Advertisement Contrary To Service Regulations Won't Create Right In Favour Of Applicants: SC

Cause Title: The Employees’ State Insurance Corporation v. Union of India and Others

Case Number: Civil Appeal No. 152/ 2022

Quorum: Justice Dr. Dhananjaya Y Chandrachud and Justice A. S. Bopanna

Judgment Date: 20/01/2022

Counsel for the Appellant: Mr. Santhosh Krishnan

Counsel for the Respondents: Mr. Yatindra Singh and Mr. Anand Sanjay M. Nuli

Author: Pragash B, Advocate, Madurai Bench of Madras High Court

Background of the Case

The Employees’ State Insurance Corporation (“ESIC”) is in appeal against a judgment of a Division Bench of the Karnataka High Court dated 5 September 2019. The Division Bench rejected the petition filed by the appellant against the promotion of the contesting respondents – Respondents 3 to 25, to the post of “Associate Professor” under the Dynamic Assured Career Progression (DACP) Scheme as opposed to the appellant’s recruitment regulations.

The recruitment and promotion of ESIC’s teaching staff are governed by the Employees’ State Insurance Corporation (Medical Teaching Faculty Posts) Recruitment Regulations 2015 which came into effect on 5 July 2015. Respondents 3 to 25 joined the appellant as Assistant Professors at ESIC Model Hospital, Rajajinagar, Bengaluru. They joined service between 7 February 2012 and 26 June 2014. The Central Government, through the Central Health Service Division of the Ministry of Health and Family Welfare, had issued the DACP Scheme through an Office Memorandum dated 29 October 2008. The DACP Scheme contemplated promotion as Associate Professor upon completion of two years of service in the post of Assistant Professor as an officer under the Ministry of Health and Family Welfare. After two years of service as Assistant Professor on 2 February 2017, the contesting respondents sought promotion under the DACP Scheme and instituted proceedings before the Central Administrative Tribunal, Bengaluru.

On 7 February 2018, CAT held that the ESIC Recruitment Regulations 2015 were not relevant for the adjudication of the matter. The CAT also relied on a letter dated 23 September 2014 addressed by the Joint Director of ESIC to the Dean of ESIC which mentioned the implementation of the DACP Scheme to the Medical Officer Cadres. Thus, the CAT directed the ESIC to consider the contesting respondents for promotion under the DACP Scheme.

ESIC challenged the order of the CAT in a writ petition before the High Court of Karnataka and the Honourable Court was pleased to dismiss the petition on 5 September 2019 holding that

i) Since the contesting respondents were recruited before the ESIC Recruitment Regulations 2015 came into effect, they would get the benefit of the DACP Scheme;

ii) The DACP Scheme has statutory effect under Section 17 of the ESI Act. The ESIC Recruitment Regulations 2015 have departed from the DACP Scheme without seeking the prior approval of the Central Government; and

iii) Counsel for the appellant conceded that the appellant would implement the DACP Scheme and the ESIC Recruitment Regulations 2015 do not apply.

Now the appeal lies before the Honourable Supreme Court of India.

Analysis of the Honourable Court

a) Fixing the Dispute

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. The controversy 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 29/10/2008 against the ESIC Recruitment Regulations 2008 and the subsequently issued ESIC Recruitment Regulations 2015.

The Union Ministry of Health and Family Welfare had extended the DACP Scheme to Medical and Dental Doctors in the Central Government and detailed promotion under DACP in various cadres under the Ministry on 29/10/2008. The Scheme enabled promotion from the post of Assistant Professor to Associate Professor after two years of service.

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 introduced the cadre of Specialist (Teaching) in the ESIC and governed all appointments to the teaching faculty posts in ESIC Medical Colleges. The ESIC Recruitment Regulations 2008 embodied a requirement of four years’ service as Assistant Professor for promotion as an Associate Professor. The ESIC Recruitment Regulations 2015 which were made on 5 July 2015 stipulated a requirement of five years’ service as Assistant Professor for promotion to the post of Associate Professor. The preamble of the ESIC Recruitment Regulations 2015 notes that these regulations were to supersede the ESIC Recruitment Regulations 2008 and were made with the approval of the Central Government.

b) Observations

The ESIC Recruitment Regulations 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 (Para 13). The contesting respondents have referred to certain letters and to an internal communication of the appellant to urge that the DACP Scheme was to be implemented for promotions at the appellant. However, these letters, similar to the Office Memorandum dated 29 October 2008 implementing the DACP Scheme would not have the force of law until they were enforced through an amendment to the recruitment regulations (Para 18).

On the dates when the contesting respondents joined the service of the appellant – 07 February 2014 till 26 June 2016 – their promotions were governed by the ESIC Recruitment Regulations 2008 which came into effect on 2 May 2009 and mandated four years of qualifying service for promotion from Assistant Professor to Associate Professor. When the contesting respondents had completed two years of service, they were governed by the ESIC Recruitment Regulations 2015 which came into effect on 5 July 2015 and mandated five years of qualifying service for promotion from Assistant Professor to Associate Professor. Thus, the DACP Scheme facilitating 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 29 October 2008 which implemented the DACP Scheme. (Para 19)

The advertisements issued by the appellant mentioned that the DACP Scheme would be applicable for its recruits. However, 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 (Para 20). Also, the contesting respondents urged that the advertisements indicated the applicability of the DACP Scheme before the ESIC Recruitment Regulations 2015 were issued. However, a subsequent amendment to recruitment regulations would override the conditions prescribed in the advertisement (Para 22).

The respondents submitted that the appellant is estopped from urging that the DACP Scheme is not applicable to the Teaching Cadre at the ESIC since they have taken this stance before the CAT and in this writ petition before the High Court. The Honourable Supreme Court of India expresses its disapproval at the lack of proper instructions being tendered to the Counsel of the Appellant, there can be no estoppel against a statute or regulations having a statutory effect (Para 23). Herewith our Apex Court had emphasised that while generally admissions of fact by counsel are binding, neither the client nor the court is bound by admissions as to matters of law or legal conclusions. In this case, the concession of the Counsel for the appellant before the CAT does not preclude the finding on the law that is arrived at by the Honourable Supreme Court of India.

c) Findings

The CAT and the Honourable Karnataka High Court failed to notice the applicability of the ESIC Recruitment Regulations 2015 to the promotions of the Teaching Cadre in the ESIC. The ESIC Recruitment Regulations 2015 have precedence over the Official Memorandum dated 29 October 2008 which implemented the DACP Scheme in respect of officers of the Central Health Service under the Union Ministry of Health and Family Welfare. The concession by the Counsel of the Appellant before the CAT does not stand in the way of the appellant supporting the correct position of law before this Court. (Para 26)

The contesting respondents did not challenge the ESIC Recruitment Regulations 2008 or the ESIC Recruitment Regulations 2015 before the CAT or the High Court. The argument on 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 contesting respondents have only supported the applicability of the DACP Scheme to claim promotion as Associate Professor after two years of service. The advertisements for recruitment mentioning the DACP Scheme would have no effect since they were in contravention of the applicable recruitment regulations. Therefore, for the above reasons, we are of the view that the appeal should be allowed. (Para 27)

The appeal is accordingly allowed and the impugned judgment and order of the Division Bench of the Karnataka High Court dated 5 September 2019 is set aside. As a consequence, the revised seniority list of the Teaching Cadre at the appellant corporation should reflect the promotions of the contesting respondents in accordance with the ESIC Recruitment Regulations 2015 and not the DACP Scheme. (Para 28)

To View/Download Judgment: The Employees’ State Insurance Corporation v. Union of India and Others

Cases Discussed

1. C. Sankarnarayanan v. State of Kerala, (1971) 2 SCC 361.

2. Union of India v. Ashok Kumar Aggarwal, (2013) 16 SCC 147.

3. State of Uttar Pradesh v. U.P. Rajya Khanij Vikas Sangharsh Samiti, (2008) 12 SCC 675.

4. Malik Mazhar Sultan v. UPSC, (2006) 9 SCC 507.

5. Ashish Kumar v. State of UP, (2018) 3 SCC 55.

6. Raminder Singh v. State of Punjab, (2016) 16 SCC 95.

7. Y. V. Rangaiah v. J. Sreenivasa Rao, 1983 (3) SCC 284.

8. State of UP v. Mukesh Narain, (2013) 4 SCC 169.

9. B.L. Gupta v. MCD, (1998) 9 SCC 223.

10. Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421.

11. Pepsu Road Transport Corporation, Patiala v. Mangal Singh and Others, (2011) 11 SCC 702.

12. Sant Ram Sharma v. State of Rajasthan, AIR 1967 SC 1910.

13. Union of India v. Ashok Kumar Agarwal, (2013) 16 SCC 147

14. P.D. Agarwal v. State of U.P., (1987) 3 SCC 622.

15. Union of India v. Majji Jangamayya, (1977) 1 SCC 606.

16. Rajasthan Public Service Commission v. Chanan Ram, (1998) 4 SCC 202.

17. Nedunuri Kameswaramma v. Sampati Subba Rao, AIR 1963 SC 884.

18. Himalayan Coop. Group Housing Society v. Balwan Singh, (2015) 7 SCC 373.

19. Director of Elementary Education, Odisha v. Pramod Kumar Sahoo, (2019) 10 SCC 674.