Supreme Court Upholds Stepping Up of Pay for Seniors: Union of India vs. C.R. Madhava Murthy (2022)

Date of the Judgment: April 06, 2022

Citation: (2022) INSC 397

Judges: M.R. Shah, J., B.V. Nagarathna, J.

Can a senior employee’s pay be stepped up to match their junior’s when the junior gets a higher salary due to an Assured Career Progression (ACP) Scheme upgrade? The Supreme Court of India recently addressed this issue in a case where senior employees were drawing less pay than their juniors due to the implementation of the ACP Scheme. The Court examined whether the principles of stepping up pay to remove anomalies applied in such a situation. The judgment was delivered by a bench comprising Justice M.R. Shah and Justice B.V. Nagarathna.

Case Background

The case involves two employees, Shri C.R. Madhava Murthy and another, who were initially appointed as Lower Division Clerks on February 1, 1973, and August 3, 1973, respectively. They were promoted to Upper Division Clerks on October 4, 1976. Subsequently, one was promoted to officiate as an Inspector on April 2, 1981, and the other on July 13, 1981. Later, two individuals, Shri C.K. Satish and Shri B.S. Srikanth, were directly recruited as Inspectors on December 17, 1981, and May 15, 1982, respectively.

The Union of India introduced the Assured Career Progression (ACP) Scheme on August 9, 1999, to provide upgradation to employees and remove stagnation. Shri C.K. Satish and Shri B.S. Srikanth received upgradation under this scheme. The original writ petitioners (Shri C.R. Madhava Murthy and another) were promoted to Superintendent of Central Excise and Customs on July 2, 2000. However, their juniors, who received ACP upgrades on December 17, 2005, and May 15, 2006, began drawing higher pay. This created a pay anomaly where the seniors were earning less than their juniors.

The original writ petitioners then submitted a representation to the department to step up their pay to match their juniors. When this was not addressed, they filed O.A. Nos. 813 & 814/2014 before the Central Administrative Tribunal, Bengaluru Bench, which were rejected on January 4, 2016. They then filed writ petitions before the High Court of Karnataka, seeking a stepping up of their pay.

Timeline:

Course of Proceedings

The original writ petitioners first approached the Central Administrative Tribunal, Bengaluru Bench, with O.A. Nos. 813 & 814/2014. The Tribunal rejected their applications on January 4, 2016. Aggrieved by this decision, the petitioners filed writ petitions before the High Court of Karnataka. The High Court, in its judgment dated July 31, 2021, allowed the writ petitions, directing the appellants to step up the pay of the respondents to match their juniors from the date the juniors started drawing higher pay. The Union of India and others then appealed to the Supreme Court.

Legal Framework

The primary legal provision at the heart of this case is Fundamental Rule 22 (FR 22), specifically relating to the removal of pay anomalies. FR 22 provides for stepping up the pay of a senior government servant who is drawing less pay than their junior in a higher post. The relevant portion of the order issued by the Government of India on removal of anomaly by stepping up of pay, which is extracted in the judgment, reads:

“(22) Removal of anomaly by stepping up of pay of Senior on promotion drawing less pay than his junior – (a) As a result of application of FR 22 – C. [Now FR 22 (I) (a) (1)]. In order to remove the anomaly of a Government servant promoted or appointed to a higher post on or after 1-4-1961 drawing a lower rate of pay in that post than another Government servant junior to him in the lower grade and promoted or appointed subsequently to another identical post, it has been decided the in such cases the pay of the senior officer in the higher post should be stepped up to a figure equal to the pay as fixed for the junior officer in that higher post. The stepping up should be done with effect from the date of promotion or appointment of the junior officer and will be subject to the following conditions, namely: –
(a) Both the junior and senior officers should belong to the same cadre and the posts in which they have been promoted or appointed should be identical and in the same cadre;
(b) The scales of pay of the lower and higher posts in which they are entitled to draw pay should be identical;
(c) The anomaly should be directly as a result of the application of FR–22–C. For example, if even in the lower post the junior officer draws from time to time a higher rate of pay than the senior by virtue of grant of advance increments, the above provisions will not be invoked to step up the pay of the senior officer.”

The Assured Career Progression (ACP) Scheme, introduced by the Union of India, aims to provide upgradation to employees and remove stagnation on a particular post. This scheme allows employees to receive monetary benefits in the form of the next higher grade, subject to fulfilling certain qualifications and eligibility criteria. The ACP Scheme does not involve the actual grant of a promotional post.

Arguments

Appellants’ Arguments (Union of India):

• The High Court did not properly consider the ACP Scheme.
• The original writ petitioners were already promoted to the post of Superintendent of Central Excise and Customs.
• Once promoted, there was no question of granting any stepping up of pay under the ACP Scheme.
• The purpose of the ACP Scheme is to relieve frustration due to stagnation and does not involve the actual grant of a promotional post, but only monetary benefits.
• Since the petitioners were already promoted and placed in the appropriate pay scale, there was no basis for any stepping up of pay.

Respondents’ Arguments (Shri C.R. Madhava Murthy & Anr.):

• Their grievance was not about the ACP Scheme itself, but about the anomaly in pay scales.
• Their juniors were receiving higher salaries due to upgradation under the ACP Scheme, despite the respondents being seniors.
• They were seeking removal of the anomaly by stepping up their pay, as provided under FR 22.
• They were entitled to have their pay stepped up to match their juniors’ pay from the date the juniors started drawing a higher salary.

The appellants argued that the ACP scheme is only for monetary benefits and not promotions, so once the respondents were promoted, no further benefit could be given. The respondents argued that the anomaly in pay scale should be removed by stepping up their pay as per FR 22, as they were drawing less than their juniors.

Issues Framed by the Supreme Court

The Supreme Court considered the following issue:

1. Whether the High Court was right in directing the appellants to step up the pay of the original writ petitioners, keeping in view the pay scale granted to their juniors from the date they started drawing lesser pay.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• Fundamental Rule 22 (FR 22): This rule, along with the government order, provides for stepping up the pay of a senior government servant who is drawing less pay than their junior in a higher post. The Court relied on this rule to address the pay anomaly.

Judgment

The Court considered the authorities as follows:

• Fundamental Rule 22 (FR 22): The Court relied on this rule to address the pay anomaly, stating that it allows for stepping up the pay of a senior to match their junior’s pay in a higher post.

The Supreme Court upheld the High Court’s decision, stating that the High Court had rightly directed the appellants to step up the pay of the original writ petitioners, keeping in view the pay scale granted to their juniors from the date they started drawing lesser pay. The Court emphasized that the issue was about removing a pay anomaly, not about the ACP Scheme itself. The Court stated, “Therefore, it was a case where a junior was drawing more pay on account of upgradation under the ACP Scheme and there was an anomaly and therefore, the pay of senior was required to be stepped up.” It further noted, “The High Court has therefore rightly relied and/or considered FR 22 and the order issued by the Government of India on removal of anomaly by stepping up of pay.” The Court concluded, “We are in complete agreement with the view taken by the High Court. No interference of this Court is called for.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to rectify the pay anomaly where senior employees were drawing less pay than their juniors. The Court emphasized that the issue was not about the merits of the ACP Scheme but about ensuring that seniors are not disadvantaged in terms of pay compared to their juniors. The Court found that the High Court was correct in applying FR 22 to address this anomaly.

Key Takeaways

• Senior employees are entitled to have their pay stepped up to match their juniors’ pay when juniors receive higher pay due to ACP Scheme upgradations.
• This ruling ensures that pay anomalies are rectified, and seniors are not disadvantaged compared to their juniors.
• The decision reinforces the application of FR 22 in cases where pay anomalies arise due to the implementation of schemes like ACP.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

There is no specific amendment analysis in this judgment.

Development of Law

The ratio decidendi of this case is that when a pay anomaly arises due to the implementation of the ACP scheme, where juniors start drawing more pay than their seniors, the seniors are entitled to have their pay stepped up to match their juniors’ pay. This decision reinforces the existing provisions of FR 22 and ensures that seniors are not disadvantaged due to the implementation of such schemes. The judgment clarifies the application of FR 22 in the context of ACP scheme upgradations.

Conclusion

The Supreme Court dismissed the appeals filed by the Union of India, thereby upholding the High Court’s decision. The Court ruled that senior employees are entitled to have their pay stepped up to match their juniors’ pay when the juniors receive higher pay due to an Assured Career Progression (ACP) Scheme upgradation. This judgment reinforces the principle that pay anomalies must be rectified to ensure that senior employees are not disadvantaged compared to their juniors, particularly when such anomalies arise from the implementation of government schemes.

Category

Parent Category: Service Law

Child Categories:

• Pay Anomaly
• Assured Career Progression Scheme
• Fundamental Rule 22

Parent Category: Fundamental Rules

Child Categories:

• Section 22, Fundamental Rules

FAQ

Q: What is the main issue in the Union of India vs. C.R. Madhava Murthy case?

A: The main issue was whether senior employees are entitled to a stepping up of pay to match their juniors’ pay when the juniors receive higher pay due to an Assured Career Progression (ACP) Scheme upgradation, despite the seniors having already been promoted.

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

A: The ACP Scheme is a scheme introduced by the Union of India to provide upgradation to employees and remove stagnation on a particular post. It provides monetary benefits in the form of the next higher grade, subject to fulfilling certain qualifications and eligibility criteria.

Q: What is Fundamental Rule 22 (FR 22)?

A: FR 22 is a rule that provides for stepping up the pay of a senior government servant who is drawing less pay than their junior in a higher post. This rule is used to address pay anomalies.

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

A: The Supreme Court upheld the High Court’s decision, ruling that senior employees are entitled to have their pay stepped up to match their juniors’ pay when the juniors receive higher pay due to an ACP Scheme upgradation.

Q: Why did the Supreme Court rule in favor of the employees?

A: The Supreme Court ruled in favor of the employees to rectify the pay anomaly where seniors were drawing less pay than their juniors. The Court emphasized that the issue was not about the merits of the ACP Scheme but about ensuring that seniors are not disadvantaged in terms of pay.

Q: What does this ruling mean for government employees?

A: This ruling means that senior government employees who are drawing less pay than their juniors due to ACP scheme upgradations are entitled to have their pay stepped up to match their juniors’ pay, ensuring pay parity.