Civil Suit for Parity in Allowances by Unaided Institution Staff Not Maintainable, Must Approach Statutory Body Under Karnataka Education Act: Karnataka HC

Karnataka HC: Civil Court Lacks Jurisdiction in Unaided Institution Staff's Pay Parity Claims; Remedy Lies Under Education Act

Belagavi , Karnataka : The Karnataka High Court, Dharwad Bench, in a significant ruling, has held that civil suits filed by employees of private unaided educational institutions seeking parity in dearness allowance (DA) and other allowances with government employees are not maintainable. Justice E.S.Indiresh , presiding over the Regular Second Appeal, stated that such grievances must be addressed through the statutory mechanisms provided under the Karnataka Education Act, 1983, and the rules framed thereunder.

The Court allowed the appeal filed by the Karnataka Lingayat Education (KLE) Society, setting aside the concurrent judgments of the I Additional Senior Civil Judge, Belagavi , and the XI Additional District and Sessions Judge, Belagavi , which had previously ruled in favour of a retired employee.

Background of the Dispute

The case, KARNATAKA LINGAYAT EDUCATION SOCIETY vs NAGENDRA SIDDAPPA KUMBAR (RSA 100910 / 2023) , originated from a suit filed by Nagendra Siddappa Kumbar , a former Peon at KLE Society's College of Pharmacy. Kumbar , who joined in 1975, claimed that he was entitled to DA, House Rent Allowance (HRA), City Compensatory Allowance (CCA), and earned leave encashment on par with State Government employees. Upon retirement, his claims for arrears amounting to Rs. 6,72,284/- towards DA and salary revision, and Rs. 21,216/- towards earned leave, were rejected by the institution, leading him to file O.S. No.111/2018.

Both the Trial Court and the First Appellate Court had decreed the suit in favour of Kumbar , prompting the KLE Society to file a Regular Second Appeal before the High Court.

Appellants' Contentions: Jurisdiction and Scope of Rules

Sri. Mallikarjunswamy B. Hiremath, counsel for the KLE Society (appellants), argued several key points: * The respondent was an employee of a private unaided educational institution, governed by the Karnataka Education Act, 1983, and the Karnataka Private Education (Discipline and Control) Rules, 1978. * The civil suit was not maintainable, as the plaintiff should have approached the competent authority under Sections 131, 132, and 134 of the Act. * Rule 5 of the 1978 Rules, which mandates that the "scale of pay" in private institutions shall not be lower than corresponding government posts, does not extend to other allowances like DA, CCA, and HRA. * Employees of the appellant-society are governed by its service rules and cannot be equated with government servants under the Karnataka Civil Service Rules (KCSR). * A judgment rendered by a court lacking jurisdiction is a nullity, citing Sushil Kumar Mehta v. Gobind Ram Bohra (Dead) through his LRs, [1990 (1) SCC 193] . * When a special Act provides a remedy and a forum, the jurisdiction of the Civil Court is ousted, referencing Dr.Jagmittar Sain Bhagat & Others v. Dir. Health Services, Haryana (AIR 2013 SC 3060) and State of Punjab v. Labour Court Jullunder (AIR 1979 SC 1991) .

High Court's Examination of Jurisdiction and Precedents

Justice E.S.Indiresh framed a substantial question of law: "Whether the facts and circumstances involved in the case Rule 5 of the Karnataka Restitution (Discipline and Control) Rules, 1978, and titles of the employees of the appellants Institution the Dearness allowance and other allowance on par with the Government employees who are Governed by the KCSR Rules?”

The Court extensively analyzed the issue of jurisdiction. It noted, "It is well established principle in law that a decree passed by a Court without jurisdiction is nullity in law." The judgment reproduced excerpts from Sushil Kumar Mehta (supra) , emphasizing that when a special statute provides a right and a forum, the remedy must be sought under that Act, thereby excluding Civil Court jurisdiction under Section 9 of CPC.

The Court observed:

"Undoubtedly, the plaintiff is not a government servant and therefore, in the event if the plaintiff claim benefits on par with government servant and if the plaintiff is appointed and governed by KCSR, then neither the suit nor the provisions under the Karnataka Education Act is applicable to the case of the plaintiff and the plaintiff has to approach the Karnataka Administrative Tribunal... However, the plaintiff is an employee of the private unaided institutions in Karnataka , the conditions of service is regulated by provisions under Karnataka Education Act and Rules made thereunder, and therefore, it is incumbent upon the plaintiff to approach the statutory body under section 133 of the Karnataka Education Act..."

Interpretation of Rule 5 and Parity in Allowances

The High Court heavily relied on its previous decisions regarding the interpretation of Rule 5 of the Karnataka Private Education (Discipline and Control) Rules, 1978. Rule 5 states: “The scale of pay of an employee of an institution shall not be lower than the scale of pay of an employee of a corresponding post in the government educational institutions.”

The Court cited Siddarth Education Society v. Tumkur District Technical Institutions Non-teaching Employees Union, [ILR 2003 KAR 163] , which held:

“Though Rule 5... provide that the scale of pay... shall not be lower than the scale of pay... in the government educational institutions it does not ipso facto mean that the benefit of DA, CCA, HRA, and other allowances are to be paid... Rule 5 only provides for payment of scale of pay and it does not refer to any allowances.”

This principle was reiterated in Karnataka Lingayat Education Society and others v. Siddappa G Namba and others, [ILR 2017 KAR 5139] and Gadigayya and others v. K.L.E. Society and others, [2018 (4) AKR 90] .

The Court also referred to the Supreme Court's stance in Satimbla Sharma & Others v. St. Paul Sr. Secondary School and others, [AIR 2011 SC 2926] , where it was held that a mandamus could not be issued to a private unaided school for pay parity with government schools in the absence of a statutory provision. Similarly, in State of Maharashtra and another v. Bhagwan , the Supreme Court cautioned against judicial interference in policy decisions of autonomous bodies regarding service benefits like pensions, even if they receive government grants.

Quoting the Constitution Bench in Dhulabhai and others v. State of Madhya Pradesh, [AIR 1969 SC 78] , the High Court concluded that where a statute creates a special right or liability and provides for its determination by specific tribunals, the Civil Court's jurisdiction is excluded if there is an adequate remedy.

Final Decision and Implications

Based on the established legal principles and precedents, Justice E.S.Indiresh concluded:

"Following the declaration of law referred to above, I am of the view that the defendant being a private unaided institution, and as such, by necessary implication, the Karnataka Education Act read with the Rules referred to above is applicable to the case of the plaintiff and therefore, jurisdiction of Civil Court under Section 9 of CPC is excluded to claim the benefits as prayed for by the plaintiff in the plaint... I am of the view that the suit itself is not maintainable."

The High Court allowed the appeal by KLE Society, set aside the judgments and decrees of the lower courts, and dismissed the plaintiff's suit. The Court clarified that it is "expedient for the plaintiff to approach the competent Authority for redressal of grievance under the Act and Rules."

This judgment reinforces the legal position that employees of private unaided educational institutions in Karnataka seeking redressal for service-related grievances, particularly concerning allowances and parity with government employees, must pursue their claims through the specialized forums established under the Karnataka Education Act, rather than through civil courts. It also reiterates that "parity in scale of pay" under Rule 5 does not automatically extend to all other allowances.