Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.6409 of 2017

KAILASH SINGH                        ….APPELLANT

Versus

THE MANAGING COMMITTEE, MAYO COLLEGE, AJMER & ORS.         ….RESPONDENTS

With

Civil Appeal No.6410/2017

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. The Mayo College, Ajmer is an educational institution founded in 1875 by

Sir Richard Southwell Bourke, the 6th Earl of Mayo, who was also the Viceroy of

India from 1868 to 1872.  It is one of the oldest educational institutions which was

set  up as  a  public  boarding school,  offering  admission to  the  then elite.   This

character of the institution changed in the post-independence era, but it continued

to be a  prestigious centre  of  learning.   The Mayo College is  an unaided,  non-

governmental educational institution receiving no grant either from the State or the

Central Government and is affiliated to the Central Board of Secondary Education,

New  Delhi,  for  purposes  of  students  taking  that  examination  to  pass  the  12th

standard.

1

2. The present unfortunate dispute involves the Managing Committee of the

School (respondent No.1), with the Principal arrayed as the 2nd respondent.  The

dispute  in  the  two  Civil  Appeals  before  us  concerns  two  employees  of  this

institution, who have served for a number of years, but apparently irreconcilable

differences had arisen on account of the alleged conduct of the employees.  The

two employees are Kailash Singh (Civil Appeal No.6409/2017) and Jeffry Jobard

(Civil Appeal No.6410/2017).

3. Kailash Singh began his employment as a Class IV employee on 4.1.1984

and was promoted after a decade’s service as an LDC from 1.2.1994 and posted in

the Library.  Jeffry Jobard began his career as an LDC itself, from 1.7.1985.  The

services of both Kailash Singh and Jeffry Jobard were terminated simultaneously

on  9.11.2000,  on  account  of  conducts  attributed  to  them,  which  created  an

extremely undesirable situation in the respondent school.

4. It may be appropriate to refer to the ground reality which resulted in the

termination of the appellants, though it is not of great importance now in view of

subsequent  developments.   Both  the  appellants,  in  different  capacities,  were

associated with the activities of Mayo College Employees Union and are stated to

have been instrumental in setting up the ‘Sangarsh Samiti Mayo College, Ajmer’,

under the banner of which they demanded bonus.  The stand of Respondent No. 1

was that such bonus was payable only as per the orders of the Government and the

Board of Governors was willing to consider the same, subject to such orders being

passed.  The Sangarsh Samiti organised protest meetings at the gate of the Mayo

2

College  on 19.10.2000 and resolved to  hold  a  general  meeting  and  dharna on

22.10.2000, on the issue of non-grant of bonus. Additionally, a threat was held out

to go on a general strike from 23.10.2000, if their demands were not met.  The

Samiti, steered by the appellants, started with their movement on 20.10.2000, and

on 22.10.2000, a general notice was issued to all employees, reiterating the stand

of the establishment that the Board of Governors was awaiting the decision of the

Government.  The employees were warned that any such “movement” was totally

illegal because no employees’ union had given any legal notice in that behalf, and a

warning to not tolerate absenteeism on 23.10.2000 and 24.10.2000 was held out.

Since  the  Board  was  awaiting  the  announcement  by  the  Government,  it  was

informed to the workers that the management would take a call on the issue on

23.10.2000, and that the workers should not indulge in any disruptive activity.

5. The appellants, despite the same, are stated to have gone ahead with their

threat, and at the time when the Annual Function of the Mayo College was being

held  on  23/24.10.2000,  instigated  other  staff  members  not  to  go  to  work  and

created disturbances, causing grave embarrassment to the Institution.  It appears

that  loudspeakers  were  used  and  inappropriate  adjectives  were  used  for  the

management, so much so that the traditional dinner scheduled for 24.10.2000 had

to be cancelled, resulting in a loss of face for the management.

6. It is the aforesaid incidents which led to the show cause notice being issued

to  both  the  appellants  on  3.11.2000  to  which  they replied  on 6.11.2000.   The

appellants  defended their  actions by claiming that  they had a  right  to  organise

3

dharnas and protests,  as a constitutional right,  and that strike and sloganeering

should not be stopped.  The adjectives used of  Murdabad, etc. are adjectives of

common parlance in such agitations and cannot be said to be derogatory, and that a

proper inquiry should be held qua their conduct.  The non-payment of bonus was

claimed to be an “administrative fanaticism”.

7. A  unanimous  resolution  was  passed  by  the  Board  of  Governors  on

7/8.11.2000 to terminate the services of the appellants, and they were so dismissed

on 9.11.2000 by issuance of letters of the even date.  It may be noted that in a

subsequent communication, Jeffry Jobard, vide letter dated 14.11.2000 sought to

slightly back-track from the issue by claiming that he was not part of the Samiti,

and that at the relevant time was, in fact, a mere spectator of the meetings.  

8. The  termination  of  the  services  of  the  appellants  resulted  in  their

approaching the Educational Tribunal, set up under the Rajasthan Non-Government

Educational Institutions Act, 1989 (hereinafter referred to as the ‘said Act’).  The

crucial aspect on which the Management erred was the non-compliance of Section

18, which reads as under: “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  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:

Provided further that this section shall not apply, -

(i) to a person who is dismissed or removed on the ground of conduct

4

which led to his conviction on a criminal charge, or

(ii) where it is not practicable or expedient to give that employee an opportunity of showing cause, the consent of Director of Education has been obtained in writing before the action is taken, or

(iii) Where the managing committee is of unanimous opinion that the services of an employee cannot be continued without prejudice to the interest  of  the  institution,  the   services  of  such  employee  are terminated after giving him six months’ notice or salary in lieu thereof and the consent of the Director of Education is obtained in writing.”

9. When we say that the Management erred, it is so, as, in any eventuality, the

consent of the Director of Education had to be obtained in writing, which was not

so obtained, which proved fatal to the Management. We may add that insofar as the

first  proviso  to  Section  18  of  the  said  Act  is  concerned,  a  Full  Bench  of  the

Rajasthan  High  Court,  in  Central  Academy  Society  v.  Rajasthan  Non-

Government Educational Institutions Tribunal, Jaipur & Ors.1 opined that for an

unaided institution the said proviso would not apply in view of the law enunciated

in the case of  T.M.A.  Pai  Foundation & Ors.  v.  State  of  Karnataka & Ors.2.

However, even in case of institutions like Mayo College (unaided institution), the

second proviso clause (iii) stared the management in the face; that while in case of

a  unanimous opinion of  the  Managing  Committee  (Board  of  Governors  in  the

present case), the services of employees could be terminated when such services

were prejudicial to the interest of the institution, they were required to be given six

(6)  months’ notice or  salary in  lieu thereof  and the consent  of  the Director  of

1 2010 (3) ILR (Raj) 450. 2 (2002) 8 SCC 481.

5

Education  had  to  be  obtained  in  writing.   The  appellants  were  paid  three  (3)

months’ salary initially and subsequently the rest of the amount was deposited in

their bank accounts, but the consent of the Director of Education was not obtained.

10. The aforesaid position led to an adverse order by the Tribunal on 10.1.2002.

The Management approached the High Court and the learned Single Judge, vide

judgment dated 16.7.2002, referring to Section 18 of the said Act held that the

same was  not  complied  with  and  even  otherwise  the  relationship  between  the

parties could not be said to have been strained beyond the point of no return.  Thus,

the direction of the Tribunal for reinstatement was upheld.

11. The aforesaid took the battle to the Division Bench, with the Management

preferring  an  appeal,  where  it  was  opined  that  this  was  a  case  where  the

Management  had  lost  confidence  in  the  appellants,  that  there  had  been  a

unanimous decision of the Board, but the consent of the Director of Education had

not been obtained and, thus, there was only a technical defect.  In terms of this

judgment dated 3.10.2013, the relief was modified to compensation equalling five

(5) years’ salary on the basis of last pay and allowances drawn by them on the date

of termination of their services, together with provident fund and all retiral benefits

by  construing  them  to  be  otherwise  in  service  till  they  attained  the  age  of

superannuation.   It  may also be noted here that  by that  date Jeffry Jobard had

superannuated  on 30.9.2013.   These  two persons  have  apparently  continued to

occupy the premises, and have used the civic facilities without paying charges.

Thus, the Division Bench also opined that they must vacate the premises within a

6

period of one (1) month of such payment being made.

12. The Management of Mayo College reconciled itself to this verdict and did

not  prefer  any  appeal.   However,  the  appellants  were  aggrieved  by  the

quantification of compensation, in both the cases, while in case of Kailash Singh,

even in respect of non-restoration of his employment.

13. We have heard learned senior counsel/counsel appearing for the parties.

14. On behalf of the appellants, an impassioned plea was made that they have

been unjustly deprived of their employment and must be re-employed and fully

compensated for the same.  By claiming full compensation, it was pleaded that

whatever be the total benefits payable right till the age of superannuation must be

paid, in the case of Jeffry Jobard, while in the case of Kailash Singh, he should be

paid till date and should be re-employed, as his services would continue till 2026.

The  monetary  compensation  to  the  fullest  extent  was  claimed  on  the  basis  of

judicial pronouncements that full  back-wages should be the rule.  On the other

hand,  learned senior  counsel  for  the  Management  pleaded that  in  a  prestigious

educational institution, the environment cannot be permitted to be vitiated in this

fashion by the appellants, who behaved irresponsibly causing grave damage to the

reputation of  the institution.   It  was pleaded that  the principles applicable to a

factory or an industrial establishment cannot be made applicable to an educational

institution,  insofar  as  the  extent  of  discipline  is  concerned,  and  the  mode  and

manner of protests cannot be identically based.  The effect of the conduct of the

appellants would have a direct impact on the young students, who are studying in

7

the  institution,  and  the  embarrassment  was  aggravated  by  the  presence  of  the

parents on the special day.  It was further pleaded that a technical non-compliance

with the provision of the said Act cannot be extended to this extent, and that it is

because of such technical non-compliance that the Management had, in principle,

agreed to accept the verdict of  the Division Bench, by not  agitating the matter

further.  He also submitted that the compensation awarded by the Division Bench

was adequate, and that in any case, an amount of Rs.5 lakhs each, towards the

award amount had already been paid in pursuance to interim orders passed by this

Court on 1.5.2017.

15. Both sides cited certain judicial precedents in support of their case, which

we shall proceed to discuss hereafter.

16. On having delved into the submissions of both sides, as well as perusing the

judgments which are before us, we cannot lose sight of the fact that we are dealing

with  an  educational  institution  of  great  eminence.   Persons  employed  in

educational institutions right from Class IV staff to the highest level have a far

greater responsibility on account of the nature of activity which takes place in these

institutions – Education.  There are students of all ages, starting from younger ones

to older teenagers, who are studying and living in these campuses.  It is a different

kind of  ‘Gurukul’.   Thus,  anything which is  done,  as  would cause  an adverse

impact on the mind of these young people, is something which we find difficult to

approve, even if it is claimed as a right to make certain demands.  The mode and

methodology of making demands in these educational institutions cannot be at par

8

with an industrial establishment, where workmen agitate for their rights.  This is

also in the background of the Management apparently claiming that they were not

averse  to  the  principal  demand  of  bonus,  but  that  they  were  waiting  for  the

necessary Government decision, in that behalf.

17. On  the  threats  being  held  out  by  the  so-called  Sangarsh  Samiti,  the

Management had warned and cautioned the employees against creating a scene,

especially when there were important functions on the anvil, where the parents of

the wards would be participating.  We may add that an annual day is always an

important day in an educational institution, with active participation of parents.  It

is of great significance even to the passing out batch of students, and the sensitivity

of the parents and children should have been kept in mind while asserting such

rights, by the employees.  This appears not to have been done.

18. We may hasten  to  add that,  of  course,  in  the  given situation  no inquiry

appears to have been done, but the response of the appellants to the show cause

notice issued by the Board of Governors, itself shows as to what transpired and

reveals the stand of the appellants.  All this led to a complete lack of confidence in

the  employees,  by  the  Board  of  Governors.   The  decision  by  the  Board  of

Governors, which is really the Managing Committee as defined under Section 18

of the said Act, was a unanimous one as provided in sub-clause (iii) of the second

proviso to Section 18 of the said Act, and even the required salary was paid, albeit

in two instalments.  However, the Management did commit a legal default in not

obtaining the consent of the Director of Education in writing, which has caused

9

this long drawn legal battle.  At the cost of repetition, we may re-emphasise that

the Mayo College is a recognised institution but is not financially aided in any

manner by the Central or the State Government, and the first proviso to Section 18

of the said Act has already been read down, and in our opinion, rightly so, in view

of the 11 Judges Bench decision in  T.M.A. Pai Foundation & Ors. v. State of

Karnataka & Ors.,3 dealing exclusively with educational institutions, and a portion

thereof, separately dealing with unaided educational institutions, as pointed out by

learned senior counsel for the Management, Mr. K.N. Bhatt, under the heading of

“Private Unaided Non-Minority Educational Institutions”. We have no hesitation in

concluding that there can be no question of reinstatement in such a case, but the

only remedy is by determining the compensation to be paid to the appellants, in

view  of  the  Management  not  having  complied  with  the  legal  requirement  of

obtaining the consent of the Director of Education in writing.

19. We  seek  to  buttress  our  conclusion  with  the  following  judicial

pronouncements.   In a seminal  judgment in  T.M.A. Pai Foundation & Ors.  v.

State of Karnataka & Ors.,4 an essential distinction is sought to be made in the

case of private unaided educational institutions, opining that its essence is in the

autonomy that the institution must enjoy in its management and administration.

Thus, while in a government-aided institution, the Government may have a greater

say  in  the  administration,  while  in  the  case  of  unaided  institutions,  maximum

autonomy in day-to-day administration is to be with the private unaided institution.

3 Supra. 4 Supra.

10

This was held to be equally applicable to the teaching faculty and the members of

staff, for maintaining excellence in education.  In para 63 of the said judgment, the

Bench took note of the grievance that wherever cases of misconduct are committed

by teachers and members of the staff, for which disciplinary action is taken, the

rules framed by the Government are against  the Management,  which  inter  alia

require  prior  permission  from  a  governmental  authority,  before  initiation  of

disciplinary proceedings.  The most relevant observation in para 64 is “In the case

of  a  private  institution,  the  relationship  between  the  management  and  the

employees is  contractual  in nature.”  We may,  however,  add that  thereafter  the

importance  of  a  domestic  inquiry,  in  accordance  with  the  principles  of  natural

justice, has also been emphasised.  But then, in the present case, the show cause

notice and the response to it, themselves seem to lend credence to the allegation of

inappropriate  behaviour of  the appellants.   The subsequent  endeavour  of  Jeffry

Jobard,  through a communication to back-out,  cannot really aid him to a  large

extent.

20. We may also note that were the appellants to file a civil suit, the evidence

would have been recorded, and the matter gone into a greater detail in a factual

context.  This is relevant from both aspects of seeking restoration of services and

quantification  of  damages.   The  significant  aspect  is  that  there  should  not  be

specific performance of a master-servant contract of service, and damages should

be  the  appropriate  remedy.   We may refer  to  Vidya Ram Misra  v.  Managing

Committee, Shri Jai Narain College,5 where in para 4, it was observed as under:

5 (1972) 1 SCC 623.

11

“4. It is well settled that, when there is a purported termination of a contract  of  service,  a  declaration  that  the  contract  of  service  still subsisted would not be made in the absence of special circumstances, because of the principle that courts do not ordinarily enforce specific performance of contracts of service (see Executive Committee of U.P. State  Warehousing  Corporation  Ltd.  v.  Chandra  Kiran  Tyagi  [AIR 1970 SC 1244 : (1970) 2 SCR 250 : (1970) 1 SCJ 790] and Indian Airlines Corporation v.  Sukhdeo Rai [AIR 1971 SC 1828] ).  If  the master rightfully ends the contract, there can be no complaint. If the master  wrongfully ends the contract,  then the servant can pursue a claim for damages. So even if  the master wrongfully dismisses the servant  in  breach  of  the  contract,  the  employment  is  effectively terminated. In Ridge v. Baldwin [(1965) 2 WLR 935 (HL)] Lord Reid said in his speech:

“The law regarding master and servant is  not in doubt.  There cannot be specific performance of a contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract. So the question in a pure case of master and servant does  not  at  all  depend  on  whether  the  master  has  heard  the servant  in  his  own  defence;  it  depends  on  whether  the  facts emerging at the trial prove breach of contract. But this kind of case  can  resemble  dismissal  from  an  office  where  the  body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its servants, or the grounds on which it can dismiss them.”

21. The  aforesaid  view  is  also  adopted  by  the  Constitution  Bench  in  Sirsi

Municipality  v.  Cecelia  Kom  Francis  Tellis6.   We  may  usefully  extract  the

observations in the following paragraphs: “15. The cases of dismissal of a servant fall under three broad heads. The first head relates to relationship of master and servant governed purely by contract of employment. Any breach of contract in such a case is enforced by a suit for wrongful dismissal and damages. Just as a  contract  of  employment  is  not  capable  of  specific  performance similarly breach of contract of employment is not capable of finding a declaratory judgment of subsistence of employment. A declaration of unlawful  termination  and  restoration  to  service  in  such  a  case  of contract  of employment would be indirectly an instance of  specific

6 (1973) 1 SCC 409.

12

performance of contract for personal services. Such a declaration is not permissible under the Law of Specific Relief Act.

16.  The  second  type  of  cases  of  master  and  servant  arises  under Industrial Law. Under that branch of law a servant who is wrongfully dismissed  may  be  reinstated.  This  is  a  special  provision  under Industrial  Law. This  relief  is  a  departure  from the reliefs  available under the Indian Contract Act and the Specific Relief Act which do not provide for reinstatement of a servant.

17. The third category of cases of master and servant arises in regard to the servant in the employment of the State or of other public or local authorities or bodies created under statute.

18. Termination or dismissal of what is described as a pure contract of master and servant is not declared to be a nullity however wrongful or illegal it may be. The reason is that dismissal in breach of contract is remedied by damages. It (sic.)7 the case of servant of the State or of local  authorities  or  statutory  bodies,  courts  have  declared  in appropriate  cases  the  dismissal  to  be  invalid  if  the  dismissal  is contrary to rules of natural justice or if the dismissal is in violation of the provisions of  the statute.  Apart  from the intervention of  statute there would not be a declaration of nullity in the case of termination or dismissal  of  a  servant  of  the  State  or  of  other  local  authorities  or statutory bodies.

19.  The courts  keep the State and the public authorities  within the limits of their statutory powers. Where a State or a public authority dismisses  an  employee  in  violation  of  the  mandatory  procedural requirements or on grounds which are not sanctioned or supported by statute  the  courts  may  exercise  jurisdiction  to  declare  the  act  of dismissal to be a nullity. Such implication of public employment is thus distinguished from private employment in pure cases of master and servant.”

22. The facts of the present case are covered by the master-servant relationship,

i.e., the first category.  There is no adjudication by invocation of a reference to the

Industrial Disputes Act, 1947.  Thus, the remedy would only be in damages.

23. Now, turning to the aspect of quantification of damages, which is the real

7 To be read as ‘In’.

13

bone of contention.  What we have to examine is whether the approach adopted by

the Division Bench and its conclusion, would give rise to a finding that justifiable

compensation has been arrived at, or otherwise.

24. Mr. Colin Gonsalves, learned senior counsel appearing for Jeffry Jobard and

Mr. Prashant Bhushan, counsel for Kailash Singh, have both sought to canvass that

the only adequate compensation can be full back-wages, till the date of retirement.

In this behalf, they referred to the following judicial pronouncements: (i)  O.P.  Bhandari  v.  Indian  Tourism Development  Corporation  Ltd.8  The

factual matrix is dealing with the employer-employee relationship in a public

sector undertaking to which Article 12 of the Constitution of India is attracted.

It was observed that reinstatement may not invariably follow as a consequence

of holding that an order of termination of service of an employee is void.  In

that context, it was observed that reinstatement should be the rule for the ‘blue

collar’ workmen and ‘white collar’ employees, other than those belonging to the

managerial or to a similar high level cadre, and compensation in lieu thereof, is

an exception.  However, this judgement also notes that the relationship between

the parties, having been strained beyond a point of no return, granting the salary

and allowances  which would  accrue  to  the  employee  till  the  future  date  of

superannuation was held to be too high a compensation.  The object, it  was

observed, would not be for the Court to confer a bonanza on the employee, but

to compensate him by adopting the appropriate formula.

(ii)  Deepali  Gundu  Surwase  v.  Kranti  Junior  Adhyapak  Mahavidyalaya

8 (1986) 4 SCC 337.

14

(D.ED.) & Ors.9: Full back-wages along with reinstatement and continuity of

service were held applicable in cases where the employee or workman was not

at all guilty of any misconduct, especially where it had been clearly averred that

the employee was not gainfully employed.  The matter pertains to a teacher with

regards to her contractual appointment where principles of Industrial Disputes

Act were imported in the award of damages. The attention of the Court was also drawn to para 38.7, where it recorded

the observations made in  J.K. Synthetics Ltd. V. K.P. Agrawal & Anr.10 that

on reinstatement the employee/workman cannot claim continuity of service,

as a right, is contrary to the ratio of the judgments of three Judge Benches in

Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works

Private  Limited11 and  Surendra  Kumar  Verma  v.  Central  Government

Industrial  Tribunal-cum-Labour Court,  New Delhi12,  and thus,  cannot  be

treated as good law.

The  judgment  emphasises  on  the  restoration  of  an  employee  to  the

position held before dismissal, removal or termination from services, once the

employer’s  action  has  been  found  to  be  illegal.   Since  the  employee  is

deprived of sustenance for himself and his family, it has been observed that

the employee  should get  full  back-wages unless  it  can  be proved that  the

employee was gainfully employed during that period.  In order to support this

proposition, various judicial pronouncements have been referred to, but which

9 (2013) 10 SCC 324. 10 (2007) 2 SCC 433. 11 (1979) 2 SCC 80. 12 (1980) 4 SCC 443.

15

are in the context  of adjudication under the Industrial  Disputes Act,  1947.

The proposition laid out, thus, is that where there is a wrongful termination of

service, reinstatement with continuity of service and back-wages is the normal

rule. A litigant ought not to be penalised, it was so observed, for the delays of

the system.  However, mitigating and aggravating aspects, such as length of

service and nature of misconduct can be taken into account while determining

so.

25. We may now turn to the cases relied upon by the learned senior counsel for

the respondents: i.  S.S. Shetty v. Bharat Nidhi Ltd.13: The position obtaining in the ordinary

law of master-servant was clarified as one of established practice that where a

master  wrongfully  dismisses  his  servant,  he  is  bound  to  pay  him  such

damages as would compensate him for the wrong that he has sustained.  In

case the employment is for a specific term, the servant would, in that event be

entitled to damages, the amount of which would be measured prima facie and

subject to the rule of mitigation in the salary of which the master had deprived

him.

ii.  Sirsi  Municipality  v.  Cecelia  Kom Francis  Tellis:14 The  judgment  has

already  been  discussed  as  aforesaid  in  respect  of  dismissal  in  contractual

matters.

iii.  Raju  Chand  v.  Zonal  Director  Nehru  Yuva  Kendra  Sangathan,

13 1958 SCR 442. 14 Supra.

16

Chandigarh  &  Ors.:15 One  of  us  (Kurian,  J.)  has  been  a  party  to  this

judgment, where in case of a driver on daily wages (or temporary basis), the

management lost confidence in him, and monetary compensation was held to

be appropriate remedy.

26. In the conspectus of the aforesaid discussion,  we now turn to the crucial

issue of adequacy of compensation to be awarded to the appellants.

27. We  have  already  noticed  that  by  the  very  nature  of  the  respondent-

Institution,  which  is  completely  unaided,  and  keeping  in  mind  the  principle

enunciated in T.M.A. Pai Foundation v. State of Karnataka,16 the only conclusion

is that the relationship between the parties is one of contract.  The present case is

one where the conduct of the appellants cannot be said to be such that would not

result in loss of confidence.  The factual matrix in the context of the show cause

notice and the replies to it itself clarified the position.  However, the issue remains

that the respondent-Institution failed in the legal compliance of the second proviso

to Section 18 of the said Act and must bear the consequences of the same.

28. It is also true that the direction of attack, on behalf of the appellants, in the

proceedings in the courts below was qua restoration of their services.  No clarity

has emerged on the issue, in the absence of any evidence led, on the employment,

if any, of these appellants.  But no affidavit has also really been filed stating that

they were not gainfully employed.  We may note that both the appellants have been

residing in the accommodation provided by the respondent-Institution, practically

15 (2016) 14 SCC 534. 16 Supra.

17

free of charge.

29. We cannot lose sight of the fact that the present case is not one under the

Industrial Disputes Act, 1947.  This in turn would have required factual matrix to

be established in different aspects,  which is not what has happened.  Thus,  the

principles of the Industrial Disputes Act, 1947 cannot be, ipso facto, imported into

a factual matrix of the present nature, for, as a consequence of the illegality in the

termination of the services of the appellants, compensation has to be granted.  The

methodology  of  calculation  would  be  based  on  the  principle  of wrongful

termination of an employee, under the master-servant relationship.  This, in turn,

would import into it the requirement of the appellants endeavouring to mitigate

their losses.  In fact, in this context, we may observe that the claim for back-wages

has apparently been raised for the first time only in the present proceedings, arising

from the manner in which the High Court dealt with the matter, where it granted

some compensation.

30. The  principle  of  awarding  adequate  compensation  in  the  form  of  back-

wages,  keeping in  mind aggravating and mitigating circumstances  would,  thus,

have to be observed.  The amount cannot be measly, nor can it be a bonanza.  The

High Court,  in  its  wisdom,  awarded the compensation of  five  (5)  years’ back-

wages on the last pay drawn.  Not only that, an additional benefit was conferred by

providing for provident fund and retiral dues, to be calculated on the premise as if

the  services  would  be  continued  till  the  appellants attained  the  age  of

superannuation.

18

31. We have no reason to find that such an aforesaid principle can be said to be

fallacious or wrong, so as to call for our interference, except to the extent discussed

hereafter.

32. We are firstly of the view that it would not be appropriate to determine the

amount on the basis of the last pay and allowances drawn.  The calculation should

be based on the actual  pay and allowances liable to be drawn for  the years  in

question, dependent on the period for which this amount is to be calculated.

33. In order to better understand, and come to an appropriate figure, we had

asked both the parties to give their calculations. The Management has given its

calculations  based  on  the  impugned  judgment,  which  includes  the  salary

calculations for five (5) years on the last pay and allowances drawn, while gratuity

and  provident  fund  benefits  are  taken  till  the  date  of  retirement.   There  are

deductions  made  on  account  of  electricity  dues,  house  rent  and  certain  other

smaller  accounts.   On  the  other  hand,  the  appellants  have  given  their  broad

calculations, taking the monthly emoluments payable in different years, right up to

date, and even beyond that if the employment was to continue, as in the case of

Kailash Singh.

34. We  are  not  going  into  the  exactitude  of  the  calculations,  but,  broadly

speaking, the final amount payable to Jeffry Jobard, as per the impugned order,

would be approximately Rs.7.75 lakhs.   If  the emoluments, as opined by us as

aforesaid,  are taken into account,  for  five (5)  years,  it  would be approximately

19

Rs.9.75 lakhs.  In the case of Kailash Singh, the amount as per the calculations of

the  Management  would  be  approximately  Rs.21  lakhs,  while  calculated  as

aforesaid would be approximately in the same range.

35. On having carefully examined the aforesaid issue and the calculations before

us, we are inclined to enhance it a little more, and grant damages in the form of

salary  and  allowances  payable  for  a  period  of  eight  (8)  years,  of  the  actual

amounts, in both the cases, after adding the respective provident fund amounts and

other retiral dues while simultaneously deducting electricity, water and occupation

charges, etc., as calculated by the management, as per the impugned order of the

Division Bench. To put a quietus to this long-drawn dispute, we have quantified

and fixed the amounts. The net impact is an all-inclusive compensation of Rs. 25

lakhs, in the case of Kailash Singh and Rs. 18 lakhs in the case of Jeffry Jobard.

Needless  to  say,  the  amount  of  Rs.5  lakhs,  already  paid  to  the  appellants,  in

pursuance to the directions of this Court,  is liable to be adjusted from the said

amounts payable.   

36. We are not inclined to grant future salary and allowances to Kailash Singh,

merely because he has not been granted reinstatement, with further years of his

service still remaining.  In fact, in O.P. Bhandari v. Indian Tourism Development

Corporation Ltd.,17 this plea of paying future salary and allowances, in cases of

such  non-reinstatement  of  an  employee,  was  rejected  as  it  would  amount  to

conferring a bonanza on an employee, and would not lead to compensation per an

acceptable formula.

17 Supra.

20

37. We are, thus, inclined to modify the impugned order to the aforesaid extent,

and direct the respondent-Institution to pay the aforementioned amounts within a

maximum period of two (2) months from today, after adjusting the amount already

paid.

38. The appellants are required to vacate the premises within a maximum period

of one (1) month of the amount being so paid.

39. The appeals are accordingly allowed, leaving the parties to bear their own

costs.   

..….….…………………….J. [Kurian Joseph]

              ...……………………………J. [Sanjay Kishan Kaul]

New Delhi. August 31, 2018.

21