RAJ KUMAR versus DIRECTOR OF EDUCATION & ORS.
[2016] 1 S.C.R. 697, Supreme Court of India, 2016
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
[2016] 1 S.C.R. 697 
RAJ KUMAR 
v. 
DIRECTOR OF EDUCATION & ORS. 
(Civil Appeal No.1020 of2011) 
APRIL 13, 2016 
[V. GOPALA GOWDA AND AMITAVA ROY, JJ.) 
Industrial Disputes Act, 1947: 
Chapter V-A, s. 25F (a), (b) - Delhi School Education Act, 
1973 - ss. 2(h), 8(2), JO - Retrenchment - Challenge to -Appel/ant-
permanent driver in a public school, having become surplus, 
retrenched from services by respondent-Managing Committee of the 
School - Issuance of notice to the appellant in accordance with s. 
25F (a) and retrenchment compensation - Tribunal and the High 
Court held that the appellant was retrenched from the services by 
the Managing Committee following the procedure laid down u/s. 
25F (a) and {b) - On appeal, held: Driver employed by a school, 
being a skilled person, is a workman for the purpose of the 1947 · 
Act - Notice for retrenchment was served on. the appellant on 
07.01.2003, however, no evidence to show that notice of the 
retrenchment was sent to the appropriate authority even till date -
Thus, the mandatory conditions of s. 25F to retrench a workman 
was not complied with - Notice of retrenchment and the order of 
retrenchment set aside - Further, the Managing Committee did not 
obtain prior approval of the order of termination passed against 
the appellant from the Director of Education as required uls.8(2) of 
the DSE Act - No evidence to show that the retrenchment of the 
appellam was necessary as he had become 'surplus' - Thus, the 
termination of
the appellant is bad in law for non-compliance with 
the mandatory provisions of s. 25F and also s. 8(2) of the DSE Act 
- Management to re-instate the appellant at his post with back wages 
- Industrial Disputes (Central) Rules, 1957 - r. 76(a). 
s. 25F {a),{b),{c) - Condition prescribed for retrenchment of 
work as prescribed u/s. 25F {a), {b), {c) - Directory or mandatory -
Held: Section 25F(c} is a condition subsequent, but is still a 
mandatory condition required to be fulfilled by the employers before 
the order of retrenchment of the workman is passed. 
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SUPREME COURT REPORTS 
[2016] I S.C.R. 
Delhi School Education Act, 1973 - s. 8(2) - Compliance of 
- Requirement - Appellant-permanent driver in a public school, 
having become surplus, retrenched from services by respondent-
Managing Committee of the School - Submission that Managing 
Committee before terminating services of appellant did not comply 
with the mandatory provision of s. 8(2), holding that s. 8(2) was 
struck down in Kathuria case - Held: Section 8(2) is a procedural 
safeguard in favour of an employee to ensure that an order of 
termination or dismissal is not passed without the prior approval of 
the Director of Education, to avoid arbitrary or unreasonable 
termination - High Court erred in striking down s. 8(2) in Kathuria 
Public School's case and is bad in law - Furthermore, notice of 
retrenchment was served on the appellant on 07. 01.2003 and was 
retrenched from service on 25. 07.2003 - Decision in Kathuria Public 
School's case striking down s. 8(2) was rendered two years later 
and respondents could not have foreseen thats. 8(2) would be struck 
down later and thus, decided not to comply with it - Section 8(2) 
was very much a valid provision of the statute on the date of the 
retrenchment of the appellant - Rights and liabilities of the parties 
to the suit must be considered in accordance with the law as on the 
date of the institution of the suit - Thus, the termznatio11 order was 
bad in law. 
Allowing the appeal,
the Court 
HELD: 1. The retrenchment of the appellant from service 
as also termination order is bad in law. The judgment and order 
passed by the High Court is set aside. (Para 37) [726-B-C] 
2. A perusal of the *HR Adyanthaya case and ••Bangalore 
Water Supply case clearly shows that a driver employed by a 
school, being a skilled person, is a workman for the purpose of 
the Industrial Disputes Act, 1947. The provisions of ID Act are 
applicable to the facts of the instant case. [Para 20) (713-C] 
*RR. Adyanthaya v. Sandoz (India) Ltd (1997) 5 SCC 
737; ••Bangalore Water Supply and Sewerage Board 
v. A. Rajappa & Ors. 1978 (3) SCR 207: (1978) 2 SCC 
213 - relied on. 
3.1 The reasoning adopted by the tribunal as well as the 
High Court cannot be accepted. Admittedly, the notice under
RAJ KUMAR v. DIRECTOR OF EDUCATION 
Section 25F(c) of the ID Act has not been se.rved upon the State 
Government, relying upon the decision of this Court in the case 
of ***Bombay Journalists, which was rendered in the year 1963 
and wherein it was held that the provisions of Section 25F (c) of 
the ID Act is directory and not mandatory in nature. The tribunal 
as well as the High Court ignored that subsequently, the 
Parliament enacted the Industrial Disputes (Amendment) Act, 
1964. Nothing was done on part of the legislature to indicate that 
it intended Section 25F(c) of the ID Act to be a directory provision, 
when the other two sub-sections of the same section are mandatory 
in nature. The amendment was enacted which seeks to make it 
administratively easier for notice to be served on any other 
authority as specified. [Para 24, 25] [714-C-E, G] 
3.2 This Court in ***Bombay Journalists case read the ID 
Act and the relevant Rules thereunder together and arrived at 
the conclusion that Section 25F(c) is not a condition precedent 
for retrenchment. By no stretch of imagination can this decision 
be said to have held that there is no need for industries to comply 
with this condition at all. At the most, it can be held that Section 
25F(c) is a condition subsequent, but is still a mandatory condition 
required to be fulfilled by the employers before the order of 
retrenchment of the workman is passed. [Para 26] [715-D-F] 
***Bombay Union of Journalists & Ors. v. The State
of 
Bombay & Anr. AIR 1964 SC 1671; Mackinon 
Mackenzie & Company Ltd. v. Mackinnon Employees 
Union (2015) 4 SCC 544 - referred to. 
3.3 Rule 76(a) of the Industrial Disputes (Central) Rules, 
1957 clearly mandates that the notice has to be sent to the 
appropriate authorities within three days from the date on which 
notice is served on the workman. In the instant case, the notice 
of retrenchment was served on the appellant on 07.01.2003. No 
evidence has been produced on behalf of the respondents to show 
that notice of the retrenchment has been sent to the appropriate 
authority even till date. It is clear that the mandatory conditions 
of Section 25F to retrench a workman have not been complied 
with. The notice of retrenchment and the order of retrenchment 
are set aside. [Para 26, 27] [716-D-F] 
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SUPREME COURT REPORTS 
[2016] I S.C.R. 
4.1 The respondent-School submitted that there was no 
requirement on the part of the respondent-Managing Committee 
to comply with Section 8(2) of the DSE Act. Reliance was placed 
on the decision of the Delhi High Court in the case of ****Kathuria 
Public School case, wherein Section 8(2) of the DSE was struck 
down. It cannot be said that not obtaining prior approval for the 
termination of the services of the appellant is justified. Section 
8(2) is a procedural safeguard in favor of an employee to ensure 
that an order of termination or dismissal is not passed without 
the prior approval of the Director of Education. This is to avoid 
arbitrary or unreasonable termination or dismissal of an employee 
of a recognized private school. A perusal of the Statement of objects 
and reasons of the DSE Act would clearly show that the intent of 
the legislature while enacting the same was to provide security 
of tenure to the employees of the school and to regulate the terms 
and conditions of their employment. [Paras 30, 31, 32, 33) [717-
G-H; 718-A; 719-F-H; 720-A; 722-E] 
The Principal & Ors. v. The Presiding Officer & Ors. 
1978 (2) SCR 507: (1978) 1 SCC 498 - referred to. 
4.2 The Division Bench of the Delhi High Court, erred in 
striking down Section 8(2) of the DSE Act in the case of Kathuria 
Public School by placing reliance on the decision of this Court in 
the case of TMA Pai as the subject matter in
controversy therein 
was not the security of tenure of the employees of a school, rather, 
the question was the right of educational institutions to function 
unfettered. Section 8(2) of the DSE Act is one such precautionary 
safeguard which needs to be followed to ensure that employees 
of educational institutions do not suffer unfair treatment at the 
hands of the management. The Division Bench of the High Court, 
while striking down Section 8(2) of the DSE Act in the case of 
Kathuria Public School has not correctly applied the law laid down 
in the case of Katra Educational Society wherein a Constitution 
Bench of this Court, with reference to provision similar to Section 
8(2) of the DSE Act and keeping in view the object of regulation 
of an aided or unaided recognised school, has held that the 
regulation of the service conditions of the employees of private 
recognized schools is required to be controlled by educational 
authorities and the state legislature is empowered to legislate 
such provision in the DSE Act. The Division Bench wrongly relied
RAJ KUMAR v. DIRECTOR OF EDUCATION 
upou that part of the judgment in the case of Katra Education 
Society which dealt with Article 14 of the Constitution and aided 
and unaided educational institutions, which had no bearing on 
the fact situation therein. Therefore, the decision in the case of 
Kathuria Public School striking down Section 8(2) of the DSE Act, 
is bad in law. [Para 33] [722-H; 723-A-H) 
Kathuria Public School v. Director of Education & Anr. 
113(2004) DLT 703 (DB) - disapproved. 
TMA PAI Foundation v. State of Karnataka 2002 (3) 
Suppl. SCR 587 :(2002) 8 SCC 481; Katra Educational 
Society v. State Of Uttar Pradesh & Ors. AIR 1966 SC 
1307 : 1966 SCR 328; Frank Anthony Public School 
Employees Association v. Union Of India & Ors. 1987 
(1) SCR 238: (1986) 4 SCC 707 - referred to. 
4.4 The notice of retrenchment was served on the appellant 
on 07 .01.2003 and he was retrenched from service on 25.07 .2003. 
The decision in the case of Katliuria School striking down Section 
8(2) of the DSE Act was rendered almost exactly two years later. 
Surely, the respondents could not have foreseen that the 
requirement of prior approval of the order of termination passed 
against the appellant from Director would be stru.ck down later 
and hence decided to not comply with it. Section 8(2) was very 
much a valid provision of the statute as on the date of the 
retrenchment of the appellant, and there is absolutely no reason 
why it should not have been complied with. The
rights and 
liabilities of the parties to the suit must be considered in 
accordance with the law as on the date of the institution of the 
suit. [Para 34) [724-A-D] 
Dayawati v. Inde1fit AIR 1966 SC 1423:1966 SCR 275; 
Carona Ltd v. Parvathy Swaminathan and Sons 2007 
(1) SCR 656:(2007) 8 SCC 559 - referred to. 
4.5 The respondent-Managing Committee did not obtain 
prior approval of the order of termination passed against the 
appellant from the Director of Education, Govt. of NCT of Delhi 
as required under Section 8(2) of the DSE Act. [Para 35) [724-G-
H) 
5. The termination of the appellant is bad in law for non-
compliance with the mandatory provisions of Section 25F of the 
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
ID Act and also Section 8(2) of the DSE Act. The respondent-
School did not prod nee any evidence on record to show that the 
retrenchment of the appellant was necessary as he had become 
'snrplus'. The termination of the appellant was ordered in the 
year 2003 and he is unemployed till date. The respondents have 
been unable to produce any evidence to show that he was gainfully 
employed during that period and thus, he is entitled to back wages 
and other consequential benefits. [Para 36) [725-A-C] 
Deepali Gundu Surwase v. Kranti Junior Adhyapak 
Mahavidyala (D.ED.)& Ors. 2013 (9) SCR 1 : (2013) 
10 sec 324 - relied on. 
6. The respondent-Managing Committee is directed to 
reinstate the appellant at his post. Consequently, the relief of 
back wages till the date of this order is awarded to the appellant, 
along with all consequential benefits from the date of termination 
of his services. [Para 37) [726-B-C] 
Miss A. Sundaramba/ v. Govt. of Goa, Daman & Diu 
and Ors. 1988 (1) Suppl. SCR 604 : (1988) 4 SCC 42; 
Babu Verghese & Ors. v. Bar Council Of Kera/a & Ors. 
1999 (1) SCR 1121 : (1999) 3 SCC 422 - referred to. 
Case Law Reference 
AIR 1964 SC 1671 
referred to. 
Para 13 
1988 (1) Suppl. SCR 604 
referred to. 
Para 17 
1978 (3) SCR 207 
relied on. 
Para 20 
fl99zl 5 sec 737 
relied on. 
Para 20 
f20l~l 4 sec 544 
referred to. 
Para 26 
1999 (1) SCR 1121 
referred to. 
Para 29 
113 (2004) DLT 703 (DB)
disapproved. 
Para 33 
2002 (3) Suppl. SCR 587 
referred to. 
Para 30 
1966 SCR 328 
referred to. 
Para 32 
1978 (2.l SCR 507 
referred to. 
Para 33 
1987 (1) SCR 238 
referred to. 
Para 34 
1966 SCR 275 
referred to. 
Para 34 
2007 (10) SCR 656 
referred to. 
Para 32 
2013 (9) SCR 1 
relied on. 
Para 36
RAJ KUMAR v. DIRECTOR OF EDUCATION 
703 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1020 
A 
of2011 
From the Judgment and Order dated 28.07.2008 of the High Court 
of Delhi at New Delhi in Writ Petition (C) No. 5349 of2008. 
A. T. M. Sampath, Rahul Nagpal for the Appellant. 
A. K. Sanghi, Dr. Abhishek Atrey, D. S. Mahra, Ajay Kumar 
Singh, RavindraA. Lokhande, S. S. Ray, Rakhi Ray, Vaibhav Gulia, Anil 
Katiyar for the Respondent. 
·The Judgment of the Court was delivered by 
V. GOPALA GOWDA, J. I. The present appeal arises out of 
the impugned judgment and order dated 28.07.2008 passed by the High 
Court of Delhi at New Delhi in Writ Petition (C) No.5349 of 2008, 
whereby the High Court dismissed the said Writ Petition filed by the 
appellant in limine and upheld the termination order dated 22.08.2008 
passed against the appellant by the Delhi School Tribunal (hereinafter 
referred to as "the Tribunal") on the ground that the appellant, who was 
a driver, had been retrenched from his services by the respondent-
Managing Committee, DAV Public School by following the procedure 
laid down under Sections 25F (a) and (b) of Chapter V-A of the Industrial 
Disputes Act, 194 7 (hereinafter referred to as "the ID Act"). 
2. The brief facts of the case required to appreciate the rival legal 
contentions advan9ed on behalf of the parties are stated as hereunder: 
3. The appellant was employed as a driver by the DAV Public 
School, Pocket 'C', LIG Flats, East of Loni Road, Delhi
and became 
permanent on the said post in the year 1994. His. terms of service are 
covered under Sections 2(h), 8(2), 10 and other provisions of the Delhi 
School Education Act, 1973 (hereinafter referred to as the "DSE Act"). 
4. On 01.05.2001, the DAV College Managing Committee in;,_ 
72"' meeting of Public Schools Governing Body, passed a resolution to 
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buy new school buses with CNG facility in compliance with the directions 
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of this Court dated 26.03.2001 passed in the case of M.C. Mehta v. 
Union of India and allowed the management of the DAV Schools to 
raise loan from nationalized banks for the said purpose. 
5. The respondent-Managing Committee in its meeting dated 
24.08.2002, passed a resolution to retrench the services of the two junior 
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
most surplus drivers, namely the appellant and one Amar Nath, for the 
rea.son that the school had two old mechanically unfit vehicles namely, a 
Matador (registration No. DL-IV-1481) and a Maruti Van bearing 
registration No.DL-5C-3107 which were disposed ofon 01.09.1995 and 
13.06.1997, respectively. As an alternate arrangement, private buses 
had to be hired for the transportation of students as per instructions in 
the earlier resolution, but the respondent-Managing Committee could 
not purchase new buses due to shortage of funds, which resulted in the 
appellant being declared surplus on account of non-availability of job. 
6. On 07.01.2003, the respondent-Managing Committee issued a 
notice to the appellant in accordance with Section 25F (a) of the ID Act, 
stating that his services were no longer required by the school and that 
he would be retrenched from his service on the expiry -of the notice 
period of one month. The notice also stated thatthe appellant was entitled 
to retrenchment compensation which would be paid after the expiry of 
the notice period of one month. 
7. On 10.01.2003, the appellant replied to the above said notice 
through his counsel, in which it was stated that the impugned notice is 
unjust and illegal, as the appellant is a permanent employee of the school 
under the provisions of the DSE Act. It was also stated in the notice that 
the school had failed to pay arrears
amounting to Rs. 70,000/- to the 
appellant as per the recommendations of the Fifth Pay Commission. On 
the same date, the appellant, through his counsel, wrote a letter to the 
respondent No. I-Director of Education, Govt ofNCT of Delhi regarding 
payment of all arrears as per the Fifth Pay Commission to the appellant. 
8. By way of letter dated 22.01.2003, the respondent-Managing 
Committee, through their counsel informed the appellant that the school 
has been paying pay and allowances to the appellant as per the 
recommendations of the Fifth Pay Commission which came to Rs.3,500/ 
- per month as basic pay and Rs.1,435/- as Dearness Allowances. In the 
same letter, the respondent- Managing Committee also denied that it 
had held back an amount ofRs.70,000/-due to the appellant. 
9. On 31.01.2003, the appellant filed Writ Petition (C) No.957 of 
2003 before the High Court of Delhi, praying that the notice served on 
him dated 07.01.2003 be quashed and to stay the operation of the impugned 
notice until the Writ Petition was finally disposed of. 
JO. Meanwhile, vide letter dated 25.07.2003, the respondent-
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
M:maging Committee informed the appellant that since the extended 
notice period under Section 25F of the ID Act was also over, his services 
now stood terminated. Further, a salary cheque for a sum of Rs.4, 165/-
against one month's notice period from 01.07 .2003 to 25 .07 .2003, along 
with a cheque bearing No.877690 dated 22.07.2003 for a sum of 
Rs.25,650/- as retrenchment compensation under Section 25F (b) of the 
ID Act were enclosed with the letter. 
11. The High Court disposed of the Writ Petition No. 957 of2003 
filed by the appellant videjudgment and order dated 25.02.2004. Placing 
reliance on the judgment of the Delhi High Court passed in Writ Petition 
(C) No.970 of2003 dated 21.07.2003, filed by the other terminated driver 
Amar Nath, in the case of Amar Nath v. Director of Education, Govt. 
of Delhi & Ors., the High Court held that Section 8 of the DSE Act is 
very wide and any kind of termination would fall within its ambit. 
Accordingly, the Writ Petition was disposed of with liberty granted to 
the petitioner to seek an appropriate remedy under the DSE Act. 
12. Accordingly, the appellant filed Appeal No.09 of2004 before 
the Presiding officer, Delhi School Tribunal under Section 8(3) of the 
DSE Act against the impugned retrenchment notice dated 07.01.2003. 
The Tribunal vide its judgment and order dated 22.02.2008, dismissed 
the said appeal on the ground that the respondent-Managing Committee
had the right to retrench surplus drivers of the School after fulfilling all 
the conditions as laid down under Sections 25F (a) & (b) of the ID Act. 
The Tribunal while upholding the validity of the retrenchment order held 
thatthe appellant is governed by the provisions of the ID Act as well the 
DSE Act. Section 2(h) of the DSE Act defines "employee" as a teacher 
and also includes every other employee working in a recognized school 
as "employee". The Tribunal held as under: 
"2(h) Hence the, laws which governs the employment of the 
Appellant are De.lhi School Education Act & Rules, 1973 and 
Industrial Disputes Act, 1947.Since Delhi School Education Act, 
1973 has no provision of retrenchment of workmen, one has to 
fall back upon the provisions oflndustrial Disputes Act, 1947 to 
see whether the conditions of the said Act regarding retrenchment 
were fully complied with by the Management or not." 
13. The Tribunal further held that all the conditions precedent 
which are required to be satisfied for retrenchment under Section 25F 
of the ID Act have been fulfilled in the instant case. The appellant was 
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SUPREME COURT REPORTS 
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given notice under the provisions of the ID Act dated 07.01.2003. The 
intended date of his retrenchment thus, was 07.02.2003. However, the 
appellant was retrenched only on 25.07.2003. It was held that since the 
notice of more than one month had been given, the condition of Section 
25F (a) of the ID Act has been duly complied with. The Tribunal in its 
order further held that the appellant had been paid the retrenchment 
compensation calculating 15 days average pay for every completed year 
of continuous service. The respondent-Managing Committee calculated 
his service for a period of 9 years and concluded that the appellant is 
entitled to salary for a period of four and a half months, which amounts 
to Rs.19, 740/-, after taking into consideration Rs.3,500/- basic pay along 
with Rs.4,07 l/- as dearness allowance. In total, the appellant was paid 
Rs.25,650/- on account of compensation. Therefore, the Tribunal held 
that Section 25F (b) of the ID Act had also been duly complied with. On 
the issue of notice being served on the appropriate government in the 
prescribed manner, the Tribunal placed reliance on the decision of this 
Court in the case of Bombay Union of Journalists & Ors. 1: The 
State of Bombay &Anr. 1, wherein it was held that this was only directory 
in nature, and not a condition precedent for retrenchment. This Court 
had held as under: 
"Clause (c) is not intended to protect the
interests of the workman 
as such. It is only intended to give intimation to the appropriate 
Government about the retrenchment, and that only helps the 
Government to keep itself informed about the conditions of 
employment in the different industries within its region. There 
does not appear to be present any compelling consideration which 
would justify the making of the provision prescribed by clause (c) 
a condition precedent as in the case of clauses (a) & (b). Therefore, 
having regard to the object which is intended to be achieved by 
clauses (a) & (bl as distinguished from the object which clause 
(cl has in mind. it would not be unreasonable to hold that clause 
(cl. unlike clauses (al & (bl, is not a condition precedent." 
(emphasis laid by this Court) 
Thus, the Tribunal held that both the mandatory conditions for 
retrenchment have been fulfilled in the instant case, and that Section 
25F(c) of the ID Act merely lays down a direction and not a condition 
precedent. The Tribunal further held: 
H 
I AIR 1964 SC 1671
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
"As far as the question of permission from Directorate of 
Education before removing an employee is concerned, in view of 
the judgment of the Hon'ble Supreme Court in the matter of'TMA 
Pai Foundation v/s State of Karnataka" and the judgment of our 
own Hon 'ble High c·ourt in the matter of"Kathuria Public School 
vis Directorate of Education", the provision regarding obtaining 
prior approval from the Director of Education has been struck 
down and the School Management has been given a free hand to 
deal with its employees." 
The appeal tiled by the appellant before the Tribunal was accordingly 
dismissed. 
14.Aggrieved of the said judgment of the Tribunal, the appellant 
filed Writ Petition (C) No. 5349 of2008 before the High Court of Delhi 
questioning the correctness of the same urging various grounds. The 
High Court vide impugned judgment and order dated 28.07.2008 dismissed 
the same in limine as it found no infirmity in the view taken by the 
Tribunal. Hence, the present appeal. 
15. On the basis of the contentions advanced by the learned counsel 
appearing on behalf of the parties, the following issues would arise for 
our consideration: 
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I) Whether the appellant is a workman for the purpose of ID 
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Act? 
2) Whether the conditions precedent for the retrenchment of a 
workman as prescribed un.der Section 25F (a), (b) and (c) of the 
ID Act have been fulfilled in the instant case? 
3)
Whether the provision of Section 8(2) of the DSE Act is 
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applicable to the facts of the instant case? 
4) What order? 
16. Before we advert to the rival legal contentions advanced on 
behalf of the parties, it is important for us to consider the relevant 
provisions of the ID Act and DSE Act in play in the instant case. 
The DSE Act was enacted in the year 1973 and is: 
"An Act to provide for better organisation and development of 
school education in the Union Territory of Delhi and for matters 
connected therewith or incidental thereto" 
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
A 
Section 2(h) defines an employee: 
"means a teacher and includes every other employee working in 
a recognized school" 
Section 8(2) of the DSE Act provides: 
B 
"Subject to any rule that may be made in this behalf, no employee 
of a recognized private school shall be dismissed, removed or 
reduced in rank nor shall his service be otherwise terminated 
excepted with the prior approval of the Director" 
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Section I 0 of the DSE Act reads as under: 
"10.(1). Salaries of employees- the scales of pay and 
allowances, medical facilities, pension, gratuity provident fund and 
other prescribed benefits of the employees of a recognized private 
school shall not be as less than these of the employees of the 
corresponding status in school run by the appropriate 
authority ........ . 
(2). The managing committee of every aided school, shall deposit 
every month, its share towards pay and allowances, medical 
facilities, pension, gratuity, provident fund and other prescribed 
benefits with the Administrator and theAdministratorshall disburse, 
or cause to be disbursed within the first week of every month, the 
salaries and allowances to the employees of the aided schools." 
The Industrial Disputes Act, 194 7, is: 
"An Act to make provision for the investigation and settlement of 
industrial disputes, and for certain other purposes" 
Section 2(s) defines a Workman as: 
"2(s). "workman" means any person (including an
apprentice) 
employed in any industry to do any manual, unskilled, skilled, 
technical, operational, clerical or supervisory work for hire or 
reward, whether the terms of employment be express or implied, 
and for the purposes of any proceeding under this Act in relation 
to an industrial dispute, includes any such person who has been 
dismissed, discharged or retrenched in connection with, or as a 
consequence of, 9 that dispute, or whose dismissal, discharge or 
retrenchment has led to that dispute, but does not include any 
such person-
RAJ KUMAR v. DIRECTOR OF EDUCATION 
709 
[V. GOPALA GOWDA, J.] 
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the 
A 
Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 
1957); 
(ii) who is employed in the police service or as an officer or other 
employee of a prison; 
(iii) who is employed mainly in a managerial or administrative 
capacity; 
(iv) who, being employed in a suftervisory capacity, draws wages 
exceeding one thousand six hundred rupees per mensem or 
exercises, either by the nature of the duties attached to the 
office or by reason of the powers vested in him, functions 
mainly of a managerial nature." 
Section 2(oo) lays down the concept of retrenchment as: 
"2(oo). Retrenchment means the termination by the employer of 
the service of a workman for any reason whatsoever, otherwise 
than as a punishment inflicted by way of disciplinary action, but 
does not include--
(a) voluntary retirement of the workman; 
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(b) retirement of the workman on reaching the age of 
superannuation if the contract of employment between the 
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employer and the workman concerned contains a stipulation in 
that behalf; 
(bb) termination of the service of the workman as a result of the 
non-renewal of the contract of employment between the employer 
and the workman concerned on its expiry or of such contract 
F 
being terminated under a stipulation in that behalf contained 
therein;" 
(c) termination of the service of a workman on the ground of
continued ill-health" 
Section 25F of the ID Act provides for the conditions precedent for the 
retrenchment of a workman and reads as under: 
"25F.Conditions precedent to retrenchment of workmen.-
No workman employed in any industry who has been in continuous 
service for not less than one year under an employer shall be 
retrenched by that employer until-
G 
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
A 
(a) the workman has been given one month' s notice in writing 
indicating the reasons for retrenchment and the period of notice 
has expired, or the workman has been paid in lieu of such notice, 
wages for the period of the notice: 
(b) the workman has been paid, at the time of retrenchment, 
B 
compensation which shall be equivalent to fifteen days' average 
pay 2 for every completed year of continuous service] or any part 
thereof in excess of six months; and 
(c) notice in the prescribed manner is served on the appropriate 
Government 3 or such authority as may be specified by the 
c 
appropriate Government by notification in the Official Gazette. 
The spirit and scheme of the ID Act was discussed by a Seven-Judge 
Bench of this Court in the case of Bangalore Water Supply and 
Sewerage Board v. A. Rajappa & Ors.' as under: 
"To sum up, the personality of the whole statute, be it remembered, 
D 
has a welfare basis, it being a beneficial legislation which protects 
Labour, promotes their contentment and regulates situations of 
crisis and tension where production may be imperiled by untenable 
strikes and blackmail lock-outs. The mechanism of the Act is 
geared to conferment of regulated benefits to workmen and 
E 
resolution, according to a sympathetic rule oflaw, of the conflicts, 
actual or potential, between managements and workmen. Its goal 
is amelioration of the conditions of workers, tempered by a practical 
sense of
peaceful co-existence, to the benefit of both-not a neutral 
position but restraints on laissez faire and concern for the welfare 
of the weaker lot. Empathy with the statute is necessary to 
F 
understand not merely its spirit, but also its sense." 
(emphasis laid by this Court) 
lt is in th is context that any dispute regarding retrenchment of a workman 
under the ID Act needs to be appreciated. 
G 
Answer to Point 1: 
H 
17. Mr. A. T.M. Sam path, the learned counsel appearing on behalf 
of the appellant contends that in the instant case, the appellant is a 
permanent employee of the school and thus, he is not a 'workman' for 
the purposes of the ID Act. His services are covered instead, under 
'(1978) 2 sec 213
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
Sections 2(h), 8(2) and 10 of the DSEAct, and thus, his services cannot 
be retrenched under Section 25F of the ID Act. Reliance is placed on 
the decision of this CoUFt in the case of Miss A. Sundarambal v. Govt. 
of Goa, Daman & Diu and Ors.-', wherein this Court has laid down the 
legal principle that while educational institutions come within the ambit 
of 'industry', a teacher is not 'workman' for the purpose of the ID Act. 
The learned counsel submits that using the analogy, the driver of the 
school would also be not a 'workman' for the purpose of the ID Act, 
rather would come within the ambit of the term 'employee ' as defined 
under Section 2(h) of the DSE Act. 
18. On the other hand, Mr. S.S. Ray, the learned counsel appearing 
·on behalfofthe respondent- School contends that the appellant is squarely 
covered under the definition of 'workman' under the ID Act as well as 
the definition of 'employee ' under the DSE Act. The learned counsel 
places strong reliance on the decision of this Court in the case of A 
Sundarambal (supra), wherein this Court held that teachers are not 
workmen for the purpose of the ID Act, though educational institutions 
are industry in terms of Section 2U) of the ID Act. 
19. We are unable to agree with the contention advanced by the 
learned counsel appearing on behalf of the appellant. The question 'who 
is a workman' has been well settled by various judgments of this Court.
In the case of H.R. Adyantliaya v. Sandoz (India) Ltd', a Constitution 
Bench of this Court has held as under: 
" .. We thus have three Judge Bench decisions which have taken 
the view that a person to be qualified to be a workman must be 
doing the work which falls in any of the four categories, viz, manual, 
clerical, supervisory or technical and two two-judge Bench 
decisions which have by referring to one or the other of the said 
three decisions have reiterated the said law. As against this, we 
have three three-judge Dench decisions which have without 
referring to the decisions in May & Baker, WIMCO and Bunnah 
Shell cases (supra) have taken the other view which was expressly 
negatived, viz., if a person does not fall within the four exceptions 
to the said definition he is a workman within the meaning of the 
JD Act. These decisions are also based on the facts found in 
those cases. They have, therefore, to be confined to those facts. 
'(1988) 4 sec 42 
• (1997) s sec 737 
711 
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SUPREME COURT REPORTS 
[2016] l S.C.R. 
Hence the position in law as it obtains today is that a person to be 
a workman under the ID Act must be employed to do the work of 
any of the categories. viz., manual. unskilled. skilled. technical, 
operational, clerical or supervisory. It is not enough that he is not 
covered by either of the four exceptions to the definition. We. 
reiterate the said interpretation." 
(emphasis laid by this Court) 
20. The issue whethereducationaj institution is an 'industry', and 
its employees are 'workmen' for the purpose of the ID Act has been 
answered by a Seven-judge Bench of this Court way back in the year 
c 
1978 in the case of Ban!(a/ore Water Supply (supra). It was held that 
educational institution is an industry in terms of Section 2(j) of the ID 
Act, though not all of its employees are workmen. It was held as under: 
• 
"The premises relied on is that the bulk of the employees in the 
university is the teaching community. Teachers are not workmen 
D 
and cannot raise disputes under the Act. The subordinate staff 
being only a minor category of insignificant numbers, the institution 
must be excluded, going by the predominant character test. lt is 
one thing to say that an institution is not an industry. It is altogether 
another thinking to say that a large number of its employees are 
E 
F 
G 
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not 'workmen' and cannot therefore avail of the benefits of the 
Act so the institution ceases to be an industry. The test is
not the 
predominant number of employees entitled to enjoy the benefits 
of the Act. The true test is the predominant nature of the activity . 
In the case of the university or an educational institution, the nature 
of the activity is, ex hypothesis, education which is a service to 
the community. Ergo, the university is an industry. The error has 
crept in, if we may so say with great respect, in mixing up the 
numerical strength of the personnel with the nature of the activity. 
Secondly there are a number of other activities of the University 
Administration, demonstrably industrial which are severable 
although ancillary to the main cultural enterprise. For instance, a 
university may have a large printing press as a separate but 
considerable establishment. It may have a large fleet of transport 
buses with an army of running staff. It may have a tremendous 
administrative strength ofofficers and clerical cadres. It may have 
karamcharis of various hues. As the Corporation of Nagpur has 
effectively ruled, these operations, viewed in severalty or
) 
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
collectively, may be treated as industry. It would be strange, indeed, 
if a university has 50 transport buses, hiring drivers. conductors. 
cleaners and workshop technicians. How are they to be denied 
the benefits of the Act. especially when their work is separable 
from academic teaching. merely because the buses are owned by 
the same corporate personality? We find, with all defence, little 
force in this process of.nullification of the industrial character of 
the University's multi-form operations." 
713 
A 
B 
(emphasis laid by this Court) ' · 
A perusal of the abovementioned two judgments clearly shows that a 
driver employed by a school, being a skilled person, is a workman for the c 
purpose of the ID Act. Point No. 1 is answered accordingly in favor of 
the respondents. The provisions of ID Act are applicable to the facts of 
the present case. 
Answer to Point No.2 
21. Mr. A.T.M. Sampath, the learned counsel appearing on behalf 
D 
of the appellant contends that the retrenchment of the services of the 
0 
appellant, who is a permanent employee with an unblemished record of 
service, on the ground of non availability of CNG vehicles is illegal, 
arbitrary and unjust. The appellant had been working at the respondent-
School for more than seven years and had even received a letter of 
E 
appreciation for his services from the principal of the school. The learned 
counsel submits that the appellant could
have been given alternate 
employment at any one of the 60 schools under the respondent-Managing 
Committee. It is further submitted that even the defence of loss is not 
available to the respondents, as after the retrenchment of the appellant, 
the respondent- School has appointed another, less experienced person 
F 
as driver. The learned counsel contends that t~1s is in clear viola ti on of 
•· 
Section 25H of the ID Act, which provides that when an opportunity for 
reemployment arises, preference must be given to the willing retrenched 
workmen over any other persons for filling up that vacancy. 
22. The learned counsel further contends that the conditions 
G 
precedent prescribed under Section 25F of the ID Act have not been 
complied with before retrenching the appellant. It is submitted that the 
notice required to be sentto the appropriate government in the prescribed 
form, as provided for under Section 25F ( c) of the ID Act has not been 
sent. 
H
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
23. On the other hand, Mr. S.S. Ray, the learned counsel appearing 
on behalf of the respondent-School contends that the reason for the 
retrenchment of the appellant has been explained in detail in the notice 
dated 07.01.2003. The respondent school had only one car left, while 
there were three drivers, as the two other cars had been rendered unfit 
for use. That being the case, the respondent school required the services 
of only one driver and accordingly, the two junior most drivers were 
retrenched from service, the present appellant being the junior most driver. 
It is submitted that all the mandatory conditions as laid down under Section 
25F of the ID Act were complied with, including the payment of 
retrenchment compensation to the appellant. 
24. We are unable to agree with the reasoning adopted by the 
Tribunal as well as the High Court in the instant case. Admittedly, the 
notice under Section 25F(c) of the ID Act has not been served upon the 
Delhi State Government. In support of the justification for not sending 
notice to the State Government reliance has been placed upon the decision 
of this Court in the case of Bombay Journalists (supra). This decision 
was rendered in the year 1963 and it was held in the said case that the 
provisions of Section 25F ( c) of the ID Act is directory and not mandatory 
in nature. What has been ignored by the Tribunal as well as the High 
Court is that subsequently,
the Parliament enacted the Industrial Disputes 
(Amendment)Act, 1964. Section 25F (c) of the ID Act was amended to 
include the words: 
"or such authority as may be specified by the appropriate 
Government by notification in the Official Gazette" 
The statement of objects and reasons provides: 
· F 
"Opportunity has been availed of to propose a few other essential 
amendments which are mainly of a formal or clarificatory nature" 
25. Nothing was done on part of the legislature to indicate that it 
intended Section 25F( c) of the ID Act to be a directory provision, when 
the other two sub-sections of the same section are mandatory in nature. 
G 
The amendment was enacted which seeks to make it administratively 
easier for notice to be served on any other authority as specified. 
H 
26. Further, even the decision in the case of Bombay Journalists 
(supra) does not come to the rescue of the respondents. On the issue of 
interpretation of Section 25F(c) of the ID Act, it was held as under:
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
"The hardship resulting from retrenchment has been partially 
redressed by these two clauses, and so, there is every justification 
for making them conditions precedent. The same cannot be said 
about the requirement as to clause (c). Clause (c) is not intended 
to protect the interests of the workman as such. It is only intended 
to give intimation to the appropriate Government about the 
retrenchment. and that only helps the Government to keep itself 
informed about the conditions of employment in the different 
industries within its region. There does not appear to be present 
any compelling consideration which would justify the making of 
the provision prescribed by clause (c) a condition precedent as in 
the case of clauses (a) & (b ). Therefore, having regard to the 
object which is intended to be achieved by clauses (a) & (b) as 
distinguished from the object which clause ( c) has in mind, it would 
not be unreasonable to hold that clause (c), unlike clauses (a) & 
(b), is not a condition precedent." 
(emphasis laid by this Court) 
Thus, this Court read the ID Act and the relevant Rules thereunder 
together and arrived at the conclusion that Section 25F( c) is not a condition 
precedent for retrenchment. By no stretch of imagination can this decision 
be said to have held that there is no need for industries to comply with 
this condition at all. At the most, it can be held that Section 25F(c) is a 
condition
subsequent, but is still a mandatory condition required to be 
fulfilled by the employers before the order of retrenchment of the 
workman is passed. This Court in the case of Mackinon Mackenzie & 
Company Ltd. v. Mackinnon Employees Union·' held as under: 
"Further, with regard to the provision of Section 25F Clause (c), 
the Appellant-Company has not been able to produce cogent 
evidence that notice in the prescribed manner has been served by 
it to the State Government prior to the retrenchment of the 
concerned workmen. Therefore, we have to hold that the 
Appellant-Company has not complied with the conditions precedent 
to retrenchment as per Section 25F Clauses (a) and (c) of the 
l.D. Act which are mandatory in law." 
In the instant case, the relevant rules are the Industrial Disputes (Central) 
Rules, 1957. Rule 76 of the said Rules reads as under: 
'(2015) 4 sec 544 
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716 
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SUPREME COURT REPORTS 
[2016] l S.C.R. 
"76. Notice of retrenchment.- If any employer desires to 
retrench any workman employed in his industrial establishment 
who has been in continuous service for not less than one year 
under him (hereinafter referred to as 'workman' in this rule and 
in rules 77 and 78), he shall give notice of such retrenchment as in 
Form P to the Central Government, the Regional Labour 
Commissioner (Central) and Assistant Labour Commissioner 
(Central) and the Employment Exchange concerned and such 
notice shall be served on that Government, the Regional Labour 
Commissioner (Central), the Assistant Labour Commissioner 
(Central), and the Employment Exchange concerned.by registered 
post in the following manner :-
" 
(a) where notice is given to the workman, notice ofretrenchment 
shall be sent within three days from the date on which notice is 
given to the workman; 
' 
(emphasis laid by this Court) 
Rule 76(a) clearly mandates that the notice has to be sent to the 
appropriate authorities within three d~s from the date on which notice 
is served on the workman. In the instant case, the notice ofretrenchment 
was served on the appellant on 07.01.2003. No evidence has been 
produced on behalf of the respondents to show that notice of the 
retrenchment has been sent to the appropriate authority even ti II date. 
27. That being the case, it is clear that in the instant case, the 
mandatory conditions of Section 25F of the ID Act to
retrench a workman 
have not been complied with. The notice of retrenchment dated 
07.01.2003 and the order ofretrenchment dated 25.07.2003 are liable to 
F 
be set aside and accordingly set aside. 
G 
H 
Answer to Point No.3 
28. The learned counsel for the appellant contends that the 
respondent-School is a recognized private school and the appellant is an 
'employee' in terms of Section 2(h) of the DSE Act. Chapter IV of the 
DSEAct provides forthe terms and conditions of services ofan employee 
ofa recognized private school. Section 8(2) of the DSE Act contemplates 
that no employee of a recognized private school shall be dismissed, 
removed or reduced in rank nor shall their services be otherwise 
terminated except with the prior approval of the Director of Education, 
Delhi. Jn the instant case, the respondent-Managing Committee, before
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GgWDA, J.] 
terminating the services of the appellant did not comply with the said 
mandatory provision of Section 8(2) of the DSEAct. The learned counsel 
for the appellant further contends that the notice regarding termination 
of service was served on the appellant on 07.01.2003, and as on tint 
date, the aforesaid statutory provision was valid and binding. 
29. The learned counsel for the appellant submits that Section 
8(2) of the DSE Act is a substantive right provided for safeguarding the 
conditions of ~ervices of an employee. The termination of services of 
the appellant without obtaining prior permission of the Director, renders 
the action of the respondent-School as void. The learned counsel contends 
that when statutory provisions provide a procedure to do an act in a 
particular manner, it should be done in that very manner or not at all. 
Reliance is placed on the decision of this Court in the case of Babu 
Verghese & Ors. v. Bar Council Of Kera/a & Ors. 6: 
"3 I. It is the basic principle of law long settled that ifthe manner 
of doing a particular act is prescribed under any Statute, the act 
must be done in that manner ornot at all. The origin of this rule is 
traceable to the decision in Taylor v. Taylor which was follo~ed 
by Lord Roche in Nazir Ahmad v. King Emperor who stated as 
under: 
"Where a power is given to do a certain thing in a certain way, 
the thing must be done in that way or not at all." 
32.
This rule has since been approved by this Court in Rao Shiv 
Bahadur Singh and Anr. v. St~ ofVindhya Pradesh and again in 
Deep Chand v. State of Rajao'han These cases were considered 
by a Three-Judge Bench of this Court in State ofUttar Pradesh 
v. Singhara Singh and Ors. and the rule laid down in Nazir Ahmad's 
case (supra) was again upheld. This rule has since been applied 
to the exercise of jurisdiction by courts and has also b~~n 
recognized as a salutary principle of administrative law." 
(emphasis laid by this Court) 
30. On the other hand, the learned counsel appearing on behalf of 
the respondent-School contends that there was no requirement on the 
part of the respondent-Managing Committee to comply with Section 
8(2) of the DSE A'·, Reliance is placed on the decision of the Delhi 
High Court in the case of Katfturi" Public Sc/tool v. Director of 
• l t 999J 3 sec 422 
717 
A 
B 
c 
• 
D 
F 
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' .
718 
SUPREME COURT REPORTS 
[2016] 1 S.C.R. 
A 
Education & Anr. ',wherein Section 8(2) of the DSE was struck down. 
It was held as under: 
"21. If the aforesaid observations of the Supreme Court in TMA 
Pai's case (supra) are taken to its logical conclusion, it would 
imply that there should be no such requirement of prior permissions 
B 
or subsequent approval in matter of discipline of the staff Thus, 
whether it is for suspension or disciplinary action, the educational 
institutions would have a free hand. The safeguard provided is for 
a judicial Tribunal to be set up to examine the cases." 
A Constitution Bench of this Court had held in the case of TMA PAI 
C 
Foundation v. State of Karnatak«' as under: 
D 
E 
F 
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"61 .. .ln the case ofunaided private schools, maximum autonomy 
has to be with the management with regard to administration, 
including the right of appointment, disciplinary powers, admission 
of students and the fees to be charged. 
"64. An educational institution is established only for the purpose 
of imparting education to the students. In such an institution, it is 
necessary for all to maintain discipline and abide by the rules and 
regulations that have been lawfully framed. The teachers are like 
foster-parents who are required to look after, cultivate and guide 
the students in their pursuit of education. The teachers and the 
institution exist for the students and not vice versa. Once this 
principle is kept in mind, it must follow that it
becomes imperative 
for the teaching and other staff of an educational institution to 
perform their duties properly, and for the benefit of the students. 
Where allegations of misconduct are made, it is imperative that a 
disciplinary enquiry is conducted, and that a decision is taken. In 
the case of a private institution, the relationship between the 
management and the employees is contractual in nature. A teacher. 
if the contract so provides, can be proceeded against. and 
appropriate disciplinary action can be taken ifthe misconduct of 
the teacher is proved. Considering the nature of the duties and 
keeping the principle ofnatural justice in mind forthe pumoses of 
establishing misconduct and taking action thereon. it is imperative 
that a fair domestic inquiry is conducted. It is only on the basis of 
the result of the disciplinary inquiry thatthe management will been 
'113(2004) DLT 703 (DB) 
• (2002J s sec 481
RAJ KUMAR v. DIRECTOR OF EDUCATION 
719 
[V. GOPALA GOWDA, J.] 
titled to take appropriate action. We see no reason why the 
A 
management of a private unaided educational institution should 
seek the consent or approval of any governmental authority before 
taking any such action. In the ordinary relationship of master and 
servant, governed by the terms of a contract of employment, 
anyone who is guilty of breach of the terms can be proceeded 
ru@inst and appropriate relief can be sought. Normally, the 
aggrieved party would approach a Court of law and seek redress. 
In the case of educational institutions, however, we are of the 
opinion that requiring a teacher or a member of the staff to go to 
a civil Court for the purpose of seeking redress is not in the interest 
of general education. Disputes between the management and the 
staff of educational institutions must be decided speedily, and 
without the excessive incurring of costs. It would, therefore, be 
appropriate that an educational tribunal be set up in each district 
in a state -
the object being that the teacher should not suffer 
through the substantial costs that arise because of the location of 
the tribunal; ifthe tribunals are limited in number, they can hold 
circuit/camp sittings indifferent districts to achieve this objective. 
Till a specialized tribunal is set up, the right of filing the appeal 
would lie before the District judge or Additional District Judge as 
notified by the Government. It will
not be necessary for the 
institution to get prior permission or ex post facto approval of a 
governmental authority while taking disciplinary action against a 
teacher or any other employee. The state government shall 
determine, in consultation with the High Court, the judicial forum 
in which an aggrieved teacher can file an appeal against the decision 
of the management concerning disciplinary action or termination 
of service." 
(emphasis laid by this Court) 
The learned counsel appearing on behalf of the respondent-School 
submits that not obtaining prior approval for the termination of the services 
of the appellant is thus, justified. 
31. We are unable to agree with the contention advanced by the 
learned counsel appearing on behalf of the respondent-School. Section 
8(2) of the DSE Act is a procedural safeguard in favor of an employee 
to ensure that an order of termination or dismissal is not passed without 
the prior approval of the Director of Education. This is to avoid arbitrary 
B 
c 
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720 
SUPREME COURT REPORTS 
(2016] 1 S.C.R. 
A 
or unreasonable termination or dismissal of an employee of a recognized 
private school. 
B 
c 
D 
F 
G 
H 
32. The State Legislature is empowd~d to enact such statutory 
provisions in relation to educational institutions, from Entry XI of List II 
of VII" Schedule of the Constitution of India, which reads as: 
"education including Universities" 
A number of legislations across the country have been enacted which 
deal with the regulation 9f educational institutions, which contain provisions 
similar to the one provided for under Section 8(2) of the DSE Act. One 
such provision came for consideration before a Constitution Bench of 
this Court in the case of Katra Educational Society v. State Of lfttar 
Pradesh & Ors.• The impugned provisions therein were certain Sections 
of the amended Intermediate Education Act (U .P. Act 2of1921 ). Section 
16-G of the Intermediate Education (Amendment) Act, 1958 provided 
that Committee of Management could not remove or dismiss from service 
any Principal, Headmaster or teacher of a college or school without 
prior approval in writing of the Inspector. The Amendment Act also 
contained other provisions providing for governmental control over certain 
other aspects of the educational institutions. Adjudicating upon the 
competence of the state legislature to enact the amending act, this Court 
held as under: 
.• 
"8. Power of the State Legislature to legislate under the head 
"education
including Universities" in Entry 11 of List II of the 7th 
Schedule would prima facie include the oowerto impose restrictions 
on the management of educational institutions in matters relating 
to education. The pith and substance of the impugned legislation 
being in regard to the field of education within the competence of 
the State Legislature, authority to legislate in respect of the 
maintenance of control over educational institutions imparting 
higher secondary education and forthat purpose to make provisions 
for proper administration of the educational institutions was not 
denied. But it was said that the impugned Act is inoperative to the 
extent to which it seeks to impose controls upon the management 
of an educational institution registered under the Societies 
Registration Act and managed through trustees, a11J::l\1ereby 
directly trenches upog;legislative power conferred by Entry 44 of 
List I and Entries I 0 & 18 of List III. This argument has no 
9 AIR 1966 SC 1307
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
substance. This Court has in Board of Trustees v. State of Delhi 
held that legislation which deprives the Board of Management of 
a Society registered under the Societies Registration Act of the 
power of management and creates a new Board does not fall 
within Entry 44 of List I, but falls under Entry 32 of List II, for by 
registration under the Societies Registration Act the Society does 
not acquire a corporate status. It cannot also be said that the pith 
and substance of the Act relates to charities or charitable 
institutions, or to trusts or trustees. If the true nature and character 
of the Act falls within the express legislative power conferred by 
Entry 11 of List II, merely because it incidentally trenches upon 
or affects a charitable institution, or the powers of trustees of the 
institution, it will not on that account be beyond the legislative 
authority of the State. The impact of the Act upon the rights of 
the trustees or the management of a charitable institution is purely 
incidental. the true obje~t of the legislation being to provide for 
control over educational institutions. The amending Act was 
therefore within the competence of the State Legislature and the 
fact that it incidentally affected the powers of the trustees or the 
management in respect of educational institutions which may be 
regarded as charitable. could not distract from the validity of the 
exercise of that power. 
10
... If the management fails to comply with the directions made 
by the Director, that Officer may after considering the explanation 
or representation, if any, given or made by the management, refer 
the case to the Board for withdrawal of recoguition or recommend 
to the State Government to proceed against the institution under 
sub-s. (4) and the powers which the State Government may 
exercise after being satisfied that the affairs of the institution are 
being mismanaged or that the management has wilfully or 
persistently failed in the performance of its duties, include the 
power to appoint an Authorised Controller to manage the affairs 
of the institution for such period as may be specified by the 
Government. The provision is disciplinary and enacted for securing 
the best interests of the students. The State in a democratic set-
up is vitally interested in securing a healthy system of imparting 
education for its coming generation of citizens. and if the 
management is recalcitrant and declines to afford facilities for 
enforcement of the provisions enacted in the interests of the 
721 
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722 
SUPREME COUR ".EPORTS 
[2016] 1 S.C.R. 
A 
students, a provision authorising the State Government to enter 
upon the management through its Authorized Controller cannot 
be regarded as unreasonable." 
B 
(emphasis laid by this Court) 
From a perusal of the above judgment of the Constitution Bench, it 
becomes clear that the state legislature is empowered in law to enact 
provisions similar to Section 8(2) of the DSE Act. 
33. At this stage, it would also be useful to refer to the statement 
of objects and reasons of the DSE Act, I 973. It reads as under: 
C 
"In recent years the unsatisfactory working and management of 
privately managed educational institutions in the Union territory 
of Delhi has been subjected to a good deal of adverse criticism. 
In the absence of any legal power, it has not been possible for the 
Government to improve their working. An urgent need is, therefore, 
felt for taking effective legislative measures providing for better 
D 
organization and development of educational institutions in the 
Union territory of Delhi, for ensuring security of service of teachers, 
regulating the terms and conditions of their.employment ......... The 
Bill seeks to achieve these objectives." 
A perusal of the Statement ofobjects and reasons of the DSE Act would 
E 
clearly show that the intent of the legislature while enacting the same 
was to provide security of tenure to the employees of the school and to 
regulate the terms and conditions of their
employment. 
F 
G 
In the case of Tiie Principal & Ors. v. Tiie Presiding Officer 
& Ors. 10, a Division Bench of this Court held as under: 
"Sub-section (2) of Section 8 of the Act ordains that subject to 
any rule that may be made in this behalf, no employee of a 
recognised private school shall be dismissed, removed or reduced 
in rank nor shall his service be otherwise terminated except with 
the prior approval of the DirectorofEducation. From this, it clearly 
follows that the prior approval of the Director of Education is 
required only if the service ofan employee of a recognised private 
school is to be terminated." 
34. The Division Bench of the Delhi High Court, thus, erred in 
striking down Section 8(2) of the DSE Act in the case of Katlluria 
H 
'"(1978) I SCC498
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
Public School (supra) by placing reliance on the decision of this Court 
in the case of TMA Pai (supra), as the subject matter in controversy 
therein was ·not the security of tenure of the employees of a school, 
rather, the question was the right of educational institutions to function 
unfettered. While the functioning of both aided and unaided educational 
institutions must be free from unnecessary governmental interference, 
the same needs to be reconciled with the conditions of employment of 
the employees of these institutions and provision of adequate precautions 
to safeguard their interests. Section 8(2) of the DSE Act is one such 
precautionary safeguard which needs to be followed to ensure that 
employees of educational institutions do not suffer unfair treatment at 
the hands of the management. The Division Bench of the Delhi High 
Court, while striking down Section 8(2) of the DSE Act in the case of 
Kathuria Public School (supra) has not correctly applied the law laid 
down in the case of Katra Educational Society (supra), wherein a 
Constitution Bench of this Court, with reference to provision similar to 
Section 8(2) of the DSE Act and keeping in view the object ofregulation 
ofan aided or unaided recognised school, has held that the regulation of 
the service conditions of the employees of private recognized schools is 
required to be controlled by educational authorities and the state legislature
is empowered to legislate such provision in the DSE Act. The Division 
Bench wrongly relied upon that part of the judgment in the case of Katm 
Education Society (supra) which dealt with Article 14 of the Constitution 
and aided and unaided educational institutions, which had no bearing on 
the fact situation therein. Further, the reliance placed upon the decision 
of this Court in the case of Frank Anthony Public School Employees 
Association v. Union Of India & Ors. 11 is also misplaced as the 
institution under consideration in that case was a religious minority 
institution. The reliance placed by the learned counsel appearing on behalf 
of the respondents on the case of TMA Pai (supra) is also misplaced as 
the same has no bearing on the facts of the instant case, for the reasons 
discussec) supra. The reliance placed upon the decision of the Delhi 
High Court in the case of Kathuria Public School (supra) is also 
misplaced as the same has been passed without appreciating the true 
purport of the Constitution Bench decision in the case of Katm 
Education Society (supra). Therefore, the decision in the case of 
Katlturia Public Sc/tool (supra), striking down Section 8(2) of the DSE 
Act, is bad in law. 
11 (1986)4sec101 
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35. Furthermore, the decision in the case of Kat/1uria Public 
. School(supra) does not come to the aid of the respondents for one 
more reason. Undisputedly, the notice of retrenchment was served on 
the appellant on 07.01.2003 and he was retrenched from service on 
25.07.2003. The decision in the case of Kathuria PublicScliool(supra), 
striking down Section 8(2) of the DSE Act was rendered almost exactly 
two years later, i.e. on 22.07.2005. Surely, the respondents could not 
have foreseen that the requirement of prior approval of the order of 
termination passed against the appellant from Director would be struck 
down later and hence decided to not comply with it. Section 8(2) of the 
DSE Act was very much a val id provision of the statute as on the date 
of the retrenchment of the appellant, and there is absolutely no reason 
why it should not have been complied with. The rights and liabilities of 
the parties to the suit must be considered in accordance with the law as 
on the date of the institution of the suit. This is a fairly well settled 
principle of law. Jn the case of Dayawati v. Jnderjit12, a three judge 
bench of this Court held as under: 
"Now as a general proposition, it may be admitted that ordinarily 
a court of appeal cannot take into account a new law, brought into 
existence after the judgment appealed from has been tendered, 
because the rights of the litigants in an appeal are
determined 
under the law in force at the date of the suit." 
More recently, in the case of Carona Ltd v. Parvat/1y 
Swaminathan and Sons'", this Court held as under: 
" ...... The basic rule is that the rights of the parties should be 
determined on the basis of the date ofinstitution of the suit. Thus, 
if the plaintiff has no cause of action on the date of the filing of 
the suit, ordinarily, he will not be allowed to take advantage of the 
cause of action arising subsequent to the filing of the suit. 
Conversely, no relief will normally be denied to the plaintiff by 
reason of any subsequent event if at the date of the institution of 
the suit, he has a substantive right to claim such relief." 
36. The respondent-Managing Committee in the instant case, did 
not obtain prior approval of the order of termination passed against the 
appellant from the Director of Education, Govt. of NCT of Delhi as 
required under Section 8(2) of the DSE Act. The order of termination 
passed against the appellant is thus, bad in law. 
12 AIR 1966 SC 1423 
"(2007) s sec 559
RAJ KUMAR v. DIRECTOR OF EDUCATION 
[V. GOPALA GOWDA, J.] 
Answer to Point no. 4 
3 7. The termination of the appellant is bad in law for non-
compliance with the mandatory provisions of Section 25F of the ID Act 
and also Section 8(2) of the DSE Act. Further, the respondent-School 
has not produced any evidence on record to show that the retrenchment 
of the appellant was necessary as he had become 'surplus'. The 
termination of the appellant was ordered in the year 2003 and he is 
unemployed till date. The respondents have been unable to produce any 
evidence to show that he was gainfully employed during that period and 
therefore he is entitled to back wages and other consequential benefits 
in view of the law laid down by this Court in the case of Deepali Gundu 
Surwase v. Kranti Junior Adliyapak Maliavidyala (D.ED.)& Ors. 14 
wherein it was held as under: 
"22. The very idea ofrestoring an employee to the position which 
he held before dismissal or removal or termination of service 
implies that the employee will be put in the same position in which 
he would have been but for the illegal action taken by the employer. 
The injury suffered by a person, who is dismissed or removed or 
is otherwise terminated from service cannot easily be measured 
in terms of money. With the passing of an order which has the 
effect of severing the employer employee relationship, the latter's 
source of income gets dried up. Not only the concerned employee, 
but his entire family suffers
grave adversities. They are deprived 
of the source of sustenance. The children are deprived of nutritious 
food and all opportunities of education and advancement in life. 
At times, the family has to borrow from the relatives and other 
acquaintance to avoid starvation. These sufferings continue till 
the competent adjudicatory forum decides on the legality of the 
action taken by the employer. The reinstatement of such an 
employee, which is preceded by a finding of the competent judicial/ 
quasi judicial body or Court that the action taken by the employer 
is ultra vires the relevant statutory provisions or the principles of 
natural justice, entitles the employee to claim full back wages. If 
the employer wants to deny back wages to the employee or contest 
his entitlement to get consequential benefits, then it is for him/her 
to specifically plead and prove that during the intervening period 
the employee was gainfully employed and was getting the same 
emoluments. Denial of back wages to an employee, who has 
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suffered due to an illegal act of the employer would amount to 
indirectly punishing the concerned employee and rewarding the 
employer by relieving him of the obligation to pay back wages 
including the emoluments." 
38. For the reasons stated supra, we are of the view that the 
impugned judgment and order dated 28.07.2008 passed by the Delhi 
High Court is liable to be set aside and accordingly set aside, by allowing 
this appeal. The retrenchment of the appellant from his service is bad in 
law. The respondent-Managing Committee is directed to reinstate the 
appellant at his post. Consequently, the relief of back wages till the date 
of this order is awarded to the appellant, along with all consequential 
benefits from the date of termination of his services. The back wages 
shall be computed on the basis of periodical revision of wages/salary. 
We further make it clear that the entire amount due to the appellant 
must be spread over the period between the period of retrenchment and 
the date of this decision, which amounts to 13 years, for the reason that 
the appellant is entitled to the benefit under Section 89 of the Income 
Tax Act. The same must be complied with within six weeks from the 
date of receipt of the copy of this judgment. 
Nidhi Jain 
Appeal allowed.