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Employee Can't Claim ACP Benefits On The Ground That It Is More Beneficial Than MACP Scheme : Supreme Court

Shruti Kakkar
9 March 2022 2:50 PM GMT
Employee Cant Claim ACP Benefits On The Ground That It Is More Beneficial Than MACP Scheme : Supreme Court
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The Supreme Court has set aside a judgment of the Delhi High Court which directed for applying the Modified Assured Career Progression (MACP) Scheme in the Delhi Development Authority with effect from January 1, 2006.The bench of Justices UU Lalit, SR Bhat and Bela M Trivedi was considering SLP assailing Delhi High Court's order of directing to extend the MACP benefits to the Delhi...

The Supreme Court has set aside a judgment of the Delhi High Court which directed for applying the Modified Assured Career Progression (MACP) Scheme in the Delhi Development Authority with effect from January 1, 2006.

The bench of Justices UU Lalit, SR Bhat and Bela M Trivedi was considering SLP assailing Delhi High Court's order of directing to extend the MACP benefits to the Delhi Development Authority employees from 1st January, 2006.

The Supreme Court held that the employees cannot claim a vested right for Assured Career Progression(ACP) scheme. The employees claimed for a second upgradation under the previous ACP scheme on the ground that it was more beneficial than the MACP scheme. The Court turned down this plea.

The Court observed hat a set of employees, who might have benefitted from the then prevailing regime or policy, cannot in the absence of strong and unequivocal indications in the later policy insist that they have a right to be given the benefits under the superseded policy.

While allowing the appeal in The Vice Chairman Delhi Development Authority V. Narender Kumar & Ors., the bench said,

"That, some employees could have benefitted more under the ACP benefits,if the MACP scheme had not been introduced from an earlier date, is no ground to hold so and compel an executive agency to grant the claimed benefits".

The Court observed that second ACP upgradation was not an automatic right as it was dependent on various external factors and that employee cannot claim a vested right for it.

Factual Background

The Central Government, in supersession of the ACP Scheme, introduced the MACP scheme, by an office memorandum in May, 2019. The MACP was made applicable from an earlier date, i.e. 1st September, 2008, through a specific condition in that scheme

The respondent employees were appointed as regular work charged Malis by DDA from various dates beginning from January 3, 1985. On completion of 12 years of regular service, they were granted first financial upgradation under the Assured Career Progression(ACP) Scheme with effect from January 3, 1997. They became eligible for second financial upgradation with effect from January 3, 2009 upon completion of 24 years of service which was not granted to them by DDA. Since DDA introduced MACP scheme with effect from September 1, 2008 by an order dated October 6, 2009, the employees approached Central Administrative Tribunal ("CAT") contending that they should have been granted the benefit of second ACP as the claim of second ACP benefit had accrued to them earlier.

There is no dispute that under the MACP Scheme, the employees were granted the second MACP benefits- later. The employees' grievance was that the DDA introduced the MACP scheme with effect from (01/09/2008) by an order dated 06.10.2009 and according to them, as their eligibility (indeed, as claimed, their entitlement) to claim the second ACP benefit had accrued to them earlier, they should have been granted the benefit of second ACP. Consequently, they approached the Central Administrative Tribunal (CAT) by filing original applications.

Before CAT, the employee- respondents contended that the ACP Scheme was more beneficial to them, in comparison with benefits under the MACP Scheme. 

CAT while opining that the employees were entitled to the claim, allowed the applications and directed DDA to consider their cases for granting of the financial up-gradations under the ACP Scheme till 19.05.2009. The Tribunal also directed DDA to grant appropriate pay scales accordingly in case they being qualified and eligible with all consequential benefits.

Aggrieved by the Tribunal's order, DDA approached Delhi High Court. DDA before the High Court contended that with effect from 1st September, 2008, the MACP Scheme had become operational and that the applicants- employees were no longer entitled to receive the benefits under the (erstwhile) ACP scheme. It was also contended that the ACP scheme was valid only until 31st August, 2008 and by that date the employees had not completed 24 years of service. It was further submitted that since the MACP scheme was introduced by the Office Memorandum ("OM") dated 19th May, 2019, superseding the earlier ACP scheme, the question of granting any benefit under the ACP scheme after 31st August, 2008 did not arise.

The High Court relied on the decision Union of India v. Balbir Singh Turn (2018) 11 SCC 99 where it was held that Armed Forces Personnel, had to be given the benefit of the MACP from the date of the recommendations of the 6th Central Pay Commission (January 1, 2006) and not from 1st September 2008. Based on this logic, the High Court directed that the MACP benefits should be extended to the employees with effect from January 1, 2006.

Submission Of Parties

Appearing for DDA, Senior Advocate Kailash Vasudev submitted that MACP scheme came into effect on 01.09.2008 and this should be the criteria with respect to which applicability of whether the old ACP or the MACP should be decided. It was also the counsel's contention that the employees completed 24 years in January 2009 i.e. after the date of coming into force of the MACP, and hence were not entitled to up-gradation under the old ACP. It was also contended that the High Court failed to recognise that the respondents became eligible for the second up-gradation only after the date of issuance of the MACP and consequently were not entitled to an up-gradation under the old ACP scheme.

Reliance was placed on the judgements in U.P. & Ors. Vs. U.P. Sales Tax Officer Grade-II Officer 2003 (6) SCC 250, Secretary Government (NCT of Delhi) and Ors. Vs. Grade-I officers Associations & Ors 2014 (13) SCC 296 , State of Tamilnadu v Arumugham (1998) 2 SCC 198, State of Haryana & Anr. v Haryana Civil Secretariat Personal Staff Association 2002(6) SCC 72 , Union of India v. M.V. Mohanan Nair (2020) 5 SCC 421 and Union of India v. R.K. Sharma (2021) 5 SCC 579.

Appearing for some of the employees, Advocate MK Bhardwaj contended that the employee's had never sought for High Court's direction for operation of MACP Scheme from January 1, 2006. It was also his contention that their right could not be defeated on account of policy which was adopted later. Counsel further contended that the right to be considered for the ACP benefits, was in the nature of a vested right, which had to be granted even after the coming into force, of the MACP scheme.

Supreme Court's Analysis

At the outset, the bench referred to the intent of the ACP scheme :

"The original scheme, i.e. the ACP scheme, (introduced by the OM dated 9-8-1999) granted career progression to Central Government civilian employees. Its intent was to extend relief for stagnation faced by employees' due inadequate promotional probabilities. The ACP Scheme was introduced by the Central Government -with modifications- based on the recommendations of the Fifth Central Pay Commission. That scheme, granted financial up-gradation after 12 years of regular service and a second, after 12 years of regular service from the date of the first financial up-gradation, subject to fulfilment of prescribed conditions"

The Court underscored that financial up-gradation under the ACP Scheme was available only if regular promotion during the stipulated intervals, 12 years and 24 years, were not granted to an employee.

Distinction between ACP and MACP

"The noticeable feature of the MACP Scheme- is that three increments are to be granted to employees on completion of 10, 20 and 30 years of service. According to the MACP scheme, financial up-gradation is admissible on completion of 10 years of continuous service -in the same grade pay. The distinction between the ACP and the MACP scheme is not only with respect to the number of benefits (i.e., two under the ACP scheme, and three under the MACP scheme) but also that the former assured the promotional grade, where the latter (MACP scheme) only assured higher pay"

Correctness of HC relying on Balbir Singh decision

The bench next dealt with the correctness of the High Court applying Union of India v. Balbir Singh Turn. In the said judgement, the question which arose for consideration was the correct date from which the MACP up- gradation scheme, was applicable to employees (below the rank of officer). The Court in Balbir Singh's judgement had held that the scheme had to be applied from January 1, 2006 and not the date designated by the concerned order September 1, 2008.

Remarking that there were no such parallel facts in the present case, the bench said,

"This Court in Balbir Singh Turn (supra) upheld that finding recorded by the AFT. Instructions issued on 30-5-2011 were found to be contrary to the Resolution dated 30-8-2008 as, according to the resolution 1-1-2006 was the effective date for implementation of MACPs in matters relating to pay and dearness allowance. There is no such parallel, in the facts of this case."

Referring to the judgements in Union of India v. M.V. Mohanan Nair (2020) 5 SCC 421 and Union of India v. R.K. Sharma (2021) 5 SCC 579, the bench said, "Having regard to this clearly enunciated principle, which, in this court's opinion, stems from a correct reading of the scheme, the reasoning of the High Court, that the MACP scheme is operative not from 01-09-2008, but from 01-01-2006, is untenable. The mere circumstance that the resolution of the Government which led to adoption of the MACP also contained the effective date for implementation of the pay-benefits of the Pay Commission recommendations, did not obliterate the fact that the date from which the scheme was to be made effective, was another one."

With regards to High Court's reasoning that DDA was an autonomous – a statutory – organization and High Court assuming that MACP Scheme applied automatically, the bench said,

"The other reason why the High Court went wrong, in holding what it did, is that DDA is an autonomous – a statutory – organization. No doubt, it largely follows the Central Government's policies, in respect of pay and allowances, and other benefits for its employees. However, any revision of pay-structure or revision in other terms and conditions, of Central Government personnel cannot and do not automatically apply to the DDA; it has to consider the new or fresh scheme formulated by the Central Government, and adopt it, if necessary, after appropriate adaptation, to suit its needs. Therefore, the Central Government's MACP scheme did not apply to it automatically. The DDA decided to apply it, through an office order dated 06.10.2009.18 The High Court has overlooked this aspect, and apparently assumed that the MACP scheme applied automatically, upon its adoption by the Central Government, to the DDA."

To deal with the aspect of employee's contention that the right to be considered for the ACP benefits, was in the nature of a vested right, which had to be granted even after the coming into force, of the MACP scheme, the bench relied on the judgements in State of Gujarat vs Raman Lal Keshav Lal Soni (1983) 2 SCR 287, Chairman, Railway Board v. C.R. Rangadhamaiah 1997 Supp (3) SCR 63.

The Court noted that none of the employees actually earned a second financial up-gradation.

"They undoubtedly became eligible for consideration. However, the eligibility ipso facto could not, having regard to the terms of the ACP scheme translate into an entitlement. The eligibility was, to put it differently, an expectation. To be entitled to the benefits, the public employer (here DDA) had to necessarily review and consider the employees' records, to examine whether they fulfilled the eligibility conditions and, based on such review individual orders had to be made by DDA. In other words, second ACP up-gradation was not automatic but dependant on external factors", the Court observed.

"Such expectation is akin to a candidate being declared successful in a recruitment process and whose name is published in the select list. That, such candidate has no vested right to insist that the public employer must issue an employment letter, has been held by a Constitution Bench Judgment of this Court in Shankarsan Dash vs Union Of India. Therefore, it is held that employees' contention that they acquire a vested right in securing the second ACP benefit is insubstantial," court said while observing that the employee's contention that they had acquired a vested right in securing second ACP benefit was insubstantial.

"No doubt, the MACP scheme is an executive order. Usually, such orders are expressed to be prospective. However, the executive has the option of giving effect to such an order, from an anterior date; especially if it confers some advantages or benefits to a sizeable section of its employees, as in this case. The nature of benefits- as emphasized by this court earlier, were by way of incentives. They are not embodied under rules. In such circumstances, a set of employees, who might have benefitted from the then prevailing regime or policy, cannot in the absence of strong and unequivocal indications in the later policy (which might be given effect to from an anterior date, like in this case), insist that they have a right to be given the benefits under the superseded policy," court further added while allowing the SLP. 

"The myriad intricate details which the executive has to consider, while framing a scheme applicable generally, to a large section of the employees, may not always admit of one, or one set of solutions. To insist that a particular kind of benefit, hitherto applicable, should be continued for a set of employees, while the others should be governed by another, new set or scheme, would be imposing a significant burden on the administration, apart from swelling financial costs as well as administrative energies. Such directions would result in creating different time warps, rendering efficient administration of personnel policies impracticable. Sans palpable or facial arbitrariness, the courts should be circumspect in adding conditions, or tampering with such arrangements."


Case Title: The Vice Chairman Delhi Development Authority V. Narender Kumar & Ors.| Civil Appeal No(s). 1880 of 2022

Coram: Justices UU Lalit, SR Bhat and Bela M Trivedi

Citation : 2022 LiveLaw (SC) 261

Click Here To Read/Download Judgment



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