1. Termination of employees in an unaided educational institution for misconduct — Non-compliance with Section 18 of Rajasthan Non-Government Educational Institutions Act, 1989 regarding prior approval. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 )
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2018 Supreme(SC) 860
SUPREME COURT OF INDIA
Kurian Joseph, Sanjay Kishan Kaul, JJ.
Kailash Singh – Appellant
Versus
The Managing Committee, Mayo College, Ajmer & Ors. – Respondents
Civil Appeal Nos. 6409 & 6410 of 2017
Decided On : 31-08-2018
Important Points
IMPORTANT POINTS
Principles of the Industrial Disputes Act, 1947 cannot be imported into a case of fully unaided educational institution.
In case of contractual relationship the employee is only entitled to damages and not reinstatement.
Principles of the Industrial Disputes Act, 1947 cannot be imported into a case of fully unaided educational institution.
In case of contractual relationship the employee is only entitled to damages and not reinstatement.
Subject
Employment - Termination of Employment
Act Referred
Headnote
(a) Rajasthan Non-Government Educational Institutions Act, 1989 – Section 18 – Respondent, a private unaided college, terminating appellant for misconduct and losing confidence in him by unanimous decision of Board of Governors – Required salary paid in two installments – Management committing legal default in not obtaining consent of Director of Education in writing – Held, no question of reinstatement – Appellant had only remedy of compensation, their relation with respondent college being contractual. (Para 18, 22)
(2002) 8 SCC 481; (1972) 1 SCC 623; (1973) 1 SCC 409 – Relied upon [Para 21]
2010 (3) ILR (Raj) 450 – Cited with approval
(b) Rajasthan Non-Government Educational Institutions Act, 1989 – Section 18 – Respondent, a private unaided college, terminating appellant for misconduct and losing confidence in him by unanimous decision of Board of Governors – Quantification of damages – Principles of the Industrial Disputes Act, 1947 cannot be imported into factual matrix of present case – Award of damages by High Court upheld – Relief modified – Damages granted in the form of salary and allowances payable for a period of eight (8) years instead of five years as granted by High Court , of the actual amounts – Future salary and allowances declined. (Para 29, 35, 36)
(1986) 4 SCC 337; 1958 SCR 442; (1973) 1 SCC 409; (2016) 14 SCC 534 – Relied upon
(2013) 10 SCC 324; (2007) 2 SCC 433; (1979) 2 SCC 80; (1980) 4 SCC 443 – Referred
Facts of the case:
Kailash Singh began his employment as a Class IV employee on 4.1.1984 and was promoted after a decade’s service as an LDC from 1.2.1994 and posted in the Library. Jeffry Jobard began his career as an LDC itself, from 1.7.1985. The services of both Kailash Singh and Jeffry Jobard were terminated simultaneously on 9.11.2000, on account of conducts attributed to them, which created an extremely undesirable situation in the respondent school.
The tribunal ordered reinstatement of the appellant which was upheld by a single Judge of the High Court.
The Division Bench in intra court appeal modified the relief to compensation equalling five (5) years’ salary on the basis of last pay and allowances drawn by them on the date of termination of their services, together with provident fund and all retiral benefits by construing them to be otherwise in service till they attained the age of superannuation.
Finding of the Court:
Appellant is entitled only to damages, not reinstatement.
Result: Appeals allowed.
Legal Category Hierarchy
- employment law
- contract law
Table of Contents
2. Appellants seek reinstatement and full back-wages — Management contends that disciplinary standards in educational institutions differ from industrial establishments and compensation is sufficient for technical non-compliance. (Para 12 , 14 )
3. Educational institutions require higher discipline than industrial units — Relationship in private unaided institutions is contractual — Reinstatement is inappropriate where confidence is lost. (Para 16 , 17 , 18 , 19 , 27 , 28 , 29 )
4. In master-servant contractual relationships, wrongful termination is remedied by damages rather than specific performance or reinstatement, unless governed by industrial or statutory public employment law. (Para 20 , 21 , 22 )
5. Appeals allowed — Compensation enhanced to eight years' salary and allowances plus retiral benefits, minus dues — Direction to vacate premises upon payment. (Para 35 , 36 , 37 , 38 , 39 )
6. Can an employee of a private unaided educational institution be reinstated following wrongful termination?
Generally, no. The relationship is contractual in nature (master-servant). Courts do not ordinarily enforce specific performance of contracts of service; therefore, the appropriate remedy for wrongful termination is damages rather than reinstatement. (Para 19 , 20 , 21 , 22 )
7. When are the principles of the Industrial Disputes Act applicable to employment termination?
Reinstatement is a special provision under Industrial Law. In pure master-servant contracts not adjudicated under the Industrial Disputes Act, the remedy is limited to damages for breach of contract, as the Specific Relief Act does not provide for reinstatement. (Para 21 , 22 , 29 )
8. How should compensation be quantified in cases of wrongful termination of a contractual employee?
Compensation should be based on the principle of wrongful termination under a master-servant relationship, considering aggravating and mitigating circumstances. It should be an adequate amount—neither measly nor a bonanza—and should account for the employee's duty to mitigate losses. (Para 29 , 30 , 32 )
9. What is the legal status of management autonomy in private unaided educational institutions?
Private unaided institutions enjoy maximum autonomy in day-to-day administration, including the management of teaching faculty and staff, to maintain excellence in education, distinguishing them from government-aided institutions. (Para 18 , 19 )
JUDGMENT :
Sanjay Kishan Kaul, J.
1. The Mayo College, Ajmer is an educational institution founded in 1875 by Sir Richard Southwell Bourke, the 6th Earl of Mayo, who was also the Viceroy of India from 1868 to 1872. It is one of the oldest educational institutions which was set up as a public boarding school, offering admission to the then elite. This character of the institution changed in the post-independence era, but it continued to be a prestigious centre of learning. The Mayo College is an unaided, nongovernmental educational institution receiving no grant either from the State or the Central Government and is affiliated to the Central Board of Secondary Education, New Delhi, for purposes of students taking that examination to pass the 12th standard.
2. The present unfortunate dispute involves the Managing Committee of the School (respondent No.1), with the Principal arrayed as the 2nd respondent. The dispute in the two Civil Appeals before us concerns two employees of this institution, who have served for a number of years, but apparently irreconcilable differences had arisen on account of the alleged conduct of the employees. The two employees are Kailash Singh (Civil Appeal No.6409/2017) and Jeffry Jobard (Civil Appeal No.6410/2017).
3. Kailash Singh began his employment as a Class IV employee on 4.1.1984 and was promoted after a decade’s service as an LDC from 1.2.1994 and posted in the Library. Jeffry Jobard began his career as an LDC itself, from 1.7.1985. The services of both Kailash Singh and Jeffry Jobard were terminated simultaneously on 9.11.2000, on account of conducts attributed to them, which created an extremely undesirable situation in the respondent school.
4. It may be appropriate to refer to the ground reality which resulted in the termination of the appellants, though it is not of great importance now in view of subsequent developments. Both the appellants, in different capacities, were associated with the activities of Mayo College Employees Union and are stated to have been instrumental in setting up the ‘Sangarsh Samiti Mayo College, Ajmer’, under the banner of which they demanded bonus. The stand of Respondent No. 1 was that such bonus was payable only as per the orders of the Government and the Board of Governors was willing to consider the same, subject to such orders being passed. The Sangarsh Samiti organised protest meetings at the gate of the Mayo College on 19.10.2000 and resolved to hold a general meeting and dharna on 22.10.2000, on the issue of non-grant of bonus. Additionally, a threat was held out to go on a general strike from 23.10.2000, if their demands were not met. The Samiti, steered by the appellants, started with their movement on 20.10.2000, and on 22.10.2000, a general notice was issued to all employees, reiterating the stand of the establishment that the Board of Governors was awaiting the decision of the Government. The employees were warned that any such “movement” was totally illegal because no employees’ union had given any legal notice in that behalf, and a warning to not tolerate absenteeism on 23.10.2000 and 24.10.2000 was held out. Since the Board was awaiting the announcement by the Government, it was informed to the workers that the management would take a call on the issue on 23.10.2000, and that the workers should not indulge in any disruptive activity.
5. The appellants, despite the same, are stated to have gone ahead with their threat, and at the time when the Annual Function of the Mayo College was being held on 23/24.10.2000, instigated other staff members not to go to work and created disturbances, causing grave embarrassment to the Institution. It appears that loudspeakers were used and inappropriate adjectives were used for the management, so much so that the traditional dinner scheduled for 24.10.2000 had to be cancelled, resulting in a loss of face for the management.
6. It is the aforesaid incidents which led to the show cause notice being issued to both the ap
