KAILASH SINGHversusTHE MANAGING COMMITTEE, MAYO COLLEGE, AJMER & ORS.

                        [2018] 10 S.C.R. 881                             881


                         KAILASH SINGH                                   A
                                  v.
         THE MANAGING COMMITTEE, MAYO COLLEGE,
                   AJMER & ORS.
                   (Civil Appeal No. 6409 of 2017)                       B
                         AUGUST 31, 2018
   [KURIAN JOSEPH AND SANJAY KISHAN KAUL, JJ.]
       Rajasthan Non-Government Educational Institutions Act,
1989:
                                                                         C
       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               D
management lost confidence in the appellant-employees, and non-
compliance 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        E
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       F
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        G
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         H
                                 881
882            SUPREME COURT REPORTS                      [2018] 10 S.C.R.


A     ‘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
B
      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
C     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 sub-
      clause (iii) of the second proviso to Section 18 of the said Act,
D     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]
E
             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 government-
      aided institution, the Government may have a greater say in the
      administration, while in the case of unaided institutions, maximum
F     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
G     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
H     case, but the only remedy is by determining the compensation to
 KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                          883
              COLLEGE, AJMER & ORS.

be paid to the appellants, in view of the Management not having         A
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              B
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            C
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          D
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      E
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      F
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          G
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]
                                                                        H
884          SUPREME COURT REPORTS                     [2018] 10 S.C.R.


A          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
B          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.
C
           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
D          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
E          Tribunal, Jaipur & Ors. 2010 (3) ILR (Raj) 450 –
           referred to.
                           Case Law Reference
      2010 (3) ILR (Raj) 450          referred to          Para 9
      [2002] 3 Suppl. SCR 587         referred to          Para 9
F
      [1972] 3 SCR 320                relied on            Para 20
      [1973] 3 SCR 348                relied on            Para 21
      [1986] 3 SCR 923                referred to          Para 24(i)
      [2013] 9 SCR 1                  referred to          Para 24(ii)
G     [2007] 2 SCR 60                 referred to          Para 24(ii)
      [1979] 1 SCR 563                referred to          Para 24(ii)
      (1980) 4 SCC 443                referred to          Para 24(ii)
      [1958] SCR 442                  relied on            Para 25(i)
      (2016) 14 SCC 534               relied on            Para 25(iii)
H
 KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                               885
              COLLEGE, AJMER & ORS.

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6409                   A
of 2017.
      From the Judgment and Order dated 03.10.2013 of the High Court
of Judicature for Rajasthan, Jaipur Bench, Jaipur in D. B. Special Appeal
No. 592 of 2002.
                                 WITH                                        B

      C.A. No. 6410/2017
       Colin Gonsalves, K. N. Bhatt, Sr. Advs., Prashant Bhushan, Govind
Jee, Devesh Agnihotri, T. Sudhakar, Omannakuttan KK, Ms. Pragya P.
Singh, Ms. Jyoti Mendiratta, Anuj Bhandari, Manmeet Kapur, Ms. Ruchi         C
Kohli, Yash Mishra, Ms. Nidhi Jaswal, Sarad Kumar Singhania, Advs.
for the appearing parties.
      The Judgment of the Court was delivered by
        SANJAY KISHAN KAUL, J. 1. The Mayo College, Ajmer is
an educational institution founded in 1875 by Sir Richard Southwell          D
Bourke, the 6th Earl of Mayo, who was also the Viceroy of India from
1868 to 1872. It is one of the oldest educational institutions which was
set up as a public boarding school, offering admission to the then elite.
This character of the institution changed in the post-independence era,
but it continued to be a prestigious centre of learning. The Mayo College
                                                                             E
is an unaided, non-governmental educational institution receiving no grant
either from the State or the Central Government and is affiliated to the
Central Board of Secondary Education, New Delhi, for purposes of
students taking that examination to pass the 12th standard.
       2. The present unfortunate dispute involves the Managing
                                                                             F
Committee of the School (respondent No.1), with the Principal arrayed
as the 2nd respondent. The dispute in the two Civil Appeals before us
concerns two employees of this institution, who have served for a number
of years, but apparently irreconcilable differences had arisen on account
of the alleged conduct of the employees. The two employees are Kailash
Singh (Civil Appeal No.6409/2017) and Jeffry Jobard (Civil Appeal            G
No.6410/2017).
      3. Kailash Singh began his employment as a Class IV employee
on 4.1.1984 and was promoted after a decade’s service as an LDC
from 1.2.1994 and posted in the Library. Jeffry Jobard began his career
as an LDC itself, from 1.7.1985. The services of both Kailash Singh          H
886             SUPREME COURT REPORTS                         [2018] 10 S.C.R.


A     and Jeffry Jobard were terminated simultaneously on 9.11.2000, on
      account of conducts attributed to them, which created an extremely
      undesirable situation in the respondent school.
             4. It may be appropriate to refer to the ground reality which
      resulted in the termination of the appellants, though it is not of great
B     importance now in view of subsequent developments. Both the
      appellants, in different capacities, were associated with the activities of
      Mayo College Employees Union and are stated to have been instrumental
      in setting up the ‘Sangarsh Samiti Mayo College, Ajmer’, under the
      banner of which they demanded bonus. The stand of Respondent No. 1
      was that such bonus was payable only as per the orders of the Government
C     and the Board of Governors was willing to consider the same, subject to
      such orders being passed. The Sangarsh Samiti organised protest
      meetings at the gate of the Mayo College on 19.10.2000 and resolved to
      hold a general meeting and dharna on 22.10.2000, on the issue of non-
      grant of bonus. Additionally, a threat was held out to go on a general
D     strike from 23.10.2000, if their demands were not met. The Samiti,
      steered by the appellants, started with their movement on 20.10.2000,
      and on 22.10.2000, a general notice was issued to all employees, reiterating
      the stand of the establishment that the Board of Governors was awaiting
      the decision of the Government. The employees were warned that any
      such “movement” was totally illegal because no employees’ union had
E     given any legal notice in that behalf, and a warning to not tolerate
      absenteeism on 23.10.2000 and 24.10.2000 was held out. Since the
      Board was awaiting the announcement by the Government, it was
      informed to the workers that the management would take a call on the
      issue on 23.10.2000, and that the workers should not indulge in any
F     disruptive activity.
             5. The appellants, despite the same, are stated to have gone ahead
      with their threat, and at the time when the Annual Function of the Mayo
      College was being held on 23/24.10.2000, instigated other staff members
      not to go to work and created disturbances, causing grave embarrassment
G     to the Institution. It appears that loudspeakers were used and
      inappropriate adjectives were used for the management, so much so
      that the traditional dinner scheduled for 24.10.2000 had to be cancelled,
      resulting in a loss of face for the management.
            6. It is the aforesaid incidents which led to the show cause notice
H     being issued to both the appellants on 3.11.2000 to which they replied on
 KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                                 887
  COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

6.11.2000. The appellants defended their actions by claiming that they         A
had a right to organise dharnas and protests, as a constitutional right,
and that strike and sloganeering should not be stopped. The adjectives
used of Murdabad, etc. are adjectives of common parlance in such
agitations and cannot be said to be derogatory, and that a proper inquiry
should be held qua their conduct. The non-payment of bonus was claimed
                                                                               B
to be an “administrative fanaticism”.
       7. A unanimous resolution was passed by the Board of Governors
on 7/8.11.2000 to terminate the services of the appellants, and they were
so dismissed on 9.11.2000 by issuance of letters of the even date. It
may be noted that in a subsequent communication, Jeffry Jobard, vide
letter dated 14.11.2000 sought to slightly back-track from the issue by        C
claiming that he was not part of the Samiti, and that at the relevant time
was, in fact, a mere spectator of the meetings.
       8. The termination of the services of the appellants resulted in
their approaching the Educational Tribunal, set up under the Rajasthan
Non-Government Educational Institutions Act, 1989 (hereinafter referred        D
to as the ‘said Act’). The crucial aspect on which the Management
erred was the non-compliance of Section 18, which reads as under:
        “18. Removal, dismissal or reduction in rank of
        employees.- Subject to any rules that may be made in this behalf,
        no employee of a recognised institution shall removed, dismissed       E
        or reduced in rank unless he has been given by the management
        a reasonable opportunity of being heard against the action
        proposed to be taken:
        Provided that no final order in this regard shall be passed unless
        prior approval of the Director of Education or an officer authorised   F
        by him in this behalf has been obtained:
        Provided further that this section shall not apply, -
        (i) to a person who is dismissed or removed on the ground of
        conduct which led to his conviction on a criminal charge, or
                                                                               G
        (ii) where it is not practicable or expedient to give that employee
        an opportunity of showing cause, the consent of Director of
        Education has been obtained in writing before the action is taken,
        or
                                                                               H
888                SUPREME COURT REPORTS                         [2018] 10 S.C.R.


A                (iii) Where the managing committee is of unanimous opinion that
                 the services of an employee cannot be continued without
                 prejudice to the interest of the institution, the services of such
                 employee are terminated after giving him six months’ notice or
                 salary in lieu thereof and the consent of the Director of Education
                 is obtained in writing.”
B
             9. When we say that the Management erred, it is so, as, in any
      eventuality, the consent of the Director of Education had to be obtained
      in writing, which was not so obtained, which proved fatal to the
      Management. We may add that insofar as the first proviso to Section 18
      of the said Act is concerned, a Full Bench of the Rajasthan High Court,
C     in Central Academy Society v. Rajasthan Non-Government
      Educational Institutions Tribunal, Jaipur & Ors.1 opined that for an
      unaided institution the said proviso would not apply in view of the law
      enunciated in the case of T.M.A. Pai Foundation & Ors. v. State of
      Karnataka & Ors.2. However, even in case of institutions like Mayo
D     College (unaided institution), the second proviso clause (iii) stared the
      management in the face; that while in case of a unanimous opinion of
      the Managing Committee (Board of Governors in the present case), the
      services of employees could be terminated when such services were
      prejudicial to the interest of the institution, they were required to be
      given six (6) months’ notice or salary in lieu thereof and the consent of
E     the Director of Education had to be obtained in writing. The appellants
      were paid three (3) months’ salary initially and subsequently the rest of
      the amount was deposited in their bank accounts, but the consent of the
      Director of Education was not obtained.
            10. The aforesaid position led to an adverse order by the Tribunal
F     on 10.1.2002. The Management approached the High Court and the
      learned Single Judge, vide judgment dated 16.7.2002, referring to Section
      18 of the said Act held that the same was not complied with and even
      otherwise the relationship between the parties could not be said to have
      been strained beyond the point of no return. Thus, the direction of the
G     Tribunal for reinstatement was upheld.
            11. The aforesaid took the battle to the Division Bench, with the
      Management preferring an appeal, where it was opined that this was a
      case where the Management had lost confidence in the appellants, that
      1
          2010 (3) ILR (Raj) 450.
H     2
          (2002) 8 SCC 481
 KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                                889
  COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

there had been a unanimous decision of the Board, but the consent of          A
the Director of Education had not been obtained and, thus, there was
only a technical defect. In terms of this judgment dated 3.10.2013, the
relief was modified to compensation equalling five (5) years’ salary on
the basis of last pay and allowances drawn by them on the date of
termination of their services, together with provident fund and all retiral
                                                                              B
benefits by construing them to be otherwise in service till they attained
the age of superannuation. It may also be noted here that by that date
Jeffry Jobard had superannuated on 30.9.2013. These two persons have
apparently continued to occupy the premises, and have used the civic
facilities without paying charges. Thus, the Division Bench also opined
that they must vacate the premises within a period of one (1) month of        C
such payment being made.
      12. The Management of Mayo College reconciled itself to this
verdict and did not prefer any appeal. However, the appellants were
aggrieved by the quantification of compensation, in both the cases, while
in case of Kailash Singh, even in respect of non-restoration of his           D
employment.
      13. We have heard learned senior counsel/counsel appearing for
the parties.
       14. On behalf of the appellants, an impassioned plea was made
that they have been unjustly deprived of their employment and must be         E
re-employed and fully compensated for the same. By claiming full
compensation, it was pleaded that whatever be the total benefits payable
right till the age of superannuation must be paid, in the case of Jeffry
Jobard, while in the case of Kailash Singh, he should be paid till date and
should be re-employed, as his services would continue till 2026. The          F
monetary compensation to the fullest extent was claimed on the basis of
judicial pronouncements that full back-wages should be the rule. On the
other hand, learned senior counsel for the Management pleaded that in a
prestigious educational institution, the environment cannot be permitted
to be vitiated in this fashion by the appellants, who behaved irresponsibly
causing grave damage to the reputation of the institution. It was pleaded     G
that the principles applicable to a factory or an industrial establishment
cannot be made applicable to an educational institution, insofar as the
extent of discipline is concerned, and the mode and manner of protests
cannot be identically based. The effect of the conduct of the appellants
would have a direct impact on the young students, who are studying in         H
890             SUPREME COURT REPORTS                           [2018] 10 S.C.R.


A     the institution, and the embarrassment was aggravated by the presence
      of the parents on the special day. It was further pleaded that a technical
      non-compliance with the provision of the said Act cannot be extended to
      this extent, and that it is because of such technical non-compliance that
      the Management had, in principle, agreed to accept the verdict of the
      Division Bench, by not agitating the matter further. He also submitted
B
      that the compensation awarded by the Division Bench was adequate,
      and that in any case, an amount of Rs.5 lakhs each, towards the award
      amount had already been paid in pursuance to interim orders passed by
      this Court on 1.5.2017.
            15. Both sides cited certain judicial precedents in support of their
C     case, which we shall proceed to discuss hereafter.
             16. On having delved into the submissions of both sides, as well
      as perusing the judgments which are before us, we cannot lose sight of
      the fact that we are dealing with an educational institution of great
      eminence. Persons employed in educational institutions right from Class
D     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
E     adverse impact on the mind of these young people, is something which
      we find difficult to approve, 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
F     not averse to the principal demand of bonus, but that they were waiting
      for the necessary Government decision, in that behalf.
             17. On the threats being held out by the so-called Sangarsh
      Samiti, the Management had warned and cautioned the employees
      against creating a scene, especially when there were important functions
G     on the anvil, where the parents of the wards would be participating. We
      may add that an annual day is always an important day in an educational
      institution, with active participation of parents. It is of great significance
      even to the passing out batch of students, and the sensitivity of the parents
      and children should have been kept in mind while asserting such rights,
H     by the employees. This appears not to have been done.
    KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                             891
     COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

       18. We may hasten to add that, of course, in the given situation no    A
inquiry appears to have been done, but the response of the appellants to
the show cause notice issued by the Board of Governors, itself shows as
to what transpired and reveals the stand of the appellants. All this led to
a complete lack of confidence in the employees, by the Board of
Governors. The decision by the Board of Governors, which is really the
                                                                              B
Managing Committee as defined under Section 18 of the said Act, was
a unanimous one as provided in sub-clause (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, which
has caused this long drawn legal battle. At the cost of repetition, we        C
may re-emphasise that the Mayo College is a recognised institution but
is not financially aided in any manner by the Central or the State
Government, and the first proviso to Section 18 of the said Act has
already been read down, and in our opinion, rightly so, in view of the 11
Judges Bench decision in T.M.A. Pai Foundation & Ors. v. State of
                                                                              D
Karnataka & Ors.,3 dealing exclusively with educational institutions,
and a portion thereof, separately dealing with unaided educational
institutions, as pointed out by learned senior counsel for the Management,
Mr. K.N. Bhatt, under the heading of “Private Unaided Non-Minority
Educational Institutions”. We have no hesitation in concluding that there
can be no question of reinstatement in such a case, but the only remedy       E
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.
       19. We seek to buttress our conclusion with the following judicial
pronouncements. In a seminal judgment in T.M.A. Pai Foundation &              F
Ors. v. State of Karnataka & Ors.,4 an essential distinction is sought to
be made in the case of private unaided educational institutions, opining
that its essence is in the autonomy that the institution must enjoy in its
management and administration. Thus, while in a government-aided
institution, the Government may have a greater say in the administration,
while in the case of unaided institutions, maximum autonomy in day-to-        G
day administration is to be with the private unaided institution. This was
held to be equally applicable to the teaching faculty and the members of

3
    Supra.
4
    Supra.                                                                    H
892               SUPREME COURT REPORTS                          [2018] 10 S.C.R.


A     staff, for maintaining excellence in education. In para 63 of the said
      judgment, the Bench took note of the grievance that wherever cases of
      misconduct are committed by teachers and members of the staff, for
      which disciplinary action is taken, the rules framed by the Government
      are against the Management, which inter alia require prior permission
      from a governmental authority, before initiation of disciplinary
B
      proceedings. The most relevant observation in para 64 is “In the case of
      a private institution, the relationship between the management and the
      employees is contractual in nature.” We may, however, add that
      thereafter the importance of a domestic inquiry, in accordance with the
      principles of natural justice, has also been emphasised. But then, in the
C     present case, the show cause notice and the response to it, themselves
      seem to lend credence to the allegation of inappropriate behaviour of the
      appellants. The subsequent endeavour of Jeffry Jobard, through a
      communication to back-out, cannot really aid him to a large extent.
             20. We may also note that were the appellants to file a civil suit,
D     the evidence would have been recorded, and the matter gone into a
      greater detail in a factual context. This is relevant from both aspects of
      seeking restoration of services and quantification of damages. The
      significant aspect is that there should not be specific performance of a
      master-servant contract of service, and damages should be the
      appropriate remedy. We may refer to Vidya Ram Misra v. Managing
E     Committee, Shri Jai Narain College,5 where in para 4, it was observed
      as under:
                 “4. It is well settled that, when there is a purported termination
                 of a contract of service, a declaration that the contract of service
                 still subsisted would not be made in the absence of special
F                circumstances, because of the principle that courts do not
                 ordinarily enforce specific performance of contracts of service
                 (see Executive Committee of U.P. State Warehousing
                 Corporation Ltd. v. Chandra Kiran Tyagi [AIR 1970 SC 1244 :
                 (1970) 2 SCR 250 : (1970) 1 SCJ 790] and Indian Airlines
G                Corporation v. Sukhdeo Rai [AIR 1971 SC 1828] ). If the master
                 rightfully ends the contract, there can be no complaint. If the
                 master wrongfully ends the contract, then the servant can pursue
                 a claim for damages. So even if the master wrongfully dismisses
                 the servant in breach of the contract, the employment is effectively
      5
H         (1972) 1 SCC 623.
    KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                                 893
     COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

           terminated. In Ridge v. Baldwin [(1965) 2 WLR 935 (HL)] Lord           A
           Reid said in his speech:
             “The law regarding master and servant is not in doubt. There
             cannot be specific performance of a contract of service, and
             the master can terminate the contract with his servant at any
             time and for any reason or for none. But if he does so in a          B
             manner not warranted by the contract he must pay damages
             for breach of contract. So the question in a pure case of master
             and servant does not at all depend on whether the master has
             heard the servant in his own defence; it depends on whether
             the facts emerging at the trial prove breach of contract. But
             this kind of case can resemble dismissal from an office where        C
             the body employing the man is under some statutory or other
             restriction as to the kind of contract which it can make with its
             servants, or the grounds on which it can dismiss them.”
       21. The aforesaid view is also adopted by the Constitution Bench
in Sirsi Municipality v. Cecelia Kom Francis Tellis6. We may usefully             D
extract the observations in the following paragraphs:
           “15. The cases of dismissal of a servant fall under three broad
           heads. The first head relates to relationship of master and servant
           governed purely by contract of employment. Any breach of
           contract in such a case is enforced by a suit for wrongful dismissal   E
           and damages. Just as a contract of employment is not capable
           of specific performance similarly breach of contract of
           employment is not capable of finding a declaratory judgment of
           subsistence of employment. A declaration of unlawful termination
           and restoration to service in such a case of contract of employment    F
           would be indirectly an instance of specific performance of
           contract for personal services. Such a declaration is not
           permissible under the Law of Specific Relief Act.
           16. The second type of cases of master and servant arises under
           Industrial Law. Under that branch of law a servant who is              G
           wrongfully dismissed may be reinstated. This is a special
           provision under Industrial Law. This relief is a departure from
           the reliefs available under the Indian Contract Act and the Specific
           Relief Act which do not provide for reinstatement of a servant.
6
    (1973) 1 SCC 409
                                                                                  H
894                 SUPREME COURT REPORTS                           [2018] 10 S.C.R.


A                 17. The third category of cases of master and servant arises in
                  regard to the servant in the employment of the State or of other
                  public or local authorities or bodies created under statute.
                  18. Termination or dismissal of what is described as a pure
                  contract of master and servant is not declared to be a nullity
B                 however wrongful or illegal it may be. The reason is that dismissal
                  in breach of contract is remedied by damages. It (sic.)7 the case
                  of servant of the State or of local authorities or statutory bodies,
                  courts have declared in appropriate cases the dismissal to be
                  invalid if the dismissal is contrary to rules of natural justice or if
                  the dismissal is in violation of the provisions of the statute. Apart
C                 from the intervention of statute there would not be a declaration
                  of nullity in the case of termination or dismissal of a servant of
                  the State or of other local authorities or statutory bodies.
                  19. The courts keep the State and the public authorities within
                  the limits of their statutory powers. Where a State or a public
D                 authority dismisses an employee in violation of the mandatory
                  procedural requirements or on grounds which are not sanctioned
                  or supported by statute the courts may exercise jurisdiction to
                  declare the act of dismissal to be a nullity. Such implication of
                  public employment is thus distinguished from private employment
E                 in pure cases of master and servant.”
            22. The facts of the present case are covered by the master-
      servant relationship, i.e., the first category. There is no adjudication by
      invocation of a reference to the Industrial Disputes Act, 1947. Thus, the
      remedy would only be in damages.
F             23. Now, turning to the aspect of quantification of damages, which
      is the real bone of contention. What we have to examine is whether the
      approach adopted by the Division Bench and its conclusion, would give
      rise to a finding that justifiable compensation has been arrived at, or
      otherwise.
G             24. Mr. Colin Gonsalves, learned senior counsel appearing for
      Jeffry Jobard and Mr. Prashant Bhushan, counsel for Kailash Singh,
      have both sought to canvass that the only adequate compensation can
      be full back-wages, till the date of retirement. In this behalf, they referred
      to the following judicial pronouncements:
H     7
          To be read as ‘In’.
    KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                             895
     COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

        (i) O.P. Bhandari v. Indian Tourism Development Corporation           A
        Ltd.8 The factual matrix is dealing with the employer-employee
        relationship in a public sector undertaking to which Article 12 of
        the Constitution of India is attracted. It was observed that
        reinstatement may not invariably follow as a consequence of
        holding that an order of termination of service of an employee is
                                                                              B
        void. In that context, it was observed that reinstatement should
        be the rule for the ‘blue collar’ workmen and ‘white collar’
        employees, other than those belonging to the managerial or to a
        similar high level cadre, and compensation in lieu thereof, is an
        exception. However, this judgement also notes that the
        relationship between the parties, having been strained beyond a       C
        point of no return, granting the salary and allowances which would
        accrue to the employee till the future date of superannuation
        was held to be too high a compensation. The object, it was
        observed, would not be for the Court to confer a bonanza on the
        employee, but to compensate him by adopting the appropriate
                                                                              D
        formula.
        (ii) Deepali Gundu Surwase v. Kranti Junior Adhyapak
        Mahavidyalaya (D.ED.) & Ors.9: Full back-wages along with
        reinstatement and continuity of service were held applicable in
        cases where the employee or workman was not at all guilty of
        any misconduct, especially where it had been clearly averred          E
        that the employee was not gainfully employed. The matter
        pertains to a teacher with regards to her contractual appointment
        where principles of Industrial Disputes Act were imported in the
        award of damages.
            The attention of the Court was also drawn to para 38.7, where     F
        it recorded the observations made in J.K. Synthetics Ltd. V.
        K.P. Agrawal & Anr.10 that on reinstatement the employee/
        workman cannot claim continuity of service, as a right, is contrary
        to the ratio of the judgments of three Judge Benches in
        Hindustan Tin Works Private Limited v. Employees of                   G
        Hindustan Tin Works Private Limited11 and Surendra Kumar
        Verma v. Central Government Industrial Tribunal-cum-
8
  (1986) 4 SCC 337
9
  (2013) 10 SCC 324
10
   (2007) 2 SCC 433
11
   (1979) 2 SCC 80                                                            H
896             SUPREME COURT REPORTS                          [2018] 10 S.C.R.


A             Labour Court, New Delhi12, and thus, cannot be treated as good
              law.
                  The judgment emphasises on the restoration of an employee
              to the position held before dismissal, removal or termination from
              services, once the employer’s action has been found to be illegal.
B             Since the employee is deprived of sustenance for himself and
              his family, it has been observed that the employee should get full
              back-wages unless it can be proved that the employee was
              gainfully employed during that period. In order to support this
              proposition, various judicial pronouncements have been referred
              to, but which are in the context of adjudication under the Industrial
C             Disputes Act, 1947. The proposition laid out, thus, is that where
              there is a wrongful termination of service, reinstatement with
              continuity of service and back-wages is the normal rule. A litigant
              ought not to be penalised, it was so observed, for the delays of
              the system. However, mitigating and aggravating aspects, such
D             as length of service and nature of misconduct can be taken into
              account while determining so.
            25. We may now turn to the cases relied upon by the learned
      senior counsel for the respondents:
              i. S.S. Shetty v. Bharat Nidhi Ltd.13: The position obtaining in
E             the ordinary law of master-servant was clarified as one of
              established practice that where a master wrongfully dismisses
              his servant, he is bound to pay him such damages as would
              compensate him for the wrong that he has sustained. In case
              the employment is for a specific term, the servant would, in that
              event be entitled to damages, the amount of which would be
F             measured prima facie and subject to the rule of mitigation in the
              salary of which the master had deprived him.
              ii. Sirsi Municipality v. Cecelia Kom Francis Tellis:14 The
              judgment has already been discussed as aforesaid in respect of
              dismissal in contractual matters.
G             iii. Raju Chand v. Zonal Director Nehru Yuva Kendra
              Sangathan, Chandigarh & Ors.:15 One of us (Kurian, J.) has
      12
         (1980) 4 SCC 443
      13
         1958 SCR 442
      14
         Supra.
      15
         (2016) 14 SCC 534
H
     KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                                897
      COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

          been a party to this judgment, where in case of a driver on daily       A
          wages (or temporary basis), the management lost confidence in
          him, and monetary compensation was held to be appropriate
          remedy.
      26. In the conspectus of the aforesaid discussion, we now turn to
the crucial issue of adequacy of compensation to be awarded to the                B
appellants.
       27. We have already noticed that by the very nature of the
respondent-Institution, which is completely unaided, and keeping in mind
the principle enunciated in T.M.A. Pai Foundation v. State of
Karnataka,16 the only conclusion is that the relationship between the             C
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. The factual matrix in the context of the show cause notice
and the replies to it itself clarified the position. However, the issue remains
that the respondent-Institution failed in the legal compliance of the second
proviso to Section 18 of the said Act and must bear the consequences of           D
the same.
       28. It is also true that the direction of attack, on behalf of the
appellants, in the proceedings in the courts below was qua restoration
of their services. No clarity has emerged on the issue, in the absence of
any evidence led, on the employment, if any, of these appellants. But no          E
affidavit has also really been filed stating that they were not gainfully
employed. We may note that both the appellants have been residing in
the accommodation provided by the respondent-Institution, practically
free of charge.
       29. We cannot lose sight of the fact that the present case is not          F
one under the Industrial Disputes Act, 1947. This in turn would have
required factual matrix to be established in different aspects, which is
not what has happened. Thus, the principles of the Industrial Disputes
Act, 1947 cannot be, ipso facto, imported into a factual matrix of the
present nature, for, as a consequence of the illegality in the termination
                                                                                  G
of the services of the appellants, compensation has to be granted. The
methodology of calculation would be based on the principle of wrongful
termination of an employee, under the master-servant relationship. This,
in turn, would import into it the requirement of the appellants endeavouring

16
     Supra.                                                                       H
898            SUPREME COURT REPORTS                          [2018] 10 S.C.R.


A     to mitigate their losses. In fact, in this context, we may observe that the
      claim for back-wages has apparently been raised for the first time only
      in the present proceedings, arising from the manner in which the High
      Court dealt with the matter, where it granted some compensation.
             30. The principle of awarding adequate compensation in the form
B     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
C     would be continued till the appellants attained the age of superannuation.
            31. We have no reason to find that such an aforesaid principle
      can be said to be fallacious or wrong, so as to call for our interference,
      except to the extent discussed hereafter.
D            32. We are firstly of the view that 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.

E            33. In order to better understand, and come to an appropriate
      figure, we had asked both the parties to give their calculations. The
      Management has given its calculations based on the impugned judgment,
      which includes the salary calculations for five (5) years on the last pay
      and allowances drawn, while gratuity and provident fund benefits are
      taken till the date of retirement. There are deductions made on account
F     of electricity dues, house rent and certain other smaller accounts. On
      the other hand, the appellants have given their broad calculations, taking
      the monthly emoluments payable in different years, right up to date, and
      even beyond that if the employment was to continue, as in the case of
      Kailash Singh.
G            34. We are not going into the exactitude of the calculations, but,
      broadly speaking, the final amount payable to Jeffry Jobard, as per the
      impugned order, would be approximately Rs.7.75 lakhs. If the
      emoluments, as opined by us as aforesaid, are taken into account, for
      five (5) years, it would be approximately Rs.9.75 lakhs. In the case of
      Kailash Singh, the amount as per the calculations of the Management
H
     KAILASH SINGH v. THE MANAGING COMMITTEE, MAYO                               899
      COLLEGE, AJMER & ORS. [SANJAY KISHAN KAUL, J.]

would be approximately Rs.21 lakhs, while calculated as aforesaid would          A
be approximately in the same range.
       35. On having carefully examined the aforesaid issue and the
calculations before us, we are inclined to enhance it 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       B
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, we have
quantified and fixed the amounts. The net impact is an all-inclusive
compensation of Rs. 25 lakhs, in the case of Kailash Singh and Rs. 18            C
lakhs in the case of Jeffry Jobard. Needless to say, the amount of Rs.5
lakhs, already paid to the appellants, in pursuance to the directions of
this Court, is liable to be adjusted from the said amounts payable.
       36. We are not inclined to grant future salary and allowances to
Kailash Singh, merely because he has not been granted reinstatement,             D
with further years of his service still remaining. In fact, in O.P. Bhandari
v. Indian Tourism Development Corporation Ltd.,17 this plea of paying
future salary and allowances, in cases of such non-reinstatement of an
employee, was rejected as it would amount to conferring a bonanza on
an employee, and would not lead to compensation per an acceptable                E
formula.
      37. We are, thus, inclined to modify the impugned order to the
aforesaid extent, and direct the respondent-Institution to pay the
aforementioned amounts within a maximum period of two (2) months
from today, after adjusting the amount already paid.                             F
     38. The appellants are required to vacate the premises within a
maximum period of one (1) month of the amount being so paid.
      39. The appeals are accordingly allowed, leaving the parties to
bear their own costs.
                                                                                 G

Kalpana K. Tripathy                                           Appeals allowed.




17
     Supra.
                                                                                 H