Benefit of Non-Functional Grade Pay of Rs. 5400 is Applicable In Rem to Similarly Situated Officers.

The three applicants, retired and serving Government employees under the Narcotics Commissioner, were granted financial upgradation to the Grade Pay (GP) of Rs. 4,800/- under the MACP Scheme.

Under a Government Resolution dated 29.08.2008, Group-B officers in certain departments are entitled to a non-functional GP of Rs. 5,400/- after completing four years of regular service in the GP of Rs. 4,800/-.

The applicants completion of the four-year period was undisputed; however, the respondents rejected their claim via order dated 22.07.2025, asserting that this benefit applies only to those who reached GP Rs. 4,800/- through regular promotion, not via MACP, and that the 2008 Resolution was department-specific.

1. Whether the benefit of non-functional Grade Pay of Rs. 5,400/- is applicable to employees who attained the Grade Pay of Rs. 4,800/- through MACP/ACP financial upgradation rather than regular promotion

2. Whether the judicial precedent set in M. Subramaniam v. U.O.I is a judgment in rem, requiring the respondents to extend the benefit to all similarly situated employees regardless of whether they were parties to the original litigation

The Tribunal primarily applied the Government of India Resolution dated 29.08.2008, which accepted the 6th Pay Commission's recommendation for non-functional scale upgrades.

It relied heavily on the precedent of M. Subramaniam v. U.O.I (W.P. No. 13225/2010, Madras High Court), affirmed by the Supreme Court in Civil Appeal No. 8883/2011, which established that the four-year residency period for GP Rs. 5,400/- is counted from the date the officer is placed in GP Rs. 4,800/-, irrespective of the mode of placement.

It applied the principle from State of Karnataka v. C. Lalitha (2006) 2 SCC 747, holding that service jurisprudence requires similarly situated persons to be treated equally to avoid unnecessary litigation.

The Tribunal reasoned that the legal controversy surrounding the distinction between "regular promotion" and "financial upgradation" for the purpose of non-functional scales has been rendered res integra by previous judicial pronouncements.

It noted that various Benches, including the Principal Bench and Jabalpur Bench (in Salman Imteyaz Hussaini), have consistently held that the M. Subramaniam verdict must be treated as a judgment in rem.

The Tribunal rejected the respondents' narrow interpretation of the 2008 Resolution, observing that once the principle is settled by the High Court and affirmed by the Supreme Court, the executive cannot deny the same benefit to similarly situated employees.

It emphasized that forcing every employee to approach the court for a settled entitlement causes avoidable expenditure and wastes judicial time.

It held that the applicants are entitled to the non-functional Grade Pay of Rs. 5,400/- effective from the date they completed four years of regular service in the Grade Pay of Rs. 4,800/-.

The respondents were directed to grant all consequential benefits, including arrears of pay and revision of retiral dues/PPOs for superannuated applicants, within 90 days.