IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No. 60 of 2006 Reserved on: 6.6.2008 Decided on.20.6. 2008 Jagdev Katoch. …Petitioner. Versus State of H.P. and others. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the petitioner : Mr. Rajnish Maniktala, Advocate. For the respondents : Mr. Rajinder Dogra, Additional Advocate General for respodnents No. 1 to 3 and 6. Mr. J.L. Bhardwaj, Advocate for respondents No.4 and 5. Mr. Sunil Chaudhary, Advocate vice Mr. Anand Sharma, Advocate for respondent No.7. Rajiv Sharma, J. The brief facts necessary for the disposal of the writ petition are that the petitioner was appointed as a Lecturer in Goswami Ganesh Dutt Educational Society, Baijnath. This college has now been taken over by the State Government on 4.1.2007. He attained the age of 60 years on 12.8.2004. He made a representation to the authorities that he may be permitted to continue to discharge his duties upto 31.3.2005 when the 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes. 2 academic session ended. The plea of the petitioner was not considered by the authorities and he was superannuated on 31.8.2004. He made a representation to the authorities concerned through proper channel on 26.2.2005. In his representation, he had mentioned about the decision rendered by the Hon’ble Supreme Court in case of Sh. O.P. Kaushal. He also served a legal notice upon the Secretary Education to the Government of Himachal Pradesh and Director Education on 8.8.2005 through his Advocate. He reiterated the contents of the legal notice in another representation made on 14th October, 2005 addressed to the Principal of the College relying upon the University Statutes and Ordinances. The petitioner has also relied upon communication dated 4th June, 1994 sent by the Director Education to the Principal, DAVC, Kangra under the subject “Gratuity Position of Private Colleges”. Mr. Rajnish Maniktala, Advocate had strenuously argued that as per rule 12 of Appendix-A i.e. Rule Relating to the Teachers of non- Government Affiliated Colleges, his client was to be permitted to continue in service till the end of the semester or the academic session even though his client had attained the age of 60 years on 12.8.2004. He also contended that his client is entitled to gratuity under rule 12-A of the Appendix-A framed by the respondent-University. He further contended that his client is entitled to leave encashment. Mr. Rajinder Dogra, Additional Advocate General appearing on behalf of respondents No.1 to 3 and 6 had submitted that the judgment rendered by the Hon’ble Supreme Court in O.P. Kaushal case was judgment in personam and not in rem. He also contended that the petitioner is neither entitled to gratuity nor for leave encashment. Mr. J.L. Bhardwaj, Advocate appearing on behalf of respondents No.4 and 5 had argued that the petitioner was to retire immediately after 3 attaining the age of 60 years and he had reiterated the stand taken in the reply filed by respondents No.4 and 5 to the writ petition. Mr. Sunil Chaudhary, Advocate appearing vice Mr. Anand Sharma, Advocate for respondent No.7 had adopted the arguments of Mr. J.L. Bhardwaj, Advocate. I have heard the learned counsel for the parties and perused the pleadings carefully. The petitioner was appointed as a Lecturer in the subject of History in Goswami Ganesh Dutt Sanatan Dharam College, Baijnath on 12.8.1971. This College has been taken over by the State Government vide notification dated 4.1.2007. The conditions of service of the petitioner at the time of his superannuation were regulated under the First Ordinances of the Himachal Pradesh University, 1973 as amended from time to time. Para 38.5 (B) (d) of the First Ordinances of Himachal Pradesh University, 1973 (hereinafter referred to as ‘the Ordinances’ for convenience sake) provides that the Principal/Teachers of the college or institution shall be appointed in the manner and on the terms and conditions of service as laid down in the rules in Appendix ‘A’ to the Chapter i.e. Chapter-XXXVIII. Rule 12 and 12-A of the Appendix-A deals with the age of retirement and gratuity. Rule 12 and 12-A read thus: “12. Every teacher shall retire at the age of 60 years. However, a teacher shall be allowed to continue in service till the end of the semester or the academic session even though he may have attained the age of 60 years. 12-A. Gratuity – In addition to the benefits of Provident Fund, the Governing Body of the College shall grant to every teacher, at the time of retirement or death, whichever is earlier, for efficient and faithful service rendered, a gratuity of a sum calculated at a rate of half 4 month’s pay last drawn for each complete year of service, provided that: i) no one shall be allowed gratuity unless he/she has completed at least fifteen years of continues service in the institution or institutions run by the same Management; ii) no gratuity shall accrue for any service exceeding thirty years; (iii) in case of a teacher who dies before completing fifteen years of service or who joins service at an age when he cannot upon the age of retirement, complete fifteen years of service, the Governing Body may grant such gratuity as it deems fit under the circumstances.” The respondent-State has also framed the Himachal Pradesh Aided Colleges (Security of Service of Employees) Act, 1994. Rule 6 of these rules provides that the scales of pay and other allowances and privileges of the employees of a College shall be such as may, from time to time, be specified by the State Government. The State has also framed the rules known as “the Himachal Pradesh Non-Government Affiliated Colleges Grant-in-Aid Rules, 1994 duly notified on 6th May, 1994. Rule 8 thereof reads thus: “Quantum of the Grant-in-aid.- (a) The amount of grant- in-aid to be released to a College shall be limited to 95% of the deficit of the estimated income (as detailed under) and the expenditure likely to be incurred on payment of the salary of the approved staff (Teaching and non- teaching) during one financial year subject to adjustments of over and under payments, in accordance with the norms at which the salary is being paid to the staff in Government Colleges. The requirements of Grant-in-aid in respect of the Colleges for the ensuing year shall be submitted by each College in the form of budget to the Director of Education by 31st October (on a 5 date notified by the Director) of each year, stating numbers of post of Principal, Lecturers (subject-wise), Superintendent, Assistant, Clerks and others and financial implications along with similar statistical data for at least two previous years with reasons to justify each increase and decrease. It is in this backdrop that the submissions of the learned counsel appearing on behalf of the parties are to be considered. The first contention of Mr. Rajnish Maniktala, Advocate is that as per Rule 12 of Appendix-A, his client was to be permitted to discharge his duties up to 31.3.2005. It is clear from Rule 12 that though the retirement age of the teacher working in private affiliated colleges is 60 years, but he has to be permitted to continue till the end of academic session. The academic session in the present case had to come to an end on 31.3.2005 and the petitioner was to be permitted to continue to discharge his duties up to 31.3.2005 with all consequential benefits. He has brought this fact to the notice of the authorities, but no action was taken. The legal plea raised by Mr. Rajnish Maniktala, Advocate according to him whether the teachers of a private affiliated colleges are to be permitted till the age of retirement or till the end of academic session is no more res intergra in view of the judgment in O.P. Kaushal versus State of H.P. and others (2004) 13 SCC 695. Their Lordships of the Hon’ble Supreme Court in O.P. Kaushal’s case (supra) have held as under:- “The appellant herein was a Senior Lecturer (DPE) in GGDSD College, Baijnath in District Kangra (Himachal Pradesh). As per the date of birth of the appellant, he should have retired from service on 31-7-2003. According to the appellant he should have been allowed to continue in service till the end of the academic session of 2003-2004 in view of the University 6 Ordinance, Rule 12 of Appendix A of Part I which reads to the following effect: "Every teacher shall retire at the age of sixty years. However, a teacher shall be allowed to continue in service till the end of semester or academic session even though he may have attained the age of sixty years." In the counter-affidavit filed by Respondents 4 and 5 it is submitted that the academic session for the year 2003- 2004 started on 14-7-2003 and the date of retirement of the appellant was on 31-7-2003. Respondents 4 and 5 should have allowed the appellant to continue till the academic session of 2003-2004 in view of Rule 12. The Division Bench interpreted the Rule as if the said teacher would be allowed to continue if the retirement was in the middle of the academic session as the intention of the Rule was to help the students and that they may not suffer due to absence of teachers. But the Rule does not provide that only in the case the retirement of a teacher is during the middle of the academic session then only the teacher would be allowed to continue in service. The Rule says that if the retirement happens even after the beginning of the academic session the teacher shall be allowed to continue in service till the end of the academic year. In that view of the matter, the appellant was entitled to continue in service and the respondents should have allowed him to continue in service till the end of academic session 2003-2004 and, therefore, the appellant is entitled to get the pecuniary benefits that would have accrued to him had he continued in service. The respondents will work out the pecuniary benefits due to the appellant and the same shall be paid to the appellant within a period of two months deducting the pension, if any, paid to him. The appeal is allowed accordingly.” 7 In view of the law laid down by the Hon’ble Supreme Court it is declared that the petitioner was required to be permitted to discharge his duties till 31.3.2005. This question is answered accordingly. Mr. Rajnish Maniktala, Advocate had also contended that his client is entitled to gratuity on the basis of Rule 12-A of the Appendix-A. Rule 12-A has already been reproduced hereinabove for ready reference. Respondent-University has admitted that the petitioner is entitled to gratuity as per rule 12-A. The stand of the management in the reply to the writ petition is that the amount of gratuity is to be paid by the State Government to the extent of 95% and the rest of the amount could be paid by the management from its own sources. The submission of the learned Additional Advocate General is that the petitioner is not entitled to get any gratuity. It is clear from the phraseology of rule 12-A of Appendix-A of the Ordinances that the petitioner is entitled to get gratuity as per the norms prescribed therein. He had put in regular service with effect from 12.8.1971 onwards. The University had supported the case of the petitioner. The management had also supported the case of the petitioner, but had restricted its liability only up to 5%. The conditions of service of the petitioner are regulated under the Ordinances framed by the Himachal Pradesh University. These are to be read with the Himachal Pradesh Aided Colleges (Security of Service of Employees) Act, 1994. The scales of pay and other allowances and privileges of the employees of the college shall be such as may, from time to time, specified by the State Government. The State, as noticed above, has also framed the Himachal Pradesh Non-Government Affiliated Colleges Grant-in-Aid Rules, 1994. Rule 8 thereof provides that the amount of grant-in-aid to be released to the colleges is limited to 95% of the deficit of the income and the expenditure likely to be incurred on payment of the salary of the 8 approved staff during one financial year subject to adjustments of over and under payments in accordance with the norms at which the salary is being paid to the staff in Government Colleges. Rule 12-A specifically provides that the teachers serving in private affiliated colleges are to be paid the gratuity. The petitioner was also serving in a private affiliated college. The college has been taken over by the State Government in the year 2007 vide notification dated 4th January, 2007. Respondent No.2 had also sent a communication dated 4th June, 1994 to the Principal, DAV College, Kangra under the subject “Gratuity Position of Private Colleges.” The text of letter dated 4th June, 1994 reads thus: “It is intimated that in the event of retirement or death, gratuity of sum calculated at the rate of half month’s pay last drawn for each completed year of service is allowed to regular grantee regular private college lecturers/non- teaching members of staff, provided that:- a) One has completed at least 15 years continuous service in the institution or institutions run by same management. b) No gratuity shall accrue for any service excluding 30 years. c) In case of an employee dies before completing 15 years of service or who joins service at an age when he cannot up to the age of retirement complete 15 years of service, the governing body may grant such gratuity as it deems fit under the circumstances. The Government will reimburse 95% of total amount of gratuity as its share but the claim(s) shall be entertained after the retirement or death.” The Hon’ble Supreme Court on the basis of Rule 12 has held that Mr. O.P. Kaushal was entitled to continue till the end of Academic Session a fortiori the petitioner will also be entitled to gratuity on the basis of Rule 12-A of the Appendix-A. It is evident from the phraseology employed in 9 letter dated 4th June, 1994 that the Lecturer/non-teaching members of the staff serving in private aided colleges will also be held entitled to the gratuity as per the norms laid therein. Now, the question which arises for consideration is: by whom the gratuity in the present case is to be paid? The petitioner, as already noticed hereinabove, was to superannuate on 31.3.2005. The amount of gratuity is to be calculated from 12.8.1971 to 31.3.2005. The management of the college was dependent to the extent of 95% aid to be released under the rules framed by the State. The management had to defray the expenses to the extent of 5% only. The management as per rule 12-A, as noticed above, was bound to pay the gratuity to the petitioner and the State had to bear this expenditure to the extent of 95%. Consequently, it is held that the State Government will pay 95% amount of the gratuity to the petitioner and the remaining 5% has to be paid by respondent No.7-society. The next question which fell for consideration is: whether the petitioner is entitled to leave encashment or not? The case of the petitioner has been turned down by merely stating that there is no provision for the grant of leave encashment to the petitioner. The leave encashment is a part of “salary” and the same could not be denied to the petitioner. Their Lordships of the Hon’ble Supreme Court in State of Rajasthan and another versus Senior Higher Secondary School, Lachhmangarh and others, (2005) 10 SCC 346 have held as under: “The contention urged is that Section 16 refers to various conditions of service including pay whereas Section 29(1) refers only to 'scales of pay and allowances' and not the 'conditions of service'. Learned counsel submits that by implication, Section 29 excludes the benefit of leave encashment. We are unable to accept the above contention. 10 Section 16 confers a rule-making power on the State Government to regulate recruitment and conditions of service including conditions relating to qualifications, pay, gratuity, insurance, age of retirement, entitlement of leave, conduct and discipline etc. of employees of aided institutions. Section 16 has to be read and worked harmoniously with Section 29 which directs maintenance of parity in the scales of pay and allowances between employees of aided institutions and Government institutions. As we have held above the expression 'pay and allowances in Section 29 read with wider definition of the word 'salary' in Section 2(r) of the Act has a very vide connotation. We have come to the conclusion that the expression includes benefit of leave encashment which is nothing but salary for the unavailed leave to the credit of the employee. Section 16 confers rule-making power on the State Government to regulate 'Conditions of service' of employees of aided institutions. The Section specifically confers power to frame rules regarding entitlement of leave, if leave salary is of kind a salary within the wide definition of 'salary' under Section 2(r), the rules to regulate conditions of service of employees of aided institutions, must be so framed as to maintain parity in conditions of service in that regard with employees in Government institutions. That is the mandate of Section 29 of the Act. The contention, therefore, advanced that subject-matter of entitlement of leave encashment is covered by Section 16 of the State but is beyond the purview of Section 29 of the Act, is fallacious and has to be rejected.” It is evident from rule 8 of the Himachal Pradesh Non-Government Affiliated Colleges Grant-in-Aid Rules, 1994 that the petitioner is also entitled to the same salary which is being paid to his counter-part teaching in the Government Colleges. In view of the definitive law laid down by the 11 Hon’ble Supreme Court, the word ‘leave encashment’ is to be treated as integral part of the ‘salary’ and the petitioner is entitled to the same. Accordingly, the respondents will also release the payment of leave encashment in the same ratio as laid down for the payment of the gratuity in earlier part of the judgment i.e. 95% by the State and 5% by the respondent No.7-society. In view of these observations, the writ petition is allowed. It is declared that the petitioner will be deemed to have retired on 31.3.2005 with all consequential benefits i.e. arrears of salary on the pattern of Mr. O.P. Kaushal, as noticed above. He will be paid the gratuity and leave encashment within a period of 8 weeks from today. There shall be no order as to costs. June 20, 2008 (Rajiv Sharma ), J. *awasthi*