Non-functional upgradation to Grade Pay ₹5400 follows four years’ service in Grade Pay ₹4800, including ACP/MACP placement.

The twelve applicants, serving as Inspectors/Superintendents in various formations of the Central Board of Indirect Taxes and Customs, had received ACP/MACP financial upgradations to Grade Pay of ₹4,800.

Their dates of initial appointment and grant of the first MACP were set out in the Tribunal’s tabulation.

Under the Sixth Central Pay Commission framework, the relevant posts were placed in Pay Band-II, with Inspectors generally carrying Grade Pay of ₹4,600 and Superintendents Grade Pay of ₹4,800.

The applicants claimed entitlement to Non-Functional Grade (NFG) in Grade Pay of ₹5,400 upon completing four years of regular service in Grade Pay of ₹4,800, relying on the Ministry of Finance Resolution dated 29 August 2008 and the decision in M. Subramaniam v. Union of India.

Their representations were not accepted; specifically, the representations of Applicants 1, 2 and 9 were rejected by order dated 10 April 2026 on the ground that no departmental instructions had been received for implementing M. Subramaniam on an in-rem basis.

The applicants therefore filed the present application under Section 19 of the Administrative Tribunals Act, 1985.

The respondents did not file a counter-affidavit and acknowledged that the issue had already been decided by the Tribunal and the Madras High Court, whose decision had been affirmed by the Supreme Court.

1. Whether employees who have completed four years of regular service in Grade Pay of ₹4,800, including where such Grade Pay was received pursuant to ACP/MACP financial upgradation, are entitled to NFG in Grade Pay of ₹5,400 with consequential benefits.

2. Whether the benefit declared in M. Subramaniam v. Union of India was required to be implemented uniformly and in rem, rather than being confined to the original litigants.

3. Whether the rejection order dated 10 April 2026, insofar as it concerned Applicants 1, 2 and 9, was liable to be quashed.

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

It relied on the Ministry of Finance’s Resolution dated 29 August 2008 and the related policy providing for NFG in Grade Pay of ₹5,400 after completion of four years in the relevant Grade Pay of ₹4,800.

Although a CBIC clarification dated 11 February 2009 stated that the benefit was available after regular promotion and not merely after ACP, the Tribunal followed M. Subramaniam v. Union of India, W.P. No. 13225/2010, decided by the Madras High Court on 6 September 2010, which directed grant of the benefit upon completion of four years in the relevant pay scale; the Supreme Court dismissed the Union’s Special Leave Petition on 10 October 2017 and the review petition on 23 August 2018.

The Tribunal also followed its earlier decision in Pradeep Kumar & Ors. v. Union of India & Ors., O.A. No. 1005/2019, decided on 9 January 2020, and the reasoning in O.A. No. 714/2020, decided on 3 December 2020, that uniform pay-fixation judgments concerning a government-wide policy should be implemented in rem and not treated as judgments in personam.

The Tribunal held that the controversy was no longer open because the Madras High Court had already directed grant of the ₹5,400 Grade Pay after four years in the ₹4,800 scale, and that decision had attained finality after dismissal of the Union’s SLP and review petition.

The applicants asserted, and the respondents did not dispute, that they had completed the requisite four years after being placed in Grade Pay of ₹4,800 pursuant to ACP/MACP.

The respondents’ refusal to extend the benefit merely because no specific departmental instruction had been issued for in-rem implementation was rejected.

Since pay fixation was governed by uniform governmental policy, the Tribunal reasoned that the judicial interpretation of that policy could not rationally be restricted to the successful litigants alone.

In view of the binding and consistently followed precedent, the Tribunal found no utility in awaiting a counter-affidavit or further departmental instructions.

It directed the respondents to extend to all the applicants the benefit flowing from M. Subramaniam and the Tribunal’s decision in O.A. No. 1005/2019, including the NFG/Grade Pay of ₹5,400 upon completion of four years in Grade Pay of ₹4,800, with consequential benefits.

The exercise was ordered to be completed within four months from receipt of the certified copy of the order.

The Original Application was accordingly allowed, with no order as to costs, and any pending miscellaneous application was disposed of.