstwhile ACP Scheme and also not considered the merits of the,,,,,

contention of the respondents. We have therefore, considered the MACP Scheme vis-Ã -vis erstwhile ACP Scheme in the light of the contentions",,,,,

raised by the respondent.,,,,,

As pointed out earlier, both ACP and MACP Schemes are in the nature of incentive schemes devised with the object of ensuring that the",,,,,

employees who are unable to avail of adequate promotional opportunities, get some relief from stagnation in the form of financial benefits. Under the",,,,,

MACP Scheme, financial upgradations are granted at three regular intervals on completion of 10-20-30 years of service without promotion. Hence, it",,,,,

is also intended to ensure that the employees are adequately incentivised to work efficiently despite not getting promotion for want of promotional,,,,,

avenue. The change in policy brought about by supersession of the ACP Scheme with the MACP Scheme is after well-deliberated and well-,,,,,

documented recommendations of the Sixth Central Pay Commission. Considering the various issues in the implementation of the ACP Scheme, the",,,,,

Pay Commission expressed its views “the only other way is to bring systematic changes in the existing Scheme of ACP so that all the employees,,,,,

irrespective of the existing hierarchy structure in their organisations/cadres, get some benefit under itâ€. The Commission therefore, recommended",,,,,

that the existing Scheme of ACP be continued with the modifications indicated thereon in the Report that the financial upgradation has to be in the,,,,,

next immediate Grade Pay. One of the reasons for the expert body recommending the MACP Scheme was that there were inter-departmental,,,,,

disparities where several departments had varying promotional hierarchies. As a result, the working of ACP Scheme under which an employee who",,,,,

stagnated for 12 years, was entitled to pay in the Pay Scale of the next promotional post, led to inter-departmental anomalies. The Pay Commission",,,,,

therefore, recommended MACP Scheme with a view to putting an end to the problem ensuing from inter-departmental disparities.",,,,,

The learned amicus and the learned counsel appearing for the respondents urged the court to adopt a “purposive interpretationâ€​ that the words,,,,,

“immediate next higher Grade Pay†to be interpreted as “Grade Pay of the next promotional post†in the hierarchy. MACP Scheme,,,,,

envisages merely placement in the immediate next higher Grade Pay. By perusal of the MACP Scheme extracted earlier, it is seen that the words",,,,,

used in the Scheme are “placement in the immediate next higher Grade Pay in the hierarchy of the recommended revised pay bandsâ€. The term,,,,,

“Grade Pay in the next promotional post†is conspicuously absent in the entire body of the MACP Scheme. The argument of the respondents that,,,,,

the benefit of MACP Scheme is referable to the promotional post, is de hors the MACP Scheme and cannot be accepted. Though ACP and MACP",,,,,

Schemes are intended to provide relief against stagnation, both the Schemes have different features. Pay scales under the Sixth Pay Commission and",,,,,

the MACP Scheme are stated to be more beneficial since it extends to the employees with time intervals with higher pay bands and various facilities,,,,,

which were not available under the ACP Scheme including the three financial upgradations in shorter time span. In any event, MACP Scheme has not",,,,,

been challenged by the respondents. As rightly contended by the learned ASG, the respondents cannot be permitted to cherry-pick beneficial features",,,,,

from the erstwhile ACP Scheme and also take advantage of the beneficial features in the MACP Scheme.,,,,,

The object behind the MACP Scheme is to provide relief against the stagnation. If the arguments of the respondents are to be accepted, they",,,,,

would be entitled to be paid in accordance with the grade pay offered to a promotee; but yet not assume the responsibilities of a promotee. As,,,,,

submitted on behalf of Union of India, if the employees are entitled to enjoy Grade Pay in the next promotional hierarchy, without the commensurate",,,,,

responsibilities as a matter of routine, it would have an adverse impact on the efficiency of administration.",,,,,

The change in policy brought about by supersession of ACP Scheme with the MACP Scheme is after consideration of all the disparities and the,,,,,

representations of the employees. The Sixth Central Pay Commission is an expert body which has comprehensively examined all the issues and the,,,,,

representations as also the issue of stagnation and at the same time to promote efficiency in the functioning of the departments. MACP Scheme has,,,,,

been introduced on the recommendation of the Sixth Central Pay Commission which has been accepted by the Government of India. After accepting,,,,,

the recommendation of the Sixth Central Pay Commission, the ACP Scheme was withdrawn and the same was superseded by the MACP Scheme",,,,,

with effect from 01.09.2008. This is not some random exercise which is unilaterally done by the Government, rather, it is based on the opinion of the",,,,,

expert body â€" Sixth Central Pay Commission which has examined all the issues, various representations and disparities. Before making the",,,,,

recommendation for the Pay Scale/Revised Pay Scale, the Pay Commission takes into consideration the existing pay structure, the representations of",,,,,

the government servants and various other factors after which the recommendations are made. When the expert body like Pay Commission has,,,,,

comprehensively examined all the issues and representations and also took note of inter-departmental disparities owing to varying promotional,,,,,

hierarchies, the court should not interfere with the recommendations of the expert body. When the government has accepted the recommendation of",,,,,

the Pay Commission and has also implemented those, any interference by the court would have a serious impact on the public exchequer.",,,,,

Observing that it is the function of the Government which normally acts on the recommendations of the Pay Commission which is the proper,,,,,

authority to decide upon the issues, in Union of India and another v. P.V. Hariharan and another (1997) 3 SCC 568, it was held as under:-",,,,,

“5. ….. It is the function of the Government which normally acts on the recommendations of a Pay Commission. Change of pay scale of a,,,,,

category has a cascading effect. Several other categories similarly situated, as well as those situated above and below, put forward their claims on the",,,,,

basis of such change. The Tribunal should realise that interfering with the prescribed pay scales is a serious matter. The Pay Commission, which goes",,,,,

into the problem at great depth and happens to have a full picture before it, is the proper authority to decide upon this issue. Very often, the doctrine of",,,,,

“equal pay for equal work†is also being misunderstood and misapplied, freely revising and enhancing the pay scales across the board. We hope",,,,,

and trust that the Tribunals will exercise due restraint in the matter. Unless a clear case of hostile discrimination is made out, there would be no",,,,,

justification for interfering with the fixation of pay scales. We have come across orders passed by Single Members and that too quite often,,,,,

Administrative Members, allowing such claims. These orders have a serious impact on the public exchequer too. It would be in the fitness of things if",,,,,

all matters relating to pay scales, i.e., matters asking for a higher pay scale or an enhanced pay scale, as the case may be, on one or the other ground,",,,,,

are heard by a Bench comprising at least one Judicial Member. ….â€​,,,,,

Observing that the decision of expert bodies like the Pay Commission is not ordinarily subject to judicial review, in State of U.P. and Others v.",,,,,

U.P. Sales Tax Officers Grade II Association (2003) 6 SCC 250, the Supreme Court held as under:-",,,,,

“11. There can be no denial of the legal position that decision of expert bodies like the Pay Commission is not ordinarily subject to judicial review,,,,,

obviously because pay fixation is an exercise requiring going into various aspects of the posts held in various services and nature of the duties of the,,,,,

employees…...â€​.,,,,,

In Secretary, Government (NCT of Delhi) and others v. Grade-1 Officers Association and others (2014) 13 SCC 29,6 the Supreme Court refused",,,,,

to interfere with the ACP Scheme as it would violate government policy and since exercise of judicial review would not be proper, upheld the ACP",,,,,

Scheme and the conditions therein.,,,,,

In State of Tamil Nadu v. S. Arumugham (1998) 2 SCC 198, the Supreme Court has observed that the government has the right to frame a policy",,,,,

to ensure efficiency and proper administration and to provide to suitable avenues for promotion to officers working in different department. The,,,,,

Supreme Court has further observed that the Tribunal cannot substitute its own views for the views of the government or direct new policy based on,,,,,

the views of Tribunal.,,,,,

Observing that fixation of pay and determination of responsibilities is a complex matter which is for the executive to take a decision, the courts",,,,,

should approach such matters with restraint, in State of Haryana and Another v. Haryana Civil Secretariat Personal Staff Association (2002) 6 SCC",,,,,

72, the Supreme Court held as under:-",,,,,

“10. It is to be kept in mind that the claim of equal pay for equal work is not a fundamental right vested in any employee though it is a constitutional,,,,,

goal to be achieved by the Government. Fixation of pay and determination of parity in duties and responsibilities is a complex matter which is for the,,,,,

executive to discharge. While taking a decision in the matter, several relevant factors, some of which have been noted by this Court in the decided",,,,,

case, are to be considered keeping in view the prevailing financial position and capacity of the State Government to bear the additional liability of a",,,,,

revised scale of pay……… That is not to say that the matter is not justiciable or that the courts cannot entertain any proceeding against such,,,,,

administrative decision taken by the Government. The courts should approach such matters with restraint and interfere only when they are satisfied,,,,,

that the decision of the Government is patently irrational, unjust and prejudicial to a section of employees and the Government while taking the decision",,,,,

has ignored factors which are material and relevant for a decision in the matter. Even in a case where the court holds the order passed by the,,,,,

Government to be unsustainable then ordinarily a direction should be given to the State Government or the authority taking the decision to reconsider,,,,,

the matter and pass a proper order. The court should avoid giving a declaration granting a particular scale of pay and compelling the Government to,,,,,

implement the same……â€​.,,,,,

[Underlining added],,,,,

The prescription of Pay Scales and incentives are matters where decision is taken by the Government based upon the recommendation of the,,,,,

expert bodies like Pay Commission and several relevant factors including financial implication and court cannot substitute its views. As held in,,,,,

Haryana Civil Secretariat Personal Staff Association (2002) 6 SCC 72, the court should approach such matters with restraint and interfere only when",,,,,

the court is satisfied that the decision of the Government is arbitrary. Even in a case where the court takes the view that order/Scheme passed by the,,,,,

Government is not an equitable one, ordinarily only a direction could be given to the State Government or the authority for consideration of the matter",,,,,

and take a decision. In the present batch of cases where the respondents are claiming financial upgradation in the grade pay of promotional hierarchy,",,,,,

no grounds are made out to show that the MACP Scheme granting financial upgradation in the next grade pay is arbitrary and unjust; warranting,,,,,

interference. The implementation of the MACP Scheme is claimed to have led to certain anomalies; but as pointed out earlier, MACP Scheme itself is",,,,,

not under challenge.,,,,,

Raj Pal’s Case â€" Whether could have been taken as a precedent:- In almost all the cases, the High Courts have relied upon Raj Pal’s",,,,,

case only on the basis that Raj Pal’s case was dismissed by the Supreme Court. Even at the outset, it is to be pointed out that Raj Pal’s case,",,,,,

SLP (C) No. ……CC 7467 of 2013 was dismissed by the Supreme Court vide order dated 15.04.2013 on the ground that there was no sufficient,,,,,

explanation to condone the delay in refiling the Special Leave Petition which is a default in the manner in which the case was prosecuted and not a,,,,,

dismissal on merits. Be that as it may, since various High Courts have relied upon Raj Pal’s case, it is necessary to refer to the facts, findings",,,,,

thereon and whether it could have been followed as precedent.,,,,,

Raj Pal was working in the post of Photocopier w.e.f. 12.10.1986 in the pay scale of Rs.3050-4590/- in the Central Administrative Tribunal,",,,,,

Chandigarh Bench, Chandigarh. The post of Photocopier is an isolated post. Upon introduction of the ACP Scheme in the year 1999, on completion of",,,,,

twelve years of regular service, Raj Pal was granted the next higher scale in the hierarchy of pay scales i.e. Rs.3200-4590/- vide order dated",,,,,

,,Present Scale,,Revised Pay Structure,

Sl.No.,Post/,Present Scale,Name of,Corresponding Pay,Corresponding

,Grade,,Pay,Bands/Scales,Grade Pay

,,,Band/Scale,,

(1),(2),(3),(4),(5),(6)

6.,S-5,3050-75-3950-80-4590,PB-1,5200-20200,1900

7.,S-6,3200-85-4900,PB-1,5200-20200,2000

8.,S-7,4000-100-6000,PB-1,5200-20200,2400

9.,S-8,4500-125-7000,PB-1,5200-20200,2800

10.,S-9,5000-150-8000,PB-2,9300-34800,4200

11.,S-10,5500-175-9000,PB-2,9300-34800,4200

ground of delay in filing or of refiling (like in the case of Raj Pal), whether it can be taken as a binding precedent on the merits of the case as the",,,,,

“law declared by the Supreme Court within the meaning of Article 141 of the Constitution of Indiaâ€. Raj Pal’s case having been dismissed on,,,,,

the ground that no sufficient cause was shown for the delay in refiling, in our considered view, Raj Pal’s case ought not to have been quoted as a",,,,,

precedent of this Court by the High Courts.,,,,,

Article 141 of the Constitution of India provides that the law declared by the Supreme Court shall be binding on all courts within the territory of,,,,,

India, i.e. the pronouncement of the law on the point shall operate as a binding precedent on all courts within India. Law declared by the Supreme",,,,,

Court has to be essentially understood as a principle laid down by the court and it is this principle which has the effect of a precedent. A principle as,,,,,

understood from the word itself is a proposition which can only be delivered after examination of the matter on merits. It can never be in a summary,,,,,

manner, much less be rendered in a decision delivered on technical grounds, without entering into the merits at all. A decision, unaccompanied by",,,,,

reasons can never be said to be a law declared by the Supreme Court though it will bind the parties inter-se in drawing the curtain on the litigation. In,,,,,

Union of India v. All India Service Pensioners’ Association and another (1988) 2 SCC 580, the Supreme Court held that “when reasons were",,,,,

made by the Supreme Court for dismissing the SLP, the decision becomes one which attracts Article 141 of the Constitution which provides that the",,,,,

law declared by the Supreme Court shall be binding on all the courts within the territory of India……â€​.,,,,,

Observing that when a Special Leave Petition is dismissed by a non-speaking order, by such dismissal, the Supreme Court does not lay down any",,,,,

law as envisaged under Article 141 of the Constitution of India in Supreme Court Employees Welfare Association v. Union of India and Others (1989),,,,,

4 SCC 187, this Court held as under:-",,,,,

“22. ….It is now a well-settled principle of law that when a special leave petition is summarily dismissed under Article 136 of the Constitution, by",,,,,

such dismissal this Court does not lay down any law, as envisaged by Article 141 of the Constitution, as contended by the learned Attorney General.",,,,,

In Indian Oil Corporation Ltd. v. State of Bihar (1986) 4 SCC 14 6it has been held by this Court that the dismissal of a special leave petition in limine,,,,,

by a non-speaking order does not justify any inference that, by necessary implication, the contentions raised in the special leave petition on the merits",,,,,

of the case have been rejected by the Supreme Court. It has been further held that the effect of a non-speaking order of dismissal of a special leave,,,,,

petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court",,,,,

had decided only that it was not a fit case where special leave petition should be granted. In Union of India v. All India Services Pensioners’,,,,,

Association (1988) 2 SCC 580 this Court has given reasons for dismissing the special leave petition. When such reasons are given, the decision",,,,,

becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the,,,,,

courts within the territory of India. It, therefore, follows that when no reason is given, but a special leave petition is dismissed simpliciter, it cannot be",,,,,

said that there has been a declaration of law by this Court under Article 141 of the Constitution.â€​,,,,,

[underlining added],,,,,

Raj Pal’s case having been dismissed on the ground that no sufficient cause was shown for the delay in refiling, Raj Pal’s case ought not to",,,,,

have been quoted as precedent of this Court by the High Courts.,,,,,

The learned counsel for the intervenors has referred to the record note of the meetings of the Joint Committee of MACP held under the,,,,,

chairmanship of JS(Establishment), DoP&T on 15.09.2010 and other dates and drawn our attention to various items viz. Item No.1-Provide for Grade",,,,,

Pay of the Next Promotional Post under MACP; Item No.3-Option for Earlier ACP Scheme; Item No.8-Anomaly on Introduction of MACP Scheme;,,,,,

and Item No.29 - Modification in MACP Scheme. In response to the above submission, Union of India has filed additional written submission referring",,,,,

to the decision in various meetings of the Joint Committee on MACP held on various dates.,,,,,

2nd Meeting of the Joint Committee dated 15.09.2010:- In the 2nd Meeting of the Joint Committee held on 15.09.2010, it was decided that",,,,,

organisations/cadres would be given the option to choose either the ACP Scheme or the MACP Scheme. It was also decided that individual options,,,,,

would not be permitted. Since the ACP and MACP Scheme were fallback options for stagnating employees, it was therefore decided that process of",,,,,

completing cadre restructuring in a time bound manner would solve the problem of stagnation. It was further decided that cadre structure had to be,,,,,

reviewed periodically to harmonise the functional needs of the organisation and career progression of employees. (Vide copy of O.M. dated,,,,,

10.02.2011).,,,,,

3rd Meeting of the Joint Committee dated 15.03.2011:- In the 3rd Meeting of the Joint Committee held on 15.03.2011, the staff side reiterated their",,,,,

demand that the MACP Scheme should be granted in the promotional hierarchy of posts rather than in the grade pay hierarchy. The official side had,,,,,

suggested that the Government was willing to consider a revision in the MACP Scheme to the effect that organisations/cadres shall have the option to,,,,,

choose either the ACP Scheme or the MACP Scheme. But the staff side stated that such a dispensation would not be practical and there was a need,,,,,

to explore other alternatives to solve the issue. Therefore, it was agreed between the staff side and the official side that there was no need to change",,,,,

the basic structure of MACP Scheme, but there was a need to separately examine those cases where MACP Scheme was less advantageous than",,,,,

the ACP Scheme (Vide the Minutes of the 3rd Meeting of Joint Committee dated 15.03.2011). Pursuant to the decision of the 3rd Meeting of Joint,,,,,

Committee, it was decided that the official side would write to the Ministry of Railways, Defence, Urban Development, Home Affairs and the",,,,,

Department of Posts to forward information in respect of the specific categories of employees where the MACP was less advantageous than the,,,,,

erstwhile ACP Scheme. Accordingly, these Ministries/Departments were requested to send specific cases wherein, it was less advantageous for",,,,,

employees under MACP Scheme as compared to ACP Scheme. It is stated that no Ministry/Department other than Ministry of Urban Development,,,,,

had responded. (Vide Copy of Minutes dated 15.03.2011),,,,,

Meeting of the Joint Committee dated 27.07.2012:- In the meeting of the Joint Committee held on 27.07.2012, the official side stated that it was not",,,,,

possible to give individual options to the employees to opt for erstwhile ACP Scheme in preference to MACP Scheme for availing the benefit of,,,,,

financial upgradation.,,,,,

Letter dated 04.11.2013:- Pursuant to the Joint Committee meeting held on 27.07.2012, a letter dated 04.11.2013 was sent to the staff side making",,,,,

it clear that the solution lies in review of cadre structure in a time bound manner with a view to mitigate the problem of stagnation as the benefit of,,,,,

Modified Assurance Career Progression Scheme have been granted as a fallback option in the event of promotions not taking place in time. With,,,,,

regard to letter dated 04.11.2013 which relates only to Postal Department, it is clarified that in the Department of Posts, the erstwhile ACP Scheme",,,,,

was not operational for postal employees. These employees were covered under Time Bound One Promotion (TBOP)/Biennial Cadre Review (BCR),,,,,

Schemes. The MACP Scheme for Central Government employees is a continuation of ACP Scheme. Insofar as Department of Posts is concerned, it",,,,,

was decided by the Department of Posts to adopt MACP Scheme in respect of postal employees also w.e.f. 01.09.2008. Accordingly, O.M. No.4-",,,,,

7/(MACPS)/2009-PCC dated 18.09.2009 was issued by Department of Posts to clarify that TBOP/BCR Schemes stand discontinued w.e.f.,,,,,

01.09.2008 consequent upon introduction of MACPS to postal employees w.e.f. 01.09.2008. The O.M. dated 1-20/2008-PCC dated 04.11.2013 was,,,,,

issued to regulate the fixation of pay in respect of postal employees during the period 01.01.2006 to 31.08.2008 i.e. before the switch over to MACPS,,,,,

took place. It is stated that the O.M. dated 04.11.2013 was only in respect of postal employees governed under TBOP/BCR and does not relate to,,,,,

Central Government employees who were covered under erstwhile ACP Scheme. Therefore, this O.M. has no bearing on the issue in the said SLP",,,,,

pending before Hon’ble Supreme Court of India.,,,,,

The ACP Scheme which is now superseded by MACP Scheme is a matter of government policy. Interference with the recommendations of the,,,,,

expert body like Pay Commission and its recommendations for the MACP, would have serious impact on the public exchequer. The recommendations",,,,,

of the Pay Commission for MACP Scheme has been accepted by the Government and implemented. There is nothing to show that the Scheme is,,,,,

arbitrary or unjust warranting interference. Without considering the advantages in the MACP Scheme, the High Courts erred in interfering with the",,,,,

government’s policy in accepting the recommendations of the Sixth Central Pay Commission by simply placing reliance upon Raj Pal’s case.,,,,,

The impugned orders cannot be sustained and are liable to be set aside.,,,,,

In the result, all the impugned orders in these batch of appeals arising out of SLP(C) No.21803 of 2014, SLP(C) No.22181 of 2014, SLP(C)",,,,,

No.23335 of 2014, SLP(C) No.23333 of 2014, SLP(C) No.18227 of 2015, SLP(C) No.31125 of 2016 and SLP(C) Diary No.6042 of 2017 are set",,,,,

aside and the appeals preferred by the Union of India are allowed. Consequently, appeal arising out of SLP(C)No.33706 of 2016 is disposed of. No",,,,,

costs.,,,,,

However, as pointed out earlier in para Nos. (47), (48) and (49), since certain anomalies on implementation of the MACP Scheme have been",,,,,

brought to the notice of the Joint Committee in the various meetings of the Joint Committee, Union of India and DoP&T to consider the same as they",,,,,

deem it appropriate and take a decision in accordance with law.,,,,,

We record our appreciation for the valuable assistance rendered by Mr. Jaideep Gupta, learned amicus assisted by learned counsel Mr. Kunal",,,,,

Chatterjee.,,,,,