REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.442 OF 2022
The Director, Directorate of Enforcement & Anr.     ..Appellant (S)
VERSUS
K. Sudheesh Kumar & Ors.                    ..Respondent (S)
J U D G M E N T 
M. R. Shah, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   dated   23.10.2019   passed   by   the   High
Court of Kerala at Ernakulam in OP (CAT) No.171 of 2019, by
which   the   High   Court   has   allowed   the   said   original   petition
(OP)   and   set   aside   the   order   passed   by   the   learned   Central
Administrative Tribunal, Ernakulam Bench and has declared
that   respondent   Nos.1   &   2   herein   –   original   petitioners   are
entitled   to   grade   pay   of   Rs.6600/­   on   their   third   financial
upgradation as per  the Modified Assured Career  Progression
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(MACP)   Scheme   and   they   be   paid   the   pension   accordingly
with   effect   from   April,   2015,   the   Director,   Directorate   of
Enforcement,   New   Delhi   and   another   –   original   respondents
before the High Court, have preferred the present appeal. 
2. That the private respondent Nos.1 & 2 herein were appointed
as Assistant Enforcement Officer (AEO) in the year 1976 and
1977, respectively. That in the year 2009, the Government of
India – Ministry of Personnel, Public Grievance and Pensions
(Department   of   Personnel   and   Training)   notified   the   MACP
Scheme for the Central Government Civilian Employees. The
Scheme further provided as per clause 8.1 (which is relevant
so far as the present matter is concerned) ‘consequently upon
the   implementation   of   Sixth   CPC’s   recommendations,   grade
pay of Rs.5400 is now in two pay bands viz., PB­2 and PB­3.
It further provided that the grade pay of Rs.5400 in PB­2 and
Rs.5400  in   PB­3   shall   be   treated   as   separate   grade   pays   for
the   purpose   of   grant   of   upgradations   under   MACP   Scheme’.
However,   it   so   happened   that   while   granting   third   financial
upgradation   vide   order   dated   17.11.2009,   the   private
respondents herein and others were granted the grade pay of
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Rs.6600 for PB­3 under MACP Scheme, though as per clause
8.1   PB­3  carried   the   grade   pay  of  Rs.5400.   However,   on   the
objection   being   raised   by   the   Audit   Department   their   grade
pays   (GP)   of   Rs.6600   in   PB­3  was   modified/corrected   as   GP
of   Rs.5400   as   per   clause   8.1.   Therefore,   respondent   Nos.1
and   2   herein   approached   the   Central   Administrative
Tribunal,   Ernakulam   Bench   and   prayed   to   continue   the   GP
of Rs.6600 as per the earlier order dated 17.11.2009 and not
to   make   any   recovery.   A   decision   of   the   Madras   High   Court
was   pressed   into   service   by   which   a   similar   order   of
withdrawing  the  GP  of  Rs.6600  and  to  grant  GP  Of  Rs.5400
for PB­3 was set aside. On relying upon the clause 8.1 of the
MACP   Scheme   by   which   the   implementation   of   Sixth   CPC’s
recommendations,   grade   pay   of   Rs.5400   was   in   two   pay
bands i.e., PB­2 and PB­3 and for grant of upgradation under
MACP  Scheme  they   shall  be treated  as  separate  grade  pays,
the learned Tribunal dismissed the original application (OA).
3. Feeling   aggrieved   and   dissatisfied   with   the   judgment   and
order   passed   by   the   Central   Administrative   Tribunal
dismissing   the   said   OA,   respondent   Nos.1   &   2   herein
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preferred the original petition before the High Court. By the
impugned   judgment   and   order   and   ignoring   clause   8.1   of
the   MACP   Scheme   the   High   Court   has   allowed   the   said
petition   by   observing   that   the   next   promotion   post   of
Assistant   Director   which   is   in   the   PB­3   would   be   that   of
Deputy Director which carries a grade pay of Rs.6600, when
the third financial upgradation is due to an employee, it has
to   be   of   the   next   promotional   post   in   the   hierarchy   as   per
the   Recruitment   Rules.   Feeling   aggrieved   and   dissatisfied
with the impugned judgment and order passed by the High
Court, the department has preferred the present appeal. 
       
4. Ms. Madhavi Divan, learned ASG appearing on behalf of the
appellants   has   vehemently   submitted   that   the   impugned
judgment   and   order   passed   by   the   High   Court   is   just
contrary to the decision of the Delhi High Court in the case
of   National   Council   of   Educational   Research   &   Training
& Anr. Vs. Anita Gupta & Anr.  2016 SCC OnLine Del 4720
as well as to the decision of this Court in the case of   Union
of India and others Vs. M.V. Mohanan Nair   (2020) 5 SCC
421.   
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4.1 It is submitted that on interpretation of very MACP Scheme,
it is observed and held by this Court that the employees are
entitled   to   the   grade   pay   as   provided   under   the   MACP
Scheme which has been framed on the recommendations of
the   pay   commission.   It   is   submitted   that   on   interpreting
MACP   Scheme,   it   is   specifically   observed   and   held   by   this
Court   that   MACP   Scheme   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,   2008   and   has   nothing   to   do   with   the   next
promotional post. 
      
4.2 It is submitted that in the present case the High Court has
allowed   the   grade   pay   of   Rs.6600.   However,   as   per   clause
8.1,   PB­2   and   PB­3   carried   grade   pay   of   Rs.5400   and   it
specifically  provided  that   the  grade  pay  of  Rs.5400  in  PB­2
and   grade   pay   of   Rs.5400   in   PB­3   shall   be   treated   as
separate grade pays for the purpose of grant of upgradation
under   MACP   Scheme.   It   is   submitted   that   therefore
respondent Nos.1 & 2 – original petitioners as per the MACP
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Scheme   shall   be   entitled   to   the   grade   pay   of   Rs.5400   i.e.,
next grade pay for PB­3. It is submitted that as such by the
impugned judgment and order  and directing to grant grade
pay   of   Rs.6600   the   High   Court   has   modified   the   MACP
Scheme and has granted the benefit of three steps upward. 
4.3 Making   the   above   submissions   and   relying   upon   the
aforesaid decisions, it is prayed to allow the present appeal.
5. The   present   appeal   is   vehemently   opposed   by   Shri   Mathai
Paikaday,   learned   Senior   Advocate   appearing   on   behalf   of
the private respondent Nos.1 & 2 herein.  
5.1 It   is   vehemently   submitted   by   learned   Senior   Advocate
appearing   on   behalf   of   the   private   respondent   Nos.1   &   2
that   the   employee   shall   be   entitled   to   the   next   higher   pay
and the submissions made on behalf of the appellants that
both   PB­2   and   PB­3   shall   carry   grade   pay   of   Rs.5400   is
accepted in that case the purpose of higher­grade pay shall
be   frustrated.   It   is   submitted   that   when   the   next   higher­
grade   pay   would   be   Rs.6600,   the   High   Court   has   rightly
directed to grant grade pay of Rs.6600.  
5.2 It   is   submitted   that   it   is   true   that   the   High   Court   has
wrongly used the word next promotion post. It is submitted
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that   the   question   is   not   of   next   promotional   post   but   the
question is of next higher grade pay. 
5.3 In the alternative it is prayed by the learned Senior Advocate
appearing   on   behalf   of   respondent   Nos.1   &   2   and   relying
upon   the   decision   of   this   Court   in   the   case   of   State   of
Rajasthan   Vs.   Mahesh   Kumar   Sharma   (2011)   4   SCC   257
that if this Court is inclined to accept the submissions made
on behalf of the appellants and set aside the judgment and
order   passed   by   the   High   Court   holding   that   respondent
No.1   &   2  shall   be   entitled   to   grade  pay   of   Rs.5400,  in   that
case  no  recovery   be  ordered   as  respondent  Nos.1  &   2  have
already   retired   and   the   difference   would   be   of   Rs.1200
approximately   per   month   so   far   as   the   pension   is
concerned.    
6. We   have   heard   learned   counsel   appearing   on   behalf   of   the
respective parties. 
7. At   the   outset   it   is   required   to   be   noted   that   the   issue
involved   in   the   present   appeal   is   as   such   squarely   covered
by   the   decision   of   this   Court   in   the  case  of   M.V.   Mohanan
Nair  (supra). By detailed judgment and order this Court has
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interpreted   the   very   MACP   Scheme   and   it   is   observed   and
held that under the MACP Scheme employees are entitled to
the immediate next higher  grade pay as given in Section 1,
Part A of the First Schedule of the CCS (Revised Pay) Rules,
2008.   It   is   specifically   observed   and   held   by   this   Court   in
the aforesaid decision that MACP has nothing to do with the
next   promotional   post   and   what   the   employee   would   be
entitled   would   be   the   immediate   next   higher   grade   pay   in
the   hierarchy   of   the   recommended   revised   pay   bands   and
grade pay as given in the CCS (Revised Pay) Rules, 2008. As
per clause 8.1 of the MACP Scheme ‘consequently upon the
implementation of Sixth CPC’s recommendations, grade pay
of PB­2 and PB­3 would be Rs.5400. It specifically provides
that the grade pay of Rs.5400 in PB­2 and Rs.5400 in PB­3
shall   be   treated   as   separate   grade   pays   for   the   purpose   of
grant  of upgradations  under   the  MACP Scheme’. Therefore,
respondent   Nos.1   &2   as   PB­2   shall   be   entitled   to   the   next
grade pay of Rs.5400 as per clause 8.1 and as per Section 1,
Part A of the First Schedule of the CCS (Revised Pay) Rules,
2008. The High Court has allowed the grade pay of Rs.6600
by considering the next promotion post of Assistant Director
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i.e.,  Deputy   Director   which   carries  a  grade   pay   of  Rs.6600.
However,   the   aforesaid   interpretation   would   be   contrary   to
the   MACP   Scheme.   On   considering   the   relevant   clauses   of
the   MACP   Scheme,   it   appears   that   the   MACP   Scheme
envisages 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, 2008. Thus, the High Court
has   committed   a   grave   error   in   allowing   the   grade   pay   of
Rs.6600   ­   the   grade   pay   which   was   available   to   the   next
promotional post as Deputy Director. Respondent Nos.1 & 2
as per PB­2 were entitled to the grade pay of Rs.5400 as PB­
3 as per clause 8.1. 
8. By   the   impugned   judgment   and   order   and   while   granting
grade pay of Rs.6600 to respondent Nos.1 & 2 virtually, the
High Court has modified the MACP Scheme which has been
framed   by   the   Government   on   the   recommendations   of   the
expert   body   like   the   pay   commission   and   its
recommendations   for   the   MACP   Scheme.   As   observed   and
held   by   this   Court   in   the   case   of   M.V.   Mohanan   Nair
(supra) the ACP which is now superseded by MACP Scheme
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is   a   matter   of   Government   policy   and   interfering   with   the
recommendations   of   the   expert   body   like   the   pay
commission and its recommendations for the MACP Scheme
would   have   serious   impact   on   the   public   exchequer.   It   is
further   observed   that   the   recommendations   of   the   pay
commission   for   the   MACP   Scheme   have   been   accepted   by
the   Government   and   implemented.   It   is   further   observed
that therefore the High Court has no jurisdiction to interfere
with  the   Government   policies   in  the   form   of  MACP  Scheme
which   was   after   accepting   the   Sixth   Central   Pay
Commission. In view of the above and for the reasons stated
above  and the binding   decision  of  this Court  in the case of
M.V.   Mohanan   Nair   (supra)   with   which   we   also   agree,   the
impugned   judgment   and   order   passed   by   the   High   Court
granting   grade   pay   of   Rs.6600   to   respondent   Nos.1&   2   is
unsustainable and deserves to be quashed and set aside.
However, we observe that the view which we are taking
is on the premise that neither the MACP Scheme nor Clause
8.1 is under challenge and as per the law laid down by this
Court   in   M.V.   Mohanan   Nair   (supra) ,   an   employee   is
entitled   to   the   higher   grade   pay   as   provided   under   MACP
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Scheme,   more   particularly,   as   per   Section   1,   Part   A   of   the
First   Schedule   of   the   CCS   (Revised   Pay)   Rules,   2008.
Therefore,   so   long   as   Clause   8.1   and   the   grade   pay
mentioned as per Section 1, Part A of the First Schedule of
the   CCS   (Revised   Pay)   Rules,   2008   stands,   the   employee
shall be entitled to the grade pay accordingly.   Therefore, if
any of the employees is aggrieved by Clause 8.1 and if in his
opinion, there is any anomaly the same has to be challenged
by   the   aggrieved   employee,   which   can   be   considered   in
accordance with law and on its own merits.  However, as the
same   is   not   under   challenge,   we   have   to   go   by   the   MACP
Scheme as it is.  
9. In   view   of   the   above   and   for   the   reasons   stated   above   the
impugned judgment and order passed by the High Court is
hereby   quashed  and  set  aside  and   the   judgment   and   order
that   of   the   Central   Administrative   Tribunal   is   hereby
restored. It is observed and held that on implementation of
MACP   Scheme   respondent   No.1   and   2   herein   shall   be
entitled  to  the grade pay  of  Rs.5400 and not of Rs.6600 as
claimed   by   them.   Their   pensions   be   refixed   accordingly.
However,   it   is   observed   that   as   respondent   Nos.1   &   2   are
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the   retired   employees   and   till   date   they   have   received   the
pension   considering   the   grade   pay   of   Rs.6600   and   being
retired persons it will be very difficult for them to refund the
difference   in   the   pay   pension,   in   the   peculiar   facts   and
circumstances   of   the   case   we   direct   that   there   shall   be   no
recovery  of the difference in the pension  between  the grade
pay   of   Rs.5400   and   grade   pay   of   Rs.6600   for   the   period
prior   to   December,   2021.   However,   on   refixation   of   the
pension as per the present judgment and order, fixing their
grade   pay   of   Rs.5400   they   shall   be   paid   the   pension
accordingly   from   January,   2022   onwards.   The   present
appeal   is   allowed   accordingly,   however,   with   the   above
observations and directions. No costs.      
…………………………………J.
                 (M. R. SHAH)
…………………………………J.
      (SANJIV KHANNA)
New Delhi, 
January 28, 2022.
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