Supreme Court: Benefits from the MACPS schemes are an incentive rather than a pay raise

Supreme court Law Insider IN
Supreme court Law Insider IN

Kriti Agrawal

According to the Supreme Court, benefits derived from the Assured Career Progression Scheme (ACPS) and the Modified ACPS (MACPS) are rewards rather than pay.

The Court granted the Centre’s appeal against the Delhi High Court’s order to grant the second financial upgradation to MACPS employees with effect from January 1, 2006, citing a decision in Union of India & Ors. v. Balbir Singh Turn.

The Centre argued before the Supreme Court that in the above case it was determined that payment under the ACPS is part of the pay structure, while in a later decision in Union of India and Ors. v. M.V. Mohanan Nair, it was determined that both the ACP and MACP schemes are reward schemes.

It was argued that the workers were entitled to the incentive under the ACP Scheme, which was in effect until August 31, 2008, and that they should not pursue the applicability of the MACPS as of January 1, 2006.

The bench of Justice L. Nageswara Rao and Justice Vineet Saran observed that, “In view of the judgment of this Court in M.V. Mohanan Nair, the Respondents and other similarly situated employees are entitled for financial upgradation under MACPS only to the next grade pay and not to the grade pay of next promotional post. It is clear from the resolution dated 30.08.2008 that the recommendation of the 6th Pay Commission was accepted by the Government and was made effective from 01.01.2006 in respect of civilian employees with regard to revised scales of pay and dearness allowances.

In so far as the revised allowances other than dearness allowance, recommendation of the 6th Pay Commission were given effect from 01.09.2008. The judgment in M.V. Mohanan Nair clinches the issue. Benefits flowing from ACP & MACP Schemes are incentives and are not part of pay.

The resolution dated 29.08.2008 is made effective from 01.09.2008 for implementation of allowances other than Pay and DA which includes financial upgradation under ACP & MACP Schemes. Therefore, the Respondents and other similarly situated officers are not entitled to seek implementation of the benefits of MACPS w.e.f. 01.01.2006 according to the resolution dated 29.08.2008.”

Allowing the appeal, the Court also agreed with the Centre’s position that implementing MACPS uniformly for civilian workers beginning January 1, 2006 would result in large-scale recoveries of excess pay.

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