A prior higher pay scale counts as first ACP upgradation, entitling employees to second ACP after 24 years.

The applicant, a retired Assistant Engineer (Civil) in the Military Engineer Services, joined service as a Junior Engineer (Civil) on 26 March 1973 and retired on 30 September 2009 after more than 36 years of service.

He had been granted the pay scale of Assistant Engineer with effect from 1 January 1991 on completion of 15 years’ service as a Junior Engineer, which the Tribunal treated as his first financial upgradation.

The respondents initially granted him the second financial upgradation under the Assured Career Progression (“ACP”) Scheme with effect from 10 July 2004, and subsequently ante-dated it to 9 August 1999.

By order dated 17 December 2014, issued nearly five years after his retirement, the respondents withdrew the second ACP on the ground that it had been wrongly granted by counting 24 years from the date of initial appointment, although the first ACP could allegedly accrue only after the applicant passed the mandatory MES Procedure Examination.

No prior notice or opportunity of representation was given to the applicant before the withdrawal.

His earlier order in O.A. No. 974/2017, based on State of Punjab v. Rafiq Masih, was set aside by the Kerala High Court in O.P.(CAT) No. 144/2023 and the matter was remanded for consideration on merits.

Whether the applicant was entitled to the second financial upgradation under the ACP Scheme with effect from 9 August 1999, taking his Assistant Engineer pay scale granted from 1 January 1991 as the first financial upgradation?

Whether the respondents could withdraw the granted second ACP benefit in 2014, after the applicant’s retirement and without issuing notice or providing an opportunity of representation?

Whether the applicant was entitled to consequential financial upgradation under the MACP Scheme, arrears, and corresponding revision of pension and pensionary benefits?

Condition 4 provides that the first financial upgradation is ordinarily granted after 12 years of regular service and the second after 12 years from the first, subject to prescribed conditions; postponement of the first upgradation may consequently defer the second.

Condition 15, however, provides that employees who have completed 24 years of regular service, with or without a promotion, may receive the second financial upgradation directly, while surplus regular service is counted towards the second upgradation.

The Ministry of Defence policy letter dated 22 March 2007, issued with the concurrence of the Department of Personnel and Training, granted the second ACP to eligible diploma-holder Junior Engineers on completion of 24 years of service or from 9 August 1999, whichever was later, and did not impose the MES Procedure Examination requirement in the relevant category.

The principles of natural justice require prior notice and an opportunity of representation before an adverse order withdrawing an already granted financial benefit is made, particularly where the order affects a retired employee.

The Tribunal also referred to the Bangalore Bench decision in O.A. No. 540/2002 and connected matters, which had adopted a similar approach regarding ACP entitlement.

The Tribunal held that the applicant’s placement in the Assistant Engineer pay scale from 1 January 1991 constituted the first financial upgradation for ACP purposes.

Consequently, under Condition 15, he became eligible for the second ACP after completing 24 years of eligible service, and the respondents’ contention that he had received only his first ACP in 2004 after passing the MES Procedure Examination was inconsistent with their own earlier orders granting and later ante-dating the second ACP.

The Tribunal further found that the 2007 policy relaxation was intended to enable eligible Junior Engineers with 24 years of service to obtain the second ACP and that the respondents’ reliance on the examination requirement was misplaced in the applicant’s case.

Since the second ACP had been withdrawn nearly five years after retirement without notice or an opportunity to respond, the withdrawal also violated basic natural justice.

The subsequent departmental correction could not therefore be sustained either on the merits or procedurally.

It directed the respondents to restore the second financial upgradation with effect from 9 August 1999, together with all consequential benefits, including financial upgradation due under the MACP Scheme, release of arrears, and appropriate refixation and revision of pension and pensionary benefits.

The respondents were directed to complete the exercise within three months from the date of the order, failing which interest at 8% per annum would become payable thereafter.

No order as to costs was made.