Supreme Court clarifies pay fixation rules under Central Civil Service (Revised Pay) Rules, 2008: Union of India & Ors. vs. Raj Kumar Anand & Ors. (2019) INSC 198 (14 March 2019)

Introduction

Date of the Judgment: 14 March 2019

Citation: (2019) INSC 198

Judges: Hon’ble Mr. Justice Arun Mishra and Hon’ble Mr. Justice Navin Sinha.

What happens when a government employee gets a pay raise before new pay rules come into effect? The Supreme Court of India recently addressed this question in a case concerning the correct way to fix pay scales under the Central Civil Service (Revised Pay) Rules, 2008. The case specifically deals with an employee who received a pay upgrade under the Assured Career Progression (ACP) scheme before the 6th Central Pay Commission (CPC) recommendations were implemented. The core issue is whether Rule 7 or Rule 11 of the 2008 Rules should apply in such cases. The judgment was delivered by a two-judge bench comprising Justice Arun Mishra and Justice Navin Sinha.

Case Background

Raj Kumar Anand, the respondent, was initially appointed as an Assistant Teacher (Primary School Teacher) in the East Delhi Municipal Corporation (EDMC) on August 10, 1994. He was later promoted to Trained Graduate Teacher (TGT) (Social Science) in the Government of NCT of Delhi, Directorate of Education, on January 4, 2007, and posted on March 17, 2007. On April 25, 2008, he was granted an Assured Career Progression (ACP) which placed him in the Trained Graduate Teacher pay scale with effect from August 10, 2006.

The 6th Central Pay Commission (CPC) was enforced on August 29, 2008, and the Central Civil Service (Revised Pay) Rules, 2008, were notified to revise salaries from January 1, 2006. Consequently, the respondent’s pay was revised on November 18, 2009, as per the 2008 Rules. However, the respondent’s pay was fixed under Rule 7 of the Rules, 2008, which he contested. He argued that his pay should have been fixed under Rule 11, given that he had received an upgraded pay scale under the ACP scheme before the 2008 Rules came into effect and had opted for revision of pay from the date of his ACP upgradation.

Timeline:

Course of Proceedings

The respondent, feeling aggrieved by the incorrect pay fixation, initially approached the Central Administrative Tribunal (CAT). The CAT, on May 17, 2012, directed the authorities to issue a speaking order on the respondent’s representation. Subsequently, the respondent’s representation was rejected by the Director, Directorate of Education, on July 24, 2012, and by the Assistant Director on August 7, 2012. The respondent then filed another original application before the CAT, which was dismissed, along with a review petition.

Aggrieved by the CAT’s decision, the respondent filed a Writ Petition before the High Court of Delhi. The Division Bench of the High Court allowed the writ petition, holding that Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, was applicable to the respondent’s case, as he had opted for a revised pay scale from the date of his ACP upgradation i.e. August 10, 2006. The High Court found that the pay fixation was wrongly done under Rule 7 and should have been done under Rule 11.

Legal Framework

The case primarily revolves around the interpretation and application of three key provisions of the Central Civil Service (Revised Pay) Rules, 2008: Rule 5, Rule 7, and Rule 11.

✓ Rule 5: Drawal of pay in the revised pay structure

This rule generally states that a government servant will draw pay in the revised pay structure applicable to their post. However, it provides two provisos:

“Provided that a Government servant may elect to continue to draw pay in the existing scale until the date on which he earns his next or any subsequent increment in the existing scale or until he vacates his post or ceases to draw pay in that scale.”

This allows a government servant to continue in the old pay scale until their next increment or until they leave the post.

“Provided further that in cases where a government servant has been placed in a higher pay scale between 1.1.2006 and the date of notification of these Rules on account of promotion, upgradation of pay scale etc., the government servant may elect to switch over to the revised pay structure from the date of such promotion, upgradation etc.”

This allows a government servant who has been placed in a higher pay scale between January 1, 2006, and the date of notification of the Rules to switch to the revised pay structure from the date of such upgradation.

✓ Rule 7: Fixation of initial pay in the revised pay structure

This rule outlines how the initial pay is fixed for a government servant who opts to be governed by the revised pay structure from January 1, 2006. It specifies that the pay will be fixed 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.

Note 2A of Rule 7 states:

“Where a post has been upgraded as a result of the recommendations of the Sixth CPC as indicated in part B or Part C of the First Schedule to these Rules, the fixation of pay in the applicable pay band will be done in the manner prescribed in accordance with Clause (A) (i) and (ii) of Rule 7 by multiplying the existing basic pay as on 1.1.2006 by a factor of 1.86 and rounding the resultant figure to the next multiple of ten. The grade pay corresponding to the upgraded scale as indicated in Column 6 of Part B or C will be payable in addition.”

This note applies when a post is upgraded as a result of the 6th CPC recommendations.

✓ Rule 11: Fixation of pay in the revised pay structure subsequent to the 1st day of January, 2006

This rule applies when a government servant continues to draw pay in the existing scale and is brought over to the revised pay structure from a date later than January 1, 2006. It specifies that the pay will be fixed by adding the basic pay applicable on the later date, the dearness pay applicable on that date, and the pre-revised dearness allowance based on rates applicable as on 1.1.2006.

The interplay between these rules, particularly the provisos to Rule 5 and the specific conditions under which Rule 7 and Rule 11 apply, forms the crux of the legal dispute.

Arguments

Arguments by the Union of India:

The learned Additional Solicitor General (ASG), Mr. Vikramjit Banerjee, representing the Union of India, argued that Rule 7 of the Central Civil Service (Revised Pay) Rules, 2008, was clearly applicable in this case. He contended that Note 2A of Rule 7 specifically addresses the mode of salary fixation in situations where a post has been upgraded as a result of the recommendations of the Sixth CPC. He asserted that the respondent’s pay fixation was correctly done under Rule 7 and that the Central Administrative Tribunal (CAT) was right in dismissing the original application. The ASG also argued that the High Court had erred in applying Rule 11 of the Rules, 2008.

The Union of India relied on the decision of the Supreme Court in Union of India & Ors. v. K.V. Rama Raju & Ors. [2018 (2) SCALE 239] to support their argument that Rule 7 was the appropriate provision for pay fixation.

Arguments by the Respondent:

The respondent, who appeared in person, supported the decision of the High Court. He argued that once he had opted for the revision of pay under the Rules of 2008 with effect from August 10, 2006 (the date on which his upgraded pay scale was made available under the ACP scheme), his pay fixation should have been done under Rule 11 of the Rules of 2008. He contended that since he had opted for the revised pay scale from the date of his ACP upgradation, Rule 7 was not applicable.

The respondent maintained that the High Court was correct in holding that Rule 11 was applicable and that no interference was warranted with the High Court’s decision.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in a separate section. However, the core issue that the court addressed was:

✓ Whether the pay fixation of the respondent should be done under Rule 7 or Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, given that the respondent had received an upgraded pay scale under the ACP scheme between 1.1.2006 and the date of notification of the Rules and had opted for revision of pay from the date of his ACP upgradation.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issue:

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court dismissed the appeals filed by the Union of India, upholding the High Court’s decision that Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, is applicable in this case.

How each authority was viewed by the Court?

✓ The Court examined Rule 5 of the Central Civil Service (Revised Pay) Rules, 2008, and noted the provisos that allow a government servant to opt for the revised pay structure from the date of upgradation.

✓ The Court analyzed Rule 7 of the Central Civil Service (Revised Pay) Rules, 2008, and determined that it applies to initial pay fixation as per the 6th CPC and not to cases where the employee opts for revision from a date of upgradation under ACP.

✓ The Court determined that Note 2A of Rule 7 of the Central Civil Service (Revised Pay) Rules, 2008 does not apply because the upgradation was under the ACP scheme and not a result of the 6th CPC recommendations.

✓ The Court held that Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, is applicable as it deals with pay fixation when a government servant opts for the revised pay structure from a date later than 1.1.2006.

✓ The Court distinguished the case of Union of India & Ors. v. K.V. Rama Raju & Ors. [2018 (2) SCALE 239], stating that it did not involve a situation where the employee opted for revision from the date of upgradation under the ACP scheme.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the specific facts of the case and the correct interpretation of the Central Civil Service (Revised Pay) Rules, 2008. The Court emphasized that the respondent had opted for the revised pay scale from the date of his ACP upgradation, which occurred between 1.1.2006 and the date of notification of the Rules. This crucial fact made Rule 11 applicable, as it specifically deals with such situations. The Court also highlighted that the upgradation was under the ACP scheme and not as a result of the 6th CPC recommendations, thus making Note 2A of Rule 7 inapplicable. The Court’s reasoning focused on the correct application of the law to the specific facts of the case, rather than on broader policy considerations.

Logical Reasoning

Key Takeaways

✓ When a government servant has been placed in a higher pay scale between 1.1.2006 and the date of notification of the Central Civil Service (Revised Pay) Rules, 2008, due to promotion or upgradation under the ACP scheme, and they opt to switch to the revised pay structure from the date of such upgradation, Rule 11 of the Rules applies for pay fixation, not Rule 7.

✓ Note 2A of Rule 7 is applicable only when a post has been upgraded as a result of the recommendations of the Sixth CPC, as indicated in the First Schedule to the Rules. It does not apply to upgradations under the ACP scheme.

✓ The Supreme Court clarified that the decision in Union of India & Ors. v. K.V. Rama Raju & Ors. [2018 (2) SCALE 239] is distinguishable and does not apply to cases where the employee has opted for revision from the date of upgradation under the ACP scheme.

Directions

The Supreme Court directed that the pay revision be worked out as per Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, and that any arrears be paid within a period of three months from the date of the judgment.

Development of Law

The ratio decidendi of this case is that when a government servant has been placed in a higher pay scale between 1.1.2006 and the date of notification of the Central Civil Service (Revised Pay) Rules, 2008, due to promotion or upgradation under the ACP scheme, and they opt to switch to the revised pay structure from the date of such upgradation, Rule 11 of the Rules applies for pay fixation, not Rule 7. This clarifies the correct procedure for pay fixation in such cases and distinguishes it from the general pay fixation under the 6th CPC recommendations. The Supreme Court also clarified that the decision in Union of India & Ors. v. K.V. Rama Raju & Ors. [2018 (2) SCALE 239] is not applicable in cases where the employee has opted for revision from the date of upgradation under the ACP scheme.

Conclusion

In conclusion, the Supreme Court dismissed the appeals filed by the Union of India, affirming that the pay fixation of the respondent should be done under Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, as he had opted for the revised pay scale from the date of his ACP upgradation. The Court clarified that Rule 7 and Note 2A of Rule 7 are not applicable in such cases. This judgment provides clarity on the correct application of the pay rules in cases involving upgradation under the ACP scheme and ensures that government servants receive their rightful pay.

Category

✓ Service Law

✓ Central Civil Service (Revised Pay) Rules, 2008

✓ Rule 5, Central Civil Service (Revised Pay) Rules, 2008

✓ Rule 7, Central Civil Service (Revised Pay) Rules, 2008

✓ Rule 11, Central Civil Service (Revised Pay) Rules, 2008

FAQ

Q: What is the main issue in this case?

A: The main issue is whether Rule 7 or Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, should apply for pay fixation when an employee has received an upgraded pay scale under the ACP scheme before the 6th CPC recommendations were implemented and has opted for revision of pay from the date of such upgradation.

Q: What is the Assured Career Progression (ACP) scheme?

A: The ACP scheme is a mechanism to grant financial upgradation to employees who have not received promotions within a certain period. It provides for placement in a higher pay scale.

Q: When does Rule 7 of the Central Civil Service (Revised Pay) Rules, 2008, apply?

A: Rule 7 applies for the fixation of initial pay in the revised pay structure as per the 6th Central Pay Commission recommendations. It is applicable when the pay scale has been upgraded as a result of the 6th CPC recommendations.

Q: When does Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, apply?

A: Rule 11 applies when a government servant continues to draw pay in the existing scale and is brought over to the revised pay structure from a date later than January 1, 2006. This is particularly relevant when an employee has opted for revision from the date of an upgradation under the ACP scheme.

Q: What did the Supreme Court decide in this case?

A: The Supreme Court held that Rule 11 of the Central Civil Service (Revised Pay) Rules, 2008, is applicable when an employee has opted for the revised pay scale from the date of their ACP upgradation, and that the pay revision should be done accordingly.

Q: What is the significance of this judgment?

A: This judgment clarifies the correct application of the Central Civil Service (Revised Pay) Rules, 2008, particularly in cases where employees have received upgraded pay scales under the ACP scheme before the implementation of the 6th CPC recommendations. It ensures that pay is fixed correctly and that employees receive their rightful dues.