According to Times Now report, the controversy is related to the sudden ouster of the Union health and family welfare secretary and IAS officer Keshav Desiraju.
On February 11 this month, Desiraju was 'transferred' to the department of consumer affairs during cabinet reshuffle, while AIDS Control department Secretary Luv Verma was given additional charge as health secretary.
The Union health minister Ghulam Nabi Azad is said to be involved in the "capable officer" Desiraju's ouster. The top PMO official reportedly put pressure on Desiraju to "clear" Ketan Deasi's file.
In an alleged "secret fightback" note, it has been claimed that Azad had written to the cabinet secretary that "why Desiraju must go".
When reporters asked him on his ouster, Azad evaded questions and instead attacked the shunned bureaucrat.
Shockingly, the PMO has remained silent on the medical scam, that has resurface now.
Now, after coming under media's scanner, 'cornered' Azad has been forced to "expalin" that why he tried to "undo" the MCI's decision.
Azad has said that "he initially did not want to accept Desai's nomination."
Azad has been accused of shunting Desiraju, an IAS officer of 1978 batch of the Uttar Pradesh cadre, who opposed him because he did not give his go ahead to the re-appointment of ex-MCI boss, who was jailed on corruption charges.
Under pressure to explain, Azad tried to throw dirt back at the bureaucrat.
When Azad was questioned about Desiraju's transfer within 11 months of his appointment, he said these were ‘administrative things'.
"I don't think people should get into it. Officers' and ministers' portfolios change. It is a regular affair. He (Desiraju) is a capable officer", he said.
Sources said that the decision to transfer Desiraju was taken by the PMO, due to issues with the Cabinet secretariat.
Alleging foul-play, many health ex-secretaries and former bureaucrats had written to the PM Dr Manmohan Singh, that why Desiraju was removed without following any procedure.
Desiraju had joined the Ministry as an Additional Secretary in 2010, after completing his tenure as the Chief Secretary of Uttarakhand.
The 'tainted' Dr Ketan Desai's name first emerged in 2000 when the Income Tax Department had raided his house and established a corruption charge against him.
In 2010, he was arrested by the CBI on corruption and disproportionate assets charges and is said to be currently out on bail.
'Government doing contempt of court'
The former Cabinet Secretary TSR Subramanian told a newspaper, "by transferring him (Desiraju), the government appeared to be violating a Supreme Court order last October directing the government to ensure fixed tenures for bureaucrats -- to insulate them from political pulls and pressures. This is fully contempt of court."
AAP questions Congress, BJP over ex-MCI chief
According to a news report, senior AAP leader Prashant Bhushan told mediapersons, "Ideological differences have been set aside to bring back Ketan Desai, despite the ongoing criminal cases pending against him."
"Medical education was reduced to a private business when Desai was at the helm in MCI," Bhushan alleged.