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Union of India & Ors. vs. N.M. Raut & Ors.

Not available · 2024 INSC 1042Decided 12 Dec 2024
Not available
Chief Justice Sanjiv Khanna · Justice Sanjay Kumar

Background

This judgment resolved a batch of appeals (led by Union of India v. N.M. Raut, and disposing of several tagged appeals together) involving government employees, such as Pharmacists and Superintendents, who had earlier received an early, non-functional pay upgrade under the 2008 pay revision rules after completing a set number of years in a post. Years later they separately claimed further "financial upgradations" under the Modified Assured Career Progression Scheme (MACPS) as if that earlier upgrade did not count, and the government sought to recover the resulting excess payments.

Decision Breakdown

The Supreme Court held that the earlier non-functional pay upgrades must be factored into the count of an employee's three MACPS upgradations (granted at 10, 20, and 30 years of service); ignoring them, as some employees argued, would grant a windfall beyond what the scheme intends. Accordingly, the Court allowed the Union's appeals and upheld the corrected computation. However, recognising the errors originated from the government's own implementation, it directed that no recovery be made from employees who had already retired or were retiring within a year, barred any interest on recoveries from others, and made the corrected position apply prospectively from 1 January 2025.

Lesson Learnt

Career-progression pay benefits must be calculated by counting all upgradations an employee has actually received, not selectively, but when the government itself caused an overpayment through its own error, courts will shield employees, especially retirees, from harsh or interest-bearing recovery.

Official source (sci.gov.in)View Judgment (PDF)

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