Case: UNION OF INDIA AND OTHERS Vs. M.V. MOHANAN NAIR

Appeals relating to Issue No.III were ordered to be de-tagged and listed separately5. At the outset, it is to be pointed out that almost all the Tribunals/High Courts have only relied upon Raj Pals 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-amicusAssured Career Progression (ACP) Scheme:6. 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 avenues, 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 ase 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;Conditions for grant of benefits under the ACP Scheme:-1. 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;4. 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;8. 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 scale9. 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 PayModified Assured Career Progression (MACP) Scheme:10. 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 asMODIFIED ASSURED CAREER PROGRESSION SCHEME (MACPS)1. 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-pay2. 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,17. 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 Good for financial upgradation to the grade pay of Rs. 7600 and above12. Clause 28 contains illustrations as to grant of financial upgradation under MACP. The illustrations in Clause 28 of the Scheme can easily be understood by referring to the First Schedule, Part-A of Section 1 of Central Civil Services (Revised Pay) Rules, 2008 which gives a comparison of the scale of pay under the 5 th Pay Commission and the 6 th Pay Commission as under:-(SEE RULES 3 & 4)Comparison of ACP and MACP Scheme:13. For grant of financial upgradation under ACP Scheme, a Screening Committee shall be constituted for the purpose of processing the cases for grant of benefits under the ACP Scheme. In terms of Clause 6.2 of the ACP Scheme, the composition of the Screening Committee shall be the same as that of Departmental Promotion Committee (DPC) prescribed under the relevant recruitment/service rules for regular promotion to the higher grade to which financial upgradation is to be granted. The requirement that the composition of the Screening Committee shall be the same as that of DPC, under ACP Scheme, the consideration for financial upgradations are stringent and the government servant has to satisfy the norms for promotion. Fulfilment of normal promotional norms like benchmark, departmental examination, seniority-cum-fitness (in case of Group D employees) are the requirement for grant of financial upgradation under ACP Scheme14. Per contra, under the MACP Scheme, financial upgradation is granted in the next higher Grade Pay in the hierarchy of the recommended Pay Bands and Grade Pay as given in Section-1, Part-A of the First Schedule of CCS (Revised Pay) Rules, 2008. Under the MACP Scheme, the financial upgradation would be on non-functional basis subject to fitness in the hierarchy of Grade Pay. 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 (vide para (19) of the MACP Scheme). In terms of para (20) of MACP Scheme, financial upgradation under the MACP Scheme shall be purely personal to the employees 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 employee in the grade has got higher pay/higher Grade Pay under MACP Scheme (vide para (20) of the MACP Scheme)15. The distinction between the ACP Scheme and MACP Scheme can be well understood by reference to the Pay Scale under the Fifth Central Pay Commission and the revised pay structure under the Sixth Central Pay Commission and the corresponding Grade Pay thereon as stated in Section-1, Part-A of the First Schedule of CCS (Revised Pay) Rules, 2008(SEE RULES 3 & 4)16. Upon implementation of the Sixth Central Pay Commission, the Pay Scale of 3050-75-3950-80-4590 was kept in Pay Band-1 i.e. Rs.5200-20200 with Grade Pay of Rs.1900/-. Likewise, the Pay Scale of 3200-85-4900 was kept in Pay Band-1 i.e. 5200- 20200 with Grade Pay of Rs.2000/-. Pay Scale of Upper Division Clerk 4000-100-6000 was also kept in the same Pay Band-1 i.e. 5200-20200 but with Grade Pay of Rs.2400/-. Under the ACP Scheme, the Government employee who was working as Lower Division Clerk in the Pay Scale of 3050-75-3950-80-4590, on completion of 12 years of service, would be entitled to the financial upgradation in the next promotional hierarchy i.e. in the cadre of UDC i.e. Pay Scale of 4000-100-6000 while working in the same capacity as LDC. Whereas under the MACP Scheme, the Government servant who is Lower Division Clerk in the Pay Band-1 i.e. Rs.5200-20200/- with Grade Pay of Rs.1900/-, on completion of 10 years of service upon grant of financial upgradation, would be getting the immediate next higher Grade Pay of Rs.2000/- and not the grade pay on promotional hierarchy. Following the erstwhile ACP Scheme (as per which financial upgradation was granted in promotional hierarchy), the respondents are claiming the benefit of Grade Pay of Rs.4200/- (which is in the next promotional hierarchy). While the respondents are granted financial upgradations as per the prevailing rules of MACP Scheme, they can only claim the immediate next higher Grade Pay and not the Grade Pay in the next promotional hierarchy17. As noted above, under the Sixth Pay Commission, scales of pay of various hierarchies namely Lower Division Clerk and Upper Division Clerk are all placed in the Pay Band-I i.e. Rs.5200-20200, of course with different Grade Pay. When the respondents are enjoying the benefit of the Sixth Pay Commission by getting higher pay scale, they should go by the Scheme in accepting what it gives on the financial upgradation; but the respondents are claiming the best of the benefits from both the ACP and MACP Schemes. The respondents have already been granted the beneficial pay upgradation as per the prevailing rules of MACP Scheme on the recommendation of the Sixth Central Pay Commission. The previous ACP Scheme was withdrawn and superseded by MACP Scheme with effect from 01.09.2008 based on the recommendation of the Sixth Central Pay Commission. Under MACP Scheme, the respondent can only claim immediate next Grade Pay and not the corresponding Grade Pay in promotional hierarchy18. As discussed earlier, in the ACP Scheme, there was no Grade Pay but only fixed Pay Scales and fixed increments were there. After the Sixth Central Pay Commission, various Pay Scales have been clubbed together and there is revised Pay Scale with corresponding Pay Bands and corresponding Grade Pay. As discussed earlier, the norms for grant of ACP were stringent and the government servant has to satisfy the norms for promotion. Whereas under the MACP Scheme, for financial upgradation, the rigour of screening is diluted. For upgradation under the MACP Scheme, the benchmark of Good would be applicable till the Grade Pay of Rs.6600/- in Pay Band-3. The benchmark will be Very Good for financial upgradation to the Grade Pay of Rs.7600/- and above.

Court's reasoning:
25. 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 pay, 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 Pals 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-à-vis erstwhile ACP Scheme in the light of the contentions raised by the respondent26. 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 it. 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 disparitiesMACP 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 bands. 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 Scheme28. 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 promotee29. 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 – 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 exchequerIn 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 challengeRajpals case did not go into any details in respect of the overall features of the new MACP Scheme and did not consider the recommendations of the expert body which culminated in the new Scheme. The order passed in Raj Pals case could not have been taken as a precedent in other cases. This is all the more so when SLP (C) No.….CC 7467 of 2013 was dismissed by the Supreme Court on the ground of delay in refiling the Special Leave Petition and no decision was rendered on meritsDismissal of case by the Supreme Court on the ground of delay in filing/non-filing, is not a binding precedent:43. As noted above, SLP preferred by Union of India against the order dated 19.10.2011 passed by the High Court was dismissed on the ground that the delay in refiling has not been satisfactorily explainedRaj Pals case having been dismissed on the ground that no sufficient cause was shown for the delay in refiling, in our considered view, Raj Pals case ought not to have been quoted as a precedent of this Court by the High CourtsRaj Pals case having been dismissed on the ground that no sufficient cause was shown for the delay in refiling, Raj Pals case ought not to have been quoted as precedent of this Court by the High Courts51. 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 governments policy in accepting the recommendations of the Sixth Central Pay Commission by simply placing reliance upon Raj Pals case. The impugned orders cannot be sustained and are liable to be set aside44. 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.