M. Sudhakar & Ors. vs Union Of India & Ors.

Per Harvinder Kaur Oberoi, Member (J):

MA No. 1957/2026 seeking permission to join together in a single application is allowed for the reasons stated therein.

In this OA, The applicants, members of the applicant Association, are aggrieved by the withdrawal of the benefit of 3% pay fixation/fitment granted to officers on their appointment to the post of Assistant Accounts Officer (AAO) through Limited Departmental Competitive Examination (LDCE), as well as the denial of consequential benefits under the Modified Assured Career Progression (MACP) Scheme. The applicants contend that their appointment to the post of AAO was through a competitive examination and did not constitute a regular promotion in the hierarchy of any lower cadre. They rely upon F.R. 22(I)(a)(1), under which the initial pay of a Government servant appointed to a post carrying duties and responsibilities of greater importance is required to be fixed by granting the prescribed benefit of one increment/3% fitment, as applicable.

The applicants were promoted/appointed as AAOs pursuant to the AAO LDCE-2018. Their promotion orders dated 01.10.2018 specifically provided that their pay would be regulated under F.R. 22(I)(a)(1). At the relevant time, the Department of Posts had already issued clarification dated 07.02.2013 providing that employees who had received financial upgradations under TBOP/BCR/MACP and thereafter qualified for appointment to the AAO cadre through the departmental examination would be entitled to the benefit of 3% fitment, since appointment to the AAO cadre was not in their regular promotional hierarchy. A further clarification dated 16.10.2019 also specifically recognised the admissibility of 3% fitment to AAOs promoted from the Senior Accountant cadre who had reached Level-7 through MACP, while clarifying the position where an employee was already in Level-8.

The applicants state that, prior to MACP, the Department had the TBOP and BCR schemes under which financial upgradations were granted after specified periods of service. With effect from 01.09.2008, the MACP Scheme was introduced, providing three financial upgradations. The applicants contend that the benefit of pay fixation accompanying such financial upgradation was distinct from regular promotion, and that appointment to AAO through LDCE, being outside the regular promotional hierarchy, could not retrospectively be treated as a regular promotion for adjusting the financial upgradations already granted.

However, by order dated 26.04.2021, the Department withdrew the earlier clarifications dated 07.02.2013 and 16.10.2019 and directed review of cases where 3% fitment had been granted to officials/officers already enjoying MACP benefits and subsequently appointed as AAOs. The applicants contend that the said decision operated retrospectively and sought to withdraw a benefit which had been granted in accordance with the rules and the express terms of their promotion orders. The applicants further rely upon subsequent departmental clarification dated 29.09.2021, which, according to them, recognised that promotion through LDCE could attract pay fixation under F.R. 22(I)(a)(1) without adjusting the financial upgradations already earned.

The applicants further rely upon various judicial decisions concerning appointment/promotion through LDCE, including the decisions of the Jodhpur Bench of this Tribunal dated 22.05.2012, the Madras High Court dated 04.02.2015 in Union of India v. D. Sivakumar, and the dismissal of the corresponding SLP by the Hon’ble Supreme Court on 16.08.2016 and the review petition on 13.09.2017. They also rely upon the judgment of the Hon’ble Supreme Court in Pavnesh Kumar v. Union of India, Civil Appeal No.3641/2023, decided on 28.11.2023, to contend that appointment through LDCE is distinguishable from normal promotion based upon seniority-cum-fitness.

It is the case of the applicants that the AAO cadre is not in the regular promotional hierarchy of either the Operational Wing or the Accounts Wing of the Department of Posts. Officials belonging to different cadres and different levels are eligible to participate in the AAO LDCE and selection is made on the basis of merit in the competitive examination. The applicants therefore contend that their appointment to the AAO cadre is in the nature of selection/fresh appointment for the purposes of MACP and cannot be treated as a regular promotion so as to adjust the financial upgradations already earned by them.

The applicants also rely upon clarifications issued by the Controller General of Accounts and the Comptroller and Auditor General of India concerning appointment to the AAO/Section Officer cadre through departmental competitive examination, wherein such appointment was treated as direct recruitment/fresh appointment for the purpose of ACP/MACP and previous service in the lower cadre was not counted for such benefits. According to the applicants, these clarifications demonstrate the consistent principle that an appointment through LDCE to a cadre outside the regular promotional hierarchy is distinct from a normal promotion.

The applicants further contend that, despite the aforesaid position, their representations were rejected by the Department vide order dated 17.02.2026, wherein the Department proceeded on the premise that all lower cadres from which candidates could appear in the AAO LDCE constituted feeder cadres. The applicants dispute this interpretation and submit that mere eligibility to participate in an LDCE cannot make a cadre a feeder cadre in the conventional sense, particularly when selection is not based upon seniority-cum-fitness or consideration by a DPC but upon merit in a competitive examination.

The applicants also refer to the Recruitment Rules for the AAO cadre and submit that, although the Rules contemplate different modes of recruitment, including LDCE, deputation and direct recruitment, the fact that direct recruitment is provided for further demonstrates that appointment to AAO through LDCE cannot automatically be equated with regular promotion in a lower cadre. They also rely upon the decision of this Tribunal in OA No.1456/2015 concerning the AAO cadre under the Controller General of Accounts, as well as the subsequent clarification dated 10.12.2012, in support of their contention.

Learned counsel for the applicants submitted that the controversy essentially relates to two connected issues, namely, whether the applicants, who were appointed as AAOs through LDCE, are entitled to pay fixation under F.R. 22(I)(a)(1) and whether their appointment to the AAO cadre is to be treated as a regular promotion for the purpose of adjusting the financial upgradations already granted under ACP/MACP.

Learned counsel submitted that the applicants' promotion orders dated 01.10.2018 expressly provided that their pay would be regulated under F.R. 22(I)(a)(1), and that at the time when the AAO LDCE-2018 was notified, the departmental clarification dated 07.02.2013 was in force and specifically permitted 3% fitment to employees who, despite having received financial upgradations, subsequently entered the AAO cadre through the departmental examination. The applicants had therefore participated in the selection and accepted appointment on the basis of the conditions prevailing at that time. The subsequent withdrawal of the benefit by the order dated 26.04.2021, according to learned counsel, could not operate retrospectively to their prejudice.

Learned counsel further submitted that the AAO post does not form part of the regular promotional hierarchy of either the Operational Wing or the Accounts Wing. Candidates from different cadres are eligible to compete in the LDCE and appointment is based upon merit in the competitive examination. Thus, the appointment to AAO cannot be equated with a normal promotion obtained through seniority-cum-fitness or selection within a feeder cadre. The mere fact that candidates are drawn from lower cadres does not, according to learned counsel, convert those cadres into feeder cadres for the purposes of the MACP Scheme.

Learned counsel placed reliance upon the judgment of the Jodhpur Bench of this Tribunal dated 22.05.2012, wherein appointment through LDCE to the post of Postal Assistant was held to be a fresh appointment for the purposes of ACP/MACP and the earlier career advancements were not treated as regular promotions. It was submitted that the said view was affirmed by the Madras High Court in Union of India v. D. Sivakumar and that the SLP and subsequent Review Petition filed by the Department were dismissed by the Hon’ble Supreme Court.

Learned counsel also relied upon the judgment of the Hon’ble Supreme Court in Pavnesh Kumar v. Union of India dated 28.11.2023, submitting that the Hon’ble Supreme Court has clearly distinguished normal promotion from promotion/selection through LDCE and held that selection through competitive examination within the limited category of eligible employees cannot be equated with normal promotion.

Learned counsel further relied upon the decisions of different Benches of this Tribunal, including the Ahmedabad Bench decision dated 17.09.2019, to submit that where candidates from more than one category are eligible to participate in an LDCE and selection is based upon merit, the appointment cannot be treated as a regular promotion from a feeder cadre for the purposes of MACP. It was argued that the same principle squarely applies to appointment to the AAO cadre.

Learned counsel further submitted that the Department itself had, through its clarification dated 16.10.2019, accepted that an AAO promoted from the Senior Accountant cadre who had already reached Level-7 through MACP would be entitled to the 3% fitment benefit while being placed in Level-8. The subsequent withdrawal of the said clarification, according to learned counsel, was contrary to the earlier settled departmental position and could not retrospectively deprive the applicants of a benefit already granted to them.

It was also submitted that the departmental clarification dated 29.09.2021 supports the applicants' case, as it contemplated pay fixation under F.R. 22(I)(a)(1) upon promotion through LDCE without adjustment of earlier financial upgradations. Learned counsel submitted that the Department could not adopt inconsistent positions in respect of similarly situated LDCE appointments.

Learned counsel further relied upon the clarifications issued by the Controller General of Accounts dated 10.12.2012 and by the Comptroller and Auditor General of India dated 20.06.2016, under which appointment to the AAO/Section Officer cadre through departmental examination was treated as direct recruitment/fresh appointment for the purpose of ACP/MACP and previous service in the lower cadre was not counted. It was argued that these instructions provide a persuasive and consistent administrative interpretation of the distinction between regular promotion and appointment through LDCE.

Learned counsel submitted that F.R. 22(I)(a)(1) itself provides for pay fixation where a Government servant is appointed to a post carrying duties and responsibilities of greater importance. The AAO post is a Group-B Gazetted post carrying greater responsibilities than the posts held by the applicants, and their appointment was made after qualifying a competitive examination. Therefore, the applicants satisfy the requirements of F.R. 22(I)(a)(1) and are entitled to the benefit of pay fixation thereunder.

It was finally submitted that the applicants had acquired the benefit of 3% fitment pursuant to the rules and departmental instructions prevailing when they qualified the AAO LDCE-2018 and were appointed as AAOs. The subsequent withdrawal of the benefit and proposed recovery of amounts already paid is therefore arbitrary, retrospective and contrary to the applicants' legitimate entitlement. Learned counsel accordingly prayed that the impugned orders dated 26.04.2021 and 17.02.2026, insofar as they withdraw the 3% fitment benefit and adjust the applicants' earlier MACP/financial upgradations against their appointment to AAO, be set aside and the respondents be directed to grant the applicants the benefit of pay fixation under F.R. 22(I)(a)(1) and treat their appointment through LDCE as a fresh appointment/direct recruitment for the purposes of MACP.

Counsel for the respondents has filed the counter affidavit and submitted that the nodal department, namely, the Department of Personnel and Training (DoP&T), vide ID Note dated 14.10.2024, has clarified that the increment granted on promotion as well as on grant of MACP is covered under the same provision, namely, FR 22(I)(a)(1). Therefore, grant of the benefit of increment twice, once on grant of MACP and again on promotion/NFSG, would place seniors at a disadvantageous position and result in pay anomaly.

Learned counsel further submitted that the applicants' association has relied upon a number of judgments which are wholly distinguishable and have no application to the facts and circumstances of the present case. It is submitted that in the cases relied upon by the applicants, the employees were promoted from the post of Postman to Postal Assistant, which are Group-C posts. As per the Recruitment Rules for Postal Assistant/Sorting Assistant, 2002, 50% of the vacancies were required to be filled through direct recruitment and the remaining 50% through promotion. In contrast, the method of recruitment prescribed for the post of AAO is "promotion, failing which by deputation, and failing both by direct recruitment".

It is further submitted that the applicants in OA Nos. 382/2011, 353/2011 and 354/2011, referred to by the applicants, were appointed as Group-D employees/GDS and subsequently promoted to the posts of Postman and Postal Assistant, with limited promotional opportunities in the regular line of cadre. On the other hand, the post of AAO in the IP&TAFS is a Group-B Gazetted post having ample promotional avenues on the basis of length of service to the posts of AO, Senior AO or ACAO in Group-A, besides Non-Functional Upgradation after completion of four years of regular service in the grade of AAO. Hence, the judgments relied upon by the applicants are clearly distinguishable and have no application to the facts of the present case.

Learned counsel submitted that the issue involved in the aforesaid cases was whether a promotion earned through LDCE was to be adjusted against the benefits of TBOP/BCR/ACP/MACP or whether such financial upgradations were to be counted from the date of appointment in the lower post. The Hon'ble Courts, while interpreting the relevant schemes and Recruitment Rules applicable to the respective cadres, adjudicated upon the nature of promotion through LDCE vis-à-vis the grant of financial upgradations. In the present case, however, the applicants have already been granted the admissible benefits under the MACP Scheme in accordance with the applicable rules and instructions. The withdrawal of the 3% fitment benefit does not affect the grant of MACP itself, but only rectifies the pay fixation which was found to be inconsistent with the clarification issued by the competent authority. Therefore, the judgments relied upon by the applicants, which pertain to the counting of LDCE promotions for the purposes of TBOP/BCR/ACP/MACP, are not relevant to the issue arising for consideration in the present case.

It is further submitted that it is a settled principle of law that a judgment is an authority only for what it actually decides and not for what may logically follow therefrom. Therefore, the applicants cannot seek extension of the ratio of the aforesaid judgments to the present case, which arises out of an entirely different factual and legal background.

Learned counsel further submitted that the reliance placed by the applicants upon the judgments of the Hon'ble CAT, Principal Bench in OA No. 3756/2011, the Hon'ble CAT, Ahmedabad Bench in OA No. 93/2019 and connected matters, and the Hon'ble CAT, Ernakulam Bench in OA No. 967/2017, is wholly misplaced and misconceived. It is submitted that the aforesaid cases pertained to appointment to the posts of Postal Assistant/Sorting Assistant, which are Group-C posts, and involved interpretation of the Recruitment Rules governing those cadres. The issue before the respective Tribunals was whether appointment through LDCE to those posts, where employees belonging to different cadres were eligible to compete, could be treated as direct recruitment or promotion for the limited purpose of grant of ACP/MACP benefits. The findings recorded therein were rendered in the peculiar facts of those cases and on the basis of the Recruitment Rules applicable to the respective Group-C cadres of the operative side of the Department of Posts.

It is submitted that the Department of Posts, vide PA Wing letter dated 17.02.2026, has clarified that promotion to the AAO grade of the IP&TAFS Group-B cadre is carried out through LDCE from the feeder cadres of DoP and DoT in accordance with the AAO Recruitment Rules, 2018. The said Recruitment Rules are self-explanatory and such appointment cannot be treated as direct recruitment for the purpose of MACP. Eligibility of employees from multiple lower cadres to appear in an LDCE does not, ipso facto, convert the appointment into direct recruitment. LDCE is merely a mode of selection and the nature of appointment has to be determined from the Recruitment Rules, which, in the case of AAO in IP&TAFS Group-B, prescribe promotion as the primary mode of recruitment. It is further submitted that DPC is also mentioned in the Recruitment Rules as a mandatory part of the promotion process.

Learned counsel submitted that the posts of AAO in CAG and CGA are governed by their respective cadre structures, Recruitment Rules and departmental clarifications, which are different from those applicable to the Department of Posts. Therefore, the decisions and provisions governing those cadres cannot be mechanically applied to the present case.

Learned counsel further submitted that the contentions raised in the other paragraphs have already been dealt with in detail in the foregoing submissions and, therefore, the same are not being repeated for the sake of brevity.

With regard to the contention of the applicants that appointment to the post of AAO through LDCE is to be treated as direct recruitment for the purpose of MACP, learned counsel submitted that the said contention is false, incorrect and misconceived. It is submitted that the present Original Application does not involve the issue of grant of MACP benefits or counting of service thereunder. The applicants have already been granted all admissible benefits under the MACP Scheme. The issue in the present OA is confined to the withdrawal of the additional 3% fitment benefit earlier granted on promotion to the post of AAO in cases where the officials had already availed the benefit of MACP.

Learned counsel submitted that the provisions of FR 22(I)(a)(1) relied upon by the applicants cannot be read in isolation and have to be harmoniously construed with paragraph 4 of Annexure-I to the DoP&T OM dated 19.05.2009, as amended by OM dated 04.07.2017 and reiterated by the consolidated OM dated 22.10.2019. The DoP&T has categorically clarified vide ID Note dated 14.10.2024 that the increment granted on promotion and MACP is covered under the same Rule, namely FR 22(I)(a)(1), and that grant of increment benefit twice, i.e. on grant of MACP and again on promotion/NFSG, would create pay anomalies and place seniors at a disadvantageous position. Accordingly, the applicants are not entitled to the additional 3% fitment benefit claimed by them.

Learned counsel further submitted that the contents of the relevant paragraph are denied and that the DoP&T, vide ID Note dated 14.10.2024, has clarified that the increment granted on promotion and MACP is covered under the same provision, namely FR 22(I)(a)(1). Therefore, grant of increment benefit twice, once on grant of MACP and again on promotion/NFSG, would place seniors at a disadvantageous position and create pay anomaly. It is submitted that the impugned letter dated 17.02.2026 was issued after due consideration of the applicable Recruitment Rules, MACP guidelines and clarifications issued by the competent authority and does not suffer from any legal infirmity.

Learned counsel submitted that the contention of the applicants that they acquired a vested right on account of the departmental instructions prevailing at the time of issuance of the notification for AAO-LDCE-2018 is also misconceived. Mere existence of a departmental instruction at the time of issuance of the notification does not confer any vested or indefeasible right upon the applicants to continue to enjoy a benefit if the same is subsequently found to be inconsistent with the governing rules and the clarifications issued by the nodal department. It is reiterated that the applicants joined the post of AAO during the years 2018/2020 and have since received further financial advancements by way of Non-Functional Upgradation on completion of four years of service or by promotion to the post of Accounts Officer/Senior Accounts Officer, whichever was earlier. At present, the concerned officers are drawing pay in Level-9/Level-10 of the 7th CPC Pay Matrix, which demonstrates that they have continued to receive regular promotional and financial advancements in accordance with the applicable rules.

It is further submitted that the members of the applicants' association are serving as AAO/Senior AO, Group-B Gazetted Officers, under the Central Government and are, therefore, expected to possess adequate knowledge and understanding of the extant rules and guidelines governing pay fixation. Learned counsel reiterated that a Government servant is entitled only to draw the pay that is legitimately due to him or her. Once an overpayment is detected, non-recovery thereof would result in recurring financial loss to the Government and may also give rise to claims from similarly placed employees for retention of the overpaid amount.

Learned counsel further submitted that the letters dated 07.02.2013 and 16.10.2019 were reviewed in the light of the provisions of the DoP&T OM dated 19.05.2009, OM dated 22.10.2019 and the clarification issued by the DoP&T vide ID Note dated 08.08.2019. Consequently, the Department of Posts withdrew the earlier clarification vide letter dated 26.04.2021 and reiterated the position vide letters dated 29.09.2021 and 10.10.2022. Therefore, the withdrawal of the 3% fitment benefit and consequential recovery of excess payment are stated to be legal, valid and in accordance with the applicable rules and instructions.

Learned counsel further submitted that the contention of the applicants that the Department has equated the cadre of AAO with the cadres of Postmaster Grade-I, II and III is wholly misconceived and untenable. No such comparison has been made by the respondents. It is submitted that the clarification dated 07.02.2013 was initially issued in respect of AAOs of the Accounts line. Subsequently, on the basis of the same interpretation, the benefit of 3% pay fixation was also extended to certain officials of the operative side, such as Inspector Posts and erstwhile Postmaster Grade-I officials promoted under LDCE, who had already availed financial upgradation under the MACP Scheme, vide OMs dated 20.08.2018 and 15.10.2018.

It is submitted that when the matter relating to grant of fixation benefit to Postmaster Grade-I officials was referred to the DoP&T, being the nodal department for service matters, the DoP&T, vide ID Note Ty. No. 1376647/19/CR dated 08.08.2019, advised the Department to review such pay fixation in terms of paragraph 4 of Annexure-I to the MACP Scheme issued vide OM dated 19.05.2009. Accordingly, the benefit of additional pay fixation granted to the erstwhile Postmaster Grade-I officials was withdrawn.

Learned counsel submitted that, thereafter, in the light of the provisions of DoP&T OM No. 35034/3/2008-Estt.(D) dated 19.05.2009 and the further clarification received vide ID Note Ty. No. 1376647/19/CR dated 08.08.2019, the 3% fitment benefit allowed to officers who had already been granted MACP on their promotion to AAO under the letters dated 07.02.2013 and 16.10.2019 was withdrawn vide letter dated 26.04.2021. Accordingly, directions were issued to review all cases falling under the said categories and to fix the pay in accordance with the guidelines contained in the DoP&T OM dated 19.05.2009 and OM dated 22.10.2019. It is, therefore, submitted that the withdrawal of the 3% fitment benefit in the case of the applicants was not based upon any comparison between the cadre of AAO and the cadres of Postmaster Grade-I, II or III, but was pursuant to the clarification and instructions issued by the competent nodal department. Hence, the contention of the applicants is wholly misconceived and the OA is liable to be dismissed.

We have heard the learned counsel for the parties and perused the pleadings available on record.

The controversy arising for consideration in the present Original Application is essentially whether the applicants, who were appointed to the post of Assistant Accounts Officer (AAO) through Limited Departmental Competitive Examination (LDCE), after having already availed financial upgradation under the MACP Scheme, are entitled to a further benefit of pay fixation under F.R. 22(I)(a)(1), including the benefit of 3% fitment, without taking into account the financial upgradation already granted to them under the MACP Scheme.

The principal contention of the applicants is that their appointment to the post of AAO through LDCE is in the nature of a fresh appointment/selection and cannot be treated as a regular promotion in the hierarchy of their respective feeder cadres. It has accordingly been contended that the benefit of pay fixation under F.R. 22(I)(a)(1) was rightly extended to them pursuant to the departmental clarifications dated 07.02.2013 and 16.10.2019 and that the subsequent withdrawal of such benefit is impermissible. The applicants have also placed reliance upon various judicial pronouncements concerning appointment through LDCE to contend that such appointment cannot be equated with regular promotion for the purposes of ACP/MACP.

The mere fact that appointment to the post of AAO is made through a competitive examination or that candidates belonging to different cadres are eligible to participate in the LDCE does not, by itself, determine the legal character of such appointment for the purposes of the applicable service rules. The nature and character of the appointment have to be determined primarily with reference to the relevant Recruitment Rules governing the post. In the present case, the respondents have specifically relied upon the AAO Recruitment Rules, 2018, under which promotion is prescribed as the primary mode of recruitment, failing which deputation and, failing both, direct recruitment. The respondents have also pointed out that the DPC forms part of the prescribed process. Thus, the appointment of the applicants to the post of AAO cannot be treated as an appointment by direct recruitment merely because the mode of selection adopted was an LDCE.

The distinction sought to be drawn by the applicants between LDCE and regular promotion, therefore, cannot be considered in isolation from the statutory Recruitment Rules. LDCE is a mode of selection, whereas the character of the appointment flowing from such selection is to be determined in accordance with the Recruitment Rules. The eligibility of employees belonging to different feeder cadres to participate in the examination does not ipso facto convert the appointment into direct recruitment or a fresh appointment for all purposes, including the purposes of the MACP Scheme.

The reliance placed by the applicants upon the judgments concerning Postal Assistant/Sorting Assistant and other Group-C cadres is also of little assistance to them. Those decisions were rendered in the context of the particular Recruitment Rules applicable to the respective cadres and the nature of promotional avenues available therein. The post of AAO in the present case is a Group-B Gazetted post and, as pointed out by the respondents, carries further avenues of advancement to higher posts as well as the benefit of Non-Functional Upgradation upon completion of the prescribed period of service. The factual and statutory setting in which the decisions relied upon by the applicants were rendered is thus materially different from that obtaining in the present case.

We also find substance in the submission of the respondents that the present controversy does not concern denial of MACP benefits to the applicants. The applicants have already been granted the financial upgradations admissible to them under the MACP Scheme. The question is whether, after having received such financial upgradation, they can claim a further benefit of pay fixation under F.R. 22(I)(a)(1) on their appointment to the post of AAO, resulting in a second benefit of increment/fitment on the same account. In this context, the clarification issued by the nodal department, namely, the DoP&T, assumes significance.

The respondents have placed reliance upon the DoP&T ID Note dated 14.10.2024, wherein it has been clarified that the increment granted on promotion and the increment granted on MACP are covered under the same provision, namely, F.R. 22(I)(a)(1), and that allowing the benefit of increment twice, once on grant of MACP and again on promotion/NFSG, would result in pay anomaly and place seniors at a disadvantageous position. We find that the said clarification cannot be ignored while examining the legality of the subsequent decision of the Department of Posts to withdraw the additional 3% fitment benefit.

The applicants have sought to rely upon the earlier departmental clarifications dated 07.02.2013 and 16.10.2019. However, the mere fact that a particular interpretation was earlier adopted by the Department does not create an indefeasible right in favour of the applicants if such interpretation is subsequently found to be inconsistent with the instructions and clarification issued by the competent nodal authority. The respondents have explained that, after the matter was examined in the light of the DoP&T OM dated 19.05.2009, the clarification dated 08.08.2019 and the consolidated OM dated 22.10.2019, the earlier position was reviewed and the Department issued the order dated 26.04.2021 withdrawing the earlier benefit and directing review of the cases concerned.

We may also refer to the decision of the Hon'ble Hyderabad Bench of this Tribunal dated 10.12.2025 in OA No. 21/174/2023, K. Shashikant v. Union of India. The said decision has also been brought to our notice in the context of the controversy concerning pay fixation under F.R. 22(I)(a)(1), financial upgradation under the MACP Scheme and the effect of subsequent appointment/promotion to a higher post. The principle emerging therefrom, insofar as relevant for the present controversy, is that the entitlement to pay fixation has to be examined with reference to the governing statutory rules and the applicable MACP instructions and that the benefit under F.R. 22(I)(a)(1) cannot be claimed in isolation so as to result in duplication of a benefit already extended under the MACP Scheme. The said decision, though rendered in the context of the facts and rules applicable therein, lends support to the approach that the provisions governing pay fixation and financial upgradation have to be read harmoniously and the same financial benefit cannot be permitted to operate twice merely because the subsequent appointment has taken place through a competitive selection process.

The judgment relied upon by the applicants in Pavnesh Kumar v. Union of India and the other decisions cited before us have also been considered. Those decisions cannot be read as laying down an absolute proposition that every appointment made through LDCE must, irrespective of the applicable Recruitment Rules, be treated as direct recruitment or fresh appointment for all purposes under the MACP Scheme. The ratio of a judgment has to be understood in the context of the statutory framework and the factual circumstances in which it was rendered. In the present case, the applicable AAO Recruitment Rules and the subsequent clarification of the nodal department constitute the relevant framework for determining the entitlement of the applicants.

We are also unable to accept the contention that the applicants acquired an immutable right to the 3% fitment benefit merely because their appointment orders dated 01.10.2018 referred to F.R. 22(I)(a)(1) or because the departmental clarification dated 07.02.2013 was in existence when they participated in the AAO LDCE-2018. Such reference in the appointment orders cannot confer an entitlement contrary to the governing rules and instructions. An administrative order cannot create a substantive right inconsistent with the statutory rules or the binding instructions issued by the competent authority. Consequently, the subsequent review and correction of the pay fixation, upon the competent authority finding that the additional benefit was inconsistent with the applicable MACP provisions, cannot be characterised merely as retrospective deprivation of a vested right.

We also find no merit in the contention that the respondents have adopted an inconsistent stand merely because similar benefits were at one stage extended to certain other categories of employees. The respondents have explained that the earlier clarification dated 07.02.2013 and subsequent clarification dated 16.10.2019 were reviewed after the matter was examined by the DoP&T and that, pursuant to the clarification dated 08.08.2019, the Department withdrew the additional fixation benefit vide letter dated 26.04.2021 and thereafter reiterated the position through subsequent communications. The withdrawal was, therefore, not founded upon any arbitrary comparison between the AAO cadre and the Postmaster Grade-I, II or III cadres, but upon reconsideration of the pay fixation in the light of the MACP Scheme and the clarification issued by the nodal department.

The submission of the applicants that the benefit under F.R. 22(I)(a)(1) is independently available whenever an employee is appointed to a post carrying duties and responsibilities of greater importance also cannot be accepted in the manner suggested. F.R. 22(I)(a)(1) cannot be read in isolation from the specific provisions governing financial upgradation under the MACP Scheme. The entitlement has to be determined by harmoniously reading the two sets of provisions. Where an employee has already received financial upgradation carrying the prescribed pay fixation under the MACP Scheme and the subsequent appointment/promotion attracts the same rule of pay fixation, permitting another identical benefit would result in duplication of the financial benefit and the very anomaly which the DoP&T clarification seeks to avoid.

In the facts of the present case, therefore, we find that the respondents were justified in reviewing the earlier pay fixation and withdrawing the additional 3% fitment benefit granted to those applicants who had already availed the benefit of financial upgradation under the MACP Scheme. The impugned communication dated 17.02.2026, insofar as it reiterates the said position and rejects the claim of the applicants, cannot be said to suffer from any jurisdictional error, arbitrariness or violation of the applicable rules.

For the foregoing reasons, we hold that the applicants are not entitled to claim an additional 3% fitment/pay fixation under F.R. 22(I)(a)(1) on their appointment to the post of AAO through LDCE after having already availed the corresponding financial benefit under the MACP Scheme. The departmental clarification dated 07.02.2013 and the subsequent clarification dated 16.10.2019, to the extent they permitted such additional benefit in the circumstances of the present case, stood duly reviewed and withdrawn in the light of the clarification issued by the competent nodal department. The applicants cannot, therefore, claim continuance of a benefit which is contrary to the subsequently clarified position governing pay fixation under the MACP Scheme.

Accordingly, the Original Application is found to be devoid of merit and is hereby dismissed. Pending MA(s), if any, shall also stand disposed of. In the facts and circumstances of the case, there shall be no order as to costs.