The Karnataka High Court has quashed the Tribunal Order and Bars Recovery from Retirees and held that the Prior Financial Upgradations Must Be Counted Under Modified Assured Career Progression (MACP) Scheme.
The bench of Justice S.G.Pandit and Justice K. V. Aravind has observed that no recovery shall be made from retired employees or those retiring within one year. In other cases, recovery may be made after issuing notice, and may be allowed in installments over a period not exceeding two years. No interest shall be charged on such recoveries. Where recoveries have already been made from retirees, such amounts must be refunded. However, recoveries already made from serving employees need not be refunded.
The petitions were filed by various departments under the Union Government, including the Ministry of Finance, Department of Revenue, and the Central Board of Indirect Taxes and Customs (CBIC). The government sought to overturn a common order dated March 4, 2020, issued by the CAT in favor of several employees and retirees.
The respondents in these cases include multiple individuals—many of them retired Assistant Commissioners and other officials—who had approached the Tribunal seeking relief related to pay fixation and financial upgradation under the MACP scheme.
At the heart of the dispute is the interpretation of how MACP benefits should be granted, particularly whether certain promotions or pay scales should be counted toward financial progression under the scheme.
The Union of India argued that the CAT’s order was “illegal, arbitrary, and untenable,” asserting that it misinterpreted the provisions of the MACP scheme. The government maintained that granting the benefits as directed by the Tribunal would contradict established rules and create inconsistencies in pay structures across departments.
Officials also expressed concerns about the broader financial implications, noting that similar claims from other employees could significantly increase the government’s financial burden.
On the other side, the respondents contended that the Tribunal had correctly interpreted the scheme and that they were entitled to financial upgradation due to stagnation in their careers. Many of them had served for decades without adequate promotions and argued that the MACP scheme was specifically designed to address such situations.
Legal representatives for the employees emphasized fairness and uniformity, stating that denying the benefits would defeat the very purpose of the policy.
What makes this case particularly notable is its scale. The High Court heard a large number of connected petitions involving different individuals but similar legal questions. These included employees from various parts of Karnataka and beyond, highlighting the widespread nature of the issue.
The petitions also demonstrate a recurring pattern in service law disputes—where administrative interpretations of policy clash with employees’ expectations of equitable treatment.
The court set aside the Tribunal’s common order, and remitted the matter to authorities for fresh determination in accordance with the Supreme Court ruling in the case of Union of India v. N. M. Raut.
Case Details
Case Title: UOI Versus M. K. Narayan
Citation: JURISHOUR-647-HC-2026(KAR)
Case No.: WP No. 1803 of 2021
Date: 02/03/2026
Counsel For Petitioner: B. Pramod
Counsel For Respondent: M.A. Narayana, Advocate
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