Secy., Akola Taluka Education Society And Another v. Shivaji And Others

S.B Sinha, J.— Leave granted.

2. The State of Maharashtra enacted the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977 (for short “the Act”) to regulate recruitment and conditions of service of employees in certain private schools. It came into force with effect from 20-3-1978. “Private school” has been defined in Section 2(20) of the Act to mean:

“2. (20) ‘private school’, means a recognised school established or administered by a management, other than the Government or a local authority;”

3. The terms “recognised” and “school” have been defined in Sections 2(21) and 2(24) respectively in the following terms:

“2. (21) ‘recognised’ means recognised by the Director, the Divisional Board or the State Board, or by any officer authorised by him or by any of such Boards;

(24) ‘school’ means a primary school, secondary school, higher secondary school, junior college of education or any other institution by whatever name called including technical, vocational or art institution or part of any such school, college or institution, which imparts general, technical, vocational, art or, as the case may be, special education or training in any faculty or discipline or subject below the degree level;”

4. Appellant 1 herein runs a training institute. It imparts vocational training to the students admitted therein in different disciplines e.g Draftsman Civil, Electrician, Wireman, Welder and Fitter, etc. The strength of the students in the aforementioned disciplines allegedly began to go down from year to year. So much so, no student took admission in the courses of “Draftsman Civil” or “Welder”. The relevant portion of the chart showing details of admissions in the aforementioned disciplines reads as under:

Sl. No. Academic Year Draftsman Civil Electrician Wireman Welder Fitter Sanctioned strength Actual admission Sanctioned strength Actual admission Sanctioned strength Actual admission Sanctioned strength Actual admission Sanctioned strength Actual admission 14. August 1998 16 08 16 18 16 18 16 18 24 26 15. August 1999 16 09 16 18 16 09 16 18 24 19 16. August 2000 16 07 16 17 16 07 16 12 24 14 17. August 2001 16 00 16 09 16 06 16 05 24 11 18. August 2002 16 00 16 01 16 05 16 00 24 02

5. Similarly, in the certificate courses of six months and one year also, there had been a steady decline, as would appear from the following charts:

“Details of Admission for Certificate Courses of Six Months

Sl. No. Academic Year Electric Motor & Armetcher Winding Electronic Assembly & Trouble Shooting Sanctioned strength Actual admission Sanctioned strength Actual admission 1. January 1999 20 13 25 10 2. July 1999 20 16 25 05 3. January 2000 20 05 25 06 4. July 2000 20 15 25 07 5. January 2001 20 08 25 -- 6. July 2001 20 06 25 -- 7. January 2002 20 -- 25 -- 8. July 2002 20 -- 25 -- Details of Admission for Certificate Courses of One Year Sl. No. Academic Year Tailoring & Cutting Lathe Machine Operator Computer Operation (Part-time) Sanctioned strength Actual admission Sanctioned strength Actual admission Sanctioned strength Actual admission 1. July 1998 40 34 25 17 20 -- 2. July 1999 40 24 25 09 20 -- 3. July 2000 40 26 25 05 20 -- 4. July 2001 40 32 25 06 20 -- 5. July 2002 40 -- 25 -- 20”

6. Respondent 1 herein was appointed on a temporary basis. The services of the private respondents were purported to have been temporarily terminated as allegedly a decision had been taken to close down the institute with effect from 12-8-2002, contending that the said purported orders of termination were violative of the Act and the rules framed thereunder.

7. Appeals thereagainst were filed by the aggrieved employees/teachers before the School Tribunal, Pune Region. The jurisdiction of the Tribunal to entertain the said appeals was questioned on the ground that the institute in question was not a school within the meaning of the provisions of the said Act. The Tribunal, however, in its judgment held: (i) as the appellant was duly recognised by the Central Government permanently without grant-in-aid, it was a school within the meaning of the provisions of the said Act; (ii) inter alia, on the premise that the services of all the staff and teachers were not terminated, the plea of the appellant that the institute had to be closed down being incorrect, the orders of termination were mala fide.

8. The Tribunal furthermore took note of the fact that during pendency of the said appeals, some new teachers had been appointed.

9. The writ petition preferred by the appellant thereagainst has been dismissed by reason of the impugned judgment.

10. Mr Shekhar Naphade, the learned Senior Counsel appearing on behalf of the appellants, would urge:

(i) The institute is not covered by the definition of the “private school” within the meaning of the provisions of the said Act, as it was not recognised by the authorities under the said Act.

(ii) The Tribunal in its judgment merely proceeded on the basis that the school, in fact, was not closed down, but had failed to take into consideration the charts filed before it, from which, it would appear that the number of students had gone down in different disciplines, and thus, the impugned judgment cannot be sustained.

(iii) The Tribunal wrongly allowed full back wages to the teachers without taking into consideration the financial condition of the appellant.

11. Our attention, in this behalf, has also been drawn to the following statements made in the rejoinder to the counter-affidavit of Respondents 1 to 3 before this Court:

“I say that the details of the number of students currently studying in the institute and the fees collected from them are as follows:

Students studying in 2nd year of ITI 47 × Rs 6000 (Fees collected from every student) Rs 2,82,000 Students studying in 1st year of ITI 72 × Rs 8000 (Fees collected from every student) Rs 5,76,000 Students studying in certificate course 7 × Rs 2000 (Fees collected from every student) Rs 14,000 Total Rs 8,72,000

I say that the details regarding the expenses incurred by the petitioner on the salary and other miscellaneous expenses are as follows:

1. Towards salary of staff at current rate of consolidated pay Rs 65,200 per month × 12 months Rs 7,80,400 per annum 2. Expenses for raw material per student per year (Rs 2400) Rs 2400 × 126 (No. of students) Rs 3,02,400 3. Misc. expenses (Telephone bill, electricity bill, stationery, travel expenses, repairs, etc.) Rs 2,00,000 Total Rs 12,82,800

Considering the abovementioned two tables, it becomes clear that the petitioner is facing a deficit of Rs 4,10,800 in the current academic year. If the petitioner is directed to pay 100% back wages to the respondent employees, it would create a burden of more than Rs 40 lakhs. The petitioner is not in a position to pay back wages and the said direction would affect the poor students, who are studying in the institute and the efforts of the management to re-establish the institute would be thwarted. It is respectfully submitted that the institute is being run by reducing the tuition fees so as to attract the higher number of students. As stated earlier the fees charged from the students have dwindled from Rs 20,000 per annum in the year 1998 to Rs 6000 to 8000 at present.”

12. It was furthermore submitted that the institute having been set up in a tribal area, it was unlikely that many students would take admission in the said institute in future.

13. Mr Vinayak Dixit, the learned Senior Counsel appearing on behalf of the respondents, on the other hand, supported the impugned judgment contending that the plea taken by the appellant that the school was required to be closed down was an act of mala fide on the part of the appellants. The learned counsel would contend that in terms of Rule 26 of the Maharashtra Employees of Private Schools (Conditions of Service) Rules, 1981, as the appellant was bound to give three months' notice and was furthermore required to obtain prior approval of the competent authority specified therein; and as the mandatory conditions for retrenching the services of the respondents had not been complied with, the orders of termination were void ab initio.

14. It was submitted that the appellant had not paid any salary to the teachers for the last 23 months, although they had been reinstated in terms of this Court's order dated 19-8-2006. It was also submitted that even after their reinstatement, they are being paid salary only on a consolidated basis.

15. The question as to whether the provisions of the said Act were applicable in the case of appellant school although raised a question of jurisdiction, in our opinion, it was necessary for the appellant to plead the jurisdictional fact in relation thereto.

16. It is true that in the light of the interpretation clause contained in the said Act, a “private school” was required to be recognised by the authorities specified therein. The Tribunal had found that it was recognised by the Central Government. The State also in its counter-affidavit contended that it is recognised by the State. The appellant herein did not raise a contention before the Tribunal that the institute in question was not recognised by the authorities specified under sub-section (21) of Section 2 of the Act. The said contention was required to be specifically raised so as to enable the respondents herein to meet the same. As the jurisdictional fact required for determining the jurisdiction of the Tribunal had not been stated by the appellants, we are of the opinion that such a contention cannot be allowed to be raised before us for the first time.

17. There cannot be any doubt whatsoever that if the “institute” comes within the description of “school” in terms of the provisions of the said Act, before terminating the services of the respondents, it was obligatory on their part to satisfy the conditions precedent therefor.

18. Rule 26 of the Rules provides that a permanent employee may be retrenched by the management after giving him three months' notice on one or more grounds specified therein. Stoppage of imparting coaching in respect of some courses of studies was one of them. Admittedly, the respondents had not been given three months' notice. The order of termination was, therefore, bad in law.

19. We may, however, state that in view of the provisions contained in sub-clause (ii) of Clause (2) of Rule 26, it was not necessary to obtain prior approval of the Education Officer, as a technical or a vocational school does not come within the purview thereof. There cannot furthermore be any doubt whatsoever that the contention raised by the appellants before the Tribunal that the institute was required to be closed down was found to be factually incorrect and on that ground the decision of the Tribunal to the effect that the termination of services of the respondents was bad in law cannot be said to be suffering from any error of law apparent on the face of the records.

20. The Tribunal, however, in our opinion ought not to have granted full back wages. Full back wages, as is well known, should not be directed to be granted only because it would be lawful to do so. Before such an order is passed, a judicial or a quasi-judicial authority must consider all aspects of the matter. The appellant herein has produced facts to show decline in strength of the students in different disciplines. The same has not been disputed. We have noticed hereinbefore that in some disciplines the strength of the students has considerably gone down. The school is an unaided one. It, therefore, must meet its financial need from the fees realised from the students. It was a relevant consideration. The Tribunal, in our opinion, failed to take the said fact into consideration. The financial condition of the school, as noticed supra, has also not been denied or disputed.

21. It is now well settled by a large number of decisions of this Court that back wages should not be granted automatically. In U.P State Brassware Corpn. Ltd. v. Uday Narain Pandey (2006) 1 SCC 479 this Court observed:

“22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6-N of the U.P Industrial Disputes Act.”

(See also Banshi Dhar v. State of Rajasthan (2007) 1 SCC 324, (2006) 11 Scale 199 SCC at para 11.)

22. In U.P SRTC v. Mitthu Singh (2006) 7 SCC 180 this Court opined:

“But we are fully satisfied that in the facts and circumstances of the case, back wages should not have been awarded to the respondent workman. In several cases, this Court has held that payment of back wages is a discretionary power which has to be exercised by a court/tribunal keeping in view the facts in their entirety and neither straitjacket formula can be evolved nor a rule of universal application can be laid down in such cases.”

(See also A.P SRTC v. B.S David Paul (2006) 2 SCC 282.)

23. We, therefore, are of the opinion that in the peculiar facts and circumstances of this case, interest of justice shall be met if grant of back wages is confined to 25% only from the date of termination of the respondents till their reinstatement. It is, however, made clear that the respondents shall be entitled to receive entire salary for the period they had worked prior to their termination as also post-reinstatement.

24. The appeal is allowed to the aforementioned extent with the aforementioned directions. However, in the facts and circumstances of the case, there shall be no order as to costs.