The principal bench of the Tribunal, imposing a cost of Rs 50,000 on the medical regulatory body, said the order terminating former secretary Sangeeta Sharma in 2012 was "totally illegal, unwarranted and in gross violation of the principles of natural justice".
Sharma was sacked on March 30, 2012, by the MCI's Board of Governors after a nod from the Union health ministry.
The termination followed a probe into her appointment on the grounds that it violated the rules as she did not fulfil the eligibility criteria and also faced corruption charges.
"Since the termination of the applicant is consequent upon the letter of the respondent No.2 (Centre), the impugned order terminating her services under the terms and conditions of the appointment seems to be only a ploy and not the real basis for termination of her services," the bench headed by its chairman Justice Permod Kohli said.
The CAT also noted that, in the counter affidavit or any other document produced, neither the MCI nor the Centre has specifically pointed out how and on what basis Sharma was said to be ineligible.