Holding

The retrenchment and termination of the appellant were illegal as the mandatory conditions of Section 25F(c) of the ID Act and Section 8(2) of the DSE Act were not complied with, and the appellant, being a workman, is entitled to reinstatement with back wages.

Summary

The appellant, a permanent driver at DAV Public School, was declared surplus and retrenched by the school’s Managing Committee in 2003. The school served a notice under Section 25F(a) of the Industrial Disputes Act but failed to send the statutory notice to the appropriate government authority under Section 25F(c) and did not obtain prior approval from the Director of Education as required by Section 8(2) of the Delhi School Education Act. The Delhi School Tribunal and the High Court upheld the retrenchment, but the Supreme Court held that the driver is a "workman" under the ID Act and that the procedural safeguards of both statutes were not complied with. Consequently, the order of retrenchment was set aside, the appellant was ordered to be reinstated, and awarded back wages with consequential benefits. The appeal was allowed.

Issues considered

Whether the driver is a "workman" for the purposes of the Industrial Disputes Act, 1947.
Whether the conditions precedent for retrenchment under Section 25F(a), (b) and (c) of the ID Act were satisfied.
Whether Section 8(2) of the Delhi School Education Act, 1973, requiring prior approval of the Director of Education, applies and was complied with.
What relief is appropriate for the appellant.

Legislation cited

Delhi School Education Act, 1973s. 10, s. 2(h), s. 8(2)
Income Tax Acts. 89
Industrial Disputes Act, 1947s. 25F(a), s. 25F(b), s. 25F(c), s. 2(s)
Industrial Disputes (Amendment) Act, 1964
Industrial Disputes (Central) Rules, 1957s. 76(a)

Subjects

retrenchmentworkmanIndustrial Disputes ActDelhi School Education Actnotice requirementprior approvalreinstatementback wages

Judgment

[2016] 1 S.C.R. 697

RAJ KUMAR A
v.
DIRECTOR OF EDUCATION & ORS.
(Civil Appeal No.1020 of2011)
APRIL 13, 2016 B

[V. GOPALA GOWDA AND AMITAVA ROY, JJ.)
Industrial Disputes Act, 1947:
Chapter V-A, s. 25F (a), (b) - Delhi School Education Act,
1973 - ss. 2(h), 8(2), JO - Retrenchment - Challenge to -Appel/ant- c
permanent driver in a public school, having become surplus,
retrenched from services by respondent-Managing Committee of the
School - Issuance of notice to the appellant in accordance with s.
25F (a) and retrenchment compensation - Tribunal and the High
Court held that the appellant was retrenched from the services by
D
the Managing Committee following the procedure laid down u/s.
25F (a) and {b) - On appeal, held: Driver employed by a school,
being a skilled person, is a workman for the purpose of the 1947 ·
Act - Notice for retrenchment was served on. the appellant on
07.01.2003, however, no evidence to show that notice of the
retrenchment was sent to the appropriate authority even till date - E
Thus, the mandatory conditions of s. 25F to retrench a workman
was not complied with - Notice of retrenchment and the order of
retrenchment set aside - Further, the Managing Committee did not
obtain prior approval of the order of termination passed against
the appellant from the Director of Education as required uls.8(2) of
F
the DSE Act - No evidence to show that the retrenchment of the
appellam was necessary as he had become 'surplus' - Thus, the
termination of the appellant is bad in law for non-compliance with
the mandatory provisions of s. 25F and also s. 8(2) of the DSE Act
- Management to re-instate the appellant at his post with back wages
- Industrial Disputes (Central) Rules, 1957 - r. 76(a). G
s. 25F {a),{b),{c) - Condition prescribed for retrenchment of
work as prescribed u/s. 25F {a), {b), {c) - Directory or mandatory -
Held: Section 25F(c} is a condition subsequent, but is still a
mandatory condition required to be fulfilled by the employers before
the order of retrenchment of the workman is passed. H
697
698 SUPREME COURT REPORTS [2016] I S.C.R.

A Delhi School Education Act, 1973 - s. 8(2) - Compliance of
- Requirement - Appellant-permanent driver in a public school,
having become surplus, retrenched from services by respondent-
Managing Committee of the School - Submission that Managing
Committee before terminating services of appellant did not comply
with the mandatory provision of s. 8(2), holding that s. 8(2) was
B
struck down in Kathuria case - Held: Section 8(2) is a procedural
safeguard in favour of an employee to ensure that an order of
termination or dismissal is not passed without the prior approval of
the Director of Education, to avoid arbitrary or unreasonable
termination - High Court erred in striking down s. 8(2) in Kathuria
c Public School's case and is bad in law - Furthermore, notice of
retrenchment was served on the appellant on 07. 01.2003 and was
retrenched from service on 25. 07.2003 - Decision in Kathuria Public
School's case striking down s. 8(2) was rendered two years later
and respondents could not have foreseen thats. 8(2) would be struck
down later and thus, decided not to comply with it - Section 8(2)
D
was very much a valid provision of the statute on the date of the
retrenchment of the appellant - Rights and liabilities of the parties
to the suit must be considered in accordance with the law as on the
date of the institution of the suit - Thus, the termznatio11 order was
bad in law.
E Allowing the appeal, the Court
HELD: 1. The retrenchment of the appellant from service
as also termination order is bad in law. The judgment and order
passed by the High Court is set aside. (Para 37) [726-B-C]

F 2. A perusal of the *HR Adyanthaya case and ••Bangalore
Water Supply case clearly shows that a driver employed by a
school, being a skilled person, is a workman for the purpose of
the Industrial Disputes Act, 1947. The provisions of ID Act are
applicable to the facts of the instant case. [Para 20) (713-C]
*RR. Adyanthaya v. Sandoz (India) Ltd (1997) 5 SCC
G
737; ••Bangalore Water Supply and Sewerage Board
v. A. Rajappa & Ors. 1978 (3) SCR 207: (1978) 2 SCC
213 - relied on.
3.1 The reasoning adopted by the tribunal as well as the
High Court cannot be accepted. Admittedly, the notice under
H
RAJ KUMAR v. DIRECTOR OF EDUCATION 699

Section 25F(c) of the ID Act has not been se.rved upon the State A
Government, relying upon the decision of this Court in the case
of ***Bombay Journalists, which was rendered in the year 1963
and wherein it was held that the provisions of Section 25F (c) of
the ID Act is directory and not mandatory in nature. The tribunal
as well as the High Court ignored that subsequently, the
B
Parliament enacted the Industrial Disputes (Amendment) Act,
1964. Nothing was done on part of the legislature to indicate that
it intended Section 25F(c) of the ID Act to be a directory provision,
when the other two sub-sections of the same section are mandatory
in nature. The amendment was enacted which seeks to make it
administratively easier for notice to be served on any other c
authority as specified. [Para 24, 25] [714-C-E, G]
3.2 This Court in ***Bombay Journalists case read the ID
Act and the relevant Rules thereunder together and arrived at
the conclusion that Section 25F(c) is not a condition precedent
for retrenchment. By no stretch of imagination can this decision D
be said to have held that there is no need for industries to comply
with this condition at all. At the most, it can be held that Section
25F(c) is a condition subsequent, but is still a mandatory condition
required to be fulfilled by the employers before the order of
retrenchment of the workman is passed. [Para 26] [715-D-F]
E
***Bombay Union of Journalists & Ors. v. The State of
Bombay & Anr. AIR 1964 SC 1671; Mackinon
Mackenzie & Company Ltd. v. Mackinnon Employees
Union (2015) 4 SCC 544 - referred to.
3.3 Rule 76(a) of the Industrial Disputes (Central) Rules, F
1957 clearly mandates that the notice has to be sent to the
appropriate authorities within three days from the date on which
notice is served on the workman. In the instant case, the notice
of retrenchment was served on the appellant on 07.01.2003. No
evidence has been produced on behalf of the respondents to show
that notice of the retrenchment has been sent to the appropriate G
authority even till date. It is clear that the mandatory conditions
of Section 25F to retrench a workman have not been complied
with. The notice of retrenchment and the order of retrenchment
are set aside. [Para 26, 27] [716-D-F]
H
700 SUPREME COURT REPORTS [2016] I S.C.R.

A 4.1 The respondent-School submitted that there was no
requirement on the part of the respondent-Managing Committee
to comply with Section 8(2) of the DSE Act. Reliance was placed
on the decision of the Delhi High Court in the case of ****Kathuria
Public School case, wherein Section 8(2) of the DSE was struck
down. It cannot be said that not obtaining prior approval for the
B termination of the services of the appellant is justified. Section
8(2) is a procedural safeguard in favor of an employee to ensure
that an order of termination or dismissal is not passed without
the prior approval of the Director of Education. This is to avoid
arbitrary or unreasonable termination or dismissal of an employee
c of a recognized private school. A perusal of the Statement of objects
and reasons of the DSE Act would clearly show that the intent of
the legislature while enacting the same was to provide security
of tenure to the employees of the school and to regulate the terms
and conditions of their employment. [Paras 30, 31, 32, 33) [717-
G-H; 718-A; 719-F-H; 720-A; 722-E]
D
The Principal & Ors. v. The Presiding Officer & Ors.
1978 (2) SCR 507: (1978) 1 SCC 498 - referred to.
4.2 The Division Bench of the Delhi High Court, erred in
striking down Section 8(2) of the DSE Act in the case of Kathuria
E Public School by placing reliance on the decision of this Court in
the case of TMA Pai as the subject matter in controversy therein
was not the security of tenure of the employees of a school, rather,
the question was the right of educational institutions to function
unfettered. Section 8(2) of the DSE Act is one such precautionary
safeguard which needs to be followed to ensure that employees
F of educational institutions do not suffer unfair treatment at the
hands of the management. The Division Bench of the High Court,
while striking down Section 8(2) of the DSE Act in the case of
Kathuria Public School has not correctly applied the law laid down
in the case of Katra Educational Society wherein a Constitution
G Bench of this Court, with reference to provision similar to Section
8(2) of the DSE Act and keeping in view the object of regulation
of an aided or unaided recognised school, has held that the
regulation of the service conditions of the employees of private
recognized schools is required to be controlled by educational
authorities and the state legislature is empowered to legislate
H such provision in the DSE Act. The Division Bench wrongly relied
RAJ KUMAR v. DIRECTOR OF EDUCATION 701

upou that part of the judgment in the case of Katra Education A
Society which dealt with Article 14 of the Constitution and aided
and unaided educational institutions, which had no bearing on
the fact situation therein. Therefore, the decision in the case of
Kathuria Public School striking down Section 8(2) of the DSE Act,
is bad in law. [Para 33] [722-H; 723-A-H)
B
Kathuria Public School v. Director of Education & Anr.
113(2004) DLT 703 (DB) - disapproved.
TMA PAI Foundation v. State of Karnataka 2002 (3)
Suppl. SCR 587 :(2002) 8 SCC 481; Katra Educational
Society v. State Of Uttar Pradesh & Ors. AIR 1966 SC
1307 : 1966 SCR 328; Frank Anthony Public School
c
Employees Association v. Union Of India & Ors. 1987
(1) SCR 238: (1986) 4 SCC 707 - referred to.
4.4 The notice of retrenchment was served on the appellant
on 07 .01.2003 and he was retrenched from service on 25.07 .2003.
The decision in the case of Katliuria School striking down Section D
8(2) of the DSE Act was rendered almost exactly two years later.
Surely, the respondents could not have foreseen that the
requirement of prior approval of the order of termination passed
against the appellant from Director would be stru.ck down later
and hence decided to not comply with it. Section 8(2) was very E
much a valid provision of the statute as on the date of the
retrenchment of the appellant, and there is absolutely no reason
why it should not have been complied with. The rights and
liabilities of the parties to the suit must be considered in
accordance with the law as on the date of the institution of the
suit. [Para 34) [724-A-D] F

Dayawati v. Inde1fit AIR 1966 SC 1423:1966 SCR 275;
Carona Ltd v. Parvathy Swaminathan and Sons 2007
(1) SCR 656:(2007) 8 SCC 559 - referred to.
4.5 The respondent-Managing Committee did not obtain
G
prior approval of the order of termination passed against the
appellant from the Director of Education, Govt. of NCT of Delhi
as required under Section 8(2) of the DSE Act. [Para 35) [724-G-
H)
5. The termination of the appellant is bad in law for non-
compliance with the mandatory provisions of Section 25F of the H
702 SUPREME COURT REPORTS (2016] I S.C.R.

A ID Act and also Section 8(2) of the DSE Act. The respondent-
School did not prod nee any evidence on record to show that the
retrenchment of the appellant was necessary as he had become
'snrplus'. The termination of the appellant was ordered in the
year 2003 and he is unemployed till date. The respondents have
been unable to produce any evidence to show that he was gainfully
B
employed during that period and thus, he is entitled to back wages
and other consequential benefits. [Para 36) [725-A-C]
Deepali Gundu Surwase v. Kranti Junior Adhyapak
Mahavidyala (D.ED.)& Ors. 2013 (9) SCR 1 : (2013)
10 sec 324 - relied on.
c
6. The respondent-Managing Committee is directed to
reinstate the appellant at his post. Consequently, the relief of
back wages till the date of this order is awarded to the appellant,
along with all consequential benefits from the date of termination
of his services. [Para 37) [726-B-C]
D
Miss A. Sundaramba/ v. Govt. of Goa, Daman & Diu
and Ors. 1988 (1) Suppl. SCR 604 : (1988) 4 SCC 42;
Babu Verghese & Ors. v. Bar Council Of Kera/a & Ors.
1999 (1) SCR 1121 : (1999) 3 SCC 422 - referred to.

E Case Law Reference
AIR 1964 SC 1671 referred to. Para 13
1988 (1) Suppl. SCR 604 referred to. Para 17
1978 (3) SCR 207 relied on. Para 20
fl99zl 5 sec 737 relied on. Para 20
F f20l~l 4 sec 544 referred to. Para 26
1999 (1) SCR 1121 referred to. Para 29
113 (2004) DLT 703 (DB) disapproved. Para 33
2002 (3) Suppl. SCR 587 referred to. Para 30
G 1966 SCR 328 referred to. Para 32
1978 (2.l SCR 507 referred to. Para 33
1987 (1) SCR 238 referred to. Para 34
1966 SCR 275 referred to. Para 34
2007 (10) SCR 656 referred to. Para 32
H 2013 (9) SCR 1 relied on. Para 36
RAJ KUMAR v. DIRECTOR OF EDUCATION 703

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1020 A
of2011
From the Judgment and Order dated 28.07.2008 of the High Court
of Delhi at New Delhi in Writ Petition (C) No. 5349 of2008.
A. T. M. Sampath, Rahul Nagpal for the Appellant.
B
A. K. Sanghi, Dr. Abhishek Atrey, D. S. Mahra, Ajay Kumar
Singh, RavindraA. Lokhande, S. S. Ray, Rakhi Ray, Vaibhav Gulia, Anil
Katiyar for the Respondent.
·The Judgment of the Court was delivered by
V. GOPALA GOWDA, J. I. The present appeal arises out of c
the impugned judgment and order dated 28.07.2008 passed by the High
Court of Delhi at New Delhi in Writ Petition (C) No.5349 of 2008,
whereby the High Court dismissed the said Writ Petition filed by the
appellant in limine and upheld the termination order dated 22.08.2008
passed against the appellant by the Delhi School Tribunal (hereinafter
D
referred to as "the Tribunal") on the ground that the appellant, who was
a driver, had been retrenched from his services by the respondent-
Managing Committee, DAV Public School by following the procedure
laid down under Sections 25F (a) and (b) of Chapter V-A of the Industrial
Disputes Act, 194 7 (hereinafter referred to as "the ID Act").
E
2. The brief facts of the case required to appreciate the rival legal
contentions advan9ed on behalf of the parties are stated as hereunder:
3. The appellant was employed as a driver by the DAV Public
School, Pocket 'C', LIG Flats, East of Loni Road, Delhi and became
permanent on the said post in the year 1994. His. terms of service are
F
covered under Sections 2(h), 8(2), 10 and other provisions of the Delhi
School Education Act, 1973 (hereinafter referred to as the "DSE Act").
4. On 01.05.2001, the DAV College Managing Committee in;,_
72"' meeting of Public Schools Governing Body, passed a resolution to
buy new school buses with CNG facility in compliance with the directions G
of this Court dated 26.03.2001 passed in the case of M.C. Mehta v.
Union of India and allowed the management of the DAV Schools to
raise loan from nationalized banks for the said purpose.
5. The respondent-Managing Committee in its meeting dated
24.08.2002, passed a resolution to retrench the services of the two junior H
704 SUPREME COURT REPORTS (2016] I S.C.R.

A most surplus drivers, namely the appellant and one Amar Nath, for the
rea.son that the school had two old mechanically unfit vehicles namely, a
Matador (registration No. DL-IV-1481) and a Maruti Van bearing
registration No.DL-5C-3107 which were disposed ofon 01.09.1995 and
13.06.1997, respectively. As an alternate arrangement, private buses
had to be hired for the transportation of students as per instructions in
B
the earlier resolution, but the respondent-Managing Committee could
not purchase new buses due to shortage of funds, which resulted in the
appellant being declared surplus on account of non-availability ofjob.
6. On 07.01.2003, the respondent-Managing Committee issued a
notice to the appellant in accordance with Section 25F (a) of the ID Act,
c stating that his services were no longer required by the school and that
he would be retrenched from his service on the expiry -of the notice
period of one month. The notice also stated thatthe appellant was entitled
to retrenchment compensation which would be paid after the expiry of
the notice period of one month.
D 7. On 10.01.2003, the appellant replied to the above said notice
through his counsel, in which it was stated that the impugned notice is
unjust and illegal, as the appellant is a permanent employee of the school
under the provisions of the DSE Act. It was also stated in the notice that
the school had failed to pay arrears amounting to Rs. 70,000/- to the
E appellant as per the recommendations of the Fifth Pay Commission. On
the same date, the appellant, through his counsel, wrote a letter to the
respondent No. I-Director of Education, Govt ofNCT of Delhi regarding
payment of all arrears as per the Fifth Pay Commission to the appellant.
8. By way of letter dated 22.01.2003, the respondent-Managing
F Committee, through their counsel informed the appellant that the school
has been paying pay and allowances to the appellant as per the
recommendations of the Fifth Pay Commission which came to Rs.3,500/
- per month as basic pay and Rs.1,435/- as Dearness Allowances. In the
same letter, the respondent- Managing Committee also denied that it
had held back an amount ofRs.70,000/-due to the appellant.
G
9. On 31.01.2003, the appellant filed Writ Petition (C) No.957 of
2003 before the High Court of Delhi, praying that the notice served on
him dated 07.01.2003 be quashed and to stay the operation of the impugned
notice until the Writ Petition was finally disposed of.
JO. Meanwhile, vide letter dated 25.07.2003, the respondent-
H
RAJ KUMAR v. DIRECTOR OF EDUCATION 705
[V. GOPALA GOWDA, J.]

M:maging Committee informed the appellant that since the extended A
notice period under Section 25F of the ID Act was also over, his services
now stood terminated. Further, a salary cheque for a sum of Rs.4, 165/-
against one month's notice period from 01.07 .2003 to 25 .07 .2003, along
with a cheque bearing No.877690 dated 22.07.2003 for a sum of
Rs.25,650/- as retrenchment compensation under Section 25F (b) of the
B
ID Act were enclosed with the letter.
11. The High Court disposed of the Writ Petition No. 957 of2003
filed by the appellant videjudgment and order dated 25.02.2004. Placing
reliance on the judgment of the Delhi High Court passed in Writ Petition
(C) No.970 of2003 dated 21.07.2003, filed by the other terminated driver
Amar Nath, in the case of Amar Nath v. Director of Education, Govt.
c
of Delhi & Ors., the High Court held that Section 8 of the DSE Act is
very wide and any kind of termination would fall within its ambit.
Accordingly, the Writ Petition was disposed of with liberty granted to
the petitioner to seek an appropriate remedy under the DSE Act.
12. Accordingly, the appellant filed Appeal No.09 of2004 before D
the Presiding officer, Delhi School Tribunal under Section 8(3) of the
DSE Act against the impugned retrenchment notice dated 07.01.2003.
The Tribunal vide its judgment and order dated 22.02.2008, dismissed
the said appeal on the ground that the respondent-Managing Committee
had the right to retrench surplus drivers of the School after fulfilling all E
the conditions as laid down under Sections 25F (a) & (b) of the ID Act.
The Tribunal while upholding the validity of the retrenchment order held
thatthe appellant is governed by the provisions of the ID Act as well the
DSE Act. Section 2(h) of the DSE Act defines "employee" as a teacher
and also includes every other employee working in a recognized school
as "employee". The Tribunal held as under: F

"2(h) Hence the, laws which governs the employment of the
Appellant are De.lhi School Education Act & Rules, 1973 and
Industrial Disputes Act, 1947.Since Delhi School Education Act,
1973 has no provision of retrenchment of workmen, one has to
fall back upon the provisions oflndustrial Disputes Act, 1947 to G
see whether the conditions of the said Act regarding retrenchment
were fully complied with by the Management or not."
13. The Tribunal further held that all the conditions precedent
which are required to be satisfied for retrenchment under Section 25F
of the ID Act have been fulfilled in the instant case. The appellant was H
706 SUPREME COURT REPORTS (2016] l S.C.R.

A given notice under the provisions of the ID Act dated 07.01.2003. The
intended date of his retrenchment thus, was 07.02.2003. However, the
appellant was retrenched only on 25.07.2003. It was held that since the
notice of more than one month had been given, the condition of Section
25F (a) of the ID Act has been duly complied with. The Tribunal in its
order further held that the appellant had been paid the retrenchment
B
compensation calculating 15 days average pay for every completed year
of continuous service. The respondent-Managing Committee calculated
his service for a period of 9 years and concluded that the appellant is
entitled to salary for a period of four and a half months, which amounts
to Rs.19, 740/-, after taking into consideration Rs.3,500/- basic pay along
c with Rs.4,07 l/- as dearness allowance. In total, the appellant was paid
Rs.25,650/- on account of compensation. Therefore, the Tribunal held
that Section 25F (b) of the ID Act had also been duly complied with. On
the issue of notice being served on the appropriate government in the
prescribed manner, the Tribunal placed reliance on the decision of this
Court in the case of Bombay Union of Journalists & Ors. 1: The
D
State ofBombay &Anr. 1, wherein it was held that this was only directory
in nature, and not a condition precedent for retrenchment. This Court
had held as under:
"Clause (c) is not intended to protect the interests of the workman
as such. It is only intended to give intimation to the appropriate
E Government about the retrenchment, and that only helps the
Government to keep itself informed about the conditions of
employment in the different industries within its region. There
does not appear to be present any compelling consideration which
would justify the making of the provision prescribed by clause (c)
F a condition precedent as in the case of clauses (a) & (b). Therefore,
having regard to the object which is intended to be achieved by
clauses (a) & (bl as distinguished from the object which clause
(cl has in mind. it would not be unreasonable to hold that clause
(cl. unlike clauses (al & (bl, is not a condition precedent."

G (emphasis laid by this Court)
Thus, the Tribunal held that both the mandatory conditions for
retrenchment have been fulfilled in the instant case, and that Section
25F(c) of the ID Act merely lays down a direction and not a condition
precedent. The Tribunal further held:
H I AIR 1964 SC 1671
RAJ KUMAR v. DIRECTOR OF EDUCATION 707
[V. GOPALA GOWDA, J.]

"As far as the question of permission from Directorate of A
Education before removing an employee is concerned, in view of
the judgment of the Hon'ble Supreme Court in the matter of'TMA
Pai Foundation v/s State of Karnataka" and the judgment of our
own Hon 'ble High c·ourt in the matter of"Kathuria Public School
vis Directorate of Education", the provision regarding obtaining
B
prior approval from the Director of Education has been struck
down and the School Management has been given a free hand to
deal with its employees."
The appeal tiled by the appellant before the Tribunal was accordingly
dismissed.
c
14.Aggrieved of the said judgment of the Tribunal, the appellant
filed Writ Petition (C) No. 5349 of2008 before the High Court of Delhi
questioning the correctness of the same urging various grounds. The
High Court vide impugned judgment and order dated 28.07.2008 dismissed
the same in limine as it found no infirmity in the view taken by the
Tribunal. Hence, the present appeal. D

15. On the basis of the contentions advanced by the learned counsel
appearing on behalf of the parties, the following issues would arise for
our consideration:
I) Whether the appellant is a workman for the purpose of ID E
Act?
2) Whether the conditions precedent for the retrenchment of a
workman as prescribed un.der Section 25F (a), (b) and (c) of the
ID Act have been fulfilled in the instant case?
3) Whether the provision of Section 8(2) of the DSE Act is F
applicable to the facts of the instant case?
4) What order?
16. Before we advert to the rival legal contentions advanced on
behalf of the parties, it is important for us to consider the relevant
provisions of the ID Act and DSE Act in play in the instant case. G

The DSE Act was enacted in the year 1973 and is:
"An Act to provide for better organisation and development of
school education in the Union Territory of Delhi and for matters
connected therewith or incidental thereto" H
708 SUPREME COURT REPORTS (2016] I S.C.R.

A Section 2(h) defines an employee:
"means a teacher and includes every other employee working in
a recognized school"
Section 8(2) of the DSE Act provides:
B "Subject to any rule that may be made in this behalf, no employee
of a recognized private school shall be dismissed, removed or
reduced in rank nor shall his service be otherwise terminated
excepted with the prior approval of the Director"
Section I 0 of the DSE Act reads as under:
c "10.(1). Salaries of employees- the scales of pay and
allowances, medical facilities, pension, gratuity provident fund and
other prescribed benefits of the employees of a recognized private
school shall not be as less than these of the employees of the
corresponding status in school run by the appropriate
authority ........ .
D
(2). The managing committee of every aided school, shall deposit
every month, its share towards pay and allowances, medical
facilities, pension, gratuity, provident fund and other prescribed
benefits with the Administrator and theAdministratorshall disburse,
or cause to be disbursed within the first week of every month, the
E
salaries and allowances to the employees of the aided schools."
The Industrial Disputes Act, 194 7, is:
"An Act to make provision for the investigation and settlement of
industrial disputes, and for certain other purposes"
F Section 2(s) defines a Workman as:
"2(s). "workman" means any person (including an apprentice)
employed in any industry to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or
reward, whether the terms of employment be express or implied,
G and for the purposes of any proceeding under this Act in relation
to an industrial dispute, includes any such person who has been
dismissed, discharged or retrenched in connection with, or as a
consequence of, 9 that dispute, or whose dismissal, discharge or
retrenchment has led to that dispute, but does not include any
H such person-
RAJ KUMAR v. DIRECTOR OF EDUCATION 709
[V. GOPALA GOWDA, J.]

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the A
Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of
1957);
(ii) who is employed in the police service or as an officer or other
employee of a prison;
(iii) who is employed mainly in a managerial or administrative B
capacity;
(iv) who, being employed in a suftervisory capacity, draws wages
exceeding one thousand six hundred rupees per mensem or
exercises, either by the nature of the duties attached to the
office or by reason of the powers vested in him, functions c
mainly of a managerial nature."
Section 2(oo) lays down the concept of retrenchment as:
"2(oo). Retrenchment means the termination by the employer of
the service of a workman for any reason whatsoever, otherwise
D
than as a punishment inflicted by way of disciplinary action, but
does not include--
(a) voluntary retirement of the workman;
(b) retirement of the workman on reaching the age of
superannuation if the contract of employment between the E
employer and the workman concerned contains a stipulation in
that behalf;
(bb) termination of the service of the workman as a result of the
non-renewal of the contract of employment between the employer
and the workman concerned on its expiry or of such contract F
being terminated under a stipulation in that behalf contained
therein;"
(c) termination of the service of a workman on the ground of
continued ill-health"
Section 25F of the ID Act provides for the conditions precedent for the G
retrenchment of a workman and reads as under:
"25F.Conditions precedent to retrenchment of workmen.-
No workman employed in any industry who has been in continuous
service for not less than one year under an employer shall be
retrenched by that employer until- H
710 SUPREME COURT REPORTS (2016] I S.C.R.

A (a) the workman has been given one month' s notice in writing
indicating the reasons for retrenchment and the period of notice
has expired, or the workman has been paid in lieu of such notice,
wages for the period of the notice:
(b) the workman has been paid, at the time of retrenchment,
B compensation which shall be equivalent to fifteen days' average
pay 2 for every completed year of continuous service] or any part
thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate
Government 3 or such authority as may be specified by the
c appropriate Government by notification in the Official Gazette.
The spirit and scheme of the ID Act was discussed by a Seven-Judge
Bench of this Court in the case of Bangalore Water Supply and
Sewerage Board v. A. Rajappa & Ors.' as under:
"To sum up, the personality of the whole statute, be it remembered,
D has a welfare basis, it being a beneficial legislation which protects
Labour, promotes their contentment and regulates situations of
crisis and tension where production may be imperiled by untenable
strikes and blackmail lock-outs. The mechanism of the Act is
geared to conferment of regulated benefits to workmen and
E resolution, according to a sympathetic rule oflaw, of the conflicts,
actual or potential, between managements and workmen. Its goal
is amelioration of the conditions of workers, tempered by a practical
sense of peaceful co-existence, to the benefit of both-not a neutral
position but restraints on laissez faire and concern for the welfare
of the weaker lot. Empathy with the statute is necessary to
F understand not merely its spirit, but also its sense."
(emphasis laid by this Court)
lt is in th is context that any dispute regarding retrenchment of a workman
under the ID Act needs to be appreciated.
G Answer to Point 1:
17. Mr. A. T.M. Sam path, the learned counsel appearing on behalf
of the appellant contends that in the instant case, the appellant is a
permanent employee of the school and thus, he is not a 'workman' for
the purposes of the ID Act. His services are covered instead, under
H '(1978) 2 sec 213
RAJ KUMAR v. DIRECTOR OF EDUCATION 711
[V. GOPALA GOWDA, J.]

Sections 2(h), 8(2) and 10 of the DSEAct, and thus, his services cannot A
be retrenched under Section 25F of the ID Act. Reliance is placed on
the decision of this CoUFt in the case of Miss A. Sundarambal v. Govt.
of Goa, Daman & Diu and Ors.-', wherein this Court has laid down the
legal principle that while educational institutions come within the ambit
of 'industry', a teacher is not 'workman' for the purpose of the ID Act.
B
The learned counsel submits that using the analogy, the driver of the
school would also be not a 'workman' for the purpose of the ID Act,
rather would come within the ambit of the term 'employee ' as defined
under Section 2(h) of the DSE Act.
18. On the other hand, Mr. S.S. Ray, the learned counsel appearing
·on behalfofthe respondent- School contends that the appellant is squarely c
covered under the definition of 'workman' under the ID Act as well as
the definition of 'employee ' under the DSE Act. The learned counsel
places strong reliance on the decision of this Court in the case of A
Sundarambal (supra), wherein this Court held that teachers are not
workmen for the purpose of the ID Act, though educational institutions D
are industry in terms of Section 2U) of the ID Act.
19. We are unable to agree with the contention advanced by the
learned counsel appearing on behalf of the appellant. The question 'who
is a workman' has been well settled by various judgments of this Court.
In the case of H.R. Adyantliaya v. Sandoz (India) Ltd', a Constitution E
Bench of this Court has held as under:
" .. We thus have three Judge Bench decisions which have taken
the view that a person to be qualified to be a workman must be
doing the work which falls in any ofthe four categories, viz, manual,
clerical, supervisory or technical and two two-judge Bench F
decisions which have by referring to one or the other of the said
three decisions have reiterated the said law. As against this, we
have three three-judge Dench decisions which have without
referring to the decisions in May & Baker, WIMCO and Bunnah
Shell cases (supra) have taken the other view which was expressly
negatived, viz., if a person does not fall within the four exceptions G
to the said definition he is a workman within the meaning of the
JD Act. These decisions are also based on the facts found in
those cases. They have, therefore, to be confined to those facts.
'(1988) 4 sec 42
s
• (1997) sec 737 H
712 SUPREME COURT REPORTS [2016] l S.C.R.

A Hence the position in law as it obtains today is that a person to be
a workman under the ID Act must be employed to do the work of
any of the categories. viz., manual. unskilled. skilled. technical,
operational, clerical or supervisory. It is not enough that he is not
covered by either of the four exceptions to the definition. We.
reiterate the said interpretation."
B
(emphasis laid by this Court)
20. The issue whethereducationaj institution is an 'industry', and
its employees are 'workmen' for the purpose of the ID Act has been
answered by a Seven-judge Bench of this Court way back in the year
c 1978 in the case of Ban!(a/ore Water Supply (supra). It was held that
educational institution is an industry in terms of Section 2(j) of the ID
Act, though not all of its employees are workmen. It was held as under:
"The premises relied on is that the bulk of the employees in the
university is the teaching community. Teachers are not workmen
D and cannot raise disputes under the Act. The subordinate staff
being only a minor category of insignificant numbers, the institution
must be excluded, going by the predominant character test. lt is
one thing to say that an institution is not an industry. It is altogether
another thinking to say that a large number of its employees are
not 'workmen' and cannot therefore avail of the benefits of the
E Act so the institution ceases to be an industry. The test is not the
predominant number of employees entitled to enjoy the benefits
of the Act. The true test is the predominant nature of the activity.
• In the case of the university or an educational institution, the nature
of the activity is, ex hypothesis, education which is a service to
F the community. Ergo, the university is an industry. The error has
crept in, if we may so say with great respect, in mixing up the
numerical strength of the personnel with the nature of the activity.
Secondly there are a number of other activities of the University
Administration, demonstrably industrial which are severable
G although ancillary to the main cultural enterprise. For instance, a
university may have a large printing press as a separate but
considerable establishment. It may have a large fleet of transport
buses with an army of running staff. It may have a tremendous
administrative strength ofofficers and clerical cadres. It may have
karamcharis of various hues. As the Corporation of Nagpur has
H effectively ruled, these operations, viewed in severalty or
RAJ KUMAR v. DIRECTOR OF EDUCATION 713
[V. GOPALA GOWDA, J.]
)
collectively, may be treated as industry. It would be strange, indeed, A
if a university has 50 transport buses, hiring drivers. conductors.
cleaners and workshop technicians. How are they to be denied
the benefits of the Act. especially when their work is separable
from academic teaching. merely because the buses are owned by
the same corporate personality? We find, with all defence, little
B
force in this process of.nullification of the industrial character of
the University's multi-form operations."
(emphasis laid by this Court) ' ·
A perusal of the abovementioned two judgments clearly shows that a
driver employed by a school, being a skilled person, is a workman for the c
purpose of the ID Act. Point No. 1 is answered accordingly in favor of
the respondents. The provisions of ID Act are applicable to the facts of
the present case.
Answer to Point No.2
21. Mr. A.T.M. Sampath, the learned counsel appearing on behalf D
0
of the appellant contends that the retrenchment of the services of the
appellant, who is a permanent employee with an unblemished record of
service, on the ground of non availability of CNG vehicles is illegal,
arbitrary and unjust. The appellant had been working at the respondent-
School for more than seven years and had even received a letter of E
appreciation for his services from the principal of the school. The learned
counsel submits that the appellant could have been given alternate
employment at any one of the 60 schools under the respondent-Managing
Committee. It is further submitted that even the defence of loss is not
available to the respondents, as after the retrenchment of the appellant,
the respondent- School has appointed another, less experienced person F
as driver. The learned counsel contends that t~1s is in clear violati on of •·
Section 25H of the ID Act, which provides that when an opportunity for
reemployment arises, preference must be given to the willing retrenched
workmen over any other persons for filling up that vacancy.
22. The learned counsel further contends that the conditions G
precedent prescribed under Section 25F of the ID Act have not been
complied with before retrenching the appellant. It is submitted that the
notice required to be sentto the appropriate government in the prescribed
form, as provided for under Section 25F ( c) of the ID Act has not been
sent.
H
714 SUPREME COURT REPORTS (2016] I S.C.R.

A 23. On the other hand, Mr. S.S. Ray, the learned counsel appearing
on behalf of the respondent-School contends that the reason for the
retrenchment of the appellant has been explained in detail in the notice
dated 07.01.2003. The respondent school had only one car left, while
there were three drivers, as the two other cars had been rendered unfit
for use. That being the case, the respondent school required the services
B
of only one driver and accordingly, the two junior most drivers were
retrenched from service, the present appellant being the junior most driver.
It is submitted that all the mandatory conditions as laid down under Section
25F of the ID Act were complied with, including the payment of
retrenchment compensation to the appellant.
c 24. We are unable to agree with the reasoning adopted by the
Tribunal as well as the High Court in the instant case. Admittedly, the
notice under Section 25F(c) of the ID Act has not been served upon the
Delhi State Government. In support of the justification for not sending
notice to the State Government reliance has been placed upon the decision
D of this Court in the case of Bombay Journalists (supra). This decision
was rendered in the year 1963 and it was held in the said case that the
provisions of Section 25F (c) of the ID Act is directory and not mandatory
in nature. What has been ignored by the Tribunal as well as the High
Court is that subsequently, the Parliament enacted the Industrial Disputes
(Amendment)Act, 1964. Section 25F (c) of the ID Act was amended to
E include the words:
"or such authority as may be specified by the appropriate
Government by notification in the Official Gazette"
The statement of objects and reasons provides:
· F "Opportunity has been availed of to propose a few other essential
amendments which are mainly of a formal or clarificatory nature"
25. Nothing was done on part of the legislature to indicate that it
intended Section 25F( c) of the ID Act to be a directory provision, when
the other two sub-sections of the same section are mandatory in nature.
G The amendment was enacted which seeks to make it administratively
easier for notice to be served on any other authority as specified.
26. Further, even the decision in the case of Bombay Journalists
(supra) does not come to the rescue of the respondents. On the issue of
interpretation of Section 25F(c) of the ID Act, it was held as under:
H
RAJ KUMAR v. DIRECTOR OF EDUCATION 715
[V. GOPALA GOWDA, J.]

"The hardship resulting from retrenchment has been partially A
redressed by these two clauses, and so, there is every justification
for making them conditions precedent. The same cannot be said
about the requirement as to clause (c). Clause (c) is not intended
to protect the interests of the workman as such. It is only intended
to give intimation to the appropriate Government about the
B
retrenchment. and that only helps the Government to keep itself
informed about the conditions of employment in the different
industries within its region. There does not appear to be present
any compelling consideration which would justify the making of
the provision prescribed by clause (c) a condition precedent as in
the case of clauses (a) & (b). Therefore, having regard to the c
object which is intended to be achieved by clauses (a) & (b) as
distinguished from the object which clause (c) has in mind, it would
not be unreasonable to hold that clause (c), unlike clauses (a) &
(b), is not a condition precedent."
(emphasis laid by this Court) D
Thus, this Court read the ID Act and the relevant Rules thereunder
together and arrived at the conclusion that Section 25F( c) is not a condition
precedent for retrenchment. By no stretch of imagination can this decision
be said to have held that there is no need for industries to comply with
this condition at all. At the most, it can be held that Section 25F(c) is a E
condition subsequent, but is still a mandatory condition required to be
fulfilled by the employers before the order of retrenchment of the
workman is passed. This Court in the case of Mackinon Mackenzie &
Company Ltd. v. Mackinnon Employees Union·' held as under:
"Further, with regard to the provision of Section 25F Clause (c), F
the Appellant-Company has not been able to produce cogent
evidence that notice in the prescribed manner has been served by
it to the State Government prior to the retrenchment of the
concerned workmen. Therefore, we have to hold that the
Appellant-Company has not complied with the conditions precedent
to retrenchment as per Section 25F Clauses (a) and (c) of the G
l.D. Act which are mandatory in law."
In the instant case, the relevant rules are the Industrial Disputes (Central)
Rules, 1957. Rule 76 of the said Rules reads as under:

'(2015) 4 sec 544
H
716 SUPREME COURT REPORTS [2016] l S.C.R.

A "76. Notice of retrenchment.- If any employer desires to
retrench any workman employed in his industrial establishment
who has been in continuous service for not less than one year
under him (hereinafter referred to as 'workman' in this rule and
in rules 77 and 78), he shall give notice of such retrenchment as in
Form P to the Central Government, the Regional Labour
B
Commissioner (Central) and Assistant Labour Commissioner
(Central) and the Employment Exchange concerned and such
notice shall be served on that Government, the Regional Labour
Commissioner (Central), the Assistant Labour Commissioner
(Central), and the Employment Exchange concerned.by registered
c post in the following manner :- "
(a) where notice is given to the workman, notice ofretrenchment
shall be sent within three days from the date on which notice is
given to the workman;
' (emphasis laid by this Court)
D
Rule 76(a) clearly mandates that the notice has to be sent to the
appropriate authorities within three d~s from the date on which notice
is served on the workman. In the instant case, the notice ofretrenchment
was served on the appellant on 07.01.2003. No evidence has been
produced on behalf of the respondents to show that notice of the
E retrenchment has been sent to the appropriate authority even ti II date.
27. That being the case, it is clear that in the instant case, the
mandatory conditions of Section 25F of the ID Act to retrench a workman
have not been complied with. The notice of retrenchment dated
07.01.2003 and the order ofretrenchment dated 25.07.2003 are liable to
F be set aside and accordingly set aside.
Answer to Point No.3
28. The learned counsel for the appellant contends that the
respondent-School is a recognized private school and the appellant is an
'employee' in terms of Section 2(h) of the DSE Act. Chapter IV of the
G
DSEAct provides forthe terms and conditions of services ofan employee
ofa recognized private school. Section 8(2) of the DSE Act contemplates
that no employee of a recognized private school shall be dismissed,
removed or reduced in rank nor shall their services be otherwise
terminated except with the prior approval of the Director of Education,
H Delhi. Jn the instant case, the respondent-Managing Committee, before
RAJ KUMAR v. DIRECTOR OF EDUCATION 717
[V. GOPALA GgWDA, J.]

terminating the services of the appellant did not comply with the said A
mandatory provision of Section 8(2) of the DSEAct. The learned counsel
for the appellant further contends that the notice regarding termination
of service was served on the appellant on 07.01.2003, and as on tint
date, the aforesaid statutory provision was valid and binding.
29. The learned counsel for the appellant submits that Section B
8(2) of the DSE Act is a substantive right provided for safeguarding the
conditions of ~ervices of an employee. The termination of services of
the appellant without obtaining prior permission of the Director, renders
the action of the respondent-School as void. The learned counsel contends
that when statutory provisions provide a procedure to do an act in a
particular manner, it should be done in that very manner or not at all.
c
Reliance is placed on the decision of this Court in the case of Babu •
Verghese & Ors. v. Bar Council Of Kera/a & Ors. 6 :
"3 I. It is the basic principle of law long settled that ifthe manner
of doing a particular act is prescribed under any Statute, the act
must be done in that manner ornot at all. The origin of this rule is D
traceable to the decision in Taylor v. Taylor which was follo~ed
by Lord Roche in Nazir Ahmad v. King Emperor who stated as
under:
"Where a power is given to do a certain thing in a certain way,
the thing must be done in that way or not at all."
32. This rule has since been approved by this Court in Rao Shiv
Bahadur Singh and Anr. v. St~ ofVindhya Pradesh and again in
Deep Chand v. State of Rajao'han These cases were considered
by a Three-Judge Bench of this Court in State ofUttar Pradesh
v. Singhara Singh and Ors. and the rule laid down in Nazir Ahmad's F
case (supra) was again upheld. This rule has since been applied
to the exercise of jurisdiction by courts and has also b~~n
recognized as a salutary principle of administrative law."
(emphasis laid by this Court)
G
30. On the other hand, the learned counsel appearing on behalf of
the respondent-School contends that there was no requirement on the
part of the respondent-Managing Committee to comply with Section
8(2) of the DSE A'·, Reliance is placed on the decision of the Delhi
High Court in the case of Katfturi" Public Sc/tool v. Director of
• l t 999J 3 sec 422 H

' .
718 SUPREME COURT REPORTS [2016] 1 S.C.R.

A Education & Anr. ',wherein Section 8(2) of the DSE was struck down.
It was held as under:
"21. If the aforesaid observations of the Supreme Court in TMA
Pai's case (supra) are taken to its logical conclusion, it would
imply that there should be no such requirement of prior permissions
B or subsequent approval in matter of discipline of the staff Thus,
whether it is for suspension or disciplinary action, the educational
institutions would have a free hand. The safeguard provided is for
a judicial Tribunal to be set up to examine the cases."
A Constitution Bench of this Court had held in the case of TMA PAI
C Foundation v. State of Karnatak«' as under:
"61 .. .ln the case ofunaided private schools, maximum autonomy
has to be with the management with regard to administration,
including the right of appointment, disciplinary powers, admission
of students and the fees to be charged.
D "64. An educational institution is established only for the purpose
of imparting education to the students. In such an institution, it is
necessary for all to maintain discipline and abide by the rules and
regulations that have been lawfully framed. The teachers are like
foster-parents who are required to look after, cultivate and guide
the students in their pursuit of education. The teachers and the
E institution exist for the students and not vice versa. Once this
principle is kept in mind, it must follow that it becomes imperative
for the teaching and other staff of an educational institution to
perform their duties properly, and for the benefit of the students.
Where allegations of misconduct are made, it is imperative that a
F disciplinary enquiry is conducted, and that a decision is taken. In
the case of a private institution, the relationship between the
management and the employees is contractual in nature. A teacher.
if the contract so provides, can be proceeded against. and
appropriate disciplinary action can be taken ifthe misconduct of
the teacher is proved. Considering the nature of the duties and
G keeping the principle ofnatural justice in mind forthe pumoses of
establishing misconduct and taking action thereon. it is imperative
that a fair domestic inquiry is conducted. It is only on the basis of
the result of the disciplinary inquiry thatthe management will been
'113(2004) DLT 703 (DB)
H • (2002J s sec 481
RAJ KUMAR v. DIRECTOR OF EDUCATION 719
[V. GOPALA GOWDA, J.]

titled to take appropriate action. We see no reason why the A
management of a private unaided educational institution should
seek the consent or approval of any governmental authority before
taking any such action. In the ordinary relationship of master and
servant, governed by the terms of a contract of employment,
anyone who is guilty of breach of the terms can be proceeded
B
ru@inst and appropriate relief can be sought. Normally, the
aggrieved party would approach a Court of law and seek redress.
In the case of educational institutions, however, we are of the
opinion that requiring a teacher or a member of the staff to go to
a civil Court for the purpose of seeking redress is not in the interest
of general education. Disputes between the management and the c
staff of educational institutions must be decided speedily, and
without the excessive incurring of costs. It would, therefore, be
appropriate that an educational tribunal be set up in each district
in a state - the object being that the teacher should not suffer
through the substantial costs that arise because of the location of
D
the tribunal; ifthe tribunals are limited in number, they can hold
circuit/camp sittings indifferent districts to achieve this objective.
Till a specialized tribunal is set up, the right of filing the appeal
would lie before the District judge or Additional District Judge as
notified by the Government. It will not be necessary for the
institution to get prior permission or ex post facto approval of a E
governmental authority while taking disciplinary action against a
teacher or any other employee. The state government shall
determine, in consultation with the High Court, the judicial forum
in which an aggrieved teacher can file an appeal against the decision
of the management concerning disciplinary action or termination
F
of service."
(emphasis laid by this Court)
The learned counsel appearing on behalf of the respondent-School
submits that not obtaining prior approval for the termination of the services
of the appellant is thus, justified.
G
31. We are unable to agree with the contention advanced by the
learned counsel appearing on behalf of the respondent-School. Section
8(2) of the DSE Act is a procedural safeguard in favor of an employee
to ensure that an order of termination or dismissal is not passed without
the prior approval of the Director of Education. This is to avoid arbitrary
H
720 SUPREME COURT REPORTS (2016] 1 S.C.R.

A or unreasonable termination or dismissal of an employee of a recognized
private school.
32. The State Legislature is empowd~d to enact such statutory
provisions in relation to educational institutions, from Entry XI of List II
of VII" Schedule of the Constitution of India, which reads as:
B "education including Universities"
A number of legislations across the country have been enacted which
deal with the regulation 9feducational institutions, which contain provisions
similar to the one provided for under Section 8(2) of the DSE Act. One
such provision came for consideration before a Constitution Bench of
c this Court in the case of Katra Educational Society v. State Of lfttar
Pradesh & Ors.• The impugned provisions therein were certain Sections
of the amended Intermediate Education Act (U .P. Act 2of1921 ). Section
16-G of the Intermediate Education (Amendment) Act, 1958 provided
that Committee of Management could not remove or dismiss from service
D any Principal, Headmaster or teacher of a college or school without
prior approval in writing of the Inspector. The Amendment Act also
contained other provisions providing for governmental control over certain
other aspects of the educational institutions. Adjudicating upon the
competence of the state legislature to enact the amending act, this Court
held as under:
"8. Power of the State Legislature to legislate under the head
"education including Universities" in Entry 11 of List II of the 7th
Schedule would prima facie include the oowerto impose restrictions
on the management of educational institutions in matters relating
to education. The pith and substance of the impugned legislation
.•
F being in regard to the field of education within the competence of
the State Legislature, authority to legislate in respect of the
maintenance of control over educational institutions imparting
higher secondary education and forthat purpose to make provisions
for proper administration of the educational institutions was not
G denied. But it was said that the impugned Act is inoperative to the
extent to which it seeks to impose controls upon the management
of an educational institution registered under the Societies
Registration Act and managed through trustees, a11J::l\1ereby
directly trenches upog;legislative power conferred by Entry 44 of
List I and Entries I 0 & 18 of List III. This argument has no
H 9
AIR 1966 SC 1307
RAJ KUMAR v. DIRECTOR OF EDUCATION 721
[V. GOPALA GOWDA, J.]

substance. This Court has in Board of Trustees v. State of Delhi A
held that legislation which deprives the Board of Management of
a Society registered under the Societies Registration Act of the
power of management and creates a new Board does not fall
within Entry 44 of List I, but falls under Entry 32 of List II, for by
registration under the Societies Registration Act the Society does
B
not acquire a corporate status. It cannot also be said that the pith
and substance of the Act relates to charities or charitable
institutions, or to trusts or trustees. If the true nature and character
of the Act falls within the express legislative power conferred by
Entry 11 of List II, merely because it incidentally trenches upon
or affects a charitable institution, or the powers of trustees of the c
institution, it will not on that account be beyond the legislative
authority of the State. The impact of the Act upon the rights of
the trustees or the management of a charitable institution is purely
incidental. the true obje~t of the legislation being to provide for
control over educational institutions. The amending Act was
D
therefore within the competence of the State Legislature and the
fact that it incidentally affected the powers of the trustees or the
management in respect of educational institutions which may be
regarded as charitable. could not distract from the validity of the
exercise of that power.
10 ... If the management fails to comply with the directions made E
by the Director, that Officer may after considering the explanation
or representation, if any, given or made by the management, refer
the case to the Board for withdrawal of recoguition or recommend
to the State Government to proceed against the institution under
sub-s. (4) and the powers which the State Government may F
exercise after being satisfied that the affairs of the institution are
being mismanaged or that the management has wilfully or
persistently failed in the performance of its duties, include the
power to appoint an Authorised Controller to manage the affairs
of the institution for such period as may be specified by the
Government. The provision is disciplinary and enacted for securing G
the best interests of the students. The State in a democratic set-
up is vitally interested in securing a healthy system of imparting
education for its coming generation of citizens. and if the
management is recalcitrant and declines to afford facilities for
enforcement of the provisions enacted in the interests of the H
722 SUPREME COUR ".EPORTS [2016] 1 S.C.R.

A students, a provision authorising the State Government to enter
upon the management through its Authorized Controller cannot
be regarded as unreasonable."
(emphasis laid by this Court)
From a perusal of the above judgment of the Constitution Bench, it
B becomes clear that the state legislature is empowered in law to enact
provisions similar to Section 8(2) of the DSE Act.
33. At this stage, it would also be useful to refer to the statement
of objects and reasons of the DSE Act, I 973. It reads as under:
C "In recent years the unsatisfactory working and management of
privately managed educational institutions in the Union territory
of Delhi has been subjected to a good deal of adverse criticism.
In the absence of any legal power, it has not been possible for the
Government to improve their working. An urgent need is, therefore,
felt for taking effective legislative measures providing for better
D organization and development of educational institutions in the
Union territory of Delhi, for ensuring security of service ofteachers,
regulating the terms and conditions of their.employment ......... The
Bill seeks to achieve these objectives."
A perusal of the Statement ofobjects and reasons of the DSE Act would
E clearly show that the intent of the legislature while enacting the same
was to provide security of tenure to the employees of the school and to
regulate the terms and conditions of their employment.
In the case of Tiie Principal & Ors. v. Tiie Presiding Officer
& Ors. 10, a Division Bench of this Court held as under:
F
"Sub-section (2) of Section 8 of the Act ordains that subject to
any rule that may be made in this behalf, no employee of a
recognised private school shall be dismissed, removed or reduced
in rank nor shall his service be otherwise terminated except with
the prior approval of the DirectorofEducation. From this, it clearly
G follows that the prior approval of the Director of Education is
required only if the service ofan employee of a recognised private
school is to be terminated."
34. The Division Bench of the Delhi High Court, thus, erred in
striking down Section 8(2) of the DSE Act in the case of Katlluria
H '"(1978) I SCC498
RAJ KUMAR v. DIRECTOR OF EDUCATION 723
[V. GOPALA GOWDA, J.]

Public School (supra) by placing reliance on the decision of this Court A
in the case of TMA Pai (supra), as the subject matter in controversy
therein was ·not the security of tenure of the employees of a school,
rather, the question was the right of educational institutions to function
unfettered. While the functioning of both aided and unaided educational
institutions must be free from unnecessary governmental interference,
B
the same needs to be reconciled with the conditions of employment of
the employees of these institutions and provision of adequate precautions
to safeguard their interests. Section 8(2) of the DSE Act is one such
precautionary safeguard which needs to be followed to ensure that
employees of educational institutions do not suffer unfair treatment at
the hands of the management. The Division Bench of the Delhi High c
Court, while striking down Section 8(2) of the DSE Act in the case of
Kathuria Public School (supra) has not correctly applied the law laid
down in the case of Katra Educational Society (supra), wherein a
Constitution Bench of this Court, with reference to provision similar to
Section 8(2) of the DSE Act and keeping in view the object ofregulation
D
ofan aided or unaided recognised school, has held that the regulation of
the service conditions of the employees of private recognized schools is
required to be controlled by educational authorities and the state legislature
is empowered to legislate such provision in the DSE Act. The Division
Bench wrongly relied upon that part of the judgment in the case of Katm
Education Society (supra) which dealt with Article 14 of the Constitution E
and aided and unaided educational institutions, which had no bearing on
the fact situation therein. Further, the reliance placed upon the decision
of this Court in the case of Frank Anthony Public School Employees
Association v. Union Of India & Ors. 11 is also misplaced as the
institution under consideration in that case was a religious minority
F
institution. The reliance placed by the learned counsel appearing on behalf
of the respondents on the case of TMA Pai (supra) is also misplaced as
the same has no bearing on the facts of the instant case, for the reasons
discussec) supra. The reliance placed upon the decision of the Delhi
High Court in the case of Kathuria Public School (supra) is also
misplaced as the same has been passed without appreciating the true G
purport of the Constitution Bench decision in the case of Katm
Education Society (supra). Therefore, the decision in the case of
Katlturia Public Sc/tool (supra), striking down Section 8(2) of the DSE
Act, is bad in law.
11 (1986)4sec101
H
724 SUPREME COURT JI' .'ORTS (2016] l S.C.R.

A 35. Furthermore, the decision in the case of Kat/1uria Public
. School(supra) does not come to the aid of the respondents for one
more reason. Undisputedly, the notice of retrenchment was served on
the appellant on 07.01.2003 and he was retrenched from service on
25.07.2003. The decision in the case of Kathuria PublicScliool(supra),
striking down Section 8(2) of the DSE Act was rendered almost exactly
B
two years later, i.e. on 22.07.2005. Surely, the respondents could not
have foreseen that the requirement of prior approval of the order of
termination passed against the appellant from Director would be struck
down later and hence decided to not comply with it. Section 8(2) of the
DSE Act was very much a val id provision of the statute as on the date
c of the retrenchment of the appellant, and there is absolutely no reason
why it should not have been complied with. The rights and liabilities of
the parties to the suit must be considered in accordance with the law as
on the date of the institution of the suit. This is a fairly well settled
principle of law. Jn the case of Dayawati v. Jnderjit1 2, a three judge
bench of this Court held as under:
D
"Now as a general proposition, it may be admitted that ordinarily
a court of appeal cannot take into account a new law, brought into
existence after the judgment appealed from has been tendered,
because the rights of the litigants in an appeal are determined
under the law in force at the date of the suit."
E More recently, in the case of Carona Ltd v. Parvat/1y
Swaminathan and Sons'", this Court held as under:
" ...... The basic rule is that the rights of the parties should be
determined on the basis of the date ofinstitution of the suit. Thus,
if the plaintiff has no cause of action on the date of the filing of
F the suit, ordinarily, he will not be allowed to take advantage of the
cause of action arising subsequent to the filing of the suit.
Conversely, no relief will normally be denied to the plaintiff by
reason of any subsequent event if at the date of the institution of
the suit, he has a substantive right to claim such relief."
G 36. The respondent-Managing Committee in the instant case, did
not obtain prior approval of the order of termination passed against the
appellant from the Director of Education, Govt. of NCT of Delhi as
required under Section 8(2) of the DSE Act. The order of termination
passed against the appellant is thus, bad in law.
12 AIR 1966 SC 1423
H
"(2007) s sec 559
RAJ KUMAR v. DIRECTOR OF EDUCATION 725
[V. GOPALA GOWDA, J.]

Answer to Point no. 4 A
3 7. The termination of the appellant is bad in law for non-
compliance with the mandatory provisions of Section 25F of the ID Act
and also Section 8(2) of the DSE Act. Further, the respondent-School
has not produced any evidence on record to show that the retrenchment
of the appellant was necessary as he had become 'surplus'. The B
termination of the appellant was ordered in the year 2003 and he is
unemployed till date. The respondents have been unable to produce any
evidence to show that he was gainfully employed during that period and
therefore he is entitled to back wages and other consequential benefits
in view of the law laid down by this Court in the case of Deepali Gundu
Surwase v. Kranti Junior Adliyapak Maliavidyala (D.ED.)& Ors. 14 c
wherein it was held as under:
"22. The very idea ofrestoring an employee to the position which
he held before dismissal or removal or termination of service
implies that the employee will be put in the same position in which
he would have been but for the illegal action taken by the employer. D
The injury suffered by a person, who is dismissed or removed or
is otherwise terminated from service cannot easily be measured
in terms of money. With the passing of an order which has the
effect of severing the employer employee relationship, the latter's
source of income gets dried up. Not only the concerned employee, E
but his entire family suffers grave adversities. They are deprived
ofthe source of sustenance. The children are deprived of nutritious
food and all opportunities of education and advancement in life.
At times, the family has to borrow from the relatives and other
acquaintance to avoid starvation. These sufferings continue till
the competent adjudicatory forum decides on the legality of the F
action taken by the employer. The reinstatement of such an
employee, which is preceded by a finding of the competent judicial/
quasi judicial body or Court that the action taken by the employer
is ultra vires the relevant statutory provisions or the principles of
natural justice, entitles the employee to claim full back wages. If G
the employer wants to deny back wages to the employee or contest
his entitlement to get consequential benefits, then it is for him/her
to specifically plead and prove that during the intervening period
the employee was gainfully employed and was getting the same
emoluments. Denial of back wages to an employee, who has
H
"(2013) 10 sec 324
726 SUPREME COURT REPORTS [2016) I S.C.R.

A suffered due to an illegal act of the employer would amount to
indirectly punishing the concerned employee and rewarding the
employer by relieving him of the obligation to pay back wages
including the emoluments."
38. For the reasons stated supra, we are of the view that the
B impugned judgment and order dated 28.07.2008 passed by the Delhi
High Court is liable to be set aside and accordingly set aside, by allowing
this appeal. The retrenchment of the appellant from his service is bad in
law. The respondent-Managing Committee is directed to reinstate the
appellant at his post. Consequently, the relief of back wages till the date
of this order is awarded to the appellant, along with all consequential
c benefits from the date of termination of his services. The back wages
shall be computed on the basis of periodical revision of wages/salary.
We further make it clear that the entire amount due to the appellant
must be spread over the period between the period of retrenchment and
the date of this decision, which amounts to 13 years, for the reason that
D the appellant is entitled to the benefit under Section 89 of the Income
Tax Act. The same must be complied with within six weeks from the
date of receipt of the copy of this judgment.
Nidhi Jain Appeal allowed.