Supreme Court Clarifies Grant-in-Aid Eligibility Post Repeal of 1994 Order: State of Odisha vs. Anup Kumar Senapati (2019)

Introduction

Date of the Judgment: 16 September 2019
Citation: 2019 INSC 918
Judges: Arun Mishra, J., S. Abdul Nazeer, J., and M.R. Shah, J.

Can a repealed government order still grant benefits? The Supreme Court of India recently addressed this crucial question in a case concerning educational grants in Odisha. This judgment clarifies whether employees of non-government educational institutions can claim financial aid under a repealed order. The core issue revolves around the interpretation of the Orissa (Non-Government Colleges, Junior Colleges and Higher Secondary Schools) Grant-in-aid Order, 1994, and its subsequent repeal in 2004. The bench comprised Justices Arun Mishra, S. Abdul Nazeer, and M.R. Shah, with the judgment authored by Justice Arun Mishra.

Case Background

Prior to 1994, grant-in-aid to non-government educational institutions in Odisha was governed by instructions issued under the Orissa Education Act, 1969. In 1994, Section 7-C was inserted into the Act, which formalized the provision of grant-in-aid. This led to the issuance of the Orissa (Non-Government Colleges, Junior Colleges and Higher Secondary Schools) Grant-in-aid Order, 1994. This order specified eligibility criteria for institutions and their employees to receive financial aid. Subsequently, the 1994 order was repealed in 2004 by the Orissa (Non-Government Colleges, Junior Colleges and Higher Secondary Schools) Grant-in-aid Order, 2004, which introduced a block grant system. The 2004 order was further repealed by the Orissa (Aided Colleges, Aided Junior Colleges, and Higher Secondary Schools) Grant-in-aid Order, 2008. The employees of various non-government educational institutions claimed entitlement to grant-in-aid under the 1994 order, even after its repeal, arguing that their right to receive aid had accrued before the repeal. The State of Odisha contested these claims, asserting that the repeal of the 1994 order extinguished any such rights, and that the grant-in-aid is subject to the economic capacity of the government and is not an automatic entitlement.

Timeline:

Legal Framework

The case primarily revolves around Section 7-C of the Orissa Education Act, 1969, which empowers the State Government to provide grant-in-aid to private educational institutions within its economic capacity. Section 7-C(4) states that no grant-in-aid shall be paid except in accordance with an order or rule made under this Act. The 1994 Order, issued under this section, categorized institutions and posts eligible for aid. Paragraph 4 of the 1994 order classified institutions into Categories I, II, and III based on their grant-in-aid status and years of operation. Paragraph 5 outlined conditions for institutions to be notified as Aided Educational Institutions. Paragraph 9 detailed the conditions for posts to be considered approved for grant-in-aid. The 2004 Order repealed the 1994 order, introducing a block grant system and specifying that only institutions eligible by 1.6.1994 would be notified as aided institutions. The 2008 order further modified the grant system, providing a fixed sum of grant-in-aid at 40% of the salary cost of approved teaching and non-teaching posts.

Key provisions include:

• Section 7-C(1) of the Orissa Education Act, 1969: “The State Government shall within the limits of its economic capacity, set apart a sum of money annually for being given as grant-in-aid to private Educational Institution in the State.”
• Section 7-C(4) of the Orissa Education Act, 1969: “Notwithstanding anything contained in any law, rule, executive order or any judgment, decree or order any Court, no grant-in-aid shall be paid and no payment towards salary costs or any other expense shall be made to any private educational institution or for any post or to any person employed in any such institution after the commencement of the Odisha Education (Amendment) Act, 1994, except in accordance with an order or rule made under this Act.”
• Paragraph 4 of the 1994 Order: Classified Non-Government Educational Institutions into Categories I, II, and III.
• Paragraph 4(1) of the 2004 Order: “The Odisha (Non-Government Colleges, Junior Colleges, and Higher Secondary Schools) Grant-in-aid Order, 1994 is hereby repealed, save for the purposes mentioned in sub-para (1) of para 3.”
• Paragraph 4(2) of the 2004 Order: “Notwithstanding the repeal under sub-para (1), the private educational institutions which are in receipt of any grant-in-aid from Government under the Order so repealed immediately before the date of commencement of this Order shall continue to receive such grant-in-aid, as if the Grant-in-aid Order, 1994 had not been repealed.”

Arguments

Submissions on behalf of the State of Odisha:

• The State argued that the High Court and the State Education Tribunal erred in entertaining the claims of the employees, as the applications were filed belatedly in 2011 and 2012, seeking grant-in-aid under the repealed 1994 order.
• Grant-in-aid cannot be claimed as a matter of right and is subject to various factors, including the economic capacity of the government.
• The employees did not file representations at the relevant time and approached the Tribunal and High Court belatedly.
• The 1994 order was repealed by the 2004 order, and therefore, no claims can be made under the repealed order.
• Divergent views were taken by the High Court in different cases, and the decision in Lokanath Behera v. the State of Odisha correctly held that grant-in-aid cannot be claimed under the 1994 order after its repeal.

Submissions on behalf of the Employees:

• The employees argued that they had a vested right to receive grant-in-aid under the 1994 order, as their posts existed, and appointments were made before 1.6.1994, upon completion of 5 or 3 years of service.
• The Tribunal had allowed similar applications in 2010, and subsequent writ petitions were filed based on parity.
• The State Government illegally rejected the representations filed under the order of the High Court.
• The decision in Lokanath Behera case was incorrect, as once a right has accrued, it cannot be taken away.
• The 1994 order contained a long-lasting commitment to extend grant-in-aid benefits, and a communication from the Higher Education Department, Government of Odisha, dated 7.10.2017, indicated that grant-in-aid can be claimed despite the repeal.
• The employees were entitled to approval of their appointments and payment of grant-in-aid per the 1994 order, and they should not be forced to accept less favorable treatment under the 2008 order, which provides for only 40% block grant.

[TABLE] of Submissions

Issues Framed by the Supreme Court:

The Supreme Court framed the following issue:

1. Whether the employees are entitled to claim grant-in-aid as admissible under the Orissa (Non-Government Colleges, Junior Colleges and Higher Secondary Schools) Grant-in-aid Order, 1994, after its repeal in the year 2004.

Treatment of the Issue by the Court:

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Cases:

• Lokanath Behera v. the State of Odisha – High Court of Orissa: The High Court correctly held that grant-in-aid cannot be claimed under the 1994 order after its repeal.
• State of Uttar Pradesh and others v. Hirendra Pal Singh, and others, (2011) 5 SCC 305 – Supreme Court of India: The Court reiterated that a repealed Act is considered as if it had never existed, except for savings under Section 6 of the General Clauses Act, 1897.
• Board of Control of Cricket in India v. Kochi Cricket Private Limited, (2018) 6 SCC 287 – Supreme Court of India: The Court relied on State of Punjab v. Mohar Singh to reiterate that when a repeal is followed by fresh legislation, the new Act must be examined to see if it intends to destroy or keep alive existing rights.
• State of Punjab v. Mohar Singh, AIR 1955 SC 84 – Supreme Court of India: The Court held that when a repeal is followed by fresh legislation, the provisions of the new Act have to be looked into to ascertain whether it manifests an intention to destroy the rights or keep them alive.
• Basawaraj and another v. Special Land Acquisition Officer, (2013) 14 SCC 81 – Supreme Court of India: The Court held that Article 14 of the Constitution is not meant to perpetuate illegality or fraud and does not envisage negative equality.
• Chaman Lal v. State of Punjab and others, (2014) 15 SCC 715 – Supreme Court of India: The Court reiterated that Article 14 does not envisage negative equality and a wrong benefit conferred on someone does not create a right for others.
• Fuljit Kaur v. State of Punjab and others, (2010) 11 SCC 455 – Supreme Court of India: The Court held that Article 14 does not envisage negative equality and if an illegality has been committed, others cannot claim the same benefit.
• Doiwala Sehkari Shram Samvida Samiti Ltd. v. State of Uttaranchal and others, (2007) 11 SCC 641 – Supreme Court of India: The Court held that two wrongs do not make one right and the concept of equal treatment does not countenance repetition of a wrong action.
• Bondu Ramaswamy and others v. Bangalore Development Authority and others, (2010) 7 SCC 129 – Supreme Court of India: The Court held that if a land is not eligible for deletion under rules, it cannot be deleted merely because other similar lands were deleted.
• Kulwinder Pal Singh and another v. State of Punjab and others, (2016) 6 SCC 532 – Supreme Court of India: The Court reiterated that Article 14 does not perpetuate illegality and does not envisage negative equality.
• Rajasthan State Industrial Development & Investment Corporation v. Subhash Sindhi Cooperative Housing Society, Jaipur and others, (2013) 5 SCC 427 – Supreme Court of India: The Court held that Article 14 does not envisage negative equality and cannot be used to perpetuate illegality.
• Arup Das and others v. State of Assam and others, (2012) 5 SCC 559 – Supreme Court of India: The Court held that filling up vacancies over and above the number advertised is violative of Articles 14 and 16 and that mere inclusion in a select list does not confer a right to be selected.
• State of Orissa and another v. Mamata Mohanty, (2011) 3 SCC 436 – Supreme Court of India: The Court held that Article 14 is not meant to perpetuate illegality and does not envisage negative equality.

Books:

• Principles of Statutory Interpretation, 14th Edition by Justice G.P. Singh: The Court referred to the principles of statutory interpretation, particularly regarding the effect of repeal and savings clauses.
• Black’s Law Dictionary: The Court referred to the definition of “vest” in this dictionary.

Legal Provisions:

• Section 7-C of the Orissa Education Act, 1969: The core provision authorizing the State Government to provide grant-in-aid to private educational institutions.
• Section 6 of the General Clauses Act, 1897: The Court discussed the effect of repeal of an enactment and the savings of rights, privileges, and obligations.

[TABLE] of Authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court approved the decision of the High Court in Lokanath Behera v. the State of Odisha, which held that grant-in-aid could not be claimed under the 1994 order after its repeal.
• The Court followed the principles laid down in State of Uttar Pradesh and others v. Hirendra Pal Singh, and others, (2011) 5 SCC 305, regarding the effect of repeal of a statute.
• The Court followed the decision in Board of Control of Cricket in India v. Kochi Cricket Private Limited, (2018) 6 SCC 287, which reiterated the principles laid down in State of Punjab v. Mohar Singh, AIR 1955 SC 84, regarding the interpretation of repealing statutes.
• The Court followed the principle of negative equality as laid down in Basawaraj and another v. Special Land Acquisition Officer, (2013) 14 SCC 81, Chaman Lal v. State of Punjab and others, (2014) 15 SCC 715, Fuljit Kaur v. State of Punjab and others, (2010) 11 SCC 455, Doiwala Sehkari Shram Samvida Samiti Ltd. v. State of Uttaranchal and others, (2007) 11 SCC 641, Bondu Ramaswamy and others v. Bangalore Development Authority and others, (2010) 7 SCC 129, Kulwinder Pal Singh and another v. State of Punjab and others, (2016) 6 SCC 532, Rajasthan State Industrial Development & Investment Corporation v. Subhash Sindhi Cooperative Housing Society, Jaipur and others, (2013) 5 SCC 427, Arup Das and others v. State of Assam and others, (2012) 5 SCC 559, and State of Orissa and another v. Mamata Mohanty, (2011) 3 SCC 436 to hold that there is no concept of negative equality.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the legal principle that a repealed statute is considered as if it never existed, except for specific savings. The court emphasized that grant-in-aid is not an automatic right but is subject to the economic capacity of the government and the fulfillment of various conditions. The court also stressed that the employees’ claims were made belatedly, and there was no vested right to claim grant-in-aid under the repealed 1994 order.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio

Logical Reasoning:

Judgment

The Supreme Court held that the employees were not entitled to claim grant-in-aid under the 1994 order after its repeal. The court reasoned that:

• The 1994 order was repealed by the 2004 order, which introduced a block grant system. The saving clause in the 2004 order only protected institutions that were already receiving grant-in-aid under the 1994 order.
• The employees’ claims were made belatedly, and there was no vested right to claim grant-in-aid under the repealed order. The court emphasized that grant-in-aid is not an automatic entitlement but is subject to various conditions and the economic capacity of the government.
• The court relied on Section 6 of the General Clauses Act, 1897, and various precedents to highlight that a repealed statute is considered as if it never existed, except for specific savings.
• The court rejected the argument of negative equality, stating that if some persons have been granted a benefit illegally, it does not confer a right on others to claim the same benefit.

The court observed that “grant-in-aid has to be claimed within the period prescribed and the Director onbeing satisfied that the institution is eligible, can extend the benefit of grant-in-aid. The right to claim grant-in-aid is not an automatic one.”

The court further observed that “the repeal of the 1994 Order extinguishes all rights except those which are saved by the repealing order. The 2004 Order has specifically saved the rights of institutions which had been receiving the grant-in-aid under the 1994 Order. The employees did not have any vested or accrued right to claim the grant-in-aid under the 1994 Order after its repeal.”

Final Order

The Supreme Court allowed the appeals filed by the State of Odisha and set aside the judgments of the High Court and the State Education Tribunal. The court held that the employees were not entitled to claim grant-in-aid under the repealed 1994 order. The court reiterated that grant-in-aid was not an automatic entitlement and was subject to the economic capacity of the government.

Implications

The Supreme Court’s judgment in State of Odisha vs. Anup Kumar Senapati has significant implications for grant-in-aid policies and the rights of employees in similar situations. The key implications include:

• Repeal of Statutes: The judgment reinforces the legal principle that a repealed statute is considered as if it never existed, except for specific savings. This means that any rights or benefits under a repealed statute are generally extinguished unless explicitly saved by the repealing statute.
• Grant-in-Aid: The judgment clarifies that grant-in-aid is not an automatic entitlement but is subject to the economic capacity of the government and the fulfillment of various conditions. Employees cannot claim grant-in-aid under a repealed order unless their right was explicitly saved by the repealing order.
• Vested Rights: The judgment emphasizes that there is no vested right to claim grant-in-aid under a repealed statute, especially if the claim is made belatedly. Employees must assert their rights promptly and under the applicable law.
• Negative Equality: The judgment reiterates the principle that Article 14 of the Constitution does not envisage negative equality. If some persons have been granted a benefit illegally, it does not confer a right on others to claim the same benefit.
• Policy Implications: The judgment sets a precedent for the interpretation of grant-in-aid policies and the effect of repealing statutes. It underscores the need for clear and explicit saving clauses in repealing statutes to protect any rights or benefits under the repealed statute.

Conclusion

The Supreme Court’s judgment in State of Odisha vs. Anup Kumar Senapati provides a clear interpretation of the effect of repealing statutes on grant-in-aid policies. The court held that employees cannot claim grant-in-aid under a repealed order unless their right was explicitly saved by the repealing order. The judgment underscores the importance of timely claims and the principle that grant-in-aid is not an automatic entitlement but is subject to the economic capacity of the government and the fulfillment of various conditions. The judgment also reinforces the principle that a repealed statute is considered as if it never existed, except for specific savings, and the principle of negative equality. This case serves as a significant precedent for future cases involving grant-in-aid policies and the interpretation of repealing statutes.