KHETRI VIKAS SAMITIversusDIRECTOR COLLEGE EDUCATION, GOVERNMENT OF RAJASTHAN & ORS.

638                       [2019]
               SUPREME COURT     7 S.C.R. 638
                              REPORTS                     [2019] 7 S.C.R.


A                          KHETRI VIKAS SAMITI
                                       v.
         DIRECTOR COLLEGE EDUCATION, GOVERNMENT OF
                      RAJASTHAN & ORS.
B                       (Civil Appeal No. 4806 of 2019)
                                 MAY 09, 2019
              [L. NAGESWARA RAO AND M. R. SHAH, JJ.]
             Rajasthan Non-Government Educational Institutions Act,
      1989 – s.18 – Rajasthan Non-Government Educational Institutions
C
      (Recognition, Grant-In-Aid and Service Conditions etc.) Rules,
      1993– r.39 – Private Respondents were engaged as Assistant/Lab
      boy, sweeper, waterman and mechanic respectively in the non-
      Government College of the appellant – In 2003, the Managing
      Committee of the appellant, unanimously resolved to abolish the
D     abovesaid posts – Consequent to abolition of the said posts, the
      respondents were removed from their posts – Aggrieved, the private
      respondents filed an appeal before the Non-Government Educational
      Tribunal u/s. 19 – Tribunal set aside the order of removal of the
      private employees and directed their reinstatement and held that it
      was mandatory to seek the prior approval of the Director of
E
      Education before terminating the employees, as per s. 18 of the Act
      – Writ petition by the appellant – Writ petition was dismissed by the
      Single Judge of High Court – Division Bench of High Court
      confirmed the decisions of the Single Judge of the High Court – On
      appeal, held: s.18 of the Act and r. 39 of the Rules would not be
F     applicable in case of removal of an employee due to abolition of
      posts, more particularly when the post to which the employee was
      working was not aided and that his appointment was not approved
      by the Education Department – Further, a communication dated
      25.01.2005 from the office of the Commissioner had clarified that
      there was no necessity for seeking Governmental approval for the
G
      removal of the employees, as the posts to which they were working
      were not aided posts and that their appointment was not approved
      by the Education Department – Even as per the State Government
      also, the prior approval of the State authorities was not required –
      Therefore, the impugned judgment and order passed by the Division
H
                                      638
   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                       639
            GOVERNMENT OF RAJASTHAN

Bench of the High Court, Single Judge of the High Court and the         A
Tribunal holding that the removal of the concerned employees was
hit by s.18 of the Act, unsustainable – Accordingly, the impugned
judgment and order passed by the Division Bench of the High Court,
Single Judge of the High Court and the Tribunal quashed and set
aside.
                                                                        B
      Rajasthan Non-Government Educational Institutions Act,
1989 – s.18 – Rajasthan Non-Government Educational Institutions
(Recognition, Grant-In-Aid and Service Conditions etc.) Rules, 1993
– r. 39 – Private Respondents engaged as Assistant/Lab boy,
sweeper, waterman and mechanic respectively in the non-
Government College of the appellant – Managing Committee of the         C
appellant abolished the said posts – Tribunal and the High Court
held the abolition of posts bad in law – On appeal, held: Managing
Committee of the appellant was facing financial constraints and
running in heavy losses – There was no finding that the decision of
the Management to abolish posts was malafide and/or with the            D
oblique motive – Further, the question before the Tribunal was with
respect to the removal and not with respect to abolition of the posts
– Also, the entire financial position of the appellant was not
considered by the High Court – Therefore, in absence of challenge
to the Managing Committee to abolish the posts in question and
non-consideration of the financial position of the appellant –          E
Reasoning given by the Tribunal and the High Court to hold the
abolition of posts bad in law, unsustainable.
      Allowing the appeals, the Court
      HELD: 1. On a fair reading of Section 18 of the Rajasthan         F
Non-Government Educational Institutions Act, 1989 and Rule
39 of the Rajasthan Non-Government Educational Institutions
(Recognition, Grant-In-Aid and Service Conditions etc.) Rules,
1993, this Court is of the opinion that Section 18 of the Act and
Rule 39 would not be applicable in case of removal of an employee
due to the abolition of posts, more particularly when the post to       G
which the employee is working was not aided and that his
appointment was not approved by the Education Department. In
the case of Shri Maheshwari Senior Higher Secondary School v.
Bhikha Ram Sharma , this Court has specifically observed and
held that in case of termination of the service of the employee         H
640            SUPREME COURT REPORTS                      [2019] 7 S.C.R.


A     due to abolition of post, the question of conducting the enquiry
      under the Rules does not arise. Though the said decision was
      cited and relied upon by the counsel appearing on behalf of the
      appellant before the Division Bench of the High Court, the
      Division Bench thereafter has not at all dealt with and/or
      considered the same. Therefore, the Tribunal, Single Judge and
B
      Division Bench of the High Court have materially erred in
      applying Section 18 of the Act and in holding the removal of the
      concerned employees which as such was due to the abolition of
      the posts was hit by Section 18 of the Act. At this stage, it is
      required to be noted that even the State Government also made
C     its stand clear before the Single Judge vide letter dated
      25.01.2005 which was placed before the Single Judge pursuant
      to the order passed by the High Court, in which it was specifically
      stated that there is no necessity for seeking Government approval
      for the removal of the employees, as the posts to which they
      were working were not aided posts and that their appointment
D
      was not approved by the Education Department. The Single Judge
      has refused to take into consideration the communication dated
      25.01.2005 on the ground that the said communication was not
      placed before the Tribunal. The said communication could not
      have been produced before the Tribunal as the said communication
E     was after the decision of the Tribunal. When the said
      communication was placed on record by way of an additional
      affidavit and that too pursuant to the direction issued by the Single
      Judge, the Single Judge ought to have considered the same.
      Therefore, even as per the State Government also, the prior
      approval of the State authorities was not required. Therefore,
F
      the impugned judgment and order passed by the Division Bench
      of the High Court, Single Judge of the High Court and the Tribunal
      holding that the removal of the concerned employees was hit by
      Section 18 of the Act, cannot be sustained and the same deserves
      to be quashed and set aside. [Para 11.2] [652-B-H; 653-A-B]
G           2. Now, so far as question, namely whether the Tribunal
      and the Single Judge were justified in holding the abolition of
      posts bad in law is concerned, it is required to be noted that a
      conscious decision was taken by the Managing Committee of
      the institution/Management to abolish the posts as the institution/
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   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                     641
            GOVERNMENT OF RAJASTHAN

Management was facing the financial constraint and running in         A
heavy losses. Therefore, unless and until the said decision is
found to be arbitrary and/or mala fide and/or with some oblique
reason, it was not open for the Tribunal and/or the High Court to
interfere with such decision of the Management to abolish the
posts. Considering the reasoning given by the High Court and
                                                                      B
the Tribunal as such there is no specific finding that the decision
of the Management to abolish the posts was mala fide and/or
with the oblique motive. It is required to be noted that the
question before the Tribunal was with respect to the removal
and not with respect to abolition of the posts. The decision of
the Management/Managing Committee to abolish the post was             C
not under challenge. Therefore, in absence of challenge to the
decision of the Managing Committee to abolish the posts in
question, it was not open for the Tribunal and/or the High Court
to hold that abolition of posts was bad in law. [Para 12] [653-B-E]
      3. Even otherwise, on merits also, the decision of the High     D
Court in holding the abolition of posts bad in law, cannot be
sustained. The Single Judge of the High Court has held the
abolition of posts bad in law by observing that as the institution/
Management received the grant and the fees from the students,
it cannot be said that the financial condition of the Management
was weak which warranted abolition of posts. However, it is           E
required to be noted that before the Single Judge the entire
financial position/balance-sheet was not placed before the High
Court. Merely some grant might have been received by the
institution/Management and/or the Management might have
received the fees from the students, unless and until the balance-    F
sheet and the entire expenditure are considered, it was not open
for the High Court to come to the conclusion that the financial
condition was not such poor which warranted the abolition of
posts. Therefore, even the reasoning given by the High Court to
hold that the abolition of posts bad in law, cannot be sustained.
[Para 12.1] [653-F-H; 654-A]                                          G

      Shri Maheshwari Senior Higher Secondary School v.
      Bhikha Ram Sharma (1996) 8 SCC 22 : [1996] 2 SCR
      466 – relied on.

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642             SUPREME COURT REPORTS                            [2019] 7 S.C.R.


A                               Case Law Reference
      [1996] 2 SCR 466                    relied on                  Para 5.2
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4806
      of 2019.
B           From the Judgment and Order dated 15.12.2016 of the High
      Court of Judicature for Rajasthan Bench at Jaipur in D.B. Special Appeal
      (Writ) No.808 of 2005.
             With
             Civil Appeal Nos. 4808, 4807, 4809 of 2019.
C
            Shubhranshu Padhi, Ms. Gursimran Dhillon, P. Kavin Prabhu,
      Advs. for the Appellant.
           Ms. Padhmalakshmi Iyengar, AAG, Milind Kumar, Ramjee Pandey,
      Ms. Alpana Pandey Advs. for the Respondents.
D            The Judgment of the Court was delivered by
             M. R. SHAH, J.
             1. Leave granted in all the Special Leave Petitions.
            2. As common question of law and facts arise in this group of
E     appeals and, as such, they arise out of the impugned common judgment
      and order passed by the High Court, all these appeals are being decided
      and disposed of by this common judgment and order.
             3. Feeling aggrieved and dissatisfied with the impugned common
      judgment and order dated 15.12.2016 passed by the Division Bench of
F     the High Court of Judicature at Rajasthan, Bench at Jaipur in D.B. Special
      Appeal Writ No. 735/2005, 764/2005, 807/2005 and 808/2005 by which
      the High Court has dismissed the said appeals preferred by the appellant
      herein and has confirmed the common judgment and order passed by the
      learned Single Judge of the High Court dismissing the respective writ
      petitions and confirming the order passed by the learned Non-Government
G     Educational Institutions Tribunal, Jaipur directing the appellant to reinstate
      the private respondents herein, original appellant-writ petitioner-Khetri
      Vikas Samiti has preferred the present appeals.
             4. For the sake of convenience, the facts of Civil Appeal arising
      out of SLP (C) No. 11712 of 2017, arising out of the impugned judgment
H     and order passed by the Division Bench of the High Court in Special
   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                                643
     GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

Appeal Writ No. 808/2005 are considered, which in nutshell are as under:         A
       That the appellant herein-original writ petitioner is a society
registered under the Rajasthan Societies Registration Act, 1958 which is
running several educational institutions, including one Vinodini P.G. College,
a non-Governmental Educational Institution. That the private respondent
herein was engaged as a Lab Assistant/Lab Boy on 01.04.1999 in the               B
aforesaid non-Government College of the appellant on a purely temporary
basis. Similarly, other private respondents in the connected matters
were engaged as Sweeper, Mechanic and Waterman respectively. That
on 20.07.2003, the Managing Committee of the appellant, after considering
the fact that the institution was running in heavy losses, unanimously
resolved to abolish the posts of Lab Assistant/Lab Boy, Sweeper,                 C
Waterman and Mechanic. It was also decided that the institution will pay
salary of six months which will be deposited in the bank accounts of
those employees. That, in view of the abolition of the posts, vide order
dated 29.07.2003, the respondent was removed from his post. Similar
orders were passed for other six employees as per the resolution of the          D
Management Committee. The respective employees were also paid the
six months salary.
       4.1 Aggrieved by the order dated 29.07.2003, the private respondent
filed an appeal before the Non-Government Educational Tribunal, Jaipur
(hereinafter referred to as the ‘learned Tribunal’) under Section 19 of          E
the Rajasthan Non-Government Educational Institutions Act, 1989
(hereinafter referred to as the ‘Act’), being Appeal No. 56 of 2003.
Other employees also preferred respective appeals before the learned
Tribunal. It was the case on behalf of the respective original applicants-
employees that as, before the termination, a prior approval of the Director
as required under Section 18 of the Act, has not been obtained and               F
therefore their termination is bad in law and in violation of Section 18 of
the Act. On the other hand, it was the case on behalf of the Management
that as the termination took place only as a result of abolition of the posts,
Section 18 of the Act shall not be applicable/attracted and prior approval
of the State authorities was not necessary.                                      G
      4.2 That, by common judgment and order dated 07.12.2004, the
learned Tribunal set aside the orders of removal of the private respondents
herein-employees and directed their reinstatement holding that it was
mandatory to seek the prior approval of the Director of Education before
terminating the employees, as per Section 18 of the Act, and as no such          H
644             SUPREME COURT REPORTS                           [2019] 7 S.C.R.


A     prior approval was taken, the termination of the concerned employees is
      bad in law. That being aggrieved by the order dated 07.12.2004 passed
      by the learned Tribunal, the appellant herein-original writ petitioner filed
      writ petitions before the High Court, which came to be dismissed by the
      learned Single Judge of the High Court vide common judgment and order
      dated 18.07.2005.
B
             4.3 At this stage, it is required to be noted that before the High
      Court, vide letter dated 25.01.2005 the Office of the Commissioner, College
      Education, Rajasthan clarified that there was no necessity for seeking
      Government approval for the removal of the employees, as the posts to
      which they were working were not aided posts and that their appointment
C     was not approved by the Education Department. That, on 08.04.2005,
      the Commissioner, College Education issued a letter calling upon the
      appellant and other similarly placed institutions to close the uneconomical
      subjects and remove their surplus employees.
             4.4 By the judgment and order dated 18.07.2005, the learned Single
D     Judge dismissed the respective writ petitions holding that it was mandatory
      for the Institution/Management to have obtained written prior consent/
      approval of the Director, Education before removing the respondents-
      employees. The learned Single Judge also did not consider the
      communication dated 25.01.2005 of the Commissioner, College Education,
E     Rajasthan on the ground that the said documents were not part of the
      record before the learned Tribunal.
             4.5 Feeling aggrieved and dissatisfied with the common judgment
      and order passed by the learned Single Judge of the High Court dismissing
      the writ petitions, the appellant herein preferred the D.B. Special Appeals
F     before the Division Bench of the High Court. By the impugned common
      judgment and order dated 15.12.2016, the Division Bench of the High
      Court has dismissed the appeals and has confirmed the common judgment
      and order passed by the learned Single Judge of the High Court. Feeling
      aggrieved and dissatisfied thereby, the Management has preferred the
      present appeals.
G
            5. Shri Shubhranshu Padhi, learned Advocate has appeared on
      behalf of the Management; Ms. Padhmalakshmi Iyengar, learned AAG
      has appeared on behalf of the respondent-State authorities and Shri
      Ramjee Pandey, learned Advocate has appeared on behalf of the private
      respondents-respective employees.
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   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                                 645
     GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

       5.1 Shri Padhi, learned advocate appearing on behalf the                   A
Management has vehemently submitted that, in the facts and
circumstances of the case, the High Court has committed a serious error
in dismissing the appeals and confirming the judgment and order passed
by the learned Single Judge approving/confirming the order passed by
the learned Tribunal directing the appellant to reinstate the private
                                                                                  B
respondents.
       5.2 It is further submitted by the learned counsel appearing on
behalf of the appellant that the High Court has not properly appreciated
and considered the fact that as it was a case of abolition of posts which
resulted in removal of the concerned employees, Section 18 of the Act
shall not be applicable/attracted at all. It is submitted that the High Court     C
has failed to appreciate and consider the fact that Section 18 of the Act
would not be attracted as no penal action had been taken against the
concerned employees, as the termination took place only as a result of
the abolition of posts. It is submitted by the learned counsel appearing on
behalf of the appellant that as held by this Court in the case of Shri            D
Maheshwari Senior Higher Secondary School v. Bhikha Ram
Sharma (1996) 8 SCC 22, in case of termination of service of an
employee due to abolition of post, the question of conducting the enquiry
under the Rules does not arise. It is submitted that despite the aforesaid
decision was cited before the Division Bench of the High Court, the
Division Bench has not at all dealt with and considered the same. It is           E
further submitted that even the Division Bench has not at all considered
the other decisions which are cited and relied upon by the counsel
appearing on behalf of the appellant-Management.
        5.3 It is further submitted by the learned counsel appearing on
behalf of the appellant that, as such, while deciding the appeals, the Division   F
Bench of the High Court has not at all dealt with and considered in detail
the specific case on behalf of the appellant-Management that in case of
abolition of post and the consequent action of removal, Section 18 of the
Act shall not be applicable. It is submitted that, however, erroneously
the Division Bench of the High Court has observed that no such contention         G
was raised before the learned Tribunal or before the learned Single Judge
and the same has been raised for the first time before the Division Bench.
It is submitted that in fact it was the case on behalf of the Management
right from the beginning and even before the learned Tribunal that, in the
facts and circumstances of the case, Section 18 of the Act shall not
applicable at all.                                                                H
646             SUPREME COURT REPORTS                            [2019] 7 S.C.R.


A            5.4 It is further submitted by the learned counsel appearing on
      behalf of the appellant that even the learned Single Judge committed a
      serious error in not considering the communications dated 25.01.2005
      and 08.04.2005 received from the Office of the Commissioner, College
      Education, Rajasthan on the ground that the said communications were
      not placed before the learned Tribunal. It is submitted that naturally the
B
      aforesaid two communications could not have been produced before the
      learned Tribunal as the same were subsequent to the decision of the
      Tribunal dated 07.12.2004. It is submitted that, however, the learned
      Single Judge and even the Division Bench of the High Court ought to
      have considered the aforesaid two communications and the stand of the
C     State Government whether in case of abolition of posts and/or the posts
      to which the respective workers were working were not aided posts and
      their appointment was not approved by the Education Department, the
      prior approval/approval for removal of such employees was not required.
             5.5 It is further submitted by the learned counsel appearing on
D     behalf of the appellant that the Division Bench of the High Court has not
      at all appreciated and/or considered the fact that neither the learned
      Tribunal nor the High Court was justified in holding that the abolition of
      posts was erroneous and/or bad in law.
              5.6 It is submitted by the learned counsel appearing on behalf of
E     the appellant that a conscious decision was taken by the Management to
      abolish the respective posts as the institution was running in heavy losses.
      It is submitted that therefore a conscious decision was taken to abolish
      the temporary posts. It is submitted that merely because the Management
      might have received some grant from the State Government and/or some
      amount from the students as fees, unless and until the entire balance-
F     sheet is considered and/or the entire financial position of the institution is
      considered, the learned Single Judge ought not to have held the abolition
      of posts as bad in law by observing that the financial conditions of the
      University did not warrant abolition of the posts.
              5.7 It is further submitted by the learned counsel appearing on
G     behalf of the appellant that accordingly the learned Single Judge of the
      High Court has committed a grave error in observing and holding that as
      the respective employees were paid six months’ salary which was
      deposited in their respective bank accounts, the Management was required
      to follow the procedure as per Rule 39 of the Rajasthan Non-Government
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   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                             647
     GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

Educational Institutions (Recognition, Grant-In-Aid and Service Condtions     A
etc.) Rules, 1993 (hereinafter referred to as the ‘1993 Rules’) and it
was essential for the Management to receive written consent of the
Education Department. It is submitted that merely because to be on a
safer side, the Management might have paid/deposited the six months’
salary, the same should not go against the Management and, by that
                                                                              B
itself, Section 18 of the Act and Rule 39 of the 1993 Rules shall be made
applicable. It is submitted that what is required to be considered whether
in a case of abolition of posts, prior approval of the Commissioner as per
Section 18 of the Act is required or not. It is submitted that therefore
both, the learned Single Judge and the Division Bench of the High Court
have committed a serious error in making Section 18 of the Act and/or         C
Rule 39 of the 1993 Rules applicable to the facts of the case.
      5.8 Making the above submissions, it is prayed to allow the present
appeals.
        6. The present appeals have been vehemently opposed by Shri
Ramjee Pandey, learned counsel appearing on behalf of the respective          D
employees. It is vehemently submitted by Shri Pandey, learned counsel
appearing on behalf of the respective employees that, as the resultant
effect of abolition of posts was removal of the concerned employees
from service, Section 18 of the Act would be applicable. It is submitted
that therefore, as such, no error has been committed by the High Court        E
in holding that the removal/termination was hit by Section 18 of the Act.
It is further submitted that, even otherwise, on merits also, the learned
Tribunal as well as the learned Single Judge have specifically observed
and held that the abolition of posts was bad in law. It is submitted,
therefore, once the abolition of posts was held to be bad in law, there
was no further question to be considered whether prior to removal the         F
approval/consent of the Director/State authorities is required or not.
      6.1 It is further submitted that there are concurrent findings of all
the Courts below on the applicability of Section 18 of the Act and,
therefore, the same is not required to be interfered with by this Court.
                                                                              G
      6.2 Making the above submissions, it is prayed to dismiss the
present appeals.
      7. Learned AAG appearing on behalf of the State has reiterated
on the communication dated 25.02.1005 and has submitted that as the
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648            SUPREME COURT REPORTS                           [2019] 7 S.C.R.


A     posts to which the respective employees were working were not aided
      posts and their appointment was not approved by the Education
      Department, there was no necessity for seeking Government approval
      for the removal of such employees.
             8. Heard learned counsel appearing on behalf of the respective
B     parties at length and perused/considered the orders passed by the leaned
      Tribunal, learned Single Judge of the High Court as well as the impugned
      common judgment and order passed by the Division Bench of the High
      Court.
             9. At the outset, it is required to be noted that all the respective
C     employees were appointed and working on a purely temporary basis.
      That a conscious decision was taken by the Management to abolish the
      posts on which the respective employees were working, namely Lab
      Assistant/Lab Boy, Sweeper. Waterman and Mechanic. A conscious
      decision was taken by the Management to abolish the temporary post/
      posts in question on the ground that the institution was running in heavy
D     losses. Consequent upon the abolition of posts, the respective employees
      were removed from the services. The respective employees were also
      paid six months’ salary which was deposited in the bank accounts of the
      concerned employees. Learned Tribunal as well as the learned Single
      Judge directed the reinstatement of the respective employees and set
E     aside the removal on the ground inter alia that: (i) before removal the
      prior consent/approval of the State authorities was not taken as required
      under Section 18 of the Act and (ii) that the abolition of posts was bad in
      law. The judgment and order of the learned Tribunal as well as the
      learned Single Judge of the High Court have been confirmed by the
      Division Bench of the High Court by the impugned common judgment
F     and order.
             10. From the common judgment and order passed by the Division
      Bench of the High Court, it appears that the learned Division Bench has
      not at all given any reasons on the applicability of Section 18 of the Act
      in a case where the removal of the concerned employees was due to
G     abolition of posts. In Paragraph 14, the Division Bench of the High
      Court has observed that no such contention was raised before the Tribunal
      or before the learned Single Judge and it has been raised for the first
      time. The aforesaid finding does not seem to be true. From the decision
      of the Tribunal as well as the learned Single Judge, it emerges that from
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   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                                 649
     GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

the very beginning the case on behalf of the Management was that as               A
the removal of the employees was due to abolition of posts, Section 18
of the Act shall not be attracted. Be that as it may, we propose to
consider independently the issue with respect to the applicability of
Section 18 of the Act in a case where the removal was due to abolition
of the posts. Therefore, the questions which are posed for consideration
                                                                                  B
of this Court are whether: (i) in case of removal due to abolition of posts
and more particularly when the respective employees were working on
temporary basis and the posts were not approved/sanctioned and their
appointments were not approved by the Education Department and the
posts to which they are working were not aided posts, Section 18 of the
Act would be applicable and (ii) whether the learned Tribunal and the             C
learned Single Judge were justified in holding the abolition of posts bad
in law?
       11. While considering Question No. 1 referred to hereinabove,
the relevant provisions of the Act and 1993 Rules are required to be
referred to.                                                                      D
         11.1 Section 18 of the Act and Rule 39 of the 1993 Rules read 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 be 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;
                                                                                  G
                or
            (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
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650      SUPREME COURT REPORTS                           [2019] 7 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
      Rule 39:
        “39. Removal or Dismissal from Service.- (1) The services
      of an employee appointed temporarily for six months, may be
      terminated by the management at any time after giving at least
C     one month’s notice or one month’s salary in lieu thereof. Temporary
      employee, who wishes to resign shall also give atleast one month’s
      notice in advance or in lieu thereof deposit or surrender one month’s
      salary to the management.
      (2) An employee, other than the employee referred to in sub-rule
D     (1), may be removed or dismissed from service on the grounds of
      insubordination, inefficiency, neglect of duty, misconduct or any
      other grounds which makes the employee unsuitable for further
      retention in service. But the following procedure shall be adopted
      for the removal or dismissal of an employee :

E        (a) A preliminary enquiry shall be held on the allegations
             coming into or brought to the notice of the management
             against the employee;
         (b) On the basis of the findings of the preliminary enquiry
             report, a charge sheet alongwith statement of allegations
F            shall be issued to the employee and he shall be asked to
             submit his reply within a reasonable time;
         (c) After having pursued the preliminary enquiry report and
             the reply submitted by the employee, if any, if the managing
             committee is of the opinion that a detailed enquiry is
             required to be conducted, a three member committee shall
G
             be constituted by it in which a nominee of the Director of
             Education shall also be included;
         (d) During the enquiry by such enquiry committee the
             employee shall be given a reasonable opportunity of being
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KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                           651
  GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

         heard and to defend himself by means of written                 A
         statement as well as by leading evidence, if any;
    (e) The enquiry committee, after completion of the detailed
        enquiry, shall submit its report to the management
        committee;
    (f) If the managing committee, having regard to the findings         B
        of the enquiry committee on the charges, is of the opinion
        that the employee should be removed or dismissed from
        service, it shall -
         (i) furnish to the employee a copy of the report of the
             enquiry committee,                                          C

         (ii) give him a notice stating the penalty of removal or
              dismissal and call upon him to submit within a specified
              time such representation as he may wish to make on
              the proposed penalty;
                                                                         D
    (g) In every case, the records of the enquiry together with a
        copy of notice given under sub-clause (f)(ii) above and
        the representation made in response to such notice if any,
        shall be forwarded by the managing committee to the
        Director of Education or an officer authorised by him in
        this behalf, for approval;                                       E
    (h) On receipt of the approval as mentioned in sub-clause (g)
        above, the managing committee may issue appropriate
        order of removal or dismissal as the case may be and
        forward a copy of such order to the employee concerned
        and also to the Director of Education or the officer             F
        authorised by him in this behalf :
    Provided that the provisions of this rule shall not apply -
         (i) to an employee who is removed or dismissed 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 the Director of Education has been obtained in
              writing before the action is taken, or
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652            SUPREME COURT REPORTS                          [2019] 7 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
B
                         Education is obtained in writing.”
             11.2 On a fair reading of Section 18 of the Act and Rule 39 of the
      1993 Rules, we are of the opinion that Section 18 of the Act and Rule 39
      would not be applicable in case of removal of an employee due to the
      abolition of posts, more particularly when the post to which the employee
C     is working was not aided and that his appointment was not approved by
      the Education Department. In the case of Bhikha Rm Sharma (supra),
      this Court has specifically observed and held that in case of termination
      of the service of the employee due to abolition of post, the question of
      conducting the enquiry under the Rules does not arise. Though the
D     said decision was cited and relied upon by the counsel appearing on
      behalf of the appellant before the Division Bench of the High Court, the
      Division Bench thereafter has not at all dealt with and/or considered the
      same. Therefore, the learned Tribunal, learned Single Judge and learned
      Division Bench of the High Court have materially erred in applying
      Section 18 of the Act and in holding the removal of the concerned
E     employees which as such was due to the abolition of the posts was hit
      by Section 18 of the Act. At this stage, it is required to be noted that
      even the State Government also made its stand clear before the learned
      Single Judge vide letter dated 25.01.2005 which was placed before the
      learned Single Judge pursuant to the order passed by the High Court, in
F     which it was specifically stated that there is no necessity for seeking
      Government approval for the removal of the employees, as the posts to
      which they were working were not aided posts and that their appointment
      was not approved by the Education Department. The learned Single
      Judge has refused to take into consideration the communication dated
      25.01.2005 on the ground that the said communication was not placed
G     before the learned Tribunal. The said communication could not have
      been produced before the learned Tribunal as the said communication
      was after the decision of the learned Tribunal. When the said
      communication was placed on record by way of an additional affidavit
      and that too pursuant to the direction issued by the learned Single Judge,
H     the learned Single Judge ought to have considered the same. Therefore,
   KHETRI VIKAS SAMITI v. DIR. COLLEGE EDUCATION,                                653
     GOVERNMENT OF RAJASTHAN [M. R. SHAH, J.]

even as per the State Government also, the prior approval of the State           A
authorities was not required. Therefore, the impugned judgment and order
passed by the Division Bench of the High Court, learned Single Judge of
the High Court and the learned Tribunal holding that the removal of the
concerned employees was hit by Section 18 of the Act, cannot be sustained
and the same deserves to be quashed and set aside.
                                                                                 B
       12. Now, so far as question No. 2, namely whether the learned
Tribunal and the learned Single Judge were justified in holding the abolition
of posts bad in law is concerned, it is required to be noted that a conscious
decision was taken by the Managing Committee of the institution/
Management to abolish the posts as the institution/Management was
facing the financial constraint and running in heavy losses. Therefore,          C
unless and until the said decision is found to be arbitrary and/or mala fide
and/or with some oblique reason, it was not open for the learned Tribunal
and/or the High Court to interfere with such decision of the Management
to abolish the posts. Considering the reasoning given by the High Court
and the Tribunal as such there is no specific finding that the decision of       D
the Management to abolish the posts was mala fide and/or with the
oblique motive. It is required to be noted that the question before the
learned Tribunal was with respect to the removal and not with respect to
abolition of the posts. The decision of the Management/Managing
Committee to abolish the post was not under challenge. Therefore, in
absence of challenge to the decision of the Managing Committee to                E
abolish the posts in question, it was not open for the Tribunal and/or the
High Court to hold that abolition of posts was bad in law.
         12.1 Even otherwise, on merits also, the decision of the High
Court in holding the abolition of posts bad in law, cannot be sustained.
The learned Singh Judge of the High Court has held the abolition of              F
posts bad in law by observing that as the institution/Management received
the grant and the fees from the students, it cannot be said that the financial
condition of the Management was weak which warranted abolition of
posts. However, it is required to be noted that before the learned Single
Judge the entire financial position/balance-sheet was not placed before          G
the High Court. Merely some grant might have been received by the
institution/Management and/or the Management might have received
the fees from the students, unless and until the balance-sheet and the
entire expenditure are considered, it was not open for the High Court to
come to the conclusion that the financial condition was not such poor
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654                SUPREME COURT REPORTS                       [2019] 7 S.C.R.


A     which warranted the abolition of posts. Therefore, even the reasoning
      given by the High Court to hold that the abolition of posts bad in law,
      cannot be sustained.
             13. Even the observation made by the learned Single Judge that
      as the Management deposited six months salary, as required under Rule
B     39 of the 1993 Rules, it was incumbent upon the Management to follow
      the procedure as provided under Rule 39 of the 1993 Rules before the
      removal of the concerned employees. However, it is required to be
      noted that Rule 39 shall be applicable only in a case where an employee,
      other than the employee referred to in sub-section (1) is removed or
      dismissed from service on the ground that of insubordination, inefficiency,
C     neglect of duty, mis-conduct or any other ground, which makes the
      employee unsuitable for further retention in service. On a fair reading
      of Rule 39, it appears that only in the aforesaid cases, the procedure
      provided under Rule 39 is required to be followed. Rule 39 further
      provides that when the Managing Committee is of the unanimous opinion
D     that the services of an employee cannot be continued without prejudice
      to the interest of the institution, the services of such employee can be
      terminated after giving him six months notice or salary in lieu thereof
      and the consent of the Director, Education is obtained in writing.
      Therefore, in case of removal of an employee due to abolition of the
      post, Rule 39 of the 1993 Rules shall not be applicable at all. Merely
E     because, for whatever reasons and may be, to be on a safer side, the
      management deposited six months salary, by that itself, Rule 39 of the
      1993 Rules shall not be made applicable, if otherwise, the same is not
      applicable.
            14. In view of the above and for the reasons stated above, the
F     present appeals are allowed. The impugned common judgment and order
      passed by the Division Bench of the High Court dated 15.12.2016, learned
      Single Judge of the High Court as well as the learned Tribunal directing
      the appellant to reinstate the private respondents herein are quashed
      and set aside. No costs.
G
      Ankit Gyan                                                   Appeals allowed.




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