KHETRI VIKAS SAMITI vs. DIRECTOR COLLEGE EDUCATION, GOVT OF RAJASTHAN

1 CORRECTED        REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4806  OF 2019 [Arising out of SLP (C) NO. 11712 of 2017] Khetri Vikas Samiti .. Appellant Versus Director College Education, Government of Rajasthan & Ors. .. Respondents WITH Civil Appeal No.4808 of 2019 @ SLP (C) No. 12240 of 2017, Civil Appeal No.4807 of 2019 @ SLP (C) No. 12066 of 2017 & Civil Appeal No.4809 of 2019 @ SLP (C) No. 12102 of 2017 J U D G M E N T M. R. Shah, J. 1. Leave granted in all the Special Leave Petitions. 2. As common question of law and facts arise in this group of appeals and, as such, they arise out of the impugned common judgment and order passed by the High Court, all these appeals 2 are being decided and disposed of by this common judgment and order. 3. Feeling   aggrieved   and   dissatisfied   with   the   impugned common judgment and order dated 15.12.2016 passed by the Division Bench of the High Court of Judicature at Rajasthan, Bench   at   Jaipur   in   D.B.   Special   Appeal   Writ   No.   735/2005, 764/2005, 807/2005 and 808/2005 by which the High Court has dismissed the said appeals preferred by the appellant herein and has confirmed the common judgment and order passed by the   learned   Single   Judge   of   the   High   Court   dismissing   the respective writ petitions and confirming the order passed by the learned   Non­Government   Educational   Institutions   Tribunal, Jaipur   directing   the   appellant   to   reinstate   the   private respondents   herein,   original   appellant­writ   petitioner­Khetri Vikas Samiti has preferred the present appeals.   4. For the sake of convenience, the facts of Civil Appeal arising out of SLP (C) No. 11712 of 2017, arising out of the impugned judgment and order passed by the Division Bench of the High Court in Special Appeal Writ No. 808/2005 are considered, which in nutshell are as under: 3 That   the   appellant   herein­original   writ   petitioner   is   a   society registered under the Rajasthan Societies Registration Act, 1958 which is running several educational institutions, including one Vinodini   P.G.   College,   a   non­Governmental   Educational Institution.  That the private respondent herein was engaged as a Lab   Assistant/Lab   Boy   on   01.04.1999   in   the   aforesaid   non­ Government College of the appellant on a purely temporary basis. Similarly,   other   private   respondents   in   the   connected   matters were engaged as Sweeper, Mechanic and Waterman respectively. That on 20.07.2003, the Managing Committee of the appellant, after  considering  the  fact that  the  institution was  running  in heavy losses, unanimously resolved to abolish the posts of Lab Assistant/Lab Boy, Sweeper, Waterman and Mechanic.    It was also decided that the institution will pay salary of six months which will be deposited in the bank accounts of those employees. That,   in   view   of   the   abolition   of   the   posts,   vide   order   dated 29.07.2003, the respondent was removed from his post.  Similar orders were passed for other six employees as per the resolution of the Management Committee.   The respective employees were also paid the six months salary.   4 4.1 Aggrieved   by   the   order   dated   29.07.2003,   the   private respondent   filed   an   appeal   before   the   Non­Government Educational   Tribunal,   Jaipur   (hereinafter   referred   to   as   the ‘learned   Tribunal’)   under   Section   19   of   the   Rajasthan   Non­ Government   Educational   Institutions   Act,   1989   (hereinafter referred to as the ‘Act’), being Appeal No. 56 of 2003.   Other employees also preferred respective appeals before the learned Tribunal.   It was the case on behalf of the respective original applicants­employees   that   as,   before   the   termination,   a   prior approval of the Director as required under Section 18 of the Act, has not been obtained and therefore their termination is bad in law and in violation of Section 18 of the Act.  On the other hand, it   was   the   case   on   behalf   of   the   Management   that   as   the termination took place only as a result of abolition of the posts, Section 18 of the Act shall not be applicable/attracted and prior approval of the State authorities was not necessary.   4.2 That, by common judgment and order dated 07.12.2004, the learned Tribunal set aside the orders of removal of the private respondents herein­employees and directed their reinstatement holding that it was mandatory to seek the prior approval of the Director of Education before terminating the employees, as per 5 Section 18 of the Act, and as no such prior approval was taken, the termination of the concerned employees is bad in law.  That being aggrieved by the order dated 07.12.2004 passed by the learned   Tribunal,   the   appellant   herein­original   writ   petitioner filed   writ   petitions   before   the   High   Court,   which   came   to   be dismissed by the learned Single Judge of the High Court vide common judgment and order dated 18.07.2005.    4.3 At this stage, it is required to be noted that before the High Court,   vide   letter   dated   25.01.2005   the   Office   of   the Commissioner, College Education, Rajasthan clarified that there was   no   necessity   for   seeking   Government   approval   for   the removal   of   the   employees,   as   the   posts   to   which   they   were working were not aided posts and that their appointment was not approved by the Education Department.   That, on 08.04.2005, the Commissioner, College Education issued a letter calling upon the appellant and other similarly placed institutions to close the uneconomical subjects and remove their surplus employees.   4.4 By the judgment and order dated 18.07.2005, the learned Single Judge dismissed the respective writ petitions holding that it   was   mandatory   for   the   Institution/Management   to   have obtained   written   prior   consent/approval   of   the   Director, 6 Education   before   removing   the   respondents­employees.       The learned Single Judge also did not consider the communication dated   25.01.2005   of   the   Commissioner,   College   Education, Rajasthan on the ground that the said documents were not part of the record before the learned Tribunal.   4.5 Feeling   aggrieved   and   dissatisfied   with   the   common judgment and order passed by the learned Single Judge of the High Court dismissing the writ petitions, the appellant herein preferred the D.B. Special Appeals before the Division Bench of the High Court.  By the impugned common judgment and order dated 15.12.2016,   the   Division   Bench   of   the   High   Court   has dismissed the appeals and has confirmed the common judgment and order passed by the learned Single Judge of the High Court. Feeling aggrieved and dissatisfied thereby, the Management has preferred the present appeals.    5. Shri Shubhranshu Padhi, learned Advocate has appeared on   behalf   of   the   Management;   Ms.   Padhmalakshmi   Iyengar, learned   AAG   has   appeared   on   behalf   of   the   respondent­State authorities   and   Shri   Ramjee   Pandey,   learned   Advocate   has appeared   on   behalf   of   the   private   respondents­respective employees.    7 5.1 Shri   Padhi,   learned   advocate   appearing   on   behalf   the Management has vehemently submitted that, in the facts and circumstances   of   the   case,   the   High   Court   has   committed   a serious   error   in   dismissing   the   appeals   and   confirming   the judgment   and   order   passed   by   the   learned   Single   Judge approving/confirming the order passed by the learned Tribunal directing the appellant to reinstate the private respondents.    5.2 It is further submitted by the learned counsel appearing on behalf of   the   appellant  that  the  High  Court  has   not  properly appreciated  and  considered  the  fact that as  it was  a case of abolition of posts which resulted in removal of the concerned employees, Section 18 of the Act shall not be applicable/attracted at   all.       It   is   submitted   that   the   High   Court   has   failed   to appreciate and consider the fact that Section 18 of the Act would not be attracted as no penal action had been taken against the concerned employees, as the termination took place only as a result of the abolition of posts.   It is submitted by the learned counsel appearing on behalf of the appellant that as held by this Court   in   the   case   of   Shri   Maheshwari   Senior   Higher Secondary School v. Bhikha Ram Sharma  (1996) 8 SCC 22, in case of termination of service of an employee due to abolition of 8 post, the question of conducting the enquiry under the Rules does not arise.  It is submitted that despite the aforesaid decision was   cited   before   the   Division   Bench   of   the   High   Court,   the Division Bench has not at all dealt with and considered the same. It is further submitted that even the Division Bench has not at all considered the other decisions which are cited and relied upon by the counsel appearing on behalf of the appellant­Management.    5.3 It is further submitted by the learned counsel appearing on behalf of the appellant that, as such, while deciding the appeals, the Division Bench of the High Court has not at all dealt with and considered in detail the specific case on behalf of the appellant­ Management that in case of abolition of post and the consequent action of removal, Section 18 of the Act shall not be applicable.  It is submitted that, however, erroneously the Division Bench of the High Court has observed that no such contention was raised before the learned Tribunal or before the learned Single Judge and   the   same   has   been   raised   for   the   first   time   before   the Division Bench.  It is submitted that in fact it was the case on behalf of the Management right from the beginning and even before the learned Tribunal that, in the facts and circumstances of the case, Section 18 of the Act shall not applicable at all. 9  5.4 It is further submitted by the learned counsel appearing on behalf   of   the   appellant   that   even   the   learned   Single   Judge committed a serious error in not considering the communications dated 25.01.2005 and 08.04.2005 received from the Office of the Commissioner, College Education, Rajasthan on the ground that the   said   communications   were   not   placed   before   the   learned Tribunal.     It   is   submitted   that   naturally   the   aforesaid   two communications   could   not   have   been   produced   before   the learned Tribunal as the same were subsequent to the decision of the Tribunal dated 07.12.2004.   It is submitted that, however, the learned Single Judge and even the Division Bench of the High Court   ought   to   have   considered   the   aforesaid   two communications and the stand of the State Government whether in   case   of   abolition   of   posts   and/or   the   posts   to   which   the respective workers were working were not aided posts and their appointment was not approved by the Education Department, the prior approval/approval for removal of such employees was not required. 5.5 It is further submitted by the learned counsel appearing on behalf of the appellant that the Division Bench of the High Court has not at all appreciated and/or considered the fact that neither 10 the learned Tribunal nor the High Court was justified in holding that the abolition of posts was erroneous and/or bad in law. 5.6 It is submitted by the learned counsel appearing on behalf of   the   appellant   that   a   conscious   decision   was   taken   by   the Management to abolish the respective posts as the institution was running in heavy losses.   It is submitted that therefore a conscious decision was taken to abolish the temporary posts.  It is submitted that merely because the Management might have received some grant from the State Government and/or some amount from the students as fees, unless and until the entire balance­sheet is considered and/or the entire financial position of the institution is considered, the learned Single Judge ought not to have held the abolition of posts as bad in law by observing that the financial conditions of the University did not warrant abolition of the posts.   5.7 It is further submitted by the learned counsel appearing on behalf of the appellant that accordingly the learned Single Judge of the High Court has committed a grave error in observing and holding that as the respective employees were paid six months’ salary which was deposited in their respective bank accounts, the Management was required to follow the procedure as per Rule 39 11 of   the   Rajasthan   Non­Government   Educational   Institutions (Recognition,   Grant­In­Aid   and   Service   Condtions   etc.)   Rules, 1993  (hereinafter   referred   to   as   the   ‘1993   Rules’)  and   it  was essential for the Management to receive written consent of the Education Department.  It is submitted that merely because to be on a safer side, the Management might have paid/deposited the six   months’   salary,   the   same   should   not   go   against   the Management and, by that itself, Section 18 of the Act and Rule 39 of the 1993 Rules shall be made applicable.   It is submitted that   what   is   required   to   be   considered   whether   in   a   case   of abolition of posts, prior approval of the Commissioner as per Section 18 of the Act is required or not.   It is submitted that therefore both, the learned Single Judge and the Division Bench of the High Court  have  committed  a serious   error in  making Section   18   of   the   Act   and/or   Rule   39   of   the   1993   Rules applicable to the facts of the case. 5.8 Making the above submissions, it is prayed to allow the present appeals. 6. The present appeals have been vehemently opposed by Shri Ramjee   Pandey,   learned   counsel   appearing   on   behalf   of   the respective   employees.     It   is   vehemently   submitted   by   Shri 12 Pandey, learned counsel appearing on behalf of the respective employees that, as the resultant effect of abolition of posts was removal of the concerned employees from service, Section 18 of the Act would be applicable.   It is submitted that therefore, as such, no error has been committed by the High Court in holding that the removal/termination was hit by Section 18 of the Act.  It is further submitted that, even otherwise, on merits also, the learned   Tribunal   as   well   as   the   learned   Single   Judge   have specifically observed and held that the abolition of posts was bad in law.       It is submitted, therefore, once the abolition of posts was held to be bad in law, there was no further question to be considered whether prior to removal the approval/consent of the Director/State authorities is required or not.   6.1 It is further submitted that there are concurrent findings of all the Courts below on the applicability of Section 18 of the Act and, therefore, the same is not required to be interfered with by this Court. 6.2 Making the above submissions, it is prayed to dismiss the present appeals.   7. Learned AAG appearing on behalf of the State has reiterated on the communication dated 25.02.1005 and has submitted that 13 as the posts to which the respective employees were working were not aided posts and their appointment was not approved by the Education   Department,   there   was   no   necessity   for   seeking Government approval for the removal of such employees.    8. Heard learned counsel appearing on behalf of the respective parties at length and perused/considered the orders passed by the leaned Tribunal, learned Single Judge of the High Court as well as the impugned common judgment and order passed by the Division Bench of the High Court. 9. At   the   outset,   it   is   required   to   be   noted   that   all   the respective employees were appointed and working on a purely temporary basis.   That a conscious decision was taken by the Management   to   abolish   the   posts   on   which   the   respective employees   were   working,   namely   Lab   Assistant/Lab   Boy, Sweeper. Waterman and Mechanic.   A conscious decision was taken by the Management to abolish the temporary post/posts in question on the ground that the institution was running in heavy losses.   Consequent upon the abolition of posts, the respective employees   were   removed   from   the   services.       The   respective employees were also paid six months’ salary which was deposited in   the   bank   accounts   of   the   concerned   employees.     Learned 14 Tribunal   as   well   as   the   learned   Single   Judge   directed   the reinstatement   of   the   respective   employees   and   set   aside   the removal on the ground inter alia that: (i) before removal the prior consent/approval   of   the   State   authorities   was   not   taken   as required under Section 18 of the Act and (ii) that the abolition of posts was bad in law.   The judgment and order of the learned Tribunal as well as the learned Single Judge of the High Court have been confirmed by the Division Bench of the High Court by the impugned common judgment and order. 10. From   the   common   judgment   and   order   passed   by   the Division Bench of the High Court, it appears that the learned Division   Bench   has   not   at   all   given   any   reasons   on   the applicability of Section 18 of the Act in a case where the removal of the concerned employees was due to abolition of posts.   In Paragraph 14, the Division Bench of the High Court has observed that no such contention was raised before the Tribunal or before the learned Single Judge and it has been raised for the first time. The   aforesaid   finding   does   not   seem   to   be   true.     From   the decision of the Tribunal as well as the learned Single Judge, it emerges that from the very beginning the case on behalf of the Management was that as the removal of the employees was due 15 to abolition of posts, Section 18 of the Act shall not be attracted. Be that as it may, we propose to consider independently the issue with respect to the applicability of Section 18 of the Act in a case where the removal was due to abolition of the posts.   Therefore, the questions which are posed for consideration of this Court are whether: (i) in case of removal due to abolition of posts and more particularly   when   the   respective   employees   were   working   on temporary   basis   and   the   posts   were   not   approved/sanctioned and   their   appointments   were   not   approved   by   the   Education Department and the posts to which they are working were not aided posts, Section 18 of the Act would be applicable and (ii) whether the learned Tribunal and the learned Single Judge were justified in holding the abolition of posts bad in law? 11. While considering Question No. 1 referred to hereinabove, the relevant provisions of the Act and 1993 Rules are required to be referred to.    11.1 Section 18 of the Act and Rule 39 of the 1993 Rules read as under:

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Provided further that this section shall not apply, ­

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18

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20 Single   Judge   vide   letter   dated   25.01.2005   which   was   placed before the learned Single Judge pursuant to the order passed by the High Court, in which it was specifically stated that there is no necessity for seeking Government approval for the removal of the employees, as the posts to which they were working were not aided posts and that their appointment was not approved by the Education Department.  The learned Single Judge has refused to take into consideration the communication dated 25.01.2005 on the ground that the said communication was not placed before the learned Tribunal. The said communication could not have been   produced   before   the   learned   Tribunal   as   the   said communication was after the decision of the learned Tribunal. When the said communication was placed on record by way of an additional affidavit and that too pursuant to the direction issued by the learned Single Judge, the learned Single Judge ought to have   considered   the   same.     Therefore,   even   as   per   the   State Government also, the prior approval of the State authorities was not   required.     Therefore,   the   impugned   judgment   and   order passed by the Division Bench of the High Court, learned Single Judge of the High Court and the learned Tribunal holding that the removal of the concerned employees was hit by Section 18 of 21 the   Act,   cannot   be   sustained   and   the   same   deserves   to   be quashed and set aside. 12. Now, so far as question No. 2, namely whether the learned Tribunal and the learned Single Judge were justified in holding the abolition of posts bad in law is concerned, it is required to be noted   that   a   conscious   decision   was   taken   by   the   Managing Committee of the institution/Management to abolish the posts as the institution/Management was facing the financial constraint and running in heavy losses.     Therefore, unless and until the said decision is found to be arbitrary and/or mala fide and/or with   some   oblique   reason,   it   was   not   open   for   the   learned Tribunal and/or the High Court to interfere with such decision of the Management to abolish the posts.  Considering the reasoning given by the High Court and the Tribunal as such there is no specific finding that the decision of the Management to abolish the posts was mala fide and/or with the oblique motive.     It is required to be noted that the question before the learned Tribunal was with respect to the removal and not with respect to abolition of   the   posts.     The   decision   of   the   Management/Managing Committee   to   abolish   the   post   was   not   under   challenge. Therefore, in absence of challenge to the decision of the Managing 22 Committee to abolish the posts in question, it was not open for the Tribunal and/or the High Court to hold that abolition of posts was bad in law.   12.1 Even otherwise, on  merits also,  the decision  of the  High Court in holding the abolition of posts bad in law, cannot be sustained.  The learned Singh Judge of the High Court has held the   abolition   of   posts   bad   in   law   by   observing   that   as   the institution/Management received the grant and the fees from the students, it cannot be said that the financial condition of the Management   was   weak   which   warranted   abolition   of   posts. However, it is required to be noted that before the learned Single Judge the entire financial position/balance­sheet was not placed before   the   High   Court.     Merely   some   grant   might   have   been received by the institution/Management and/or the Management might have received the fees from the students, unless and until the balance­sheet and the entire expenditure are considered, it was not open for the High Court to come to the conclusion that the financial condition was not such poor which warranted the abolition of posts.   Therefore, even the reasoning given by the High Court to hold that the abolition of posts bad in law, cannot be sustained.   23 13. Even the observation made by the learned Single Judge that as   the   Management   deposited   six   months   salary,   as   required under Rule 39 of the 1993 Rules, it was incumbent upon the Management to follow the procedure as provided under Rule 39 of the 1993 Rules before the removal of the concerned employees. However,   it   is   required   to   be   noted   that   Rule   39   shall   be applicable   only   in   a  case   where   an   employee,   other   than   the employee referred to in sub­section (1) is removed or dismissed from service on the ground that of insubordination, inefficiency, neglect of duty, mis­conduct or any other ground, which makes the employee unsuitable for further retention in service.  On a fair reading of Rule 39, it appears that only in the aforesaid cases, the procedure   provided   under   Rule   39   is   required   to   be   followed. Rule 39 further provides that when the Managing Committee is of the unanimous opinion that the services of an employee cannot be continued without prejudice to the interest of the institution, the services of such employee can be terminated after giving him six months notice or salary in lieu thereof and the consent of the Director, Education is obtained in writing.   Therefore, in case of removal of an employee due to abolition of the post, Rule 39 of the 1993 Rules shall not be applicable at all.  Merely because, for 24 whatever   reasons   and   may   be,   to   be   on   a   safer   side,   the management deposited six months salary, by that itself, Rule 39 of the 1993 Rules shall not be made applicable, if otherwise, the same is not applicable.   14.  In view of the above and for the reasons stated above, the present appeals are allowed.   The impugned common judgment and order passed by the Division Bench of the High Court dated 15.12.2016, learned Single Judge of the High Court as well as the learned Tribunal directing the appellant to reinstate the private respondents herein are quashed and set aside.  No costs. ……………………………….J. [L. NAGESWARA RAO] NEW DELHI, ……………………………….J. MAY 09, 2019. [M. R. SHAH] 25 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4806  OF 2019 [Arising out of SLP (C) NO. 11712 of 2017] Khetri Vikas Samiti .. Appellant Versus Director College Education, Government of Rajasthan & Ors. .. Respondents WITH Civil Appeal No.4808 of 2019 @ SLP (C) No. 12240 of 2017, Civil Appeal No.4807 of 2019 @ SLP (C) No. 12066 of 2017 & Civil Appeal No.4809 of 2019 @ SLP (C) No. 12102 of 2017 J U D G M E N T M. R. Shah, J. 1. Leave granted in all the Special Leave Petitions. 2. As common question of law and facts arise in this group of appeals and, as such, they arise out of the impugned common judgment and order passed by the High Court, all these appeals are being decided and disposed of by this common judgment and order. 26 3. Feeling   aggrieved   and   dissatisfied   with   the   impugned common judgment and order dated 15.12.2016 passed by the Division Bench of the High Court of Judicature at Rajasthan, Bench   at   Jaipur   in   D.B.   Special   Appeal   Writ   No.   735/2005, 764/2005, 807/2005 and 808/2005 by which the High Court has dismissed the said appeals preferred by the appellant herein and has confirmed the common judgment and order passed by the   learned   Single   Judge   of   the   High   Court   dismissing   the respective writ petitions and confirming the order passed by the learned   Non­Government   Educational   Institutions   Tribunal, Jaipur   directing   the   appellant   to   reinstate   the   private respondents   herein,   original   appellant­writ   petitioner­Khetri Vikas Samiti has preferred the present appeals.   4. For the sake of convenience, the facts of Civil Appeal arising out of SLP (C) No. 11712 of 2017, arising out of the impugned judgment and order passed by the Division Bench of the High Court in Special Appeal Writ No. 808/2005 are considered, which in nutshell are as under: That   the   appellant   herein­original   writ   petitioner   is   a   society registered under the Rajasthan Societies Registration Act, 1958 which is running several educational institutions, including one 27 Vinodini   P.G.   College,   a   non­Governmental   Educational Institution.  That the private respondent herein was engaged as a Lab   Assistant/Lab   Boy   on   01.04.1999   in   the   aforesaid   non­ Government College of the appellant on a purely temporary basis. Similarly,   other   private   respondents   in   the   connected   matters were engaged as Sweeper, Mechanic and Waterman respectively. That on 20.07.2003, the Managing Committee of the appellant, after  considering  the  fact that  the  institution was  running  in heavy losses, unanimously resolved to abolish the posts of Lab Assistant/Lab Boy, Sweeper, Waterman and Mechanic.    It was also decided  that  the   institution  will pay  salary  of   six  moths which will be deposited in the bank accounts of those employees. That,   in   view   of   the   abolition   of   the   posts,   vide   order   dated 29.07.2003, the respondent was removed from his post.  Similar orders were passed for other six employees as per the resolution of the Management Committee.   The respective employees were also paid the six months salary.   4.1 Aggrieved   by   the   order   dated   29.07.2003,   the   private respondent   filed   an   appeal   before   the   Non­Government Educational   Tribunal,   Jaipur   (hereinafter   referred   to   as   the ‘learned   Tribunal’)   under   Section   19   of   the   Rajasthan   Non­ 28 Government   Educational   Institutions   Act,   1989   (hereinafter referred to as the ‘Act’), being Appeal No. 56 of 2003.   Other employees also preferred respective appeals before the learned Tribunal.   It was the case on behalf of the respective original applicants­employees   that   as,   before   the   termination,   a   prior approval of the Director as required under Section 18 of the Act, has not been obtained and therefore their termination is bad in law and in violation of Section 18 of the Act.  On the other hand, it   was   the   case   on   behalf   of   the   Management   that   as   the termination took place only as a result of abolition of the posts, Section 18 of the Act shall not be applicable/attracted and prior approval of the State authorities was not necessary.   4.2 That, by common judgment and order dated 07.12.2004, the learned Tribunal set aside the orders of removal of the private respondents herein­employees and directed their reinstatement holding that it was mandatory to seek the prior approval of the Director of Education before terminating the employees, as per Section 18 of the Act, and as no such prior approval was taken, the termination of the concerned employees is bad in law.  That being aggrieved by the order dated 07.12.2004 passed by the learned   Tribunal,   the   appellant   herein­original   writ   petitioner 29 filed   writ   petitions   before   the   High   Court,   which   came   to   be dismissed by the learned Single Judge of the High Court vide common judgment and order dated 18.07.2005.    4.3 At this stage, it is required to be noted that before the High Court,   vide   letter   dated   25.01.2005   the   Office   of   the Commissioner, College Education, Rajasthan clarified that there was   no   necessity   for   seeking   Government   approval   for   the removal   of   the   employees,   as   the   posts   to   which   they   were working were not aided posts and that their appointment was not approved by the Education Department.   That, on 08.04.2005, the Commissioner, College Education issued a letter calling upon the appellant and other similarly placed institutions to close the uneconomical subjects and remove their surplus employees.   4.4 By the judgment and order dated 18.07.2005, the learned Single Judge dismissed the respective writ petitions holding that it   was   mandatory   for   the   Institution/Management   to   have obtained   written   prior   consent/approval   of   the   Director, Education   before   removing   the   respondents­employees.       The learned Single Judge also did not consider the communication dated   25.01.2005   of   the   Commissioner,   College   Education, 30 Rajasthan on the ground that the said documents were not part of the record before the learned Tribunal.   4.5 Feeling   aggrieved   and   dissatisfied   with   the   common judgment and order passed by the learned Single Judge of the High Court dismissing the writ petitions, the appellant herein preferred the D.B. Special Appeals before the Division Bench of the High Court.  By the impugned common judgment and order dated 15.12.2016,   the   Division   Bench   of   the   High   Court   has dismissed the appeals and has confirmed the common judgment and order passed by the learned Single Judge of the High Court. Feeling aggrieved and dissatisfied thereby, the Management has preferred the present appeals.    5. Shri Shubhranshu Padhi, learned Advocate has appeared on   behalf   of   the   Management;   Ms.   Padhmalakshmi   Iyengar, learned   AAG   has   appeared   on   behalf   of   the   respondent­State authorities   and   Shri   Ramjee   Pandey,   learned   Advocate   has appeared   on   behalf   of   the   private   respondents­respective employees.    5.1 Shri   Padhi,   learned   advocate   appearing   on   behalf   the Management has vehemently submitted that, in the facts and circumstances   of   the   case,   the   High   Court   has   committed   a 31 serious   error   in   dismissing   the   appeals   and   confirming   the judgment   and   order   passed   by   the   learned   Single   Judge approving/confirming the order passed by the learned Tribunal directing the appellant to reinstate the private respondents.    5.2 It is further submitted by the learned counsel appearing on behalf of   the   appellant  that  the  High  Court  has   not  properly appreciated  and  considered  the  fact that as  it was  a case of abolition of posts which resulted in removal of the concerned employees, Section 18 of the Act shall not be applicable/attracted at   all.       It   is   submitted   that   the   High   Court   has   failed   to appreciate and consider the fact that Section 18 of the Act would not be attracted as no penal action had been taken against the concerned employees, as the termination took place only as a result of the abolition of posts.   It is submitted by the learned counsel appearing on behalf of the appellant that as held by this Court   in   the   case   of   Shri   Maheshwari   Senior   Higher Secondary School v. Bhikha Ram Sharma  (1996) 8 SCC 22, in case of termination of service of an employee due to abolition of post, the question of conducting the enquiry under the Rules does not arise.  It is submitted that despite the aforesaid decision was   cited   before   the   Division   Bench   of   the   High   Court,   the 32 Division Bench has not at all dealt with and considered the same. It is further submitted that even the Division Bench has not at all considered the other decisions which are cited and relied upon by the counsel appearing on behalf of the appellant­Management.    5.3 It is further submitted by the learned counsel appearing on behalf of the appellant that, as such, while deciding the appeals, the Division Bench of the High Court has not at all dealt with and considered in detail the specific case on behalf of the appellant­ Management that in case of abolition of post and the consequent action of removal, Section 18 of the Act shall not be applicable.  It is submitted that, however, erroneously the Division Bench of the High Court has observed that no such contention was raised before the learned Tribunal or before the learned Single Judge and   the   same   has   been   raised   for   the   first   time   before   the Division Bench.  It is submitted that in fact it was the case on behalf of the Management right from the beginning and even before the learned Tribunal that, in the facts and circumstances of the case, Section 18 of the Act shall not applicable at all.  5.4 It is further submitted by the learned counsel appearing on behalf   of   the   appellant   that   even   the   learned   Single   Judge committed a serious error in not considering the communications 33 dated 25.01.2005 and 08.04.2005 received from the Office of the Commissioner, College Education, Rajasthan on the ground that the   said   communications   were   not   placed   before   the   learned Tribunal.     It   is   submitted   that   naturally   the   aforesaid   two communications   could   not   have   been   produced   before   the learned Tribunal as the same were subsequent to the decision of the Tribunal dated 07.12.2004.   It is submitted that, however, the learned Single Judge and even the Division Bench of the High Court   ought   to   have   considered   the   aforesaid   two communications and the stand of the State Government whether in   case   of   abolition   of   posts   and/or   the   posts   to   which   the respective workers were working were not aided posts and their appointment was not approved by the Education Department, the prior approval/approval for removal of such employees was not required. 5.5 It is further submitted by the learned counsel appearing on behalf of the appellant that the Division Bench of the High Court has not at all appreciated and/or considered the fact that neither the learned Tribunal nor the High Court was justified in holding that the abolition of posts was erroneous and/or bad in law. 34 5.6 It is submitted by the learned counsel appearing on behalf of   the   appellant   that   a   conscious   decision   was   taken   by   the Management to abolish the respective posts as the institution was running in heavy losses.   It is submitted that therefore a conscious decision was taken to abolish the temporary posts.  It is submitted that merely because the Management might have received some grant from the State Government and/or some amount from the students as fees, unless and until the entire balance­sheet is considered and/or the entire financial position of the institution is considered, the learned Single Judge ought not to have held the abolition of posts as bad in law by observing that the financial conditions of the University did not warrant abolition of the posts.   5.7 It is further submitted by the learned counsel appearing on behalf of the appellant that accordingly the learned Single Judge of the High Court has committed a grave error in observing and holding that as the respective employees were paid six months’ salary which was deposited in their respective bank accounts, the Management was required to follow the procedure as per Rule 39 of   the   Rajasthan   Non­Government   Educational   Institutions (Recognition,   Grant­In­Aid   and   Service   Condtions   etc.)   Rules, 35 1993  (hereinafter   referred   to   as   the   ‘1993   Rules’)  and   it  was essential for the Management to receive written consent of the Education Department.  It is submitted that merely because to be on a safer side, the Management might have paid/deposited the six   months’   salary,   the   same   should   not   go   against   the Management and, by that itself, Section 18 of the Act and Rule 39 of the 1993 Rules shall be made applicable.   It is submitted that   what   is   required   to   be   considered   whether   in   a   case   of abolition of posts, prior approval of the Commissioner as per Section 18 of the Act is required or not.   It is submitted that therefore both, the learned Single Judge and the Division Bench of the High Court  have  committed  a serious   error in  making Section   18   of   the   Act   and/or   Rule   39   of   the   1993   Rules applicable to the facts of the case. 5.8 Making the above submissions, it is prayed to allow the present appeals. 6. The present appeals have been vehemently opposed by Shri Ramjee   Pandey,   learned   counsel   appearing   on   behalf   of   the respective   employees.     It   is   vehemently   submitted   by   Shri Pandey, learned counsel appearing on behalf of the respective employees that, as the resultant effect of abolition of posts was 36 removal of the concerned employees from service, Section 18 of the Act would be applicable.   It is submitted that therefore, as such, no error has been committed by the High Court in holding that the removal/termination was hit by Section 18 of the Act.  It is further submitted that, even otherwise, on merits also, the learned   Tribunal   as   well   as   the   learned   Single   Judge   have specifically observed and held that the abolition of posts was bad in law.       It is submitted, therefore, once the abolition of posts was held to be bad in law, there was no further question to be considered whether prior to removal the approval/consent of the Director/State authorities is required or not.   6.1 It is further submitted that there are concurrent findings of all the Courts below on the applicability of Section 18 of the Act and, therefore, the same is not required to be interfered with by this Court. 6.2 Making the above submissions, it is prayed to dismiss the present appeals.   7. Learned AAG appearing on behalf of the State has reiterated on the communication dated 25.02.1005 and has submitted that as the posts to which the respective employees were working were not aided posts and their appointment was not approved by the 37 Education   Department,   there   was   no   necessity   for   seeking Government approval for the removal of such employees.    8. Heard learned counsel appearing on behalf of the respective parties at length and perused/considered the orders passed by the leaned Tribunal, learned Single Judge of the High Court as well as the impugned common judgment and order passed by the Division Bench of the High Court. 9. At   the   outset,   it   is   required   to   be   noted   that   all   the respective employees were appointed and working on a purely temporary basis.   That a conscious decision was taken by the Management   to   abolish   the   posts   on   which   the   respective employees   were   working,   namely   Lab   Assistant/Lab   Boy, Sweeper. Waterman and Mechanic.   A conscious decision was taken by the Management to abolish the temporary post/posts in question on the ground that the institution was running in heavy losses.   Consequent upon the abolition of posts, the respective employees   were   removed   from   the   services.       The   respective employees were also paid six months’ salary which was deposited in   the   bank   accounts   of   the   concerned   employees.     Learned Tribunal   as   well   as   the   learned   Single   Judge   directed   the reinstatement   of   the   respective   employees   and   set   aside   the 38 removal on the ground inter alia that: (i) before removal the prior consent/approval   of   the   State   authorities   was   not   taken   as required under Section 18 of the Act and (ii) that the abolition of posts was bad in law.   The judgment and order of the learned Tribunal as well as the learned Single Judge of the High Court have been confirmed by the Division Bench of the High Court by the impugned common judgment and order. 10. From   the   common   judgment   and   order   passed   by   the Division Bench of the High Court, it appears that the learned Division   Bench   has   not   at   all   given   any   reasons   on   the applicability of Section 18 of the Act in a case where the removal of the concerned employees was due to abolition of posts.   In Paragraph 14, the Division Bench of the High Court has observed that no such contention was raised before the Tribunal or before the learned Single Judge and it has been raised for the first time. The   aforesaid   finding   does   not   seem   to   be   true.     From   the decision of the Tribunal as well as the learned Single Judge, it emerges that from the very beginning the case on behalf of the Management was that as the removal of the employees was due to abolition of posts, Section 18 of the Act shall not be attracted. Be that as it may, we propose to consider independently the issue 39 with respect to the applicability of Section 18 of the Act in a case where the removal was due to abolition of the posts.   Therefore, the questions which are posed for consideration of this Court are whether: (i) in case of removal due to abolition of posts and more particularly   when   the   respective   employees   were   working   on temporary   basis   and   the   posts   were   not   approved/sanctioned and   their   appointments   were   not   approved   by   the   Education Department and the posts to which they are working were not aided posts, Section 18 of the Act would be applicable and (ii) whether the learned Tribunal and the learned Single Judge were justified in holding the abolition of posts bad in law? 11. While considering Question No. 1 referred to hereinabove, the relevant provisions of the Act and 1993 Rules are required to be referred to.    11.1 Section 18 of the Act and Rule 39 of the 1993 Rules read as under:

40

Provided further that this section shall not apply, ­

(2) An employee, other than the employee referred to in sub­rule (1), may be removed or dismissed from service   on   the   grounds   of   insubordination, inefficiency, neglect of duty, misconduct or any other 41

42

43 11.2 On a fair reading of Section 18 of the Act and Rule 39 of the 1993 Rules, we are of the opinion that Section 18 of the Act and Rule   39   would   not   be   applicable   in   case   of   removal   of   an employee due to the abolition of posts, more particularly when the post to which the employee is working was not aided and that his appointment was not approved by the Education Department. In   the   case   of   Bhikha   Rm   Sharma   (supra),   this   Court   has specifically observed and held that in case of termination of the service of the employee due to abolition of post, the question of conducting the enquiry under the Rules does not arise. Though the                        said decision was cited and relied upon by the counsel appearing on behalf of the appellant before the Division Bench of the High Court, the Division Bench thereafter has not at all dealt with and/or considered the same.  Therefore, the learned Tribunal, learned Singh Judge and learned Division Bench of the High Court have materially erred in applying Section 18 of the Act and in holding the removal of the concerned employees which as such was due to the abolition of the posts was hit by Section 18 of the Act.    At this stage, it is required to be noted that even the State Government also made its stand clear before the learned Single   Judge   vide   letter   dated   25.01.2005   which   was   placed 44 before the learned Single Judge pursuant to the order passed by the High Court, in which it was specifically stated that there is no necessity for seeking Government approval for the removal of the employees, as the posts to which they were working were not aided posts and that their appointment was not approved by the Education Department.  The learned Single Judge has refused to take into consideration the communication dated 25.01.2005 on the ground that the said communication was not placed before the learned Tribunal. The said communication could not have been   produced   before   the   learned   Tribunal   as   the   said communication was after the decision of the learned Tribunal. When the said communication was placed on record by way of an additional affidavit and that too pursuant to the direction issued by the learned Single Judge, the learned Single Judge ought to have   considered   the   same.     Therefore,   even   as   per   the   State Government also, the prior approval of the State authorities was not   required.     Therefore,   the   impugned   judgment   and   order passed by the Division Bench of the High Court, learned Single Judge of the High Court and the learned Tribunal holding that the removal of the concerned employees was hit by Section 18 of 45 the   Act,   cannot   be   sustained   and   the   same   deserves   to   be quashed and set aside. 12. Now, so far as question No. 2, namely whether the learned Tribunal and the learned Single Judge were justified in holding the abolition of posts bad in law is concerned, it is required to be noted   that   a   conscious   decision   was   taken   by   the   Managing Committee of the institution/Management to abolish the posts as the institution/Management was facing the financial constraint and running in heavy losses.     Therefore, unless and until the said decision is found to be arbitrary and/or mala fide and/or with   some   oblique   reason,   it   was   not   open   for   the   learned Tribunal and/or the High Court to interfere with such decision of the Management to abolish the posts.  Considering the reasoning given by the High Court and the Tribunal as such there is no specific finding that the decision of the Management to abolish the posts was mala fide and/or with the oblique motive.     It is required to be noted that the question before the learned Tribunal was with respect to the removal and not with respect to abolition of   the   posts.     The   decision   of   the   Management/Managing Committee   to   abolish   the   post   was   not   under   challenge. Therefore, in absence of challenge to the decision of the Managing 46 Committee to abolish the posts in question, it was not open for the Tribunal and/or the High Court to hold that abolition of posts was bad in law.   12.1 Even otherwise, on  merits also,  the decision  of the  High Court in holding the abolition of posts bad in law, cannot be sustained.  The learned Singh Judge of the High Court has held the   abolition   of   posts   bad   in   law   by   observing   that   as   the institution/Management received the grant and the fees from the students, it cannot be said that the financial condition of the Management   was   weak   which   warranted   abolition   of   posts. However, it is required to be noted that before the learned Single Judge the entire financial position/balance­sheet was not placed before   the   High   Court.     Merely   some   grant   might   have   been received by the institution/Management and/or the Management might have received the fees from the students, unless and until the balance­sheet and the entire expenditure are considered, it was not open for the High Court to come to the conclusion that the financial condition was not such poor which warranted the abolition of posts.   Therefore, even the reasoning given by the High Court to hold that the abolition of posts bad in law, cannot be sustained.   47 13. Even the observation made by the learned Single Judge that as   the   Management   deposited   six   months   salary,   as   required under Rule 39 of the 1993 Rules, it was incumbent upon the Management to follow the procedure as provided under Rule 39 of the 1993 Rules before the removal of the concerned employees. However,   it   is   required   to   be   noted   that   Rule   39   shall   be applicable   only   in   a  case   where   an   employee,   other   than   the employee referred to in sub­section (1) is removed or dismissed from service on the ground that of insubordination, inefficiency, neglect of duty, mis­conduct or any other ground, which makes the employee unsuitable for further retention in service.  On a fair reading of Rule 39, it appears that only in the aforesaid cases, the procedure   provided   under   Rule   39   is   required   to   be   followed. Rule 39 further provides that when the Managing Committee is of the unanimous opinion that the services of an employee cannot be continued without prejudice to the interest of the institution, the services of such employee can be terminated after giving him six months notice or salary in lieu thereof and the consent of the Director, Education is obtained in writing.   Therefore, in case of removal of an employee due to abolition of the post, Rule 39 of the 1993 Rules shall not be applicable at all.  Merely because, for 48 whatever   reasons   and   may   be,   to   be   on   a   safer   side,   the management deposited six months salary, by that itself, Rule 39 of the 1993 Rules shall not be made applicable, if otherwise, the same is not applicable.   14.  In view of the above and for the reasons stated above, the present appeals are allowed.   The impugned common judgment and order passed by the Division Bench of the High Court dated 15.12.2016, learned Single Judge of the High Court as well as the learned Tribunal directing the appellant to reinstate the private respondents herein are quashed and set aside.  No costs. ……………………………….J. [L. NAGESWARA RAO] NEW DELHI, ……………………………….J. MAY 09, 2019. [M. R. SHAH]