Benefits of MACPs w.e.f. 1.1.2006 - Supreme Court Judgement

Benefits of MACPs w.e.f. 1.1.2006 - Supreme Court Judgement

Indian Railways Technical Supervisors Association
(Estd.1965, Regd. No.1329 under ITU Act,
Website http://www.irtsa.net)

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 Defense 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: 6 th 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.

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. Consquent upon the Judgement of Honb'le Suprem 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,
Harchandan Singh,
General Secretary, IRTSA

Encls: 6 Annexure

6th CPC recommendations on Date of effect

Relevant para of Gazette of India, Extraordinary, Ministry of Finance Notification No.1/1/2008-I C, dated 29.8.2008
Relevant Para of Ministry of Railways Notification RBE No. 103/2008 dated 04.09.2008
Rule 4 of Railway Service (Revised Pay) Rules, 20008, No. PC-VI/2008/I/RSRP/1 (RBE No:108/2008) dated 11.09.2008
Relevant Para of Judgement of Hon. Supreme Court in Civil Appeal No.3744 of 2016 Dated 8-12-2017
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

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 1 st 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.
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.

Source: http://www.irtsa.net/

Proposal of the Staff Side to record disagreement of the unsettled 6th CPC anomalies and to refer the same to Arbitrator

Proposal of the Staff Side to record disagreement of the unsettled 6th CPC anomalies and to refer the same to Arbitrator.

F. No. 11/1/2015-JCA
Government of India
Ministry of Personnel, PG and Pensions
Department of Personnel & Training

North Block, New Delhi
Dated: 13th April, 2018

To
Shri S. G. Mishra
Secretary, Staff Side
National Council Staff Side (JCM),
13-C, Ferozshah Road, New Delhi - 110 001

Subject: Proposal of the Staff Side to record disagreement of the unsettled 6th CPC anomalies and to refer the same to Arbitrator.

Sir,
I am directed to refer to your letter no. NC-JCM-2008/6th CPC dated 14.08.2017 on the subject cited above and to say that the comments received from Department of Pension & PW vide OM No. 42/21/2009-P&PW(G)33199 dated 09/04/2018 regarding Parity/Modified Parity in pension/revised pension/family pension of all pre-1996 retirees with those who retired on or after 01.01.2006 is enclosed.

2. It is requested that comments on the aforesaid item if any, may please be forwarded to this  Department.

Encl.: As above.

Yours sincerely
(Raju Saraswat)
Under Secretary (JCA)
Tele: 23092110

No. 42/21/2009-P&PW(G)/33199
Government of India
Ministry of Personnel, PG and Pensions
Department of Pension & Pensioners Welfare

3rd Floor, Lok Nayak Bhawan
Khan Market, New Delhi-110003
Date:- 09th April, 2018

OFFICE MEMORANDUM

Subject:- Proposal of the Staff Side to record disagreement of unsettled 6th CPC anomalies and to refer the same to Arbitrator-Comments of DoPPW


The undersigned is directed to refer to DoPT's DO No. 11/1/2015-JCA dated 26.03.2018 on the subject cited above and to say that the comments of this Department in respect of Item No 15,16,17 & 21 are enclosed (Annex-A).

2. This issues with the approval of competent authority.

Encl: Annex-A

(Charanjit Taneja)
Under Secretary to the Govt. of India
Shri D.K.Sengupta
Deputy Secretary (J CA)
Department of Personnel and Training
North Block, New Delhi

Annex-A

Item no. 15,16,17&21:- Parity/ Modified Parity in pension/revised pension/family pension of all pre-1996 retirees with those who retired on or after 01.01.2006 .

In accordance with an Office Memorandum dated 01.09.2008, for revision of the pension of the pre-2006 pensioners, the pension/family pension of existing pre-2006 pensioners/family pensioners was to be consolidated with effect from 01.01.2006 by adding together (i) The existing pension/family pension (ii) Dearness Pension, where applicable (iii) Dearness relief upto AICPI (IW) average index 536 (Base year 19823100) i.e. @ 24% of Basic Pension/Basic family pension plus dearness pension as admissible and (iv) fitment weightage @ 40% of the existing pension/family pension. Para 4.2 of the Office Memorandum dated 01.09.2008 provided that the fixation of pension will be subject to the provision that the revised pension, in no case, shall be lower than fifty per cent of the minimum of the pay in the Pay Band plus the Grade Pay corresponding to the pre-revised Pay Scale from which the pensioner had retired and in the case of HAG+ and above scales, this will be fifty per cent of the minimum of the revised Pay Scale.

2. Clarification on various provisions of the OM dated 1.9.2008 were issued vide Department of Pension and PW OM No.38/37/08-P&PW(A) pt. 1 dated 3.10.2008. In regard to Para 4.2 of the OM dated 1.9.2008 the following clarification was issued:-

 "The pension calculated at 50% of the minimum of pay in the pay band plus grade pay would be calculated at the minimum of the pay in the pay band (irrespective of the pre-revised scale of pay) plus the grade pay corresponding to the pre-revised pay scale. For example, if a pensioner had retired in the pro-revised scale of pay of Rs.18400-22400, the corresponding pay band being Rs. 37400-67000 and the corresponding grade pay being Rs. 10,000/- p.m., his minimum guaranteed pension would be 50% of Rs. 37,4001 Rs. 10,000 (i.e. Rs. 23,700).

The pension will be reduced pro-rata, where the pensioner had less than the required service for full pension as per rule 49 of the CCS(Pension) Rules, 1972 as applicable on 01.01.2006 and in no case it will be less than Rs. 3500/- p.m.

In case the pension consolidated as per para 4.1 of OM.No.38/37/08-P&PW(A) dated 1.9.2008 is higher than the pension calculated in the manner indicated above, the same (higher consolidated pension) will be treated as Basic Pension."

3. In the Agenda item, the JCM (Staff side) claimed that the revised pension/family pension of all pic-2006 pensioners/family pensioners would not be less than 50% of the minimum of the pay band l grade pay, corresponding to the pre-revised pay scale from which pensioner had retired, as arrived at with reference to the fitment tables annexed to Ministry of Finance, Department of Expenditure's O.M. No. l/l/2008-IC dated 30.8.2008.

4. In the last meeting of the Anomaly Committee the staff side argued that a reading of the recommendation of the Sixth Pay Commission on the matter indicated that the intent of the Pay Commission was to grant modified parity to pro-01.01.2006 pensioners by allowing the same fitment benefit as is being recommended to the existing Government employees subject to the provision that revised pension shall not be lower than 50% of the minimum of the pay in the pay band prescribed for the grade pay and the sum of the grade pay with reference to the minimum of the pay band plus the grade pay which is not consistent with the recommendation of the Sixth CPC. Officer of Department of Expenditure stated that this was not the intent of me recommendation of the Pay Commission. After some discussion, the Staff Side request the Official Side to examine the matter once again.

5. After the above meeting of the Anomaly Committee, the following decisions have been taken by the Government:

(i) Orders were issued vide this Department's OM of even number dated 28.1.2013 for stepping up of pension of pre-2006 pensioners w.e.f. 24.9.2012 to 50% of the minimum of pay in the pay band and grade pay corresponding to pre-revised pay scale from which the pensioner retired. Para 5 of this OM provides that in case the consolidated pension/family pension calculated as per para 4.1 of OM. No.38/37/08-P&PW (A) dated 192008 is higher than the pension/family pension calculated in the manner indicated in the OM. dated 28.1.2013, the same (higher consolidated pension/family pension) will continue to be treated as basic pension/family pension.

(ii) Subsequently, in compliance of an order dated 1.11.2oll of the Hon'ble CAT, Principal Bench in OA No. 655/2010, order dated 29.4.2013 of Hon'ble, High Court of Delhi in WP (C) No. 1535/2012 and order dated 17.3.2015 of Hon'ble Supreme Court in SLP (C) No. 36148/2013, order were issued vide this Department's 4 O.M. No.38/37/O8-P&PW(A) dated 30.7.2015 that the pension/family pension of all pre ~ 2006 pensioners/family pensioners may be revised in accordance with this Department's O.M. No.38/3 7/08-P&PW(A) dated 28.1.2013 with effect from 1.1.2006 instead of24.9.2012.

(iii) Vide OM. No.38/37/08-P&PW(A) dated 6.4.2016, it was decided that the revised consolidated pension of pre-2006 pensioners shall not be lower than 50% of the minimum of the pay in the Pay Band and the grade pay (wherever applicable) corresponding to the pre-revised pay scale as per fitment table without pro-rata reduction of pension even if they had qualifying service of less than 33 years at the time of retirement.

6. With the issue of the aforesaid orders, the demand of the staff side in regard to modified parity to pre-2006 pensioners has been accepted and implemented.


Source : Confederation