The Employees’ State Insurance Corporation vs Union of India
The Employees’ State Insurance Corporation vs Union of India
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 152 of 2022
The Employees’ State Insurance Corporation ....Appellant
Versus
Union of India & Ors. .... Respondents
2
J U D G M E N T
Dr Dhananjaya Y Chandrachud, J
A Introduction...........................................................................................................3
B Submissions .........................................................................................................5
C Analysis ..............................................................................................................12
D Conclusion..........................................................................................................26
PART A
3
A Introduction
1 Leave granted.
2 The Employees’ State Insurance Corporation1 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 - Respondent 3 to 25, to the post of “Associate
Professor” under the Dynamic Assured Career Progression2 Scheme as opposed to
the appellant’s recruitment regulations.
3 ESIC, the appellant, is a statutory body constituted under the Employees’
State Insurance Act 19483
. The recruitment and promotion of its teaching staff are
governed by the Employees’ State Insurance Corporation (Medical Teaching Faculty
Posts) Recruitment Regulations 2015 4 which came into effect on 5 July 2015.
Respondent 3 to 255 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
1 “ESIC” (interchangeably referred to as the appellant) 2 “DACP” 3 “ESI Act” 4 “ESIC Recruitment Regulations 2015” 5 interchangeably referred to as “contesting respondents”
PART A
4
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 Tribunal6
, Bengaluru.
4 On 7 February 2018, the CAT relied on the submission by the Counsel for the
appellant and held that the ESIC Recruitment Regulations 2015 were not relevant
for 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 appellant to consider the contesting respondents for promotion
under the DACP Scheme.
5 The appellant challenged the order of the CAT in a writ petition before the
High Court of Karnataka. The High Court dismissed the petition on 5 September
2019 by 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
6 “CAT”
PART B
5
(iii) Counsel for the appellant conceded that the appellant would implement
the DACP Scheme and the ESIC Recruitment Regulations 2015 do not
apply.
B Submissions
6 Mr Santhosh Krishnan, appearing on behalf of the appellant has urged the
following submissions:
(i) The appellant is an autonomous statutory corporation incorporated under the
ESI Act. It is within the administrative control of the Ministry of Labour and
Employment of the Government of India;
(ii) Section 97 of the ESI Act confers power on the appellant to frame its own
regulations. The terms and conditions of service of Assistant Professors are
governed by the ESIC Recruitment Regulations 2015. These regulations
stipulate that a minimum of five years of qualifying service as Assistant
Professor is mandatory for promotion as Associate Professor. The ESIC
Regulations 2015 cannot be overridden by the DACP Scheme;
(iii) The Office Memorandum dated 29 October 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. The text of the
DACP Scheme makes it clear that the Office Memorandum applies to
employees of the Ministry of Health, subject to an appropriate amendment in
PART B
6
the recruitment rules. Thus, the DACP Scheme does not override or
supersede statutory regulations made under the ESI Act;
(iv) 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. Section 97(3) empowers the ESIC to frame
regulations that are deemed to have the same effect as statutory provisions;
(v) The contesting respondents joined the ESIC Medical College and PGIMSR,
Rajajinagar, Bengaluru as Assistant Professors on different dates between 7
February 2014 and 26 June 2016. These Respondents were governed by the
Employees’ State Insurance Corporation (Medical Teaching Faculty Posts)
Recruitment Regulations, 20087
;
(vi) The High Court incorrectly held that the conditions for promotion from
Assistant Professor to Associate Professor were governed by the DACP
Scheme on the ground that the ESIC Recruitment Regulations 2015 were
inapplicable to the contesting respondents. The ESIC Recruitment
Regulations 2008 were gazetted on 2 May 2009 and stipulated four years of
qualifying service for promotion from Assistant Professor to Associate
Professor. Therefore, none of the contesting respondents would have
completed four years of service before the ESIC Recruitment Regulations
2015 came into effect, i.e. on 3 July 2015;
7 “ESIC Recruitment Regulations 2008”
PART B
7
(vii) Under the ESIC Recruitment Regulations 2008, the contesting respondents
became eligible for promotion after the ESIC Recruitment Regulations 2015
came into effect. Thus, the operation of ESIC Regulations 2015 in regard to
their service conditions cannot be ignored and there can be no estoppel
against legislative action. This Court, in C Sankarnarayanan v. State of
Kerala 8 , has held that there is no estoppel against legislative action
concerning service conditions;
(viii) It is settled law that in the event of an inconsistency or conflict between a
statutory provision and an executive instruction, the former must be given
effect. This Court in Union of India v. Ashok Kumar Aggarwal9 has held
that government-issued memorandums or executive instructions can be used
only to supplement the statutory rules but not to supplant them;
(ix) 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. However, this incorrect concession does not amount to estoppel
against statutory regulation. This has been held by this Court in State of Uttar
Pradesh v. U.P. Rajya Khanij Vikas Nigam Sangharsh Samiti10;
(x) The High Court has incorrectly recorded that the ESIC Recruitment
Regulations 2015 were issued without approval from the Central Government.
The preamble to the ESIC Recruitment Regulations 2015 explicitly states that
the regulations were made after approval of the Central Government;
8 (1971) 2 SCC 361
9 (2013) 16 SCC 147 10 (2008) 12 SCC 675
PART B
8
(xi) The submission of the contesting respondents that the advertisement issued
by the appellant contemplated the application of the DACP Scheme, is
irrelevant to the adjudication of the matter. It is settled law that if an
advertisement is inconsistent with recruitment rules, the rules would prevail,
as held by this Court in Malik Mazhar Sultan v. UPSC11, Ashish Kumar v.
State of UP12 and Raminder Singh v. State of Punjab13;
(xii) The applicability of the DACP to non-teaching staff of the ESIC is irrelevant
since the ESIC Recruitment Regulations 2015 specifically govern “Medical
Teaching Faculty Posts”; and
(xiii) Except in three cases, the contesting respondents have been granted
promotions upon completion of five years of regular service, in accordance
with the ESIC Recruitment Regulations 2015.
7 Mr Yatindra Singh, Senior Counsel and Mr Anand Sanjay M Nuli, appearing
on behalf of the contesting respondents, Respondent 3 to 25, has urged the
following submissions:
(i) The Office Memorandum dated 29 August 2008 extended the DACP
Scheme to all Medical doctors, whether belonging to Organized Services,
or holding isolated posts. It also directed all Ministries/Departments to
implement the DACP Scheme. By another Office Memorandum dated 29
October 2008, the Government of India extended the DACP Scheme to
11 (2006) 9 SCC 507, para 21 12 (2018) 3 SCC 55, para 27 13 (2016) 16 SCC 95, paras 24 and 25
PART B
9
various sub-cadres of the Central Health Service, including the teaching
cadre. Under Section 17(2)(a) of the ESI Act, the DACP Scheme is binding
on the appellant;
(ii) The ESIC Recruitment Regulations 2008, which stipulate four years of
qualifying service for promotion from Assistant Professor to Associate
Professor, were issued without the approval of the Central Government;
(iii) The appellant has issued advertisements on 19 August 2011, 12
December 2012 and once in 2013 for the post of Assistant Professor by
stating “Promotional avenues in the Department are available under DACP
guidelines of Govt. of India”. The contesting respondents joined the
services of the appellant as Assistant Professors in Pay Band-3 with a
grade pay of Rs. 6600/- pursuant to various recruitment advertisements of
the appellant;
(iv) On 23 September 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”;
(v) 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;
(vi) After the contesting respondents instituted an application before the CAT,
the Assistant Director (Med), CSIC, Headquarter Office addressed a letter
to the Medical Superintendent of the ESIC Model Hospital, Rajaji Nagar,
PART B
10
Bangalore on 26 December 2017 stating that “a proposal for considering
promotion under DACP Scheme…. is under process”;
(vii) The appellant admitted before the CAT and even in its writ petition before
the High Court that the DACP Scheme is applicable to its employees and
that it is willing to be bound by the DACP rules. The argument that the
DACP Scheme is inapplicable to the contesting respondents is being
raised for the first time before this Court;
(viii) The DACP Scheme has statutory force under Section 17 of the ESI Act.
The DACP Scheme was made on 29 October 2008, before the
enforcement of the ESIC Recruitment Regulations 2008 on 2 May 2009.
Since the ESIC Recruitment Regulations 2008 were issued without
approval of the Central Government mandated under Section 17(2)(a) of
the ESI Act, they do not override the DACP Scheme;
(ix) The ESIC Recruitment Regulations 2015 were also issued without the
“prior approval” mandated under Section 17(2)(a) of the ESI Act. The
appellant has not furthered any evidence to indicate that prior approval
was taken and this has been noted by the High Court;
(x) The appellant is estopped from denying the applicability of the DACP
Scheme to the contesting respondents since they made such a
representation in their recruitment advertisements. The contesting
respondents have acted on such representations to quit their existing jobs.
PART B
11
Reliance is placed on a decision of this Court in Y V Rangaiah v. J
Sreenivasa Rao14;
(xi) 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 5 July 2015. Therefore, the
contesting respondents should be considered for promotion in accordance
with the DACP Scheme, in view of the decisions of this Court in State of
UP v. Mukesh Narain15 and B L Gupta v. MCD16;
(xii) All the contesting respondents had three or more years of teaching
experience before they joined the appellant as Assistant Professors. The
qualifying service of five years under the ESIC Recruitment Regulations
2015 should be given a reasonable interpretation and the cumulative
experience of more than five years should be held sufficient for promotion;
(xiii) The doctors and medical teaching staff in the Central Government are
being promoted in accordance with the DACP Scheme. The arbitrary
denial of the DACP Scheme to the contesting respondents’ Teaching
Cadre of the appellant violates Article 14, especially when they are also
discharging functions of attending to patients and performing specialised
clinical work; and
14 1983 (3) SCC 284, para 9 15 (2013) 4 SCC 169 16 (1998) 9 SCC 223
PART C
12
(xiv) In other legal proceedings, the appellant has taken the stance that the
DACP scheme is applicable to its employees with effect from 01 March
2008 itself.
8 The rival submissions will now be analysed.
C Analysis
9 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 29 October 2008, the Sixth
Central Pay Commission recommended the extension of the DACP Scheme to all
doctors in employment of the Central Government. The recommendations were
accepted by the Union Ministry of Health and Family Welfare through an Office
Memorandum dated 29 October 2008 which extended the DACP Scheme to Medical
and Dental Doctors in the Central Government. In continuation of the Office
Memorandum, the Government of India issued another Office Memorandum dated
29 October 2008 detailing promotion under DACP in various cadres under the
Ministry of Health and Welfare. The Scheme enabled promotion from the post of
Assistant Professor to Associate Professor after two years of service:
“B. Teaching Sub Cadre
Promotions under the DACP Scheme No. of years of
regular works
required for
promotion
From To
Assistant Associate Professor 2 years in Grade
PART C
13
Professor
(Grade Pay
Rs. 6600 in
PB-3)
(Grade Pay Rs. 7600 in
PB-3)
Pay of Rs. 6600 in
PB-3 including
service rendered
in the pre-revised
scale of Rs. 10000-
15200.
Associate
Professor
(Grade Pay
Rs. 7600 in
PB-3)
Professor (Grade Pay
Rs.8700 in PB-4)
4 years in Grade
Pay of Rs. 7600 in
PB-3 including
service rendered in
the pre-revised
scale of Rs. 12000-
16500.
Professor
(Grade Pay
Rs. 8700 in
PB-4)
Director Professor
(Grade Pay Rs.10000 in
PB-4)
7 years in Grade
Pay of Rs. 8700 in
PB-4 including
service rendered in
the pre-revised
scale of Rs. 14300-
18300.”
(emphasis supplied)
10 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 October 2008 against the ESIC Recruitment Regulations
2008 and the subsequently issued ESIC Recruitment Regulations 2015. Section 17
of the ESI Act 1948 provides as follows:
“17. Staff.—(1) The Corporation may employ such other staff of
officers and servants as may be necessary for the efficient
transaction of its business, provided that the sanction of the
Central Government shall be obtained for the creation of any
post the maximum monthly salary of which exceeds such salary
as may be prescribed by the Central Government.
(2)(a) The method of recruitment, salary and 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 the
officers and employees of the Central Government drawing
corresponding scales of pay:
Provided that where the Corporation is of the opinion that it
is necessary to make a departure from the said rules or
orders in respect of any of the matters aforesaid, it shall
obtain the prior approval of the Central Government:
PART C
14
Provided further that this sub-section shall not apply to
appointment of consultants and specialists in various fields
appointed on contract basis,
(b) In determining the corresponding scales of pay of the
members of the staff under clause (a), the Corporation shall have
regard to the educational qualifications, method of recruitment,
duties and responsibilities of such officers and employees under
the Central Government and in case of any doubt, the
Corporation shall refer the matter to the Central Government
whose decision thereon shall be final…….”
(emphasis supplied)
11 Section 97 of the ESI Act empowers the ESIC to frame regulations. The
regulations are deemed to have the same effect as statutory provisions:
“97. Power of Corporation to make regulations.—(1) The
Corporation may, subject to the condition of previous
publication, make regulations, not inconsistent with this Act
and the rules made thereunder, for the administration of the
affairs of the Corporation and for carrying into effect the
provisions of this Act.
(2) In particular and without prejudice to the generality of the
foregoing power, such regulations may provide for all or any of
the following matters, namely—
[…..]
(xvi) the appointment of medical practitioners for the purposes
of this Act, the duties of such practitioners and the form of
medical certificates;
[…..]
(xxi) the method of recruitment, pay and allowances,
discipline, superannuation benefits and other conditions of
service of the officers and servants of the Corporation other
than the [Director General and Financial Commissioner;
[…..]
(xxiii) any matter in respect of which regulations are required
or permitted to be made by this Act.
(2-A) The condition of previous publication shall not apply to any
regulations of the nature specified in clause (xxi) of sub-section
(2).
(3) Regulations made by the Corporation shall be published
in the Gazette of India and thereupon shall have effect as if
enacted in this Act.
(4) Every regulation shall, as soon as may be, after it is made by
the Corporation, be forwarded to the Central Government and
that Government shall cause a copy of the same to be laid before
each House of Parliament, while it is in session for a total period
PART C
15
of thirty days, which may be comprised in one session or in two
or more successive sessions, and if, before the expiry of the
session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any
modification in the regulation or both Houses agree that the
regulation should not be made, the regulation shall thereafter
have effect only in such modified form or be of no effect, as the
case may be, so, however, that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that regulation.”
(emphasis supplied)
12 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:
“….ln exercise of the powers conferred by sub-section (1) of
Section 97, read with clause(xxi) of sub-section (2) and subsection (2A) of the said section and sub-section (3) of section 17
of the Employees' State Insurance Act, 1948 (34 of 1948) and in
supersession of the Employees State Insurance Corporation
(Medical Teaching Faculty posts) Recruitment Regulations, 2008
published in the Gazette of India vide No.A-12(11 )11/2008-Med.-
IV dated the 2nd May, 2009, except as respects things done or
omitted to be done before such supersession, the Employees'
State Insurance Corporation hereby makes, with the
PART C
16
approval of the Central Government, the following
regulations for regulating the method of recruitment to the
medical teaching faculty posts in the Employees' State
Insurance Corporation's medical colleges, namely:- …”
(emphasis supplied)
13 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. A
Constitution Bench in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi17
considered the regulations framed by several statutory authorities considered as
“State” within the terms of Article 12. Chief Justice A N Ray held that the regulations
have the same effect of law and bind the statutory authorities:
“21. The characteristic of law is the manner and procedure
adopted in many forms of subordinate legislation. The authority
making rules and regulation must specify the source of the rule
and regulation making authority. To illustrate, rules are always
framed in exercise of the specific power conferred by the statute
to make rules. Similarly, regulations are framed in exercise of
specific power conferred by the statute to make regulations. The
essence of law is that it is made by the law-makers in exercise of
specific authority. The vires of law is capable of being challenged
if the power is absent or has been exceeded by the authority
making rules or regulations.
[…]
23. The noticeable feature is that these statutory bodies have no
free hand in framing the conditions and terms of service of their
employees. These statutory bodies are bound to apply the terms
and conditions as laid down in the regulations. The statutory
bodies are not free to make such terms as they think fit and
proper. Regulations prescribe the terms of appointment,
conditions of service and procedure for dismissing employees.
These regulations in the statutes are described as “status fetters
on freedom of contract”. The Oil and Natural Gas Commission
Act in Section 12 specifically enacts that the terms and conditions
of the employees may be such as may be provided by
17 (1975) 1 SCC 421
PART C
17
regulations. There is a legal compulsion on the Commission
to comply with the regulations. Any breach of such
compliance would be a breach of the regulations which are
statutory provisions. In other statutes under consideration
viz. the Life Insurance Corporation Act and the Industrial
Finance Corporation Act though there is no specific
provision comparable to Section 12 of the 1959 Act the
terms and conditions of employment and conditions of
service are provided for by regulations. These regulations
are not only binding on the authorities but also on the
public.”
(emphasis supplied)
14 A two-judge Bench of this Court in Pepsu Road Transport Corporation,
Patiala v. Mangal Singh and Others 18 interpreted a similar power to frame
regulations under the Road Transport Corporations Act 1950. This Court held that
regulations made under the statute have the force of law:
“29. It is well-settled law that the regulations made under the
statute laying down the terms and conditions of service of the
employees, including the grant of retirement benefits, have the
force of law. The regulations validly made under the statutory
powers are binding and effective as the enactment of the
competent legislature. The statutory bodies as well as general
public are bound to comply with the terms and conditions laid
down in the regulations as a legal compulsion. Any action or
order in breach of the terms and conditions of the regulations
shall amount to violation of the regulations which are in the
nature of statutory provisions and shall render such action or
order illegal and invalid.”
15 Respondent 3 to 25 joined the service of the ESIC Model Hospital,
Rajajinagar, Bengaluru as Assistant Professors on different dates, between 07
February 2014 and 26 June 2016. On completing two years in the post of Assistant
Professor, Respondent 3 to 25 made representations to the appellant seeking
18 (2011) 11 SCC 702
PART C
18
promotion to the grade of Associate Professor, claiming the benefit of the DACP
Scheme. 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. In the event of a conflict between an executive instruction,
an office memorandum in this case, and statutory regulations – the latter prevail. A
Constitution Bench in Sant Ram Sharma v. State of Rajasthan19 considered the
applicability of the letters issued by the Government of India detailing the
administrative practice for promotions, against the Indian Police Service (Regulation
of Seniority) Rules, 1954. The Constitution Bench held that:
7. We proceed to consider the next contention of Mr N.C.
Chatterjee that in the absence of any statutory rules governing
promotions to selection grade posts the Government cannot
issue administrative instructions and such administrative
instructions cannot impose any restrictions not found in the Rules
already framed. We are unable to accept this argument as
correct. It is true that there is no specific provision in the Rules
laying down the principle of promotion of junior or senior grade
officers to selection grade posts. But that does not mean that till
statutory rules are framed in this behalf the Government cannot
issue administrative instructions regarding the principle to be
followed in promotions of the officers concerned to selection
grade posts. It is true that Government cannot amend or
supersede statutory rules by administrative instructions, but
if the rules are silent on any particular point Government can
fill up the gaps and supplement the rules and issue
instructions not inconsistent with the rules already framed.”
(emphasis supplied)
19 AIR 1967 SC 1910
PART C
19
16 In Union of India v. Ashok Kumar Aggarwal20 a two judge Bench of this
Court speaking in the context of service regulations governing a departmental
enquiry re-iterated that an office order or office memorandum cannot contravene
statutory rules. Justice B S Chauhan noted the position in law in the following terms:
“59. The law laid down above has consistently been followed
and it is a settled proposition of law that an authority cannot
issue orders/office memorandum/executive instructions in
contravention of the statutory rules. However, instructions
can be issued only to supplement the statutory rules but not
to supplant it. Such instructions should be subservient to
the statutory provisions. (Vide Union of Indiav. Majji
Jangamayya [(1977) 1 SCC 606 : 1977 SCC (L&S) 191] , P.D.
Aggarwal v. State of U.P. [(1987) 3 SCC 622 : 1987 SCC (L&S)
310 : (1987) 4 ATC 272] , Paluru Ramkrishnaiah v. Union of
India [(1989) 2 SCC 541 : 1989 SCC (L&S) 375 : (1989) 10 ATC
378 : AIR 1990 SC 166] , C. Rangaswamaiah v. Karnataka
Lokayukta [(1998) 6 SCC 66 : 1998 SCC (L&S) 1448] and Joint
Action Committee of Air Line Pilots' Assn. of India v. DG of Civil
Aviation [(2011) 5 SCC 435 : AIR 2011 SC 2220] .)”
(emphasis supplied)
17 In P D Aggarwal v. State of U.P.21 a two judge Bench of this Court declined
to grant primacy to an Office Memorandum issued by the Government of Uttar
Pradesh which purportedly amended the method of recruitment of Assistant Civil
Engineers in the U.P. Public Service Commission without amending the relevant
regulations. The Court held:
“20. The office memorandum dated December 7, 1961 which
purports to amend the United Provinces Service of
Engineers (Buildings and Roads Branch) Class II Rules, 1936
in our opinion cannot override, amend or supersede
20 (2013) 16 SCC 147 21 (1987) 3 SCC 622
PART C
20
statutory rules. This memorandum is nothing but an
administrative order or instruction and as such it cannot
amend or supersede the statutory rules by adding
something therein as has been observed by this Court
in Sant Ram Sharma v. State of Rajasthan [AIR 1967 SC 1910
: (1968) 1 SCR 111 : (1968) 2 LLJ 830] . Moreover the benefits
that have been conferred on the temporary Assistant Engineers
who have become members of the service after being selected
by the Public Service Commission in accordance with the service
rules are entitled to have their seniority reckoned in accordance
with the provisions of Rule 23 as it was then, from the date of
their becoming member of the service, and this cannot be taken
away by giving retrospective effect to the rules of 1969 and 1971
as it is arbitrary, irrational and not reasonable.”
(emphasis supplied)
18 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. In considering a similar factual situation, a three-judge
Bench of this Court in Union of India v. Majji Jangamayya22 held that:
“31. The second question is whether the requirement of 10
years' experience was a statutory rule. The High Court held that
the requirement of 10 years' experience is not a statutory rule.
Counsel for the respondents contended that the requirement
of 10 years' experience is statutory because the letter dated
January 16, 1950 is by the Government of India and the
Government of India has authority to frame rules and one of
the letters dated July 21, 1950 referred to it as a formal rule.
The contention is erroneous because there is a distinction
between statutory orders and administrative instructions of
the Government. This Court has held that in the absence of
22 (1977) 1 SCC 606
PART C
21
statutory rules, executive orders or administrative
instructions may be made. (See CIT v. A. Raman &
Company [AIR 1968 SC 49 : (1968) 1 SCR 10 : 67 ITR 11] )
[….]
34. Counsel on behalf of the respondents contended that the
requirement of 10 years' experience laid down in the letter dated
January 16, 1950 had the force of law because of Article 313.
Article 313 does not change the legal character of a document.
Article 313 refers to laws in force which mean statutory laws. An
administrative instruction or order is not a statutory rule. The
administrative instructions can be changed by the Government
by reason of Article 73(1)(a) itself.
[….]
36. The expression “ordinarily” in the requirement of 10 years'
experience shows that there can be a deviation from the
requirement and such deviation can be justified by reasons.
Administrative instructions if not carried into effect for good
reasons cannot confer a right. (See P.C. Sethi v. Union of
India [(1975) 4 SCC 67 : 1975 SCC (L&S) 203 : (1975) 3 SCR
201] .)….”
(emphasis supplied)
19 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
PART C
22
effect that overrides the Office Memorandum dated 29 October 2008 which
implemented the DACP Scheme.
20 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. In Malik Mazhar
Sultan v. U.P. Public Service Commission23 a two-judge Bench of this Court
clarified that an erroneous advertisement would not create a right in favour of
applicants who act on such representation. The Court considered the eligibility
criteria for the post of Civil Judge (Junior Division) under the U.P. Judicial Service
Rules, 2001 against an erroneous advertisement issued by the U.P. Public Service
Commission and held:
“21. The present controversy has arisen as the advertisement
issued by PSC stated that the candidates who were within the
age on 1-7-2001 and 1-7-2002 shall be treated within age for the
examination. Undoubtedly, the excluded candidates were of
eligible age as per the advertisement but the recruitment to the
service can only be made in accordance with the Rules and the
error, if any, in the advertisement cannot override the Rules and
create a right in favour of a candidate if otherwise not eligible
according to the Rules. The relaxation of age can be granted only
if permissible under the Rules and not on the basis of the
advertisement. If the interpretation of the Rules by PSC when it
issued the advertisement was erroneous, no right can accrue on
basis thereof. Therefore, the answer to the question would turn
upon the interpretation of the Rules.”
23 (2006) 9 SCC 507 [“Malik Mazhar Sultan”]
PART C
23
21 In Ashish Kumar v. State of Uttar Pradesh24 a two-judge Bench of this
Court followed the decision in Malik Mazhar Sultan (supra) in interpreting an
advertisement issued by the Director, Social Welfare Department, Uttar Pradesh for
the position of a psychologist. This Court declined to give precedence to the
erroneous qualifications prescribed in the advertisement against the relevant
recruitment rules and held:
“27. Any part of the advertisement which is contrary to the
statutory rules has to give way to the statutory prescription. Thus,
looking to the qualification prescribed in the statutory rules, the
appellant fulfils the qualification and after being selected for the
post denying appointment to him is arbitrary and illegal. It is well
settled that when there is variance in the advertisement and in
the statutory rules, it is the statutory rules which take
precedence….”
22 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. In Rajasthan Public
Service Commission v. Chanan Ram25 a two-judge Bench of this Court held that
an earlier advertisement becomes infructuous after a subsequent amendment to the
service rules:
“13. Under these circumstances, therefore, it is difficult to
appreciate how the Division Bench of the High Court could
persuade itself in agreeing with the submission of the learned
counsel for the respondent-writ petitioner that despite this change
of cadres and the provision for recruitment on new posts the old
advertisement of 5-11-1993 Annexure P-1 seeking to consider
24 (2018) 3 SCC 55 25 (1998) 4 SCC 202
PART C
24
the candidature of applicants for erstwhile 23 advertised
vacancies in the posts of Assistant Directors (Junior) in the
Agricultural Marketing Service of the State of Rajasthan would
still be pursued further and recruitment should be effected for
these 23 erstwhile vacancies as per the old advertisement. It is
easy to visualise that even if such an earlier advertisement of 5-
11-1993 was proceeded with further it would have resulted into a
stalemate and an exercise in futility. No appointment could
have been given to the selected candidates to the posts of
Assistant Directors (Junior) after 1995 amendment of Rules
as there were no such posts in the hierarchy of State
Service. Consequently it must be held that on account of the
amendments to the Rajasthan Agricultural Marketing Service
Rules the earlier advertisement dated 5-11-1993 had become
infructuous and otiose. Only on this short ground the writ
petition of the respondent-writ petitioner should have been
dismissed by confirming the order of dismissal of the writ petition
earlier passed by the learned Single Judge…….”
(emphasis supplied)
23 The contesting 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 its writ petition before the
High Court. While this Court 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. In Nedunuri
Kameswaramma v. Sampati Subba Rao 26 a three-judge Bench of this Court
decided a central point of the dispute in favour of a party, irrespective of the
concession of its Counsel since it was on a point of law. Justice M Hidayatullah (as
the learned Chief Justice then was), speaking on behalf of the Court observed:
“20. From the above analysis of the documents, it is quite clear
that the documents on the side of the appellant established that
26 AIR 1963 SC 884
PART C
25
this was a Karnikam service inam, and the action of the Zamindar
in resuming it as such, which again has a presumption of
correctness attaching to it, clearly established the appellant's
case. Much cannot be made of a concession by counsel that
this was a Dharmilainam, in the trial court, because it was a
concession on a point of law, and it was withdrawn. Indeed,
the central point in the dispute was this, and the concession
appears to us to be due to some mistake or possibly
ignorance not binding on the client. We are thus of opinion
that the decision of the two courts below which had concurrently
held this to be jeroyti land after resumption of
the Karnikam service inam, was correct in the circumstances of
the case, and the High Court was not justified in reversing it.”
(emphasis supplied)
24 In Himalayan Coop. Group Housing Society v. Balwan Singh27 a threejudge Bench of this Court clarified the law of agency with respect to client-lawyer
relationships. The Court held 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:
“32. Generally, admissions of fact made by a counsel are binding
upon their principals as long as they are unequivocal; where,
however, doubt exists as to a purported admission, the court
should be wary to accept such admissions until and unless the
counsel or the advocate is authorised by his principal to make
such admissions. Furthermore, a client is not bound by a
statement or admission which he or his lawyer was not
authorised to make. A lawyer generally has no implied or
apparent authority to make an admission or statement which
would directly surrender or conclude the substantial legal
rights of the client unless such an admission or statement is
clearly a proper step in accomplishing the purpose for which
the lawyer was employed. We hasten to add neither the
client nor the court is bound by the lawyer's statements or
admissions as to matters of law or legal conclusions. Thus,
according to generally accepted notions of professional
responsibility, lawyers should follow the client's instructions rather
than substitute their judgment for that of the client. We may add
27 (2015) 7 SCC 373
PART D
26
that in some cases, lawyers can make decisions without
consulting the client. While in others, the decision is reserved for
the client. It is often said that the lawyer can make decisions as
to tactics without consulting the client, while the client has a right
to make decisions that can affect his rights.”
(emphasis supplied)
25 Recently, a two-judge Bench of this Court in Director of Elementary
Education, Odisha v. Pramod Kumar Sahoo28 observed that a concession on a
question of law concerning service rules would not bind the State:
“11. The concession given by the learned State Counsel before
the Tribunal was a concession in law and contrary to the
statutory rules. Such concession is not binding on the State for
the reason that there cannot be any estoppel against law. The
rules provide for a specific grade of pay, therefore, the
concession given by the learned State Counsel before the
Tribunal is not binding on the appellant.”
The concession of the Counsel for the appellant before the CAT does not preclude
the finding on the law that is arrived at by this Court.
D Conclusion
26 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 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
28 (2019) 10 SCC 674
PART D
27
before the CAT does not stand in the way of the appellant supporting the correct
position of law before this Court.
27 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.
28 The appeal is accordingly allowed and the impugned judgement 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.
PART D
28
29 The appeal is disposed of in the above terms.
30 Pending application(s), if any, shall stand disposed of.
…….…………………………...............................J.
[Dr Dhananjaya Y Chandrachud]
…….…………………………...............................J.
[A S Bopanna]
New Delhi;
January 20, 2022
Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले
Comments
Post a Comment