Benefits of MACPS w.e.f. 1.1.2006 – Judgment of Supreme Court

Benefits of MACPS w.e.f. 1.1.2006 – Judgment of Supreme Court

No.IRTSA/Memo RB/2018-8

Date: 08-08-2018

Member Staff,

Railway Board.

Respected Sir,

Subject:

Benefits of MACPS w.e.f. 1.1.2006 – since MACPS is given as a part of
pay structure and is not an allowances as per recommendations Sixth
CPC, Resolution of Govt. thereon and as per judgment of Supreme Court.

Ref: 1. Ministry of Defence letter No.14(1)/99-D(AG), dated 25.07.2018.

2. Judgement of Supreme Court in Civil Appeal No.3744 of 2016 Dated
8-12-2017.

3. Recommendations of Sixth Central Pay Commission para 6.1.15, 6.5.2 &
6.5.4

4. Ministry of Finance Notification No.1/1/2008-I C & Government of
India Resolution dated 29.8.2008

5. Railway Board’s OM No. PC-V/2009/ACP/2 (RBE No.101 /2009) dated
10.06.2009 – Regarding Recommendations of Sixth CPC – Modified Assured
Career Progression Scheme (MACPS) for Railway Employees,

6. Ministry of Railways Notification RBE No. 103/2008 dated 04.09.2008

7. Railway Service (Revised Pay) Rules, 2008, No. PC VI/2008/I/RSRP/1 (RBE
No:108/2008) dated 11.09.2008

1. a) We seek your kind intervention on date of implementation of MACPS
w.e.f 1.1.2006 (instead of 1-9-2008) as has been held by the Supreme Court
of India vide its judgment cited above wherein MACPS has been held to be a
part of pay structure recommended by 6th CPC and not to be considered as
allowance which were implemented from 1.9.2008. The judgement has cited the
Resolution of the Government of India dated 30-8-2008 referred to above as
Notification of MOF where in in MACPS has been defined as Pay and not as
Allowance and has thus to be allowed from 1-1-2006.

b) Consequent upon the said judgment of the Supreme Court Judgement
Ministry of Defence made the MACP Scheme operational from 01.01.2006 vide
its orders dated 25-7-2018 cited above.

2. Sixth CPC Recommendations on Date of implementation:

a) Reg. Pay Structure: 6th CPC in para 6.5.2 & 6.5.4 of its
report (Annexure-I) had recommended for implementation of revised scheme of
pay bands and grade pay as on 1/1/2006 retrospectively

b) Reg. Allowances: 6th CPC had recommended for implementation of
revised allowances to take effect prospectively.

c) Reg. Pay: 6th CPC had recommended for implementation of revised
pay retrospectively from 1-1-2006, as clear from the relevant Para
reproduce below:


6.5.2. The Commission has devised the revised scheme of pay bands and
grade pay on the basis of price index as on 1/1/2006. Consequently, the
revised structure of pay bands and grade pay being recommended in this
Report would need to be implemented from 1/1/2006. The Government will
have to pay arrears of salary on account of fixation of pay in the
revised pay bands and grade pay retrospectively with effect from
1/1/2006.

3. Ministry of Finance vide Gazette of India, Extraordinary Notification of
Resolution No.1/1/2008-I C, dated 29.8.2008 had implemented revised pay
w.e.f.1.1.2006. But it implemented MACPS and all allowances except DA
w.e.f.1.9.2008. Relevant rules of finance ministry resolution is attached
as

Annexure-II.

4. Ministry of Railways also implemented revised pay w.e.f.1.1.2006 and all
allowances except DA w.e.f.1.9.2008. Relevant part of RBE No. 103/2008
dated 04.09.2008 is attached as Annexure-III

5. Railway Board implemented the revised rate of NPA effective from the
date an employee drawing pay in the revised scale applicable to him in
accordance with the provisions of the Railway Services (Revised Pay) Rules,
2008, i.e. w.e.f. 1.1.2006, vide its letter No. PCV/2008/A/O/1(NPA) (RBE
No. 122/2008) dated 22.9.2008. Relevant part of RSRP is attached as
Annexure-IV

6. It is very much evident that 6th CPC recommended MACPS as part of pay
structure. Subsequent resolution issued by Finance Ministry, (relevant
paras of resolution implemented revised pay w.e.f. 1.1.2006. Only the
allowances were implemented w.e.f.1.9.2008 while the Pay & DA were
revised w.e.f. 1-1-2006.

Read also :  7th CPC: Risk and Hardship Allowance : Railway Board Order

7. MACPS is a part of pay structure. But MACPS order have been implemented
w.e.f.1.9.2008, which is against the 6th CPC recommendations and Government
of India’s resolution issued vide MOF Notification dated 29-8-2008.

8. A). Hon’ble Supreme Court of India in Civil Appeal Diary No.3744 of 2016
decided on 8-12-2017(copy of relavant para of judgemnt attached as
Annexure-V) had 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
will apply from 01.01.2006.

B). The Court had further ordered and held that there can be no dispute
that grant of ACP is part of the pay structure.

C). Apex Court is very clear on its Judgement that, resolution dated
30.08.2008 on implementation of 6th CPC recommendations (with regard to pay
structure, pay scales, grade pay, etc) are applicable from 01.01.2006. This
is a decision of the Cabinet and could not have been modified by issuing
executive instructions.

D). The apex court also disposed bunch of appeals by a common Judgement
since similar questions of law are involved.

9. Consequent upon the Judgement of Honb’le Supreme Court, Ministry of
Defence vide letter No.14(1)/99-D(AG), dated 25.07.2018 (copy attached as
Annexure-VI) made the MACP Scheme operational from 01.01.2006.

10. It is also pertinent to mention that rules & procedures for MACPS
is being followed uniformly for all Government employees irrespective of
departments / ministries, who are all covered under Central Pay
Commissions.

11. It is, therefore, requested that MACPS may please be implemented from
1.1.2006 since MACPS is part of pay structure – as recommended by 6th CPC,
accepted by the Government of India vide its Resolution Dated 29-8-2008 and
implemented by MoD consequent upon the Judgement of Hon’ble Supreme Court.

Thanking you in anticipation, with kind regards,

Encls: 6 Annexure


Yours faithfully,

Sd/-
Harchandan Singh,

General Secretary, IRTSA

Encls: 6 Annexure

1. 6th CPC recommendations on Date of effect

2. Relevant para of Gazette of India, Extraordinary, Ministry of Finance
Notification No.1/1/2008-I C, dated 29.8.2008

3. Relevant Para of Ministry of Railways Notification RBE No. 103/2008
dated 04.09.2008

4. Rule 4 of Railway Service (Revised Pay) Rules, 20008, No.
PC-VI/2008/I/RSRP/1 (RBE No:108/2008) dated 11.09.2008

5. Relevant Para of Judgement of Hon. Supreme Court in Civil Appeal No.3744
of 2016 Dated 8-12-2017

6. Copy of Ministry of Defence letter No.14(1)/99-D(AG), dated 25.07.2018


Annexure-I

6th CPC recommendations on Date of effect 



6.5.2 The Commission has devised the revised scheme of pay bands and grade
pay on the basis of price index as on 1/1/2006. Consequently, the revised
structure of pay bands and grade pay being recommended in this Report would
need to be implemented from 1/1/2006. The Government will have to pay
arrears of salary on account of fixation of pay in the revised pay bands
and grade pay retrospectively with effect from 1/1/2006.

6.5.4. The Commission is of the view that prospective revision of various
allowances is justified as their retrospective revision will give
unintended benefits and may also, in some instances, cause loss to the
employees as in the case of City Compensatory Allowance. Accordingly, the
Commission’s recommendations relating to allowances shall take effect
prospectively. All recommendations relating to other facilities, benefits
and conditions of service shall also take effect prospectively.


Annexure-II

Read also :  7th CPC DA from Jul, 2016 & Jan, 2017 for Defence Personnel: MoD Order.

Ministry of Finance
Gazette Extraordinary, No.1/1/2008-I C dated 29.8.2008

Govt. vide resolution dated 29.8.2008 has implemented revised pay
w.e.f.1.1.2006 and all allowances except DA w.e.f.1.9.2008.

rule (iv) of rule 1. With regard to fixation pay in the revised pay bands,
the basic pay drawn as on 1.1.2006 on the existing 5th CPC pay scales will
be multiplied by a factor of 1.86 and then rounded of to next multiple of
10. This will be the pay in the revised running pay band. Grade Pay, as
approved by Government, corresponding to the pre-revised pay scale, will be
then added to the pay in the revised pay band. The total of pay in pay band
and grade pay will be the revised basic pay as on 1.1.2006.

rule (vii) of rule 1. Three upgradation will be granted under Assured
Career Progression (ACP) scheme at 10, 20 and 30 years as per Modified ACP
scheme recommended by the Commission. ACP scheme will also applicable to
Group ‘A’ employees.

rule 3. The revised allowances, other than dearness allowance, will be
effective from 1st day of September 2008.


Annexure-III

Ministry of Railways Notification RBE No. 103/2008 dated 04.09.2008

Sub rule (2) of rule1 – They shall deemed to have come into force on the
1st January 2006.

Sub rule (1) of rule 7 – The initial pay of Railway servant who elects, or
deemed to have elected under sub rule (3) of rule 6 to be governed by the
revised pay structure on or from 1st January 2006, shall, unless in case
the President by special order otherwise directs, be fixed separately in
respect of substantive pay in the permanent post on which he holds a lean
or would have held a lean if it had not been suspended, and in respect of
pay in the officiating post held by him, in the following manner namely:-

(A) In the case of all employees

(i) the pay in the pay band/Pay scale will be determined by multiplying the
existing basic pay as on 1.1.2006 by a factor of 1.86 and rounding off the
resultant figure to the next multiple of 10.


Annexure-IV

Railway Service (Revised Pay) Rules, 20008, No. PC-VI/2008/I/RSRP/1 (RBE
No:108/2008) dated 11.09.2008

Rule 4. The revised rates of all allowances, such as House Rent Allowance,
Transport Allowance, Children Education Allowance, Special Compensatory
Allowance, Special Duty Allowance, Island Special Duty Allowance, Hard Duty
Allowance etc will be paid prospectively w.e.f.1.9.2008. Accordingly no
arrears will be paid in respect of these allowances. However, Dearness
Allowances and non-practicing allowance for medical doctors at rates
notified separately, will be payable w.e.f.1.1.2006 or from the date of
option.


Annexure-V


(The Apex Court find no merit in bunch of appeals (25 appeals along
with civil appeal no. 3744) made on behalf of Union of India and
disposed all pending applications in favour of extending the benefit of
MACPS w.e.f. 01.01.2006.)


Excerpts from the Judgment of the Apex Court

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL DIARY NO. 3744 OF 2016
Union of India and Ors. .… Appellant(s)
Vs.

Balbir Singh Turn &Anr. ….Respondent(s)

Para 2. This bunch of appeals is being disposed of by a common judgment
since similar questions of law are involved.

Para 5. …. The AFT 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.

Read also :  7th CPC : Risk and Hardship Allowance @ 2,700/- p.m. for P. Way Staff - NFIR request to Railway Board

Para 6. The question that arises for decision is whether the benefit of
MACP is applicable from 01.01.2006 or from 01.09.2008.

Para 7. The answer to this question will lie in the interpretation given to
the Government Resolution, relevant portion of which has been quoted
hereinabove. A bare perusal of Clause(i) of the Resolution clearly
indicates that the Central Government decided to implement the revised pay
structure of pay bands and grade pay, as well as pension with effect from
01.01.2006. The second part of the Clause lays down that all allowances
except the Dearness Allowance/relief will be effective from 01.09.2008. The
AFT held, and in our opinion rightly so, that the benefit of MACP is part
of the pay structure and will affect the grade pay of the employees and,
therefore, it cannot be said that it is a part of allowances. The benefit
of MACP if given to the respondents would affect their pension also.

Para 10. As already held by us above, there can be no dispute that grant of
ACP is part of the pay structure. It affects the pay of the employee and he
gets a higher grade pay even though it may be in the same pay band. ….

Para 11. …… There may be some gainers and some losers but the intention of
the Government was clear that this Scheme which is part of the pay
structure would apply from 01.01.2006. 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.


Annexure-VI
Government of India
Ministry of defence

No. 14(1)/99-D(AG)

New Delhi, the 25th July 2018

To

The Chief of the army staff

New Delhi

Subject: Modified Assured Career Progression Scheme (MACPS) for PBOR of
Army.

Sir,

Consequent upon the judgement of Hon’ble Supreme Court dated 08-12-2007, in
the matter of Civil Appeal Diary No.3744 of 2016 (UOI Vs Shri. Balbir Singh
Turn & Anr), I am directed to refer to this Ministry’s letter No.
14(1)/99-D(AG) dated 30 May 2011 on the above subject and to state that the
President is pleased to make the following amendment in para 5 of the
aforesaid letter:

For: “The scheme would be operational w.e.f. 01 Sep 2008”

Read: “The scheme would be operational w.e.f. 01 Jan 2006” 

2. The other terms and conditions (including eligibility), as mentioned in
MoD letter No. 14(1)/99-D(AG) dated 30 May 2011 would continue to remain
the same.

3. This issues with the concurrence of the Ministry of Defence (Finance)
vide their Dy. No. 1270/Addl.FA(AN)/JS dated 27-06-2018.

Yours faithfully,
Sd/-
(Balbir Singh)
Under Secretary to the Govt. of India

Source: http://www.irtsa.net/
[http://www.irtsa.net/pdfdocs/Memorandum-to-MS-regarding-Benefits-of-MACPS-wef-01-01-.2006.pdf]

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