Service Matter Related MACP Scheme Legal Advice

Last Updated on June 3, 2020 by Satish Mishra

This is a judgment digest on the topic of MACP explaining what needs to be considered while granting the benefit of MACP to the individual and how it will be given as per settled law on the topic.

Whether MACP Scheme entitles financial upgradation to the next grade pay or to the grade pay of the next promotional hierarchy.

Also Read- Assured Career Progression Scheme

In 1999 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.It was a Career advancement program designed for those officials/officers who are normally not promoted though many years spent in the same Grade pay/scale because of the reason that higher posts are unavailable.

The Assured Career Progression Scheme

This scheme was essentially introduced 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.
• 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.

Thus 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. 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

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The Modified Assured Career Progression (MACP) Scheme

The 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:

• The ACP Scheme had 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;
• 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.

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 above.

The 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. Therefore, no reservation orders/roster shall apply to the MACPS, which shall extend its benefits uniformly to all eligible SC/ST employees also. However, the Rules of reservation in promotion shall be ensured at the time of regular promotion. For this reason, it shall not be mandatory to associate members of SC/ST in the Screening Committee meant to consider cases for grant of financial upgradation under the Scheme.

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Comparison of ACP and MACP Scheme

• Under the ACP scheme, for grant of financial upgradation , a Screening Committee shall be constituted for the purpose of processing the cases for grant of benefits under the ACP Scheme. under this 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.
• 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 and 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).
• 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.
• 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 hierarchy.

Thus the abovementioned differentiation was discussed in the case of Union of India (UOI) and Ors.v M.V. Mohanan Nair

Facts of the Case

In this case, a  batch of appeals were 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 Ors. v. Raj Pal and Anr. CWP No. 19387 of 2011 dated 19.10.2011. In these batch matters, the main question in concern is 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.

In this case 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 12.10.1999. At that point of time, Raj Pal claimed parity with other posts like Hindi Typist/LDC which was also in the equivalent pay scale of Rs. 3050-4590/- and had been placed in the scale of Rs. 4000-6000/- on the grant of 1st financial step up on completion of twelve years of regular service.

Raj Pal filed OA No. 1038/CH/2010 before CAT contending that his pay has been wrongly fixed in PB-1 in the scale of Rs. 5200-20200/- with Grade Pay of Rs. 2400/-. He claimed that he was entitled to be fixed in PB-2 in the scale of Rs. 9300-34800/- with Grade Pay of Rs. 4600/-. HoweverThe said writ petition was dismissed by the High Court.

The above judgment of the High Court was challenged in the Supreme Court by filing SLP (C) No. ….CC 7467 of 2013. The SLP was dismissed by the Hon’ble Chamber Judge vide order dated 15.04.2013 on the ground that sufficient explanation has not been given to condone the delay in refiling the SLP.

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Therefore , in the current case of Union of India (UOI) and Ors.v M.V. Mohanan Nair, the Issues are as follows

• 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?
• 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?
• 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?

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 exchequer 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.

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Respondent’s Claim

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. Under MACP Scheme, the Respondent can only claim immediate next Grade Pay and not the corresponding Grade Pay in promotional hierarchy.

Mr. Vinay Kumar Garg, learned Senior Counsel appearing on behalf of some Respondents has submitted that pay band includes a bracket of erstwhile pay scale and the grade pay and the concept of grade pay is a fitment benefit applicable to different pay. Learned Senior Counsel submitted that when a person is to be given benefit, pay, allowance or upgradation of the pay has to be given and in such a case, the upgradation has to be in the next hierarchy of promotional position i.e. grade pay in the next promotional position. It was submitted that pay, allowance and financial upgradation granted to the employees are the “conditions of service” and the same cannot be altered at the will of the employer-Government. Learned Senior Counsel further submitted that MACP scheme envisages merely placement in the immediate next higher grade pay and the word “hierarchy” cannot be dissected from the “recruitment” and “conditions of service”. It was submitted that as per Rule 3(7) of Central Civil Services (Revised Pay) Rules, 2008, “revised pay structure” in relation to any post specified in column (2) of the First Schedule means the pay band and grade pay specified against that post or the pay scale specified in column (5) and (6) thereof. It was submitted that while granting financial upgradation under MACP scheme, the same has to be in the “higher grade pay in the next promotional hierarchy and not merely in the hierarchy of grade pay”.

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

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Petitioner’s/Government’s Stand

Ms. Madhvi Divan, learned ASG appearing on behalf of Union of India has taken us through the salient features of both ACP and MACP schemes and submitted that ACP and MACP schemes shall be subject to the conditions mentioned thereon. Learned ASG has submitted that Sixth Central Pay Commission took the view that ACP led to disparities within the employees in different organisations/departments and recommended adoption of the modified scheme which was accepted by the Government and Sixth Central Pay Commission and MACP scheme are being implemented. It was submitted that under the ACP scheme, the employee is entitled to financial upgradations (two times – on completion of 12 and 24 years of regular service) as per promotional hierarchy. Whereas under the MACP scheme, the financial upgradations (three times – on completion of 10, 20 and 30 years of regular service) are fixed on the basis of immediate next grade pay and therefore, ACP and MACP schemes are significantly different in terms of the effect and benefit to the employees. Learned ASG submitted that the previous ACP scheme was withdrawn and it is superseded by the MACP scheme w.e.f. 01.09.2008 and the Respondents while enjoying the benefits of revised pay structure under the Sixth Central Pay Commission, cannot cherry-pick the benefit of financial upgradation in the next promotional hierarchy under the erstwhile ACP scheme. Learned ASG has further submitted that it is the prerogative of the Government to provide any financial benefit to its employees and so long as such scheme is not discriminatory or arbitrary, the Court may not interfere with schemes of Government fixing pay scales and granting incentives.

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The Court’s Findings and Discussions

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.

The learned amicus and the learned Counsel appearing for the Respondents urged the court to adopt a “purposive interpretation” 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 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 was therefore not 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 court believed that this was  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 exchequer.

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Observing that the decision of expert bodies like the Pay Commission is not ordinarily subject to judicial review, in State of U.P. and Ors. v. U.P. Sales Tax Officers Grade II Association[1], the Supreme Court held as under:

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……

In Secretary, Government (NCT of Delhi) and Ors. v. Grade-1 Officers Association and Ors. [2], 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[3], 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.

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. HoweverRaj 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.

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.

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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 staff side stated that such a dispensation (previous contention )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. 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.

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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.

Therefore it was held that 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.

However, as pointed out in the meetings, 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.

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This post is written by Rachita Yedhula.

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[1]2003) 6 SCC 250

[2](2014) 13 SCC 296

[3](1998) 2 SCC 198