The Supreme Court of India, comprising a Bench of Justice Sanjay Karol and Justice Augustine George Masih, held that functional promotions earned within the Railway Guard cadre—even if they carry the same Grade Pay—must be counted for the purpose of financial upgradations under the Modified Assured Career Progression Scheme (MACPS). Allowing the appeals filed by the Union of India, the apex court ruled that an employee who has traversed the promotional hierarchy up to the terminal post of Mail/Express Guard has exhausted all three financial upgradation slots under the MACPS and cannot claim Grade Pay of Rs. 4600 or Rs. 4800, which exceeds the maximum Grade Pay available on normal promotion within the cadre.
Background of the Case
The primary respondent, Harbans Lal Verma, joined the Indian Railways as a Goods Guard in the West Central Railway, Kota Division, on August 13, 1976, in the pay scale of Rs. 1200-2040. He was subsequently promoted to Passenger Guard on March 13, 1992, in the pay scale of Rs. 1350-2200 (revised to Rs. 1400-2600 with effect from March 1, 1993), and then to Mail/Express Guard on June 22, 1993, in the scale of Rs. 1400-2600. He served as Mail/Express Guard until his superannuation on March 31, 2009, completing over thirty-two years of service within the Guard cadre.
Following the recommendations of the Sixth Central Pay Commission (6th CPC), the pay structure for the Guard cadre was revised. Prior to the revision, the cadre comprised distinct scales: Goods Guard (Rs. 4500-7000), Senior Goods Guard and Passenger Guard (Rs. 5000-8000), and Senior Passenger Guard and Mail/Express Guard (Rs. 5500-9000). The 6th CPC merged these scales into two Grade Pays within Pay Bands PB-1 and PB-2: Goods Guard was placed in PB-1 at Grade Pay Rs. 2800, while all higher posts—Senior Goods Guard, Passenger Guard, Senior Passenger Guard, and Mail/Express Guard—were placed in PB-2 at a uniform Grade Pay of Rs. 4200.
After the Ministry of Railways notified the MACPS vide RBE No. 101/2009 dated June 10, 2009 (effective September 1, 2008), the Zonal Railway Manager, Kota, initially granted the 2nd and 3rd financial upgradations to the respondent, placing him at Grade Pay Rs. 4600 and Rs. 4800 with effect from September 1, 2008.
However, following consultations with the Department of Personnel and Training (DoPT), the Railway Board issued RBE No. 76/2011 on February 10, 2011, clarifying that movements from Goods Guard to Senior Goods Guard, Senior Goods Guard to Passenger Guard, and Senior Passenger Guard to Mail/Express Guard constituted promotions for MACP computation under Paragraph 8 of the Scheme. The circular noted that employees who reached Mail/Express Guard had availed three promotions and thus exhausted their MACP slots. This was further reinforced by RBE No. 142/2012, which stipulated that financial upgradations under MACPS cannot exceed the Grade Pay available on normal promotion within the cadre. Consequently, the Divisional Railway Manager, Kota, withdrew the higher Grade Pays and revised the respondent’s Grade Pay to Rs. 4200.
The respondent challenged the withdrawal before the Central Administrative Tribunal (CAT), Jaipur Bench. In O.A. No. 92/2015, the Tribunal set aside the withdrawal and ordered the grant of Grade Pay Rs. 4600 and Rs. 4800. The High Court of Judicature for Rajasthan at Jaipur affirmed the Tribunal’s decision in D.B. Civil Writ Petition No. 16939/2024, relying on a coordinate Bench decision of the High Court at Jodhpur in Union of India & Ors. v. Laxman Lal Parihar & Ors. The Union of India subsequently appealed to the Supreme Court.
Arguments of the Parties
Appearing for the Union of India, Additional Solicitor General Vikramjit Banerjee and Senior Advocate Nachiketa Joshi argued that the posts within the Guard cadre remained distinct promotional posts under the Recruitment Rules and the Avenue Chart. They contended that each promotion yielded promotional increments, enhanced pay-linked running allowances, and post-specific allowances, resulting in higher gross emoluments. The appellants submitted that under Paragraph 8 of the MACPS, promotions earned in posts carrying the same Grade Pay in the promotional hierarchy must be counted. Relying on departmental clarifications (RBE No. 76/2011 and RBE No. 142/2012) and Supreme Court precedents including Union of India v. M.V. Mohanan Nair, Union of India & Ors. v. Mukti Singha, and Union of India v. Birendra Kujur, they asserted that MACPS cannot grant a Grade Pay higher than what is available on regular promotion within the cadre structure.
Representing the respondent, Advocate Dr. Sumant Bharadwaj argued that Paragraph 2 of the MACPS entitles employees to placement in the immediate next higher Grade Pay in the hierarchy of revised Pay Bands (Rs. 4600 and Rs. 4800). He relied on Paragraph 5 of the MACPS and its illustration, contending that promotions earned in pre-revised pay scales that were subsequently merged into a single Grade Pay of Rs. 4200 must be ignored for granting MACPS benefits. It was further urged that the Union of India had accepted and implemented the Jodhpur High Court judgment in Laxman Lal Parihar, and that several Special Leave Petitions filed by the Railway authorities in similar matters had been dismissed by the Supreme Court.
Court’s Analysis and Interpretation
The Supreme Court examined the statutory framework of the MACPS, specifically evaluating the interplay between Paragraphs 2, 5, and 8 of the Scheme.
Addressing Paragraph 8 of the MACPS, the court observed that its application depends on three conditions: a promotion occurs, the posts carry the same Grade Pay, and the posts reside in the promotional hierarchy prescribed by the Recruitment Rules. The Bench rejected the argument that movements within the Guard cadre were not promotions due to the constancy of Grade Pay, highlighting that a promotion retains its character through formal selection, enhanced operational duties, and structural placement within the cadre.
Quoting Paragraph 8 of the Scheme, the court highlighted:
“Promotions earned in the post carrying same Grade Pay in the promotional hierarchy as per Recruitment Rules shall be counted for the purpose of MACPS.”
The court clarified that Paragraph 5 and its illustration serve as transitional provisions designed to adjust pre-MACPS (pre-September 1, 2008) ACP-era grants upon pay scale merger, ensuring employees start their MACPS count afresh. However, Paragraph 5 does not override Paragraph 8 regarding post-merger career progression or the counting of functional promotions within the hierarchy.
On the binding nature of executive clarifications, the court referenced its decision in Union of India v. M.V. Mohanan Nair, reiterating:
“Departmental clarifications issued by DoPT are integral to the Scheme and binding on all authorities.”
The Bench observed that RBE No. 76/2011 and RBE No. 142/2012 were issued in consultation with DoPT as the nodal department and correctly reflect the principle that MACPS cannot grant a Grade Pay exceeding the highest Grade Pay obtainable through regular promotion in the cadre. Reaffirming the ratio in Union of India & Ors. v. Mukti Singha, the court quoted:
“In our opinion, the view taken by the High Court that the respondents are entitled to grade pay higher than what they may get on actual promotion in the hierarchy cannot be sustained.”
Addressing previous SLP dismissals, including the order dated November 7, 2023, in SLP (C) No. 20906/2019, the court noted that non-speaking dismissal orders leaving questions of law open do not constitute binding precedent under Article 141 of the Constitution. Citing Kunhayammed and Others v. State of Kerala and Another, the Bench cited:
“If the order refusing leave to appeal is a non-speaking order, i.e., does not assign any reasons, then it will not be a declaration of law by the Supreme Court under Article 141 of the Constitution and would not attract the doctrine of merger.”
The court further held that the failure of the Union of India to challenge the judgment in Laxman Lal Parihar does not create an issue estoppel in a matter of public law involving general legal interpretation across the Indian Railways.
Final Decision
The Supreme Court allowed the appeal and set aside the judgment and order dated January 6, 2025, passed by the High Court of Judicature for Rajasthan at Jaipur in D.B. Civil Writ Petition No. 16939/2024, as well as the underlying orders of CAT Jaipur. The speaking order dated October 15, 2014, issued by the Divisional Railway Manager, Kota, rejecting the respondent’s MACP claim, was restored and confirmed.
The court directed that no recovery of any MACP benefits already paid to the respondent shall be made, recording the statement of the Additional Solicitor General.
The Bench specified that this declaration of law shall apply across Indian Railways to all similarly situated Railway Guards who reached Mail/Express Guard and whose MACP claims at Grade Pay Rs. 4600 and Rs. 4800 were denied or withdrawn. However, employees who received MACP benefits under judicial orders that have attained finality between the parties and been fully implemented shall not be subjected to recovery or revision.
Case Title: Union of India and Others v. Harbans Lal Verma
Case No.: SLP (C) No. 35363 of 2025
Bench: Justice Sanjay Karol, Justice Augustine George Masih
Date: July 23, 2026
