Supreme Court Upholds Grant-in-Aid Rules for Minority Institutions: State of Gujarat vs. H.B. Kapadia Education Trust (2023)

Date of the Judgment: 21 February 2023

Citation: Civil Appeal No. 2837 of 2022

Judges: Dinesh Maheshwari, J., Bela M. Trivedi, J.

Can a minority educational institution receiving government aid disregard the standard retirement age for its staff? The Supreme Court of India recently addressed this question, clarifying the extent to which minority institutions are bound by the rules of the Grant-in-Aid Code. The court held that while minority institutions have the right to administer their institutions, they must adhere to the grant-in-aid rules regarding the age of superannuation for staff to receive government funding. This judgment clarifies the balance between the rights of minority institutions and the state’s interest in ensuring uniform standards in aided educational institutions. The bench comprised Justices Dinesh Maheshwari and Bela M. Trivedi, with the judgment authored by Justice Bela M. Trivedi.

Case Background

The H.B. Kapadia Education Trust, a Jain minority institution, was running a government-aided school called “The New High School.” Shri H.H. Kapadia, the school’s principal, reached the age of 58 on July 22, 1999. The institution sought permission from the government to extend his service. The District Education Officer (DEO) allowed him to continue until age 60, provided the institution paid his salary. Subsequently, the institution requested a further extension beyond 60, which the DEO rejected on June 18, 2001. The institution challenged these decisions in the High Court of Gujarat, arguing their right to manage their institution, including the service of their principal.

Timeline

Course of Proceedings

The Single Bench of the High Court of Gujarat ruled in favor of the institution, stating that stopping the grant was a violation of Article 30(1) of the Constitution of India. The court held that the institution had the right to continue Mr. Kapadia as principal beyond 60 and ordered the state to pay the grant-in-aid arrears from 2001 to 2012. The State of Gujarat appealed this decision before the Division Bench, which upheld the Single Bench’s decision. The State of Gujarat then appealed to the Supreme Court of India.

Legal Framework

The Supreme Court examined the following legal provisions:

• Article 30 of the Constitution of India: This article protects the rights of minorities to establish and administer educational institutions. Specifically, Article 30(1) states: “All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.” Article 30(2) states: “The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.”
• The Gujarat Secondary Education Act, 1972: This act regulates secondary education in Gujarat and established a board for that purpose.
• The Secondary Education Regulations, 1974: These regulations, framed under Section 53 of the Gujarat Secondary Education Act, 1972, govern the administration of secondary schools. Regulation 36 specifies the age of superannuation for employees of registered secondary schools as 58 years. Regulation 42 states that these regulations prevail over the Grant-in-Aid Code. Regulation 43 exempts minority institutions from certain regulations, including Regulation 36.
• Grant-in-Aid Code for Secondary Schools (1964): This code, published under a government notification, provides guidelines for grant-in-aid to secondary schools. Para 81.1 states that a secondary school teacher shall ordinarily retire at the age of 58. Para 81.2 allows for extensions up to the age of 60 by the management. Para 81.5 states that no person who has attained the age of 58 shall be employed as a teacher.

The Court noted that Regulation 43 of the Secondary Education Regulations exempts minority institutions from Regulation 36, which pertains to the age of superannuation. However, the court also noted that the Grant-in-Aid Code, specifically para 81, applies to all aided secondary schools, including minority institutions.

Arguments

Submissions of the Appellants (State of Gujarat):

• The State argued that the Grant-in-Aid Code applies to all aided institutions, including minority institutions, regarding the age of superannuation.
• They contended that the exemption of minority institutions from Regulation 36 of the Secondary Education Regulations does not exempt them from the provisions of the Grant-in-Aid Code.
• The State submitted that the High Court erred in holding that the institution had a right to continue the principal beyond the age of 60 and in directing the state to pay the arrears of grant.
• The State relied on the judgment in T.M.A. Pai Foundation and Others vs. State of Karnataka and Others [(2002) 8 SCC 481], arguing that the right under Article 30(1) is not absolute and that conditions for grant or non-grant of aid must be uniformly applied.
• The State also relied on the judgment in State of Uttar Pradesh and Others vs. Principal Abhay Nandan Inter College and Others [2021 SCC Online SC 807], which held that aided institutions are bound by the conditions imposed by the government.

Submissions of the Respondents (H.B. Kapadia Education Trust):

• The institution contended that as a minority institution, they have the right to administer their institution as per Article 30(1) of the Constitution.
• They argued that Regulation 43 of the Secondary Education Regulations exempts them from the age of superannuation rules applicable to other institutions.
• The institution submitted that the state’s refusal to grant aid for the principal’s salary beyond 60 years was a violation of their rights under Article 30(1).
• The institution argued that the Grant-in-Aid Code should not override their right to manage their institution, including the service of their principal.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the decision of the appellants in not providing the aid to the respondents towards the salary of the principal of the respondent no. 2 – school on his attaining the age of superannuation as per the Grant-in-aid Code, could be said to be arbitrary or violative of Article 30(1) of the Constitution of India?

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:

Judgment

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

How each authority was viewed by the Court?

• T.M.A. Pai Foundation and Others vs. State of Karnataka and Others [(2002) 8 SCC 481]: The Supreme Court relied on this case to support its view that the right under Article 30(1) is not an absolute right and that conditions for grant or non-grant of aid to educational institutions have to be uniformly applied.
• State of Uttar Pradesh and Others vs. Principal Abhay Nandan Inter College and Others [2021 SCC Online SC 807]: The Supreme Court cited this case to emphasize that an institution receiving aid is bound by the conditions imposed by the government.
• Article 30(1) of the Constitution of India: The Court interpreted this article to mean that while minorities have the right to administer their institutions, this right is not absolute and is subject to reasonable restrictions.
• Article 30(2) of the Constitution of India: The Court interpreted this article to mean that the State shall not discriminate against any educational institution on the ground that it is under the management of a minority.
• Regulation 36 of the Secondary Education Regulations, 1974: The Court noted that this regulation specifies the age of superannuation for employees of registered secondary schools as 58 years, but does not apply to minority institutions.
• Regulation 42 of the Secondary Education Regulations, 1974: The Court noted that this regulation states that the Secondary Education Regulations prevail over the Grant-in-Aid Code.
• Regulation 43 of the Secondary Education Regulations, 1974: The Court noted that this regulation exempts minority institutions from certain regulations, including Regulation 36.
• Para 81 of the Grant-in-Aid Code for Secondary Schools (1964): The Court relied on this provision to state that a secondary school teacher shall ordinarily retire at the age of 58, and the management may grant extensions up to the age of 60.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to maintain uniformity in the application of grant-in-aid rules while respecting the rights of minority institutions. The Court emphasized that the right under Article 30(1) is not absolute and is subject to reasonable restrictions. The Court also noted that the Grant-in-Aid Code applies uniformly to all aided institutions, and the conditions for grant or non-grant of aid must be uniformly applied. The Court also considered that there was no discrimination by the State against the respondent institution.

Fact:Law Ratio

The court’s reasoning was heavily based on legal interpretation and precedent, with a greater emphasis on the legal framework than on the specific facts of the case.

Logical Reasoning

Judgment

The Supreme Court held that the respondent-institution was bound by the provisions contained in the Grant-in-Aid Code. The Court stated that there was no evidence of discrimination against the respondent-institution on the ground that it was under the management of a minority, which would attract Article 30(2) of the Constitution. The Court set aside the High Court’s order, stating that the institution did not have a right to continue the Principal beyond the age of 60 and that the appellants were not obligated to pay the grant-in-aid for that period.

The Court observed:

“The necessary corollary would be that the said Regulation 36 being not applicable to the minority educational institution, the provisions contained in the Grant-in-Aid Code pertaining to the age of superannuation would be applicable to such minority institutions availing the grant from the State Government.”

“The provisions of Grant-in-Aid Code are applicable to all the registered secondary education institutions desirous of receiving or which are receiving the grant from the Government, and such institutions would be subject to the restrictions imposed under the Code, except for the matters provided in the said Regulations.”

“The conditions for grant or non-grant of aid to educational institutions have to be uniformly applied, whether it is a majority-run institution or a minority-run institution.”

Key Takeaways

• Minority educational institutions receiving government aid are not exempt from the standard retirement age rules stipulated in the Grant-in-Aid Code.
• While Article 30(1) of the Constitution grants minorities the right to administer their educational institutions, this right is not absolute and is subject to reasonable restrictions.
• The Grant-in-Aid Code applies uniformly to all aided institutions, and the conditions for grant or non-grant of aid must be uniformly applied, irrespective of whether the institution is run by a majority or a minority.
• Minority institutions cannot claim grant-in-aid for employees retained beyond the age of superannuation as per the Grant-in-Aid Code.

Directions

The Supreme Court set aside the impugned order passed by the Division Bench of the High Court, which had confirmed the order passed by the Single Bench allowing the writ petition filed by the respondent institution. The appeal filed by the appellants was allowed.

Development of Law

The ratio decidendi of this case is that minority educational institutions receiving government aid are bound by the provisions of the Grant-in-Aid Code, particularly regarding the age of superannuation for staff. This judgment clarifies that while minority institutions have the right to administer their institutions, this right is not absolute and is subject to reasonable restrictions, including compliance with the Grant-in-Aid Code. This decision reinforces the principle that conditions for grant or non-grant of aid must be uniformly applied to all aided institutions.

Conclusion

The Supreme Court’s judgment in The State of Gujarat & Ors. vs. H. B. Kapadia Education Trust & Anr. clarifies that minority educational institutions receiving government aid must adhere to the Grant-in-Aid Code regarding the age of superannuation for staff. The court emphasized that while minority institutions have the right to administer their institutions, this right is not absolute and is subject to reasonable restrictions. The judgment ensures that the conditions for grant or non-grant of aid are uniformly applied to all aided institutions, thereby promoting consistency and fairness in the education sector.

Category

Parent Category: Education Law

Child Categories: Grant-in-Aid, Minority Institutions, Article 30, Constitution of India, Retirement Age, Superannuation, Gujarat Secondary Education Act, 1972, Secondary Education Regulations, 1974, Grant-in-Aid Code for Secondary Schools, 1964

Parent Category: Constitution of India

Child Categories: Article 30, Constitution of India

Parent Category: Gujarat Secondary Education Act, 1972

Child Categories: Section 53, Gujarat Secondary Education Act, 1972

FAQ

Q: Are minority educational institutions exempt from government rules regarding retirement age?

A: No, minority educational institutions receiving government aid must adhere to the standard retirement age rules stipulated in the Grant-in-Aid Code.

Q: Does Article 30(1) of the Constitution give minority institutions absolute rights?

A: No, while Article 30(1) grants minorities the right to administer their institutions, this right is not absolute and is subject to reasonable restrictions.

Q: What is the Grant-in-Aid Code?

A: The Grant-in-Aid Code provides guidelines for grant-in-aid to secondary schools, including rules on the age of superannuation for staff.

Q: Can minority institutions claim grant-in-aid for employees retained beyond the standard retirement age?

A: No, minority institutions cannot claim grant-in-aid for employees retained beyond the age of superannuation as per the Grant-in-Aid Code.

Q: Does the state discriminate against minority institutions by applying the Grant-in-Aid Code?

A: No, the Grant-in-Aid Code applies uniformly to all aided institutions, and the conditions for grant or non-grant of aid must be uniformly applied.