Government Not Estopped From Raising Public Law Question Merely For Not Challenging One High Court Ruling: Supreme Court

The Court was hearing appeals filed by the Union of India and Railway authorities in a dispute concerning whether Railway Guards who had moved through the Guard cadre up to Mail/Express Guard were entitled to further financial upgradation under the Modified Assured Career Progression Scheme.

A Bench of Justice Sanjay Karol and Justice Augustine George Masih, while rejecting the argument that the Union was barred from contesting the issue because it had not challenged an earlier coordinate High Court ruling, observed:

“The doctrine of issue estoppel operates between the same parties or their privies in relation to the same subject-matter; it does not operate to foreclose a question of law of general public importance merely because the Government failed to challenge one High Court judgment on that question.”

Advocate Amrish Kumar appeared for the Union of India, while Advocate Ashutosh Thakur appeared for the respondent.

Background

The dispute arose from the MACP claim of a retired Mail/Express Guard. He had joined the Railways as a Goods Guard and had later moved through the Guard cadre up to Mail/Express Guard, the highest post in that cadre.

After the implementation of the Sixth Central Pay Commission, several posts above Goods Guard in the Guard cadre were placed in the same Grade Pay of ₹4200. The Railway Board initially extended MACP benefits, placing the respondent at higher Grade Pay levels. Later, relying on Railway Board clarifications, the benefits were withdrawn on the ground that his movement through the Guard cadre amounted to promotions and exhausted the MACP slots.

The Central Administrative Tribunal and the Rajasthan High Court ruled in favour of the employee. One of the arguments raised against the Union before the Supreme Court was that the Government had not challenged an earlier High Court judgment in favour of similarly situated Guards and had implemented it, and therefore should not be permitted to contest the same legal position in the present appeals.

Court’s Observations

The Supreme Court rejected the argument that the Union’s omission to challenge an earlier coordinate High Court judgment created a bar against raising the issue again.

The Court noted that the question before it involved the correct interpretation of a government-wide service scheme affecting a large body of railway employees.

The Court stated: “The Respondent placed considerable weight on the circumstance that the Union of India did not challenge the Jodhpur Bench judgment in Laxman Lal Parihar (supra) and is stated to have implemented it without reservation. This circumstance does not and cannot create an issue estoppel or a binding precedent against the Union in the present proceedings.”

The Bench added that issue estoppel applies between the same parties or their privies in relation to the same subject matter, and cannot shut out a broader question of law merely because the Government did not appeal in one case involving employees of another Zonal Railway.

The Court also considered the effect of earlier dismissal of special leave petitions arising from similar matters. Referring to Kunhayammed v. State of Kerala (2000), it held that a non-speaking order refusing leave does not amount to a declaration of law under Article 141.

The Court observed: “The order dated 07.11.2023 dismissing SLP(C) No. 20906/2019 and connected matters is not merely a non-speaking order it goes further and expressly records that "the question of law, if any, is left open to be decided in an appropriate case." This self-limiting language places it beyond doubt that the dismissal was not a declaration of law and that the question was specifically preserved for a future case.”

It held that the Rajasthan High Court erred in treating those dismissals as if they embodied a binding determination of the legal position.

The Court acknowledged that a coordinate Bench of a High Court must ordinarily follow an earlier coordinate Bench judgment or refer the matter to a larger Bench. It referred to Chandra Prakash v. State of U.P. (2002) and State of Bihar v. Kalika Kuer (2003) on that principle.

However, the Supreme Court clarified that such internal judicial discipline does not prevent appellate scrutiny.

The Bench stated: “The discipline that a coordinate Bench owes to an earlier coordinate Bench judgment is a discipline internal to the High Court. It does not constrain this Court's jurisdiction under Article 136, which is supervisory and corrective in nature. This Court is not bound by the Jodhpur Bench's or the Jaipur Bench's understanding of the MACPS. It has independently examined the provisions and, for the reasons set out in this judgment, reached a different conclusion.”

Turning to the MACP dispute, the Court said that although the employee’s case carried equitable force because he had served for decades without Grade Pay moving beyond ₹4200, the answer had to come from the scheme itself, not from equitable appeal.

The Court observed: “There is a submission implicit in the Respondent's case and explicit in the reasoning of the lower courts that the MACPS was intended to address financial stagnation, and that a Guard who spent thirty-two years in service without ever improving his Grade Pay beyond Rs. 4200 is, by any measure, stagnant in the financial sense. The submission is not without a certain equitable force. It must, however, be addressed by reference to the scheme's provisions, not by reference to the equitable appeal of an individual's predicament.”

The Court held that Paragraph 8 of the MACPS applied to the Guard cadre and that functional promotions within the same Grade Pay had to be counted for MACP purposes.

It stated: “Paragraph 8 of the MACPS applies to the Guard cadre. The posts of Senior Goods Guard, Passenger Guard, Senior Passenger Guard, and Mail/Express Guard are distinct posts in the promotional hierarchy as per the applicable Recruitment Rules, carrying the same Grade Pay of Rs. 4200 in Pay Band PB-2. The functional promotions earned within the Guard cadre constitute "promotions" within the meaning of Paragraph 8.”

The Supreme Court held that a Mail/Express Guard who had reached the highest functional post in the Guard cadre could not claim MACP Grade Pay higher than what was available on actual promotion in that cadre.

The Bench noted that each promotion within the Guard cadre carried financial consequences, including promotional increments, enhanced running-duty allowances and post-specific emoluments.

The Court observed: “If a Mail/Express Guard the holder of the terminal post of the Guard cadre, the highest functional achievement within that cadre is granted MACP at Grade Pay Rs. 4600 and then Rs. 4800, he will, as a matter of financial entitlement, draw a Grade Pay higher than the highest Grade Pay available to any Guard on any actual promotion.”

It held that such a result would be structurally anomalous and would create financial entitlements with no anchor in the cadre structure.

Conclusion

The Supreme Court allowed the appeals and set aside the orders of the Rajasthan High Court and the Central Administrative Tribunal to the extent they directed the grant of MACP financial upgradation to the respondent at higher Grade Pay levels. It restored and confirmed the competent authority’s order rejecting the MACP claim based on Paragraph 8 of the MACPS and the Railway Board circulars.

The Court also clarified that similarly situated Railway Guards across Indian Railways, whose MACP claims were denied or withdrawn consistently with the law declared in the judgment, would have their MACP positions regulated accordingly. However, employees who had already received benefits under final and implemented Tribunal or High Court orders would not face recovery or revision on the basis of the judgment.

Cause Title: Union of India and Others v. Harbans Lal Verma (Neutral Citation: 2026 INSC 739)

Appearances

Petitioners: Amrish Kumar, AOR

Respondents: Ashutosh Thakur, AOR, with Advocates Keshav Baheti, Aanchal Maheshwari, Dr. Sumant Bharadwaj, Dr. Vedant Bharadwaj, D.M. Sharma, Amrita Behera, Pooja Gupta, Anshu Singh and Anshita Sharma; Mridula Ray Bharadwaj, AOR

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