The Delhi High Court recently upheld a Central Administrative Tribunal's (CAT) ruling that payment received by a doctor while serving as a junior resident is a form of “income” that can be factored in while assessing his eligibility for availing the Economically Weaker Section (EWS) quota [Dr. Bahubali N. Shetti Vs All India Institute of Medical Sciences & Anr].
A Division Bench of Justices Anil Kshetarpal and Amit Mahajan rejected an argument that such remuneration is merely a stipend that can be excluded while determining whether a candidate's gross annual income exceeds the upper limit for availing the EWS quota.
The Court made the observation in a case where a doctor's EWS certificate was held to be invalid for recruitment as a senior resident, after the CAT found that his gross annual income amounted to ₹13 lakh, exceeding the ₹8 lakh threshold for inclusion under the EWS quota.
The doctor challenged this ruling, arguing that his gross annual income was higher due to a stipend he received for post-graduate medical training as a Junior Resident. He stated that this stipend cannot be considered as his income to determine EWS quota eligibility.
The Court disagreed. Rather, it concurred with the CAT's view that it is not the nomenclature of the payment, but its substance or purpose that is important to determine whether the payment is a form of income.
In the doctor's case, the Court pointed out that the 'stipend' was paid on a monthly basis, that salary slips were generated, TDS cut and that the Form 16 (tax form) generated by the hospital also referred to the payment as being part of gross salary.
It also noted that stipend payments that are usually excluded from calculating income are meant to help the beneficiary meet the costs of pursuing education.
On the other hand, salary payments are made in exchange for services.
The Court opined that since a junior resident is expected to also provide services to the hospitals alongside academic training, the payments made in exchange are more in the nature of a salary than a stipend.
"The Tribunal, therefore, rightly held that the remuneration received by the Petitioner bore the essential attributes of income arising from engagement and could not be equated with a scholarship granted solely to meet the cost of education," the Court concluded.
The doctor before the Court (petitioner) had secured the position of senior resident (Ophthalmology) at the All India Institute of Medical Sciences (AIIMS) under the EWS category.
A candidate belonging to the unreserved category who did not get selected, complained to AIIMS against the authenticity of the petitioner's EWS certificate.
Consequently, AIIMS terminated his recruitment, prompting him to approach the CAT.
The CAT denied him relief and cancelled his EWS certificate, which led him to approach the High Court.
The High Court on February 7 dismissed his appeal, holding,
“The conclusion that the Petitioner’s gross annual income exceeded the prescribed ceiling under the Office Memorandum (on EWS eligibility) dated 31.01.2019 issued by the DoPT cannot be faulted,” the Court stated.
The Court further rejected an argument that since stipends are expressly excluded from income under tax laws, such payments should be excluded while calculating EWS eligibility.
"The Tribunal has correctly observed that the issue before it was not the taxability of the amount under the Tax Act, but its inclusion for the purposes of determining eligibility under the EWS reservation policy, which operates in a distinct statutory field," it held, on this issue.
It proceeded to uphold the CAT's direction to restore the selection process and declare the seat earlier allotted to the petitioner as an unreserved seat if no other EWS candidate is found for it.
“Once the Tribunal arrived at the conclusion that the petitioner was not eligible to be considered under the EWS category, the consequential directions issued for restoration of the selection process in accordance with the applicable prospectus and merit list cannot be said to be arbitrary or disproportionate,” the Court stated.
Advocates Amit George, Akshay Bhandari, Manu Jain, Rupam Jha, Medhavi Bhatia, Adhishwar Suri, Bhrigu A. Pamidighantam, Vaibhav Gandhi, Kartikay Puneesh appeared for the petitioner.
Advocates Anand Varma and Ayush Gupta appeared for AIIMS.
Advocates Shrey Kapoor, Nishit Agrawal, Kanishka Mittal and Deepti Rathi appeared for the candidate who challenged the allotment of an EWS seat to the petitioner.
[Read judgment]