Supreme Court Upholds MACP Implementation Date, Rejects ACP Claims: Delhi Development Authority vs. Narender Kumar & Ors. (2022)

Introduction

Date of the Judgment: 8 March 2022

Citation: 2022 INSC 168

Judges: Uday Umesh Lalit, J., S. Ravindra Bhat, J., Bela M. Trivedi, J. (authored by S. Ravindra Bhat, J.)

When does a new government policy take effect, and what happens to the benefits under the old policy? The Supreme Court of India recently addressed this question in a case concerning the Modified Assured Career Progression (MACP) scheme for employees of the Delhi Development Authority (DDA). The core issue was whether the MACP scheme should be applied from 01-01-2006, as argued by the employees, or from 01-09-2008, as contended by the DDA. The Court also examined whether the employees were entitled to the benefits of the old Assured Career Progression (ACP) scheme after the implementation of the MACP scheme.

Case Background

The case revolves around a dispute between the Delhi Development Authority (DDA) and its employees, who were initially appointed as regular Work Charged Malis from various dates starting 03.01.1985. The Government of India introduced the Assured Career Progression (ACP) Scheme in August 1999 to address stagnation in employee careers. Under this scheme, employees were granted financial upgrades after 12 and 24 years of service, subject to certain conditions. The employees of DDA received their first financial upgrade after 12 years of regular service.

Subsequently, the Sixth Central Pay Commission submitted its report on 24-03-2008, which was accepted by the Central Government on 29-08-2008, with revised pay scales and dearness allowances effective from 01-01-2006. The Central Government then introduced the Modified Assured Career Progression (MACP) scheme in May 2009, which superseded the ACP scheme and was made applicable from 01-09-2008.

The DDA implemented the MACP scheme from 01-09-2008. The employees claimed that they had completed 24 years of service in January 2009, making them eligible for the second financial upgrade under the ACP scheme. They argued that since their eligibility for the second ACP benefit had accrued before the implementation of the MACP scheme, they should have received the benefits under the old ACP scheme. The employees approached the Central Administrative Tribunal (CAT) seeking the second financial upgrade under the ACP Scheme.

Timeline

Course of Proceedings

The employees initially approached the Central Administrative Tribunal (CAT), arguing that they were entitled to the second financial upgrade under the ACP scheme, as they had completed 24 years of service before the MACP scheme was implemented. The CAT ruled in favor of the employees, directing the DDA to consider their cases for financial upgrades under the ACP scheme until 19.05.2009 (the date of issuance of the MACP scheme).

Aggrieved by the CAT’s order, the DDA appealed to the Delhi High Court. The High Court, relying on the Supreme Court’s decision in Union of India v. Balbir Singh Turn, directed that the MACP benefits should be extended to the employees of DDA from 1st January, 2006, and not from 1st September 2008.

The DDA then appealed to the Supreme Court, contesting the High Court’s decision. Some of the employees also appealed, seeking modification of the High Court’s order.

Legal Framework

The case primarily involves the interpretation and application of the Assured Career Progression (ACP) Scheme and the Modified Assured Career Progression (MACP) Scheme.

The ACP Scheme, introduced in August 1999, aimed to provide financial upgrades to employees after 12 and 24 years of regular service. The scheme stated that:

✓ The ACP Scheme provided for financial up-gradation only to the government servant concerned on personal basis and shall, therefore, neither amount to functional/regular promotion nor would require creation of new posts for the purpose.

✓ The first financial up-gradation under the ACP Scheme shall be allowed after 12 years of regular service and the second financial up-gradation after 12 years of regular service from the date of the first financial up-gradation subject to fulfilment of prescribed conditions.

✓ Two financial up-gradations under the ACP Scheme in the entire government service career of an employee shall be counted against regular promotions availed from the grade in which an employee was appointed as a direct recruit.

The MACP scheme, introduced in May 2009, superseded the ACP scheme and was made applicable from 01-09-2008. Para 9 of the MACP scheme stated:

“Any interpretation/ clarification or doubt as to the scope and meaning of the provisions of the MACP scheme shall be given by the Department of Personnel and Training (Establishment-I)). The scheme would be operational w.e.f. 01.09.2008. In other words, financial up-gradations as per the earlier ACP Scheme (of August, 1999) would be granted till 31-08-2008.”

The MACP scheme provided for three financial upgrades upon completion of 10, 20, and 30 years of service. The MACP scheme also stated that no past cases would be reopened.

Arguments

Arguments by DDA:

• The MACP scheme came into effect on 01.09.2008, and this date should be the criterion for deciding whether the old ACP or the MACP scheme applies. The employees completed 24 years of service in January 2009, after the MACP scheme’s effective date, and were therefore not entitled to an upgrade under the old ACP.
• The decision in Balbir Singh Turn, relied upon by the Delhi High Court, applied only to Armed Forces personnel and not to civil establishments like the DDA.
• The DDA argued that the MACP scheme clearly stated that financial up-gradations in terms of the earlier ACP Scheme would be granted till 31.08.2008.
• The DDA contended that the High Court failed to recognize that the employees became eligible for the second upgrade only after the date of issuance of the MACP, and consequently, were not entitled to an upgrade under the old ACP scheme.
• The DDA argued that the courts should not interfere in policy matters related to pay fixation, as these are complex matters best left to expert bodies.
• The DDA relied on the judgment in Union of India v. M.V . Mohanan Nair, which outlined the nature of the MACP benefits and held that the scheme fell within the realm of executive decision-making.
• The DDA relied on the judgment in Union of India v. R.K. Sharma, which held that the benefits from the MACP scheme could be availed of only from 01.09.2008.

Arguments by the Employees:

• The employees argued that they were seeking the grant of ACP benefits, which were in force in January 2009, before the MACP scheme was launched. Their eligibility for the second ACP benefit was crystallized before the MACP scheme came into effect.
• The employees contended that their right to be considered for the ACP benefits was a vested right and that this right could not be defeated by a policy adopted later, even if it was made effective from an earlier date.
• The employees argued that Para 9 of the MACP scheme preserved their right to be granted ACP benefits even after the introduction of the MACP scheme.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the reasoning adopted by the Delhi High Court to hold, and direct that the Modified Assured Career Progression Scheme (“MACP”) had to be applied from 01-01-2006, is correct.
2. Whether the employees were entitled to the second financial up-gradation under the ACP Scheme.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court set aside the Delhi High Court’s judgment and upheld the DDA’s position that the MACP scheme was applicable from 01-09-2008.

How each authority was viewed by the Court?

• Union of India v. Balbir Singh Turn [(2018) 11 SCC 99]: The Court distinguished this case, stating that it was specific to Armed Forces personnel and did not apply to civil establishments like DDA.
• Chandi Prasad Uniyal v State of Uttarakhand [(2012) 8 SCC 417]: Cited to emphasize that excess payments of public money cannot be retained.
• State of U.P . & Ors. Vs. U.P . Sales Tax Officer Grade-II Officer [(2003) 6 SCC 250]: Cited to argue that decisions of expert bodies like the pay commission should not be subject to judicial review.
• Secretary Government (NCT of Delhi) and Ors. Vs. Grade-I officers Associations & Ors [(2014) 13 SCC 296]: Cited to emphasize that courts should not interfere with the government’s policy regarding the ACP scheme.
• State of Tamilnadu v Arumugham [(1998) 2 SCC 198]: Cited to argue that the state has the right to frame policies to ensure efficiency and proper administration.
• State of Haryana & Anr. v Haryana Civil Secretariat Personal Staff Association [(2002) 6 SCC 72]: Cited to argue that fixation of pay and determination of responsibilities is a complex matter in the realm of executive decision-making.
• Union of India v. M.V . Mohanan Nair [(2020) 5 SCC 421]: Cited to outline the nature of the MACP benefits and to emphasize that the scheme falls within the realm of executive decision-making.
• Union of India v. R.K. Sharma [(2021) 5 SCC 579]: Cited to emphasize that MACP benefits could be availed only from 01.09.2008.
• Himachal RTC v. Retired Employees Union [(2021) 4 SCC 502]: Cited to argue that courts should not interfere with the choice of a cut-off date for the implementation of a new policy regime.
• State of Gujarat vs Raman Lal Keshav Lal Soni [(1983) 2 SCR 287]: Considered in the context of whether a vested right had accrued in favor of the employees.
• Chairman, Railway Board v. C.R. Rangadhamaiah [1997Supp (3) SCR63]: Considered the concept of “vested rights” and the retrospective alteration of service conditions.
• Shankarsan Dash vs Union Of India [(1991) 3 SCC 47]: Cited to argue that a candidate in a select list does not have a vested right to an employment letter.
• Ajoy Kumar Banerjee v Union of India [(1984) 3 SCR 252]: Cited to emphasize that courts should not interfere with policy decisions made by the executive.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors. The Court emphasized that the MACP scheme was a policy decision made by the executive, and the courts should not interfere with such decisions unless there is clear arbitrariness. The Court also noted that the MACP scheme was introduced after considering the recommendations of an expert body (the Sixth Central Pay Commission) and that the date of implementation was a deliberate decision.

The Court also highlighted that the employees did not have a vested right to the second ACP upgrade, as the eligibility did not automatically translate into an entitlement. The Court noted that the MACP scheme was more beneficial to a larger section of employees and that the executive should have the flexibility to implement such schemes without undue judicial interference.

Logical Reasoning:

Key Takeaways

✓ The MACP scheme is applicable from 01-09-2008, and not from 01-01-2006.

✓ Employees do not have a vested right to benefits under a superseded scheme (ACP) once a new scheme (MACP) is implemented.

✓ Courts should be cautious in interfering with executive policy decisions, especially those related to pay and benefits.

✓ The date of implementation of a new scheme is a policy decision that should not be easily altered by the courts.

Directions

The Supreme Court directed that the benefits granted to the employees under the ACP scheme, as a result of interim orders, can be reversed by the DDA. However, the MACP benefits granted by DDA, on its consideration that they were entitled to it, from later dates (such as from 2010-2011 or later dates) shall not be disturbed.

Development of Law

The ratio decidendi of this case is that the implementation date of a new scheme is a policy decision of the executive, and the courts should not interfere with it unless there is clear arbitrariness. Further, employees do not have a vested right to benefits under a superseded scheme, and eligibility does not automatically translate into an entitlement. This judgment reinforces the principle that courts should be circumspect in interfering with executive decisions, especially in matters of pay and benefits, and that the date of implementation of a policy is a matter for the executive to decide.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Narender Kumar & Ors. upholds the implementation date of the MACP scheme as 01-09-2008 and rejects the employees’ claims for benefits under the old ACP scheme. The Court emphasized that the MACP scheme was a policy decision of the executive and that the courts should not interfere with such decisions unless there is clear arbitrariness. This case clarifies the legal position on the implementation of new benefit schemes and the rights of employees under superseded schemes.