Supreme Court Upholds Retirement Age for Aided Minority Schools: State of Gujarat vs. H.B. Kapadia Education Trust (2023)

Date of the Judgment: 21 February 2023

Citation: 2023 INSC 147

Judges: Justices Dinesh Maheshwari and Bela M. Trivedi

Can a minority educational institution receiving government aid disregard the state’s retirement age for teachers? The Supreme Court of India recently addressed this question, clarifying the extent of minority rights in the context of receiving state grants. This case revolves around a dispute between the State of Gujarat and a minority-run school regarding the retirement age of its principal. The judgment was delivered by a two-judge bench comprising Justices Dinesh Maheshwari and Bela M. Trivedi, with the opinion 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.” Mr. H.H. Kapadia was appointed as the Principal. He reached the age of 58 on July 22, 1999. The institution sought permission from the government to allow him to continue as Principal. The District Education Officer (DEO) granted permission for him to continue until age 60, provided the institution paid his salary. Subsequently, the institution requested an extension beyond 60 years, which was rejected by the DEO on June 18, 2001. The institution challenged these decisions in the High Court of Gujarat.

The Single Bench of the High Court ruled in favor of the institution, stating that stopping the grant was a violation of Article 30(1) of the Constitution, which protects minority rights to administer educational institutions. The court held that the institution could continue Mr. Kapadia as Principal beyond 60 years and that the government was obligated to pay the grant-in-aid for his salary. The State of Gujarat appealed this decision to the Division Bench, which upheld the Single Bench’s order. The State then appealed to the Supreme Court.

Timeline:

Course of Proceedings

The case originated in the Gujarat High Court, where the single bench ruled in favor of the H.B. Kapadia Education Trust, stating that the government’s action of stopping the grant was a violation of Article 30(1) of the Constitution. The single bench further directed the government to pay the arrears of grant. The State of Gujarat appealed to the Division Bench of the High Court, which upheld the single bench’s decision. The State of Gujarat then approached the Supreme Court.

Legal Framework

The Supreme Court considered the following legal provisions:

• Article 30 of the Constitution of India: This article grants minorities the right to establish and administer educational institutions of their choice. It also prohibits the state from discriminating against minority institutions when granting aid. The relevant part of Article 30 of the Constitution reads as under:
  
  “30. Right of minorities to establish and administer educational institutions. –
  (1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
  (1A) – xxxx –
  (2) 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.
• The Secondary Education Regulations, 1974: These regulations, framed under the Gujarat Secondary Education Act, specify rules for secondary schools. Regulation 36 states that an employee of a registered secondary school shall be compulsorily retired on the date on which he attains the age of 58 years. However, Regulation 43 states that Regulation 36 shall not apply to any educational institution established and administered by a minority. Regulation 42 states that the provisions of the regulations shall prevail over the provisions contained in the Grant-in-Aid Code.
  
  The relevant Regulations are:
  
  “36. Superannuation- (1) An employee of a registered secondary school shall be compulsorily retired on the date on which he attains the age of 58 years.
  (2) No management shall employ or re-employ any person who has completed the age of 58 years.
  Provided however that if the date of superannuation of an employee falls within a term, his service shall automatically be extended up to end of that term,
  Provided further that re-employment upto the age of 60 years should normally be given to peons and such other menial servants by the management if they are physically fit.
  42. Regulations to prevail over Grant-in-Aid Code -The provisions of these regulations shall prevail over those provisions contained in the Grant-in-aid Code published under Government Notification, Education and Labour Department No.GAC-1064-C dated the 22nd April, 1974 in so far as they relate to any matters provided in these regulations.
  43. Nothing contained in Regulations 19, 20, 21, 22, 24, 25, 26, 27, 28, 30, 31, 32, 33, 36, 37, 40 and sub-clauses (4), (5) and (6) of Regulation No. 41 shall apply to any educational institution established and administered by a minority, whether based on religion or language.”
• The Grant-in-Aid Code for Secondary Schools (1964): This code outlines the rules for government grants to secondary schools. Para 81.1 states that a secondary school teacher shall ordinarily retire at the age of 58. Para 81.2 allows management to grant extensions up to the age of 60. Para 81.5 states that no person who has attained the age of 58 shall be employed as a teacher.
  
  The relevant provisions of the Grant-in-Aid Code are:
  
  “81.1 A secondary school teacher shall ordinarily retire from service at the age of 58.
  81.2 The management may grant to teachers extensions upto the age of 60. If the Inspecting Officers report on the basis of their inspection that any teacher beyond the age of 58 is unable to discharge his duties properly, the teacher will be sent for medical examination and if declared unfit will be compelled to retire.
  81.5 No person who has already attained the age of 58 years shall be employed as a teacher or on the non-teaching staff. Retired persons from Government or non-Government Educational Institutions may however, be re-employed by the Educational Institution provided they are physically and mentally fit. The employment of such retired persons should be subject to the provisions made in clauses 81.2 and 81.3 above and such other terms and conditions not in contravention of these rules and the general service conditions as may be mutually agreed upon between the employer and the employee. Such re-employed persons will not however, be eligible for the departmentally prescribed scales of pay and allowances, etc. and to the Government aided provident fund scheme.”

Arguments

The following arguments were presented by the parties:

• Appellant (State of Gujarat):
  • The State argued that the Grant-in-Aid Code applies to all aided schools, including minority institutions, regarding the retirement age of teachers.
  • They contended that while minority institutions have the right to administer their schools, this right is not absolute and is subject to reasonable restrictions, especially when receiving government aid.
  • The State submitted that since Regulation 36 of the Secondary Education Regulations, 1974, which specifies the retirement age, does not apply to minority institutions, the Grant-in-Aid Code would apply to them.
  • The State relied on the judgment of the Constitution Bench in T.M.A. Pai Foundation and Others vs. State of Karnataka and Others [(2002) 8 SCC 481], which held that the conditions for grant or non-grant of aid have to be uniformly applied to both minority and majority institutions.
  • The State also cited the recent decision in State of Uttar Pradesh and Others vs. Principal Abhay Nandan Inter College and Others [2021 SCC Online SC 807], which reiterated that an institution receiving aid is bound by the conditions imposed by the government.
• Respondent (H.B. Kapadia Education Trust):
  • The institution argued that as a minority institution, it has the right to administer its school, including the right to determine the retirement age of its teachers, under Article 30(1) of the Constitution.
  • They contended that the government’s decision to stop the grant was a violation of their rights under Article 30(1).
  • The institution argued that since Regulation 36 of the Secondary Education Regulations, 1974, does not apply to minority institutions, they are not bound by the retirement age specified in the regulations.
  • They claimed that the Grant-in-Aid Code, to the extent it interferes with their right to administer their institution, should not apply to them.

Submissions of the Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

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:

The Court also considered the following legal provisions:

• Article 30 of the Constitution of India: The Court interpreted this article to mean that while minority institutions have the right to establish and administer their schools, this right is not absolute and is subject to reasonable restrictions, especially when receiving government aid.
• Regulation 36 of the Secondary Education Regulations, 1974: The Court noted that this regulation, which specifies the retirement age, does not apply to minority institutions.
• Regulation 42 of the Secondary Education Regulations, 1974: The Court noted that this regulation states that the provisions of the regulations shall prevail over the provisions contained in the Grant-in-Aid Code.
• Regulation 43 of the Secondary Education Regulations, 1974: The Court noted that this regulation states that Regulation 36 shall not apply to any educational institution established and administered by a minority.
• The Grant-in-Aid Code for Secondary Schools (1964): The Court held that since the Secondary Education Regulations do not specify the retirement age for minority institutions, the provisions of the Grant-in-Aid Code regarding retirement age would apply to them.

Judgment

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

How each authority was viewed by the Court?

• The Court relied on T.M.A. Pai Foundation and Others vs. State of Karnataka and Others [(2002) 8 SCC 481]* to emphasize that the right under Article 30(1) is not absolute and that conditions for grant or non-grant of aid have to be uniformly applied to both minority and majority institutions.
• The Court cited State of Uttar Pradesh and Others vs. Principal Abhay Nandan Inter College and Others [2021 SCC Online SC 807]* to reiterate that an institution receiving aid is bound by the conditions imposed by the government.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of the interplay between the constitutional right of minority institutions to administer their educational institutions and the state’s power to impose reasonable conditions for granting aid. The court emphasized that while Article 30(1) of the Constitution protects the rights of minority institutions, this right is not absolute and is subject to reasonable restrictions, particularly when the institution receives financial aid from the state. The court also noted that the Secondary Education Regulations, 1974, specifically exclude minority institutions from the application of Regulation 36, which prescribes the retirement age for teachers. However, the court clarified that this exclusion does not exempt minority institutions from all regulations. Instead, it means that the provisions of the Grant-in-Aid Code, which specify the retirement age for teachers, would apply to them. The Court was of the opinion that the minority educational institutions could not continue the employees/teachers beyond the age of 58 years or 60 years as the case may be, and if any employee or a teacher is continued in service by the management of any registered minority Secondary School receiving Grant-in-Aid from the State-Government, then such school would not be entitled to receive any grant in respect of the expenditure incurred for continuing such employee or teacher beyond the age of 58 or 60 years, as the case may be. The Court also stated that there was nothing on record to show that the State had discriminated against the respondent-institution on the ground that it was under the management of a minority, attracting Article 30(2) of the Constitution of India.

Fact:Law Ratio

Logical Reasoning:

The Court rejected the argument that minority institutions have an absolute right to determine the retirement age of their teachers. The Court emphasized that the right under Article 30(1) is not absolute and is subject to reasonable restrictions, especially when receiving government aid. The Court also stated that the conditions for grant or non-grant of aid have to be uniformly applied to both minority and majority institutions. The Court held that the Grant-in-Aid Code applies to minority institutions regarding retirement age since Regulation 36 of the Secondary Education Regulations does not apply to them.

The Court observed, “From the above stated provisions, it emerges that as per Regulation 42 of the said Regulations, the provisions contained in the said Regulations framed under the said Act prevail over those provisions contained in the Grant-in-Aid Code published under the government notification dated 22.04.1964, insofar as they relate to any matter provided in the said Regulations. It further emerges that as per Regulation 43 of the said Regulations, Regulation 36 pertaining to the age of superannuation is not applicable to the educational institution established and administered by a minority, whether based on religion or language.”

The Court further stated, “Therefore, the age of superannuation of an employee of a registered Secondary School as mentioned in Regulation 36 would not be applicable to the employee or teacher of an educational institution established and administered by a minority. The combined reading of Regulations 42 and 43 of the said Regulations makes it clear that Regulation 36 would not apply to any educational institutions established and administered by minority, and therefore the matter pertaining to the age of superannuation of the employees of registered Secondary School established and administered by minority, availing the Grant-in-Aid could not be said to have been provided under the said Regulations.”

The Court also 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.”

Key Takeaways

• Minority educational institutions receiving government aid are bound by the state’s rules regarding the retirement age of teachers.
• The right of minority institutions to administer their schools under Article 30(1) of the Constitution is not absolute and is subject to reasonable restrictions, especially when receiving state grants.
• The conditions for grant or non-grant of aid have to be uniformly applied to both minority and majority institutions.
• The provisions of the Grant-in-Aid Code regarding retirement age would apply to minority institutions, as the Secondary Education Regulations do not specify a retirement age for such institutions.

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 Court allowed the appeal filed by the State of Gujarat.

Development of Law

The ratio decidendi of this case is that minority educational institutions receiving government aid are bound by the state’s rules regarding the retirement age of teachers. The Court clarified that while minority institutions have the right to administer their schools, this right is not absolute and is subject to reasonable restrictions, especially when receiving state grants. This judgment reinforces the principle that the conditions for grant or non-grant of aid have to be uniformly applied to both minority and majority institutions. This is not a change in the previous position of law but a reiteration of the same.

Conclusion

The Supreme Court’s decision in State of Gujarat vs. H.B. Kapadia Education Trust clarifies that minority educational institutions receiving government aid must adhere to the state’s retirement age regulations for teachers. This ruling emphasizes that while Article 30(1) of the Constitution protects the rights of minority institutions, these rights are not absolute and are subject to reasonable restrictions, particularly when the institutions receive financial aid from the state. The Court held that the Grant-in-Aid Code applies to minority institutions regarding retirement age since Regulation 36 of the Secondary Education Regulations does not apply to them. The Court set aside the High Court’s decision and upheld the State’s position.