The Central Administrative Tribunal's ruling in O.A. No. 384/2017 clarifies a long-standing ambiguity in the application of the Modified Assured Career Progression Scheme (MACP) for Central Government employees. By distinguishing between promotions earned through departmental examinations and direct recruitment, the Tribunal has reinforced the principle that service continuity, not hierarchical advancement, determines eligibility for financial up-gradations under MACP.
Background & Facts
The Dispute
The applicant, a postal employee appointed as Postal Assistant in 1983, sought the benefit of the third financial up-gradation under MACP, granted w.e.f. 15.11.2013 in Grade Pay of Rs. 4800/-. The Department later withdrew this benefit, citing that he had already received three promotions - Time Bound One Promotion (TBOP) in 1999, promotion to Inspector of Posts (IPO) in 2002 via LDCE, and promotion to Assistant Superintendent of Post Offices (ASPO) in 2007. The Department contended that these three promotions disqualified him from receiving the third MACP under DoPT OM No. 35034/2008-Estt(D).
Procedural History
- 1983: Appointed as Postal Assistant
- 1999: Granted TBOP in Pay Scale Rs. 4500-7000
- 2002: Promoted to Inspector of Posts via Departmental Competitive Examination (LDCE) in Pay Scale Rs. 5500-9000
- 2007: Promoted to Assistant Superintendent of Post Offices in Pay Scale Rs. 9300-34800 (Grade Pay Rs. 4600)
- 2013: Granted 3rd MACP w.e.f. 15.11.2013 (Grade Pay Rs. 4800)
- 2015: Audit inspection at Nanpura HO raised objection to MACP grant
- 2016: Chief Postmaster General withdrew MACP benefit via Memo No. Staff/63-5/MACPs/2016
- 2017: Applicant filed Original Application before CAT Ahmedabad
Relief Sought
The applicant sought quashing of the withdrawal order, refund of recovered amount (Rs. 45,339), re-fixation of pay from 15.11.2013 with arrears, and direction to the Review Screening Committee to reconsider his MACP eligibility.
The Legal Issue
The central question was whether promotion through a Limited Departmental Competitive Examination (LDCE) constitutes a "promotion" for the purpose of counting against MACP eligibility, and whether pre-2006 promotions from merged pay scales must be ignored under the Sixth Pay Commission’s merger provisions.
Arguments Presented
For the Petitioner
The applicant’s counsel relied on D. Sivakumar v. Union of India (Madras High Court and Supreme Court), arguing that LDCE promotions are treated as direct recruitment, not promotions, under MACP. He cited para 5 of the Department of Posts’ OM dated 18.09.2009, which mandates that promotions in pre-revised scales (Rs. 5000-8000, Rs. 5500-9000, Rs. 6500-10500) merged under the Sixth CPC must be ignored for MACP purposes. He further argued that his TBOP (1999) was in a different pay scale (Rs. 4500-7000) and thus not covered by the merger provision.
For the Respondent
The Department contended that the applicant had received three promotions - TBOP, IPO, and ASPO - and therefore was ineligible for the third MACP under DoPT guidelines. It argued that the Madras High Court judgment in Sivakumar was not binding as it lacked reference to specific recruitment rules, and that the Supreme Court had left the legal question open in its dismissal of the SLP.
The Court's Analysis
The Tribunal undertook a detailed statutory and jurisprudential analysis of the MACP scheme and the Sixth Pay Commission’s pay structure merger. It emphasized that para 5 of the Department of Posts’ OM dated 18.09.2009 explicitly states that promotions in the pre-revised scales of Rs. 5000-8000, Rs. 5500-9000, and Rs. 6500-10500 must be ignored for MACP purposes after their merger into a single pay band. The applicant’s TBOP in 1999 was in Rs. 4500-7000, a scale not covered by the merger provision, and his LDCE promotion in 2002 was to Rs. 5500-9000, which was merged under the Sixth CPC.
"The selection of an employee through LDCE is not considered as a 'Promotion' rather it is considered as 'Direct Recruitment' as it is open for the employees who have completed the certain required length of service."
The Tribunal relied on binding precedents from the Madras High Court, Rajasthan High Court, and the Supreme Court’s dismissal of the SLP in D. Sivakumar, which collectively affirm that LDCE is a form of direct recruitment, not promotion. The Court held that the Department’s interpretation conflated hierarchical advancement with service-based eligibility. The withdrawal of MACP without notice violated principles of natural justice, and the audit objection could not override settled legal principles.
The Verdict
The applicant won. The Tribunal held that promotion through LDCE is direct recruitment and must not be counted as a promotion for MACP eligibility. The withdrawal order was quashed, the recovery reversed, and the applicant’s pay was to be re-fixed with arrears from 15.11.2013, subject to a three-year limitation.
What This Means For Similar Cases
LDCE Promotions Are Not MACP Counters
- Practitioners must argue that any promotion via LDCE, JSC, or similar departmental exams should be treated as direct recruitment, not a promotion, for MACP calculations
- Service periods before LDCE appointment remain relevant for MACP eligibility
- The 30-year service threshold is calculated from initial appointment, not from the last promotion
Pre-2006 Merged Scales Must Be Ignored
- MACP eligibility must be assessed by ignoring promotions in scales merged under Sixth CPC (Rs. 5000-8000, Rs. 5500-9000, Rs. 6500-10500)
- Promotions in non-merged scales (e.g., Rs. 4500-7000) do not count against MACP
- Employers must audit MACP grants against the 18.09.2009 OM, not generic DoPT guidelines
Natural Justice Requires Notice Before Recovery
- Withdrawal of MACP benefits without prior notice or opportunity of hearing is procedurally invalid
- Recovery orders based on audit objections alone, without adjudication, violate Article 14 and 21
- Departments must issue show-cause notices and consider representations before reversing financial benefits
