Full Judgment Text
1
2025 INSC 374
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO.17595 OF 2024)
INDIAN COUNCIL OF SOCIAL SCIENCE
RESEARCH (ICSSR) …APPELLANT
VERSUS
NEETU GAUR & ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO. OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 22022 OF 2024)
WITH
CIVIL APPEAL NO(S). OF 2025
(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO(s). 54273/2024)
AND
CIVIL APPEAL NO(S). OF 2025
(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO.(s) 54276/2024)
J U D G M E N T
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Date: 2025.03.20
18:23:45 IST
Reason:
SUDHANSHU DHULIA, J.
1. Delay condoned. Leave granted.
2
Heard Mr. K. M. Nataraj, learned Additional Solicitor General
and Mr. Ranbir Singh Thakur, learned counsel appearing for
the appellant(s) as well as Mr. Narender Hooda and Mr. Sanjeev
Sharma, learned senior counsel and Ms. Ana Upadhyay,
learned counsel appearing for the respondents(s).
2. These appeals challenge the order dated 16.05.2024 passed by
the Division Bench of the High Court of Punjab and Haryana at
Chandigarh. For the sake of convenience, facts have been noted
from SLP(C) No.17595 of 2024 by considering it as the main
matter.
3. The appellantIndian Council of Social Science Research
(hereinafter ‘ICSSR’) before this Court is a society established in
1969 and registered under the Societies Registration Act, 1860
but under the total financial and administrative control of
Ministry of Education, Government of India (‘GOI’). As per the
Memorandum of Association of ICSSR, its objectives are as
follows:
(i) reviewing the progress of social science research and
giving advice to GOI and other users;
(ii) sponsoring social science research programs and
administering grants to research institutions and
individuals for research in social sciences, indicating areas
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and topics on which social science research is to be
promoted;
(iii) advising GOI on all such matters pertaining to social
science research etc.
ICSSR consists of twentyseven members including social
scientists and exofficio members from various departments
and bodies of GOI. The chairman of ICSSR, appointed by GOI,
has to be a person of national eminence in the field of social
sciences with proven contributions to research. The funds of
ICSSR consist of grants made by the GOI, contributions from
other sources and income from the assets of ICSSR.
4. Respondent No.19Centre for Research in Rural and Industrial
Development (hereinafter ‘CRRID’) was established in the year
1978, and is an autonomous Research Institute in Chandigarh.
It is registered as a scientific and educational charitable society
under the Societies Registration Act, 1860. The working of
CRRID is administered, directed and controlled by its main body,
known as the Governing Body. This Governing Body of CRRID
can have a maximum of twelve members including seven life
members.
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5. Whereas ICSSR, as referred above, provides grants to institutions
involved in social science research and since one of the aims of
CRRID is to conduct and promote research in various subjects
including social sciences, CRRID is under the grantinaid of the
ICSSR. CRRID receives 45% grants from ICSSR and equally
45% from the State of Punjab. The remaining 10% is generated
by CRRID through its own resources. CRRID is hugely
dependent upon these grantsinaid, which it has been receiving
since 1984. The ICSSR’s Rules of GrantinAid to Societies and
Institutions Doing Research in the field of Social Sciences
(hereinafter ‘GrantinAid Rules’), govern the manner in which
grants are to be given by ICSSR.
6. In the year 20152016, several complaints were received by
ICSSR against CRRID alleging malpractices in the functioning of
CRRID including violation of rules and regulations, and misuse
of resources including the grants paid by ICSSR. Pursuant to
these complaints, ICSSR constituted a committee to enquire into
allegations against CRRID. The terms of reference of the
Committee inter alia included:
1. Recruitment/promotion of staff allegedly on the
basis of fake degrees, placement of faculty to
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higher grades and grant of additional
increments against MHRD norms.
2. Alleged violation of ICSSR GrantinAid rules in
amending MoA and its misuse by BOG members
of CRRID for availing large benefits.
3. Audit objections particularly about the elevation
of faculty/staff to higher grades.
4. Alleged discrepancies in the implementation of
6th CPC and submission of incorrect records for
this purpose.
5. Issues related to alleged violation of service
rules including retirement age.
6. Nonresponse of the queries forwarded by
MHRD and other authorities of Govt. of India
about CRRID.
7. Complaints about alleged violation of building
byelaws by CRRID.
8. Alleged nepotism and misuse of office facility
and funds by Executive Vice Chairman of CRRID
on purposeless abroad visits and visits within
India.
9. Any other violation of ICSSR Grantinaid Rules
applicable to the CRRID as mentioned in the
complaint.
7. In its report dated 29.05.2017, the Committee highlighted
various irregularities and malpractices within CRRID. CRRID
was found to be in violation of its Rules as there were
appointments of unqualified persons with either fake or
dubious degrees. Promotions and increments of staff were also
made against the norms. There were findings of non
maintenance of proper office records, etc. The Committee
recommended several corrective measures to be taken by
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CRRID including the recovery of excess payments made by
CRRID to some of its employees.
8. Thereafter, between 2017 and 2021, we have a long list of
correspondence between ICSSR and CRRID about the
implementation of the directions suggested by ICSSR largely to
employ corrective measures including rectifying academic
qualifications of the staff, recovering excess salaries paid to
employees, taking action against guilty persons etc. In January
2021, CRRID had submitted an actiontaken report to ICSSR. A
FactFinding Committee was also constituted by ICSSR to
enquire into the compliances by CRRID and this factfinding
committee concluded that CRRID Management has been non
cooperative and responses/compliances made by CRRID are
evasive, ambiguous and incomplete. In sum and substance,
ICSSR was not satisfied with the actions taken by CRRID and
since CRRID did not submit its clarification as sought by ICSSR
regarding deficiencies in the actiontaken report, ICSSR finally
stopped releasing its grant in favour of CRRID April 2021
onwards. Once the grant was stopped by ICSSR, we are told
that the Government of Punjab followed suit and stopped 45%
of its share of grant to CRRID.
7
9. In July 2022, seventeen employees of CRRID (Respondent Nos.1
to 17) filed a Writ Petition before the High Court for the release
of their salary. In their Writ Petition, Respondent Nos.117
pleaded that they have been working on different academic and
nonacademic posts in CRRID, but they have not been paid the
salaries and thus prayed for the release of their salaries. The
plea taken by the CRRID before the High Court was that the
salaries of its employees are paid from the grant given by ICSSR
and since ICSSR has stopped the payment of the grant, CRRID
could not pay the salaries of employees. Meanwhile, during the
pendency of proceedings before the High Court, in January
2023, ICSSR constituted a highlevel committee consisting inter
alia of a retired High Court Judge to look into the matter
related to CRRID. The terms and reference of this HighLevel
Committee read as follows:
1. To comprehensively look into all the issues
pointed out in various enquiry reports, actions
taken by the CRRID in compliance of these
reports and observations recorded by Fact
Finding Committee; and
2. To suggest comprehensive resolution of the
matter including any punitive action that
needs to be initiated by ICSSR or by CRRID
against concerned officers responsible for
irregular appointments and promotions by
CRRID.
8
10. This HighLevel Committee was informed by CRRID that Rs.55
lacs and Rs.189 lacs have been withheld by ICSSR for the year
20202021 and 20212022, respectively. The Committee gave
its findings that the faith of the ICSSR in CRRID was misused
by the management of CRRID and the Committee suggested
that the grant already withheld by the ICSSR, to the tune of
Rs.55 lacs for the year 20202021 and Rs.189 lacs for the year
20212022, may not be released as a punitive measure against
CRRID. There were some other recommendations for ICSSR to
be imposed on CRRID like incorporating restrictions on the
tenure of members of the Governing Body including the life
members. However, considering that CRRID is a research and
educational institution, and many Ph.D. scholars are getting
the assistance of CRRID in their research work, this HighLevel
Committee recommended the release of future grants so that
payment of salaries be made to the employees including Ph.D.
supervisors, librarians etc. Consequently, April 2023 onwards,
grants were released.
11. Meanwhile, vide order dated 17.10.2023, the learned Single
Judge of the High Court allowed the Writ Petition filed by
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employees as it had come to the conclusion that ICSSR has the
ultimate responsibility of releasing the grant for the salaries of
the employees of CRRID for the reason that ICSSR has a ‘deep
and pervasive’ control over CRRID as it has its nominee in the
Governing Body, which had taken all the important decisions
which have now been questioned by ICSSR for violating its
rules and norms. The learned Single Judge of the High Court
was of the opinion that there is no justification for ICSSR to
withhold the grant. The Writ Petitions were allowed, and
direction was given to release the grant. Aggrieved by the same,
ICSSR filed a Writ Appeal before the Division Bench of the High
Court. The Division Bench dismissed the Writ Appeal on
16.05.2024 reiterating the findings of the Single Judge and
directing that the amount, deposited by ICSSR before the
Registry of the High Court, be disbursed in favour of the
employees as their salaries.
12. We have heard Mr. K.M Nataraj, Additional Solicitor General for
AppellantICSSR, Mr. Narender Hooda, Senior Advocate, for
respondent no. 1 to 17 (employees) as well as for the CRRID
and Mr. Sanjeev Sharma, Senior Advocate, for the State of
Punjab. We have also perused the material on record.
10
13. The learned Single Judge as well as the Division Bench of the
High Court, to our mind, have erred in observing that since the
governing body of CRRID had a nominee of ICSSR, ICSSR has a
‘deep and pervasive’ control over the functioning of CRRID and
ICSSR is equally at fault for irregularities within CRRID. In
other words, the High Court was of the opinion that
appointments were made on the posts sanctioned by ICSSR and
with the approval of the Governing Body which consisted of a
nominee of ICSSR, thus ICSSR is not justified in withholding
the grant by alleging irregularities in such appointments or
promotions. It is our respectful opinion that the High Court has
not considered the matter in its right perspective.
14. We have gone through the Rules and Regulations of CRRID
(hereinafter ‘CRRID Rules’) by which CRRID is governed as a
society. As per Rule 22(a)(i) of the said Rules, the total number
of members in the Governing Body cannot exceed twelve
including the seven life members. Rule 22(d) provides the
Governing Body to accept the nominees by the ICSSR or the
State Governments in the society and the Governing Body.
Here, the relevant portion of Rule 22(d) of CRRID Rules is
reproduced below:
11
The Governing Body shall have the authority to
accept the nominees in the Society and the
Governing Body who are deputed by the Indian
Council of Social Science Research (ICSSR) or the
State Governments.
Similarly, Rule 17 of GrantinAid Rules of ICSSR, by which
grants given by ICSSR are governed, read as follows:
17. Condition of GrantsinAid (Special):
A Research Institution which receives a recurring
grant of Rs. One lakh or more shall be subject to
the following additional conditions:
(1) …
(2) The Council shall nominate not more than two
representatives on the governing body of the
research Institution.
(3) …
15. The learned Single Judge and the learned judges of the Division
Bench of the High Court have considered the above provision to
be amounting to a ‘deep and pervasive’ control by the State!
However, it is to be noted that the second part of Rule 22(d) of
CRRID Rules empowers the Governing Body to reject the names
of nominees proposed by ICSSR or State Governments without
giving any reason. It is like a proviso to the general part
embodied under Rule 22(d) of CRRID Rules. It reads as follows:
The Governing Body shall, however, have the right
to reject/or refer back to the deputing authorities
the names of the proposed nominees(s) should it
feel that the said nominee is not acceptable to the
Governing Body. The Governing Body shall not be
12
obliged to give the reason for rejecting or referring
back any such name.
This shows that CRRID is an autonomous body without much
control of ICSSR. The Governing Body of CRRID has the
authority to reject and refer back the names of proposed
nominees and while doing so, CRRID is not even required to
give any reasons.
16. The presence of one or even two members of ICSSR in a Governing
Body of twelve does not amount to ‘deep and pervasive’ control
of the State. Even assuming an additional two nominees from
the Government of Punjab in the Governing Body will at best
make four such members in a Governing Body of twelve. We
have been informed that as of today there are only three
nominees together from ICSSR and State of Punjab in all. This
is not ‘deep and pervasive’ control.
17. We have no doubt in our mind that ICSSR is indeed an “authority”,
within the purview of Article 12 of the Constitution of India. It
also controls CRRID to an extent inasmuch as CRRID depends
on the funds released by ICSSR as grants. But this itself
cannot be called a ‘deep and pervasive’ control. A ‘deep and
pervasive’ control would require much more than just financing
an institution or a body. Even guiding, controlling or regulating
13
affairs of an institution will not be called a ‘deep and pervasive’
control. The ‘deep and pervasive’ control requires
administrative, financial and functional control of such a body
to a much higher degree including interference into its dayto
day working, and mere regulatory control cannot mean ‘deep
and pervasive’ control. [ See: S.S Rana v. Registrar Coop.
;
Societies and Anr. (2006) 11 SCC 634 Chander Mohan
Khanna v. NCERT (1991) 4 SCC 578 ; Balmer Lawrie & Co.
].
Ltd. v. Partha Sarathi Sen Roy (2013) 8 SCC 345
18. Moreover, the crucial question here is not whether the control
exercised by ICSSR on CRRID is ‘deep and pervasive’ but
whether ICSSR was justified in withholding its grant. CRRID
has not answered this question with any degree of satisfaction.
The High Court has also failed to address this crucial issue.
Simply because ICSSR has some control over CRRID, it cannot
be a reason for directing ICSSR to release the grants when it
has been withheld for just and valid reasons. Once ICSSR gives
its grant to CRRID it does not have much interference in the
management of these funds. Nor is the administration of
CRRID controlled by ICSSR. CRRID, in any case, is not an
14
authority within the purview of Article 12 of the Constitution of
India. Merely because CRRID is under the control of an
authority (as defined under Article 12) will not make CRRID an
authority. In fact, this is neither the case of the respondents
employees nor does CRRID in any manner assert itself as an
Authority.
19. The grantinaid provided by ICSSR to any research institution
comes with certain conditions which are required to be followed
by the beneficiary institution. Rule 3 of the GrantinAid Rules
of ICSSR makes this position very clear. It states that ‘the
Indian Council of Social Science Research (hereinafter referred to
as the Council) shall have authority, with prior approval of the
Government of India, to extend grantinaid under these Rules to
Research Institutions (…) provided that they fulfill all the
conditions laid down in Rule 4 below ’. Thereafter, Rule 4 lays
down certain conditions that make an institution eligible for a
grant by ICSSR. Certain other Rules prescribing conditions for
grants are as follows:
16. CONDITIONS OF ASSISTANCE (General):
…
(2) Grant under a particular head shall not be
utilized for a purpose other than that for which it is
15
intended except with the previous approval of the
Council.
(3) The Council may require a Research
Institution to refund a grant given under specific
conditions, if the Research Institution does not
comply with these conditions. The Council may, in
such cases, also stop any further grant to the
Research Institution.
…
(10) It shall be obligatory for the Research
institutions to surrender any unspent balance of
the grant after expiry of the period within which
the grant I required to be spent.
17. CONDITION OF GRANTSINAID (Special):
A Research Institution which receives a
recurring grant of Rs. One lakh or more shall be
subject to the following additional conditions:
(3) The constitution of the Research Institute
shall be got approved by the Council and the
Research Institution shall agree not to make any
change therein without the prior approval of the
Council.
20. A reading of these GrantinAid Rules makes it clear that the grants
by ICSSR are discretionary and institutions like CRRID cannot
claim grants as a matter of right. It is made more apparent by
Rule 11 which explicitly states that ‘all grants under these rules
are discretionary and cannot be claimed as a matter of right.’
Further, Rule 16(3) of said Rules, as reproduced above, even
empowers ICSSR to the extent that, in cases of violation of
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conditions of grants by any institution, ICSSR can demand the
refund of grants from such institution and can stop any further
grant to such an institution. Rule 6 reads as follows:
6. WITHDRAWAL OF ASSISTANCE:
If an aided Research Institution ceases to
fulfill the conditions of eligibility laid down in Rule
4, or persistently violates any of the conditions of
grantinaid, the Council may, after giving due
notice to the Institution, declare the Institution as
in eligible to receive assistance under these Rules
under intimation to the Government of India, and
may pass such orders as it may deem necessary
regarding the disposal of the assets created with
grantinaid given earlier to the Institution.
21. Besides grants being discretionary, these GrantinAid Rules and
CRRID Rules also tell us something about the kind of control
that ICSSR has over the CRRID. The only control that ICSSR
has over CRRID is in the form of certain conditions under
which grantinaid is provided to CRRID. Otherwise, there is no
reason for ICSSR to assert any control over this autonomous
private society i.e. CRRID and in fact, it is the essence of any
private society registered under the Societies Registration Act,
that societies should be governed and restricted only by its own
Rules or some general principles of law applicable to all such
societies. CRRID, therefore, has absolute authority over its
17
financial as well as administrative matters. Thus, as far as
‘deep and pervasive’ control of ICSSR over CRRID is concerned,
we are afraid that the findings of the High Court are totally
misplaced. There is a very loose control over the large affairs of
the CRRID, which would include both financial and
administrative. The financial control by both ICSSR and the
State of Punjab is limited only to their grantinaid. ICSSR does
not have any power to interfere with the daytoday functions of
CRRID. Under these circumstances, it cannot be said that
CRRID is under a ‘deep and pervasive’ control of the State. At
the same time, it cannot be denied that there is some control of
the State in the form of the State of Punjab and ICSSR which is
an instrumentality of State. But this control is not of such
nature as to make it ‘deep and pervasive’ as has been held by
the High Court. What ICSSR has in its control, definitely, is
that it can stop the grant in case of violation of the conditions
under which the grant is being given and this is exactly what
has happened in the present case.
22. After the enquiry report of the year 2017, CRRID was repeatedly
asked by ICSSR to take proper and prompt corrective
measures. However, for one reason or another, CRRID did not
18
follow the recommendations given by ICSSR and consequently,
the grant in favour of CRRID was stopped. With regard to
recoveries from employees to whom excess salaries were paid,
CRRID has tried to make an excuse that many of such
employees have by now retired from service. Although much
later, CRRID issued certain recovery notices, but it never took
recourse to any Court proceedings when such notices were not
complied by the employees. All three committees constituted by
ICSSR: the enquiry committee, the factfinding committee and
the HighLevel Committee, had given reports against CRRID,
highlighting anomalies in the working of CRRID. CRRID was
provided with ample opportunities to improve its functioning by
rectifying the deficiencies, but CRRID failed to do so. In such
circumstance, we see no fault on the part of ICSSR if it has
withheld the grant from April 2021 to March 2023, after which
the grant was again released by ICSSR in favour of CRRID. By
withholding the grant, ICSSR has only taken recourse to the
law which allowed it to exercise such power in case of detection
of anomalies in the functioning of the beneficiary research
institution, which is CRRID in the present case. This
19
withholding of grants for a certain period was even suggested
by the HighLevel Committee as a punitive measure.
23. There is also another aspect to this matter. The grant was withheld
in the year 2021 but that decision of withholding the grant has
never been challenged by CRRID before any forum. The picture
is therefore very clear and CRRID also understands it very well
that the grantinaid is a discretion of ICSSR and CRRID is not
in a position to assert a claim on receipt of the grantinaid
particularly when there is a clear finding of various committees
that it is CRRID which has defaulted and has violated the
mandate and the directions under which it had to work to
receive the aid without any interruption. This we have already
discussed in the preceding paragraphs of this judgment and it
needs no further elaboration.
24. Another point which has been argued before us as well as before
the High Court is that respondents nos.1 to 17 are employees of
CRRID and not of ICSSR. It has been argued on behalf of the
ICSSR that these employees do not have any right against
ICSSR and ICSSR is not under any kind of obligation to pay
salaries to these persons who are employees of CRRID. This
contention of ICSSR has to be kept in mind because it is a fact
20
that the private respondents are employees of CRRID and they
may have their rights against their employer i.e. CRRID, but
they cannot claim any right to salary from ICSSR, which is just
a body providing grantinaid to their employer. In other words,
there is no employeremployee or masterservant relationship
between respondents nos.1 to 17 and appellantICSSR. Thus,
ICSSR cannot be held liable for providing salaries of these
respondentsemployees as it is the responsibility of CRRID to
pay them the salaries irrespective of whether it gets a grant
from ICSSR or not.
25. Although CRRID has taken a stand before the High Court as well as
before this Court that it had followed the directions of ICSSR
and whatever anomalies were committed during the past were
in the period of a particular Director, but the Institution is
running well as of now and ICSSR is liable to release the grant
for the period for which it has been withheld. All the same, the
learned counsel for CRRID, who could only appear before us
after much persuasion, when asked by this Court as to why
employees have raised their claim for salary before the High
Court and why CRRID did not directly move the Court for the
21
release of its grants, very candidly answered that this was not
done as CRRID cannot compel ICSSR to release the grants.
In other words, therefore, ICSSR is not bound to release the
grant in favour of CRRID and the employees of CRRID have no
masterservant relationship with ICSSR.
26. We can understand that both the learned Single Judge and Division
Bench of the High Court have taken a compassionate view as
employees, who may have had nothing to do with the
anomalies, should not be deprived of remuneration for the work
done by them. The High Court ordered the ICSSR to release the
grant so that employees could get their salaries as withholding
of grants amounted to withholding of salaries of these
employees. All the same, at the risk of repetition we would note
that this Court cannot lose sight of the fact that it is ultimately
the responsibility of CRRID to pay salaries to its employees.
This liability cannot be shifted to ICSSR.
27. We have also been informed that CRRID has, in its account, funds
which it has received from sources other than Punjab
Government or ICSSR as grants. This amount has admittedly
been received by CRRID from other sources. It has been
admitted by CRRID that they do research for other entities for
which they engage ad hoc employees on a need to basis.
22
However, it cannot be said that the respondentsemployees
were not engaged in such other work especially since some of
the respondentsemployees are occupying pivotal positions in
the autonomous private institution i.e. CRRID. This is evident
from the fact that one of these employees has filed an affidavit
on behalf of CRRID, representing it in the present matter; in
support of the claim of the respondentsemployees. The
audited balance sheet also indicates sufficient funds being
available with CRRID to settle the dues of the employees before
us. It is the submission of the learned counsel for CRRID that
the funds shown in the balance sheet are those available with
CRRID for the other assignments. If that is so, definitely
CRRID cannot claim that the salary of the employees is only
dependent on the grantinaid made by the appellantICSSR.
As already stated earlier, ultimately, the responsibility to pay
the salary to its employees, lies on CRRID and not on ICSSR or
Government of Punjab.
28. Consequently, we allow these appeals and set aside the order of
learned Single Judge dated 17.10.2023 as well as the impugned
order dated 16.05.2024 passed by the Division Bench.
This would not mean that now respondent Nos. 1 to 17 will not
23
be given their salaries for the period they worked. We direct
CRRID to ensure payment of salaries to all its employees which
were withheld between April, 2021 to March, 2023 from its own
resources within a period of three weeks from the date of this
order. In case, CRRID fails to release this amount in favour of
the employees, we direct ICSSR to withhold all further grantin
aid in favour of CRRID. The CRRID will not only have to release
the amount in favour of employees but shall also file a
compliance report before ICSSR stating that this has been done
within the stipulated period. This we do as we cannot lose sight
of the fact that anomalies have been committed at the end of
CRRID.
29. The Registry of this Court is directed to release the amount which
has been deposited by ICSSR in this Court, in favour of ICSSR
along with the interest, if any, within a week from today.
30. All connected matters stand disposed of in the light of the decision
made in the main matter and we make it clear that what has
been determined in the case of ICSSR as to its liabilities of
payment of grants will also apply to the State of Punjab as well.
31. ICCSR and the State of Punjab are at liberty to move applications
before the High Court to get back the amount, if any, deposited
24
by them and the High Court shall decide such applications in
the light of this order.
32. Pending application(s), if any, stand(s) disposed of.
.......………………………….J.
[SUDHANSHU DHULIA]
..….....………………………….J.
[K. VINOD CHANDRAN]
NEW DELHI,
MARCH 20, 2025.
2025 INSC 374
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO.17595 OF 2024)
INDIAN COUNCIL OF SOCIAL SCIENCE
RESEARCH (ICSSR) …APPELLANT
VERSUS
NEETU GAUR & ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO. OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 22022 OF 2024)
WITH
CIVIL APPEAL NO(S). OF 2025
(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO(s). 54273/2024)
AND
CIVIL APPEAL NO(S). OF 2025
(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO.(s) 54276/2024)
J U D G M E N T
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Date: 2025.03.20
18:23:45 IST
Reason:
SUDHANSHU DHULIA, J.
1. Delay condoned. Leave granted.
2
Heard Mr. K. M. Nataraj, learned Additional Solicitor General
and Mr. Ranbir Singh Thakur, learned counsel appearing for
the appellant(s) as well as Mr. Narender Hooda and Mr. Sanjeev
Sharma, learned senior counsel and Ms. Ana Upadhyay,
learned counsel appearing for the respondents(s).
2. These appeals challenge the order dated 16.05.2024 passed by
the Division Bench of the High Court of Punjab and Haryana at
Chandigarh. For the sake of convenience, facts have been noted
from SLP(C) No.17595 of 2024 by considering it as the main
matter.
3. The appellantIndian Council of Social Science Research
(hereinafter ‘ICSSR’) before this Court is a society established in
1969 and registered under the Societies Registration Act, 1860
but under the total financial and administrative control of
Ministry of Education, Government of India (‘GOI’). As per the
Memorandum of Association of ICSSR, its objectives are as
follows:
(i) reviewing the progress of social science research and
giving advice to GOI and other users;
(ii) sponsoring social science research programs and
administering grants to research institutions and
individuals for research in social sciences, indicating areas
3
and topics on which social science research is to be
promoted;
(iii) advising GOI on all such matters pertaining to social
science research etc.
ICSSR consists of twentyseven members including social
scientists and exofficio members from various departments
and bodies of GOI. The chairman of ICSSR, appointed by GOI,
has to be a person of national eminence in the field of social
sciences with proven contributions to research. The funds of
ICSSR consist of grants made by the GOI, contributions from
other sources and income from the assets of ICSSR.
4. Respondent No.19Centre for Research in Rural and Industrial
Development (hereinafter ‘CRRID’) was established in the year
1978, and is an autonomous Research Institute in Chandigarh.
It is registered as a scientific and educational charitable society
under the Societies Registration Act, 1860. The working of
CRRID is administered, directed and controlled by its main body,
known as the Governing Body. This Governing Body of CRRID
can have a maximum of twelve members including seven life
members.
4
5. Whereas ICSSR, as referred above, provides grants to institutions
involved in social science research and since one of the aims of
CRRID is to conduct and promote research in various subjects
including social sciences, CRRID is under the grantinaid of the
ICSSR. CRRID receives 45% grants from ICSSR and equally
45% from the State of Punjab. The remaining 10% is generated
by CRRID through its own resources. CRRID is hugely
dependent upon these grantsinaid, which it has been receiving
since 1984. The ICSSR’s Rules of GrantinAid to Societies and
Institutions Doing Research in the field of Social Sciences
(hereinafter ‘GrantinAid Rules’), govern the manner in which
grants are to be given by ICSSR.
6. In the year 20152016, several complaints were received by
ICSSR against CRRID alleging malpractices in the functioning of
CRRID including violation of rules and regulations, and misuse
of resources including the grants paid by ICSSR. Pursuant to
these complaints, ICSSR constituted a committee to enquire into
allegations against CRRID. The terms of reference of the
Committee inter alia included:
1. Recruitment/promotion of staff allegedly on the
basis of fake degrees, placement of faculty to
5
higher grades and grant of additional
increments against MHRD norms.
2. Alleged violation of ICSSR GrantinAid rules in
amending MoA and its misuse by BOG members
of CRRID for availing large benefits.
3. Audit objections particularly about the elevation
of faculty/staff to higher grades.
4. Alleged discrepancies in the implementation of
6th CPC and submission of incorrect records for
this purpose.
5. Issues related to alleged violation of service
rules including retirement age.
6. Nonresponse of the queries forwarded by
MHRD and other authorities of Govt. of India
about CRRID.
7. Complaints about alleged violation of building
byelaws by CRRID.
8. Alleged nepotism and misuse of office facility
and funds by Executive Vice Chairman of CRRID
on purposeless abroad visits and visits within
India.
9. Any other violation of ICSSR Grantinaid Rules
applicable to the CRRID as mentioned in the
complaint.
7. In its report dated 29.05.2017, the Committee highlighted
various irregularities and malpractices within CRRID. CRRID
was found to be in violation of its Rules as there were
appointments of unqualified persons with either fake or
dubious degrees. Promotions and increments of staff were also
made against the norms. There were findings of non
maintenance of proper office records, etc. The Committee
recommended several corrective measures to be taken by
6
CRRID including the recovery of excess payments made by
CRRID to some of its employees.
8. Thereafter, between 2017 and 2021, we have a long list of
correspondence between ICSSR and CRRID about the
implementation of the directions suggested by ICSSR largely to
employ corrective measures including rectifying academic
qualifications of the staff, recovering excess salaries paid to
employees, taking action against guilty persons etc. In January
2021, CRRID had submitted an actiontaken report to ICSSR. A
FactFinding Committee was also constituted by ICSSR to
enquire into the compliances by CRRID and this factfinding
committee concluded that CRRID Management has been non
cooperative and responses/compliances made by CRRID are
evasive, ambiguous and incomplete. In sum and substance,
ICSSR was not satisfied with the actions taken by CRRID and
since CRRID did not submit its clarification as sought by ICSSR
regarding deficiencies in the actiontaken report, ICSSR finally
stopped releasing its grant in favour of CRRID April 2021
onwards. Once the grant was stopped by ICSSR, we are told
that the Government of Punjab followed suit and stopped 45%
of its share of grant to CRRID.
7
9. In July 2022, seventeen employees of CRRID (Respondent Nos.1
to 17) filed a Writ Petition before the High Court for the release
of their salary. In their Writ Petition, Respondent Nos.117
pleaded that they have been working on different academic and
nonacademic posts in CRRID, but they have not been paid the
salaries and thus prayed for the release of their salaries. The
plea taken by the CRRID before the High Court was that the
salaries of its employees are paid from the grant given by ICSSR
and since ICSSR has stopped the payment of the grant, CRRID
could not pay the salaries of employees. Meanwhile, during the
pendency of proceedings before the High Court, in January
2023, ICSSR constituted a highlevel committee consisting inter
alia of a retired High Court Judge to look into the matter
related to CRRID. The terms and reference of this HighLevel
Committee read as follows:
1. To comprehensively look into all the issues
pointed out in various enquiry reports, actions
taken by the CRRID in compliance of these
reports and observations recorded by Fact
Finding Committee; and
2. To suggest comprehensive resolution of the
matter including any punitive action that
needs to be initiated by ICSSR or by CRRID
against concerned officers responsible for
irregular appointments and promotions by
CRRID.
8
10. This HighLevel Committee was informed by CRRID that Rs.55
lacs and Rs.189 lacs have been withheld by ICSSR for the year
20202021 and 20212022, respectively. The Committee gave
its findings that the faith of the ICSSR in CRRID was misused
by the management of CRRID and the Committee suggested
that the grant already withheld by the ICSSR, to the tune of
Rs.55 lacs for the year 20202021 and Rs.189 lacs for the year
20212022, may not be released as a punitive measure against
CRRID. There were some other recommendations for ICSSR to
be imposed on CRRID like incorporating restrictions on the
tenure of members of the Governing Body including the life
members. However, considering that CRRID is a research and
educational institution, and many Ph.D. scholars are getting
the assistance of CRRID in their research work, this HighLevel
Committee recommended the release of future grants so that
payment of salaries be made to the employees including Ph.D.
supervisors, librarians etc. Consequently, April 2023 onwards,
grants were released.
11. Meanwhile, vide order dated 17.10.2023, the learned Single
Judge of the High Court allowed the Writ Petition filed by
9
employees as it had come to the conclusion that ICSSR has the
ultimate responsibility of releasing the grant for the salaries of
the employees of CRRID for the reason that ICSSR has a ‘deep
and pervasive’ control over CRRID as it has its nominee in the
Governing Body, which had taken all the important decisions
which have now been questioned by ICSSR for violating its
rules and norms. The learned Single Judge of the High Court
was of the opinion that there is no justification for ICSSR to
withhold the grant. The Writ Petitions were allowed, and
direction was given to release the grant. Aggrieved by the same,
ICSSR filed a Writ Appeal before the Division Bench of the High
Court. The Division Bench dismissed the Writ Appeal on
16.05.2024 reiterating the findings of the Single Judge and
directing that the amount, deposited by ICSSR before the
Registry of the High Court, be disbursed in favour of the
employees as their salaries.
12. We have heard Mr. K.M Nataraj, Additional Solicitor General for
AppellantICSSR, Mr. Narender Hooda, Senior Advocate, for
respondent no. 1 to 17 (employees) as well as for the CRRID
and Mr. Sanjeev Sharma, Senior Advocate, for the State of
Punjab. We have also perused the material on record.
10
13. The learned Single Judge as well as the Division Bench of the
High Court, to our mind, have erred in observing that since the
governing body of CRRID had a nominee of ICSSR, ICSSR has a
‘deep and pervasive’ control over the functioning of CRRID and
ICSSR is equally at fault for irregularities within CRRID. In
other words, the High Court was of the opinion that
appointments were made on the posts sanctioned by ICSSR and
with the approval of the Governing Body which consisted of a
nominee of ICSSR, thus ICSSR is not justified in withholding
the grant by alleging irregularities in such appointments or
promotions. It is our respectful opinion that the High Court has
not considered the matter in its right perspective.
14. We have gone through the Rules and Regulations of CRRID
(hereinafter ‘CRRID Rules’) by which CRRID is governed as a
society. As per Rule 22(a)(i) of the said Rules, the total number
of members in the Governing Body cannot exceed twelve
including the seven life members. Rule 22(d) provides the
Governing Body to accept the nominees by the ICSSR or the
State Governments in the society and the Governing Body.
Here, the relevant portion of Rule 22(d) of CRRID Rules is
reproduced below:
11
The Governing Body shall have the authority to
accept the nominees in the Society and the
Governing Body who are deputed by the Indian
Council of Social Science Research (ICSSR) or the
State Governments.
Similarly, Rule 17 of GrantinAid Rules of ICSSR, by which
grants given by ICSSR are governed, read as follows:
17. Condition of GrantsinAid (Special):
A Research Institution which receives a recurring
grant of Rs. One lakh or more shall be subject to
the following additional conditions:
(1) …
(2) The Council shall nominate not more than two
representatives on the governing body of the
research Institution.
(3) …
15. The learned Single Judge and the learned judges of the Division
Bench of the High Court have considered the above provision to
be amounting to a ‘deep and pervasive’ control by the State!
However, it is to be noted that the second part of Rule 22(d) of
CRRID Rules empowers the Governing Body to reject the names
of nominees proposed by ICSSR or State Governments without
giving any reason. It is like a proviso to the general part
embodied under Rule 22(d) of CRRID Rules. It reads as follows:
The Governing Body shall, however, have the right
to reject/or refer back to the deputing authorities
the names of the proposed nominees(s) should it
feel that the said nominee is not acceptable to the
Governing Body. The Governing Body shall not be
12
obliged to give the reason for rejecting or referring
back any such name.
This shows that CRRID is an autonomous body without much
control of ICSSR. The Governing Body of CRRID has the
authority to reject and refer back the names of proposed
nominees and while doing so, CRRID is not even required to
give any reasons.
16. The presence of one or even two members of ICSSR in a Governing
Body of twelve does not amount to ‘deep and pervasive’ control
of the State. Even assuming an additional two nominees from
the Government of Punjab in the Governing Body will at best
make four such members in a Governing Body of twelve. We
have been informed that as of today there are only three
nominees together from ICSSR and State of Punjab in all. This
is not ‘deep and pervasive’ control.
17. We have no doubt in our mind that ICSSR is indeed an “authority”,
within the purview of Article 12 of the Constitution of India. It
also controls CRRID to an extent inasmuch as CRRID depends
on the funds released by ICSSR as grants. But this itself
cannot be called a ‘deep and pervasive’ control. A ‘deep and
pervasive’ control would require much more than just financing
an institution or a body. Even guiding, controlling or regulating
13
affairs of an institution will not be called a ‘deep and pervasive’
control. The ‘deep and pervasive’ control requires
administrative, financial and functional control of such a body
to a much higher degree including interference into its dayto
day working, and mere regulatory control cannot mean ‘deep
and pervasive’ control. [ See: S.S Rana v. Registrar Coop.
;
Societies and Anr. (2006) 11 SCC 634 Chander Mohan
Khanna v. NCERT (1991) 4 SCC 578 ; Balmer Lawrie & Co.
].
Ltd. v. Partha Sarathi Sen Roy (2013) 8 SCC 345
18. Moreover, the crucial question here is not whether the control
exercised by ICSSR on CRRID is ‘deep and pervasive’ but
whether ICSSR was justified in withholding its grant. CRRID
has not answered this question with any degree of satisfaction.
The High Court has also failed to address this crucial issue.
Simply because ICSSR has some control over CRRID, it cannot
be a reason for directing ICSSR to release the grants when it
has been withheld for just and valid reasons. Once ICSSR gives
its grant to CRRID it does not have much interference in the
management of these funds. Nor is the administration of
CRRID controlled by ICSSR. CRRID, in any case, is not an
14
authority within the purview of Article 12 of the Constitution of
India. Merely because CRRID is under the control of an
authority (as defined under Article 12) will not make CRRID an
authority. In fact, this is neither the case of the respondents
employees nor does CRRID in any manner assert itself as an
Authority.
19. The grantinaid provided by ICSSR to any research institution
comes with certain conditions which are required to be followed
by the beneficiary institution. Rule 3 of the GrantinAid Rules
of ICSSR makes this position very clear. It states that ‘the
Indian Council of Social Science Research (hereinafter referred to
as the Council) shall have authority, with prior approval of the
Government of India, to extend grantinaid under these Rules to
Research Institutions (…) provided that they fulfill all the
conditions laid down in Rule 4 below ’. Thereafter, Rule 4 lays
down certain conditions that make an institution eligible for a
grant by ICSSR. Certain other Rules prescribing conditions for
grants are as follows:
16. CONDITIONS OF ASSISTANCE (General):
…
(2) Grant under a particular head shall not be
utilized for a purpose other than that for which it is
15
intended except with the previous approval of the
Council.
(3) The Council may require a Research
Institution to refund a grant given under specific
conditions, if the Research Institution does not
comply with these conditions. The Council may, in
such cases, also stop any further grant to the
Research Institution.
…
(10) It shall be obligatory for the Research
institutions to surrender any unspent balance of
the grant after expiry of the period within which
the grant I required to be spent.
17. CONDITION OF GRANTSINAID (Special):
A Research Institution which receives a
recurring grant of Rs. One lakh or more shall be
subject to the following additional conditions:
(3) The constitution of the Research Institute
shall be got approved by the Council and the
Research Institution shall agree not to make any
change therein without the prior approval of the
Council.
20. A reading of these GrantinAid Rules makes it clear that the grants
by ICSSR are discretionary and institutions like CRRID cannot
claim grants as a matter of right. It is made more apparent by
Rule 11 which explicitly states that ‘all grants under these rules
are discretionary and cannot be claimed as a matter of right.’
Further, Rule 16(3) of said Rules, as reproduced above, even
empowers ICSSR to the extent that, in cases of violation of
16
conditions of grants by any institution, ICSSR can demand the
refund of grants from such institution and can stop any further
grant to such an institution. Rule 6 reads as follows:
6. WITHDRAWAL OF ASSISTANCE:
If an aided Research Institution ceases to
fulfill the conditions of eligibility laid down in Rule
4, or persistently violates any of the conditions of
grantinaid, the Council may, after giving due
notice to the Institution, declare the Institution as
in eligible to receive assistance under these Rules
under intimation to the Government of India, and
may pass such orders as it may deem necessary
regarding the disposal of the assets created with
grantinaid given earlier to the Institution.
21. Besides grants being discretionary, these GrantinAid Rules and
CRRID Rules also tell us something about the kind of control
that ICSSR has over the CRRID. The only control that ICSSR
has over CRRID is in the form of certain conditions under
which grantinaid is provided to CRRID. Otherwise, there is no
reason for ICSSR to assert any control over this autonomous
private society i.e. CRRID and in fact, it is the essence of any
private society registered under the Societies Registration Act,
that societies should be governed and restricted only by its own
Rules or some general principles of law applicable to all such
societies. CRRID, therefore, has absolute authority over its
17
financial as well as administrative matters. Thus, as far as
‘deep and pervasive’ control of ICSSR over CRRID is concerned,
we are afraid that the findings of the High Court are totally
misplaced. There is a very loose control over the large affairs of
the CRRID, which would include both financial and
administrative. The financial control by both ICSSR and the
State of Punjab is limited only to their grantinaid. ICSSR does
not have any power to interfere with the daytoday functions of
CRRID. Under these circumstances, it cannot be said that
CRRID is under a ‘deep and pervasive’ control of the State. At
the same time, it cannot be denied that there is some control of
the State in the form of the State of Punjab and ICSSR which is
an instrumentality of State. But this control is not of such
nature as to make it ‘deep and pervasive’ as has been held by
the High Court. What ICSSR has in its control, definitely, is
that it can stop the grant in case of violation of the conditions
under which the grant is being given and this is exactly what
has happened in the present case.
22. After the enquiry report of the year 2017, CRRID was repeatedly
asked by ICSSR to take proper and prompt corrective
measures. However, for one reason or another, CRRID did not
18
follow the recommendations given by ICSSR and consequently,
the grant in favour of CRRID was stopped. With regard to
recoveries from employees to whom excess salaries were paid,
CRRID has tried to make an excuse that many of such
employees have by now retired from service. Although much
later, CRRID issued certain recovery notices, but it never took
recourse to any Court proceedings when such notices were not
complied by the employees. All three committees constituted by
ICSSR: the enquiry committee, the factfinding committee and
the HighLevel Committee, had given reports against CRRID,
highlighting anomalies in the working of CRRID. CRRID was
provided with ample opportunities to improve its functioning by
rectifying the deficiencies, but CRRID failed to do so. In such
circumstance, we see no fault on the part of ICSSR if it has
withheld the grant from April 2021 to March 2023, after which
the grant was again released by ICSSR in favour of CRRID. By
withholding the grant, ICSSR has only taken recourse to the
law which allowed it to exercise such power in case of detection
of anomalies in the functioning of the beneficiary research
institution, which is CRRID in the present case. This
19
withholding of grants for a certain period was even suggested
by the HighLevel Committee as a punitive measure.
23. There is also another aspect to this matter. The grant was withheld
in the year 2021 but that decision of withholding the grant has
never been challenged by CRRID before any forum. The picture
is therefore very clear and CRRID also understands it very well
that the grantinaid is a discretion of ICSSR and CRRID is not
in a position to assert a claim on receipt of the grantinaid
particularly when there is a clear finding of various committees
that it is CRRID which has defaulted and has violated the
mandate and the directions under which it had to work to
receive the aid without any interruption. This we have already
discussed in the preceding paragraphs of this judgment and it
needs no further elaboration.
24. Another point which has been argued before us as well as before
the High Court is that respondents nos.1 to 17 are employees of
CRRID and not of ICSSR. It has been argued on behalf of the
ICSSR that these employees do not have any right against
ICSSR and ICSSR is not under any kind of obligation to pay
salaries to these persons who are employees of CRRID. This
contention of ICSSR has to be kept in mind because it is a fact
20
that the private respondents are employees of CRRID and they
may have their rights against their employer i.e. CRRID, but
they cannot claim any right to salary from ICSSR, which is just
a body providing grantinaid to their employer. In other words,
there is no employeremployee or masterservant relationship
between respondents nos.1 to 17 and appellantICSSR. Thus,
ICSSR cannot be held liable for providing salaries of these
respondentsemployees as it is the responsibility of CRRID to
pay them the salaries irrespective of whether it gets a grant
from ICSSR or not.
25. Although CRRID has taken a stand before the High Court as well as
before this Court that it had followed the directions of ICSSR
and whatever anomalies were committed during the past were
in the period of a particular Director, but the Institution is
running well as of now and ICSSR is liable to release the grant
for the period for which it has been withheld. All the same, the
learned counsel for CRRID, who could only appear before us
after much persuasion, when asked by this Court as to why
employees have raised their claim for salary before the High
Court and why CRRID did not directly move the Court for the
21
release of its grants, very candidly answered that this was not
done as CRRID cannot compel ICSSR to release the grants.
In other words, therefore, ICSSR is not bound to release the
grant in favour of CRRID and the employees of CRRID have no
masterservant relationship with ICSSR.
26. We can understand that both the learned Single Judge and Division
Bench of the High Court have taken a compassionate view as
employees, who may have had nothing to do with the
anomalies, should not be deprived of remuneration for the work
done by them. The High Court ordered the ICSSR to release the
grant so that employees could get their salaries as withholding
of grants amounted to withholding of salaries of these
employees. All the same, at the risk of repetition we would note
that this Court cannot lose sight of the fact that it is ultimately
the responsibility of CRRID to pay salaries to its employees.
This liability cannot be shifted to ICSSR.
27. We have also been informed that CRRID has, in its account, funds
which it has received from sources other than Punjab
Government or ICSSR as grants. This amount has admittedly
been received by CRRID from other sources. It has been
admitted by CRRID that they do research for other entities for
which they engage ad hoc employees on a need to basis.
22
However, it cannot be said that the respondentsemployees
were not engaged in such other work especially since some of
the respondentsemployees are occupying pivotal positions in
the autonomous private institution i.e. CRRID. This is evident
from the fact that one of these employees has filed an affidavit
on behalf of CRRID, representing it in the present matter; in
support of the claim of the respondentsemployees. The
audited balance sheet also indicates sufficient funds being
available with CRRID to settle the dues of the employees before
us. It is the submission of the learned counsel for CRRID that
the funds shown in the balance sheet are those available with
CRRID for the other assignments. If that is so, definitely
CRRID cannot claim that the salary of the employees is only
dependent on the grantinaid made by the appellantICSSR.
As already stated earlier, ultimately, the responsibility to pay
the salary to its employees, lies on CRRID and not on ICSSR or
Government of Punjab.
28. Consequently, we allow these appeals and set aside the order of
learned Single Judge dated 17.10.2023 as well as the impugned
order dated 16.05.2024 passed by the Division Bench.
This would not mean that now respondent Nos. 1 to 17 will not
23
be given their salaries for the period they worked. We direct
CRRID to ensure payment of salaries to all its employees which
were withheld between April, 2021 to March, 2023 from its own
resources within a period of three weeks from the date of this
order. In case, CRRID fails to release this amount in favour of
the employees, we direct ICSSR to withhold all further grantin
aid in favour of CRRID. The CRRID will not only have to release
the amount in favour of employees but shall also file a
compliance report before ICSSR stating that this has been done
within the stipulated period. This we do as we cannot lose sight
of the fact that anomalies have been committed at the end of
CRRID.
29. The Registry of this Court is directed to release the amount which
has been deposited by ICSSR in this Court, in favour of ICSSR
along with the interest, if any, within a week from today.
30. All connected matters stand disposed of in the light of the decision
made in the main matter and we make it clear that what has
been determined in the case of ICSSR as to its liabilities of
payment of grants will also apply to the State of Punjab as well.
31. ICCSR and the State of Punjab are at liberty to move applications
before the High Court to get back the amount, if any, deposited
24
by them and the High Court shall decide such applications in
the light of this order.
32. Pending application(s), if any, stand(s) disposed of.
.......………………………….J.
[SUDHANSHU DHULIA]
..….....………………………….J.
[K. VINOD CHANDRAN]
NEW DELHI,
MARCH 20, 2025.