Supreme Court Clarifies Powers of Delhi School Tribunal on Back Wages in Reinstatement Cases: Sunil Sikri vs. Guru Harkrishan Public School (28 July 2022)

Date of the Judgment: 28 July 2022
Citation: 2022 INSC 648
Judges: K.M. Joseph, J., Pamidighantam Sri Narasimha, J.
Can a school tribunal order back wages when reinstating an employee, or is this decision solely within the purview of the school’s managing committee? The Supreme Court of India addressed this critical question in a recent judgment, clarifying the powers of the Delhi School Tribunal regarding back wages in cases of employee reinstatement. The court examined the interplay between the Delhi School Education Act, 1973, and the Delhi School Education Rules, 1973, to determine the appropriate authority for deciding on back wages. The judgment was authored by Justice K.M. Joseph, with Justice Pamidighantam Sri Narasimha concurring.

Case Background

The case involves a Post Graduate Teacher (PGT) in Chemistry, Mr. Sunil Sikri, who was employed by Guru Harkrishan Public School, a minority institution, since July 2, 1984. On January 22, 1994, the school alleged that Mr. Sikri misbehaved with and molested a newly married employee. Following this, Mr. Sikri purportedly submitted a voluntary resignation, which the school accepted. However, Mr. Sikri disputed this, claiming the resignation was coerced and withdrawn the next day, before it could be acted upon. He also challenged the competence of the Chairperson of the Managing Committee to accept his resignation.

This dispute led to an appeal before the Delhi School Education Tribunal. After 17 years, the Tribunal ruled on August 18, 2011, that the resignation was withdrawn before acceptance and was therefore invalid. The Tribunal also held that the Chairperson lacked the authority to accept the resignation, declaring the termination illegal and ordering Mr. Sikri’s reinstatement with 50% back wages. The school challenged the award of back wages, leading to the present case.

Timeline:

Course of Proceedings

The matter initially went before the Delhi School Education Tribunal, which ruled in favor of Mr. Sikri, ordering his reinstatement with 50% back wages. The school then filed a writ petition challenging the Tribunal’s order, specifically contesting the Tribunal’s power to award back wages. Due to conflicting opinions between two judges, the matter was referred to a larger bench of the High Court. The Full Bench of the High Court, in the impugned judgment, held that the power to decide on back wages lies with the Managing Committee of the school under Rule 121 of the Delhi School Education Rules, 1973, and not with the Tribunal. This decision was then appealed to the Supreme Court.

Legal Framework

The judgment primarily revolves around the interpretation of the Delhi School Education Act, 1973, and the Delhi School Education Rules, 1973. Key provisions include:

• Section 8 of the Delhi School Education Act, 1973: This section deals with the terms and conditions of service of employees in recognized private schools. It states that:
  • (1) The Administrator may make rules regulating the minimum qualifications for recruitment, and the conditions of service, of employees of recognised private schools…
  • (2) Subject to any rule that may be made in this behalf, no employee of a recognised private school shall be dismissed, removed or reduced in rank nor shall his service be otherwise terminated except with the prior approval of the Director.
  • (3) Any employee of a recognised private school who is dismissed, removed or reduced in rank may, within three months from the date of communication to him of the order of such dismissal, removal or reduction in rank, appeal against such order to the Tribunal constituted under section 11.
  • (4) Where the managing committee of a recognised private school intends to suspend any of its employees, such intention shall be communicated to the Director and no such suspension shall be made except with the prior approval of the Director…
• Section 11 of the Delhi School Education Act, 1973: This section provides for the constitution of the Delhi School Tribunal. It states that:
  • (1) The Administrator shall, by notification, constitute a Tribunal, to be known as the “Delhi School Tribunal”, consisting of one person…
  • (6) The Tribunal shall for the purpose of disposal of an appeal preferred under this Act have the same powers as are vested in a court of appeal by the Code of Civil Procedure, 1908 (5 of 1908) and shall also have the power to stay the operation of the order appealed against on such terms as it may think fit.
• Rule 115 of the Delhi School Education Rules, 1973: This rule deals with the suspension of employees. Specifically,
  • (1) Subject to the provision of sub-sections (4) and (5) of section 8, the managing committee may place an employee of a recognised private school, whether aided or not, under suspension…
  • (4) Where a penalty of dismissal, removal or compulsory retirement from service imposed upon an employee is set aside or rendered void, in consequence of or by, a decision of a court of law or of the Tribunal; and the disciplinary authority on a consideration of the circumstances of the case decides to hold further inquiry against such employee on the same allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, such employee shall be deemed to have been placed under suspension by the managing committee from the date of original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further orders…
• Rule 121 of the Delhi School Education Rules, 1973: This rule governs the payment of pay and allowances on reinstatement. It states that:
  • (1) When an employee who has been dismissed, removed or compulsorily retired from service is reinstated as a result of appeal…the managing committee shall consider and make a specified order: – (a) with regard to the salary and allowances to be paid to the employee for the period of his absence from duty…; and (b) whether or not the said period shall be treated as the period spent on duty.
  • (2) Where the managing committee is of opinion that the employee who had been dismissed, removed or compulsorily retired from service had been fully exonerated, the employee shall be paid the full salary and allowances to which he would have been entitled had he not been dismissed…

Arguments

Appellant’s (Mr. Sunil Sikri) Arguments:

• The Tribunal has the same powers as an appellate court under the Code of Civil Procedure, which includes the power to award back wages.
• The Tribunal possesses incidental and ancillary powers to make its express statutory powers effective.
• Rule 121 of the Delhi School Education Rules, 1973, is ultra vires the Delhi School Education Act, 1973, as it restricts the Tribunal’s power to award back wages.
• The Tribunal should have the power to decide on back wages in all cases, following guidelines laid down in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) and others.
• Fundamental Rule 54, which is similar to Rule 121, applies only to departmental appeals, not to appeals before the Tribunal.
• The Tribunal must have the power to decide the issue of back wages in all cases in view of the factors and guidelines laid down in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) and others.

Respondent’s (Guru Harkrishan Public School) Arguments:

• The Tribunal does not have any express power under Sections 8 and 11 of the Delhi School Education Act, 1973, to order back wages.
• Rule 121 of the Delhi School Education Rules, 1973, mandates that the Managing Committee of the school should decide on the issue of back wages after an inquiry.
• Giving the Tribunal the power to award back wages would make Rule 121 redundant.
• The Managing Committee is the appropriate authority to determine back wages as it can consider factors such as gainful employment during the period of absence.
• The view taken by the Full Bench of the High Court has been consistently followed and should not be disturbed for the sake of certainty in law.

Submissions of the Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether there is any express power under Sections 8 and 11 of the Delhi School Education Act, 1973, to order back wages?
2. Whether Fundamental Rule 54 fortifies the contention of the respondent?
3. Is there any conflict between Sections 8 and 11 on one hand and Rule 121 on the other hand? Is Rule 121 ultra vires to the parent enactment?
4. Whether the tribunal has incidental and ancillary power to direct payment of pay and allowance on setting aside the order of termination?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• Shashi Gaur v. NCT of Delhi and others [(2001) 10 SCC 445]: The Court acknowledged this case for expanding the scope of appeal under Section 8(3) of the Delhi School Education Act, 1973, but clarified that it does not grant the Tribunal the power to decide on back wages.
• Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) and others [(2013) 10 SCC 324]: The Court distinguished this case, noting that the Maharashtra Act in question had an explicit provision granting the Tribunal the power to award arrears of emoluments, unlike the Delhi Act.
• Bharathidasan University and another v. All-India Council for Technical Education and others [(2001) 8 SCC 676]: The Court noted this case for the principle that a subordinate legislation can be challenged even without a specific challenge if it is ultra vires the parent Act, but clarified that it does not apply in this case.
• Devendra Pratap Narain Rai Sharma v. State of Uttar Pradesh and others [AIR 1962 SC 1334]: The Court cited this case to clarify that Fundamental Rule 54 does not apply when a civil court declares a dismissal invalid, but held that Rule 121 applies to Tribunal appeals.
• The Manager Arva Samaj Girls Higher Secondary School & Anr. Vs. Sunrita Thakur [43 (1991) DLT 139]: The Court upheld this case as correctly interpreting Rule 121.
• The Managing Committee Heera Lal Jain Vs. Shri Chander Gupt Sharma & Ors. [W.P.(C) No.7617/2000]: The Court overruled this case.
• State of A.P. v. P. Narasimha and another [(1994) 4 SCC 453]: The Court did not find this case persuasive in the present context.
• Karnataka Bank Ltd. v. State of Andhra Pradesh and others [(2008) 2 SCC 254]: The Court did not find this case persuasive in the present context.
• Union of India v. Madhusudan Prasad [(2004) 1 SCC 43]: The Court did not find this case persuasive in the present context.
• Smt. Ujjam Bai v. State of Uttar Pradesh [AIR 1962 SC 1621]: The Court found this case persuasive in the present context.
• Shanmugam v. Commissioner for Registration [(1962) 3 LR 200 PC]: The Court found this case not applicable to the present context.

The Supreme Court held that the Delhi School Tribunal does not have the express power to order back wages. It clarified that the power to decide on back wages lies with the Managing Committee of the school under Rule 121 of the Delhi School Education Rules, 1973. The Court emphasized that Rule 121 is a mandatory provision, requiring the Managing Committee to consider and make a specific order regarding salary and allowances for the period of absence, and whether the period should be treated as duty. The Court also held that Rule 121 is not ultra vires the Delhi School Education Act, 1973, and that it is part of a scheme that includes Sections 8 and 11 of the Act, as well as Rule 115(4) of the Rules.

The Court stated that the Managing Committee must conduct an inquiry and provide an opportunity for the employee to be heard before making a decision on back wages. The court also pointed out that the Tribunal’s role is to decide on the legality of the termination and order reinstatement, but the decision on back wages is a separate matter that falls within the purview of the Managing Committee.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• Statutory Interpretation: The Court emphasized the importance of interpreting the Delhi School Education Act, 1973, and the Delhi School Education Rules, 1973, in a harmonious manner. The Court noted that the Act does not explicitly grant the Tribunal the power to award back wages.
• Specific Provisions: The Court focused on the specific language of Rule 121, which mandates that the Managing Committee must consider and make a specific order regarding the payment of salary and allowances upon reinstatement.
• Legislative Intent: The Court inferred that the legislature intended for the Managing Committee to decide on back wages, as it is better positioned to consider factors such as gainful employment and other relevant circumstances.
• Balance of Power: The Court aimed to balance the rights of the employees with the administrative responsibilities of the school management.
• Consistency of Law: The Court noted that the view taken by the Full Bench of the High Court has been consistently followed for a long period of time, and therefore, it should not be disturbed unless it is palpably erroneous.

Fact:Law Ratio

“The purport of the provisions in Section 107 is to only declare that the Appellate Court has a wide range of options, which include the power to finally decide the case.”

“The right of appeal under Section 8 is given with respect to the order of termination which has been interpreted by this Court in Shashi Gaur (supra) to include all kinds of termination except for termination which occurs by efflux of time.”

“Rule 121, in fact, specifically contemplates re-instatement of the employee whose services are terminated on the basis of the decision in an appeal and what is most important is the very premise of the re-instatement is the decision in an appeal and it is beyond dispute that the lawgiver has contemplated an appeal only to the Tribunal constituted under Section 11.”

Logical Reasoning

Key Takeaways

• The Delhi School Tribunal cannot directly order back wages in cases of employee reinstatement.
• The Managing Committee of the school is the appropriate authority to decide on back wages, as per Rule 121 of the Delhi School Education Rules, 1973.
• The Managing Committee must conduct an inquiry and give the employee an opportunity to be heard before deciding on back wages.
• Rule 121 is a mandatory provision, and the Managing Committee must act promptly after an order of reinstatement.
• This judgment clarifies the division of powers between the Tribunal and the Managing Committee in cases of employee reinstatement.
• This judgment applies to all recognized private schools including minority institutions.

Directions

The Supreme Court did not issue any specific directions other than dismissing the appeal. However, the Court emphasized that the Managing Committee should not cause any needless and unjustifiable delay in concluding the proceedings under Rule 121.

Development of Law

The ratio decidendi of this case is that the Delhi School Tribunal does not have the express power to order back wages in cases of employee reinstatement. This power lies solely with the Managing Committee of the school, as per Rule 121 of the Delhi School Education Rules, 1973. This judgment clarifies the division of powers between the Tribunal and the Managing Committee and reinforces the importance of adhering to the statutory framework.

Conclusion

In conclusion, the Supreme Court dismissed the appeal, affirming that the Delhi School Tribunal does not have the power to order back wages. The responsibility for deciding on back wages rests with the Managing Committee of the school, which must conduct an inquiry and consider all relevant factors as per Rule 121 of the Delhi School Education Rules, 1973. This judgment provides clarity on the powers and responsibilities of the Tribunal and the Managing Committee in cases of employee reinstatement.