Unilateral stoppage of school operations without prior statutory approval is not legal closure and cannot extinguish salary liabilities.

The Petitioners, comprising teaching and non-teaching staff of Dayanand Adarsh Vidyalaya (the School), sought payment of salary arrears under the 7th Central Pay Commission and regular dues from April 1, 2020

The School management ceased all educational activities on April 1, 2020, asserting financial unviability and a sharp decline in student enrollment

Although the School had applied for formal closure on July 17, 2019, the Directorate of Education (DoE) had not granted prior approval as required by statute

The School contended that since it had ceased to exist in substance, no liability could be fastened upon its assets or the parent society, Delhi Arya Pratinidhi Sabha

The Petitioners argued that the School remained legally operational due to the lack of formal approval for closure

1. Whether a recognized private school can be treated as closed in law merely by a unilateral stoppage of functions by the management without prior approval from the Directorate of Education under Rule 46 of the Delhi School Education Rules, 1973

2. Whether the staff must be treated as continuing in service after the factual shutdown on April 1, 2020

3. Whether the liability for salary and service dues can be carried beyond the school to the parent society or management bodies that exercised real and effective control

The Court primarily applied Section 3 and Section 4 of the Delhi School Education Act, 1973 (DSEA), which mandate that the closing of classes is subject to the Act and treat financial stability as a continuing condition of recognition

Rule 46 of the Delhi School Education Rules (DSER), 1973, was identified as mandatory, requiring "prior approval" from the Director before closing a recognized school

The Court relied on the Supreme Court’s ruling in NDMC & Anr. v. Manju Tomar & Ors. (2024), which held that a closure de hors Rule 46 is invalid and management cannot shift salary burdens resulting from its own illegality

Section 10 of the DSEA ensures pay parity for private school employees, and Section 20 provides for the takeover of management in cases of neglect of duties

The Court reasoned that "factual drift or managerial declaration" does not constitute legal closure

Under Rule 46, prior approval is a mandatory legal control designed to protect students and staff; therefore, a physical shutdown is insufficient to end statutory obligations

The Court distinguished Rule 55 (lapse of recognition for cessation of function) as a regulatory consequence of an unlawful act rather than a grant of legitimacy to that act

Applying the principle from Manju Tomar, the Court held that the School remained within the statutory fold because the DoE’s approval was never granted

Regarding liability, the Court rejected the "free-standing shell" defense, noting that DSER ensures schools remain under the supervision of the running society or trust

Following Anjna Sharma v. Shishu Bharti Vidyalaya, the Court observed that where a school is part of a larger network, liability can extend to the society from its general accruals

However, the Court adopted a "real and effective control" test to identify the specific liable entity among the various Arya Samaj bodies, noting that the current record presented an inconclusive picture of which entity exercised definitive management

It held that liability rests jointly and severally upon the School and the entity found to be in "actual management and control"

The Court directed the DoE to identify the controlling entity within eight weeks

The Court directed the DoE to nominate an officer to compute Petitioner-wise dues including 7th CPC arrears and 6% interest

The Court directed the DoE to take a final decision on the closure application within ten weeks, ensuring that no approval is granted until all employee dues are paid or secured. The contempt petition was disposed of as the claims were integrated into the writ proceedings