FACTS :- The suits were filed by Krishna and others (plaintiffs) who were head masters and first assistants in charge of the primary schools under the administration of the District Local Board, East Khandesh, Jalgaon, (defendant 1).

Before the enactment of the Bombay Primary Education Act, Bom IV (4) of 1923, the primary schools were under the Government and all teachers in those primary schools were employed under the Education Department of the Provincial Government. When the Bombay Primary Education Act was enacted it provided for absorption of existing educational staff by the local authorities and relevant provisions were enacted in the Act providing for such absorption. This transfer of primary teachers from the employment of the Government to the employment of the local authorities took place with effect from 1st July 1925. Before that, however, there had been certain revision of the scales of pay granted to the primary teachers by the Government as a result of the deliberations of a committee which had been appointed by the Government in that behalf. The Government had passed on 24th March 1924, a resolution with reference to the revision of time scales and selection grades of the primary teachers in their employ and the resolution put forward a scheme for the revision of pay of those teachers. Certain scales of pay were sanctioned with effect from 1st March 1923, and the question of the allowances to be given to the head masters and the scales thereof was held over for the time being pending further consideration. This appears to have been ultimately decided by the Government as incorporated in their resolution dated 10th March 1926. By that resolution of 10th March 1926, the Government endorsed certain recommendations of a committee which had been appointed by them in this behalf and resolved that the duty allowances (then termed special pay) should be granted on the lines suggested by the committee in para. 2 of their report. These allowances were calculated on the basis of average attendance for two years instead of one year and the whole of the extra expenditure to be incurred in the current year on account of these allowances was to be met from the budgetary provision under the head "31-C, Education Primary-Grants to Local Bodies for Primary Education." The allowances to be paid to the head masters were mentioned in para. 2 of the recommendations of the committee and they were based upon the size and importance of the school and were to be paid whether the head master was permanent or acting. The allowances were to be treated as special pay, i.e., they were to be taken into account in calculating leave allowances and pensions. These allowances were to be given not only to the head masters but also to the first assistants in certain cases therein specified. This was the resolution of the Government which put on definite basis the allowances to be given to the head masters and the first assistants in the primary schools. The Government, accordingly, passed orders on 1st June 1926, for the adoption by the local authorities on the lines accepted by them in their resolution dated 10th March 1926, and ultimately by their resolution 12th July 1929, confirmed the position that the scales of pay and the scales of allowance which had been thus sanctioned by them would count for the purpose of the grant to be given by them to various local authorities. This is how the allowances came to be paid by the local authorities to the head masters and the first assistants in the various primary schools administered by the local authorities. It appears, however, that owing to the financial burden of the grants, in aid being considered by the Government to be rather heavy, they resorted to 8 per cent. cut in the primary education grant and enforced the cut by way of reducing protanto the grants in aid which they gave to the local authorities. Subsequently, however, by their resolution dated 17th April 1931, they enunciated th