Full Judgment Text
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CASE NO.:
Appeal (civil) 1816 of 2007
PETITIONER:
Secretary, Akola Taluka Education Society & Anr
RESPONDENT:
Shivaji and Ors
DATE OF JUDGMENT: 05/04/2007
BENCH:
S.B. Sinha & Markandey Katju
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 1816 OF 2007
[Arising out of SLP (Civil) No.13907 of 2006]
S.B. SINHA, J :
Leave granted.
The State of Maharashtra enacted ’The Maharashtra Employees of
Private Schools (Conditions of Service) Regulation Act, 1977 (for short, ’the
Act’) to regulate recruitment and conditions of service of employees in
certain private schools. It came into force with effect from 20.03.1978.
’Private School’ has been defined in Section 2(20) of the Act to mean :
"Private School", means a recognized school established
or administered by a Management other than the
Government or a local authority."
The terms ’recognized’ and ’school’ have been defined in Section
2(21) and 2(24) respectively in the following terms :
"2(21).-"Recognized" means recognized by the Director,
the Divisional Board or the State Board, or by any officer
authorized by him or by any of such Boards;"
"2(24).- "School", means a primary school, secondary
school, higher secondary school, junior college of
education or any other institution by whatever name
called including technical, vocational or art institution
or part of any such school, college or institution, which
imparts general, technical, vocational, art or, as the case
may be, special education or training in any faculty or
discipline or subject below the degree level;"
Appellant No.1 herein runs a training institute. It imparts vocational
training to the students admitted therein in different disciplines e.g.
Draftsman Civil, Electrician, Wireman, Welder and Fitter etc. The strength
of the students in the aforementioned disciplines allegedly began to go down
from year to year. So much so, no student took admission in the courses of
’Draftsman Civil’ or ’Welder’. The relevant portion of the chart showing
details of admissions in the aforementioned disciplines reads as under :
"
Sr.
No.
Academic
Year
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Draftsman Civil
Electrician
Wireman
Welder
Fitter
Sanctioned
strength
Actual
admission
Sanctioned
strength
Actual
admission
Sanctioned
strength
Actual
admission
Sanction
ed
strength
Actual
admission
Sanction
ed
strength
Actual
Admission
14
August
1998
16
08
16
18
16
18
16
18
24
26
15
August
1999
16
09
16
18
16
09
16
18
24
19
16
August
2000
16
07
16
17
16
07
16
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12
24
14
17
August
2001
16
00
16
09
16
06
16
05
24
11
18
August
2002
16
00
16
01
16
05
16
00
24
02
Similarly, in the certificate courses of six months and one year also,
there had been a steady decline, as would appear from the following charts :
"Details of Admission for Certificate Courses of six months
Sr.
No.
Academic
Year
Electric Motor & Armetcher
Winding
Electronic Assembly &
Trouble shooting
Sanctioned
Strength
Actual
Admission
Sanctioned
Strength
Actual
Admission
1.
Jan. 1999
20
13
25
10
2.
Jul. 1999
20
16
25
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05
3.
Jan. 2000
20
05
25
06
4.
Jul. 2000
20
15
25
07
5.
Jan. 2001
20
08
25
--
6.
Jul. 2001
20
06
25
--
7.
Jan. 2002
20
--
25
--
8.
Jul. 2002
20
--
25
--
Details of Admission for Certificate Courses of one year
Sr.
No.
Academic
Year
Tailoring &
Cutting
Lathe Machine
Operator
Computer Operation
(Part-time)
Sanctioned
Strength
Actual
Admission
Sanctioned
Strength
Actual
Admission
Sanctioned
Strength
Actual
Admission
1.
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Jul. 1998
40
34
25
17
20
--
2.
Jul. 1999
40
24
25
09
20
--
3.
Jul. 2000
40
26
25
05
20
--
4.
Jul. 2001
40
32
25
06
20
--
5.
Jul. 2002
40
--
25
--
20
--
"
Respondent No. 1 herein was appointed on a temporary basis. The
services of the private respondents were purported to have been temporarily
terminated as allegedly a decision had been taken to close down the institute
with effect from 12.08.2002, contending that the said purported orders of
termination were violative of the Act and the Rules framed thereunder.
Appeals thereagainst were filed by the aggrieved employees/teachers
before the School Tribunal, Pune Region. The jurisdiction of the Tribunal to
entertain the said appeals was questioned on the ground that the institute in
question was not a school within the meaning of the provisions of the said
Act. The Tribunal, however, in its judgment held : (i) As the appellant was
duly recognized by the Central Government permanently without grant-in-
aid, it was a school within the meaning of the provisions of the said Act; (ii)
Inter alia, on the premise that the services of all the staff and teachers were
not terminated, the plea of the appellant that the institute had to be closed
down being incorrect, the orders of termination were mala fide;
The Tribunal furthermore took note of the fact that during pendency
of the said appeals, some new teachers had been appointed.
The writ petition preferred by the appellant thereagainst has been
dismissed by reason of the impugned judgment.
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Mr. Shekhar Naphade, the learned Senior Counsel appearing on
behalf of the appellants, would urge :
(i) The institute is not covered by the definition of the ’private school’
within the meaning of the provisions of the said Act, as it was not
recognized by the authorities under the said Act.
(ii) The Tribunal in its judgment merely proceeded on the basis that the
school, in fact, was not closed down, but having failed to take into
consideration the charts filed before it; from which, it would appear that the
number of students had gone down in different disciplines, and thus, the
impugned judgment cannot be sustained.
(iii) The Tribunal wrongly allowed full back wages to the teachers without
taking into consideration the financial condition of the appellant.
Our attention, in this behalf, has also been drawn to the following
statements made in the Rejoinder to the Counter Affidavit of Respondent
Nos. 1 to 3 before this Court :
"I say that the details of the number of students currently
studying in the Institute and the fees collected from them are as
follows :
Students studying in 2nd
year of ITI
47 x Rs.6,000 (Fees
collected from every
student)
Rs.2,82,000/-
Students studying in 1st
year of ITI
72 x Rs.8,000/- (Fees
collected from every
student)
Rs. 5,76,000/-
Students studying in
certificate course
7 x 2,000 (Fees
collected from every
student)
Rs.14,000/-
Total
Rs.8,72,000/-
I say that the details regarding the expenses incurred by
the Petitioner on the salary and other miscellaneous expenses
are as follows :
1.
Towards salary of
staff at current rate of
consolidated pay
Rs. 65,200/- per month x
12 months
Rs.7,80,400/- per
annum
2.
Expenses for raw
material per student
per year (Rs.2400)
Rs.2,400 x 126 (No. of
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students)
Rs.3,02,400/-
3.
Misc. Expenses
(Telephone bill,
electricity bill,
stationery, travel
expenses, repairs, etc.
Rs.2,00,000/-
Total
Rs.12,82,800/-
Considering the above mentioned two tables, it becomes
clear that the Petitioner is facing a deficit of Rs.4,10,800/- in
the current academic year. The Petitioner if is directed to pay
100% back wages to the Respondents employees, it would
create a burden of more than Rs. 40 lacs. The Petitioner is not
in a position to pay back wages and the said direction would
affect the poor students, who are studying in the Institute and
the efforts of the Management to re-establish the Institute
would be thwarted. It is respectfully submitted that the institute
is being run by reducing the tuition fees so as to attract the
higher number of students. As stated earlier the fees charged
from the students have dwindled from Rs.20,000/- per annum in
the year 1998 to Rs.6,000/- to 8,000/- at present."
It was furthermore submitted that the institute having been set up in a
tribal area, it is unlikely that many students would take admission in the said
institute in future.
Mr. Vinayak Dixit, the learned Senior Counsel appearing on behalf of
the respondents, on the other hand, supported the impugned judgment
contending that the plea taken by the appellant that the school was required
to be closed down was an act of mala fide on the part of the appellants. The
learned counsel would contend that in terms of Rule 26 of the Maharashtra
Employees of Private Schools (Conditions of Service) Rules, 1981, as the
appellant was bound to give three months’ notice and was furthermore
required to obtain prior approval of the competent authority specified
therein; and as the mandatory conditions for retrenching the services of the
respondents had not been complied with, the orders of termination were void
ab initio.
It was submitted that the appellant had not paid any salary to the
teachers for the last 23 months, although they had been reinstated in terms of
this Court’s order dated 19.08.2006. It was also submitted that even after
their reinstatement, they are being paid salary only on a consolidated basis.
The question as to whether the provisions of the said Act were
applicable in the case of Appellant school although raised a question of
jurisdiction, in our opinion, it was necessary for the appellant to plead the
jurisdictional fact in relation thereto.
It is true that in the light of the interpretation clause contained in the
said Act, a ’private school’ was required to be recognized by the authorities
specified therein. The Tribunal had found that it was recognized by the
Central Government. The State also in its counter affidavit contended that it
is recognized by the State. Appellant herein did not raise a contention
before the Tribunal that the institute in question was not recognized by the
authorities specified under sub-section (21) of Section 2 of the Act. The said
contention was required to be specifically raised so as to enable the
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respondents herein to meet the same. As the jurisdictional fact required for
determining the jurisdiction of the Tribunal had not been stated by the
appellants, we are of the opinion that such a contention cannot be allowed to
be raised before us for the first time.
There cannot be any doubt whatsoever that if the ’institute’ comes
within the description of ’school’ in terms of the provisions of the said Act,
before terminating the services of the respondents, it was obligatory on their
part to satisfy the conditions precedent therefor.
Rule 26 of the Rules provides that a permanent employee may be
retrenched by the management after giving him three months’ notice on one
or more grounds specified therein. Stoppage of imparting coaching in
respect of some courses of studies was one of them. Admittedly, the
respondents had not been given three months’ notice. The order of
termination was, therefore, bad in law.
We may, however, state that in view of the provisions contained in
sub-clause (ii) of clause (2) of Rule 26, it was not necessary to obtain prior
approval of the Education Officer, as a technical or a vocational school does
not come within the purview thereof. There cannot furthermore be any
doubt whatsoever that the contention raised by the appellants before the
Tribunal that the institute was required to be closed down was found to be
factually incorrect and on that ground the decision of the Tribunal to the
effect that the termination of services of the respondents were bad in law
cannot be said to be suffering from any error of law apparent on the face of
the records.
The Tribunal, however, in our opinion ought not to have granted full
back wages. Full back wages, as is well-known, should not be directed to be
granted only because it would be lawful to do so. Before such an order is
passed, a judicial or a quasi-judicial authority must consider all aspects of
the matter. Appellant herein has produced facts to show decline in strength
of the students in different disciplines. The same has not been disputed. We
have noticed hereinbefore that in some disciplines the strength of the
students has considerably gone down. The school is an unaided one. It,
therefore, must meet its financial need from the fees realized from the
students. It was a relevant consideration. The Tribunal, in our opinion,
failed to take the said fact into consideration. The financial condition of the
school, as noticed supra, has also not been denied or disputed.
It is now well-settled by a large number of decisions of this Court that
back wages should not granted automatically. In U.P. State Brassware
Corporation Ltd. and Anr. v. Uday Narain Pandey [(2006) 1 SCC 479], this
Court observed :
"22. No precise formula can be laid down as to under
what circumstances payment of entire back wages should
be allowed. Indisputably, it depends upon the facts and
circumstances of each case. It would, however, not be
correct to contend that it is automatic. It should not be
granted mechanically only because on technical grounds
or otherwise an order of termination is found to be in
contravention of the provisions of Section 6-N of the
U.P. Industrial Disputes Act."
[See also Banshi Dhar v. State of Rajasthan & Another \026 2006 (11) SCALE
199 \026 Para 11]
In U.P. SRTC v. Mutthu Singh [(2006) 7 SCC 180], this Court
opined :
"\005But we are fully satisfied that in the facts and
circumstances of the case, back wages should not have
been awarded to the respondent-workman. In several
cases, this Court has held that payment of back wages is
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a discretionary power which has to be exercised by a
court/tribunal keeping in view the facts in their entirety
and neither straight jacket formula can be evolved nor a
rule of universal application can be laid down in such
cases."
[See also A.P. SRTC and Another v. B.S. David Paul - (2006) 2 SCC 282]
We, therefore, are of the opinion that in the peculiar facts and
circumstances of this case, interest of justice shall be met if grant of back
wages is confined to 25% only from the date of termination of the
respondents till their reinstatement. It is, however, made clear that the
respondents shall be entitled to receive entire salary for the period they had
worked prior to their termination as also post reinstatement.
The appeal is allowed to the aforementioned extent with the
aforementioned directions. However, in the facts and circumstances of the
case, there shall be no order as to costs.