Category Archives: Transfers

ESI Corporation under attack!

ESI Corporation is the backbone of the nation’s economy. The importance of the organization would become known to the ‘ill-informed’  and  the ‘innocents’ only when the organization ceases to exist. The economic miracle of 1945-71 of the West Germany became possible only because of the well-run social security system there.

But, the already-ailing ESIC in India, is under attack from the media, the self-styled ‘national’ media, now, for various commissions and omissions including the impact of having opened many medical colleges. But, these ‘traders in news’ simply forget the fact that it was they who did not care to publish even letters to editors when three retired officers had written to them about those issues in the year 2009 and 2010 itself. If these ‘traders’ had had real devotion to their profession, they would have applied their mind to the issues that had been brought before them and that exposure would have prevented the passage of the Bill bringing in amendments to the Act in the year 2010, by the MPs who did not care to discuss the issues in the floor of the house, in spite of the fact that those retired officers had taken the issues to their knowledge both in person and through email provided in the website of the two houses of Parliament. So much for the depth of knowledge and commitment of these ‘national traders in news’.

But, even while such exposure is being made in the media, the ESIC is under attack from various other quarters also as given below, making it difficult for the honest administrators to set things right even at that this late stage:

  • the corrupt officials who just want to loot and share among themselves the ESIC funds,
  • the association leaders, working overtime, to play power-politics in the postings of officers (by roping in the politicians in power) to bring in pliable officers, at appropriate places, to suit their myopic personal agenda,
  • the indifferent officials who just do their work with honesty and sincerity but do not want to have macro-knowledge about the purpose of their work, the goal of the organization and the goings on in the organisation,
  • the dishonest employers who do not want proper and periodical inspections to ensure correct compliance and payment of the dues legally payable but are conniving to shift the burden to the ESIC with retrospective effect when accidents take place in their factories and
  • the middlemen called ‘Consultants’ who play a major role by assisting such employers, etc.,
  • the inert statutory organisations, like the Central Vigilance Commission and the Office of the CAG which do not want to have proper probe into the issues.
  • the indifferent peoples’ representatives who are in large numbers, who do not feel any ownership to the  nation and do not spare time to understand the impact of the issues.

ESIC can provide medical and cash benefits properly only when its funds are managed in a professional way. ESIC funds can be generated only through proper monitoring mechanism by conducting proper inspection of all the covered and coverable units regularly. Its inspection machinery must be trained on core issues to detect concealment in coverage. The Inspectors (SSOs) and Officers must be equipped with more knowledge than the most knowledgeable but corrupt Consultants, about the  intricacies of the provisions on Revenue. The ESIC must curb corruption and provide quality treatment in the ESIC medical institutions by adopting the caring the manner in which it was done earlier. Otherwise, the ESIC might be in the red, as predicted by its Finance wing.

Endless enhancement of limit for coverage cannot be the solution.

In the circumstances, the only consolation is that there are honest authorities of the ESI Corporation who are really concerned about the issues and are struggling every day to find ways to save the organization by resisting and circumventing the pressures given by these unscrupulous elements.

Should the public remain unconcerned?

Before narrating certain issues with evidence, two articles explaining the importance of the ESI Corporation are published here for information and basic understanding of the importance of the ESIC in the Indian social and economic life.

Please Click on Articles


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Filed under Amendments 2010, Inspections, Transfers

ESIC Meeting Minutes: Letter to the Hon’ble Prime Minister!

The last sentence in the post titled “ ESI Corporation Meeting on 19.09.2013” published on 25.09.2013 ( read:

“At present, we only hope that the Minutes approved by the Chairman of the ESI Corporation would faithfully record the complete discussion that had, actually, taken place on 19.09.2013 on all subjects.”

But, our worst fears on this issue have come true. The Minutes have been modified by the Hon’ble Minister as he pleased. He had made the entire body of members of the ESI Corporation a mockery. What can we do now? We can only write to the Hon’ble Prime Minister. We have, therefore, written. The following is the text:


The Prime Minister,

Government of India,


New Delhi

E.S.I. Corporation – Meeting of the Corporation on 19.09.2013 – Minutes – tampered and doctored by the Minister for Labour – intercession – requested.


I have to state that the meeting of the Apex Body of the ESI Corporation was held on 19.09.2013. Among the points on the Agenda were the ones conferring powers on the Hon’ble Minister for Labour and Employment to act as the Appointing Authority and Disciplinary Authority of the officers of the ESI Corporation.

This was opposed to by the Members of the body, as it was unnecessary and no justifiable reason was given in the Agenda for the change proposed. It was, therefore, decided to refer the matter to a Sub-Committee to examine the issue in-depth. The tape-recorded version of the discussion during the Meeting would testify to these facts.

That was a correct decision of the body, especially when the Agenda had been introduced under dubious circumstances by the Hon’ble Minister in his capacity as the Chairman of the ESI Corporation.

It is a fact that he was showing extraordinary interest in acquiring the powers of transfer of the officers of the ESI Corporation right from the day he assumed charge as Minister for Labour. This power, when conferred upon the Minister, will give him real authority without any responsibility.

Earlier, Hon’ble Mr. Sahib Singh Verma was also exhibiting such irrepressible desire to acquire the power of transferring the officers of the ESI Corporation. Documentary evidences are available in the Ministry itself in this regard. The organization was saved, fortunately, because his party lost  the elections in the year 2004.

Hon’ble Mr. Sis Ram Ola has not only been exhibiting similar uncontainable desire on this issue but has also gone to the extent of writing the Minutes as he pleased. He has, thus, rendered the entire body of the ESI Corporation redundant. His action is unlawful and gives new dimension to the way we understand democracy in India. I request you to kindly intercede, immediately, and set right matters before it spills over as a major issue spoiling the image of your government during the coming elections in 2014.

Yours faithfully,


Filed under Amendments 2010, For Trainees, Transfers

For “Efficient” transaction of “ESI Corporation’s” business!

The ESI Corporation has been set up as per the ESI Act, 1948, which is a social security legislation that provides for medical care and cash benefits in the contingencies of sickness, maternity, disablement and death due to employment injury to the employees drawing Rs.15,000 or less as wages in the factories and establishments covered by the Act. The social security system of a nation aims at providing the much-needed economic basis, thus, for the development of the resources of a nation. The security-net provided by the ESI Corporation constitutes the essential basic structure of such a social security system in India by ensuring the “willing participation of labour”in the making of the nation.

The Charter of the International Labour Organisation had declared, in the year 1919 itself, that “the peace and harmony of the world are imperilled” when “the condition of labour exist involving such injustice, hardship and privation of large numbers of people (so) as to produce unrest”. The link between the ‘peace and harmony of the world’ and the ‘security-net provided to the labour’ is  intimate and intertwined. It is in the interest of every nation that its social security system is run in a flawless manner so that there is no social upheaval and unrest in the nation.

 The ESI Corporation which was set up in India to carry forward the lofty ideals of the International Labour Organisation, as per Art. 41 of the Constitution of India, is an important organ of the Government of India to ensure peace and progress of the nation. It is only because the Government had realized the importance of the organization, the ESI Corporation had been made an autonomous body and its officers empowered with functional independence to enable them to concentrate, without any interference, on the goal for which the organization had been set up.

In order to discharge the responsibility enshrined in the ESI Act, 1948, the ESI Corporation needed the services of employees. The ESI Corporation had, therefore, been empowered, as per Sec.17 of the ESI Act, to appoint employees in various cadres as may be necessary for the efficient transaction of its business.

Such an efficient transaction of its businessnecessitates proper management policies in the area of Human Resources Management to ensure fair and just conditions of serviceof the employees. It is a constitutional requirement that such conditions of service are made applicable to all the employees universally and are enforced without any partiality and bias.

One of the conditions of service governing the employees of the ESI Corporation is periodical transfers and placements. Such periodical transfers of the employees have been recognized by the Government of India and the Central Vigilance Commission as one of the many aspects of preventive vigilance. Formal and routine transfer of officials from one place to another is not a new phenomenon.  The procedure of “routine transfer of officials from one province to another” was initiated by Sher Shah Suri (1540-1545) ( Page 54 – Part II – History of Medieval India – V.D.Mahajan – S.Chand Publications – 1995) and it had become the hallmark of administration thereafter. It is, therefore, in the interest of the Organization to make use of this concept of preventive vigilance and enforce periodical transfers to reap the benefit for the organization “for the efficient transaction of its business, as mandated by Sec. 17 of the ESI Act, 1948. While enforcing such periodical transfers, the Administration has to take into account the individual interests of the employees also. The Government of India have, in their MHA, OM, No.75/55-Ests (A)- dated 24.3.1955, said, “In a Welfare State, a balance has to be struck between the public interest and the welfare of the individual concerned. The Government of India have also accepted the position that a transfer to distant place involves hardships not only to the Officer concerned but also to his dependants.....

In the context of the ESI Corporation, all the employees in the cadre of Inspectors and above in the ESI Corporation join the organization only with prior knowledge and clear understanding that they are liable to be transferred anywhere in India during the period of their service. But, all of them can have a reasonable expectation that such transfers would be ordered in respect of all the officers in their respective cadre without any bias and in a systematic, pre-determined and impartial manner universally without any discrimination. They have, therefore, no reason to nurture any legally valid grievance, if and when they are subjected to transfers in public interest in the exigency of public service. But, they can have legitimate grievance if the transfers are ordered by the persons in power in the Administration Division selectively on subjective considerations. Because, the “right to transfer an employee is a powerful weapon in the hands of the employer. Sometimes, it is more dangerous than other punishments. Recent history bears testimony to this. It may, at times, bear the mask of innocuousness. What is ostensible in a transfer order may not be the real object. Behind the mask of innocence may hide the sweet revenge, a desire to get rid of an inconvenient employee. ..” Asserting that there can a “deceptive innocuousness” in the transfer orders, the Hon’ble Court said, “ a transfer can uproot a family, cause irrepairable harm to employee and drive him to desperation.” {Pushpakara Vs Chairman Coir Board, Cochin 1979 – SLR-309-315 316 Kerala) and in llyas Ahmad Vs Station Director, All India Radio, Hyderabad (1979 – 2.5 LR -58, 1979-Slj -592. K. K. Jindal Vs. General Manager, Northern Railway}.

But, there had been no transfer policy in the ESI Corporation for a very long time. The ESI Corporation had even filed Counter Affidavits in the Honble Central Administration Tribunal, Jabalpur, in the year 1989, alleging that there was no transfer policy in the Corporation, which observation was not viewed favourably by the Hon’ble Tribunal. There arose many power-centres in within and outside the organization on the issue of transfers and postings. Total adhoc-ism was prevailing in the matters of transfers. Transfers and postings were made as per the whims and fancies of the persons in position in the Administration Division of the Organisation. The organizational interest had been the prime consideration only occasionally as exceptions. The loyalty to the persons in position in the Administration Division had been the prime factor of consideration while deciding transfers and postings. Consequently, political interference was also at its peak and influence-peddlers had a heyday. Persons inside and outside the organization had been playing godfathers to the officers of the organization.

The consequences of such political interference in the matters of transfers of public servants have been summed-up best by the Hon’ble High Court of Himachal Pradesh in Ram Krishan Vs. District Education Officer(ILR 1979 H.P.481). The Hon’ble Court has observed, We hereby record our strong disapproval of such type of interference from outsiders in day-to-day administration of the State. If such interference is to be allowed, it would only mean that the government servants should run after those who are taking part in public life and in politics for getting better terms of service and better place of their postings, and should do everything to please them and not to please the department by their ability, honesty and integrity. It need not be emphasized that such interference of outsiders in day-to-day administration of the State is highly detrimental to the public interest as it would result in nepotism and corruption wherein only those who can wield influence and purse can succeed. Therefore, we want by this judgment to bring it to the notice of all concerned that sooner this type of interference is discouraged and stopped the better for the administration and people of the State.” The direct link between the political interference and the corruption has, thus, been clearly recognized and recorded by the Hon’ble High Court, in the aforesaid judgment. That precisely was the situation prevailing in the ESI Corporation for a long time and the organization had been affected very much in various spheres because of such adhoc-ism in the matter of transfers and placements of its officers.

Wherever a cadre in the ESI Corporation consists of more than one person, the principles of equity and justice necessarily demand that the Administration must keep a reasonable system in place regarding their transfers and postings. Because, the officers who were subjected to transfers had been resorting to inter-personal comparison when it came to their transfers and postings, and rightly so, because the concept of inter-personal comparison is also an element of natural justice. But, such a comparison with fellow-officers resulted in bitterness among colleagues, which could have been avoided if only the Administration had been fair and enforced the transfers in a just and transparent manner through a publicized Transfer Policy. But, that was not to be. Consequently, the officers’ fraternity got divided by the Administration into two classes, viz., those who were ‘Favoured’ and those who were ‘Not Favoured’. This affected the normal official work too.

Justice being always relative, natural justice demanded the Administration to demonstrate and convince that such transfers were effected in a fair manner by observing all parameters of objectivity like the Doctrine of Equality, the Doctrine of Transparency, and the Doctrine of Predictability. But, that the Administration division of the ESI Corporation could not do, in the absence of any Transfer Policy. It had been rightly observed in K.K. Jindal Vs. General Manager, Northern Railway & Others (ATR – May 1986 – Page 304 & 305) that “a welfare state, governed by Rule of Law, has, therefore, attempted to ensure fairness and equality of treatment and eliminate arbitrary action even in the matter of transfers by enunciating a policy.” But, the ESI Corporation did not have any Transfer Policy at all. This had its own negative effect in the Administration of the organization as could be seen from the Agenda Item No. SC-12 of the 166th meeting of the Standing Committee of the ESI Corporation held on 8.6.2004, which says, the absence of transfer policy for long in the ESI Corporation had resulted in many visible and invisible negative effects both to the Corporation as whole and also to many individual employees.

It was, in this context, the Director General, who assumed charge of the organization in January, 2003 introduced the Transfer Policies in respect of the Group A and B officers on the Administration Side and in respect of the Medical Officers on 29.5.2003. The Director General of the ESI Corporation is the Head of Department as per Reg. 8 (5) (vi) of the ESIC (Staff & Conditions of Service) Regulations, 1959. By virtue of the said status, as per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, he is vested with full power to transfer employees of the ESI Corporation. Yet, the Director General promulgated the Transfer Policy on 29.5.2003 with the avowed objective of ensuring and demonstrating transparency and equity in the enforcement of transfers and informing the world how he was going to enforce the “full powers” vested in him in this regard. “It is the basic principle of rule of law and good administration that even the administrative actions should be just and fair” (Shesharao Nagarao Umap Vs. State of Maharashtra and others – Services Law Reporter- Vol. 36- 1984 (2) Page 332). He ensured that there was a transparent system in place to ensure justice and fairness in the matter of transfers and postings.

However, the All India ESIC Officers’ Federation, which had been demanding introduction of Transfer Policies from the year 1991 on various occasions, had, all of a sudden, changed its stand and resorted to manipulations to avoid enforcement of the Transfer Policy introduced by the former Director General on 29.5.2003. The letter dated 22.2.1991 of the All India ESIC Officers’ Federation demanding introduction of the Transfer Policy explains in detail the methods of enforcing the Transfer Policy and says that this was a “vexed issue bothering the Administration as well as ourselves (officers)”. Strangely enough, when the much-sought-after Transfer Policy was introduced, the Federation did a volte-face and conveyed a totally contradictory stand in its letter dated 28.1.2004.

What the then office bearers of Federation had demonstrated through that letter dated 28.1.2004 was that the Federation had had no concern at all for public interest and also about the interests of the affected officers who also belonged to the same Federation. It would become very clear from the said letter that the Federation did not intend to look after the interests of either the organization as a whole or the interests of all its members but only a majority of them.

The criterion for being included in that majority had also not been made public by the Federation. It was not in public knowledge as to who would be in that majority and whether those in the majority would always be in the majority or whether anyone in the majority would also become part of the minority and vice versa, now and then. The fact, however, was that it was subject to variation and dependent on the fancies and whims of the individuals who happened to occupy the positions of power in the Administration Division of the Headquarters Office. As a result, the officers tended to discharge their functions in such a manner that it pleased the bosses and not in the manner that would please the organization, which is an impersonal body. The way they submitted their notes without bringing all the relevant facts pertaining to the issues in hand on various crucial issues would show that while dealing with each and every file, the prime consideration of the officers had been whether the facts recorded by them would please or displease the superiors in the hierarchy. Adhoc-ism in transfers and placements had such a negative effect in the manner in which each and every crucial file in the organization was dealt with by each and every officer. Consequently, public interest became the casualty and the mandate of Sec.17 of the ESI Act for “efficient” transaction of the business of the ESI Corporation stood violatedin a very flagrant manner.

(N.B: The above are part of the excerpts from the Affidavit filed in the Central Administrative Tribunal by an Applicant. More from that document would follow in the next post.  It is proposed to submit a comprehensive note to the Sub-committee on these lines.  Readers are welcome to communicate their views and additional information relevant to the issue for inclusion in the note being prepared for submission to the Sub-committee. This portion of the note deals only with transfers. The desires of the Hon’ble Minister of Labour to be the Appointing Authority and Disciplinary Authority of officers in the ESIC  and its consequences would be dealt with later.)

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Filed under Amendments 2010, For Trainees, Transfers

ESI Corporation Meeting on 19.09.2013

The meeting of the ESI Corporation took place on the after noon of 19.09.2013. We came to know that there was on the Agenda a subject for conferring on the Hon’ble Minister of Labour and Employment in the capacity of his being the Chairman of the ESI Corporation, the power to be the Appointing Authority of the officers in Group ‘A’. That power would automatically confer on him the power to those officers also. We also came to know that Sec. 92 of the ESI Act, 1948 had been invoked in this regard and a direction had been given to the ESI Corporation to that effect. Giving direction is different from taking over the Administration. There cannot be any method of Administration that would change the basic structure of the ESIC being an Autonomous Body.

We sent the following SMS to three members of the ESI Corporation at 2.12 p.m on 19.09.2013:
Hon’ble Minister wants power to transfer officers. Any ESIC resolution to confer such power is ultra vires. Please refer the mater to ESIC Sub-committee. Please do not permit hasty decision. Thankyou! –”
This SMS was sent to Mr. Kali Ghose, Mr. Ram Kishor Tripathi and Mr. Dipak Sarkar. We came to know later that the matter had been referred to the Sub-Committee.

We, on behalf of the insured population, thank all those who contributed to that very meaningful decision taken by that Body.

Now that the Sub-Committee is to go into the issue, we request the readers to send their opinions, representations, if any, on the issue to the Sub-Committee for their considered decision. If the copies of such references are forwarded to this website, the contents thereof will be displayed here for the benefit of all. First of all, the Ministry of Labour which is stated to have issued the direction under Sec. 92 must explain how and why it felt it necessary to issue such direction, which is totally contradictory to the decision taken on the floor of the ESI Corporation in February, 2005 when it was chaired by Hon’ble K.C.Rao, the then Minister for Labour and Employment. That meeting had set right the anomalies sought to be perpetrated by the earlier Minister who also wanted to wield power in the matter of transfers and postings of officers of the ESIC.

It is proposed to submit a detailed representation to the Sub-Committee after collecting necessary information in this regard. One thing is certain. Public interest will be served only when transfers of officers are made on the basis of set guidelines, in a transparent manner. There should be no need for the officers to go the PAs of the Ministers to salam and stand before them, whatever be the party in power. Such situation will be beneficial only for those officers who believe in manipulations and not for others who do serve, really, for the welfare of the organisation.

In the context, the readers are also informed that the issue of running Medical Colleges by the ESIC had come in for serious discussion during the said Meeting. The Chairman of the ESIC was annoyed and he asked the members why they did not raise such objections when the previous Ministers were pressing for so many medical colleges. That was a right question, anyway. But, it did not justify opening more such colleges as desired by the present Minister.

It is also understood that the Finance Division informed the Body that the funds position of the ESIC was estimated and predicted to be in the negative after two years. The reasons are not far to seek. The improper amendments rammed down the throats of Parliament without any discussion on the day the issue of Mr. Sibu Soren rocked the house are the main reason for such state of affairs. The details in this regard have already been posted with evidence in this forum.

At present, we only hope that the Minutes approved by the Chairman of the ESI Corporation would faithfully record the complete discussion that had, actually, taken place on 19.09.2013 on all subjects.


Filed under Amendments 2010, For Trainees, Transfers

Appointment of Chief Engineer in the ESI Corporation!

(This article constitutes Episode IV of the series ‘A Review in Heavens’)

Mr. Adharkar and his friends meet at their usual place of retreat.

Mr. Adharkar says, “It is a long time since we met last. I am sad to say that things in the ESIC have taken a turn for the worse, since the arrival of Mr. Sis Ram Ola on the scene as the Minister for Labour. As politicians, these Ministers know the art of wielding authority without responsibility. Mr. Ola wants to acquire authority over the transfers and postings of officers who head the Regions and Sub-Regions. He is also showing interest in construction matters and medical college buildings. It is plain unlawful on his part to demand a role in the transfer of officers in the ESI Corporation. But, he never cares for law. Besides, there are so many things murky in the area of construction and medical college matters. Crores roll there. Instead of setting right things one should not add to the already existing problems. Hope the CAG takes note of the facts”.

There was sullen silence. It was Prof. Adharkar who broke the ice again. He said, “In regard to construction matters the less said the better. It becomes difficult for the Director General to protect the organisation from the people who have vested interests, because there are so many persons with such interests. Now that the post of Chief Engineer has become vacant, with the exit of Mr. Om Kumar, who was on deputation, proper course of action is only to fill up the post of Chief Engineer through the UPSC. But, no proposal is stated to have been sent to the UPSC, although it should have been sent last year itself, after giving proper advertisement calling for applications for appointment on deputation, if the people in the feeder cadre did not meet the requirement to be considered for promotion. But, the latter one is the better option. It is better to promote cadre officers, even by relaxing the condition of the period of residency. Action for that also should have been taken last year. But, it was not done. Anyway, the ESIC should avoid recruiting anyone as Chief Engineer directly in violation of the rules and regulations on the subject.”

“How can there be appointment to a post, and that too, to the post of Chief Engineer, in violation of rules?”, asked Mr. Beveridge.

“Oh, dear!” said Mr. Adharkar, “You people in England follow conventions. You hold them dear, there. But, in India, conventions were given a go-by, immediately when the British rulers declared in 1945 that they were prepared to leave India to Indians. Nothing is sacrosanct now in India and one would do anything if one could get power or money through something”.

“How to save India, then, from such people of India?”, said Mr. Murray.

“It is possible. The silver lining is already there. The Central Information Commission has already declared that the political parties must make their source of income public. This is the precise remedy for the Indian malady. Once this is implemented, the politicians in power as well as in opposition cannot make money for themselves, in the name of collecting funds for the party. Collecting funds for the party is the euphemism for accepting corrupt money that is shared between the individual politicians and their political parties. When one cannot collect money secretly in the name of his political party, he cannot put up a brave face and demand corrupt money for himself saying that it was for his party. Everyone would know that that unaccounted for money is only for him. Corrupt politicians and Ministers cannot wear a mask of honesty anymore. They would stand exposed in public, if their political parties are compelled by law to make the source of income public. That is the mortal fear of the present day politicians. All of them became so scared that they pass a resolution in the Parliament to nullify the orders of the Central Information Commission. The resolution, even if made an Act, is unlawful and can and will be struck down in the Court of Law.

Because, these politicians who made the law do not have the locus standi to pass such a law, when they are a party to the issue. If at all, the orders of the Central Information Commission is to be annulled, it must be done only by the people through a referendum and not by the so-called people’s representatives who are afraid of the people and want to keep the people in dark. But, that is a different story. The issue now is that unless the political parties are made to make their source of finance public, corruption in the nation cannot be controlled.

The enthusiastic consequence of implementing the order of the Central Information Commission is that, once the CIC’s orders are implemented, the present set of politicians would, as a breed, run away and vanish from the political scene and only those who are interested in public welfare would dominate the political field. No politician would have the urge to make his son or daughter or daughter-in-law, as his successor. Politics would not prove to be a field for making money. Indian people must learn from Scandinavian countries in this regard”, said Mr. Adharkar.

“That, definitely, is a very encouraging solution. Every Indian must thank the Central Information Commission for it. I find that once the source of funds to the political parties becomes transparent, the tendency of criminals entering political fields, the tendency of the political parties to appoint and patronize local criminals to be their party workers, etc., would cease”, said Mr. Dengill.

“I think we were discussing about appointment to the post of Chief Engineer in the ESI Corporation”, said Mr. Beveridge bringing the course of the conversation to the back to the original issue.

“Yes, yes. There had been violations in the past in the appointment of Chief Engineer in the ESIC. Convenient persons had been appointed and were attempted to be appointed. That was the reason the UPSC asserted itself when the Recruitment Regulations were framed. The Recruitment Regulations for the post of Chief Engineer was, thereafter, notified in the Gazette with the condition that the consultation with the UPSC “is” necessary on “all” occasions.

There was, then, a Minister who wanted one Mr. R.N. Singh to be appointed as Chief Engineer for one year temporarily, in the year 2004. He cited the provisions in Sec. 17 (3) of the ESI Act, to achieve his purpose. But, Sec. 17 (3) of the ESI Act, 1948 has to be read with the very restrictive provisions of the Recruitment Regulations for the post of Chief Engineer in the ESI Corporation which necessitate consultation with the ESIC ‘on all occasions’ and the instructions of the DOPT on temporary and officiating posts as found in the Swamy’s Manual of Establishment and Administration. When this fact was taken to the notice of that Minister, he was convinced of the stand and left the issue at that.

But, thereafter, one Mr. P.R. Roy was appointed as Chief Engineer in an unlawful manner on the basis of a single application, in the year 2007. He was also given an unlawful extension in the year 2008. The consequences are not described here. But, the UPSC is understood to have taken serious note of it, when it came to know of the facts in the year 2010. Because, no one could answer how Mr. Roy came to know that there was vacancy in the post of Chief Engineer in the ESI Corporation. A single para in the office note decided the appointment and projects worth more than Rs. 10,000 crores cleared through him”, concluded Mr. Adharkar. Others were just watching him wondering how things could go astray in the ESI Corporation. They went through the following Office Note also, which had been obtained through the Right to Information Act, 2005:

Filenoting that led to the appointment of a Chief Engineer

Filenoting that led to the appointment of a Chief Engineer


Dr.K. M.Soni, Superintending Engineer, was recommended by the UPSC to be appointed as Chief Engineer in the ESI Corporation on deputation. When he did not join, a note had been put up on 28.11.2007 as under:

“Thus the appointment of Dr. Soni through UPSC could not be effected. As a matter of recourse, DG may like to consider the name of Shri Prithwi Raj Roy EE in Rural Engg. Services, Govt. of UP, for being hired on deputation basis for one year, w.r.t. the application of Shri Roy, flagged “A”. A formal proposal in this regard is put up pl.”

The Administration Division entertained the application only from one person, Shri P.R. Roy and appointed him as Chief Engineer on deputation. Shri P.R. Roy was only an Executive Engineer in his parent department and he was posted here on deputation by naming him as Chief Engineer. He was, thereby, vested with administrative and disciplinary powers over the other regular UPSC-recruited Executive Engineers already working in the ESI Corporation. The riddles were:

  1. How did Shri. P.R. Roy come to know of the existence of vacancy in the ESI Corporation?
  2. How did he alone come to know?

There was no answer to these riddles. The proper course for the Administration Division was to inform the UPSC about the non-acceptance of the offer by Dr. K.M.Soni and ask for substitute or further course of action, if there was no one in the Reserve List. It should also have followed proper procedure in appointing the Chief Engineer. It should have intimated the UPSC about the appointment of Shri Prithwi Raj Roy, immediately and asked, at least, for the ratification of such action. It was not done. The UPSC had not received any intimation for more than one year and eight months. The UPSC  received the intimation only on 14.9.2009 (UPSC letter dated F.No. 2/39 (1)/2010-ADT-1 dated 11.2.2010).

The file-notings dated 6.1.2009 in Page 7 of the Note file show that ‘the Secretary, UPSC had already been intimated about the appointment of Shri P.R. Roy as Chief Engineer in ESIC’. But, the UPSC which went through the copy of this note-file page concerned said that it had been informed of the said appointment only on 14.9.2009, more than eight months after the date of the file-noting itself. This was how a false declaration had been given in the issue of appointment of Chief Engineer.

The file noting dated 7.1.2009 contained the remarks that ‘it (the UPSC) was informed to continue the services of Shri Roy as CE till regular selectee joins in ESIC’. That was another false declaration.

The same Chief Engineer had been given an unlawful extension also in the year 2008 in total violation of all the rules on the subject. The file-notings dated 6.1.2009 and 7.1.2009 in Page 7 of the Note file did not refer to the specific proviso to the contrary under Sec. 17(3) of the ESI Act, 1948.

Moreover, the UPSC came to know of the extension given to Shri P.R.Roy only on 11.1.2010, just five days before the expiry of the extended term. Nobody cared for Sec. 17 (3). There was no discussion either about Sec. 17 (3) or about the concerned Recruitment Regulations in the notes submitted on 11.12.2008, 6.1.2009 or on 7.1.2009.


Mr. Adharkar and others went through the above note. Mr. Adharkar then said, “Now that the post of Chief Engineer is vacant, it would be proper if the Administration is permitted to follow the lawful methods of filling it up, through UPSC”.

Mr. Beveridge said, “Besides, there must be some Public Interest Litigation about the matter of Medical Colleges to render justice to the contributing insured populace. The legislation in this regard in 2010 was made by hoodwinking the Parliamentary Committee of Labour”


Filed under Amendments 2010, For Trainees, Transfers

ESIC Officers transfer: Amend the Act first before allowing a role for Minister!

A Study on Authority to Transfer the Officers of the ESIC was done in the year 2004 when Hon’ble Mr.Sahib Singh Verma, the then Minister for Labour wanted to acquire the power to transfer the Group ‘A’ and Group ‘B’ officers of the ESI Corporation. And, the paper was circulated among various units of the ESIC Officers’ Association. Now, in the context of similar intense desire shown by the present Minister for Labour, Hon’ble Mr. Sis Ram Ola to have a role in the matter of transfer of officers of the ESI Corporation, the Study Paper circulated then is published, now, for the benefit of the public. The following is the text of that Paper:


The issue whether the transfers and postings of the officers of the ESI Corporation can be done by the Hon’ble Minister for Labour, Government of India in the capacity of his being the Chairman of the ESI Corporation had been examined on various occasions in the past in various fora. But, it was found that such power could not be vested in the Hon’ble Minister. Unless the Sec. 94 (A) of the ESI Act, 1948 and the Reg. 4 of the ESIC (Staff & Conditions of Service) Regulations, 1959 are amended to provide for such vestiture, the power for ordering such transfers cannot be exercised by the Hon’ble Minister.

The fact that the Hon’ble Minister exercises such powers in the Employees’ Provident Fund Organisation made it necessary for us to make a comparative study of the provisions of the both the Organisations. And it became clearer that no executive power for running the Administration is vested in the Chairman of the ESI Corporation in contrast to the executive powers vested in the Chairman of the Central Board of Trustees of the Employees’ Provident Fund Organisation.

In the EPFO, The Board is the Appointing Authority as per Sec. 5 D of the EPF&MP Act, 1952 and Para 22-A of the EPF Scheme, 1952. As per Sec. 5 E of the EPF&MP Act, 1952 the Central Board can delegate the Executive Committee or to the Chairman of the Board or to any of its officers any of its powers for the efficient administration of the Scheme. Accordingly, as empowered under Para 24-A (2) of the EPF Scheme, 1952, the Central Board, by a resolution, enabled its the Chairman to act as the Appointing Authority in respect of the Officers and Staff other than the CPFC and the FA&CAO. This para 24-A(2) prescribes a specific method and the Board has adopted that method to make its Chairman the Appointing Authority. It is by virtue of having thus become the Appointing Authority, the Chairman of the EPFO is able to exercise the power of transfers and postings of these officers. The provisions in the EPF&MP Act, 1952 and the EPF Scheme, 1952 are very explicit to enable the Chairman to act as the Appointing Authority and thereby exercise the powers of transfer of officers.

Transfer is one of the essential conditions of service for government servants. The authority which functions as the Appointing Authority has the inherent power to enforce transfers and postings also. In other words, the authority to transfer goes together with the authority to appoint. As per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, full power to transfer employees has been delegated to the Heads of Departments.

It is only such an inherent power which enables the Chairman of the EPFO to exercise the powers for the transfers and postings of the Officers in the EPFO. If the Chairman of the EPFO had not been empowered, by a specific resolution of the Board passed under Para 24-A (2) of the EPF&MP Act, 1952, to act as the Appointing Authority he cannot exercise the powers of transfer of the officers in the EPFO.

It is only because the Chairman of the EPFO is not the Appointing Authority in respect of the CPFC and the FA&CAO in the EPFO that he is not, at present, exercising the powers of transfer and posting of these two officers.

There is no provision in the ESI Act to enable the Corporation to pass a resolution to empower the Chairman to act as the Appointing Authority. The Parliament has specifically mentioned in the original ESI Act in the year 1948 itself that the Director General shall be the Chief Executive Officer of the Corporation. That would imply that the executive powers of the Corporation would be carried out through the Director General. Although the CPFC has also been shown in Sec. 5D (1) of the EPF&MP Act, 1952 as the Chief Executive Officer of the Central Board, the Board has resolved, as per Sec. 5 E and Para 24-D to vest the powers of the Appointing Authority in the Chairman and not on the CEO.

This is in striking contrast to the decision of the ESI Corporation which, in the year 1959, resolved to vest the powers of the Appointing Authority in the CEO and not the Chairman.

So, the Director General of the ESI Corporation has alone been empowered by the Corporation to exercise the powers of transfer and postings of the officers in the Corporation (except the Financial Commissioner), by virtue of his being the Appointing Authority as per Reg. 4 of the ESIC (S&CS) Regs. 1959. Thus, as long as the Reg. 4 remains in the present form, it is only the Director General who can do the transfers and postings of the officers and staff of the Corporation.

If the Reg. 4 is sought to be amended, such amendment must be in consonance with Sec. 94 (A) of the ESI Act, 1948 which gives the option to the Corporation to direct any officer or authority to perform the functions of the Corporation. But, such officer or authority must be the one who is subordinate to the Corporation. The Chairman of the Corporation cannot be called as a subordinate to the Corporation whereas the Director General is a subordinate, as could be seen from the duties cast upon him, especially through Rule 16 (1) (vi) of the ESI (Central) Rules, 1950.

A cursory reading of Sec. 5 E of the EPF&MA Act, 1952 in the context would make it very clear that the Sec. 94 (A) of the ESI Act, 1948 is in sharp contrast to the provisions of the former which enables the Central Board ‘to delegate’ any or all its powers to the Chairman of the Board while the latter enables the Corporation ‘to direct’ only its subordinate officers or authority to carry out such functions.

So, as long as the Sec. 94 (A) remains in its present form, the Corporation cannot vest the power of the Appointing Authority on anyone who is not its subordinate and the Chairman of the Corporation can never be classified as its subordinate.

The apparent differences between the earlier ESI Act of the year 1948 and the later EPF&MP Act of the year 1952 would clearly prove that the Parliament of India wanted to make the ESI Corporation an autonomous one while it did not want to confer such status on the EPFO.

The ESI Corporation has not been given authority by the ESI Act, 1948 to delegate its powers and more particularly the executive powers to the Chairman of the ESI Corporation. So, the resolution, if any, passed by the ESI Corporation on 13.2.2004 empowering its Chairman to transfer the officers of the Corporation would only be ultra vires.

Moreover, the Director General of the ESI Corporation is the Head of Department as per Reg. 8 (5) (vi) of the ESIC (Staff & Conditions of Service) Regulations, 1959. So, as per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, he, and he alone, does have the power, the full power, to transfer all the employees, i.e., officers and staff members of the ESI Corporation.

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ESIC: A review in Heavens – Episode III

Mr. Adharkar, Mr. Beveridge, Mr. Dengill, Mr. Murray and Mr. Wagner are sitting under a tree. An innocent person who was a factory employee and  a beneficiary under the ESI Scheme arrives at the spot and talks to Mr. Adharkar. “Sir, I was an insured person in India when I was living on earth. I want my posterity to get similar or even better benefits from the ESIC. But, I find that you were all somewhat apprehensive about various things. May I just be present here?”

“Dear brother, you are most welcome. We would, of course, be delighted to hear your inputs too. Please be seated”. Adharkar then continues to explain to him. “I can summarise the problem this way. Suppose, there is a small village in which there are around 100 families. That village does not have proper approach road to the Main road, which is four kilometers away and in which buses ply. A proposal to lay the approach road of four kilometers is cleared by the government and the outlay is Rs. 2 crores. Now, a team of officials arrives at the village to lay the road. The team is headed by an Executive Engineer. When the road is being laid, it is being supervised by an honest Junior Engineer who is brimming with enthusiasm and devotion. He joined the team of this Executive Engineer just six months back, on his request for the present station, and was working earlier in a far away station for more than ten years.

He notices, at the initial stage itself, that the contractor was laying the road with a thickness of only 4.5 inches instead of 9 inches as per the approved plan. He objects to this kind of work. But, the contractor simply ignores him. The plan of the contractor was to eat away a neat 50% of the allocated amount. When the bill for the first stretch of the road is presented, the Junior Engineer refuses to clear the Bill of the contractor, as the work had not been performed as per rules. The contractor has some understanding with the Executive Engineer and complains to him against the Junior Engineer. The Executive Engineer summoned the Junior Engineer and advised him to clear the bills of the contractor. But, the Junior Engineer said that the contractor had not done his work as per rules. His explanation enrages the Executive Engineer. He, immediately, transfers the Junior Engineer to a far away station, relieves him all of a sudden and does not give any time to him even to represent against the transfer. He did not even inform the Chief Engineer about his orders. It is the Chief Engineer who is the competent authority to transfer the Junior Engineer and not the Executive Engineer.”

“Oh, My God! What happened to the road, then?”

“The road was laid fully, as desired by the contractor. He got the entire amount cleared. But, please tell me, who was affected in the entire process?”

“The honest Junior Engineer and the people of the village. The Junior Engineer who had already been working in a far away station and came to the present station on his request is punished again because of the malafide motive of the Executive Engineer. But, the villagers are the most affected as they have been provided with a link road of 50% deficiency and would suffer when the road vanishes after a rain or two.”

“Okay, you have understood the problem in correct perspective. What should the villagers do now?”

“They must organize a protest against the substandard road.”

“Of course, they should! But, what caused the substandard road to come into existence, in the first place?”

The insured person thinks for a while. He says, “Yeah! The road would not have come into existence this way, if the objection raised by the Junior Engineer at the initial stage itself had been taken cognizance of. But, the Executive Engineer had, instead of hearing the Junior Engineer, transferred him to a far away station, even when he had no power to transfer him beyond the area of his jurisdiction. This transfer had been effected, in spite of the fact that the Junior Engineer has completed only six months of service in the present station.”

“Okay, you have analysed the issue well. Now, where does the problem originate?”, said Mr. Adharkar.

“The problem arises because of the absence of proper Transfer Policy of officials in the department. If there had been some assurance to the officials about their tenure in a transferred station, they can settle their personal problems accordingly. They can also plan their future. When there is uncertainty on transfers, the officials think that their life depends upon the whims and fancies of the higher officials. They, therefore, would try to please the higher officials instead of doing the work assigned to them as per rules. Their loyalty will not be towards their duty but to their higher officials.” said the Insured Person.

“Yes. In the present case also, if the said Junior Engineer had acted as per the desires of the Executive Engineer, he would not have faced the transfer to a far-away station again. But, he was honest by his choice. The system as evolved by the corrupt officers of this department, did not permit honest people to survive. Now, what would you suggest?”, asked Prof. Adharkar.

“If I were aware of these intricacies and if I were one of those villagers, I would organize an effective protest against the absence of proper Transfer Policy in the department”, said the Insured Person.

“Hurrah! Well done!”, said Mr. Wagner, patting on the back of the Insured Person. “You have correctly understood the problem. The Administrative Procedure of every government organization affects the public directly. Because, the defects in the Administrative Procedure affect the delivery mechanism. It is, therefore, essential for the people of the nation to feel really concerned about the internal administrative procedure of every department. They must agitate, if there is no proper policy or defective policy. In this case, the Executive Engineer who had no authority had exceeded his authority to transfer the honest Junior Engineer. There was no system, in place, even to represent against such transfers. These defects work against public interest”.

“Yes, that precisely is the problem now with the ESI Corporation in India”, said Mr. Adharkar. “Mr. Sahib Singh Verma, who was the Minister for Labour in the early 2000s was trying very hard to take over the power of transfer of officers in the ESIC and the EPFO. The ESIC resisted a lot. Mr. Sis Ram Ola who succeeded him wanted to follow only him in the matter of transfer of officers in the ESIC. The Labour Ministers, who are politicians, should not be given the powers of transfers of the officers of the ESIC. They do not want to follow any system in the matter of transfers. They want to wield arbitrary powers in the matter of transfers. These Ministers demonstrate irrepressible desire to acquire the power of transfer of officers. They issue unlawful directions to the ESI authorities in the matter of transfers. They believe that the people would not bother themselves about such unscrupulous activities indulged in by them.”

“Mr. Sis Ram Ola is interfering in and preventing proper administration of the ESI Corporation. It is time someone filed a Public Interest Litigation to prevent the role of the politicians in the matter of transfer of officers of the ESIC. When Mr. Sahib Singh Verma was recklessly interfering in the appointment of officers in the EPFO, the Officers Association passed resolution against him. Such things did not happen in the ESIC as the office-bearers of the ESIC Officers Federation were also not interested in evolving proper system. They were concerned only about themselves and not about the system. Fortunately, after Mr. Rao came into power, proper transfer policy was evolved. But, things were back to the same chaotic era, after 2007. Now, when the Administration took steps to bring the system back on rails, Mr. Sis Ram Ola is playing the villainy. He wants to wield powers, which are not vested in him. He does not bother about the areas in which he should, rightly, concentrate and for which powers are vested in him. For example, he can examine how the Parliamentary Committee of Labour was hoodwinked when it asked right questions about the need for undergraduate medical colleges. But, he does not do that. The ESIC has to be salvaged now, by overcoming the urge of Mr. Sis Ram Ola also to interfere in the matter of transfer of officers. Very sorry state of affairs that the nation has to face this kind of politicians. The only way out is to make them answerable to the public”, said Mr. Adharkar.

“Haiti was once a famous island nation, famous for its prosperity. It prospered, because the institutions of that nation were doing the work assigned. But, there came some politicians to wreck the institutions. Now the country is in ruins.”, said Mr. Murray.

“I do not understand”, said the Insured Person.

“You see, when a person who was robbed goes to the police station, he believes that the police would hear him and help him. If it happens that way, the institution commands respect of the public and helps the nation to progress. If the policemen there support the robber instead, the public loses confidence in the police station and try to take law into its own hands or suffer in silence. There will, then, be more robbery and conflicts. The nation cannot progress. It is the case with every organization. When unscrupulous officials or politicians try to unsettle the system and acquire arbitrary power to favour or harm the subordinate officials, the entire institution collapses. The institution will not serve the public then but only the person who has acquired such arbitrary power. The ESIC is now facing problems from the Minister. As the activities of this over-ambitious Minister conflict with public interest, the public must take action to resist his attempts, effectively.

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ESIC: A review in Heavens ! – Episode II

It so happened that we had a chance, recently, to visit the Heavens, and come back too. What we saw and heard there were found to be worth sharing. Hence this attempt. 


What Mr. Wagner asked raised the curiosity of everyone. They requested him to explain the facts without putting questions.

Mr. Wagner continued, “There was one Mr. Charles Ponzi. He collected money from a lot of people promising that he would pay them very high returns. Attracted by his promises, people poured in money. ‘He promised investors outrageous returns of 50 percent in 45 days, or 100 percent in 90 days. Ponzi paid these investors using money from other investors, rather than with actual profit….He bought a mansion in Lexington, Massachusetts, with air conditioning and a heated swimming pool. He reportedly made $250,000 a day.”

“How could he pay so much?” asked Mr. Beveridge.

“Yes. He paid money to the investors from the deposits made by the subsequent investors. He could not invest the deposits properly in any venture to make profits. He did not pay the investors from dividends that he got any source.”

“How long could he go on like that?”

“His reasoning was that as long as the inflow is more than the outflow, there was no problem for him. That was the reason he could continue with the scheme for so long. He could run the scheme only for two years. When The Boston Post started investigating and bringing out the facts, the scared depositors stopped paying further. Naturally, it caused the bubble to burst.”

“A lone man had brought sufferings to millions.” concluded Mr. Dingell. There was sullen silence there for some time.

Mr. Murray broke the ice. “But, the United States Social Security Administration has not learnt any lesson. These administrators also want to run the Social Security Scheme just like that of Ponzi scheme although they labour so much to portray that they are not managing it like the Ponzi scheme”.

“Yes. They say, ‘As long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out, the system can continue forever. There is no unsustainable progression during the mechanism of pay-as-you-go pension system and so it is not a pyramid or Ponzi scheme’. But, this very concept is Ponzi Scheme only.”

Mr. Adharkar intervened. “But, we did not conceive of the ESI Scheme in India that way. We wanted the scheme to be the backbone of the nation’s economy. Our concept was making the scheme largely self-sustaining and stronger in the long run.”

(Economic Times: 05.02.2003: Please click on it for bigger image)

(Economic Times: 05.02.2003: Please click on it for bigger image)

Mr. Beveridge nodded in assent. He said, “Yes. Indians managed the ESIC funds very well. If they had continued with that trend, the scheme would have become self-sustaining in the long run. For example, their surplus of about Rs. 16000 crores would have earned them, on proper investment @ 10% interest per annum, a sum of Rs. 1600 crores. That was equivalent to the revenue generated in Maharashtra and Tamilnadu combined together. Or it was equivalent to the revenues generated in many other states. Once you have the economic strength to run the scheme with your own funds, you are stronger economically and provide better security net for the posterity forever.”

“But, what is the problem now? They can continue that way.” said Mr. Dingell.

“No. Things are different now. The surplus funds have been frittered away in the name of establishing medical colleges and constructing buildings for them.”

“How is the scheme being run, then?”

“By increasing the wage limit of the employees coverable under the Scheme. That appears to be the only way, once all the Medical Colleges start functioning. You know, these medical colleges do not collect donations like the private medical colleges. There is no income through them, but only expenditure. And, the expenditure is very huge. If you compare the revenue generated in a region with the expenditure required for the medical colleges in those regions only, you will be alarmed to think of the consequences.”, said Mr. Adharkar.

“But, can the Indians increase the wage limit everytime they find the money available is inadequate?”, said Mr.Wagner.

“Yeah. That’s what makes Mr. Adharkar sad”, said Mr. Beveridge.

There was a wry smile in the face of Mr. Adarkar. “That is not the only thing that makes me sad” , he said.

“What else?”, demanded Mr. Beveridge.

“The brazen interference of politicians in the transfers and postings of the officers in Group A and Group B level in the ESI Corporation. That is wrecking the system. The Labour Ministers do not want to stabilise the system so that it works for public welfare. They want to play godfathers to one or the 0ther officer and force the Director General to yield. In the process, the officers who are the beneficiaries of such favours from the Ministers demonstrate their loyalty to the Minister and not to the organisation. The pr0blem was there earlier in respect of one or two stray cases, earlier. But, it was Mr. Sahib Singh Verma who wanted to institutionalise his interference in the matters of transfers and postings of senior officers. It was resisted fiercefully. Yet, he could have his way in some cases. Fortunately, because his political party lost the elections he could not meddle with the ESIC and EPFO anymore. But, his successor Mr. Sis Ram Ola also followed the footsteps of only Mr. Sahib SinghVerma. It was only Mr. K. C. Rao who put an end to it in the year 2005. He put the organization, again, on the right path. But, many Indian politicians could not resist the temptation of demonstrating that they are mightier. They believe in the present and, therefore, care for their show of strength only. They do not care for establishing corruption-free system in the institutions.  India, therefore, goes the Haiti way. That makes me sad”, said Mr. Adharkar.

“Oh, My!, I am tired of hearing all these things. I need a break, yaar!”, said Mr. Murray.

“Okay, let us make a move, then! We assemble here next week and discuss about the Haitian examples and warnings, the importance of transfer policy of officers, the consequences of the interferences by the Labour Ministers in the transfers and postings of officers in the ESIC and the EPFO and the necessity for the public to know the facts as all these administrative matters affect only the public and the nation, at last.”

“I agree. The Social Security System of every nation is too big to be left only to the Labour Ministers to be run by them as they please. The public must know why these Ministers have such irresistible temptation to play with the transfers and postings of the senior officers in the ESIC and the EPFO. A trip down the history is essential. Mr. Adharkar has, rightly, drawn the Haitian example. Let us discuss it next week”, concurred Mr. Beveridge.

(Continued in Episode-III)

Readers who would like to know more of the Ponzi Scheme and the Social Security Scheme in the USA may please click on the following links please for some facts. The opinions expressed therein are subjects of discussion, if not subjects of controversy:

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ESIC: A review in Heavens! – Episode 1

It so happened that we had a chance, recently, to visit the Heavens,  and come back too. What we saw and heard there were found to be worth-sharing. Hence this attempt. 

When we were wandering ‘lonely as a cloud’ in the Heaven, we came across a person sitting under a tree in a pensive mood for a long time. How could there be a man so sad when he was in Heaven? We went nearer to see who he was. What a pleasant surprise! The unpleasant person was Prof. B.P. Adharkar, the Father of Social Security in India. We were just watching him, without his being aware of our presence. All of a sudden, there was a flash in his eyes when he looked in a particular direction. We could then see  the reason for his lit up eyes. He got up and cheerfully welcomed the person who came near him and shook hands. He was Sir William Beveridge.

“Good Morning, Mr. Beveridge! How are you? Happy to see you here.”

“Good Morning, Mr. Adharkar! I wanted to meet you for a long time. I could make it only today. I saw you sitting as if you were lost in thoughts. What is on in your mind?  May I know that?”

“Oh, sure! I was just thinking about the way the Social Security system is functioning at present in India. How marvellous the scheme was, when you prepared the blue print for it!”

“It is okay! All of us had done our bit for the society. But what made you to be lost so much  in your thoughts today?”

“A lot, A LOT!. I do not know how to describe or where to start from. But, the only positive thing is that the present CEO of the ESI Corporation really wants to bring the organisation back on rails. But, there are many vested interests working against that objective. I do not know what the future holds for the ESIC. It is the backbone of the nation’s economy. But, people do not seem to realise its importance.Things had gone awry for quite some time. The after-effects are felt, still. The organisation must recover from those effects.”

“Oh, no! What do you say? It was you who were instrumental in preparing the ESI Act. It was prepared on the basis of the report given by you on 15.08.1944. Was there anything wrong in your report?”

“I do not know! I just prepared the report as per the standards of the 1940s. I did not know that things would move this way.”

“Can you please elaborate?”

“That is what I said. I do not know where to start. There are so many things that we have to discuss. I am just flabbergasted at the way things had gone astray for some time that it has become a Herculean task for the present day Administrators to clean the Augean Stable.”

“Mr. Adharkar, you are just increasing my anxiety and worry with all these statements. You please start from somewhere, anywhere. We are not writing a book here to narrate things in an orderly fashion. Do share what comes to your mind, and whatever you feel like saying. We can revisit the same issue again and again during our discussion, and there is no statutory bar of any kind to it.”

“Yeah, that’s true! Mr. Beveridge. Let me tell you about the Standing Committee and the ESI Corporation. I conceived of them as autonomous bodies consisting of people who would exhibit real and sincere interest in the welfare of the working population. I thought these bodies would function like brain-storming centres and decisions would be taken after no-holds-barred discussion. But, contrary became the reality. Discussions were managed. You can see the article “Executive Powers of the Chairman, Standing Committee” published in the website ‘’ in this regard.  Except a very few, the other members are not evincing keen interest and involvement in the state of affairs. Take for example, the officers who are on these Bodies as members representing their respective State Governments. Do they take part in any discussion on important matters? Do they, at least, want to get things clarified, when information that affects the System, is made available to them? No!”

“But, why? After all, they are there in these Elected Bodies as representatives of their State Governments. If there is nothing to represent for their States, why should they speak?”

“No, the meetings of these Bodies are not like the meetings of Chief Ministers for allocation of funds, where they need not bother themselves about anyone except their own States and where they do not really know much about the area of the others. These members in the Standing Committee and the ESI Corporation have voting rights. The resolutions passed by these Bodies are shown to have been passed with their approval too. Their silence gives room to declare that every resolution was passed with majority support. Nobody has barred them from voicing their opinion as members of the Standing Committee or ESIC  on any issue placed before them on the Agenda. Yet, they maintain silence, presuming that it was courtesy. But, it is really indifference. Likewise, many representatives of  employers and employees too do not bestow adequate attention to details. The Bureaucrats Vs. Political leaders episodes of the serial ‘Yes, Minister’ are re-enacted on many occasions.”

“I am simply surprised. How does it happen?”

“I am also puzzled. But, they do happen. Please take the issue of I.T. Roll-out. Every department that wants to computerise its activities starts it only as a pilot project in a small area. That way the trials and errors would not affect the routine of the organisation even for  a single day. Take for example, the Railways.  Did they stop any train even for a single day, to computerise their activities? But, in the ESIC the inspection work and the work in many other areas came to a standstill for long, even for the preparation and supply of Identity Card. Did anyone assess the cost-benefit ratio of this kind of approach, as this work was done simultaneously throughout the nation. So many wrong orders were issued affecting not only the office work but also the insured persons and their family members for the photo sessions. Yet,these ID cards have not become fully functional. These cards must prevent duplication, in the ideal situation. But, that ideal situation has not yet come, in spite of the passage of more than four years. The finger prints and the other bio-metric data are not used for de-duplication process. Employers and Employees have found various methods to circumvent the System. The mounds and mounds of ID cards returned undelivered speak volumes of the flaw in the planning. If only there had been pilot project, the damage would have been limited only to a small area. You know, I have, so far, told you only about the ID card matter. I have not told you anything about the defect in the System in preparing Payment Dockets in the Branch Offices or processing the Inspection Report in the Insurance Branches, or others.”

“Mr. Adharkar, you, surely, have reason to feel worried. But, it does not matter much, I think. After all, you can dump the I.T. Roll-Out and go back to the time-tested manner in which your Scheme was functioning earlier with pen and paper. Take heart! Not much has been lost.”

“I agree with you Mr. Beveridge. The Airforce of the USA provides a precedent in this regard. I saw one article titled ‘BOOTS or COTS’ in this regard in the website ‘’.’ But, the white elephants, the ESIC Medical Colleges worry me so much. The way the construction work was started even before the Parliament amended the Act, the way Deans were appointed, the way money was spent, the way some projects were abandoned midway, the way the authorities have been left to wonder now, how to make use of the buildings constructed for the abandoned Medical Colleges are really making me apprehensive.”

Mr. Adharkar continued. “While formulating the ESI Scheme, I had, very consciously, specified eleven Fundamental Principles. They are, in fact, sound directive principles to be kept in view by the Government not only for any social security measure to be introduced through the ESI Scheme but also on any labour-welfare related matter. One of the Fundamental Principles is that the proposed schememust not be too ambitious in the beginning”. But, this fundamental thing has not been examined on record before starting I.T.Roll-Out all over the nation or before starting construction work for so many medical colleges.”

“I do understand. …(Looking off into the distance)  Oh, you see there comes the trio, Mr. Wagner, Mr.Murray and Mr.Dingell, the architects of the Social Security Scheme in the USA. Let us hear them too.”

These three gentlemen arrive on the scene. They join the discussion after exchange of courtesies.

“It is not just these things”, continues Mr. Adharkar, “The way the Ministers wanted to interfere in the day-to-day administration of the autonomous body by influencing the transfers of officers is more worrisome. The evil effects of such interferences had been felt in the past and had been narrated in detail in the agenda for the Standing Committee in the year 2004. It was only Mr. Chandrasekar Rao who allowed the Rule of Law to prevail in the matter of transfer of officers. His period as Chairman of the ESI Corporation was short. But, it had a telling effect in establishing Rule of Law in the matters of transfer of officers. He said in the open meeting of the ESI Corporation that there would be no interference from the Minister or Ministry in the matter of transfer of officers and the Director General would, as the Team Leader, be free to decide the issues. The Transfer Policy assuring equality for all, was enforced thenceforth. But, as I said, his tenure was short. Again interference in the matter of transfers started. There became so many power-centres de facto. Such interference by the Ministers and other power-centres would sink the organisation and we can discuss about it in detail later”.

“Yes, yes. What you told, so far, appears to be only an introduction of various things that had taken place. The burden on the shoulders of the well-meaning administrators of the present  to put things again in proper shape and perspective is just enormous.    But, I feel not only worried but also tired just by hearing these things. Anyway, what about the financial aspects, especially with so many medical colleges? There would be heavy running costs without any income from these medical colleges. Was that issue analysed on file before the proposals were submitted? What would be the long term effect?”, said Mr. Beveridge.

At this moment, Mr. Wagner chipped in. “Friends, have you heard of a scheme in the USA started by one Mr. P….?”

(Continued in Episode 2.)


Filed under Amendments 2010, Benefits, For Trainees, Transfers

Civil Servants Vs. Rude Masters

Civil servants turn out to be rude masters” 

– Lloyd George, Prime Minister of the U.K. – 1916-1922

A transparent Transfer Policy was brought into existence in the ESI Corporation on 17.03.2005 which ensured fairness and struck a balance  between public interest and private needs of the public servants. But, for quite some time, this Policy had been thrown to the winds and transfers are ordered as per the arbitrary decisions of the persons who have power or role to influence the decision. The Rule of Law is not allowed to prevail.

As a result, the officers have again developed the tendency to do anything to please the persons who matter. The consequential victim is the office work. Some officers are subjected to frequent transfers and the all-India transfer liability is held out against them to justify those  transfers. Many others are not transferred for a long time in violation of the principles of transfers and in  violation of the same transfer policy and all-India transfer liability. Many sub-regions are without administrative heads and many important posts in many regions are vacant, because of non-enforcement of transfer policy.

If a person is posted to a place there must be reason for it. If a person is transferred from that place within a short while, there must be a reason for that too and the Administration must explain why, at all, in the first place the original posting was made. The rights of an individual cannot be pooh-poohed by people who exercise the powers vested in them in an arbitrary manner while at them same time manage to avoid transfers for themselves. Every transfer is watched by the other officers and they would get negative signals if the apparent and the hidden reasons differ from each other. It would be better for the Administration to put in place only the transparent Transfer Policy which is applicable to all the officers without any exception.

Otherwise, the suspicion of the public that the internal Administrative Procedure of the ESI Corporation abets only favouritism and corruption will get confirmed.  A civil servant posted in the Administration Branch  or is vested with examining the cases of transfers will find it difficult to submit proper proposals in the absence of  transfer policy. Creating situation to exercise arbitrary powers or to condone the exercise of such arbitrary powers would convert the civil servants into rude masters.  The Fairness Committees, when they functioned, did not render justice because there were no guidelines for them too in the matters of proposal for transfers.

Absence of uniformity, predictability and universality in transfers in public services will make the people in the Administration Wing feel that they are supreme and above law and above their own colleagues. They would develop the tendency to violate law and make other public servants who are not working in the Administration Wing suffer. The dark side of the Administration in every public organisation is removed only when a transparent transfer policy is enforced. Hope the ESIC will take a turn for the better, at least, henceforth. There must be some assurance to the officers about the period of stay in a particular place of posting so that they can plan their personal life accordingly.

In Mohambaram vs. Jayavelu , reported in AIR 1970 Mad 63 at page 73, the Hon’ble High Court of Madras had made the following remarks:

There is no such thing as absolute or untrammeled discretion, the nursery of despotic power, in a democracy based on the rule of law.

More on it in :

“Government servants shall … also be transferred from one work to another, so that they cannot either misappropriate government money or vomit what they had eaten up”.

– Chanakya  (Page 71 – Arthasasthra – Dr. Shama Sastry -Mysore Printing and Publishing House).

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Filed under Transfers