The court's Madurai bench directed the principal health secretary to consider his merit, seniority and ability and that of another contestant for the post S Revathy with an open mind and appoint one of them as DME as per law.
A division bench of the bench comprising Justices M Venugopal and Abdul Quddhose also set aside the order of the single judge appointing Revathy as DME.
The court said the government order (GO) has not weighed the pros and cons of the comparative merit, ability of the medical officers coupled with seniority.
Joe's contention that administrative experience in the post of dean was not relevant to the post of DME was contrary to service rules, it said.
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"Besides certain insertions made in black ink (in G O appointing Joe as DME) do not inspire the confidence of the court."
"Hence the court based on equity, fair play, justice and good conscience and even as a matter of prudence sets aside the G.O (government order)," it said.
The court directed the health secretary to reconsider the case of Revathy and Edwin Joe afresh for promotion to the post of DME in a free and fair manner within six weeks from the receipt of the order.
The court earlier ordered status quo on the single judge order.
Revathy had filed a case claiming that she had the seniority to become the DME.
In September this year, Justice R.Mahadevan had directed authorities to appoint her as DME.
The government and Edwin Joe appealed against the single judge's order.