Stipend or salary? Delhi HC verdict costs doctor his EWS seat at Aiims

Delhi High Court said that a junior resident doctor's stipend qualifies as income for EWS eligibility, stressing that the true nature of a payment must be judged by its substance, not its nomenclature

The Delhi High Court recently dismissed a petition by a doctor challenging a Central Administrative Tribunal's (CAT) order, which led to the cancellation of his appointment at the All India Institute of Medical Sciences (Aiims) under the Economically Weaker Section (EWS) category, reported Bar and Bench.

 

A Division Bench of Justices Anil Kshetarpal and Amit Mahajan, in an order dated February 7, said that the Court finds no ground to interfere with the impugned order passed by the Tribunal.

 

What's the case?

The petitioner, a doctor, had moved the apex court after the CAT declared his EWS certificate invalid, eventually leading to the cancellation of his appointment as a senior resident at Aiims' department of Ophthalmology.

 

His appointment came under scrutiny after an unreserved category candidate who was not selected filed a complaint with Aiims questioning the authenticity of the petitioner’s EWS certificate. The complainant alleged that the doctor received a stipend as a junior resident that exceeded the income eligibility limit under the EWS criteria.

 

Following the complaint, the CAT ruled that his EWS certificate was invalid, holding that the remuneration received by the petitioner qualified as income for the purpose of determining EWS eligibility.

 

However, the doctor challenged the ruling, contending that his higher gross annual income was due to a stipend/scholarship earned during his postgraduate medical training as a junior resident. He argued that this stipend should not be treated as income for the purpose of determining eligibility under the EWS quota.

 

The petitioner also argued that scholarships granted to meet the cost of education are expressly excluded from the computation of total income and are exempt from income tax.

 

What did the High Court say?

The High Court, after hearing the arguments, upheld the CAT's view that the true nature of a payment must be determined based on its substance and not merely on the nomenclature employed. "This Court finds no infirmity in the said approach," the Court said.

 

The Bench further stated that the petitioner received a fixed monthly remuneration regularly, and the payments were subject to deduction of tax at source. It noted that pay slips were also generated and Form-16 was issued, reflecting the amount as "gross salary" for the relevant assessment year.

 

The Court also rejected the petitioner’s claim that the payments were merely meant to cover educational expenses, observing that junior residents perform regular clinical work, handle patient-care duties and undertake night shifts in the hospital in addition to their academic training.

 

"The fact that the remuneration was reflected in the pay slips as 'gross salary', subjected to statutory tax deductions and reported through Form-16, fortifies the conclusion that the payment was compensatory in nature and not a scholarship granted solely to defray educational expenses," the Court said.

 

On the petitioner’s contention that stipends are exempt from income tax and therefore should be excluded while assessing EWS eligibility, the Bench upheld the CAT order, clarifying that the issue was not taxability under income tax law but whether the amount should be counted for determining eligibility under the EWS reservation policy, which operates in a distinct statutory field.

 

The Court concluded by upholding the CAT's ruling 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.