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TMI Blog2016 (4) TMI 1470X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly in favor of the Respondents. The provisions of ID Act are applicable to the facts of the present case. Whether the conditions precedent for the retrenchment of a workman as prescribed Under Section 25F(a), (b) and (c) of the ID Act have been fulfilled in the instant case? - HELD THAT:- 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 [ 1963 (12) TMI 33 - SUPREME COURT ]. 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 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. 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 07.01.2003. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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.) and Ors. [ 2013 (8) TMI 1142 - SUPREME COURT ] wherein it was held ' 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.' 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 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring 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 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. State of Karnataka and the judgment of our own Hon'ble High Court in the matter of Kathuria Public School v. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses 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 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) re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncern 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. 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 and Diu and Ors. (1988) 4 SCC 42, 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 woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced person as driver. The 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 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 mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent 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, 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 and Co. Ltd. v. Mackinnon Employees Union (2015) 4 SCC 544 held as under: Further, with regard to the provision of Section 25F Clause (c), the Appellant-Company has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices of an employee of a recognized private school. Section 8(2) of the DSE Act contemplates that no employee of a recognized private school 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 procedure to do an act in a particular manner, it should be done in that very manner or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 and Ors. AIR 1966 SC 1307. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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-section (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 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties to the suit must be 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. Inderjit AIR 1966 SC 1423, 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 Sons (2007) 8 SCC 559, 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 of the suit, he has a substantive right to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples 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 consequential benefits from the date of termination of his services. The back wages shall be computed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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