Stipend counts as income! Delhi HC upholds CAT order, cancellation of AIIMS doctor's EWS appointment

The Court rejected the argument that the remuneration received during Junior Residency was merely a stipend and should not be counted while calculating gross annual income under the EWS policy. It held that the Tribunal had not committed any legal error in treating the amount as income for determining eligibility.

"This Court is of the considered opinion that the Tribunal has neither exceeded its jurisdiction nor committed any patent illegality or perversity in holding that the remuneration received by the Petitioner during the relevant financial year constituted income for the purposes of determining eligibility under the EWS category," said the court.

The Bench further stated, "The directions issued by the Tribunal for termination of the Petitioner‟s appointment as Senior Resident (Ophthalmology) and for offering the post to the next eligible candidate under the EWS category, and in the absence thereof, conversion of the post to the Unreserved category and offer to Respondent No.2 in accordance with the applicable prospectus and merit list, are consequential in nature."

The Bench noted that the petitioner had received Rs 13,59,032 during the financial year 2023–24 while working as a Junior Resident. "This figure emerges from the Form-16 and pay slips placed on record pursuant to the RTI application and was also noticed by the Tribunal in the Impugned Order. The said amount, on the face of the record, exceeds the income ceiling prescribed under the EWS policy," added the bench.

Background of the case

The court was hearing a plea filed by a senior resident doctor challenging the order dated January 13, 2026, passed by the Central Administrative Tribunal (CAT). In that order, the Tribunal allowed the application filed by a medico. It declared that the petitioner’s EWS certificate was not valid for recruitment under the EWS category and directed AIIMS to terminate his appointment as Senior Resident (Ophthalmology).

The Tribunal also ordered that the EWS post should be given to the next eligible candidate under the EWS category. If no such candidate is available, the post should be converted to the Unreserved (UR) category and offered to the other doctor according to the merit list and the prospectus.

On June 5, 2024, AIIMS issued a prospectus for the recruitment of Senior Residents/Senior Demonstrators, including 16 seats in Ophthalmology - 6 UR, 1 EWS, 8 OBC and 1 ST. The EWS reservation was subject to the Rs 8 lakh annual family income limit under the DoPT Office Memorandum dated January 31, 2019.

The petitioner applied under the EWS category and submitted an EWS certificate stating that his family income was within the prescribed limit. After the selection process, the other doctor secured Rank 7 in the Unreserved category but could not get a seat due to the cut-off. The petitioner, who secured Rank 19 under EWS, was selected against the single EWS seat.

The other doctor challenged his selection, alleging that his income during the financial year 2023–24 exceeded Rs 8 lakh and that his EWS certificate was invalid. When AIIMS did not act on her complaints, an RTI application was filed. The reply revealed through Form-16 that the petitioner had received Rs 13,59,032 during the year 2023–24.

She first approached the Delhi High Court but later withdrew the petition and moved the Central Administrative Tribunal (CAT). She also approached the Tehsildar, Belagavi, who cancelled the petitioner’s EWS certificate on February 24, 2025, treating his stipend/remuneration as salary. The petitioner challenged this, and the District Magistrate granted an interim stay, which continued until the Tribunal decided the matter.

On January 13, 2026, the Tribunal allowed her plea. It held that the petitioner’s remuneration must be counted as income, declared his EWS certificate invalid for recruitment purposes, and directed AIIMS to terminate his appointment. The Tribunal further ordered that the post be offered to the next eligible EWS candidate, and if none was available, be converted to the Unreserved category and offered to her as per the merit list.

Contentions of the Parties

The petitioner argued that the Tribunal’s order was legally incorrect and that it wrongly treated his stipend as salary for EWS eligibility. He said Junior Residency is part of postgraduate medical training and is academic in nature, not regular employment. Therefore, the amount he received was a stipend or scholarship, not income from a job.

Relying on Section 10(16) of the Income Tax Act, he argued that scholarships meant to meet educational expenses are exempt from income tax and should not be counted while calculating the Rs 8 lakh EWS income limit. He also said that deduction of tax and issuance of Form-16 do not automatically make the payment “salary.”

The petitioner further argued that his EWS certificate was valid and protected by an interim stay from the District Magistrate. He claimed the Tribunal should not have declared it invalid without hearing the issuing authority.

Lastly, he stated that the other doctor had no automatic right to appointment merely because she had a higher overall rank, as he was selected according to the reservation policy.

On the other hand, counsel appearing for AIIMS supported the Tribunal’s decision and said it was correct. They argued that the petitioner received Rs 13.59 lakh in 2023–24 as a Junior Resident, with regular monthly payments, tax deduction, and Form-16 showing it as salary. Since this amount exceeded the Rs 8 lakh EWS income limit, he was not eligible.

They relied on the DoPT Office Memorandum and the 2022 clarification stating that “gross annual income from all sources” must be considered, in line with income under the Income Tax Act.

The counsel argued that the payment was not a scholarship but a salary, as Junior Residents perform regular hospital duties and are appointed on a contractual basis with allowances and service conditions. The name "stipend" does not change its real nature.

They also said the Tribunal had the authority to examine EWS eligibility and that the petitioner failed to disclose income above Rs 8 lakh while obtaining the certificate.

Court's Observation

The Court held that the Tribunal had not exceeded its powers and had committed no legal error in treating the amount received by the petitioner during the relevant year as income for the purpose of determining the eligibility under the EWS category.

It observed that the Tribunal had properly interpreted the EWS policy, examined the records, and applied the principle that the true nature of a payment is more important than the name given to it. Since the petitioner’s total annual income was above Rs 8 lakh, the income limit fixed under the EWS policy, the Tribunal was right in declaring him ineligible under the EWS category.

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 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. 

The Court further noted that the Tribunal was competent to examine the petitioner’s eligibility for EWS benefits in a service dispute. The interim stay on the cancellation of the EWS certificate did not prevent the Tribunal from independently assessing his eligibility for recruitment.

"This Court is also satisfied that the Tribunal acted within the bounds of its jurisdiction in examining the validity of the Petitioner‟s claim to EWS status in the context of a service dispute and in issuing consequential directions upon finding that the Petitioner was ineligible to be considered under the EWS category. The existence of an interim stay granted by the appellate authority on the cancellation of the EWS certificate did not denude the Tribunal of its authority to assess eligibility for recruitment purposes," said the court.

Finding no reason to interfere under Article 226 of the Constitution, the Court dismissed the writ petition and disposed of all pending applications.

To view the official court order, click on the link below: 

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