Supreme Court settles mandatory prior approval for employee termination in private schools: Gajanand Sharma vs. Adarsh Siksha Parisad Samiti (2023) INSC 58

Date of the Judgment: January 19, 2023
Citation: 2023 INSC 58
Judges: M. R. Shah, J. and C.T. Ravikumar, J.

Can a private school 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 interpretation of the Rajasthan Non-Governmental Educational Institutions Act, 1989. The court clarified that even in cases of termination following a disciplinary inquiry, prior approval from the Director of Education is mandatory, reinforcing the security of tenure for employees in recognized private institutions. This judgment emphasizes the procedural safeguards in place to protect employees from arbitrary dismissals. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice C.T. Ravikumar, with Justice M.R. Shah authoring the opinion.

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 on August 6, 1998. The employee challenged this termination before the Tribunal, which set aside the termination order, noting the absence of prior approval from the Director of Education, as mandated by Section 18 of the Act. The learned Single Judge confirmed the Tribunal’s order. However, the Division Bench of the High Court overturned these decisions, upholding the termination. The Division Bench reasoned that prior approval was not needed for terminations following a disciplinary inquiry, relying on a previous Larger Bench decision of the High Court and distinguishing the Supreme Court’s ruling in *Raj Kumar vs. Director of Education and Ors.*

Timeline

Course of Proceedings

The case began with the employee challenging his termination before the Tribunal, which ruled in his favor, citing the lack of prior approval from the Director of Education. The learned Single Judge upheld this decision. However, the Division Bench of the High Court reversed these orders, stating that prior approval was not necessary for terminations following a disciplinary inquiry. This decision was based on a Larger Bench decision of the same High Court, which had read down Section 18 of the Act, 1989. The Division Bench distinguished the Supreme Court’s judgment in *Raj Kumar*, arguing that it did not consider the *T.M.A. Pai Foundation* case. The employee then appealed to the Supreme Court, challenging the High Court’s decision.

Legal Framework

The core legal issue revolves around the interpretation of 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 terminating an employee, a recognized institution must provide a reasonable opportunity for the employee to be heard and obtain prior approval from the Director of Education. The Supreme Court also considered Section 8(2) of the Delhi School Education Act, 1973, which is a pari materia provision, and reads as follows:

“8. (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.”

The Court emphasized that these provisions aim to protect employees from arbitrary termination by ensuring a procedural safeguard and that these provisions are to be read as they are without adding or taking away anything.

Arguments

Appellant’s Arguments:

• ✓ The appellant argued that the High Court erred in not following the binding precedent set by the Supreme Court in *Raj Kumar vs. Director of Education and Ors.* which held that prior approval of the Director of Education is mandatory before terminating an employee of a recognized institution.
• ✓ The appellant contended that the High Court incorrectly stated that the Supreme Court in *Raj Kumar* had not considered the *T.M.A. Pai Foundation* case. The appellant pointed out that the *Raj Kumar* judgment explicitly referred to and discussed the *T.M.A. Pai Foundation* case in multiple paragraphs.
• ✓ It was submitted that the decision in *Raj Kumar* was followed in *Marwari Balika Vidyalaya Vs. Asha Srivastava*, where the Supreme Court reiterated that prior approval of the Director of Education is mandatory before terminating an employee.
• ✓ The appellant highlighted that the Delhi High Court also followed *Raj Kumar* in *Mangal Sain Jain Vs. Principal Balvantray Mehta Vidya Bhawan & Ors.*, and the Special Leave Petition against this decision was dismissed by the Supreme Court.

Respondent’s Arguments:

• ✓ The respondent argued that the *Raj Kumar* and *T.M.A. Pai Foundation* cases were not applicable because they involved terminations without any disciplinary enquiry, whereas the present case involved termination after a full departmental inquiry.
• ✓ The respondent relied on the Larger Bench decision of the Rajasthan High Court in *Central Academy Society vs. Rajasthan Non-Govt. Educational Institutional Tribunal*, which had read down Section 18 of the Act, holding that prior approval is not required for terminations following a disciplinary inquiry.
• ✓ The respondent argued that the presence of a District Education Officer’s nominee in the disciplinary committee fulfilled the requirement of oversight, making prior approval from the Director of Education unnecessary.
• ✓ The respondent highlighted the serious nature of the charges against the appellant, including misbehavior, threats, embezzlement, and negligence, justifying the termination.

Submissions Table

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the termination of an employee of a recognized institution requires prior approval of the Director of Education under Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, even when the termination follows a disciplinary inquiry.

Treatment of the Issue by the Court

Authorities

Cases Cited:

• ✓ Raj Kumar vs. Director of Education and Ors., (2016) 6 SCC 541 – Supreme Court of India: This case dealt with the pari materia provisions of the Delhi School Education Act, 1973, and held that prior approval of the Director of Education is mandatory before terminating an employee.
• ✓ T.M.A. Pai Foundation Vs. State of Karnataka; (2002) 8 SCC 481 – Supreme Court of India: This case discussed the autonomy of private educational institutions but was distinguished by the Court in the context of employee protection.
• ✓ Central Academy Society Vs. Rajasthan Non-Govt. Educational Institutional Tribunal; (2010) 3 WLC 21 – Rajasthan High Court: This Larger Bench decision of the High Court read down Section 18 of the Act, holding that prior approval is not required for terminations after a disciplinary inquiry, which was overruled by the Supreme Court in this case.
• ✓ Marwari Balika Vidyalaya Vs. Asha Srivastava; (2020) 14 SCC 449 – Supreme Court of India: This case followed *Raj Kumar* and reiterated that prior approval of the Director of Education is mandatory before terminating an employee.
• ✓ Mangal Sain Jain Vs. Principal Balvantray Mehta Vidya Bhawan & Ors. [W.P. (C) No. 3415/2020] – Delhi High Court: This case followed the *Raj Kumar* precedent.
• ✓ Principal Balvantray Mehta Vidya Bhawan Vs. Mangal Jain – Supreme Court of India: The Special Leave Petition against the Delhi High Court decision in *Mangal Sain Jain* was dismissed.

Legal Provisions Cited:

• ✓ Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989: This provision mandates prior approval of the Director of Education before terminating an employee of a recognized institution.
• ✓ Section 8(2) of the Delhi School Education Act, 1973: This is a pari materia provision to Section 18 of the Rajasthan Act, requiring prior approval for employee terminations.

Authority Analysis Table

Judgment

The Supreme Court allowed the appeals, setting aside the High Court’s judgment and restoring the Tribunal’s order. 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 where the termination follows a disciplinary inquiry.

Treatment of Submissions

Treatment of Authorities

The Supreme Court relied heavily on its previous decision in *Raj Kumar vs. Director of Education and Ors., (2016) 6 SCC 541*, stating that the High Court was bound to follow it. The Court clarified that the *Raj Kumar* judgment had indeed considered the *T.M.A. Pai Foundation Vs. State of Karnataka; (2002) 8 SCC 481*, and distinguished the latter’s applicability in the present context. The Court explicitly overruled the 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 held that prior approval was not required for terminations after a disciplinary inquiry. The Court also reaffirmed its stance in *Marwari Balika Vidyalaya Vs. Asha Srivastava; (2020) 14 SCC 449*, which followed the *Raj Kumar* precedent.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to uphold the procedural safeguards provided to employees under Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989. The Court emphasized the importance of ensuring that employees are not subjected to arbitrary terminations and that the legislative intent behind requiring prior approval from the Director of Education is strictly adhered to. The Court’s reasoning focused on the plain reading of the statute, rejecting any interpretation that would dilute the protection afforded to employees. The Court also expressed its disapproval of the High Court’s failure to follow binding precedents and its incorrect observation regarding the *Raj Kumar* judgment.

Sentiment Analysis Table

Fact:Law Ratio Table

Logical Reasoning

The Supreme Court reasoned that the plain language of Section 18 of the Rajasthan Act does not differentiate between terminations following a disciplinary inquiry and those without. The Court emphasized that the provision’s intent is to protect employees from arbitrary dismissals by mandating prior approval from the Director of Education. The Court rejected the High Court’s interpretation that prior approval is unnecessary after a disciplinary inquiry, stating that such an interpretation would undermine the statutory safeguards.

The Court also noted that the High Court had incorrectly stated that the Supreme Court in *Raj Kumar* had not considered the *T.M.A. Pai Foundation* case. The Supreme Court clarified that *Raj Kumar* had indeed considered *T.M.A. Pai Foundation* and distinguished its applicability in the context of employee protection. The Court emphasized the binding nature of its precedents and expressed disapproval of the High Court’s failure to follow them.

The Supreme Court quoted from the judgment as follows:

“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.””

“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.”

“In view of the above and for the reasons stated hereinabove, the impugned judgment and order passed by the Division Bench of the High Court restoring the order of termination which as such was without obtaining the prior approval of the Director of Education deserves to be quashed and set aside and is accordingly quashed and set aside.”

The Court did not discuss any alternative interpretations, as it found the plain language of the statute to be clear and unambiguous. The Court rejected the High Court’s interpretation and the Larger Bench decision of the Rajasthan High Court, thereby ensuring a uniform application of the law.

The decision was unanimous, with both judges agreeing on the interpretation of Section 18 of the Act.

Key Takeaways

• ✓ Private educational institutions in Rajasthan must obtain prior approval from the Director of Education before terminating any employee, regardless of whether the termination follows a disciplinary inquiry.
• ✓ This judgment reinforces the security of tenure for employees in private educational institutions and protects them from arbitrary dismissals.
• ✓ The Supreme Court has clarified that its previous decisions, particularly in *Raj Kumar*, must be followed by High Courts, emphasizing the importance of judicial discipline.
• ✓ The decision overrules the Larger Bench decision of the Rajasthan High Court in *Central Academy Society*, which had taken a contrary view.

Directions

The Supreme Court directed the reinstatement of the appellant with 50% back wages, along with all other benefits notionally, including seniority. The Court also remanded the matter related to equal pay for equal work back to the High Court for a fresh decision on its merits.

Development of Law

The ratio decidendi of this case is that Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989, mandates prior approval of the Director of Education for the termination of any employee of a recognized institution, regardless of whether a disciplinary inquiry has been conducted. This decision overrules the previous position taken by the Larger Bench of the Rajasthan High Court in *Central Academy Society*, thus establishing a new position of law in the state of Rajasthan.

Conclusion

In conclusion, the Supreme Court’s judgment in *Gajanand Sharma vs. Adarsh Siksha Parisad Samiti* clarifies that prior approval from the Director of Education is mandatory for terminating employees of recognized private educational institutions in Rajasthan, even after a disciplinary inquiry. This decision reinforces the statutory safeguards for employees and ensures that they are not subjected to arbitrary dismissals. The Court’s ruling also emphasizes the importance of judicial discipline and the binding nature of Supreme Court precedents.

Category

Parent Category: Education Law
Child Categories: Employee Rights, Rajasthan Non-Governmental Educational Institutions Act, 1989, Section 18, Termination of Employment

Parent Category: Rajasthan Non-Governmental Educational Institutions Act, 1989
Child Category: Section 18, Rajasthan Non-Governmental Educational Institutions Act, 1989

FAQ

Q: What does this judgment mean for private school employees in Rajasthan?
A: This judgment means that private school employees in Rajasthan have greater job security. Their employment cannot be terminated without the prior approval of the Director of Education, even if there has been a disciplinary inquiry.

Q: Can a private school still conduct a disciplinary inquiry against an employee?
A: Yes, a private school can still conduct a disciplinary inquiry. However, even if the inquiry concludes that the employee should be terminated, the school must still obtain prior approval from the Director of Education.

Q: What happens if a private school terminates an employee without prior approval?
A: If a private school terminates an employee without prior approval, the termination is likely to be deemed invalid. The employee may be entitled to reinstatement and back wages, as was the case in this judgment.

Q: Does this judgment apply to all types of private educational institutions?
A: This judgment specifically applies to recognized private educational institutions in Rajasthan, as it interprets Section 18 of the Rajasthan Non-Governmental Educational Institutions Act, 1989.

Q: What should an employee do if they are terminated without prior approval?
A: An employee who is terminated without prior approval should immediately seek legal advice and challenge the termination before the appropriate legal forum.