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Union of India vs. S. Ranjit Samuel

Civil Appeal · 2022 INSC 340Decided 24 Mar 2022
Civil Appeal Nos. 1625-1627 of 2021

Background

The respondent employees, working as Junior Engineers/Lower Division Clerks, had already received one financial upgradation under the government's Assured Career Progression (ACP) Scheme, 1999. They completed 24 years of service (which would have qualified them for a second upgradation under the ACP Scheme) between January and April 2009: right around the time the government replaced the ACP Scheme with the Modified ACP (MACP) Scheme via an office memorandum dated 19 May 2009, made retrospectively effective from 1 September 2008. The employees argued they were entitled to the more favourable ACP Scheme benefits since their eligibility arose before the new scheme was notified, and they won before the Central Administrative Tribunal and the Madras High Court.

Decision Breakdown

The Supreme Court allowed the government's appeals, relying on its own recent three-judge bench decision in Vice Chairman, Delhi Development Authority vs. Narender Kumar, which held that mere eligibility for a benefit under an old policy does not create a vested right: the employer still had to formally review and grant the benefit, and until that happened there was only an expectation, not an entitlement. The Court held the government was free to make the new MACP Scheme retrospective from 1 September 2008 (an executive policy decision), and since these employees became eligible only after that date, they had to be considered under the MACP Scheme and not the more generous ACP Scheme. It set aside the Tribunal's and High Court's orders and dismissed the employees' original applications.

Lesson Learnt

Employees do not acquire a permanent "vested right" merely by becoming technically eligible for a benefit under a policy. If the government replaces that policy (even retrospectively) before the benefit is actually granted, employees are generally bound by the new scheme.

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

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