Supreme Court mandates prior approval for employee termination in recognized institutions: Gajanand Sharma vs. Adarsh Siksha Parisad Samiti (2023)

Introduction

Date of the Judgment: 19 January 2023
Citation: 2023 INSC 46
Judges: M. R. Shah, J. and C.T. Ravikumar, J.

Can a recognized educational institution terminate an employee without the prior approval of the Director of Education? The Supreme Court of India recently addressed this critical question in a case concerning the termination of an employee of a non-governmental educational institution in Rajasthan. The core issue revolved around the interpretation of Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, specifically whether prior approval is mandatory for termination, even after a disciplinary inquiry. This judgment clarifies the procedural safeguards in place to protect employees of recognized institutions.

Case Background

The appellant, Gajanand Sharma, was an employee of Adarsh Siksha Parisad Samiti. A disciplinary inquiry was initiated against him under the Rajasthan Non-Governmental Educational Institutions Act, 1989. Following the inquiry, his services were terminated. The employee challenged the termination before the Tribunal, arguing that the mandatory prior approval of the Director of Education, as required under Section 18 of the Act, was not obtained. The Tribunal sided with the employee, setting aside the termination order, a decision that was later upheld by the Single Judge of the High Court. However, the Division Bench of the High Court reversed these decisions, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

The employee’s termination was initially challenged before the Tribunal, which ruled in favor of the employee, citing the lack of prior approval from the Director of Education as a violation of Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989. This decision was upheld by a Single Judge of the High Court. However, the Division Bench of the High Court overturned these decisions, relying on a previous Larger Bench decision of the same High Court which had read down Section 18 of the Act, 1989. The Division Bench held that prior approval was not required in cases of termination following a disciplinary inquiry. This led to the employee appealing to the Supreme Court.

Legal Framework

The core legal provision in question is Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, which states:

“18. Removal, dismissal or reduction in rank of employees.- Subject to any rules that may be made in this behalf, no employee of a recognised institution shall be removed, dismissed or reduced in rank unless he has been given by the management a reasonable opportunity of being heard against the action proposed to be taken; Provided that no final order in this regard shall be passed unless prior approval of the Director of Education or an officer authorised by him in this behalf has been obtained.”

This provision mandates that before an employee of a recognized institution is removed, dismissed, or reduced in rank, they must be given a reasonable opportunity to be heard, and crucially, no final order can be passed without the prior approval of the Director of Education or an authorized officer. The Supreme Court interpreted this section to determine whether the requirement of prior approval applies even when termination follows a disciplinary inquiry. The court also considered the implications of this provision in light of the constitutional rights of employees and the autonomy of educational institutions.

Arguments

The appellant (employee) argued that the High Court erred in not following the Supreme Court’s binding decision in Raj Kumar vs. Director of Education and Ors., (2016) 6 SCC 541, which held that prior approval of the Director of Education is mandatory before terminating an employee, even in non-aided institutions. The appellant contended that the High Court incorrectly stated that the Supreme Court in Raj Kumar had not considered the decision in T.M.A. Pai Foundation vs. State of Karnataka; (2002) 8 SCC 481, when in fact, the Supreme Court had extensively discussed and distinguished it. The appellant further argued that the decision in Marwari Balika Vidyalaya Vs. Asha Srivastava; (2020) 14 SCC 449 also supported the view that prior approval is mandatory.

The respondent (management) argued that the decisions in Raj Kumar and T.M.A. Pai Foundation were not applicable as they dealt with cases of termination without a disciplinary inquiry. They contended that since the termination in this case followed a full departmental inquiry, the requirement of prior approval under Section 18 of the Act, 1989, did not apply. The management relied on a Larger Bench decision of the Rajasthan High Court in Central Academy Society Vs. Rajasthan Non-Govt. Educational Institutional Tribunal; (2010) 3 WLC 21, which had read down Section 18, holding that prior approval was not required after a disciplinary inquiry. They also argued that the presence of a District Education Officer’s nominee on the disciplinary committee satisfied the intent of the prior approval requirement.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the prior approval of the Director of Education is mandatory under Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, before terminating an employee of a recognized institution, even in cases where the termination follows a disciplinary inquiry.

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:

The Court also considered the following legal provisions:

• Section 8(2) of the Delhi School Education Act, 1973 – “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.”
• Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989 – “Removal, dismissal or reduction in rank of employees.- Subject to any rules that may be made in this behalf, no employee of a recognised institution shall be removed, dismissed or reduced in rank unless he has been given by the management a reasonable opportunity of being heard against the action proposed to be taken; Provided that no final order in this regard shall be passed unless prior approval of the Director of Education or an officer authorised by him in this behalf has been obtained.”

Judgment

The Supreme Court allowed the appeals, setting aside the High Court’s decision and restoring the order of the Tribunal and Single Judge. The Court held that prior approval of the Director of Education is mandatory under Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, even in cases of termination following a disciplinary inquiry.

The Court analyzed the authorities as follows:

• Raj Kumar vs. Director of Education and Ors., (2016) 6 SCC 541: The Supreme Court followed its previous decision in Raj Kumar, reiterating that prior approval is a procedural safeguard for employees of recognized institutions. The Court emphasized that the decision in Raj Kumar had, in fact, considered and distinguished the decision in T.M.A. Pai Foundation.
• Marwari Balika Vidyalaya Vs. Asha Srivastava; (2020) 14 SCC 449: The Court noted that this decision also supported the view that prior approval is mandatory.
• Central Academy Society Vs. Rajasthan Non-Govt. Educational Institutional Tribunal; (2010) 3 WLC 21: The Court explicitly overruled the Larger Bench decision of the Rajasthan High Court, stating that its interpretation of Section 18 was incorrect.
• Mangal Sain Jain Vs. Principal Balvantray Mehta Vidya Bhawan & Ors. [W.P. (C) No. 3415/2020]: The Court noted that the Delhi High Court followed the decision in Raj Kumar, further strengthening the position that prior approval is mandatory.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to protect the interests of employees of recognized educational institutions and to ensure that terminations are not arbitrary or unreasonable. The Court emphasized the importance of procedural safeguards and the plain reading of Section 18 of the Act, 1989.

The Court’s analysis of the ratio of Fact:Law is as follows:

The court’s reasoning was as follows:

The Court rejected the argument that the presence of a District Education Officer’s nominee on the disciplinary committee satisfied the intent of prior approval, stating that the statute clearly requires the approval of the Director of Education or an authorized officer.

The Court quoted the following from the judgment:

“The words used are “no employee of a recognized institution shall be removed without holding any enquiry and it further provides that no final order in this regard shall be passed unless prior approval of the Director of Education has been obtained.””

“The first part of Section 18 is to be read along with first proviso.”

“Therefore, on true interpretation of Section 18 of the Act, 1989, it is specifically observed and held that even in case of termination/removal of an employee of a recognized institution after holding departmental enquiry/proceedings prior approval of the Director of Education has to be obtained as per first proviso to Section 18 of the Act, 1989.”

Key Takeaways

• Prior approval of the Director of Education is mandatory before terminating an employee of a recognized educational institution in Rajasthan, irrespective of whether the termination follows a disciplinary inquiry.
• The Supreme Court has upheld the importance of procedural safeguards for employees in educational institutions.
• The decision overrules the Larger Bench decision of the Rajasthan High Court in Central Academy Society.
• The judgment reinforces the binding nature of Supreme Court decisions on High Courts.

Directions

The Supreme Court directed the reinstatement of the employee with 50% back wages and all other benefits notionally, including seniority. The Court also remanded the matter of equal pay for equal work to the High Court for fresh consideration.

Development of Law

The ratio decidendi of the case is that prior approval of the Director of Education is mandatory under Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, before terminating an employee of a recognized institution, even if the termination follows a disciplinary inquiry. This judgment clarifies the position of law and overrules the previous contrary position taken by the Larger Bench of the Rajasthan High Court.

Conclusion

The Supreme Court’s decision in Gajanand Sharma vs. Adarsh Siksha Parisad Samiti reinforces the importance of prior approval from the Director of Education before terminating an employee of a recognized educational institution in Rajasthan. This judgment ensures that employees of such institutions are protected from arbitrary or unreasonable termination and provides clarity on the interpretation of Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989.