INDIAN COUNCIL OF SOCIAL SCIENCE RESEARCH (ICSSR)versusNEETU GAUR & ORS.

                  [2025] 3 S.C.R. 850 : 2025 INSC 374

       Indian Council of Social Science Research (ICSSR)
                                v.
                       Neetu Gaur & Ors.
                       (Civil Appeal No. 4025 of 2025)
                                 20 March 2025
           [Sudhanshu Dhulia* and K. Vinod Chandran, JJ.]


                            Issue for Consideration
       In view of detection of anomalies in the functioning of the beneficiary
       research institution-Centre for Research in Rural and Industrial
       Development (CRRID), whether the appellant-Indian Council of
       Social Science Research (ICSSR) was justified in withholding
       its grant to CRRID; whether the control exercised by ICSSR on
       CRRID is ‘deep and pervasive’.

                                   Headnotes†
       Grant-in-Aid – ICSSR's Rules of Grant-in-Aid to Societies and
       Institutions Doing Research in the field of Social Sciences –
       Complaints received by ICSSR against CRRID alleging
       malpractices in its functioning including violation of rules
       and regulations, misuse of resoures including the grants
       paid by ICSSR – ICSSR constituted committees to enquire
       into allegations – Anomalies in the working of CRRID were
       highlighted, corrective measures recommended – CRRID failed
       to rectify deficiencies despite ample opportunities – ICSSR
       stopped releasing the grant – High Court directed ICSSR to
       release the grant holding that it has the ultimate responsibility
       of releasing the grant for the salaries of the employees of
       CRRID – Interference with:
       Held: The grant was withheld for just and valid reasons – The
       grant-in-aid is a discretion of ICSSR – The grant-in-aid provided
       by ICSSR comes with certain conditions required to be followed
       by the beneficiary institution – Thus, beneficiary institutions like
       CRRID cannot claim grants as a matter of right – There was a
       clear finding of various committees that CRRID defaulted and
       violated the mandate and the directions under which it had to
       work to receive the aid without any interruption – Further, there
       is no employer-employee or master-servant relationship between
* Author
[2025] 3 S.C.R.                                                             851

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

     the respondents-employees of CRRID and ICSSR – ICSSR is
     not liable for providing salaries of these employees as it is the
     responsibility of CRRID to pay them salaries irrespective of whether
     it gets a grant from ICSSR or not – Order of Single Judge and
     the impugned order set aside – CRRID to ensure payment of
     withheld salaries to all its employees – In case, it fails to release
     this amount, ICSSR to withhold all further grant-in-aid in favour of
     CRRID. [Paras 18-20, 23, 24, 28]

     Constitution of India – Art.12 – Control of ICSSR over CRRID –
     Nature – High Court held that ICSSR has ‘deep and pervasive’
     control over CRRID as it has its nominee in Governing Body
     of CRRID – Correctness:
     Held: Findings of the High Court are misplaced – The presence of
     one or even two members of ICSSR in a Governing Body of twelve
     does not amount to ‘deep and pervasive’ control of the State – As
     of today there are only three nominees together from ICSSR and
     State of Punjab in all – This is not 'deep and pervasive' control –
     Further, ICSSR is indeed an “authority”, within the purview of
     Art.12 of the Constitution of India – It controls CRRID to an extent
     inasmuch as CRRID depends on the funds released by ICSSR
     as grants – But this itself cannot be called a ‘deep and pervasive’
     control – A ‘deep and pervasive’ control would require much more
     than just financing an institution or a body – There is a very loose
     control over the large affairs of the CRRID, which would include
     both financial and administrative – The financial control by both
     ICSSR and the State of Punjab is limited only to their grant-in-
     aid – ICSSR does not have any power to interfere with the day
     to day functions of CRRID – The ‘deep and pervasive’ control
     requires administrative, financial and functional control of such a
     body to a much higher degree including interference into its day-
     to-day working – Mere regulatory control cannot mean ‘deep and
     pervasive’ control – Rules and Regulations of CRRID – Societies
     Registration Act, 1860. [Paras 16, 17, 21]

                              Case Law Cited
     S.S Rana v. Registrar Coop. Societies and Anr. [2006] Supp. 1
     SCR 311 : (2006) 11 SCC 634; Chander Mohan Khanna v. NCERT
     [1991] Supp. 1 SCR 165 : (1991) 4 SCC 578; Balmer Lawrie &
     Co. Ltd. v. Partha Sarathi Sen Roy [2013] 4 SCR 1018 : (2013)
     8 SCC 345 – referred to.
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                                   List of Acts
       ICSSR’s Rules of Grant-in-Aid to Societies and Institutions Doing
       Research in the field of Social Sciences; Constitution of India;
       Societies Registration Act, 1860; Rules and Regulations of CRRID.

                                List of Keywords
       Indian Council of Social Science Research (ICSSR); Centre for
       Research in Rural and Industrial Development (CRRID); Beneficiary
       institution; Beneficiary research institution; Grant-in-aid; Release/
       Payment of grants stopped; Grant withheld; Salaries withheld;
       Deep and pervasive control; Administrative, financial and functional
       control; Regulatory control; Management of funds; Autonomous
       private society; Employer-employee relationship; Master-servant
       relationship; Article 12 of the Constitution of India; Instrumentality
       of the State; Enquiry committee; Fact-finding committee; High-
       Level committee; Ad hoc employees; Governing body; Nominee
       in Governing Body; Misuse of grants.

                               Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4025 of 2025
       From the Judgment and Order dated 16.05.2024 of the High Court
       of Punjab & Haryana at Chandigarh in LPA No. 310 of 2024
       With
       Civil Appeal No(s). 4026, 4027 and 4028 of 2025

                           Appearances for Parties
       Advs. for the Appellant:
       K M Nataraj, A.S.G., Amitesh Kumar, Ms. Priti Kumari, Mrinal
       Kishore, Abhinav Singh, Shashank Shekhar Singh, Ranbir Singh
       Thakur, Karan Sharma, Mohit Siwach, Abhishek Bhudiraja,
       Ms. Ishika Jain.
       Advs. for the Respondents:
       Narender Hooda, Sanjeev Sharma, Sr. Advs., Shiv Bhatnagar,
       Yuvraj Nandal, Ms. Pallvi Hooda, Ms. Tannu, Ms. Seema Sindhu,
       Vikram Singh Rawat, Ashutosh Kumar, Navin Kumar, Dr. Surender
       Singh Hooda, Sandeep Singh, Ms. Sylona Mohapatra, Ms. Ana
       Upadhyay, T. Illayarasu, Nirnimesh Dube.
[2025] 3 S.C.R.                                                        853

            Indian Council of Social Science Research (ICSSR) v.
                              Neetu Gaur & Ors.

                  Judgment / Order of the Supreme Court

                                 Judgment

     Sudhanshu Dhulia, J.

1.   Delay condoned. Leave granted.
     Heard Mr. K. M. Nataraj, learned Additional Solicitor General and
     Mr. Ranbir Singh Thakur, learned counsel appearing for the
     appellant(s) as well as Mr. Narender Hooda and Mr. Sanjeev Sharma,
     learned senior counsel and Ms. Ana Upadhyay, learned counsel
     appearing for the respondents(s).
2.   These appeals challenge the order dated 16.05.2024 passed by
     the Division Bench of the High Court of Punjab and Haryana at
     Chandigarh. For the sake of convenience, facts have been noted
     from SLP(C) No.17595 of 2024 by considering it as the main matter.
3.   The appellant-Indian Council of Social Science Research (hereinafter
     ‘ICSSR’) before this Court is a society established in 1969 and
     registered under the Societies Registration Act, 1860 but under the
     total financial and administrative control of Ministry of Education,
     Government of India (‘GOI’). As per the Memorandum of Association
     of ICSSR, its objectives are as follows:
     (i)     reviewing the progress of social science research and giving
             advice to GOI and other users;
     (ii)    sponsoring social science research programs and administering
             grants to research institutions and individuals for research in
             social sciences, indicating areas and topics on which social
             science research is to be promoted;
     (iii) advising GOI on all such matters pertaining to social science
           research etc.
     ICSSR consists of twenty-seven members including social scientists
     and ex-officio members from various departments and bodies of
     GOI. The chairman of ICSSR, appointed by GOI, has to be a person
     of national eminence in the field of social sciences with proven
     contributions to research. The funds of ICSSR consist of grants
     made by the GOI, contributions from other sources and income from
     the assets of ICSSR.
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4.     Respondent No.19-Centre for Research in Rural and Industrial
       Development (hereinafter ‘CRRID’) was established in the year
       1978, and is an autonomous Research Institute in Chandigarh.
       It is registered as a scientific and educational charitable society
       under the Societies Registration Act, 1860. The working of CRRID
       is administered, directed and controlled by its main body, known as
       the Governing Body. This Governing Body of CRRID can have a
       maximum of twelve members including seven life members.
5.     Whereas ICSSR, as referred above, provides grants to institutions
       involved in social science research and since one of the aims of
       CRRID is to conduct and promote research in various subjects
       including social sciences, CRRID is under the grant-in-aid of the
       ICSSR. CRRID receives 45% grants from ICSSR and equally 45%
       from the State of Punjab. The remaining 10% is generated by CRRID
       through its own resources. CRRID is hugely dependent upon these
       grants-in-aid, which it has been receiving since 1984. The ICSSR’s
       Rules of Grant-in-Aid to Societies and Institutions Doing Research in
       the field of Social Sciences (hereinafter ‘Grant-in-Aid Rules’), govern
       the manner in which grants are to be given by ICSSR.
6.     In the year 2015-2016, several complaints were received by ICSSR
       against CRRID alleging malpractices in the functioning of CRRID
       including violation of rules and regulations, and misuse of resources
       including the grants paid by ICSSR. Pursuant to these complaints,
       ICSSR constituted a committee to enquire into allegations against
       CRRID. The terms of reference of the Committee inter alia included:
            1.   Recruitment/promotion of staff allegedly on the basis
                 of fake degrees, placement of faculty to higher grades
                 and grant of additional increments against MHRD
                 norms.
            2.   Alleged violation of ICSSR Grant-in-Aid rules in
                 amending MoA and its misuse by BOG members of
                 CRRID for availing large benefits.
            3.   Audit objections particularly about the elevation of
                 faculty/staff to higher grades.
            4.   Alleged discrepancies in the implementation of 6th
                 CPC and submission of incorrect records for this
                 purpose.
[2025] 3 S.C.R.                                                       855

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

           5.   Issues related to alleged violation of service rules
                including retirement age.
           6.   Non-response of the queries forwarded by MHRD
                and other authorities of Govt. of India about CRRID.
           7.   Complaints about alleged violation of building bye-
                laws by CRRID.
           8.   Alleged nepotism and misuse of office facility and
                funds by Executive Vice Chairman of CRRID on
                purposeless abroad visits and visits within India.
           9.   Any other violation of ICSSR Grant-in-aid Rules
                applicable to the CRRID as mentioned in the
                complaint.
7.   In its report dated 29.05.2017, the Committee highlighted various
     irregularities and malpractices within CRRID. CRRID was found to
     be in violation of its Rules as there were appointments of unqualified
     persons with either fake or dubious degrees. Promotions and
     increments of staff were also made against the norms. There were
     findings of non-maintenance of proper office records, etc. The
     Committee recommended several corrective measures to be taken
     by CRRID including the recovery of excess payments made by
     CRRID to some of its employees.
8.   Thereafter, between 2017 and 2021, we have a long list of
     correspondence between ICSSR and CRRID about the implementation
     of the directions suggested by ICSSR largely to employ corrective
     measures including rectifying academic qualifications of the staff,
     recovering excess salaries paid to employees, taking action against
     guilty persons etc. In January 2021, CRRID had submitted an action-
     taken report to ICSSR. A Fact-Finding Committee was also constituted
     by ICSSR to enquire into the compliances by CRRID and this fact-
     finding committee concluded that CRRID Management has been non-
     cooperative and responses/compliances made by CRRID are evasive,
     ambiguous and incomplete. In sum and substance, ICSSR was not
     satisfied with the actions taken by CRRID and since CRRID did not
     submit its clarification as sought by ICSSR regarding deficiencies in
     the action-taken report, ICSSR finally stopped releasing its grant in
     favour of CRRID April 2021 onwards. Once the grant was stopped
     by ICSSR, we are told that the Government of Punjab followed suit
     and stopped 45% of its share of grant to CRRID.
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9.     In July 2022, seventeen employees of CRRID (Respondent Nos.1
       to 17) filed a Writ Petition before the High Court for the release of
       their salary. In their Writ Petition, Respondent Nos.1-17 pleaded that
       they have been working on different academic and non-academic
       posts in CRRID, but they have not been paid the salaries and thus
       prayed for the release of their salaries. The plea taken by the CRRID
       before the High Court was that the salaries of its employees are paid
       from the grant given by ICSSR and since ICSSR has stopped the
       payment of the grant, CRRID could not pay the salaries of employees.
       Meanwhile, during the pendency of proceedings before the High
       Court, in January 2023, ICSSR constituted a high-level committee
       consisting inter alia of a retired High Court Judge to look into the
       matter related to CRRID. The terms and reference of this High-Level
       Committee read as follows:
            1.   To comprehensively look into all the issues pointed out
                 in various enquiry reports, actions taken by the CRRID
                 in compliance of these reports and observations
                 recorded by Fact-Finding Committee; and
            2.   To suggest comprehensive resolution of the matter
                 including any punitive action that needs to be initiated
                 by ICSSR or by CRRID against concerned officers
                 responsible for irregular appointments and promotions
                 by CRRID.
10. This High-Level Committee was informed by CRRID that Rs.55
    lacs and Rs.189 lacs have been withheld by ICSSR for the year
    2020-2021 and 2021-2022, respectively. The Committee gave its
    findings that the faith of the ICSSR in CRRID was misused by the
    management of CRRID and the Committee suggested that the grant
    already withheld by the ICSSR, to the tune of Rs.55 lacs for the year
    2020-2021 and Rs.189 lacs for the year 2021-2022, may not be
    released as a punitive measure against CRRID. There were some
    other recommendations for ICSSR to be imposed on CRRID like
    incorporating restrictions on the tenure of members of the Governing
    Body including the life members. However, considering that CRRID
    is a research and educational institution, and many Ph.D. scholars
    are getting the assistance of CRRID in their research work, this
    High-Level Committee recommended the release of future grants
    so that payment of salaries be made to the employees including
[2025] 3 S.C.R.                                                       857

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

     Ph.D. supervisors, librarians etc. Consequently, April 2023 onwards,
     grants were released.
11. Meanwhile, vide order dated 17.10.2023, the learned Single Judge
    of the High Court allowed the Writ Petition filed by employees as it
    had come to the conclusion that ICSSR has the ultimate responsibility
    of releasing the grant for the salaries of the employees of CRRID
    for the reason that ICSSR has a ‘deep and pervasive’ control over
    CRRID as it has its nominee in the Governing Body, which had
    taken all the important decisions which have now been questioned
    by ICSSR for violating its rules and norms. The learned Single Judge
    of the High Court was of the opinion that there is no justification for
    ICSSR to withhold the grant. The Writ Petitions were allowed, and
    direction was given to release the grant. Aggrieved by the same,
    ICSSR filed a Writ Appeal before the Division Bench of the High
    Court. The Division Bench dismissed the Writ Appeal on 16.05.2024
    reiterating the findings of the Single Judge and directing that the
    amount, deposited by ICSSR before the Registry of the High Court,
    be disbursed in favour of the employees as their salaries.
12. We have heard Mr. K.M Nataraj, Additional Solicitor General for
    Appellant-ICSSR, Mr. Narender Hooda, Senior Advocate, for
    respondent no. 1 to 17 (employees) as well as for the CRRID and
    Mr. Sanjeev Sharma, Senior Advocate, for the State of Punjab. We
    have also perused the material on record.
13. The learned Single Judge as well as the Division Bench of the High
    Court, to our mind, have erred in observing that since the governing
    body of CRRID had a nominee of ICSSR, ICSSR has a ‘deep and
    pervasive’ control over the functioning of CRRID and ICSSR is
    equally at fault for irregularities within CRRID. In other words, the
    High Court was of the opinion that appointments were made on the
    posts sanctioned by ICSSR and with the approval of the Governing
    Body which consisted of a nominee of ICSSR, thus ICSSR is not
    justified in withholding the grant by alleging irregularities in such
    appointments or promotions. It is our respectful opinion that the
    High Court has not considered the matter in its right perspective.
14. We have gone through the Rules and Regulations of CRRID
    (hereinafter ‘CRRID Rules’) by which CRRID is governed as a
    society. As per Rule 22(a)(i) of the said Rules, the total number of
    members in the Governing Body cannot exceed twelve including
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       the seven life members. Rule 22(d) provides the Governing Body
       to accept the nominees by the ICSSR or the State Governments in
       the society and the Governing Body. Here, the relevant portion of
       Rule 22(d) of CRRID Rules is reproduced below:
            The Governing Body shall have the authority to accept the
            nominees in the Society and the Governing Body who are
            deputed by the Indian Council of Social Science Research
            (ICSSR) or the State Governments.
       Similarly, Rule 17 of Grant-in-Aid Rules of ICSSR, by which grants
       given by ICSSR are governed, read as follows:
            17. Condition of Grants-in-Aid (Special):
            A Research Institution which receives a recurring grant
            of Rs. One lakh or more shall be subject to the following
            additional conditions:
            (1) …
            (2) The Council shall nominate not more than two
            representatives on the governing body of the research
            Institution.
            (3) …

15. The learned Single Judge and the learned judges of the Division
    Bench of the High Court have considered the above provision to be
    amounting to a ‘deep and pervasive’ control by the State! However,
    it is to be noted that the second part of Rule 22(d) of CRRID Rules
    empowers the Governing Body to reject the names of nominees
    proposed by ICSSR or State Governments without giving any reason.
    It is like a proviso to the general part embodied under Rule 22(d) of
    CRRID Rules. It reads as follows:
            The Governing Body shall, however, have the right to
            reject/or refer back to the deputing authorities the names
            of the proposed nominees(s) should it feel that the said
            nominee is not acceptable to the Governing Body. The
            Governing Body shall not be obliged to give the reason
            for rejecting or referring back any such name.
       This shows that CRRID is an autonomous body without much control
       of ICSSR. The Governing Body of CRRID has the authority to reject
[2025] 3 S.C.R.                                                        859

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

     and refer back the names of proposed nominees and while doing
     so, CRRID is not even required to give any reasons.
16. The presence of one or even two members of ICSSR in a Governing
    Body of twelve does not amount to ‘deep and pervasive’ control
    of the State. Even assuming an additional two nominees from the
    Government of Punjab in the Governing Body will at best make four
    such members in a Governing Body of twelve. We have been informed
    that as of today there are only three nominees together from ICSSR
    and State of Punjab in all. This is not ‘deep and pervasive’ control.
17. We have no doubt in our mind that ICSSR is indeed an “authority”,
    within the purview of Article 12 of the Constitution of India. It also
    controls CRRID to an extent inasmuch as CRRID depends on the
    funds released by ICSSR as grants. But this itself cannot be called
    a ‘deep and pervasive’ control. A ‘deep and pervasive’ control would
    require much more than just financing an institution or a body. Even
    guiding, controlling or regulating affairs of an institution will not be
    called a ‘deep and pervasive’ control. The ‘deep and pervasive’
    control requires administrative, financial and functional control of
    such a body to a much higher degree including interference into its
    day-to-day working, and mere regulatory control cannot mean ‘deep
    and pervasive’ control. [See: S.S Rana v. Registrar Coop. Societies
    and Anr. (2006) 11 SCC 634; Chander Mohan Khanna v. NCERT
    (1991) 4 SCC 578; Balmer Lawrie & Co. Ltd. v. Partha Sarathi
    Sen Roy (2013) 8 SCC 345].
18. Moreover, the crucial question here is not whether the control
    exercised by ICSSR on CRRID is ‘deep and pervasive’ but whether
    ICSSR was justified in withholding its grant. CRRID has not answered
    this question with any degree of satisfaction. The High Court has
    also failed to address this crucial issue. Simply because ICSSR has
    some control over CRRID, it cannot be a reason for directing ICSSR
    to release the grants when it has been withheld for just and valid
    reasons. Once ICSSR gives its grant to CRRID it does not have
    much interference in the management of these funds. Nor is the
    administration of CRRID controlled by ICSSR. CRRID, in any case,
    is not an authority within the purview of Article 12 of the Constitution
    of India. Merely because CRRID is under the control of an authority
    (as defined under Article 12) will not make CRRID an authority. In
    fact, this is neither the case of the respondents-employees nor does
    CRRID in any manner assert itself as an Authority.
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19. The grant-in-aid provided by ICSSR to any research institution
    comes with certain conditions which are required to be followed by
    the beneficiary institution. Rule 3 of the Grant-in-Aid Rules of ICSSR
    makes this position very clear. It states that ‘the Indian Council of
    Social Science Research (hereinafter referred to as the Council)
    shall have authority, with prior approval of the Government of India,
    to extend grant-in-aid under these Rules to Research Institutions
    (…) provided that they fulfill all the conditions laid down in Rule 4
    below’. Thereafter, Rule 4 lays down certain conditions that make
    an institution eligible for a grant by ICSSR. Certain other Rules
    prescribing conditions for grants are as follows:
          16. CONDITIONS OF ASSISTANCE (General):
          ...
          (2) Grant under a particular head shall not be utilized for
          a purpose other than that for which it is intended except
          with the previous approval of the Council.
          (3) The Council may require a Research Institution to refund
          a grant given under specific conditions, if the Research
          Institution does not comply with these conditions. The
          Council may, in such cases, also stop any further grant
          to the Research Institution.
          …
          (10) It shall be obligatory for the Research institutions to
          surrender any unspent balance of the grant after expiry of
          the period within which the grant I required to be spent.
          17. CONDITION OF GRANTS-IN-AID (Special):
          A Research Institution which receives a recurring grant
          of Rs. One lakh or more shall be subject to the following
          additional conditions:
          (3) The constitution of the Research Institute shall be got
          approved by the Council and the Research Institution shall
          agree not to make any change therein without the prior
          approval of the Council.
20. A reading of these Grant-in-Aid Rules makes it clear that the grants
    by ICSSR are discretionary and institutions like CRRID cannot claim
[2025] 3 S.C.R.                                                            861

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

     grants as a matter of right. It is made more apparent by Rule 11 which
     explicitly states that ‘all grants under these rules are discretionary and
     cannot be claimed as a matter of right.’ Further, Rule 16(3) of said
     Rules, as reproduced above, even empowers ICSSR to the extent
     that, in cases of violation of conditions of grants by any institution,
     ICSSR can demand the refund of grants from such institution and can
     stop any further grant to such an institution. Rule 6 reads as follows:
           6. WITHDRAWAL OF ASSISTANCE:
           If an aided Research Institution ceases to fulfill the
           conditions of eligibility laid down in Rule 4, or persistently
           violates any of the conditions of grant-in-aid, the Council
           may, after giving due notice to the Institution, declare the
           Institution as in eligible to receive assistance under these
           Rules under intimation to the Government of India, and
           may pass such orders as it may deem necessary regarding
           the disposal of the assets created with grant-in-aid given
           earlier to the Institution.
21. Besides grants being discretionary, these Grant-in-Aid Rules and
    CRRID Rules also tell us something about the kind of control that
    ICSSR has over the CRRID. The only control that ICSSR has over
    CRRID is in the form of certain conditions under which grant-in-aid
    is provided to CRRID. Otherwise, there is no reason for ICSSR to
    assert any control over this autonomous private society i.e. CRRID
    and in fact, it is the essence of any private society registered under
    the Societies Registration Act, that societies should be governed
    and restricted only by its own Rules or some general principles of
    law applicable to all such societies. CRRID, therefore, has absolute
    authority over its financial as well as administrative matters. Thus,
    as far as ‘deep and pervasive’ control of ICSSR over CRRID is
    concerned, we are afraid that the findings of the High Court are totally
    misplaced. There is a very loose control over the large affairs of the
    CRRID, which would include both financial and administrative. The
    financial control by both ICSSR and the State of Punjab is limited
    only to their grant-in-aid. ICSSR does not have any power to interfere
    with the day-to-day functions of CRRID. Under these circumstances,
    it cannot be said that CRRID is under a ‘deep and pervasive’ control
    of the State. At the same time, it cannot be denied that there is some
    control of the State in the form of the State of Punjab and ICSSR
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       which is an instrumentality of State. But this control is not of such
       nature as to make it ‘deep and pervasive’ as has been held by the
       High Court. What ICSSR has in its control, definitely, is that it can
       stop the grant in case of violation of the conditions under which the
       grant is being given and this is exactly what has happened in the
       present case.
22. After the enquiry report of the year 2017, CRRID was repeatedly asked
    by ICSSR to take proper and prompt corrective measures. However,
    for one reason or another, CRRID did not follow the recommendations
    given by ICSSR and consequently, the grant in favour of CRRID
    was stopped. With regard to recoveries from employees to whom
    excess salaries were paid, CRRID has tried to make an excuse that
    many of such employees have by now retired from service. Although
    much later, CRRID issued certain recovery notices, but it never
    took recourse to any Court proceedings when such notices were
    not complied by the employees. All three committees constituted by
    ICSSR: the enquiry committee, the fact-finding committee and the
    High-Level Committee, had given reports against CRRID, highlighting
    anomalies in the working of CRRID. CRRID was provided with ample
    opportunities to improve its functioning by rectifying the deficiencies,
    but CRRID failed to do so. In such circumstance, we see no fault
    on the part of ICSSR if it has withheld the grant from April 2021 to
    March 2023, after which the grant was again released by ICSSR in
    favour of CRRID. By withholding the grant, ICSSR has only taken
    recourse to the law which allowed it to exercise such power in case of
    detection of anomalies in the functioning of the beneficiary research
    institution, which is CRRID in the present case. This withholding of
    grants for a certain period was even suggested by the High-Level
    Committee as a punitive measure.
23. There is also another aspect to this matter. The grant was withheld
    in the year 2021 but that decision of withholding the grant has never
    been challenged by CRRID before any forum. The picture is therefore
    very clear and CRRID also understands it very well that the grant-
    in-aid is a discretion of ICSSR and CRRID is not in a position to
    assert a claim on receipt of the grant-in-aid particularly when there
    is a clear finding of various committees that it is CRRID which has
    defaulted and has violated the mandate and the directions under
    which it had to work to receive the aid without any interruption. This
[2025] 3 S.C.R.                                                        863

         Indian Council of Social Science Research (ICSSR) v.
                           Neetu Gaur & Ors.

     we have already discussed in the preceding paragraphs of this
     judgment and it needs no further elaboration.
24. Another point which has been argued before us as well as before
    the High Court is that respondents nos.1 to 17 are employees of
    CRRID and not of ICSSR. It has been argued on behalf of the
    ICSSR that these employees do not have any right against ICSSR
    and ICSSR is not under any kind of obligation to pay salaries to
    these persons who are employees of CRRID. This contention of
    ICSSR has to be kept in mind because it is a fact that the private
    respondents are employees of CRRID and they may have their rights
    against their employer i.e. CRRID, but they cannot claim any right
    to salary from ICSSR, which is just a body providing grant-in-aid to
    their employer. In other words, there is no employer-employee or
    master-servant relationship between respondents nos.1 to 17 and
    appellant-ICSSR. Thus, ICSSR cannot be held liable for providing
    salaries of these respondents-employees as it is the responsibility
    of CRRID to pay them the salaries irrespective of whether it gets a
    grant from ICSSR or not.
25. Although CRRID has taken a stand before the High Court as well
    as before this Court that it had followed the directions of ICSSR
    and whatever anomalies were committed during the past were in
    the period of a particular Director, but the Institution is running well
    as of now and ICSSR is liable to release the grant for the period
    for which it has been withheld. All the same, the learned counsel for
    CRRID, who could only appear before us after much persuasion,
    when asked by this Court as to why employees have raised their
    claim for salary before the High Court and why CRRID did not
    directly move the Court for the release of its grants, very candidly
    answered that this was not done as CRRID cannot compel ICSSR
    to release the grants.
     In other words, therefore, ICSSR is not bound to release the grant
     in favour of CRRID and the employees of CRRID have no master-
     servant relationship with ICSSR.
26. We can understand that both the learned Single Judge and Division
    Bench of the High Court have taken a compassionate view as
    employees, who may have had nothing to do with the anomalies,
    should not be deprived of remuneration for the work done by them.
    The High Court ordered the ICSSR to release the grant so that
864                                                            [2025] 3 S.C.R.

                           Supreme Court Reports


       employees could get their salaries as withholding of grants amounted
       to withholding of salaries of these employees. All the same, at the
       risk of repetition we would note that this Court cannot lose sight of
       the fact that it is ultimately the responsibility of CRRID to pay salaries
       to its employees. This liability cannot be shifted to ICSSR.
27. We have also been informed that CRRID has, in its account, funds
    which it has received from sources other than Punjab Government
    or ICSSR as grants. This amount has admittedly been received by
    CRRID from other sources. It has been admitted by CRRID that
    they do research for other entities for which they engage ad hoc
    employees on a need to basis. However, it cannot be said that
    the respondents-employees were not engaged in such other work
    especially since some of the respondents-employees are occupying
    pivotal positions in the autonomous private institution i.e. CRRID.
    This is evident from the fact that one of these employees has filed
    an affidavit on behalf of CRRID, representing it in the present
    matter; in support of the claim of the respondents-employees. The
    audited balance sheet also indicates sufficient funds being available
    with CRRID to settle the dues of the employees before us. It is the
    submission of the learned counsel for CRRID that the funds shown
    in the balance sheet are those available with CRRID for the other
    assignments. If that is so, definitely CRRID cannot claim that the
    salary of the employees is only dependent on the grant-in-aid made
    by the appellant-ICSSR. As already stated earlier, ultimately, the
    responsibility to pay the salary to its employees, lies on CRRID and
    not on ICSSR or Government of Punjab.
28. Consequently, we allow these appeals and set aside the order of
    learned Single Judge dated 17.10.2023 as well as the impugned
    order dated 16.05.2024 passed by the Division Bench. This would
    not mean that now respondent Nos. 1 to 17 will not be given their
    salaries for the period they worked. We direct CRRID to ensure
    payment of salaries to all its employees which were withheld between
    April, 2021 to March, 2023 from its own resources within a period
    of three weeks from the date of this order. In case, CRRID fails to
    release this amount in favour of the employees, we direct ICSSR
    to withhold all further grant-in-aid in favour of CRRID. The CRRID
    will not only have to release the amount in favour of employees
    but shall also file a compliance report before ICSSR stating that
[2025] 3 S.C.R.                                                    865

            Indian Council of Social Science Research (ICSSR) v.
                              Neetu Gaur & Ors.

     this has been done within the stipulated period. This we do as we
     cannot lose sight of the fact that anomalies have been committed
     at the end of CRRID.
29. The Registry of this Court is directed to release the amount which
    has been deposited by ICSSR in this Court, in favour of ICSSR along
    with the interest, if any, within a week from today.
30. All connected matters stand disposed of in the light of the decision
    made in the main matter and we make it clear that what has been
    determined in the case of ICSSR as to its liabilities of payment of
    grants will also apply to the State of Punjab as well.
31. ICCSR and the State of Punjab are at liberty to move applications
    before the High Court to get back the amount, if any, deposited by
    them and the High Court shall decide such applications in the light
    of this order.
32. Pending application(s), if any, stand(s) disposed of.

     Result of the case: Appeals allowed.




     †
         Headnotes prepared by: Divya Pandey