Rajasthan Non-Government Educational Institutions Act, 1989:
s.18 – Dismissal of service – By unaided non-Governmental educational institution (respondent) – By unanimous resolution passed by Board of Governors – Dismissal order challenged by appellant-employees – Education Tribunal directed reinstatement of the employees – Single Judge of High Court upheld the order of reinstatement – Division Bench of High Court held that the management lost confidence in the appellant-employees, and noncompliance of second Proviso clause (iii) to s.18 was only a technical defect – Relief of reinstatement was modified to compensation equalling five years salary on the basis of last pay and allowances drawn by them on the date of termination of service together with all retiral benefits – Appeal by the employees – Held:In the case of private institution, relationship between the management and the employees is contractual in nature – Relationship between the parties is one of contract – Conduct of the appellant-employees have resulted in loss of confidence – There can be no question of reinstatement in such case – The only remedy is by determining the compensation as there was violation of provisions of s.18 in not obtaining consent of Director of Education in writing – Compensation amount is enhanced.
Allowing the appeals, the Court
HELD: 1. Persons employed in educational institutions right from Class IV staff to the highest level have a far greater responsibility on account of the nature of activity which takes place in these institutions – Education. There are students of all ages, starting from younger ones to older teenagers, who are studying and living in these campuses. It is a different kind of ‘Gurukul’. Thus, anything which is done, as would cause an adverse impact on the mind of these young people, is something which cannot be approved, even if it is claimed as a right to make certain demands. The mode and methodology of making demands in these educational institutions cannot be at par with an industrial establishment, where workmen agitate for their rights. This is also in the background of the Management apparently claiming that they were not averse to the principal demand of bonus, but that they were waiting for the necessary Government decision, in that behalf. [Para 16] [890-D-F]
2.1 There was a complete lack of confidence in the employees, by the Board of Governors. The decision by the Board of Governors, which is really the Managing Committee as defined under Section 18 of the Rajasthan Non-Government Educational Institutions Act, 1989 was a unanimous one as provided in subclause (iii) of the second proviso to Section 18 of the said Act, and even the required salary was paid, albeit in two instalments. However, the Management did commit a legal default in not obtaining the consent of the Director of Education in writing. The College in question is a recognised institution but is not financially aided in any manner by the Central or the State Government. [Para 18] [891-B-C, D]
2.2 In the case of private unaided educational institutions, its essence is in the autonomy that the institution must enjoy in its management and administration. Thus, while in a governmentaided institution, the Government may have a greater say in the administration, while in the case of unaided institutions, maximum autonomy in day-to-day administration is to be with the private unaided institution. In the case of a private institution, the relationship between the management and the employees is contractual in nature. The facts of the present case are covered by the master-servant relationship. The relationship between the parties is one of contract. The present case is one where the conduct of the appellants cannot be said to be such that would not result in loss of confidence. [Paras 19, 22 and 27] [891-G; 892-B-C; 894-E-F; 897-C]
2.3 There can be no question of reinstatement in such a case, but the only remedy is by determining the compensation to be paid to the appellants, in view of the Management not having complied with the legal requirement of obtaining the consent of the Director of Education in writing. [Para 18] [891-E]
2.4 The principle of awarding adequate compensation in the form of back-wages, keeping in mind aggravating and mitigating circumstances would, thus, have to be observed. The amount cannot be measly, nor can it be a bonanza. The High Court, in its wisdom, awarded the compensation of five (5) years’ back-wages on the last pay drawn. Not only that, an additional benefit was conferred by providing for provident fund and retiral dues, to be calculated on the premise as if the services would be continued till the appellants attained the age of superannuation. Such principle cannot be said to be fallacious or wrong, so as to call for interference. However, it would not be appropriate to determine the amount on the basis of the last pay and allowances drawn. The calculation should be based on the actual pay and allowances liable to be drawn for the years in question, dependent on the period for which this amount is to be calculated. [Paras 30, 31 and 32] [898-B-E]
2.5 The Court is inclined to enhance the compensation a little more, and grant damages in the form of salary and allowances payable for a period of eight (8) years, of the actual amounts, in both the cases, after adding the respective provident fund amounts and other retiral dues while simultaneously deducting electricity, water and occupation charges, etc., as calculated by the management, as per the impugned order of the Division Bench. To put a quietus to this long-drawn dispute, the amounts of compensation are quantified and fixed at Rs. 25 lakhs, in the case of appellant ‘K’ and at Rs. 18 lakhs in the case of appellant ‘J’. [Para 35] [899-B-C]
2.6 The Court is not inclined to grant future salary and allowances to appellant ‘K’, merely because he has not been granted reinstatement, with further years of his service still remaining. Paying future salary and allowances, in cases of such non-reinstatement of an employee, would amount to conferring a bonanza on an employee, and would not lead to compensation per an acceptable formula. [Para 36] [899-D-E] T.M.A. Pai Foundation & Ors. v. State of Karnataka & Ors. (2002) 8 SCC 481 : [2002] 3 Suppl. SCR 587; Sirsi Municipality v. Cecelia Kom Francis Tellis (1973)
1 SCC 409 : [1973] 3 SCR 348 – followed.
Vidya Ram Misra v. Managing Committee, Shri Jai Narain College (1972) 1 SCC 623 : [1972] 3 SCR 320; S.S. Shetty v. Bharat Nidhi Ltd. [1958] SCR 442; Raju Chand v. Zonal Director Nehru Yuva Kendra Sangathan, Chandigarh & Ors. (2016) 14 SCC 534; O.P. Bhandari v. Indian Tourism Development Corporation Ltd. (1986)
4 SCC 337 : [1986] 3 SCR 923 – relied on.
Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.ED.) & Ors. (2013) 10 SCC 324 : [2013] 9 SCR 1; J.K. Synthetics Ltd. V. K.P. Agrawal & Anr. (2007) 2 SCC 433 : [2007] 2 SCR 60; Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private Limited (1979) 2 SCC 80 : [1979] 1 SCR 563; Surendra Kumar Verma v. Central Government Industrial Tribunal-cum-Labour Court, New Delhi (1980) 4 SCC 443; Central Academy Society v. Rajasthan Non-Government Educational Institutions Tribunal, Jaipur & Ors. 2010 (3) ILR (Raj) 450 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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