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The Union of India and six others have filed the present writ petition impugning the order dated 31st January, 2014 passed by the Principal Bench of the Central Administration Tribunal (Tribunal, for short) in OA No. 3441/2012, which was filed by All India CGHS Employees Association and three others, the respondents herein.

2. The Tribunal has allowed the said OA and held that the officers working as Pharmacists in the Central Government Health Service (CGHS, for short) would be entitled to three financial upgradations in the grade pay of Rs.4600, 4800 and 5400 without taking into consideration the non- functional upgradation to the grade pay of Rs.4200, which is granted after two years of service in the grade pay of Rs.2800.

4. Pursuant to the report of the Sixth Pay Commission, the demands regarding the pay scale of the Pharmacist Cadre were referred to a Fast Track Committee. Thereupon, the Government of India, Ministry of Finance, issued a memorandum dated 18th November, 2009 which reads:-

"While approving the Report of the Sixth Central Pay Commission, the Government referred the matter related to the demands made in regard to pay scales of certain common category posts to a Fast Track Committee. The pay scales of the common category posts of Pharmacists was one of the items referred to the Committee. The recommendation of the Fast Track Committee regarding the pay scales of the common category posts of Pharmacists has since been received. The Committee has recommended that the entry grade of Pharmacists in Central Government should remain at grade pay of Rs.2800 in the pay band PB-1. However, on completion of two years service in the entry grade, all the incumbents should be granted non- functional upgradation to the next higher grade having grade pay of Rs.4200 in the pay band PB-2.
You are, therefore, requested to bring this to the notice of all concerned to enable them to submit a representation, if any, before initiating action to re-fix the pay."

The communication dated 11th November, 2011 states that non- functional upgradation from grade pay of Rs.2800 in Pay Band-1 to grade pay of Rs. 4200 in Pay Band 2 granted to Pharmacist (entry grade) on completion of two years of service in the lower grade should be taken as the first financial upgradation under the MACP Scheme. This was in contrast with and contrary to the earlier communication/letter dated 16th July, 2010 that the non-functional upgradation in the grade pay of Rs. 4200 would not be treated as "promotion for the purpose of MACP Scheme"

Once an employee has got the benefit of time-bound promotion or in-situ promotion and has got the higher pay scale, the same has to be counted for the purpose of financial upgradation under the MACP Scheme. Similarly, paragraph 16 of the MACP Scheme affirms our interpretation for it stipulates that there would be no change in designation, classification or higher status on the grant of financial upgradation. However, certain benefits like HBA, allotment of Government accommodation shall be permitted. Paragraph 17 re-affirms what has been stated in paragraph 2 for it states that upgradation would be on non-functional basis subject to fitness in the hierarchy of grade pay within Pay Band-1. The upgradation under the MACP Scheme would be on the benchmark of 'Good' till the grade pay of Rs. 6600/- in Pay Band-3. The benchmark of 'Very Good' will be applicable for financial upgradation to the grade pay of Rs. 7600 and above. Paragraph 19 contemplates that the placement in the higher grade pay or financial upgradation shall be personal and will be restricted to the next higher grade pay and grant of financial upgradation only. It would not amount to actual or functional promotion of the employees. Accordingly, no reservation or roster would apply. This would support the contention of the petitioner that the grant of non-functional grade pay is treated as financial upgradation for the purpose of the MACP Scheme. For grant of non-functional upgradation, there is no reservation and there is also no requirement of vacancy. It postulates time- bound upgradation of pay scales. Similar is the effect of paragraphs 20 and 22.