MACP Benefits and Promotion Quotas: Supreme Court Remands Case of Union of India vs. Rosamma Benny (2020)

Introduction

Date of the Judgment: 04 February 2020
Citation: Civil Appeal No. 996 of 2020 (Arising out of Special Leave Petition (C) No. 17440 of 2019)
Judges: S. Abdul Nazeer, J. and Sanjiv Khanna, J.

How should an employee’s past service be counted when they are promoted through a Limited Departmental Competitive Examination (LDCE) and are seeking benefits under the Modified Assured Career Progression Scheme (MACP)? This question was at the heart of a recent case before the Supreme Court of India. The Court examined whether employees who were promoted to the post of Enquiry-Cum-Reservation Clerks (ECRC) through LDCE should have their previous service counted for MACP benefits.

The Supreme Court, in this case, did not provide a final answer. Instead, it remanded the case back to the Central Administrative Tribunal (CAT) for a fresh decision, directing them to consider specific aspects of the case that were not previously examined. This decision highlights the importance of proper application of service rules and the need for clarity in determining eligibility for financial benefits.

Case Background

The case involves three employees, Rosamma Benny, Jessy S. Babu, and Sreekala P.V., who were working as Enquiry-Cum-Reservation Clerks (ECRC) in the Southern Railway. They had sought financial upgradation under the Modified Assured Career Progression Scheme (MACP), claiming that they had completed ten years in the cadre of ECRC.

Rosamma Benny was initially appointed as an Office Clerk on 01 April 1982 under the Sports Quota in Western Railways. She was later transferred to the Palakkad Division in Southern Railway on 13 February 1989 as a Commercial Clerk. She was promoted as ECRC-II on 28 December 1993 and then as ECRC-I on 01 November 2003 (proforma) and 02 January 2009 (regular).

Jessy S. Babu was appointed as an Office Clerk in South Eastern Railway on 02 March 1984. She was transferred to the Trivandrum Division in Southern Railway on 25 June 1986 as a Commercial Clerk. She was promoted as ECRC-II on 14 March 1995 and further promoted as ECRC-I on 01 November 2003.

Sreekala P.V. was appointed as an Office Clerk on 13 March 1984 in South Central Railway. She was transferred to the Madras Division in Southern Railway on 15 July 1987 as a Commercial Clerk. She was promoted as ECRC-II on 22 August 1993 and then as ECRC-I on 01 November 2003.

The Central Administrative Tribunal (CAT) ruled in favor of the employees, granting them the benefit of placement in pay band-II with a grade pay of Rs. 4600 w.e.f. 01 November 2013. The High Court of Kerala upheld this decision. The Union of India appealed this decision to the Supreme Court.

Timeline

Course of Proceedings

The Central Administrative Tribunal (CAT), Ernakulam Bench, initially allowed the Original Application (O.A. No. 180/523/2014) filed by Rosamma Benny, Jessy S. Babu, and Sreekala P.V. The CAT held that the employees were entitled to financial upgradation under the MACP scheme, as they had completed ten years in the cadre of ECRC.

The Union of India and Senior Divisional Personnel Officer, Southern Railway, Trivandrum, challenged the CAT’s order by filing a Writ Petition before the High Court of Kerala, Ernakulam Bench. The High Court dismissed the Writ Petition, affirming the CAT’s order.

Aggrieved by the High Court’s decision, the Union of India and the Senior Divisional Personnel Officer, Southern Railway, Trivandrum, filed a Special Leave Petition before the Supreme Court. The Supreme Court granted leave and heard the appeal.

Legal Framework

The core of the dispute revolves around the interpretation and application of the Modified Assured Career Progression Scheme (MACP). The MACP scheme provides for financial upgradation to employees after completion of 10, 20, and 30 years of service.

The Indian Railway Establishment Manual Vol. I, Clause 129, specifies that posts of ECRC are filled through:

• ✓ 25% by direct recruitment through Railway Recruitment Board.
• ✓ 75% by promotion by selection from amongst Senior Commercial Clerks and Senior Ticket Collectors.

The Ministry of Railways (Railway Board) issued a circular on 12 September 2012, clarifying the grant of benefits under MACP to employees appointed through LDCE. The circular states:


“References have been received from Zonal Railways seeking clarification regarding grant of benefits under MACPs in respect of the employees qualifying through LDCE/GDCE. The matter has been examined in consultation with Department of Personnel & Training (DoP&T), the nodal department of Government on MACPS and it has been declared as under:
(i)if the relevant RRs provide for filling up of vacancies in a grade by Direct Recruitment, induction of an employee to that grade through LDCE/GDCE may be treated as Direct Recruitment for the purpose of grant of financial upgradation under MACPS. In such cases past service rendered in a lower pay scale/Grade Pay shall NOT be counted for the purpose of MACP Scheme.
(ii)if the relevant RRs prescribe a promotion Quota to be filled on the basis of LDCE/GDCE, such appointment would be treated as promotion for the purpose of benefit under the MACPS and in such cases past regular service shall also be counted for further benefits, if any, under the MACP Scheme.”

The circular dated 10 June 2009 issued by the Ministry of Railways (Railway Board) states that three financial upgradations would be “counted from the direct entry grade on completion of 10, 20 and 30 years of service”. A further circular dated 29 September 2010 clarifies that the benefit under the MACP Scheme would be available from the date of actual joining of the post in the entry grade.

Arguments

The appellants (Union of India and Senior Divisional Personnel Officer, Southern Railway) argued that the three respondents were appointed to the post of ECRC under the promotion quota, not through direct recruitment. They contended that according to the circular dated 12 September 2012, if the appointment is through the promotion quota, past service should be counted, but since the respondents were promoted, the past service should not be counted.

The appellants relied on Clause 129 of the Indian Railway Establishment Manual Vol. I, which specifies that 75% of ECRC posts are filled by promotion. They argued that the respondents’ appointments were promotions and not direct recruitment, and thus their past service should not be counted for MACP benefits.

The respondents (Rosamma Benny, Jessy S. Babu, and Sreekala P.V.) argued that they had completed ten years in the ECRC cadre and were therefore entitled to financial upgradation under the MACP scheme. They contended that their appointments should be treated as direct recruitment, and their past service should be counted for MACP benefits.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues. However, the court identified the following key aspects that required examination:

• ✓ Whether the posting on transfer as Commercial Clerks in the case of the respondents can be and should be treated as the first promotion.
• ✓ Whether there has been any merger of pay scales/upgradations which may have a bearing on the application of the MACP Scheme to the present respondents.
• ✓ Whether the appointment of the three respondents to the post of ECRC was under the promotion quota or direct recruitment as per the circular dated 12.09.2012 and Clause 129 of the Indian Railway Establishment, Manual Vol. I.

Treatment of the Issue by the Court

The Supreme Court did not decide the issues on merits. Instead, it remanded the matter back to the Central Administrative Tribunal (CAT) for a fresh decision.

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court set aside the impugned orders passed by the High Court and the Tribunal. The matter was remanded to the Central Administrative Tribunal for a fresh decision. The Tribunal was directed to independently apply its mind to the facts and legal position after calling upon the appellant (Southern Railway) and the respondents to file additional affidavits, if required.

The Court noted that the Tribunal and the High Court had not examined the circular dated 12 September 2012, issued by the Ministry of Railways, which clarifies the grant of MACP benefits to employees appointed through LDCE. The Court also noted that the Tribunal and the High Court had not examined Clause 129 of the Indian Railway Establishment, Manual Vol. I, which specifies the method of filling ECRC posts.

The Supreme Court stated:


“These aspects have not been examined by the Tribunal and the High Court in the impugned orders. Normally we would have decided the question but find ourselves in difficulty in absence of details as there is no clarity on facts. Keeping the aforesaid aspects in mind and as there is no discussion on the said issues, we would set aside the impugned orders passed by the High Court as well as the Tribunal and remand the matter to the Tribunal for a fresh decision and adjudication on merits without being influenced by the earlier orders passed by them, the High Court and this judgment/order.”

What weighed in the mind of the Court?

The Supreme Court was primarily concerned with the lack of clarity regarding the facts of the case and the failure of the Tribunal and the High Court to consider crucial aspects of the legal framework. The court emphasized the need for a thorough examination of the circular dated 12 September 2012, and Clause 129 of the Indian Railway Establishment Manual Vol. I. The court’s decision to remand the case indicates its emphasis on procedural correctness and the importance of considering all relevant factors before arriving at a decision.

Key Takeaways

• ✓ The case emphasizes the importance of correctly applying service rules and circulars, especially when determining eligibility for financial benefits like MACP.
• ✓ The decision underscores the need for clarity in the rules regarding the counting of past service for employees who are promoted through Limited Departmental Competitive Examinations (LDCE).
• ✓ The Supreme Court’s decision to remand the case highlights the significance of a thorough examination of all relevant facts and legal provisions by the lower courts and tribunals.
• ✓ The case serves as a reminder to administrative bodies to consider all relevant circulars and rules before making decisions on service matters.
• ✓ The judgment underscores the importance of procedural correctness and the need to consider all relevant factors before arriving at a decision.

Directions

The Supreme Court directed the parties to appear before the Central Administrative Tribunal on 30 March 2020. The Tribunal was instructed to make a fresh decision on the matter, without being influenced by the earlier orders passed by the Tribunal or the High Court, or by the Supreme Court’s judgment.

Development of Law

The ratio decidendi of this case is that the nature of appointment (whether through direct recruitment or promotion) is crucial in determining the applicability of the MACP scheme. The Supreme Court emphasized that the Central Administrative Tribunal (CAT) and the High Court failed to consider the relevant circulars and rules, particularly the circular dated 12 September 2012 and Clause 129 of the Indian Railway Establishment Manual Vol. I.

This case does not change the previous position of the law but clarifies the procedure to be followed in cases where employees are promoted through LDCE and are claiming MACP benefits. It underscores the importance of a thorough examination of all relevant facts and legal provisions.

Conclusion

In the case of Union of India vs. Rosamma Benny, the Supreme Court did not provide a final resolution on the merits of the case. Instead, it remanded the matter to the Central Administrative Tribunal (CAT) for a fresh decision. The Court highlighted the need for the Tribunal to examine the nature of the appointments of the employees, the applicability of the MACP scheme, and relevant circulars and rules. This decision underscores the importance of a thorough and correct application of service rules and circulars in determining eligibility for financial benefits.