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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1020 OF 2011

RAJ KUMAR                         ………… APPELLANT Vs.

DIRECTOR OF EDUCATION & ORS.       ………… RESPONDENTS

J U D G M E N T

 V. GOPALA GOWDA, J.

1. The  present  appeal  arises  out  of  the  impugned

judgment and order dated 28.07.2008 passed by the

High Court of Delhi at New Delhi in Writ Petition

(C)  No.5349  of  2008,  whereby  the  High  Court

dismissed  the  said  Writ  Petition  filed  by  the

appellant  in limine and  upheld  the  termination

order  dated  22.08.2008  passed  against  the

appellant  by  the  Delhi  School  Tribunal

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(hereinafter referred to as “the Tribunal”) on the

ground that the appellant, who was a driver, had

been  retrenched  from  his  services  by  the

respondent-Managing  Committee,  DAV  Public  School

by  following  the  procedure  laid  down  under

Sections 25F (a) and (b) of Chapter V-A of the

Industrial  Disputes  Act,  1947  (hereinafter

referred to as “the ID Act”). 2. The brief facts of the case required to appreciate

the rival legal contentions advanced on behalf of

the parties are stated as hereunder:   

    The appellant was employed as a driver by the

DAV Public School, Pocket ‘C’, LIG Flats, East of

Loni Road, Delhi and became permanent on the said

post  in  the  year  1994.  His  terms  of  service  are

covered  under  Sections  2(h),  8(2),  10  and  other

provisions of the Delhi School Education Act, 1973

(hereinafter referred to as the “DSE Act”).

 3. On 01.05.2001, the DAV College Managing Committee

in  its  72nd meeting  of  Public  Schools  Governing

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Body, passed a resolution to buy new school buses

with  CNG  facility  in  compliance  with  the

directions of this Court dated 26.03.2001 passed

in the case of  M.C. Mehta v. Union of India and

allowed the management of the DAV Schools to raise

loan from nationalized banks for the said purpose. 4. The respondent-Managing Committee in its meeting

dated 24.08.2002, passed a resolution to retrench

the  services  of  the  two  junior  most  surplus

drivers, namely the appellant and one Amar Nath,

for  the  reason  that  the  school  had  two  old

mechanically  unfit  vehicles  namely,  a  Matador

(registration  No.  DL-IV-1481)  and  a  Maruti  Van

bearing  registration  No.DL-5C-3107  which  were

disposed  of  on  01.09.1995  and  13.06.1997,

respectively. As an alternate arrangement, private

buses had to be hired for the transportation of

students  as  per  instructions  in  the  earlier

resolution, but the respondent-Managing Committee

could not purchase new buses due to shortage of

funds,  which  resulted  in  the  appellant  being

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declared surplus on account of non-availability of

job.  

5. On  07.01.2003,  the  respondent-Managing  Committee

issued  a  notice  to  the  appellant  in  accordance

with Section 25F (a) of the ID Act,  stating that

his services were no longer required by the school

and that he would be retrenched from his service

on the expiry of the notice period of one month.

The  notice  also  stated  that  the  appellant  was

entitled to retrenchment compensation which would

be paid after the expiry of the notice period of

one month.   

6. On 10.01.2003, the appellant replied to the above

said notice through his counsel, in which it was

stated  that  the  impugned  notice  is  unjust  and

illegal, as the appellant is a permanent employee

of the school under the provisions of the DSE Act.

It was also stated in the notice that the school

had  failed  to  pay  arrears  amounting  to  Rs.

70,000/-  to  the  appellant  as  per  the

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recommendations  of  the  Fifth  Pay  Commission. On the same date, the appellant, through his counsel,

wrote a letter to the respondent No.1-Director of

Education, Govt of NCT of Delhi regarding payment

of all arrears as per the Fifth Pay Commission to

the appellant.  

7. By  way  of  letter  dated  22.01.2003,  the

respondent-Managing  Committee,  through  their

counsel informed the appellant that the school has

been paying pay and allowances to the appellant as

per  the  recommendations  of  the  Fifth  Pay

Commission which came to Rs.3,500/- per month as

basic pay and Rs.1,435/- as Dearness Allowances.

In  the  same  letter,  the  respondent-  Managing

Committee also denied that it had held back an

amount of Rs.70,000/- due to the appellant. 8. On 31.01.2003, the appellant filed Writ Petition

(C) No.957 of 2003 before the High Court of Delhi,

praying  that  the  notice  served  on  him  dated

07.01.2003 be quashed and to stay the operation of

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the impugned notice until the Writ Petition was

finally disposed of. 9. Meanwhile,  vide  letter  dated  25.07.2003,  the

respondent-Managing  Committee  informed  the

appellant  that  since  the  extended  notice  period

under Section 25F of the ID Act was also over, his

services now stood terminated. Further, a salary

cheque for a sum of Rs.4,165/- against one month’s

notice period from 01.07.2003 to 25.07.2003, along

with a cheque bearing No.877690 dated 22.07.2003

for  a  sum  of  Rs.25,650/-  as  retrenchment

compensation under Section 25F (b) of the ID Act

were enclosed with the letter. 10. The High Court disposed of the Writ Petition No.

957 of 2003 filed by the appellant vide judgment

and  order  dated  25.02.2004.  Placing  reliance  on

the judgment of the Delhi High Court passed in

Writ Petition (C) No.970 of 2003 dated 21.07.2003,

filed by the other terminated driver Amar Nath, in

the case of  Amar Nath v. Director of Education,

Govt. of Delhi & Ors., the High Court held that

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Section 8 of the DSE Act is very wide and any kind

of  termination  would  fall  within  its  ambit.

Accordingly,  the  Writ  Petition  was  disposed  of

with liberty granted to the petitioner to seek an

appropriate remedy under the DSE Act. 11. Accordingly, the appellant filed Appeal No.09 of

2004  before  the  Presiding  officer,  Delhi  School

Tribunal under Section 8(3) of the DSE Act against

the impugned retrenchment notice dated 07.01.2003.

The  Tribunal  vide  its  judgment  and  order  dated

22.02.2008,  dismissed  the  said  appeal  on  the

ground that the respondent-Managing Committee had

the  right  to  retrench  surplus  drivers  of  the

School after fulfilling all the conditions as laid

down under Sections 25F (a) & (b) of the ID Act.

The Tribunal while upholding the validity of the

retrenchment  order  held  that  the  appellant  is

governed by the provisions of the ID Act as well

the DSE Act. Section 2(h) of the DSE Act defines

“employee” as a teacher and also includes every

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other employee working in a recognized school as

“employee”. The Tribunal held as under: “2(h)  Hence  the  laws  which  governs  the employment  of  the  Appellant  are  Delhi School  Education  Act  &  Rules,  1973  and Industrial Disputes Act, 1947.Since Delhi School  Education  Act,  1973  has  no provision of retrenchment of workmen, one has to fall back upon the provisions of Industrial  Disputes  Act,  1947  to  see whether  the  conditions  of  the  said  Act regarding retrenchment were fully complied with by the Management or not.”

12. The Tribunal further held that all the conditions

precedent which are required to be satisfied for

retrenchment under Section 25F of the ID Act have

been fulfilled in the instant case. The appellant

was given notice under the provisions of the ID

Act  dated  07.01.2003.  The  intended  date  of  his

retrenchment  thus,  was  07.02.2003.  However,  the

appellant  was  retrenched  only  on  25.07.2003.  It

was held that since the notice of more than one

month had been given, the condition of Section 25F

(a) of the ID Act has been duly complied with. The

Tribunal  in  its  order  further  held  that  the

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appellant  had  been  paid  the  retrenchment

compensation calculating 15 days average pay for

every  completed  year  of  continuous  service.  The

respondent-Managing  Committee  calculated  his

service for a period of 9 years and concluded that

the appellant is entitled to salary for a period

of  four  and  a  half  months,  which  amounts  to

Rs.19,740/-,  after  taking  into  consideration

Rs.3,500/-  basic  pay  along  with  Rs.4,071/-  as

dearness  allowance.  In  total,  the  appellant  was

paid  Rs.25,650/-  on  account  of  compensation.

Therefore, the Tribunal held that Section 25F (b)

of the ID Act had also been duly complied with. On

the  issue  of  notice  being  served  on  the

appropriate government in the prescribed manner,

the Tribunal placed reliance on the decision of

this  Court  in  the  case  of  Bombay  Union  of

Journalists & Ors. v. The State of Bombay & Anr.1, wherein it was held that this was only directory

1 AIR 1964 SC 1671

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in  nature,  and  not  a  condition  precedent  for

retrenchment. This Court had held as under:

“Clause (c) is not intended to protect the interests of the workman as such. It is only intended to give intimation to the appropriate  Government  about  the retrenchment,  and  that  only  helps  the Government to keep itself informed about the  conditions  of  employment  in  the different  industries  within  its  region. There does not appear to be present any compelling  consideration  which  would justify  the  making  of  the  provision prescribed  by  clause  (c)  a  condition precedent as in the case of clauses (a) & (b).  Therefore,  having  regard  to  the object which is intended to be achieved by clauses (a) & (b) as distinguished from the object which clause (c) has in mind, it would not be unreasonable to hold that clause (c), unlike clauses (a) & (b), is not a condition precedent.”                (emphasis laid by this Court)

Thus,  the  Tribunal  held  that  both  the  mandatory

conditions for retrenchment have been fulfilled in

the instant case, and that Section 25F(c) of the ID

Act merely lays down a direction and not a condition

precedent. The Tribunal further held:

“As far as the question of permission from Directorate  of  Education  before  removing an employee is concerned, in view of the judgment of the Hon’ble Supreme Court in the  matter  of  “TMA  Pai  Foundation  v/s

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State  of  Karnataka”  and  the  judgment  of our own Hon’ble High Court in the matter of “Kathuria Public School v/s Directorate of  Education”,  the  provision  regarding obtaining prior approval from the Director of Education has been struck down and the School  Management  has  been  given  a  free hand to deal with its employees.”

The  appeal  filed  by  the  appellant  before  the

Tribunal was accordingly dismissed.

13. Aggrieved of the said judgment of the Tribunal,

the appellant filed Writ Petition (C) No. 5349 of

2008 before the High Court of Delhi questioning

the  correctness  of  the  same  urging  various

grounds. The High Court vide impugned judgment and

order  dated  28.07.2008  dismissed  the  same  in

limine as it found no infirmity in the view taken

by the Tribunal. Hence, the present appeal. 14. On the basis of the contentions advanced by the

learned  counsel  appearing  on  behalf  of  the

parties, the following issues would arise for our

consideration: 1)Whether the appellant is a workman for the

purpose of ID Act? 2)Whether  the  conditions  precedent  for  the

retrenchment  of  a  workman  as  prescribed

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under Section 25F (a), (b) and (c) of the ID Act have been fulfilled in the instant case?

3)Whether the provision of Section 8(2) of the DSE Act is applicable to the facts of the instant case?

4)What order?

15. Before we advert to the rival legal contentions

advanced on behalf of the parties, it is important

for us to consider the relevant provisions of the

ID Act and DSE Act in play in the instant case.

The DSE Act was enacted in the year 1973 and is:

“An Act to provide for better organisation and development of school education in the Union Territory of Delhi and for matters connected therewith or incidental thereto”

Section 2(h) defines an employee:

“means a teacher and includes every other employee working in a recognized school”

Section 8(2) of the DSE Act provides:

“Subject to any rule that may be made in this behalf, no employee of a recognized private school shall be dismissed, removed or reduced in rank nor shall his service be otherwise terminated excepted with the prior approval of the Director”

Section 10 of the DSE Act reads as under:

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“10.(1). Salaries of employees- the scales of pay and allowances, medical facilities, pension, gratuity provident fund and other prescribed benefits of the employees of a recognized private school shall not be as less than these of the employees of the corresponding status in school run by the appropriate authority………

(2). The managing committee of every aided school,  shall  deposit  every  month,  its share towards pay and allowances, medical facilities,  pension,  gratuity,  provident fund  and  other  prescribed  benefits  with the  Administrator  and  the  Administrator shall disburse, or cause to be disbursed within the first week of every month, the salaries and allowances to the employees of the aided schools.”

The Industrial Disputes Act, 1947, is:

“An  Act  to  make  provision  for  the investigation and settlement of industrial disputes, and for certain other purposes”

     Section 2(s) defines a Workman as:

“2(s). "workman"  means  any  person (including an apprentice) employed in any industry  to  do  any  manual,  unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, 9 that dispute, or whose

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dismissal, discharge or retrenchment has led to that dispute, but does not include any such person—

(i) who  is  subject  to  the  Air  Force Act,  1950  (45  of  1950),  or  the Army  Act,  1950  (46  of  1950),  or the Navy Act, 1957 (62 of 1957);  

(ii)  who  is  employed  in  the  police service or as an officer or other employee of a prison;  

(iii) who  is  employed  mainly  in  a managerial  or  administrative capacity;  

(iv) who,  being  employed  in  a supervisory capacity, draws wages exceeding one thousand six hundred rupees  per  mensem  or  exercises, either by the nature of the duties attached  to  the  office  or  by reason  of  the  powers  vested  in him,  functions  mainly  of  a managerial nature.”

Section 2(oo) lays down the concept of retrenchment as:

“2(oo). Retrenchment means the termination by  the  employer  of  the  service  of  a workman  for  any  reason  whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—

(a) voluntary  retirement  of  the workman;  

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf;

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(bb)  termination  of  the  service  of  the workman as a result of the non-renewal of the  contract  of  employment  between  the employer and the workman concerned on its expiry  or  of  such  contract  being terminated  under  a  stipulation  in  that behalf contained therein;”  

(c)  termination  of  the  service  of  a workman  on  the  ground  of  continued ill-health”

Section  25F  of  the  ID  Act  provides  for  the

conditions  precedent  for  the  retrenchment  of  a

workman and reads as under:

“25F.Conditions precedent to retrenchment of workmen.- No workman employed in any industry  who  has  been  in  continuous service for not less than one year under an employer shall be retrenched by that employer until-

(a) the workman has been given one month' s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in  lieu  of  such  notice,  wages  for  the period of the notice: (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 2 for every completed year of continuous service] or any part thereof in excess of six months; and (c)  notice  in  the  prescribed  manner  is served on the appropriate Government 3 or such authority as may be specified by the

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appropriate Government by notification in the Official Gazette.

The spirit and scheme of the ID Act was discussed by a

Seven-Judge  Bench  of  this  Court  in  the  case  of

Bangalore  Water  Supply  and  Sewerage  Board  v. A.

Rajappa & Ors.2 as under:

“To sum up, the personality of the whole statute, be it remembered, has a welfare basis,  it being a beneficial legislation which  protects  Labour,  promotes  their contentment  and  regulates  situations  of crisis and tension where production may be imperiled  by  untenable  strikes  and blackmail lock-outs. The mechanism of the Act is geared to conferment of regulated benefits  to  workmen  and  resolution, according to a sympathetic rule of law, of the  conflicts,  actual  or  potential, between managements and workmen. Its goal is  amelioration  of  the  conditions  of workers, tempered by a practical sense of peaceful co-existence, to the benefit of both-not a neutral position but restraints on  laissez  faire  and  concern  for  the welfare of the weaker lot. Empathy with the statute is necessary to understand not merely its spirit, but also its sense.”

      (emphasis laid by this Court)

It  is in  this context  that any  dispute regarding

retrenchment of a workman under the ID Act needs to

be appreciated.

2 (1978) 2 SCC 213

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Answer to Point 1: 16. Mr. A.T.M. Sampath, the learned counsel appearing

on behalf of the appellant contends that in the

instant  case,  the  appellant  is  a  permanent

employee  of  the  school  and  thus,  he  is  not  a

‘workman’  for  the  purposes  of  the  ID  Act.  His

services are covered instead, under Sections 2(h),

8(2) and 10 of the DSE Act, and thus, his services

cannot be retrenched under Section 25F of the ID

Act. Reliance is placed on the decision of this

Court in the case of Miss A. Sundarambal v. Govt.

of Goa, Daman & Diu and Ors.3, wherein this Court

has  laid  down  the  legal  principle  that  while

educational institutions come within the ambit of

‘industry’,  a  teacher  is  not  ‘workman’ for  the

purpose of the ID Act. The learned counsel submits

that using the analogy, the driver of the school

would also be not a ‘workman’ for the purpose of

the ID Act, rather would come within the ambit of

3 (1988) 4 SCC 42

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the term ‘employee’ as defined under Section 2(h)

of the DSE Act.

17. On  the  other  hand,  Mr.  S.S.  Ray,  the  learned

counsel  appearing  on  behalf  of  the  respondent-

School  contends  that  the  appellant  is  squarely

covered  under  the  definition  of  ‘workman’  under

the ID Act as well as the definition of ‘employee’

under  the  DSE  Act.  The  learned  counsel  places

strong reliance on the decision of this Court in

the case of  A Sundarambal (supra),  wherein this

Court held that teachers are not workmen for the

purpose  of  the  ID  Act,  though  educational

institutions are industry in terms of Section 2(j)

of the ID Act.

18. We  are  unable  to  agree  with  the  contention

advanced  by  the  learned  counsel  appearing  on

behalf of the appellant. The question ‘who is a

workman’  has  been  well  settled  by  various

judgments  of  this  Court.  In  the  case  of  H.R.

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Adyanthaya  v. Sandoz (India) Ltd4,  a Constitution

Bench of this Court has held as under: “..We  thus  have  three  Judge  Bench decisions which have taken the view that a person to be qualified to be a workman must be doing the work which falls in any of  the  four  categories,  viz,  manual, clerical, supervisory or technical and two two-judge  Bench  decisions  which  have  by referring to one or the other of the said three decisions have reiterated the said law.  As  against  this,  we  have  three three-judge  Bench  decisions  which  have without referring to the decisions in May &  Baker,  WIMCO  and  Bunnah  Shell  cases (supra) have taken the other view which was expressly negatived, viz., if a person does not fall within the four exceptions to the said definition he is a workman within the meaning of the ID Act. These decisions  are  also  based  on  the  facts found  in  those  cases.  They  have, therefore, to be confined to those facts. Hence the position in law as it obtains today is that a person to be a workman under the ID Act must be employed to do the work of any of the categories, viz., manual,  unskilled,  skilled,  technical, operational, clerical or supervisory. It is not enough that he is not covered by either  of  the  four  exceptions  to  the definition.  We  reiterate  the  said interpretation.”                 (emphasis laid by this Court)

19. The  issue  whether  educational  institution  is  an

‘industry’,  and  its  employees  are  ‘workmen’  for

4 (1997) 5 SCC 737

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the purpose of the ID Act has been answered by a

Seven-judge Bench of this Court way back in the

year 1978 in the case of  Bangalore Water Supply

(supra). It was held that educational institution

is an industry in terms of Section 2(j) of the ID

Act, though not all of its employees are workmen.

It was held as under:

“The premises relied on is that the bulk of the employees in the university is the teaching community. Teachers are not workmen and cannot raise disputes under the  Act.  The  subordinate  staff  being only a minor category of insignificant numbers,  the  institution  must  be excluded,  going  by  the  predominant character test. It is one thing to say that an institution is not an industry. It is altogether another thinking to say that a large number of its employees are not 'workmen' and cannot therefore avail of  the  benefits  of  the  Act  so  the institution  ceases  to  be  an  industry. The test is not the predominant number of  employees  entitled  to  enjoy  the benefits of the Act. The true test is the predominant nature of the activity. In  the  case  of  the  university  or  an educational  institution,  the  nature  of the  activity  is,  ex  hypothesis, education  which  is  a  service  to  the community.  Ergo,  the  university  is  an industry. The error has crept in, if we may so say with great respect, in mixing up  the  numerical  strength  of  the

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personnel  with  the  nature  of  the activity. Secondly  there  are  a  number  of  other activities  of  the  University Administration,  demonstrably  industrial which  are  severable  although  ancillary to  the  main  cultural  enterprise.  For instance, a university may have a large printing  press  as  a  separate  but considerable establishment. It may have a large fleet of transport buses with an army  of  running  staff.  It  may  have  a tremendous  administrative  strength  of officers  and  clerical  cadres.  It  may have karamcharis of various hues. As the Corporation  of  Nagpur  has  effectively ruled,  these  operations,  viewed  in severalty  or  collectively,  may  be treated  as  industry.  It  would  be strange, indeed, if a university has 50 transport  buses,  hiring  drivers, conductors,  cleaners  and  workshop technicians. How are they to be denied the benefits of the Act, especially when their  work  is  separable  from  academic teaching, merely because the buses are owned by the same corporate personality? We find, with all defence, little force in this process of nullification of the industrial character of the University's multi-form operations.”

               (emphasis laid by this Court)

A  perusal  of  the  abovementioned  two  judgments

clearly shows that a driver employed by a school,

being a skilled person, is a workman for the purpose

of the ID Act. Point No.1 is answered accordingly in

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favor of the respondents. The provisions of ID Act

are applicable to the facts of the present case.

Answer to Point No.2 20. Mr. A.T.M. Sampath, the learned counsel appearing

on  behalf  of  the  appellant  contends  that  the

retrenchment of the services of the appellant, who

is a permanent employee with an unblemished record

of service, on the ground of non availability of

CNG vehicles is illegal, arbitrary and unjust. The

appellant  had  been  working  at  the

respondent-School  for  more  than  seven  years  and

had even received a letter of appreciation for his

services  from  the  principal  of  the  school.  The

learned counsel submits that the appellant could

have been given alternate employment at any one of

the  60  schools  under  the  respondent-Managing

Committee. It is further submitted that even the

defence  of  loss  is  not  available  to  the

respondents,  as  after  the  retrenchment  of  the

appellant,  the  respondent-  School  has  appointed

another,  less  experienced  person  as  driver.  The

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23

learned  counsel  contends  that  this  is  in  clear

violation  of  Section  25H  of  the  ID  Act,  which

provides that when an opportunity for reemployment

arises, preference must be given to the willing

retrenched  workmen  over  any  other  persons  for

filling up that vacancy.

21. The  learned  counsel  further  contends  that  the

conditions precedent prescribed under Section 25F

of the ID Act have not been complied with before

retrenching  the  appellant.  It  is  submitted  that

the notice required to be sent to the appropriate

government in the prescribed form, as provided for

under Section 25F (c) of the ID Act has not been

sent.

22. On  the  other  hand,  Mr.  S.S.  Ray,  the  learned

counsel  appearing  on  behalf  of  the

respondent-School contends that the reason for the

retrenchment of the appellant has been explained

in  detail  in  the  notice  dated  07.01.2003.  The

respondent  school  had  only  one  car  left,  while

there were three drivers, as the two other cars

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had been rendered unfit for use. That being the

case, the respondent school required the services

of only one driver and accordingly, the two junior

most  drivers  were  retrenched  from  service,  the

present appellant being the junior most driver. It

is submitted that all the mandatory conditions as

laid down under Section 25F  of the ID Act were

complied  with,  including  the  payment  of

retrenchment compensation to the appellant.

23. We are unable to agree with the reasoning adopted

by the Tribunal as well as the High Court in the

instant case. Admittedly, the notice under Section

25F(c) of the ID Act has not been served upon the

Delhi  State  Government.  In  support  of  the

justification for not sending notice to the State

Government  reliance  has  been  placed  upon  the

decision  of  this  Court  in  the  case  of  Bombay

Journalists (supra). This decision was rendered in

the year 1963 and it was held in the said case

that the provisions of Section 25F (c) of the ID

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Act is directory and not mandatory in nature. What

has been ignored by the Tribunal as well as the

High  Court  is  that  subsequently,  the  Parliament

enacted the Industrial Disputes (Amendment) Act,

1964. Section 25F (c) of the ID Act was amended to

include the words:  “or such authority as may be specified by the appropriate Government by notification in the Official Gazette”

   The statement of objects and reasons provides:

“Opportunity  has  been  availed  of  to propose a few other essential amendments which  are  mainly  of  a  formal  or clarificatory nature”

24. Nothing was done on part of the legislature to

indicate that it intended Section 25F(c) of the

ID  Act  to  be  a  directory  provision,  when  the

other two sub-sections of the same section are

mandatory  in  nature.  The  amendment  was  enacted

which  seeks  to  make  it  administratively  easier

for notice to be served on any other authority as

specified.

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25. Further, even the decision in the case of  Bombay

Journalists (supra) does not come to the rescue of

the respondents. On the issue of interpretation of

Section  25F(c)  of  the  ID  Act,  it  was  held  as

under:

“The hardship resulting from retrenchment has been partially redressed by these two clauses,  and  so,  there  is  every justification for making them conditions precedent. The same cannot be said about the requirement as to clause (c). Clause (c)  is  not  intended  to  protect  the interests of the workman as such.  It is only intended to give intimation to the appropriate  Government  about  the retrenchment,  and  that  only  helps  the Government to keep itself informed about the  conditions  of  employment  in  the different  industries  within  its  region. There does not appear to be present any compelling  consideration  which  would justify  the  making  of  the  provision prescribed  by  clause  (c)  a  condition precedent as in the case of clauses (a) & (b).  Therefore,  having  regard  to  the object which is intended to be achieved by clauses (a) & (b) as distinguished from the object which clause (c) has in mind, it would not be unreasonable to hold that clause (c), unlike clauses (a) & (b), is not a condition precedent.”

                 (emphasis laid by this Court)

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Thus, this Court read the ID Act and the relevant

Rules  thereunder  together  and  arrived  at  the

conclusion that Section 25F(c) is not a condition

precedent  for  retrenchment.  By  no  stretch  of

imagination can this decision be said to have held

that there is no need for industries to comply with

this condition at all. At the most, it can be held

that Section 25F(c) is a condition subsequent, but

is  still  a  mandatory  condition  required  to  be

fulfilled  by  the  employers  before  the  order  of

retrenchment of the workman is passed.  This Court

in the case of Mackinon Mackenzie & Company Ltd. v.

Mackinnon Employees Union5 held as under:  “Further, with regard to the provision of Section  25F  Clause  (c),  the Appellant-Company  has  not  been  able  to produce cogent evidence that notice in the prescribed manner has been served by it to the  State  Government  prior  to  the retrenchment  of  the  concerned  workmen. Therefore,  we  have  to  hold  that  the Appellant-Company  has  not  complied  with the conditions precedent to retrenchment as per Section 25F Clauses (a) and (c) of the I.D. Act which are mandatory in law.”

5(2015) 4 SCC 544

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In  the  instant  case,  the  relevant  rules  are  the

Industrial Disputes (Central) Rules, 1957. Rule 76

of the said Rules reads as under:

“76.  Notice  of  retrenchment.-  If  any employer desires to retrench any workman employed in his industrial establishment who has been in continuous service for not less than one year under him (hereinafter referred to as 'workman' in this rule and in rules 77 and 78), he shall give notice of such retrenchment as in Form P to the Central  Government,  the  Regional  Labour Commissioner  (Central)  and  Assistant Labour  Commissioner  (Central)  and  the Employment  Exchange  concerned  and  such notice shall be served on that Government, the  Regional  Labour  Commissioner (Central),  the  Assistant  Labour Commissioner (Central), and the Employment Exchange concerned by registered post in the following manner :-  (a) where  notice  is  given  to  the workman,  notice of retrenchment shall be sent within three days from the date on which notice is given to the workman;                (emphasis laid by this Court)

Rule 76(a) clearly mandates that the notice has to

be sent to the appropriate authorities within three

days from the date on which notice is served on the

workman.  In  the  instant  case,  the  notice  of

retrenchment  was  served  on  the  appellant  on

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07.01.2003. No evidence has been produced on behalf

of  the  respondents  to  show  that  notice  of  the

retrenchment  has  been  sent  to  the  appropriate

authority even till date.

26. That  being  the  case,  it  is  clear  that  in  the

instant case, the mandatory conditions of Section

25F of the ID Act to retrench a workman have not

been  complied  with.  The  notice  of  retrenchment

dated  07.01.2003  and  the  order  of  retrenchment

dated 25.07.2003 are liable to be set aside and

accordingly set aside.

Answer to Point No.3 27. The  learned  counsel  for  the  appellant  contends

that the respondent-School is a recognized private

school and the appellant is an ‘employee’ in terms

of Section 2(h) of the DSE Act. Chapter IV of the

DSE Act provides for the terms and conditions of

services of an employee of a recognized private

school. Section 8(2) of the DSE Act contemplates

that no employee of a recognized private school

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shall be dismissed, removed or reduced in rank nor

shall  their  services  be  otherwise  terminated

except with the prior approval of the Director of

Education,  Delhi.  In  the  instant  case,  the

respondent–Managing Committee, before terminating

the services of the appellant did not comply with

the said mandatory provision of Section 8(2) of

the DSE Act. The learned counsel for the appellant

further  contends  that  the  notice  regarding

termination of service was served on the appellant

on 07.01.2003, and as on that date, the aforesaid

statutory provision was valid and binding.  

28. The learned counsel for the appellant submits that

Section 8(2) of the DSE Act is a substantive right

provided  for  safeguarding  the  conditions  of

services  of  an  employee.  The  termination  of

services of the appellant without obtaining prior

permission of the Director, renders the action of

the respondent-School as void. The learned counsel

contends that when statutory provisions provide a

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procedure to do an act in a particular manner, it

should be done in that very manner or not at all.

Reliance is placed on the decision of this Court

in the case of Babu Verghese & Ors. v. Bar Council

Of Kerala & Ors.6: “31. It is the basic principle of law long settled  that  if  the  manner  of  doing  a particular  act  is  prescribed  under  any Statute,  the  act  must  be  done  in  that manner or not at all. The origin of this rule  is  traceable  to  the  decision  in Taylor  v.  Taylor which  was  followed  by Lord Roche in Nazir Ahmad v. King Emperor who stated as under :

“Where a power is given to do a certain thing in a certain way, the  thing  must  be  done  in  that way or not at all.”

32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh and Anr. v. State of Vindhya Pradesh and again in Deep Chand v. State of Rajasthan These cases  were  considered  by  a  Three-Judge Bench  of  this  Court  in  State  of  Uttar Pradesh v. Singhara Singh and Ors. and the rule  laid  down  in  Nazir  Ahmad's  case (supra) was again upheld.  This rule has since  been  applied  to  the  exercise  of jurisdiction by courts and has also been recognized  as  a  salutary  principle  of administrative law.”                   (emphasis laid by this Court)

6(1999) 3 SCC 422

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29. On the other hand, the learned counsel appearing

on behalf of the  respondent-School contends that

there  was  no  requirement  on  the  part  of  the

respondent-Managing  Committee  to  comply  with

Section 8(2) of the DSE Act. Reliance is placed on

the decision of the Delhi High Court in the case

of Kathuria Public School v. Director of Education

& Anr.7, wherein Section 8(2) of the DSE was struck

down. It was held as under: “21. If the aforesaid observations of the Supreme Court in TMA Pai’s case (supra)  are  taken  to  its  logical conclusion, it would imply that there should  be  no  such  requirement  of prior  permissions  or  subsequent approval in matter of discipline of the  staff.  Thus,  whether  it  is  for suspension  or  disciplinary  action, the  educational  institutions  would have  a  free  hand.  The  safeguard provided is for a judicial Tribunal to be set up to examine the cases.”  

A Constitution Bench of this Court had held in the

case of TMA PAI Foundation v. State of Karnataka8 as

under:  

7 113(2004) DLT 703 (DB) 8(2002)8 SCC 481

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“61...In  the  case  of  unaided  private schools, maximum autonomy has to be with the  management  with  regard  to administration,  including  the  right  of appointment,  disciplinary  powers, admission of students and the fees to be charged.  “64.  An  educational  institution  is established  only  for  the  purpose  of imparting  education  to  the  students.  In such an institution, it is necessary for all to maintain discipline and abide by the rules and regulations that have been lawfully  framed.  The  teachers  are  like foster-parents  who  are  required  to  look after, cultivate and guide the students in their pursuit of education. The teachers and the institution exist for the students and not vice versa. Once this principle is kept  in  mind,  it  must  follow  that  it becomes  imperative  for  the  teaching  and other staff of an educational institution to perform their duties properly, and for the  benefit  of  the  students.  Where allegations of misconduct are made, it is imperative that a disciplinary enquiry is conducted, and that a decision is taken. In the case of a private institution, the relationship  between  the  management  and the employees is contractual in nature. A teacher, if the contract so provides, can be  proceeded  against,  and  appropriate disciplinary action can be taken if the misconduct  of  the  teacher  is  proved. Considering the nature of the duties and keeping the principle of natural justice in mind for the purposes of establishing misconduct and taking action thereon, it is imperative that a fair domestic inquiry is conducted. It is only on the basis of the  result  of  the  disciplinary  inquiry

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that the management will been titled to take appropriate action. We see no reason why the management of a private unaided educational  institution  should  seek  the consent  or  approval  of  any  governmental authority before taking any such action. In the ordinary relationship of master and servant,  governed  by  the  terms  of  a contract  of  employment,  anyone  who  is guilty  of  breach  of  the  terms  can  be proceeded against and appropriate relief can  be  sought. Normally,  the  aggrieved party would approach a Court of law and seek redress. In the case of educational institutions,  however,  we  are  of  the opinion  that  requiring  a  teacher  or  a member of the staff to go to a civil Court for the purpose of seeking redress is not in  the  interest  of  general  education. Disputes  between  the  management  and  the staff of educational institutions must be decided  speedily,  and  without  the excessive  incurring  of  costs.  It  would, therefore,  be  appropriate  that  an educational  tribunal  be  set  up  in  each district in a state -- the object being that the teacher should not suffer through the substantial costs that arise because of the location of the tribunal; if the tribunals are limited in number, they can hold  circuit/camp  sittings  indifferent districts to achieve this objective. Till a  specialized  tribunal  is  set  up,  the right  of  filing  the  appeal  would  lie before  the  District  judge  or  Additional District  Judge  as  notified  by  the Government.  It will not be necessary for the institution to get prior permission or ex post facto approval of a governmental authority while taking disciplinary action against a teacher or any other employee.

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The state government shall determine, in consultation  with  the  High  Court,  the judicial  forum  in  which  an  aggrieved teacher  can  file  an  appeal  against  the decision  of  the  management  concerning disciplinary  action  or  termination  of service.”                 (emphasis laid by this Court)

The  learned  counsel  appearing  on  behalf  of  the

respondent-School submits that not obtaining prior

approval for the termination of the services of the

appellant is thus, justified.

30. We  are  unable  to  agree  with  the  contention

advanced  by  the  learned  counsel  appearing  on

behalf of the  respondent-School.  Section 8(2) of

the DSE Act is a procedural safeguard in favor of

an employee to ensure that an order of termination

or  dismissal  is  not  passed  without  the  prior

approval of the Director of Education. This is to

avoid  arbitrary  or  unreasonable  termination  or

dismissal of an employee of a recognized private

school.

31. The State Legislature is empowered to enact such

statutory  provisions  in  relation  to  educational

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institutions, from Entry XI of List II of VIIth

Schedule of the Constitution of India, which reads

as: "education including Universities"

A number of legislations across the country have

been  enacted  which  deal  with  the  regulation  of

educational institutions, which contain provisions

similar to the one provided for under Section 8(2)

of  the  DSE  Act.  One  such  provision  came  for

consideration before a Constitution Bench of this

Court in the case of  Katra Educational Society  v.

State  Of  Uttar  Pradesh  &  Ors.9 The  impugned

provisions  therein  were  certain  Sections  of  the

amended Intermediate Education Act (U.P. Act 2 of

1921). Section 16-G of the Intermediate Education

(Amendment)  Act,  1958  provided  that  Committee  of

Management could not remove or dismiss from service

any Principal, Headmaster or teacher of a college

or school without prior approval in writing of the

Inspector. The Amendment Act also contained other

provisions providing for governmental control over 9  AIR 1966  SC 1307

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certain  other  aspects  of  the  educational

institutions. Adjudicating upon the competence of

the state legislature to enact the amending act,

this Court held as under: “8.  Power  of  the  State  Legislature  to legislate  under  the  head  "education including Universities" in Entry 11 of List II of the 7th Schedule  would prima facie include the power to impose restrictions on the management of educational institutions in matters relating to education. The pith and substance of the impugned legislation being in regard to the field of education within  the  competence  of  the  State Legislature,  authority  to  legislate  in respect of the maintenance of control over educational  institutions  imparting  higher secondary education and for that purpose to make  provisions  for  proper  administration of  the  educational  institutions  was  not denied. But it was said that the impugned Act is inoperative to the extent to which it  seeks  to  impose  controls  upon  the management  of  an  educational  institution registered under the Societies Registration Act  and  managed  through  trustees,  and thereby directly trenches upon legislative power conferred by Entry 44 of List I and Entries 10 & 18 of List III. This argument has no substance. This Court has in Board of  Trustees  v.  State  of  Delhi  held  that legislation  which  deprives  the  Board  of Management  of  a  Society  registered  under the Societies Registration Act of the power of management and creates a new Board does not fall within Entry 44 of List I, but falls under Entry 32 of List II, for by registration  under  the  Societies

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Registration  Act  the  Society  does  not acquire a corporate status. It cannot also be said that the pith and substance of the Act  relates  to  charities  or  charitable institutions, or to trusts or trustees. If the true nature and character of the Act falls within the express legislative power conferred by Entry 11 of List II, merely because  it  incidentally  trenches  upon  or affects  a  charitable  institution,  or  the powers of trustees of the institution, it will  not  on  that  account  be  beyond  the legislative  authority  of  the  State.  The impact of the Act upon the rights of the trustees or the management of a charitable institution is purely incidental, the true object of the legislation being to provide for control over educational institutions. The amending Act was therefore within the competence of the State Legislature and the fact  that  it  incidentally  affected  the powers of the trustees or the management in respect  of  educational  institutions  which may  be  regarded  as  charitable,  could  not distract from the validity of the exercise of that power.

10... If the management fails to comply with the directions made by the Director, that Officer  may  after  considering  the explanation  or  representation,  if  any, given or made by the management, refer the case  to  the  Board  for  withdrawal  of recognition  or  recommend  to  the  State Government  to  proceed  against  the institution under sub-s. (4) and the powers which  the  State  Government  may  exercise after being satisfied that the affairs of the  institution  are  being  mismanaged  or that  the  management  has  wilfully  or persistently failed in the performance of

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its duties, include the power to appoint an Authorised Controller to manage the affairs of the institution for such period as may be  specified  by  the  Government.  The provision is disciplinary and enacted for securing  the  best  interests  of  the students.  The State in a democratic set-up is vitally interested in securing a healthy system  of  imparting  education  for  its coming generation of citizens, and if the management is recalcitrant and declines to afford  facilities  for  enforcement  of  the provisions enacted in the interests of the students, a provision authorising the State Government  to  enter  upon  the  management through its Authorized Controller cannot be regarded as unreasonable.”

                      (emphasis laid by this Court)

From  a  perusal  of  the  above  judgment  of  the

Constitution Bench, it becomes clear that the state

legislature is empowered in law to enact provisions

similar to Section 8(2) of the DSE Act.  

32. At this stage, it would also be useful to refer

to the statement of objects and reasons of the

DSE Act, 1973. It reads as under:

“In  recent  years  the  unsatisfactory working  and  management  of  privately managed educational institutions in the Union  territory  of  Delhi  has  been subjected  to  a  good  deal  of  adverse criticism. In the absence of any legal power, it has not been possible for the Government to improve their working. An

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urgent  need  is,  therefore,  felt  for taking  effective  legislative  measures providing  for  better  organization  and development of educational institutions in  the  Union  territory  of  Delhi,  for ensuring  security  of  service  of teachers,  regulating  the  terms  and conditions  of  their  employment………The Bill seeks to achieve these objectives.”

A perusal of the Statement of objects and reasons

of the DSE Act would clearly show that the intent

of the legislature while enacting the same was to

provide security of tenure to the employees of the

school and to regulate the terms and conditions of

their employment.  

   In the case of  The Principal & Ors. v. The

Presiding Officer & Ors.10, a Division Bench of this

Court held as under:

“Sub-section (2) of Section 8 of the Act ordains that 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  of  Education.  From  this,  it clearly follows that the prior approval of the Director of Education is required only if the service of an employee of a

10 (1978) 1 SCC 498

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recognised  private  school  is  to  be terminated.”

33. The Division Bench of the Delhi High Court, thus,

erred in striking down Section 8(2) of the DSE

Act in the case of Kathuria Public School (supra)

by placing reliance on the decision of this Court

in the case of  TMA Pai  (supra), as the subject

matter  in  controversy  therein  was  not  the

security of tenure of the employees of a school,

rather, the question was the right of educational

institutions  to  function  unfettered.  While  the

functioning of both aided and unaided educational

institutions  must  be  free  from  unnecessary

governmental interference, the same needs to be

reconciled with the conditions of employment of

the employees of these institutions and provision

of  adequate  precautions  to  safeguard  their

interests. Section 8(2) of the DSE Act is one

such  precautionary  safeguard  which  needs  to  be

followed to ensure that employees of educational

institutions  do  not  suffer  unfair  treatment  at

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the hands of the management. The Division Bench

of  the  Delhi  High  Court,  while  striking  down

Section  8(2)  of  the  DSE  Act  in  the  case  of

Kathuria Public School (supra) has not correctly

applied the law laid down in the case of  Katra

Educational  Society  (supra),  wherein  a

Constitution Bench of this Court, with reference

to provision similar to Section 8(2) of the DSE

Act and keeping in view the object of regulation

of  an  aided  or  unaided  recognised  school,  has

held  that  the  regulation  of  the  service

conditions of the employees of private recognized

schools  is  required  to  be  controlled  by

educational authorities and the state legislature

is empowered to legislate such provision in the

DSE Act. The Division Bench wrongly relied upon

that part of the judgment in the case of  Katra

Education  Society (supra)  which  dealt  with

Article  14  of  the  Constitution  and  aided  and

unaided  educational  institutions,  which  had  no

bearing on the fact situation therein. Further,

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the  reliance  placed  upon  the  decision  of  this

Court in the case of Frank Anthony Public School

Employees Association  v. Union Of India & Ors.11

is  also  misplaced  as  the  institution  under

consideration  in  that  case  was  a  religious

minority institution. The reliance placed by the

learned  counsel  appearing  on  behalf  of  the

respondents on the case of  TMA Pai  (supra) is

also misplaced as the same has no bearing on the

facts  of  the  instant  case,  for  the  reasons

discussed  supra. The  reliance  placed  upon  the

decision of the Delhi High Court in the case of

Kathuria Public School (supra) is also misplaced

as the same has been passed without appreciating

the  true  purport  of  the  Constitution  Bench

decision in the case of  Katra Education Society

(supra). Therefore, the decision in the case of

Kathuria  Public  School (supra),  striking  down

Section 8(2) of the DSE Act, is bad in law.

11(1986) 4 SCC 707

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34. Furthermore, the decision in the case of Kathuria

Public School (supra) does not come to the aid of

the  respondents  for  one  more  reason.

Undisputedly,  the  notice  of  retrenchment  was

served on the appellant on 07.01.2003 and he was

retrenched  from  service  on  25.07.2003.  The

decision in the case of  Kathuria Public School

(supra),  striking down Section 8(2) of the DSE

Act was rendered almost exactly two years later,

i.e. on 22.07.2005. Surely, the respondents could

not have foreseen that the requirement of prior

approval  of  the  order  of  termination  passed

against  the  appellant  from  Director  would  be

struck down later and hence decided to not comply

with it. Section 8(2) of the DSE Act was very

much a valid provision of the statute as on the

date of the retrenchment of the appellant, and

there is absolutely no reason why it should not

have  been  complied  with.  The  rights  and

liabilities of the parties to the suit must be

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considered in accordance with the law as on the

date of the institution of the suit. This is a

fairly well settled principle of law.  In the

case  of  Dayawati  v. Inderjit12,  a  three  judge

bench of this Court held as under:

“Now as a general proposition, it may be admitted that ordinarily a court of appeal cannot take into account a new law, brought into existence after the judgment  appealed  from  has  been tendered,  because  the  rights  of  the litigants in an appeal are determined under the law in force at the date of the suit.”

  More recently, in the case of  Carona Ltd  v.

Parvathy Swaminathan and Sons13,  this Court held as

under:

“……The basic rule is that the rights of the parties should be determined on the basis of the date of institution of the suit.  Thus,  if  the  plaintiff  has  no cause  of  action  on  the  date  of  the filing of the suit, ordinarily, he will not be allowed to take advantage of the cause  of action  arising subsequent  to the filing of the suit. Conversely, no relief will normally be denied to the plaintiff  by reason  of any  subsequent event if at the date of the institution

12 AIR 1966 SC 1423 13 (2007) 8 SCC 559

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of the suit, he has a substantive right to claim such relief.”

35. The respondent-Managing Committee in the instant

case, did not obtain prior approval of the order

of termination passed against the appellant from

the Director of Education, Govt. of NCT of Delhi

as required under Section 8(2) of the DSE Act. The

order of termination passed against the appellant

is thus, bad in law.

   Answer to Point no. 4 36. The termination of the appellant is bad in law for

non-compliance  with  the  mandatory  provisions  of

Section 25F of the ID Act and also Section 8(2) of

the  DSE  Act.  Further,  the  respondent-School  has

not produced any evidence on record to show that

the retrenchment of the appellant was necessary as

he had become ‘surplus’. The termination of the

appellant was ordered in the year 2003 and he is

unemployed  till  date.  The  respondents  have  been

unable to produce any evidence to show that he was

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gainfully  employed  during  that  period  and

therefore he is entitled to back wages and other

consequential  benefits  in  view  of  the  law  laid

down by this Court in the case of  Deepali Gundu

Surwase  v. Kranti  Junior  Adhyapak  Mahavidyala

(D.ED.)& Ors.14 wherein it was held as under: “22.  The  very  idea  of  restoring  an employee to the position which he held before  dismissal  or  removal  or termination of service implies that the employee will be put in the same position in which he would have been but for the illegal action taken by the employer. The injury  suffered  by  a  person,  who  is dismissed  or  removed  or  is  otherwise terminated from service cannot easily be measured  in  terms  of  money.  With  the passing of an order which has the effect of  severing  the  employer  employee relationship,  the  latter's  source  of income  gets  dried  up.  Not  only  the concerned employee, but his entire family suffers  grave  adversities.  They  are deprived of the source of sustenance. The children are deprived of nutritious food and  all  opportunities  of  education  and advancement in life. At times, the family has  to  borrow  from  the  relatives  and other acquaintance to avoid starvation. These  sufferings  continue  till  the competent adjudicatory forum decides on the legality of the action taken by the employer.  The  reinstatement  of  such  an employee, which is preceded by a finding

14 (2013) 10 SCC 324

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of the competent judicial/quasi judicial body or Court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles the employee to claim full back wages. If the employer wants to deny back wages to the employee or  contest  his  entitlement  to  get consequential  benefits,  then  it  is  for him/her to specifically plead and prove that  during  the  intervening  period  the employee was gainfully employed and was getting  the  same  emoluments.  Denial  of back  wages  to  an  employee,  who  has suffered due to an illegal act of the employer  would  amount  to  indirectly punishing  the  concerned  employee  and rewarding the employer by relieving him of  the  obligation  to  pay  back  wages including the emoluments.”

37. For the reasons stated supra, we are of the view

that  the  impugned  judgment  and  order  dated

28.07.2008  passed  by  the  Delhi  High  Court  is

liable to be set aside and accordingly set aside,

by allowing this appeal. The retrenchment of the

appellant  from  his  service  is  bad  in  law.  The

respondent-Managing  Committee  is  directed  to

reinstate the appellant at his post. Consequently,

the relief of back wages till the date of this

order is awarded to the appellant, along with all

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consequential  benefits  from  the  date  of

termination of his services. The back wages shall

be computed on the basis of periodical revision of

wages/salary. We further make it clear that the

entire amount due to the appellant must be spread

over the period between the period of retrenchment

and the date of this decision, which amounts to 13

years,  for  the  reason  that  the  appellant  is

entitled to the benefit under Section 89 of the

Income Tax Act. The same must be complied with

within six weeks from the date of receipt of the

copy of this judgment.

                            …………………………………………………………J.                              [V. GOPALA GOWDA]

                   …………………………………………………………J.                     [AMITAVA ROY]

New Delhi, April 13, 2016