The Supreme Court has dismissed the Union of India’s appeal and upheld the entitlement of Junior Engineers in the Border Roads Organisation (BRO) to Non-Functional Upgradation (NFU) to Level 9 after completing four years in Level 8.
The bench of Justice Pankaj Mithal and Justice S.V.N. Bhatti settled a long-standing dispute over the interpretation of the recommendations of the Seventh Central Pay Commission.
The case arose from a Delhi High Court order dated March 14, 2023, which directed the authorities to grant NFU benefits—corresponding to Grade Pay of ₹5,400—to Junior Engineers who had completed four years of service in Level 8 (Grade Pay ₹4,800).
The petitioners, working in subordinate engineering cadres under the BRO, argued that Para 7.4.13(iv)(b) of the Seventh Pay Commission clearly provides that 80% of employees in Level 8 are eligible for NFU to Level 9 upon completion of four years of service, subject to seniority-cum-suitability.
However, the BRO, through a clarification issued in February 2021, rejected their claim, stating that such benefits were applicable only to specific posts like Senior Private Secretaries and not to Assistant Engineers or Junior Engineers.
The Union of India contended that Pay Commission recommendations are advisory in nature and do not create enforceable rights unless formally accepted and notified. It further argued that NFU under the relevant provision applied only to employees whose entry-level Grade Pay was ₹4,800.
Since Junior Engineers entered service at a lower Grade Pay of ₹4,200 and reached ₹4,800 through the Modified Assured Career Progression (MACP) scheme, they were not eligible for NFU, according to the government.
The authorities also maintained that comparisons with other cadres such as Senior Private Secretaries or Assistant Accounts Officers were misplaced due to differences in recruitment rules and service structures.
Rejecting the government’s arguments, the Supreme Court held that the plain reading of Para 7.4.13(iv)(b) does not impose any condition relating to the entry-level Grade Pay. The Court emphasized that introducing such a requirement would amount to adding conditions not contemplated by the Pay Commission.
The bench observed that the only requirement for grant of NFU is completion of four years of service in Level 8, along with fulfillment of seniority-cum-suitability criteria.
The Court further noted that denying the benefit to Junior Engineers while extending it to other similarly placed cadres would be discriminatory and unjustified.
Importantly, the Court endorsed the reasoning adopted by the Delhi High Court, which had relied on earlier judicial precedents affirming that the manner in which an employee reaches a particular pay level—whether through promotion or MACP—is irrelevant for determining NFU eligibility.
The judgment also took into account earlier rulings, including decisions of the Madras High Court and their affirmation by the Supreme Court in related matters, which consistently held that employees are entitled to NFU after completing the prescribed period in the relevant pay scale.
These precedents reinforced the principle that financial upgradation benefits cannot be denied based on technical distinctions such as entry-level pay.
Dismissing the appeal, the Supreme Court concluded that the denial of NFU to Junior Engineers was not supported by valid reasoning and was contrary to the intent of the Seventh Pay Commission recommendations.
The Court upheld the High Court’s direction to grant NFU benefits, thereby entitling eligible Junior Engineers to Grade Pay of Rs. 5,400 after completing four years in Level 8.
Case Details
Case Title: UOI Versus Sunil Kumar Rai & Others
Citation: JURISHOUR-581-SC-2026
Case No.: SLP (C) NO. 11595 OF 2023
Date: 01/04/2026
