On January 20, 2022, the Hon'ble Supreme Court in the case of The Employees' State Insurance Corporation v. Union of India & Ors. (Civil Appeal no.152 of 2022) ruled that the revised seniority list of the Teaching Cadre at the appellant corporation should reflect the promotions of the contesting respondents following the ESIC Recruitment Regulations 2015.
The current case is an appeal by the Employees State Insurance Corporation (ESIC) against the order of the division bench of the Karnataka High Court dated September 5, 2019. As the division bench rejected the petition filed by the appellant against the promotion of the contesting respondents to the post of "Associate Professor" under the Dynamic Assured Career Progression Scheme (DACP) because it opposes the appellant's recruitment regulations. Between February 7, 2012, and June 26, 2014, the respondents worked as Assistant Professors at ESIC Model Hospital in Rajajinagar, Bengaluru, for the appellant. The Dynamic Assured Career Progression Scheme calls for promotion to Associate Professor after two years of service as an officer in the Ministry of Health and Family Welfare's Assistant Professor position. On February 2, 2017, after two years of service as an Assistant Professor, the contesting respondents applied for the promotion under the Dynamic Assured Career Progression Scheme and filed a complaint with the Central Administrative Tribunal Bengaluru.
The Central Administrative Tribunal held on February 7, 2018, that the ESIC Recruitment Regulations 2015 were not applicable for adjudication of the dispute, based on the submission of the appellant's counsel. The Tribunal cited a letter from the Joint Director of ESIC to the Dean of ESIC dated September 23, 2014, in which the Joint Director stated the implementation of the Dynamic Assured Career Progression Scheme to the Medical Officer functionaries.
During the trial, Senior Advocate Mr. Santosh Krishan, appearing on behalf of the appellant, has advocated the following submissions:-
- The Employees State Insurance Corporation is an autonomous statutory body governed by the Employees State Insurance Act, 1948, and is controlled by the Ministry of Labour and Employment of the government of India.
- At Section 97 of the Employees State Insurance Act, 1948, the appellant has the power to make its own rules and these regulations stipulate that a minimum of five years of qualifying service as an Assistant Professor is mandatory for promotion as an Associate Professor.
- The Office Memorandum dated October 29, 2008, implementing the DACP Scheme is applicable to employees of the Ministries and Departments of the Central Government, but not a statutory body like the ESIC.
- Section 17(2) permits the ESIC to depart from the conditions of service applicable to employees of the Central Government, subject to prior approval of the Central Government.
- The High Court incorrectly held that the conditions for promotion from Assistant Professor to Associate Professor were governed by the DACP Scheme. The contesting respondents joined the ESIC Medical College and PGIMSR, Rajajinagar, Bengaluru, as Assistant Professors between February 2014 and June 2016.
- Under the ESIC Recruitment Regulations 2008, the contesting respondents became eligible for promotion after the ESIC Recruitment Regulations 2015 came into effect.
- The appellant's counsel mistakenly made a concession before the CAT when they stated that the ESIC Recruitment Regulations 2015 would not govern the matter.
- The applicability of the DACP to non-teaching staff of the ESIC is irrelevant. The ESIC Recruitment Regulations 2015 specifically govern "Medical Teaching Faculty Posts". The contesting respondents have been granted promotions upon completion of five years of regular service.
On the other hand, some submissions are made by Mr. Yatindra Singh, Senior Counsel, and Mr. Anand Sanjay M Nuli, appearing on behalf of the contesting respondents.
- The Office Memorandum dated August 29, 2008, extended the DACP Scheme to all medical doctors, whether belonging to organised services or holding isolated posts. The government of India also extended the DACP Scheme to various sub-cadres of the Central Health Service, including the teaching cadre.
- The ESIC Recruitment Regulations 2008, stipulating four years of qualifying service for promotion from Assistant Professor to Associate Professor, were issued without the approval of the Central Government. The contesting respondents joined the services of the appellant as Assistant Professors in Pay Band-3 with grade pay of Rs. 6600/hr.
- On September 23, 2011, the appellant addressed a letter to the Dean of ESIC Dental College by stating that "the existing recruitment regulations are under active process of revision vis-à-vis provisions of the DACP Scheme"; The ESIC Recruitment Regulations 2015 were issued without obtaining prior approval from the Central Government, as contemplated under Section 17(2)(a) of the ESI Act;
- The DACP Scheme has statutory force under Section 17 of the ESI Act. Since the ESIC Recruitment Regulations 2008 were issued without the approval of the Central Government, they do not override the DACP scheme. The High Court has noted that the appellant has not furthered any evidence to indicate that prior approval was taken.
- Even if the ESIC Recruitment Regulations 2015 were held to be validly issued, the contesting respondents had already completed two years of service before they came into effect on July 5, 2015. The appellant has taken the stance that the DACP scheme is applicable to its employees with effect from March 1, 2008, itself.
The judges' decision should be given a reasonable interpretation, and their cumulative experience of more than five years should be deemed sufficient for promotion. In view of the decisions of this Court in State of UP v Mukesh Narain and B L Gupta v MCD (1998), 9 SCC 223,
The Hon'ble Supreme Court made some comments after hearing both sides:
"The crux of the dispute is about determining the applicable rules/regulations for promotion of the contesting respondents from the post of Assistant Professor to Associate Professor, namely, the ESIC Recruitment Regulations 2008, the DACP Scheme or the ESIC Recruitment Regulations 2015. On October 29, 2008, the Sixth Central Pay Commission recommended the extension of the DACP Scheme to all doctors in employment of the Central Government.
The Court observed that the main issue in the present appeal arises out of the interpretation of Section 17(2)(a) of the ESIC Act 1948 and the applicability of the Office Memorandum dated October 29, 2008 against the ESIC Recruitment Regulations 2008 and the subsequently issued ESIC Recruitment Regulations 2015".
Section 17(2)(a) of the Employees' State Insurance Act, 1948 provides that the method of recruitment, salary, allowances, discipline, and other conditions of service of the members of the staff of the Corporation shall be such as may be specified in the regulations made by the Corporation in accordance with the rules and orders applicable to officers and employees of the Central Government.
The ESIC Recruitment Regulations 2008 were issued by the ESIC in the exercise of its powers under Section 97(1) and Section 17(3) of the ESI Act. These regulations govern all appointments to the teaching faculty posts in ESIC Medical Colleges.
According to the Hon'ble Court, the ESIC Recruitment Regulations 2008 and ESIC Recruitment Regulations 2015 have statutory effect by virtue of Section 97(3) of the ESI Act. It is settled law that regulations framed by statutory authorities have the force of enacted law. In the landmark case of Sukhdev Singh v Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421, it was held that the regulations framed by several statutory authorities were considered "state" within the terms of Article 12.
The Preamble to the ESIC Recruitment Regulations 2015 recites that the prior approval of the Central Government, as necessitated by Section 17(2) of the ESI Act, was duly sought.
However, the DACP Scheme, which facilitates promotion on the completion of two years of service, is not applicable to the contesting respondents when the regulations have a statutory effect that overrides the Office Memorandum dated October 29, 2008, though it is a settled principle of service jurisprudence that in the event of a conflict between a statement in an advertisement and service regulations, the latter shall prevail.
After the completion of the case, the Hon'ble Supreme Court held that
"The CAT and the High Court failed to notice the applicability of the ESIC Recruitment Regulations 2015 to the promotions of the teaching cadre in the appellant corporation.".
The ESIC Recruitment Regulations 2015 have precedence over the Office Memorandum dated October 29, 2008, which implemented the DACP Scheme in respect of officers of the Central Health Service. The concession by the counsel for the appellant before the CAT does not stand in the way of the correct position of law before this Court.
The argument of lack of prior approval as per Section 17(2) of the ESI Act is obviated by the preamble to the ESIC Recruitment Regulations 2015. The advertisements for recruitment mentioning the DACP Scheme would have had no effect since they were in contravention of the recruitment regulations.
The appeal is accordingly allowed and the impugned judgement and order of the Karnataka High Court are set aside.