Applicability of 6th pay commission to retired employees, below officer rank of Armed Forces Personnel
December 9, 2017
Supreme Court Bench of Justice Madan B Lokur and Justice Deepak Gupta pronounced Judgment in an appeal filed by Union of India against the order of Armed Forces Tribunal by its order dated 21.05.2014 held that the benefit of ACP granted to an employee is part of the pay structure which not only affects his pay but also his pension and, therefore, held that the ACP is not an allowance but a part of pay and, therefore, in terms of Clause (i) of the Government Resolution the MACP was payable w.e.f. 01.01.2006.
Facts of the case are the 6th Central Pay Commission was set up by the Government of India to make recommendations in matters relating to emoluments, allowances and conditions of service amongst other things. The Pay Commission also made recommendation with regard to armed forces personnel. On 30th August, 2008, the Central Government resolved by a resolution of that date to accept the recommendation of the 6th Central Pay Commission ('CPC' for short) with regard to the Personnel Below Officer Rank (PBOR) subject to certain modifications.
Under the recommendations made by the 5th CPC there was a provision for Assured
Career Progression (ACP). Vide this scheme, if an employee was not promoted he
was entitled to get the next higher scale of pay after completion of 12/24 years
of service. The 6th CPC recommended the grant of benefit of ACP after 10 and 20
years of service. The Union of India, however decided to grant 3 ACP
upgradations, after 8,16 and 24 years of service to PBORs, as per Clause (ix)
extracted above. However, it would be pertinent to mention that the 6th CPC did
away with the concept of pay scales and reduced the large number of pay scales
into 4 pay bands and within the pay bands there was a separate grade pay
attached to a post.
All the petitioners before the Armed Forces Tribunal ('AFT' for short) who are
respondents before the Supreme Court are persons below officer rank. The
respondents in this case retired after 01.01.2006 but prior to 31.08.2008. They
claim that the benefit of the Modified Assured Career Progression ('MACP' for
short) was denied to them on the ground that the MACP was made applicable only
with effect from 01.09.2008. The respondents approached the AFT praying that
they are entitled to the benefit of MACP w.e.f. 01.01.2006, i.e., the date from
which the recommendation of the 6th CPC with regard to pay and benefits were
made applicable. The stand of the Union of India was that the MACP was
applicable only w.e.f. 01.09.2008 and, therefore, the respondents who had
retired prior to the said date were not entitled to the benefit of the MACP.
The Armed Forces Tribunal vide the impugned order dated 21.05.2014 held that the
benefit of ACP granted to an employee is part of the pay structure which not
only affects his pay but also his pension and, therefore, held that the ACP is
not an allowance but a part of pay and, therefore, in terms of Clause (i) of the
Government Resolution the MACP was payable w.e.f. 01.01.2006.
The question that arises for decision is whether the benefit of MACP is
applicable from 01.01.2006 or from 01.09.2008.
Supreme Court said that "We may also point out that the Resolution dated
30.08.2008 whereby the recommendation of the Pay Commission has been accepted
with modifications and recommendations with regard to pay structure, pay scales,
grade pay etc. have been made applicable from 01.01.2006. This is a decision of
the Cabinet. This decision could not have been modified by issuing executive
instruction. The letter dated 30.05.2011 flies in the face of the Cabinet
decision reflected in the Resolution dated 30.08.2008. Thus, administrative
instruction dated 30.05.2011 is totally ultra vires the Resolution of the
Government."
Since the court find no merit in the appeals, which are accordingly disposed of
with all pending applications.
Read the Judgment of Supreme Court dated 08.12.2017