Whether promotion scheme implemented by office memorandum supersedes recruitment regulations? Supreme Court answers

Supreme Court: While adjudicating the issue as to whether promotion scheme implemented by office memorandum supersedes recruitment regulations, the Division Bench of Dr Dhananjaya Y Chandrachud* and A S Bopanna, JJ., held that regulations made under the statute have the force of law. The Bench expressed,

“The ESIC Recruitment Regulations 2015 had 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.”

Factual Matrix

The Employees’ State Insurance Corporation (ESIC) had appealed against the judgment of Karnataka High Court, wherein the High Court had Bench rejected ESIC’s petition against the order of Central Administrative Tribunal (CAT) directing it to consider promotion of the contesting respondents – to the post of “Associate Professor” under the Dynamic Assured Career Progression (DACP) Scheme as opposed to ESIC’s recruitment regulations. The stand of the appellant was that the recruitment and promotion of its teaching staff are governed by the Employees’ State Insurance Corporation (Medical Teaching Faculty Posts) Recruitment Regulations 2015 not DACP.

The Central Government had issued the DACP Scheme through an Office Memorandum dated 29-10-2008 contemplating 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. 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 CAT, wherein the Tribunal held that the ESIC Recruitment Regulations 2015 were not relevant for adjudication of the matter and directed the appellant to consider the contesting respondents for promotion under the DACP Scheme.

Findings of the Tribunal and the High Court

Upholding the findings of CAT, the High Court had dismissed the appeal on the ground that since the contesting respondents were recruited before the ESIC Recruitment Regulations 2015 came into effect, they would get the benefit of the DACP Scheme. Further, the High Court opined that the DACP Scheme has statutory effect under Section 17 of the ESI Act and ESIC Recruitment Regulations 2015 had departed from the DACP Scheme without seeking prior approval of the Central Government.

Observations and Findings

The question before the Bench was with regard to 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 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, 1948. While Recruitment Regulations, 2008 embodied a requirement of four years’ service as Assistant Professor for promotion as an Associate Professor, the ESIC Recruitment Regulations 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 noted that these regulations were to supersede the ESIC Recruitment Regulations 2008 and were made with the approval of the Central Government.

Relying on the decision of Constitution Bench in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421, wherein it was held that in the event of a conflict between an executive instruction, an office memorandum in this case, and statutory regulations – the latter prevail, the Bench held that the ESIC Recruitment Regulations 2008 and ESIC Recruitment Regulations 2015 had statutory effect by virtue of Section 97(3) of the ESI Act.

Similarly, in Sant Ram Sharma v. State of Rajasthan, (1968) 1 SCR 111, it was held 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.”

Therefore, the Bench opined that on the dates when the contesting respondents joined the service of the appellant – 07-02-2014 till 26-06-2016 – their promotions were governed by the ESIC Recruitment Regulations 2008 which mandated four years of qualifying service for promotion from Assistant Professor to Associate Professor. However, 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 Bench held that DACP Scheme facilitating promotion on the completion of two years of service was not applicable to the contesting respondents, when the regulations had a statutory effect that overrides the Office Memorandum dated 29-10-2008 which implemented the DACP Scheme.

On the contention that the advertisements indicated the applicability of the DACP Scheme before the ESIC Recruitment Regulations 2015 were issued, the Bench held that a subsequent amendment to recruitment regulations would override the conditions prescribed in the advertisement.

Regarding the issue that concession of the Counsel for the appellant before the CAT would preclude the appellant from urging that the DACP Scheme was not applicable to the Teaching Cadre at the ESIC, the Bench remarked,

“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.”

Conclusion

In the backdrop of above, the Bench concluded that the CAT and the High Court failed to notice applicability of the ESIC Recruitment Regulations 2015 to the promotions of the Teaching Cadre in the appellant corporation. The advertisements for recruitment mentioning the DACP Scheme would have no effect since they were in contravention of the applicable recruitment regulations. Accordingly, the appeal was allowed and the impugned judgement and order was set aside.

[The Employees’ State Insurance Corpn. v. Union of India, 2022 SCC OnLine SC 70, decided on 20-01-2022]


*Judgment by: Justice Dr Dhananjaya Y Chandrachud


Appearance by:

For the Appellant: Santhosh Krishnan, Advocate

For the Respondents: Yatindra Singh, Senior Advocate and Anand Sanjay M Nuli, Advocate


Kamini Sharma, Editorial Assistant has put this report together 


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