The Employees State Insurance ... vs Sivaraman O.G on 26 February, 2015

[Cites 10, Cited by 0]

Kerala High Court

The Employees State Insurance ... vs Sivaraman O.G on 26 February, 2015

These Original Petitions are filed by Respondents 2, 3 and 7 against the order of the Central Administrative Tribunal Ernakulam Bench in O.A.No.1175 of 2013 dated 26.02.2015 and Respondents 1 and 2 in O.A.No.1018 of 2013 dated 18.03.2015, whereby the Administrative Tribunal has declared that the applicants in these cases will stand absorbed to the Employees State Insurance Corporation (ESIC) with effect from 02.11.2009 with all consequential benefits. Even though there is some difference between these two Original Petitions, the facts are intrinsically connected and the order rendered in O.A.No.1175 of 2013 was the basis for passing the order in O.A.No.1018 of 2013 and in that view of the matter, we are disposing of these two Original Petitions by a common judgment. But, we think it is better to refer to the brief facts of both the cases separately in order to avoid any confusion of the basic facts.

O.P.(CAT) Nos.146 & 162 of 2015 2 O.P.(CAT) No.146 of 2015

2. There were 67 applicants in the Original Application who are Respondents 1 to 67 in this Original Petition. Respondents 1 to 6 are administrative staff working as U.D. Clerks, L.D. Clerks and Peons, applicants 7 to 10 are the para- medical staff, Respondents 11 to 41 are the Head Nurses and Staff Nurses and Respondents 42 to 67 are Class-IV employees in the Employees State Insurance Corporation Hospital, Udyogamandal, which is under the control of the petitioners. They were originally the employees under Respondents 69 to

71.

3. The employees of the E.S.I Hospitals in the State including the E.S.I Hospital, Udyogamandal wherein Respondents 1 to 67 are employed, were under the control of Respondents 69 to 71 till the take over of the hospital by the petitioners. The petitioners decided to take over some of the major hospitals in the State including the E.S.I Hospital, Udyogamandal and to develop them as Model Hospitals. In furtherance to the said decision, in the 142nd meeting of the 1st petitioner held on 22.02.2008, steps were initiated for taking over the hospitals and absorbing the staff. The Chairman of O.P.(CAT) Nos.146 & 162 of 2015 3 the E.S.I. Board accepted the proposals and directed to take over the hospitals.

4. The first E.S.I Hospital which was taken over in Kerala by the 1st petitioner was the E.S.I. Hospital, Asramam, Kollam District. The formalities of take over were completed and the hospital was being run by the E.S.I Corporation on the basis of the policy decision taken by the 1st petitioner. The other hospitals which were identified by the 1st petitioner to be taken over are the E.S.I Hospital at Udyogamandal (wherein Respondents 1 to 67 were working), Ezhukone and Parippally. These hospitals were also directed to be taken over on the basis of terms and conditions on which the Asramam Hospital was taken over, contends the Respondents. The said proposal was communicated by the State Government to the 1st Respondent by Annexure-A1 letter dated 18.02.2009. There were further communications in this regard and the final order was passed by the 1st Respondent as per Annexure-A2 dated 18.08.2009 and draft terms of absorption was also communicated by the 1st petitioner to the State Government, as evident from Annexure-A3.

O.P.(CAT) Nos.146 & 162 of 2015 4

5. The final order of handing over of the hospital at Udyogamandal was issued by Respondents 69 and 70 as per Annexure-A4 dated 15.10.2009 with terms and conditions of absorption of the staff working in the hospital. It is the further case of the party Respondents that handing over of E.S.I. Hospital, Udyogamandal along with the staff working therein was accepted by Annexure-A5 order dated 30.10.2009 issued by the 1st petitioner. By Annexure-A6 order dated 17.12.2009, it was informed by the 1st petitioner that the pay and allowances of the staff will be equal to the pay and allowances of ESIC Hospitals. The 2nd petitioner approved the absorption of the staff in E.S.I. Hospital, Udyogamandal with effect from 02.11.2009 as per Annexure-A7 order dated 30.12.2009. As per Annexure-A8 order dated 21.12.2009, the 1st petitioner had given clearance to the 2nd petitioner to proceed with the absorption of Respondents 1 to 67 and the similarly situated persons in the E.S.I Corporation subject to the agreement of the terms and conditions of the E.S.I Corporation by the State Government. The State Government by Annexure-A9 order dated 25.02.2011 accorded sanction to Respondent No.71 to relieve the employees including Respondents 1 to 67 from the O.P.(CAT) Nos.146 & 162 of 2015 5 State Government Service to the Employees State Insurance Corporation.

6. Thereupon, the 2nd petitioner initiated proceedings for option and necessary forms were issued to the employees on 08.03.2011 and one of such model forms is evident from Annexure-A10. It is the contention of the party Respondents that both the petitioners and State Government have accepted the norm that the date of absorption of the employees and staff will be the date of take over of the hospital.

7. It is the further contention of the party Respondents that on the basis of the direction of the State Government and request of the E.S.I. Corporation, Respondent No.71 accepted the technical resignation of the applicants and the similarly situated employees and also relieved the employees of the duties from the State Insurance Medical Service Department with effect from 02.11.2009, evident from Annexure-A11 dated 25.03.2011. It is also the contention of the party Respondents that meanwhile some of the employees who had only less than two years period for retirement and who apprehended that they would not be absorbed to the E.S.I Service filed W.P.(C) No.8187 of 2010 before this Court, in which an interim order O.P.(CAT) Nos.146 & 162 of 2015 6 was granted in I.A.No.3857 of 2011, by which such employees were permitted to continue in service on certain terms. It is also contended that for the purpose of absorbing and regularizing the services of the party Respondents and other employees working in the E.S.I. Hospital, Udyogamandal, the 2nd petitioner initiated proceedings on the basis of the instructions received from the 1st petitioner and in the light of the interim order referred to supra. Thereupon, a Committee was constituted for screening and the said Committee as per Annexure-A12 dated 24.05.2011 recommended the absorption of 96 employees. The 2nd petitioner as per Annexure-A13 order dated 25.05.2011 absorbed all the employees including the party Respondents 1 to 67 in the E.S.I. Corporation Service with effect from 02.11.2009. Accordingly, it was reported to this Court wherein W.P.(C) Nos.8187, 9313 and 9720 of 2010 were pending, that all 96 State Government employees working in the E.S.I Hospital, Udyogamandal were absorbed with effect from 02.11.2009. In the light of the submission so made, this Court disposed of W.P.(C) No.8187 of 2010 with a direction to pay the salary due to the petitioners therein.

O.P.(CAT) Nos.146 & 162 of 2015 7

8. It is the further contention of the party Respondents that against the assurances so given before this Court in the writ petitions referred supra, 1st petitioner had directed the 2nd petitioner to give effect to the exemption granted regarding the two years period of service required for the absorbed staff only after 04.03.2011, evident from Annexure-A14 order dated 10.08.2011. It is the further contention of the party Respondents that the 1st petitioner by Annexure-A15 order dated 26.09.2011 withdrew the order of absorption of the employees in the E.S.I Corporation Service. But, as per Annexure-A16 order dated 25.10.2011, 1st petitioner confirmed the absorption with effect from 04.03.2011 against the absorption ordered with effect from 02.11.2009 by the proceedings cited supra. Circumstances being so, the party Respondents herein apprehended that the E.S.I. Hospitals, Ezhukone and Parippally taken over by the E.S.I Corporation from the State Government in the year 2011, after take over of the Udyogamandal Hospital were absorbed with effect from 04.03.2011 irrespective of take over on an earlier date. It is further stated that the absorption so done, to the other two hospitals were also under challenge before the Tribunal in O.P.(CAT) Nos.146 & 162 of 2015 8 O.A.Nos.156 and 157 of 2013.

9. Thus aggrieved, by Annexures-A14, A15 and A16, Respondents 1 to 67 have approached this Court by filing W.P. (C) Nos.30517, 30518, 30519 and 30520 of 2011. The State Government in the said writ petitions have taken a definite stand that the date of absorption is the date of take over and the entire employees were relieved from the State Government Service and the technical resignation is accepted with effect from 02.11.2009 and that there is no lien in the State Government for those employees after 02.11.2009, which stand is evident from Annexure-A17 counter affidavit filed by Respondent No.70. After hearing all the parties concerned, learned single Judge of this Court allowed the writ petitions as per Annexure-A18 common judgment dated 28.11.2012 and declared that the party Respondents are absorbed with effect from 02.11.2009 and the monetary benefits are to be distributed within a period of two months.

10. Aggrieved by Annexure-A18 judgment, petitioners 1 and 2 herein preferred Writ Appeal Nos.433, 546, 562 and 577 of 2013 before a Division Bench of this Court. At the time of final hearing of the writ appeals, it was contended by the O.P.(CAT) Nos.146 & 162 of 2015 9 petitioners that this Court had no jurisdiction under Article 226 to entertain a claim governing the service conditions of E.S.I Corporation as it is notified under the Administrative Tribunals Act. Therefore, in the light of the judgment of the Apex Court in 'L.Chandrakumar v. Union of India' [AIR 1997 SC 1125], the Division Bench held that the subject matter of the said writ appeals were to be decided by the Central Administrative Tribunal. While deciding so, the Division Bench of this Court directed the petitioners to pay the arrears of salary and extend the service benefits including the fixation of seniority to the party Respondents with effect from 04.03.2011 since the said date is accepted by the 1st petitioner as the date of absorption. The said judgment dated 02.09.2013 is produced as Annexure- A19. In spite of the direction to pay the salary with effect from 04.03.2011, same was not paid by the petitioners consequent to which Annexure-A20 representation dated 10.10.2013 was preferred, which was repelled by Annexure- A21 dated 02.12.2013. It is thus aggrieved and pursuant to the findings of Annexure-A19 judgment, Respondents 1 to 67 have preferred O.A.No.1175 of 2013 before the Tribunal. O.P.(CAT) Nos.146 & 162 of 2015 10

11. The State Government has filed a reply in the O.A., contending that the State Government has given the consent for absorption and has relieved the staff from the State Government Service to enable the petitioners to absorb them in accordance with the terms and conditions put forth by the petitioners. It was also contended by the State Government that the absorption of other hospitals were decided by the Corporation and that the petitioners were the appointing authority and the State Government has no role in deciding the date of absorption. It was also held that as per the judgment of the High Court, the date of absorption of the employees in E.S.I. Corporation will be 02.11.2009. It was also contended that the party Respondents were relieved from the State Government Service with effect from 02.11.2009 and further that the persons who opted to go back to the State Government Service were repatriated. Petitioners have filed a reply statement basically contending that Annexures-A14, A15 and A16 orders of the Corporation changing the date of regularization of the petitioners from 02.11.2009 to 04.03.2011 were in order. It was also contended that the O.A. filed without impleading the affected parties is bad for non- O.P.(CAT) Nos.146 & 162 of 2015 11 joinder of necessary parties. It was further contended that the party Respondents were working on deputation in the E.S.I Hospital and that absorption is one of the modes of recruitment which cannot be done by any authority below the rank of the appointing authority, that the 2nd petitioner is not the appointing authority for medical officers pertaining to Group-A Service and for them, the appointing authority is the Director General of the 1st petitioner Corporation. In Annexure-A13, absorption order issued by the 2nd petitioner, Medical Officers are also absorbed and therefore the same was bad especially due to the reason that Annexure-A13 order was not approved by the 1st petitioner.

12. It was thereupon, contended that Annexure-A13 order is an order without authority and jurisdiction and thus non-est in the eye of law. It is the contention of the petitioners that in that circumstances only the 1st petitioner issued Annexure-A15 order withdrawing Annexure-A13 order and decided by Annexure-A16 order to absorb the State Government staff working in E.S.I Hospital, Udyogamandal with effect from 04.03.2011, the date on which the condition of two years minimum service required on the date of O.P.(CAT) Nos.146 & 162 of 2015 12 absorption in the lending Department has been deleted in the terms of absorption to ensure absorption to the maximum possible number of employees working on deputation.

13. It is the further contention of the petitioners that the power to fix a cut off date for absorption of the State Government employees is fully vested with the petitioners and the State Government or the employees have no manner of authority to question the said power of the petitioners. It is also stated that the employees have no vested right of absorption from a particular date and they had every right to continue in the State Government Service. It is also contended that if the State Government opt for the pay scales of the Corporation as deputation pay, Corporation has no objection to pay the same. The petitioners have also continued with the 2nd petitioner approved absorption of staff with effect from 02.11.2009 and the date mentioned therein i.e. 02.11.2009 is only date of take over and that the date of absorption is not mentioned in Annexure-A7. It was also contended that the action taken by the 2nd petitioner was not approved from Headquarters and also not signed by anyone. It is the further contention of the petitioners that the reference O.P.(CAT) Nos.146 & 162 of 2015 13 quoted as item No.2 in Annexure-A7 is not actually approved terms and conditions. It is the further case of the petitioners that terms of absorption clearly state that option can be exercised by each employee who has a minimum of two years service left in the lending Department and the employees are bound by the said clause. The said clause was deleted by the 1st petitioner in the meeting held on 29.07.2011 and has approved the decision of the Chairman to delete the said condition with effect from the date of approval by the Chairman i.e. 04.03.2011.

14. So also, the petitioners have contended that it is true that a Committee headed by the 2nd petitioner has given a report on the absorption of staff of E.S.I. Hospital and that the said option for absorption was subject to the terms and conditions of Annexure-A4 order and thus they are bound by the above consent that the date of absorption can be fixed by E.S.I Corporation. Annexure-A12 report was incorporated to be a report forwarding the absorption of staff of E.S.I. Hospital, Udyogamandal after verifying all the relevant details specified in the absorption and that the cut off date for absorption is to be decided by the 1st petitioner and not the O.P.(CAT) Nos.146 & 162 of 2015 14 Committee headed by the 2nd petitioner and therefore cut off date of absorption with effect from 02.11.2009 is without authority and no jurisdiction is vested in the said Committee for deciding the date of absorption. It is the further contention of the petitioners that the condition of minimum service of two years for application for absorption was deleted only on 04.03.2011 and therefore Annexure-A12 report and A13 order to the extent of fixing the absorption date as 02.11.2009 was illegal and without authority and against the terms and conditions of absorption. It was also pointed out that Annexure-A14 order was not against the order of the High Court. Further, it was contended that the terms of absorption are uniformly applicable in all hospitals taken over by the Corporation throughout India. It was also stated that the Government has informed the petitioners that the State Government is willing to hand over E.S.I. Hospital, Udyogamandal to be run directly by the Corporation as a model Hospital on the same terms and conditions under which the Asramam Hospital was taken over including the staff which is evident from Ext.R2(a) letter dated 16.03.2009. It was also contended that Annexure-A19 judgment of the Division Bench O.P.(CAT) Nos.146 & 162 of 2015 15 of this Court in the writ appeal referred supra, 1st petitioner was directed to proceed with the matter including the payment of arrears of salary and all service benefits payable to the employees including fixation of seniority to the party Respondents with effect from 04.03.2011. Taking into account Annexures-A15 and A16, it was contended that by the said order, the cut off date or the date of absorption is fixed by the 1st petitioner and the same is a policy decision which need not be taken after hearing the party Respondents. Further, it was contended that there will not be any break of service, as during the above period the Respondents were on deputation and that there is no loss to the Respondents due to change in date of absorption. It was further submitted that the seniority for promotion will be drawn from the date on which they were promoted on regular basis i.e. the regular posts on which they were absorbed.

15. The Administrative Tribunal after evaluating the facts and circumstances of the case and the law involved in the subject matter, has found that the petitioners have fixed the cut off date in consultation with the State Government with effect from 02.11.2009 and held that the Respondents are O.P.(CAT) Nos.146 & 162 of 2015 16 absorbed to the Corporation with effect from the said date and therefore they are entitled to enjoy all consequential benefits accordingly. It is thus aggrieved, the said Original Petition is filed.

16. So far as O.P.(CAT) No.162 of 2015 is concerned, the Administrative Tribunal has relied on the order in O.A.No.1175 of 2013 and held that Respondents 1 to 4 are also entitled to be absorbed with effect from 02.11.2009 and entitled for all consequential benefits from the said date and therefore held that Respondents 1 to 4 are entitled to continue in service till they attain the age of superannuation in tune with the Rules of ESIC as well.

17. The subtle distinction between the facts of these two Original Petitions is that Respondents 1 to 4 were applicants due to superannuate on various dates during 2009- 2010 i.e. 31.08.2009, 30.11.2009 (Respondents 1, 2 and 3) and 31.03.2010 (Respondent 4). since the process of absorption took its own time and certain employees approached this Court by filing W.P.(C) No.8187 of 2010, seeking absorption and in the meanwhile, by an order dated 25.05.2011, the Respondents 1 to 4, among others were O.P.(CAT) Nos.146 & 162 of 2015 17 declared absorbed in the service of the E.S.I. Corporation with effect from 02.11.2009 evident from Annexure-A8 order. It is on production of the said order, this Court in W.P.(C) No.8187 of 2010 passed the order in the following manner:

"The counsel for the petitioners submits that although petitioners have been absorbed in the service of the E.S.I. Corporation, consequent salary due to the petitioners have not been paid yet. The salary payable to the petitioners shall be paid within one month. Insofar as no other issue survives in these writ petitions, these writ petitions are disposed of with the above direction".

18. It is thereafter that three orders dated 26.09.2011, 25.10.2011 and 10.02.2012 were passed by the petitioner Corporation insisting that the date of absorption issued by the Medical Superintendent keeping 02.11.2009 cannot be approved. It was under that circumstances, Respondents 1 to 4 approached this Court and secured necessary interim orders by which they continued in service.

19. While considering the said O.A. also, the Tribunal found that the date of absorption was accepted by the petitioner Corporation in consultation with the State Government and accordingly the absorption date was fixed as O.P.(CAT) Nos.146 & 162 of 2015 18 02.11.2009 and in that circumstances only it was held that in spite of their date of superannuation during the interregnum, Respondents 1 to 4 are entitled to continue in service. The Tribunal has also found that the Corporation has deleted the condition of minimum two years service and therefore Respondents 1 to 4 were also held to be eligible for absorption from 02.11.2009. It is thus aggrieved by the said order of the Tribunal, O.P.(CAT) No.162 of 2015 is filed.

20. Heard Sri. T.V.Ajayakumar, learned counsel for the petitioners, Sri. Thampan Thomas, learned counsel for the party Respondents, Sri. N. Nagaresh for the Union of India and the Senior Government Pleader, Smt. Rekha Vasudevan for the State and its officers.

21. The thrust of the contention put forth by learned counsel for the petitioners is that the Original Applications were bad for non-joinder of necessary parties in the O.As. and so also in these Original Petitions. The contention raised by the learned counsel for the petitioners is that the E.S.I. Hospitals at Ezhukone and Parippally in Kerala State were also taken over by the petitioners and if the date of absorption of the party Respondents in these Original Petitions were O.P.(CAT) Nos.146 & 162 of 2015 19 accepted as 02.11.2009, the seniority of the staff absorbed at Ezhukone and Parippally will be materially affected and therefore they are necessary parties to these proceedings. At the first blush it may appear that the contention raised by the learned counsel is justified, due to the fact that if different dates are fixed for absorption, there is a likelihood of affecting the seniority of the staff among the three hospitals, but the learned counsel for the party Respondents has invited our attention to the draft terms of absorption, (which terms are disputed by the petitioners) by which the manner in which the seniority of staff of various hospitals taken over, has to be fixed, is provided. Clause-4 therein takes care of the situation, which reads as follows:

"4) Seniority of an employee absorbed in the Corporation will be determined either from the date from which one holds the post on deputation or from the date one holds the post in equivalent grade on regular basis in the State Government service, whichever is earlier. Seniority of two or more State Government employees absorbed in the Corporation service would however be fixed as per the seniority existing in the State Government prior to their absorption. Before absorption an employee will be free to opt for separate institutional seniority i.e. seniority only for the particular hospital. In this case they will O.P.(CAT) Nos.146 & 162 of 2015 20 not be transferred outside the hospital even after absorption and the promotions will be based on the institutional seniority only subject to the vacancy in the hospital OR the individuals can also opt to be part of all India seniority, in which case they will be liable for all India transfer and all India promotional avenues. If opting for institutional seniority, the all India posts and cadres to which they will not be eligible for promotion will be the Medical Superintendent of the Hospital and all officers in the pay scale of Rs.14300-18300 (current NFSG scale)".

22. In order to substantiate the said contention, learned counsel for the petitioners has invited our attention to the judgments of the Hon'ble Apex Court in 'Prabodh Verma and others v. State of Uttar Pradesh and others' [(1984) 4 SCC 251], 'Girjesh Shrivastava and others v. State of Madhya Pradesh and others' [(2010) 10 SCC 707] and 'State of Assam v. Union of India and others' [(2010) 10 SCC 408]. In the first among the decisions, paragraph 28 was referred to by the learned counsel and in support of the proposition that without proper parties in the party array, the Tribunal has taken a decision. Therefore, the order passed by the Tribunal is bad on that said ground alone. Same is the proposition of law laid down by the Apex Court in the other two O.P.(CAT) Nos.146 & 162 of 2015 21 judgments also.

23. Learned counsel for the petitioners contended that the provision under which the Respondents rely is not the correct draft terms of absorption and the said draft terms of absorption is no more in force and in that context, learned counsel has invited our attention to Ext.P3 terms of appointment wherein clause-4 refers to provision regarding consideration of seniority. It reads as follows:

"4. Seniority of an employee absorbed in Corporation will be determined as per rules and instructions on the subject. Before absorption, the option shall be available to different categories of employees as under:-

(a) For Group 'C' & 'D' employees, their cadre will be State cadre and their seniority will be fixed as per rules. However, promotion from a Group 'C' to a Group 'B' post in ESI Corporation will carry All India transfer liability.

(b) Group 'A' & 'B' employees will be free to opt for either the State level seniority or All India seniority.

Doctors and Specialists opting for State level seniority will not be eligible for promotion beyond C.M.O. level posts carrying pay scales of Rs.12,000-16,500/-.

(c) Office Superintendent or other such employees who are holding posts equivalent to Insurance Inspectors in ESI Corporation opting for State level seniority will not be eligible for further O.P.(CAT) Nos.146 & 162 of 2015 22 promotion.

(d) Similarly, holders of such Group 'C' categories which have All India Transfer liability in ESIC, opting for State level seniority will not be eligible for any further promotion.

(e) In the case of employees opting for State level seniority, they will not be transferred out side the State and their promotion will be based on the State level seniority only subject to vacancies in the State and further subject to conditions mentioned at (a) to

(d) above."

24. On an appreciation of Annexure-R1(4) and Ext.P3, both are draft terms of absorption, they are different in the sense that the seniority is fixed under Ext.P3 in a different manner than that prescribed under Ext.R1(4). Anyhow, if once the date of absorption is fixed by this Court as 02.11.2009, the question of relative seniority with that of the staff absorbed at E.S.I Hospitals at Ezhukone and Parippally will not arise at all. Therefore, according to us, the staff of Parippally and Ezhukone Hospitals are entitled to contest that they are affected parties only on fixing the absorption date. So also, it depends on how Ext.P3 and Ext.R1(4) are appreciated by the Court for the purpose of accepting the draft terms of absorption. Moreover, in these Original Petitions or in the O.P.(CAT) Nos.146 & 162 of 2015 23 Original Applications, the seniority is not at all a question, and the sole question that was posed for consideration before the Tribunal as well as this Court is only the date of absorption. Therefore, if at all the question of seniority arises, that is a subject matter to be agitated at a later point of time and not in these Original Petitions. Therefore, we have no hesitation to hold that the Original Applications before the Tribunal as well as these Original Petitions are not bad for want of necessary parties.

25. The next contention put forth by the learned counsel for the petitioners is that by Annexure-A19 judgment dated 02.09.2013, a Division Bench of this Court directed the petitioner Corporation to proceed with the matter including payment of arrears of salary and all service benefits payable to them including fixation of seniority to the writ petitioners with effect from 04.03.2011, and it was accordingly that the petitioners initiated process of absorption by issuing Annexure- A21 letter dated 02.12.2013 of the Deputy Director of the Headquarters of the Corporation by addressing to the 2nd petitioner directing to form a Committee for initiating the process of the State Government officials on deputation with O.P.(CAT) Nos.146 & 162 of 2015 24 effect from 04.03.2011. Therefore, according to the learned counsel, by Annexure-A19 judgment, this Court has fixed the date of absorption as 04.03.2011.

26. Per contra, learned counsel for the party Respondents contended that the date 04.03.2011 was fixed by this Court for the purpose of payment of benefits, since the same was not disputed by the petitioners. Learned counsel also contended that the same was only an interim arrangement made by this Court while relegating the party Respondents to thrash out their claims before the Tribunal. Therefore, the date 04.03.2011 contained in Annexure-A19 judgment can never be said to be a date fixed by this Court for the purpose of accepting the same as the date of absorption.

27. It is also contended by the learned counsel for the petitioners that the party Respondents in the Original Applications have obtained stay of operation of implementation of Annexure-A23 and thereby the absorption process as directed by this Court in Ext.P19 judgment was stopped.

28. The next contention advanced by the learned counsel for the petitioners is that the Director General is the appointing authority of various posts as per Ext.P14 i.e. O.P.(CAT) Nos.146 & 162 of 2015 25 Employees State Insurance Corporation (Staff and Conditions of Service) Regulations. It is further contended that Rule 4 provides that all appointments to the posts shall be made by the Director General but the Standing Committee or the Director General is given the power to delegate to any other authority the powers to make appointment other than the posts in Class-I and II. Since by Ext.P13 order of absorption, six Medical Officers belonging to Class-I are included, Ext.P3 order issued by the Medical Superintendent is without jurisdiction. It is further contended that the Medical Superintendent of Asramam Hospital, Kollam District is the appointing authority for the Nursing and Paramedical staff, as evident from Ext.P15.

29. On the other hand, learned counsel for the party Respondents contended that the Rule pointed out by the learned counsel for the petitioners is with regard to the appointments made and the same will not apply to the deputation of the staff consequent to the take over of the hospitals from the State Government and the guiding factor therein is the conscious decision arrived at by the petitioners and the State Government regarding the terms of absorption. O.P.(CAT) Nos.146 & 162 of 2015 26 We find force in the said contention. Regulation deals only with the appointments to be made. It does not speak about the absorption of the staff made consequent to the take over of the hospitals by the 1st petitioner.

30. The next contention advanced by the learned counsel for the petitioners is that the absorption order was issued by the Medical Superintendent without approval and knowledge of the Director General. As we have already stated, on 18.02.2009, the State Government conveyed its willingness to hand over the E.S.I. Hospital, Udyogamandal to the petitioner Corporation on the same terms and conditions as in the case of E.S.I. Hospital, Asramam. On 18.08.2009, the Corporation vide Annexure-A2 communication, requested the State Government to intimate a suitable date for the take over and along with the same, a copy of the draft terms and conditions, Annexure-A3 was enclosed. Accordingly, on 15.10.2009, State Government issued an order handing over the Udyogamandal hospital to the Corporation with effect from the same date and the terms and conditions of deputation of staff were attached to the said order. In condition No.3 of the terms and conditions put forth by the State Government, it is O.P.(CAT) Nos.146 & 162 of 2015 27 clearly specified that an employee opting for absorption has to resign from the State Government Service, as absorption in Corporation Service will take effect from the date decided between E.S.I. Corporation and the State Government. Thereupon, by Annexure-A5 letter dated 30.10.2009, E.S.I Corporation, New Delhi stated thus, with reference to the order of the State Government, Annexure-A4 dated 15.10.2009 as follows:

"I am directed to convey the approval of the Director General, ESIC for taking over the E.S.I. Hospital, Udyogamandal from the State Government on 02.11.2009. Therefore, it was requested to arrange handing over the hospital to E.S.I. Corporation".

31. Thereafter, by Annexure-A6 letter dated 17.12.2009, sent to the Medical Superintendents of all Corporation Model Hospitals, the Corporation, New Delhi declared that the deputationists who opt for ESIC Service are entitled for all pay and allowances at par with ESIC's own employees. So also, as per Annexure-A8 dated 21.12.2009, the ESIC., New Delhi directed the 2nd petitioner to obtain consent of the State Government as to whether they are ready to relieve the staff for absorption of E.S.I Hospital, O.P.(CAT) Nos.146 & 162 of 2015 28 Udyogamandal in accordance with the terms of absorption. It was further stated that if the State Government agrees, then the exercise in accordance with the terms of absorption may be started.

32. It was thereupon that on 30.12.2009, the 2nd petitioner wrote to the State Government as per Annexure-A7 that the E.S.I. Hospital, Udyogamandal has been taken over by E.S.I. Corporation from the State Government with effect from 02.11.2009 for developing it as a Model Hospital and that the terms and conditions of absorption of staff as per ESIC norms have been approved by the State Government vide references 1 and 2 in the said letter. Accordingly, it was communicated by the 2nd petitioner that the consent of State Government for relieving the existing staff who were willing to be absorbed to the Corporation Service may be communicated at the earliest for receiving options from the concerned staff. Accordingly, by Annexure-A11 dated 25.03.2011, the 71st Respondent, Director of Insurance Medical Service, accepted the technical resignation of 96 employees of the Udyogamandal hospital with effect from 02.11.2009 and relieved them from the Insurance Medical Service Department of the State. Therefore, O.P.(CAT) Nos.146 & 162 of 2015 29 the contention advanced by the learned counsel for the petitioners is stoutly opposed by the learned counsel for the party Respondents and contended that the entire proceedings had taken place with the knowledge of the Headquarters at New Delhi and the 3rd petitioner who is the Regional Director of the Corporation situated at Trichur in Kerala State.

33. Learned counsel for the party Respondents further contended that it was all on a sudden that unilaterally the 1st petitioner Corporation has issued Annexures-A14 to A16 conveying that the absorption would be only with effect from 04.03.2011. Therefore, the counsel contended that such an action is totally illegal, arbitrary and unsustainable, especially in view of the fact that the employees had opted for absorption to the petitioner Corporation on fully knowing that they would be absorbed with effect from the date of take over. It is also contended that the said action of the petitioner Corporation is violative of the principles of natural justice, since the absorption date originally fixed as per the terms and conditions agreed upon by the petitioner Corporation and the State Government was unilaterally changed by the 1st petitioner without providing any opportunity of hearing to the employees O.P.(CAT) Nos.146 & 162 of 2015 30 who have opted for absorption. It is also contended that, by fixing the date of absorption as 02.11.2009, a vested right has accrued to the employees and therefore any change of the date could have been made only after hearing of the affected parties.

34. Learned counsel has also brought our attention to Appendix 5 of Fundamental Rules 9 (25), and specifically to Rule 3.1 where the terms of deputation are prescribed and Rules 4.2 and 4.3, wherein it is specified respectively that the borrowing authority shall obtain option of the employee within one month from the date of joining the ex-cadre post unless the employee has himself furnished the option and the option once exercised shall be final. Learned counsel for the party Respondents also invited our attention to Rule 10 of Appendix 5 wherein the power for relaxation of conditions are prescribed and contended that it was invoking the said power that the minimum period of two years service required for absorption was deleted by the 1st petitioner. So also, learned counsel for the party Respondents invited our attention to Rule 37 of CCS (Pension) Rules wherein the eligibility for retirement benefits is prescribed as date of absorption. Explanation 1 to the said O.P.(CAT) Nos.146 & 162 of 2015 31 rules reads that in case a Government employee joins a corporation or company or body on immediate absorption basis, the date on which he actually joins the corporation or company or body is the date of absorption. So also, learned counsel has invited our attention to paragraph 3.4.1 of consolidated orders on seniority on the basis of O.M.No.22011/7/86-Estt.(D) dated 03.07.1986 wherein it is specified that in the case of a person who is initially taken on deputation and absorbed later (i.e. where the relevant recruitment rules provides for transfer on deputation/transfer), his seniority in the grade in which he is absorbed will normally be counted from the date of absorption.

35. However, learned counsel for the petitioners contended that since the entire action on the part of the 2nd petitioner was without jurisdiction, authority and power, they were incompetent orders, which can be corrected by the 1st petitioner, Director General of the 1st petitioner Corporation at any point of time. The contention advanced by the learned counsel for the petitioners is to be considered taking into account the action initiated by the 2nd petitioner for the purpose of absorption of the staff of Udyogamandal hospital in O.P.(CAT) Nos.146 & 162 of 2015 32 agreement with the State Government, terms specified therein, the rules cited supra and also the draft terms of absorption. According to us, Ext.P3 draft terms of appointment relied on by the petitioners does not contain any seal, initial or other authentication to show that the same was the draft terms of appointment approved by the 1st petitioner Corporation in the matter of absorption of the employees of the Hospital at Udyogamandal. In contra-distinction to Ext.P3, Annexure-A3 draft terms of absorption and Annexure-R1(4) which is in pari materia with Annexure-A3 contains the seal in Hindi on all pages which is not disputed in any manner by the learned counsel for the petitioners. Therefore, while considering the authenticity of the draft terms of absorption, we have no hesitation to hold that Annexure-A3 as well as R1 (4) are the draft terms of absorption that were brought into force for the purpose of absorption of the State Government employees by the E.S.I. Corporation. Therefore, the entire terms and conditions will depend upon Annexure-A3 and R1(4) draft terms of absorption. Viewed in that manner, clause-3 of the said draft terms of absorption takes care of the date of the absorption which reads as follows:

O.P.(CAT) Nos.146 & 162 of 2015 33

"An employee opting for absorption has to resign from State Government Service and his absorption in the Corporation Service will take effect from the date of deputation in E.S.I Corporation or from the date he joins duty in E.S.I Corporation, whichever is earlier".

36. When the said clause under the draft terms of absorption is taken into account and read along with the proceedings of the 2nd petitioner stated supra, the date of absorption can only be termed as 02.11.2009. As we have already held, all the correspondence show that the entire proceedings pursuant to take over as well as absorption was done in agreement with the State Government and therefore it was not open to the petitioners to unilaterally change the same without concurrence of the State Government. So also, once resignation was accepted by the State Government, as also contended by the learned Senior Government Pleader, the deputation has come into force and thereupon an employee of the Udyogamandal Hospital has become the employee of the Corporation and therefore the employees are entitled to be absorbed from that date onwards. Thus, the entire employees will become the employees of the Corporation and they are O.P.(CAT) Nos.146 & 162 of 2015 34 entitled to get the benefits in terms of the benefits applicable to the employees of the Corporation in the appropriate posts.

37. It is also pertinent to point out that Ext.R1(i) produced along with the counter affidavit filed by Respondents 1 to 67 is a copy of the counter affidavit filed by one T.P. Sahadevan, Social Security Officer, E.S.I Corporation for and on behalf of the 1st and 2nd petitioners in W.P.(C) No.30518 of 2011 referred supra in which at paragraph 7, it is stated that the 1st and 2nd petitioners have requested the State Government to change the acceptance of technical resignation from 02.11.2009 to 03.03.2011 vide its office letter No.Z- 1107/09/MED-vi dated 01.05.2012 and no response is received till date. Therefore, going by the terms of the said counter affidavit also, one cannot believe that the petitioners were not aware of the proceedings that had taken place as per Annexures-A1 to A13. Apart from this, on a perusal of Ext.P21 issued by the Joint Director of E.S.I Model Hospital, Udyogamandal dated 06.11.2009 to the Medical Commissioner, E.S.I. Corporation, New Delhi, which was received by the Delhi office on 16.12.2009, it is categorically stated that the hospital was taken over from the State O.P.(CAT) Nos.146 & 162 of 2015 35 Government on 02.11.2009 as per letter cited as reference and that as per the MOU agreed between the Corporation and the State Government, the staff of the hospital have been taken on deputation initially for a period of one year with effect from 02.11.2009. In the said letter, three queries were made by the officer, they are as follows:

"(1) Whether the pay and allowances drawn by the staff as per the State pay scales would continue to be drawn by them?

(2) since the pay has been protected as per the agreement, whether deputation allowance is payable? If so, the rates of deputation allowance may please be confirmed.

(3) Whether the pay and allowances as mentioned in point 1 and 2 above is to be drawn and paid by the E.S.I. Corporation?".

38. It is also mentioned in the said letter that the duplicate of the list of staff taken over as on 02.11.2009 is enclosed. It was also requested that since disbursement of pay and allowances for the month of November, 2009 is to be paid on the last working day of the month, the above points may be clarified at the earliest. The said letter also points out that the Delhi office was very well aware of the proceedings that were taking place in the office of the E.S.I Corporation in O.P.(CAT) Nos.146 & 162 of 2015 36 Kerala. Such being the situation, the contention raised by the petitioners to the effect that the entire proceedings that led to fixing of date of absorption as 02.11.2009 by the Medical Superintendent was an incompetent one, cannot be swallowed simply. The proceedings and the correspondences show that the Head Office was in the know of things that were taking place regarding the taking over of the hospital as well as absorption of the staff.

39. Yet another point that was raised by the learned counsel for the petitioners is that the deletion of two years minimum period was done only on 04.03.2011 and therefore the absorption could not have been done on a date prior to the same. According to us, the same may not have much bearing on Respondents 1 to 67 in O.P.(CAT) No.146 of 2015 for the reason that all of them had more than two years of minimum service and therefore the deletion applied only to the staff who had less than two years of minimum service. That apart, in our view, the condition to delete the two years minimum period was in the larger interest of absorbing more staff to the E.S.I. Corporation and the same may not have a bearing so far as the date of absorption is concerned.

O.P.(CAT) Nos.146 & 162 of 2015 37

40. It is also contended by the learned counsel for the petitioners that since the action of the then Medical Superintendent in fixing the date of absorption as 02.11.2009 was not with the approval of the Corporation, action was initiated against the then Medical Superintendent, Rakesh Goyal by issuing Ext.P27 show cause notice and Exts.P28 and P29 letters. Exts.P27 to 29 show that notices were issued to the then Medical Superintendent of E.S.I Hospital, Udyogamandal questioning fixation of date of absorption by him without seeking the Director General's approval. To a query made by us as to whether any action was ultimately taken against the said Medical Superintendent, the counsel could not give us a pinpointed answer. On the other hand, learned counsel for the party Respondents submitted that the said person has retired from one of the top positions of the E.S.I Corporation.

41. Learned counsel for the petitioners has also invited our attention to the judgment in 'Ashok Kumar Ratilal Patel v. Union of India & Another' [(2012) 7 SCC 757] and 'Kunal Nanda v. Union of India and another' [(2000) 5 SCC 362], to canvass the proposition that the right and claim O.P.(CAT) Nos.146 & 162 of 2015 38 of a deputationist is largely dependent on the prerogative of the department and the deputationist has no manner of right to dictate terms on the department. We have gone through the said judgments and in our view, what was considered in those judgments were deputations made from department to department as stop-gap arrangements and therefore the facts and circumstances contained thereunder have no manner of relation to the facts and circumstances of this case, especially due to the fact that the deputation was made by the State Government to the Central Government in the circumstances of taking over of a hospital by the 1st petitioner Corporation from the State Government as a permanent feature. Therefore initially deputation done was for the purpose of absorbing the entire staff on the terms and conditions mutually agreed by and between the State Government and the 1st petitioner Corporation.

42. Learned counsel has also invited our attention to the judgment in 'Council of Scientific and Industrial Research and Others v. Ramesh Chandra Agrawal and another' [(2009) 3 SCC 35], to contend that the cut off date for absorption as per the scheme is a power vested with the O.P.(CAT) Nos.146 & 162 of 2015 39 authority concerned and no staff can challenge the same. The facts of the said case reveal that absorption was done on the basis of a scheme by which 15 years of service was required as an entitlement for absorption of Researchers working in CISR Laboratories/Institutes. There, a cut off date was fixed as 02.05.1997 during which period the Researchers should have put in 15 years of continuous research/Associate/Project- Associate. Therefore, it can be seen that the scheme of absorption, the subject matter of the said case has no bearing with the facts and circumstances involved in this case.

43. Learned counsel has also invited our attention to the judgment in 'Union of India and another v. Narendra Singh' [(2008) 2 SCC 750] to canvass the proposition that mistake can be corrected by the authority concerned at any time and invited our attention to paragraph 32, wherein, it was held that the Department committed a mistake by promoting a person who was not eligible and qualified and in that facts and circumstances, Hon'ble Apex Court held that mistakes are mistakes and they can always be corrected by following the due process of law. Therefore, according to us, the facts and circumstances of the said judgment are entirely different from O.P.(CAT) Nos.146 & 162 of 2015 40 the facts and circumstances of this case mainly for the reason that in the case at hand, the absorption of the staff was done as per long run proceedings and correspondences and the same can never be taken as a mistake, but going by the documents, one can only arrive at a conclusion that the entire action was transparent. The said judgment points out yet another aspect that if any mistake was committed, it should have been corrected by resorting to due process of law. As we have stated earlier, if at all there was any mistake in the entire proceedings that has taken place prior to the absorption, a vested right had accrued to the staff and therefore due process should have been followed by providing reasonable opportunity to the party Respondents and other staff to put forth their case. That has never taken place in the case at hand and therefore paragraph 32 of the said judgment is an authority for the proposition that principles of natural justice were not complied with by the petitioners.

44. Learned counsel has also invited our attention to the judgment in 'Maharashtra State Mining Corporation v. Sunil, S/o. Pundikarao Pathak' [(2006) 5 SCC 96] and 'Raghavendra Rao and others v. State of Karnataka and O.P.(CAT) Nos.146 & 162 of 2015 41 others' [(2009) 4 SCC 635], to canvass the proposition that the order passed by an incompetent authority cannot be sustained under law and in paragraph 7 of the first among the judgments, it was held that the High Court was right when it held that an act by an incompetent authority was invalid. In both the cases, the fact situation was entirely different from the case at hand and therefore the principles laid down in the said judgments have no bearing at all.

45. Learned counsel has also invited our attention to the judgments in 'Union of India and others v.

Kannadapara Sanghatanegala Okkuta & Kannadigara and others' [(2002) 10 SCC 226] and 'Census Commissioner and others v. R. Krishnamurthy' [(2015) 2 SCC 796], wherein the considerations were the realm of interference of superior courts in judicial review in the policy decisions taken by the Government. In our view, the facts have no bearing to the facts and circumstances of the case considered by us.

46. Yet another proposition canvassed by the learned counsel for the petitioners is with regard to the presumption of actions taken by the authority pursuant to Annexures-A14 to O.P.(CAT) Nos.146 & 162 of 2015 42 A16 and contended that the burden to rebut the presumption was on the Respondents and in order to substantiate the said contention, learned counsel has also invited our attention to the judgment in 'General Manager (Operations), State Bank of India and another v. R. Periyasamy' [(2015) 3 SCC 101] and specifically to paragraph 14, wherein, it is held that it is a settled principle that the onus of proof rests upon the party alleging the invalidity of an order. It was also held that there is a presumption that the decision or executive order is properly and validly made, a presumption expressed in the maxim 'omnia praesumuntur rite esse acta' which means, "all things are presumed to be done in due form". In our view, all actions pursuant to Annexures-A1 to A13 are done by the authorities of the 1st petitioner Corporation and especially the then incumbent in office of the 2nd petitioner and therefore a presumption will have to be drawn in respect of the said orders passed by the 2nd petitioner and in our view, the burden is upon the petitioners herein to primarily establish that the actions initiated by the 2nd petitioner regarding the absorption of the staff with effect from 02.11.2009 was not in order and not in accordance with law. The petitioners have not O.P.(CAT) Nos.146 & 162 of 2015 43 succeeded in shifting the onus of proof to the party Respondents, in view of the explicit terms contained under various correspondences made by and between the local office at Kerala and the Head Office at New Delhi.

47. Learned counsel for the petitioners also contended that many of the employees working in the Corporation at Udyogamandal are prepared to accept the date of absorption as 04.03.2011 and brought to our attention the requests submitted by such employees. It is also pointed out that those employees are due to retire shortly and therefore the Court may permit those employees who are willing to accept the date of 04.03.2011 and allow them to accept their retirement benefits in accordance with the said cut off date. It is also submitted by the learned counsel for the petitioners that if at all this Court is not inclined to interfere with the orders passed by the Tribunal, the relief may be confined to party Respondents in these two Original Petitions alone. We are unable to accept the said contention for the reason that if and when a relief is granted taking into account the totality of the circumstances involved in the facts and circumstances of these cases, all persons are entitled to get the benefits irrespective O.P.(CAT) Nos.146 & 162 of 2015 44 of whether they had challenged the impugned orders or not, for the reason that if we pass such an order, we would be doing a gross injustice to the similarly situated persons who are entitled to enjoy all the benefits similar to the benefits of the persons who had challenged the actions of the petitioners. Moreover, this Court is called upon to consider a question relating to the date of absorption, and once that is answered, the consequential acts pursuant to the same are to be followed in accordance with law, we are also not inclined, rather, will not be legally justified in fixing a different date of absorption for similarly situated employees, on the basis of a submission made before the Court, especially when such employees are not before this Court.

48. We have appreciated the rival contentions put forth by the learned counsel, perused the pleadings before the Tribunal and before this Court and appreciated the entire evidence on record. For the foregoing discussions, appreciating the legal situations and the cumulative circumstances which led to the taking over of the E.S.I Hospital, Udyogamandal in conjunction with the State Government, we are unable to accept the contention that the O.P.(CAT) Nos.146 & 162 of 2015 45 officers of the 1st petitioner in Kerala had not communicated the progress in the matter of taking over of the hospital and the attendant circumstances to the Headquarters at Delhi. Moreover, many of the correspondences cited and referred supra will go to show that the actions were initiated and completed by 2nd petitioner with the concurrence of the Head Office. Moreover, even in the pleadings it is stated that the change of date from 02.11.2009 was necessitated for the reason that the initial minimum requirement of two years service in the lending Department was deleted with the objective of accommodating more staff in the Corporation. Therefore, even now, the case of the petitioners is that a change had to be effected from 02.11.2009, which thus means, the said date 02.11.2009 was very familiar to the petitioners as the date of absorption of the staff with effect from the said date. Therefore, on appreciation of the entire facts and circumstances, we are of the considered opinion that, there are no valid reasons to differ from the conclusions arrived at by the Administrative Tribunal. We do not find any illegality, legal infirmity or any other circumstances warranting interference with the order, invoking the powers conferred on O.P.(CAT) Nos.146 & 162 of 2015 46 us under Article 227 of the Constitution of India.

Resultantly, the Original Petitions fail and they are accordingly dismissed.

Sd/-

K. SURENDRA MOHAN JUDGE Sd/-

SHAJI P. CHALY JUDGE //true copy// P.S. to Judge St/-

04.01.2016

Unlock Advanced Research with PRISMAI

Kerala High Court