MACP benefits cannot be cancelled without prior show-cause notice and opportunity of hearing.

The applicant, a Railway employee, was initially appointed as a Junior Clerk in 1989 and subsequently promoted/absorbed into various Accounts Department posts.

He was promoted as Senior Cashier in Grade Pay (GP) ₹4,200 on 05.12.2001.

After completing ten years without a further promotion, he was granted the third financial upgradation under the Modified Assured Career Progression (MACP) Scheme in GP ₹4,600 with effect from 05.12.2011, by Office Order No. 41 of 2012 dated 22.02.2012.

In 2021, the respondents partially cancelled the applicant’s MACP benefit, along with similarly placed employees, relying on Railway Board Establishment Circular (RBE) No. 142/2012.

The cancellation order dated 09.11.2021 was issued without a prior show-cause notice or opportunity of hearing.

The applicant challenged the order under Section 19 of the Administrative Tribunals Act, 1985, seeking restoration of the MACP benefit and protection against recovery.

Whether the respondents could cancel or partially withdraw the applicant’s MACP benefit granted in 2012 without issuing a prior show-cause notice and providing an opportunity of hearing?

Whether the applicant’s MACP benefit in GP ₹4,600 was liable to be withdrawn on the basis of RBE No. 142/2012, which clarified the treatment of MACP where the feeder and promotional posts carried the same Grade Pay?

Whether recovery or revision of the applicant’s pay could be effected before reconsideration of his entitlement by the competent authority?

The Tribunal applied Section 19 of the Administrative Tribunals Act, 1985, concerning applications before the Central Administrative Tribunal.

It considered the MACP Scheme as implemented through DoP&T instructions and Railway Board’s RBE No. 101/2009, under which financial upgradation was granted after completion of the prescribed service period.

It also considered RBE No. 142/2012, which clarified that MACP cannot confer a Grade Pay higher than that available on normal promotion and that, where the feeder and promotional posts carry the same Grade Pay, the financial upgradation is to be restricted accordingly.

Independently of the ultimate merits of MACP entitlement, the Tribunal applied the principles of natural justice, particularly audi alteram partem, requiring that an employee be given a show-cause notice and a reasonable opportunity to represent before an existing monetary benefit is withdrawn or pay is revised.

The Tribunal noted that the respondents sought to correct what they considered an erroneous grant of MACP in GP ₹4,600 by relying on RBE No. 142/2012.

However, the applicant had received the benefit pursuant to the 2012 office order and had continued to enjoy it for several years.

Since cancellation of the benefit had the potential to reduce his pay and result in recovery, the decision adversely affected his civil and financial consequences.

The Tribunal therefore held that the administrative character of the correction did not dispense with the requirement of natural justice.

Although the respondents argued that the cancellation order itself afforded an opportunity to submit a representation, the Tribunal found that no prior show-cause notice had been issued.

It consequently refrained from finally determining whether RBE No. 142/2012 correctly applied to the applicant and directed the competent authority to reconsider the matter after hearing him.

It found that the cancellation order dated 09.11.2021 was procedurally defective because it had been issued without a prior show-cause notice and opportunity of hearing.

The matter was remanded to the competent respondent authority, which was directed to issue a show-cause notice within four weeks.

The applicant was directed to submit his representation within two weeks thereafter, and the respondents were directed to pass a reasoned and speaking order in accordance with the applicable rules and Railway Board circulars.

Until such decision, no recovery was to be effected from the applicant.

The Original Application was accordingly disposed of without costs.