JUDGMENT J. Chelameswar, J.
1. Educational institutions both schools and colleges are organized by the Government, local bodies like Municipalities and Zilla Parishads, as also by the private organizations. The issue before us in this matter revolves around certain service conditions of the employees both teaching and non-teaching of the educational institutions run by private organisations.
2. The organization of educational institutions in the private sector has been subject to regulation by the State in varying degrees from time to time. It may not be necessary to trace the entire history of such regulation by the State of the various educational institutions. In the year 1966, the State Government made rules known as the Andhra Pradesh (Integrated) Education Rules, 1966 in G.O.Ms. No. 1188, Edn., dt. 10-5-1966. At that point of time, there was no comprehensive enactment dealing with all classes of educational institutions. Therefore, the above mentioned rules were framed by the State (we presume) in exercise of power under Article 162 of the Constitution of India. Under the Rules, the educational institutions were divided into two classes viz., unrecognized and recognized. Recognized institutions are again divided into colleges and schools of various categories. The activities of the various educational institutions in several spheres is regulated by the above mentioned rules. The rules contemplate according of recognition by competent authority in the case of each educational institution referred to earlier belonging to the various classes. They prescribed, inter alia, the qualifications for the teachers to be appointed in such educational institutions. Section II of the Rules, deals with Elementary schools under private management. Under Rule 56(c) it is stipulated that "the salary of the teacher should not be less than the scale fixed by the Government". Similarly, Chapter Ml Section - I deals with Rules for Secondary Schools. Under Rule 159, it is prescribed:
Rule 159 - Increments:- Increments according to the scale laid down by the department or any other higher scale adopted by the management shall be granted as a matter of course, unless withheld by a definite order of the correspondent.
From the above rule by necessary implication, it follows that the teachers in the Secondary School must be paid a minimum scale laid down by the State, of course, with liberty to the management to pay a higher scale. Thus, it can be seen that though the salary of teachers employed by a private educational institution is essentially a matter of contract between the employer and an employee, the State of Andhra Pradesh in exercise of the law making power under Article 162 regulated the freedom of contract between the employer and the employee by prescribing the minimum scales to be paid by the employers (educational institutions).
3. There has been a consistent practice in the State of Andhra Pradesh of extending financial support to private educational institutions from time to time as a matter of policy of the State. The extension of such financial assistance-called "Grant-in-Aid" is regulated by a non-statutory code known as "Grant-in-Aid Code" the origin of which is almost lost in antiquity.
4. Rule 3 of the Grant-in-Aid Code stipulates that grants are given in teaching and other purposes as specified in the various chapters of the Code. Rule 6 of the Code stipulates that no grant under the Code shall be paid to an institution which is not recognized under the Andhra Pradesh Education Rules. Chapter III deals with teaching grants for secondary schools. Chapter IV deals with teaching grants for colleges for general education etc. Chapter V deals with teaching grants to institutions imparting special education etc. Rule 25 stipulates as follows:
25. Scales of pay:- The scales of pay adopted for the several members of the teaching and non-teaching staff in aided secondary schools shall not be less than the scales prescribed by the Government.
It is not very clear from the material available on record whether the various classes of educational institutions were always under the obligation to pay any minimum scale of pay to teachers or non-teaching staff. In spite of a specific query from the Bench, none of the Counsel could bring any provision of law to the notice of the Court. It can only be understood, having regard to the Rules 56, 159 etc., referred to earlier of the A.P. Integrated Education Rules that at least in the case of some classes of the educational institutions run by the private managements, they were obligated to pay a minimum scale to its teaching and non-teaching staff.
5. In the year 1975, the State of Andhra Pradesh made an Act called A.P. Recognised Private Educational Institutions Control Act, 1975 (Act 11 of 1975). The said Act inter alia provided for certain safeguards against dismissal, removal or reduction in rank etc., of the teachers employed in private educational institutions under Section 3. Even the said Act did not deal with the pay scales of the teachers.
6. We shall now examine the scheme of the "grant-in-aid" code insofar as it is relevant for the present purpose.
7. The Preamble of the Grant-in-aid Code reads as follows:
1. Preamble:- A sum of money is annually set apart to be expended under these Rules as grants-in-aid of recognized educational institutions under private management with the objects of extending and improving secular education in the State and such grants shall be given impartially and without reference to any religious instruction to all such institutions, which impart sound secular instruction, subject to the conditions hereinafter specified and with due consideration of the requirements of each locality and of each institution and the funds available.
These rules do not apply to Anglo-Indian Schools or to Elementary Schools including Adult Literacy Schools and Pre-Basic Schools or sections which are aided under separate rules.
With reference to each category of educational institutions covered by the grant-in-aid code like secondary schools, colleges for general education and teachers training institutions etc. the grant-in-aid code contains specific rules providing for the extension of various kinds of grants such as "teaching" and "maintenance" etc. Insofar as secondary schools are concerned, under Chapter III of the Code, Rule 26 contemplates an application to be made for the extension of the grant. Insofar as it is relevant for our purpose, Rule 27-A stipulates:
27. (A). In the case of aided Secondary Schools, the amount of grant payable in a year will normally be:
(i) A teaching grant equal to the expenditure on salaries (including allowances) of the teaching and non-teaching staff in the preceding Financial Year excluding the expenditure on the menial staff paid from contingencies.
(ii) A maintenance grant equal to 10% of the expenditure referred to in item (i) above.
(iii) The amount of tuition fees collected by the management (as explained in B (iii) below shall be deducted from the total of items (i) and (ii) above, while arriving at the net grant-in-aid payable to the School.
(emphasis supplied) Similarly, in the case of Colleges for General Education in Teachers Training are dealt under Chapter IV - Rules 30 and 31.
30. Application for aid:- Application for first admission to aid under this Chapter shall be made in that form prescribed in Appendix B so as to reach the Director not later than 1st August.
No college shall be eligible for grant unless the prior approval of the Government is obtained for its establishment. In cases of new courses or groups to be opened in the existing colleges, the prior permission of the Director shall be obtained. In order to ensure compact and effective governing bodies for aided colleges, the management shall re-constitute them with small number including the representatives of the Education Department and the University.
31. Fixing the amount of grants:-
Teaching grants to aided Colleges shall be paid adopting the following formula-
(a) " Hundred percent of expenditure on salaries of teaching and non-teaching staff minus fees at standard rates to be limited to actual deficit subject to the condition that the existing rates of fees (1963-64) must not be reduced."
Any balance in actual fees collected shall be utilized by the managements towards other recurring expenses like contingencies etc. All items of expenditure permitted in the case of Government Colleges will be permitted in the case of aided colleges according to the ceilings prescribed by the department.
(b) During the year 1963-64, all the new colleges established after the introduction of the Three-Year Degree Courses which have not received financial assistance under the central scheme for implementing the P.U.C. and Three Year Degree Courses shall be paid a special laboratory grant limited to Rs. 15/- per science student (both P.U.C. and B.Sc.) studying in the college during the year. From the year 1964-65 all colleges shall be paid a special grant at the rate of Rs. 5/- for each science student (both P.U.C. and B.Sc.) on the rolls during the year.
(c) The managements shall be paid a grant equal to-
(a) half the expenditure incurred by the managements on scholarships and fees remission, if any sanctioned by them upto a limit of 10% of the free income reckoned at standard rates provided that the scheme for sanction of such scholarships and fee remissions has received the prior approval of the Director and the rate of sanction of each concession is not less than half the actual rate of fees obtaining in the institution; and
(b) the lesson in fee income on account of the award of all the fee concessions granted under the provisions of the Andhra Pradesh Education Rules.
(emphasis supplied) Thus, it can be seen from the above rules when the State decides to extend the grant-in-aid to the educational institution covered by the Grant-in-aid Code, the State undertook to pay the entire amount of expenditure incurred by such educational institution towards the salaries of the teaching and non-teaching staff, less certain admissible deductions enumerated in those respective rules. It can also be seen from the language of Rules 26 and 30 that the extension of grant-in-aid is an annual feature as every private educational institution which is otherwise eligible to claim grant-in-aid is required to make an application for the extension of grant-in-aid on or before a specified date indicated in the rules. While it is 1st July in the case of Secondary Schools, it is 1st August in the case of College for General Education and Colleges for Teacher Training, for each succeeding year.
8. During the years 1977-78 and 1978-79, Government issued orders admitting various primary, upper-primary and secondary schools to grant-in-aid in pursuance of a policy of admitting schools to grant-in-aid in a phased manner. The Director of School Education, while submitting proposals for the admission of those schools to grant-in-aid took into consideration only the minimum of pay in the time scale relevant for the various employees of each of such institutions for the purpose of computing the amount of grant to be extended to those schools. Grants-in-aid were accordingly released. Several employees of those various schools who had earned regular increments in the relevant pay scale applicable to them prior to the date of admission of those educational institutions to grant-in-aid were not paid (by the managements), the actual salary and allowances payable to them, but offered to pay only that much of the amount which was received from the Government as grant-in-aid.
9. Apparently, the managements of those private educational institutions assumed that once an educational institution is admitted to grant-in-aid, it is the responsibility of the State to make the payment of all the salaries and allowances to its employees and since the State decided to extend grant-in-aid computed only on the basis of minimum of the pay scales applicable to the employees. The private managements were no more under an obligation with regard to the payment of salaries and other allowances of its employees.
10. The managements in our view believed so because it suited their convenience. Unfortunately, even the employees and the State perhaps laboured under the same mistaken impression of the legal position. We say mistaken impression since by then it was declared by the Supreme Court State of Assam v. Ajit Kumar Sarma that the extension of grant-in-aid is a matter of policy of the State depending upon its economic capacity and its other priorities. Neither the managements of private educational institutions nor the employees working with them have any legal right to compel the State to extend grant-in-aid if in any year the State decides not to do so.
11. In view of the practice i.e., the private managements started making payments to their employees (once the educational institution was admitted to grant-in-aid), lower amounts than what those employees were drawing prior to the point of time when an institution was admitted to grant-in-aid, the Government thought it was an anomalous situation and directed by Memorandum 3866/ F2/78-6, Education (F) Department, dated 10-1-1980 as follows:
Government of Andhra Pradesh Education (F) Department Memorandum No. 3866/F2/78-6 dated: 10-1-1980 Sub: Education - Primary and Secondary - Admission to Grant-in-aid -Payment of grants - Clarification -Issued.
Ref:(1) G.O.Ms. No. 725, Education, dated 7-7-1977.
(2) G.O.Ms. No. 232, Education, dated 3-3-1978.
(3) G.O.Ms. No. 1214, Education, dated 19-12-1978.
(4) From the Director of School Education, Lr.Rc.No. 6420/D4/78, dated 7-6-1979.
In pursuance of the policy of admitting schools to Grant-in-aid in a phased programme, Government have issued orders, admitting Primary, Upper Primary and Secondary Schools to Grant-in-aid during the years 1977-78 and 1978-79. The Director of school Education while submitting proposals for admission of these schools to Grant-in-aid has taken the minimum admissible basic pay in the time scale for each post and Grant-in-aid has been released based on the minimum of the Scale of Pay, several members of staff who earned regular increments by virtue of their service prior to the date of admission to aid were not able to draw the Pay and allowances due to them under rules. Rule 159 of the Andhra Pradesh Educational Rules also lays down that Teaching and Non-Teaching staff shall be paid regular increments as per scales prescribed by the Government.
(2) Government have examined the above anomaly and direct that while releasing Grant-in-aid, the Director of School Education shall take into account the increments earned by the incumbents working in the posts prior to the date of admission to Grant-in-aid, provided the staff are qualified and increments sanctioned are in accordance with the rules in force.
(3) The authorization given in Para 2 above is however subject to the condition that the expenditure on release of grants during the current year, including new schools to be admitted to aid should not exceed Rs. 3.00 crores provided in the current year's budget.
(4) This Memo issues with the concurrence of Finance and Planning (EE) Department, vide their U.O. N0.422-A/EE/79-7, dated 14-12-1979.
D.M. De Rebello, Joint Secretary to Government To The Director of School Education, Hyderabad In our view, the Government need not necessarily have taken up the responsibility as the obligation to make the payment in accordance with the relevant scales of pay rested primarily with the private managements. However, the Government at that point of time thought it fit to relieve the managements of such a burden. What political or ethical considerations compelled the Government to take such a decision cannot be speculated now, but it is worthwhile to point out that the tenor of the above Memorandum clearly indicates that even such a responsibility assumed by the Government was, subject to a ceiling of Rs. 3 Crores for that particular year.
3. The authorization given in Para 2 above is however subject to the condition that the expenditure on release of grants during the current year, including new schools to be admitted to aid should not exceed Rs. 3.00 crores provided in the Current year's budget.
It is also worthwhile pointing out that the Memo came to be issued in the context of only grants-in-aid to primary, upper primary and secondary schools. It was not in respect of grants-in-aid to the colleges and other educational institutions.
12. In the year 1971, the Andhra Pradesh Intermediate Education Act (Act 2 of 1971) came to be passed by which a system of "Intermediate Examination" came to be introduced. It is an examination conducted by the Board created under the said Act. The examination is required to be conducted in accordance with the regulations made under the said Act. Educational institutions called Junior Colleges came into existence and recognized by the said Act as institutions providing for course of study preparing the students for the Intermediate Examination. The expression junior college itself is defined under Section 2(9) of the said Act. With the advent of Junior Colleges, a new class of teachers, junior lecturers came into existence. The Government from time to time started extending financial aid to the junior colleges. One of such junior colleges known as Dr. L.B. Junior College, Visakhapatnam was started in the year 1978. In 1991, the said institution was admitted to grant-in-aid with effect from 16-4-1990. The decision of the Government of Andhra Pradesh admitting the above institution to grant-in-aid was by way of an order in G.O.Ms. 96, dated 14-3-1991. The said G.O. under Clause-5 provided that "all the teaching and non-teaching posts shall be admitted to aid at the minimum of the respective pay scale". This clause came to be challenged in this Court by some of the teaching and non-teaching staff of the above mentioned college. A learned Judge of this Court in K.C. Venkateswarlu v. Govt. of A.P. held that the impugned clause of the above mentioned G.O., was illegal.
13. This decision in our view requires a closer examination. The case of the petitioners (in the above mentioned decision) was that prior to the admission of the institution to grant-in-aid, the petitioners were drawing a salary at a higher rate and by virtue of the condition incorporated in Clause-5 of the G.O. by which the grant-in-aid was extended to the institution in which the petitioners are working, the petitioners would draw a sala lesser than what they were drawing prior to the admission of the institution to grant-in-aid and therefore such a condition is violative of Articles 14, 16 and 21 of the Constitution of India. It is to be mentioned that the respondent (State) urged a specific plea that the Government as a matter of policy took into consideration the salaries payable to each of the employees (teaching and non-teaching) of the institution in question at the minimum of the pay scales applicable to each of those employees and the difference between the actual salary due to the employee in accordance with law and the amount that is being paid by the Government to the institution towards the salaries of the employees is liable to be paid by the management of the private educational institution and the Government cannot be compelled to meet the entire amount representing the salaries of the employees It is also stated that it is the look out of the management to pay salaries and the Government cannot be made liable for the loss if any to the petitioners by virtue of the admission of the institution to grant-in-aid. The grant-in-aid is provided taking into account the economic capacity of the Government and the recommendations of the Grant-in-aid Committee. It is also stated that the service of the petitioners is to be counted as regular service i.e., aided service only with effect from the date of their admission to the grant-in-aid i.e., 16-4-1990. The service rendered prior to 16-4-1990 cannot be taken into account for purpose of fixation of scale of pay as it was purely unaided and the pay cannot be protected. In view of the above, the petitioners are not entitled for any relief. The learned Judge in our respectful view did not decide the issue whether the decision of the Government to extend grant-in-aid to a particular private educational institution involves the legal obligation to meet the entire financial burden representing the salaries of the employees of the private educational institution. On the other hand, the specific plea of the State indicated above went unanswered. The legal obligations of the management of the educational institution was not examined 3. It is also stated that it is the look out of the management to pay salaries and the Government cannot be made liable for the loss if any to the petitioners by virtue of the admission of the institution to grant-in-aid. The grant-in-aid is provided taking into account the economic capacity of the Government and the recommendations of the Grant-in-aid Committee. It is also stated that the service of the petitioners is to be counted as regular service i.e., aided service only with effect from the date of their admission to the grant-in-aid i.e., 16-4-1990. The service rendered prior to 16-4-1990 cannot be taken into account for purpose of fixation of scale of pay as it was purely unaided and the pay cannot be protected. In view of the above, the petitioners are not entitled for any relief much less decided. The learned Judge came to the conclusion that there is a reduction of the pay scale on account of the admission of the institution to grant-in-aid and there was a forfeiture of the service of the employees rendered prior to the admission of the institution to grant-in-aid It is no doubt true that the reduction in the basic pay is on account of statutory order. However, the fact remains that the reduction in basic pay forfeiture the services in an unaided post is not for any fault of the petitioners but on account of grant-in-aid given to the institution.
14. The learned Judge came to the conclusion that the decision of the State to meet only a portion of the financial burden to be incurred by the private management towards the salary of the teachers employed by such educational institutions (as contained in Clause 5 of the G.O., impugned therein) is violative of the principle of equal pay for equal work and therefore by writ of mandamus directed the respondents to revise the scales of pay of the petitioners therein taking into account the service rendered by the petitioners prior to the admission of the institution to grant-in-aid. Subsequently in W.P. No. 31055 of 1977 filed by the Junior College Lecturers Association, Andhra Pradesh and others whereunder they prayed that the service rendered by all the lecturers and other non-teaching staff of the junior colleges, before those colleges were admitted to grant-in-aid should be taken into account for the purpose of fixation of pay and pension and for appointment to the special grade post on the basis of automatic advancement scheme, was allowed except with regard to the relief of pension, following the earlier decision in K.C. Venkateswarlu's case (2 supra). In a short judgment, the learned Judge held as follows:
In this petitioners are seeking the following reliefs (a) that the unaided service should be taken into account for the purpose of fixation of pay; and pension, for appointment to the Special Grade Post on the basis of Automatic Advancement Scheme.
About 2000 petitioners filed this writ petition and before filing the writ petition, they sought leave of the Court to file a single writ petition on behalf of all the writ petitioners. For this purpose WPMP No. 36102 of 1997 was filed. While ordering the said petition, this Court directed the Office to number the writ petition and post for admission.
As regards the relief of pension is concerned, the learned counsel for the petitioners submits that the petitioners may be permitted to make a representation before the competent authority.
Regarding the other two reliefs, it is submitted that this Court in K.C. Venkateswarlu v. Government of Andhra Pradesh and in WA 432/1997, dated 8th September 1997 in held that unaided service should be taken into account for the purpose of fixation of pay and appointment to Special Grade Post under the Career Advancement Scheme. Following the above decision, the writ petition is allowed holding that the petitioners are entitled for counting of their unaided service for fixation of pay and for purpose of promotion to Special Grade posts under the Career Advancement Scheme.
As regards their entitlement for pension, petitioners are directed to make a representation before the competent authority within a period of four weeks from the date of receipt of a copy of this order and the competent Authority is directed to dispose of the same within a period of eight weeks thereafter giving an opportunity of personal hearing to the petitioners.
15. However, the decision of the learned single Judge in K.C. Venkateswarlu's case (2 supra) came to be reversed by a Division Bench of this Court reported in Secretary to Government and Anr. v. K.C. Venkateswarlu (D.B.), while allowing the appeals the Division Bench presided over by Justice AR. Lakshmanan, Chief Justice (as he then was) held:
15. The submission of the learned Counsel for the petitioners is untenable for the reason that college in which the petitioners are working is not the only institution, which was admitted to grant-in-aid. Earlier, vide G.O.Ms. No. 170, Education (CE-11-2) Department, dated 12-7-1990, the Government admitted to grant-in-aid a number of colleges and accorded sanction to pay grant-in-aid not exceeding Rs. 8,14,50,000/-. Subsequently, the Government by the impugned G.O., while admitting 21 junior colleges, including the college in question, accorded sanction for payment of grant-in-aid not exceeding Rs. 1,65,76,105/-, and fixed the date of admission of the college to grant-in-aid from 16-4-1990, and it was further directed that the teaching and non-teaching posts shall be admitted to aid at the minimum of the respective pay scales. Admitting an institution to grant-in-aid, fixing the date of admission of a college to grant-in-aid, and extending the monetary benefit, being a policy decision, the petitioners have no manner of right whatsoever to question such a policy for it is a statewide issue, and hence, the prayer of the petitioners to protect their salary drawn by them in the unaided service, cannot at all be accepted.
16. The learned counsel for the petitioners submits that the petitioners should be allowed the scale of pay with notional benefits taking into account the services rendered by them prior to 16-4-1990. In our opinion, the said contention has no force because the service rendered by the petitioners in the college upto and prior to 16-4-1990 is purely unaided, and therefore, it cannot be counted for the purpose of pay protection. The Government has power to review the grant-in-aid keeping in view its economic capacity and financial position. Therefore, neither the management of the colleges nor the members of the staff working therein, can claim grant-in-aid as a matter of right.
17. The learned single Judge, in our opinion, has erred materially in directing he Government to release grant-in-aid with effect from a date anterior to the date on which the college was admitting to grant-in-aid, and that too not at the minimum scale as contemplated in the G.O., but on the basis of the pay scales which the petitioners were alleged to the drawing on the date when the college was admitted to grant-in-aid. In our opinion, the learned single Judge has not properly noticed the fact that the college concerned was admitted to grant-in-aid, with a condition, Condition No. 5, which states that all the teaching and non-teaching posts shall be admitted to aid at the minimum of the respective pay scales, to which the college accepted and also obtained release of the grant-in-aid. Therefore, it is neither open to the management of the college nor the members of the staff working therein to ask for grant-in-aid from a date anterior to the date of admission of the College to grant-in-aid. The reasoning of the learned single Judge is contrary to the settled position of law.
16. The settled position of law : Various States have been extending financial support to educational institutions which are established and managed by private persons. Such financial assistance came to acquire a popular name known an "grant-in-aid". There does not appear to be any law so far of either the Parliament or of any State dealing with the various aspects of the extension of grant-in-law. The terms and conditions upto which grant-in-aid is extended are mostly contained in executive instructions issued by various States. The legal character of such executive instructions, the rights and obligations (if any) created by such executive instructions were considered earliest by a Constitution Bench of the Supreme Court in State of Assam v. Ajit Kumar Sarma (1 supra). A teacher of a private college, receiving grant-in-aid from the State, affiliated to Gauhati University contested the Lok Sabha election in the year 1962. For that purpose he applied for leave with pay for specific period. The management of the private college granted leave. However, the teacher was defeated in the election and thereafter he reported back to duty. The management of the college permitted him to join service. The Director of Public Instruction, Assam, thought that the permission given to the teacher to rejoin the service was in contravention of certain rules dealing with the Conduct and Discipline of Employees of Aided Education Institutions and therefore did not approve the decision of the management. As a consequence, the management revised its earlier decision to permit the teacher to join service again. The teacher challenged the decision of the management declining to permit him to him the service. The High Court held in favour of the teacher. An appeal by the State to the Supreme Court accepted the finding of the High Court that the rules relied upon by the Director of Public Instructions did not have any statutory force, but mere executive instructions for the purpose of giving grant-in-aid to private colleges. In the said context, the Supreme Court held:
... What grants the State should make to private educational institutions and upon what terms are matters for the State to decide. Conditions of these grants may be prescribed by statutory rules; there is however no law to prevent the State from prescribing the conditions of such grants by mere executive instructions which have not the force of statutory rules. In the present case the Rules have been framed in order to give revised grants to private colleges to enable them to give higher scales of pay etc. to their teachers in accordance with the recommendations of the University Grants Commission. The Rules have been held by the High Court to have no statutory force, and that is not disputed before us. In these circumstances it is clear that the Rules are mere executive instructions containing conditions on which grants would be made to private colleges to implement the recommendations of the University Grants Commission as to pay scales etc. of teachers of private colleges. Where such conditions of grant-in-aid are laid down by mere executive instructions, it is open to a private college to accept those instructions or not to accept them. If it decides not to accept the instructions it will naturally not get the grant-in-aid which is contingent on its accepting the conditions contained in the instructions. On the other hand, if the college accepts the conditions contained in the instructions, it receives the grant-in-aid. If however having accepted the instructions containing the conditions and terms, the college does not carry out the instructions, the Government will naturally have the right to withhold the grant-in-aid. That is however a matter between the Government and the private college concerned. Such conditions and instructions as to grant-in-aid confer no right on the teachers of the private colleges and they cannot ask that either a particular instruction or condition should be enforced or should not be enforced. It is only for the Governing Body of the College to decide whether to carry out any direction contained in mere administrative instructions laying down conditions for grant-in-aid. Further it is open to the Governing Body not to carry out any such instruction which is not based on rules having statutory force, and it will then be naturally open to the State to consider what grant to make. But if the Governing Body Chooses to carry out the instruction, it could hardly be said that the instruction was being carried out under any threat. It is certainly not open to a teacher to Insist that the Governing Body should not carry out the instruction. The rules for the purpose of grant-in-aid being -as in this case - merely executive instructions confer no right of any kind on teachers and they cannot apply to the High Court for a mandamus asking for the enforcement or non-enforcement of the rules, even if indirectly there may be some effect on them because of the grant-in-aid being withheld in whole or in part. Such mere administrative instructions even though called rules are only a matter between the Governing Body and the State through the Director and cannot in our opinion form the basis of a petition for writ under Article 226 by a teacher.
17. The principle laid down in the said decision was followed by the Supreme Court in Cyril E. Fernandes v. Sr. Maria Lydia and Ors. . The appellant before the Supreme Court was a teacher in a school recognized by the Government of Goa, Daman and Diu. As a condition precedent to such recognition, the school was required to comply with the stipulations made in the grant-in-aid code established by the said Government for granting aid to educational institutions. The teacher's services were terminated by the school. Thereupon, the Government decided to withhold a part of the grant-in-aid that was till then being extended to the school as the management of the school had refused to comply with the directions of the State to reinstate the teacher as according to the State, such a termination was in violation of the terms on which the grant-in-aid was extended, i.e., termination should be preceded by an enquiry. The Management challenged the decision before the Judicial Commissioner, Goa, Daman and Diu. One of the questions before the Judicial Commissioner was whether the Code had the force of a Statute. The Judicial Commissioner held that it was a non-statutory code. This finding was not challenged in the Supreme Court. The Supreme Court following the earlier decision came to the conclusion that such non-statutory grant-in-aid code will not confer any right on the teacher. The rights and obligations, if any, arising out of such code are purely between the State and the management of private educational institutions.
18. In Haryana State Adhyapak Sangh and Ors. v. State of Haryana - Judgment dated July 28,1988 in Civil Appeals Nos. 2366-67 of 1988 and Writ Petitions Nos. 91-92 and 551-61 of 1986, the petitioner was an association of teachers of Haryana employed in recognized private aided schools. The petitioner's case was that such "teachers are entitled to parity with the teachers employed in Government schools in the matter of pay scales and other emoluments such as dearness allowance, house rent allowance, city compensatory allowance, medical reimbursement and gratuity, etc."(Para 2 of the Judgment). It is not very clear from the judgment whether it was pleaded that the State owes a legal obligation to render financial assistance to the aided schools to the extent of fully reimbursing the amount required to be paid towards the salary of the teachers.
19. The factual background of the case was that there was a considerable disparity in the emoluments of the teachers employed by the State and the private managements. The Government of India appointed a Commission popularly known as "Kothari Commission" with the object of improving the standards in education in the country. One of the recommendations of the said Commission was that the scales of pay of teachers of the same category, but working under different managements such as Government, local bodies or private organizations should be the same. The State of Haryana declared its intention to implement the said recommendation with effect from 1st December, 1997 and as the difference between the original scales and revised scales was too burdensome for the management of the aided schools, the State of Haryana also decided to meet the entire increased expenditure which should have otherwise been borne by the private managements. The situation continued till 1979. In 1979, there was a revision of the pay scales of teachers working in Government schools in the State of Haryana. But, in the case of the teachers of the private educational institutions such revision took place two years later. Even then there was a complaint that the revised pay scales were less than the pay scales applicable to the teachers in the employment of the State. The State disputed the principle that there should be a parity in the pay scales of the teachers employed by the State and the teachers employed by the private institutions. Dealing with the question, the Supreme Court held:
...We were at one time disposed to ruling on the question whether the responsibility for providing education in schools belongs to the State Government, and therefore whether there is a corresponding responsibility on the State Government to ensure that in aided schools the teachers are entitled to the same emoluments as are provided for teachers in Government schools. We do not, however, propose to enter upon this question in these cases as we are satisfied from the developments which have followed after the hearing on the merits that it would be more appropriate to dispose of these cases by a short order...
However, in the same paragraph, later it was held:
In our opinion, the teachers of aided schools must be paid the same pay scale and dearness allowance as teachers in Government schools for the entire period claimed by the petitioners, and that the expenditure on that account should be apportioned between the State and the Management in the same proportion in which they share the burden of the existing emoluments of the teachers...
and gave certain further directions which from the judgment appear to have been substantially based on a concession by the State, agreeing to reimburse to a certain extent the additional burden that is required to be borne by the private managements.
20. In Haryana State Adhyapak Sangh and Ors. v. State of Haryana -C.M.P. No. 15049 of 1989 in Civil Appeal No. 2366 of 1988, dt. 21st Feb., 1990, the Haryana Teachers Association filed a miscellaneous application praying for the implementation of the directions issued earlier in the judgment referred to supra 7. The question arose whether the earlier decision of the Supreme Court accepted the principle of parity of pay scales between the teachers employed by the State and the teachers employed by the private educational institutions. Answering the question, the Supreme Court held that that at least as far as the salaries and additional dearness allowances are concerned, the parties did not join issue on the question of parity and the dispute was only with reference to parity under certain other heads.
6. These observations show that during the course of hearing before this Court there was no dispute on the matter of parity in the pay scales of teachers employed in aided schools and those employed in Government schools so far as salaries and additional dearness allowance are concerned and the dispute was only on parity in respect of other heads of allowances put forward by the appellants and petitioners before this Court. As regards parity in pay scales and dearness allowance the position has been made clear in the following observations of this Court: (SCC p.573, para 3) In our opinion, the teachers of aided schools must be paid the same pay scale and dearness allowance, as teachers in Government schools for the entire period claimed by the petitioners, and that the expenditure on that account should be apportioned between the State and the management in the same proportion in which they share the burden of the existing emoluments of the teachers.
These observations leave no scope for doubt that this Court has directed that the teachers of aided schools must be paid the same scales of pay and dearness allowance as teachers in Government schools and that the said payment must be made for the entire period claimed by the appellants and the petitioners in these cases. While giving this direction, this Court has also indicated how the expenditure on that account has to be apportioned between the State and the management. In the writ petition which was filed in the High Court by the appellants in Civil Appeal No. 2366 of 1988 prayer (b) (i) was for the following relief:
The members of staff of the non-Government recognised schools be paid salaries at the revised grades with effect from April 1, 1979.
This means that this Court, in the judgment dated July 28, 1988 has directed that the teachers of aided schools were entitled to be paid the same pay scale and dearness allowance, as paid in Government schools with effect from April 1, 1979.
21. Parity in the matter of payment of salaries and other allowances can be achieved by the State by making an appropriate law imposing a legal obligation on the managements of those private educational institutions to pay salaries and other allowances to the teachers on par with the salaries and other allowances paid to the teachers employed by the State. The crucial question was whether the State owes a further obligation to extend necessary financial assistance to the managements of the private educational institutions to comply with their obligations to maintain parity in the matter of payment of salaries and other allowances to the teachers was neither raised nor decided in those two decisions. On the other hand, the Supreme Court on the basis of a concession made by the State to meet a part of the additional burden to be incurred by the private managements issued various directions.
22. The Supreme Court in the above mentioned two decisions in Haryana State Adhyapak Sangh (7 and 8 supra) did not lay down any principle contrary to the principle laid down by the Constitution Bench in Ajit Kumar Sarma's case (1 supra) (that it is upto the State to decide what grant should be made to private educational institutions and upon what terms such grants are to be made).
23. The question whether teachers employed in various recognized aided private schools are entitled to parity of pay scales with their counter parts in Government schools and if they are so entitled whether such schools are entitled to receive grant-in-aid to meet the entire expenditure on that account fell for consideration of the Supreme Court in State of H.P. v. H.P. State Recognised & Aided Schools Managing Committees and Ors. . The Supreme Court held, in the light of the earlier decisions in Haryana State Adhyapak Sangh's case (7 and 8 supra) that the teachers in the aided schools are entitled to parity in the matter of salary, allowances etc., with their counterparts in Government schools. On the question of liability of the State to render financial assistance to the aided private schools, the Supreme Court held that the State is under a constitutional obligation to provide free education to the children till they complete the age of 14 years and therefore in those schools where education is provided to children below the age of 14 years, the State is under an obligation to meet the total expenditure of the schools to that extent. In the said context, the Supreme Court at paras 15 and 16 held as follows:
15. The State of Himachal Pradesh is, therefore, under a constitutional obligation to provide free education to children till they complete the age of 14 years. The obligation does not end thereafter, but it is subject to the limits of its economic capacity and development. Before the High Court and also before this Court, the primary contention raised by the learned counsel for the State of Himachal Pradesh is that the economic capacity specially the financial condition of the Government does not permit the disbursement of full grant to the aided schools as envisaged under the scheme of the Rules. We may examine this contention in the facts of the present case. The writ petition was filed by the respondents before the High Court in the year 1992. A Directory of Educational Institutions in Himachal Pradesh was published by the Government of Himachal Pradesh, Department of Education. The district-wise list of schools - Government and others -has been given in the said directory. The list indicates that there were total of 2163 schools in the State of Himachal Pradesh as on 31 -3-1992. Out of these 2019 were Government schools. The details regarding Middle, High and Senior Secondary schools as given in the said directory are as under:
Name of Middle High Sr. Sec. Total District State: Others State: Others State: Others State: Others Govt. Govt. Govt. Govt. ------------------------------------------------------------------------------------- Total: 1007 54 862 82 150 8 2019 144 -------------------------------------------------------------------------------------
We proceed on the assumption that all the 144 non-Government schools are the aided schools. This Court has authoritatively held that the State is under an obligation to provide free education to the children up to the age of fourteen. We take judicial notice of the fact that, ordinarily, a child in this country joins school at the age of five years. All the children studying in the Middle Schools would be less than fourteen. Therefore, the State Government is under an obligation to provide free education to the children studying in the 54 non-Government Middle Schools. In other words, the 54 Middle Schools are entitled to full grants-in-aid from the State Government. So far as the High and Senior Secondary Schools numbering 90 (82+8) are concerned, the State Government is again under an obligation to provide free education to the children studying in these schools who are fourteen years of age or less. The net result is that even in High and Senior Secondary Schools up to 8th/9th class - the students being 14 or below - the State Government is bound to provide free education and as such bound to meet the total expenditure of the schools to that extent. The large majority of students, in the 144 non-Government schools, being fourteen years of age or below the contention of the learned counsel for the State based on financial constraints, is wholly untenable.
16. The constitutional mandate to the State, as upheld by this Court in Unni Krishnan case - to provide free education to the children up to the age of fourteen - cannot be permitted to be circumvented on the ground of lack of economic capacity or financial incapacity.
24. Insofar as the obligation of the State to provide financial assistance to those educational institutions imparting education to the children beyond the age of 14 years, the Court held at para 17 as follows:
17. It is high time that the State must accept its responsibility to extend free education to the children up to the age of fourteen. Right to education is equally guaranteed to the children who are above the age of fourteen, but they cannot enforce the same unless the economic capacity and development of the State permits the enforcement of the same. The State must endeavour to review and increase the budget allocation under the head 'Education'. The Union of India must also consider to increase the percentage of allocation of funds for "Education" out of the Gross National Product.
25. From an examination of the judgments of the Supreme Court, the settled position of law with regard to the grants-in-aid is that the State is bound to render financial assistance only to those private educational institutions where education is imparted to children upto the age of 14 years. If the State decides to extend some financial assistance to private educational institutions imparting education to children above 14 years, the State has the discretion to decide to what extent such financial assistance would be rendered so long as the State does not discriminate between the private educational institutions falling in the same class. The decision of the State to extend some financial assistance to any educational institution imparting education to children above 14 years does not relieve the management of such private educational institution of its obligations to pay the appropriate salary and other benefits which are either agreed between the management and the employee or imposed upon the management by law.
26. Over a period of time, various Service Associations of the employees of the Government of Andhra Pradesh made representations to the Government that there was a lot of stagnation in the services and that most of the employees were not getting any promotional opportunity and consequential increase in pay. The Government considered these representations and issued orders in G.O.Ms. No. 117, Finance and Planning, dated 25-5-1981. The said order was applicable to the various categories of the employees of the State who were governed by the revised pay scales of the year 1978 enumerated in para (3) of the said Order:
3. These orders shall apply to those who draw pay in the Revised Pay Scales, 1978 up to and including Grade XVII in Schedule I to the Andhra Pradesh Revised Scales of Pay Rules, 1979, and shall cover all categories of personnel i.e., Government employees, non-teaching staff of Zilla Parishads, Panchayat Samithis and Municipalities all other employees of Gram Panchayats, Panchayat Samithis, Municipalities, Zilla Parishads and Zilla Grandhalaya Samsthas, Agricultural Market Committees, non-teaching staff of Aided Schools and Junior Colleges, Non-Teaching Staff of Aided Degree Colleges and Work-charged Establishment who get monthly pay in a regular pay scale in the Revised Pay Scales, 1978.
27. Para 6 of the said order stipulated that on completion of the prescribed period of service the employees to whom the order applied were eligible for appointment to a special grade post or a special temporary promotion post or a special adhoc promotion post in accordance with the scheme appended to the G.O. However, para 5 of the said G.O. specifically excluded teachers working under all managements.
28. Subsequently, in G.O.Ms. No. 164, Finance and Planning, dated 1 -6-1982, orders were issued evolving a separate scheme for teachers working in Government, Local bodies and private aided management schools who were drawing salary in accordance with the revised pay scales of 1978. The scheme was contained in the Annexure to G.O.Ms. No. 164. The scheme is similar to the scheme that was made applicable to the employees of the State under G.O.Ms. No. 117. This scheme came to be called the 'Automatic Advancement Scheme'. The broad features of the scheme are that every teacher to whom the scheme applied was made eligible to higher scale of pay after 10 years of service in a particular scale and teachers who had completed 15 years of service were made eligible for a special temporary promotion etc.
29. Similarly, various G.Os. were issued governing the Junior Lecturers and Lecturers, the details and history of those schemes are elaborated in the Preamble to the Ordinance No. 3 of 2005 in the following words:
And whereas, Government in Memo N0.3866/F2/78-6, Education, dated 10-1-1980, directed the Director of School Education to take into account the increments earned by the employees of Private Aided Educational Institutions in the posts prior to the date of admission to grants-in-aid for the purpose of fixation of pay in the aided post subject to the condition that the staff are qualified and increments sanctioned are in accordance with the rules in force.
And whereas, Government in G.O.Ms. No. 117, Finance and Planning (FW.PRC.I) Department, dated 25-5-1981 have formulated a scheme of Advancement in service by the creation of Special Grade Posts to employees who have completed ten years of service in a particular scale of pay and Special Temporary Promotion Posts/Special Adhoc Promotion Post to employees who have completed fifteen years of service in particular scale of pay and the benefit of the scheme has been extended inter alia to the teachers working under private aided educational institutions in G.O.Ms. No. 164, Finance and Planning (F.W.PRC.I) Department, dated 1-6-1982.
And whereas, Government in G.O.Ms. No. 137, Education Department, dated 15-2-1982, created a new Grade for Junior Lecturers in the Pay scale of Rs. 1050-1600 on completion of seven years of service.
And whereas, Government in Memo No. 9279/Ser.lV-1/86-4, Education, dated 6-1 -1987 clarified that the service rendered prior to admitting a post to grants-in-aid does not count for Automatic Advancement Scheme.
And whereas, Government in G.O.(P) No. 2, Finance and Planning (FW.PRC.I) Department, dated 4-1 -1988 liberalised the Scheme of Advancement in service by creating another level of Automatic Advancement by creating Special Promotion Post II/Special Adhoc Promotion Post II on completion of twenty two years of service in a particular scale of pay and the benefit of the said scheme has been extended inter alia scheme has been extended inter alia to the teachers working under private aided educational institutions in G.O.Ms. No. 347, Finance and Planning (FW.PRC.I) Department, dt. 17-11-1989.
And whereas, Government, in G.O.Ms. No. 343, Education Department, dated 31-10-1989 inter alia extended the said Schemes to the Junior Lecturers;
And whereas, Government in G.O.Ms. No. 520, Education Department, dated 15-12-1988 extended the Career Advancement Scheme inter alia to the teachers of the aided colleges;
And whereas, Government in G.O.Ms. No. 169, Education Department, dated 7-7-1990, issued guidelines on the Career Advancement Scheme;
And whereas, in G.O.Ms. No. 41, Education (U.E.II) Department, dated 11 -2-1998, it has been clarified that for the purpose of computing the service to the Career Advancement Scheme of 8 years, 16 years, the service rendered prior to the admission of the post to grant-in-aid shall not be taken into account;
And whereas, Government in G.O.(P) No. 290, Finance and Planning (FW.PRC.I) Department, dt. 22-7-1993 modified the automatic advancement scheme by creation of Special Grade Scale on completion of eight years of service in particular scale of pay and Special Promotion Posts/Special Adhoc Promotion Posts on completion of sixteen years of service and an employee gets and increment in the Special Adhoc Promotion Post Scale or Special Adhoc Promotion Scale on completion of twenty four years of service and the said modified scheme has been extended to the teachers and Junior Lecturers, in G.O.(P) No. 311, Finance and Planning (FW. PC.II) Department, dated 20-8-1993 and G.O.Ms. No. 382, Finance and Planning (FW.PC.II) Department, dt. 16-11-1993 respectively. The Automatic Advancement Scheme was continued in the Revised Pay Scales of 1999 in G.O. (P) No. 150, Finance and Planning (FW.PC.II) Department, dt. 1-9-1999;
And whereas, the said schemes are formulated for the employees serving and drawing the pay from out of the State Fund;
And whereas, application of the said Schemes to the Employees of the private aided educational institutions shall have to be made from the date of the admission of the posts to grant-in-aid;
And whereas, the service rendered by the employee of the private educational institution prior to the date of admission into grant-in-aid was also taken into consideration for the purpose of Automatic Advancement Scheme, Career Advancement Scheme and Pension by an unintended interpretation of the clarification issued in Memo No. 3866/F2/78-6, Education, dated 10-1-1980, which was issued with the intention of fixation of pay only while admitting the posts into grant-in-aid.
30. With the issuance of these various G.Os., various legal complications arose from time to time. Whether for the purpose of conferring the benefits contemplated under these various schemes, the service rendered by an employee (a teacher or a member of non-teaching staff) prior to the point of time when the educational institution in which he was working was admitted to grant-in-aid (hereinafter referred to as 'unaided service' for the sake of convenience) should be taken into consideration fell for the consideration of this Court. The Government in Memo No. 9279/Services-1 V. 1/86-4, dated 6-1 -1987 opined that for the purpose of conferring the benefit of Automatic Advancement Scheme propounded under G.O.Ms. No. 164, referred to earlier, only service rendered by the employee of a private aided educational institution from the date such an institution was admitted to grant-in-aid (hereinafter referred to as 'aided service' for the sake of convenience) could be taken into consideration. This decision of the Government was challenged. A learned Judge of this Court in N. Hanumantha Rao v. Government of Andhra Pradesh 1994 (2) SLR 590 held that the unaided service must also be taken into consideration for the purpose of computing the eligible service for granting the benefit of the above mentioned scheme.
7. In view of the said Memorandum No. 3866 of the Government dated 10-1-1980, there can be no doubt that the service rendered by the petitioners in the posts prior to their admission to aid will have to be taken into account for the computation of 10 years of service for the purposes of their eligibility to Special Grade Posts....
The learned Judge rested his conclusions purely on the basis of the language of the order of the Government.
31. Subsequent to the decision of this Court in N. Hanumantha Rao's case (10 supra), a number of writ petitions came to be filed in this Court by the employees of various private educational institutions claiming the benefits under the Automatic Advancement and Career Advancement Scheme and those writ petitions were allowed by this Court following the decision in N. Hanumantha Rao's case (10 supra). Various directions were issued by this Court in those writ petitions on the basis of the decision in N. Hanumantha Rao's case (10 supra). Complaining that those various directions were not complied with a batch of contempt cases came to be filed in this Court which came to be disposed of by a common order of a learned Judge in this Court reported in M.V. Subrahmanyam v. M.V.P.C. Sastry, Education Department, Hyderabad . During the pendency of the contempt cases, the State of Andhra Pradesh promulgated a retrospective Ordinance called the Andhra Pradesh Private Aided Educational Staff (Regulation of Pay) Ordinance, 9 of 1999 (Ordinance 9 of 1999- Section 2. Every employee of Private Aided Educational Institution shall, from the date of approval of his appointment in a post duty admitted to grant-in-aid be eligible to count his service rendered after such date of approval for fixation of his pay and also his Pension under the schemes formulated, made applicable or extended to the employees of Private Aided Institutions from time to time.
3.(1) Notwithstanding anything contained in any rule, order, decree or any judgment of any Court, Tribunal or other authority, no employee of a Private Aided Educational institution shall claim to count the service rendered, or as the case may be, the increments drawn in the respective post prior to the date of approval of his appointment in the post duly admitted to the grant-in-aid for the purpose of Automatic Advancement Scheme, Career Advancement Scheme and Pension.) with effect from 10-1 -1980. The substance of the Ordinance was that no employee of a private educational aided institution can claim that the unaided service rendered by him be counted for the purpose of fixation of either the pay or pension or for extending the benefit under various schemes like Automatic Advancement Scheme, Career Advancement Scheme etc. The State resisted the contempt cases on the ground that the Legislature had taken away the legal basis on which the judgments in the various writ petitions came to be rendered and as the Executive is bound by the Legislative mandate and therefore cannot implement the directions given by this Court in various writ petitions.
32. The learned Judge rightly posed the question at para 6 of the judgment as follows:
6. The question that arises for consideration is whether the contempt cases could be proceeded with in the wake of Ordinance dated 27-6-1999 and whether the respondents have deliberately violated the Orders of this Court?
and came to the conclusion that the Ordinance in question did not cover the Automatic Advancement Scheme and therefore held at paras 22 and 23:
...Therefore, it has to be necessarily held that Ordinance is not applicable to the automatic advancement scheme. When once the Ordinance is not applicable to the case on hand, the judgment of this Court has to be implemented and the shelter under the penumbra of the Ordinance is no more available.
23. Under these circumstances, the Contempt Cases are disposed of with a direction that respondents shall implement the orders of this Court in the aforesaid writ petitions within a period of three months from the date of receipt of a copy of this order.
33. The logic adopted by the learned Judge for reaching the conclusion extracted earlier in our very respectful view is strained and not in accordance with established principles of the Interpretation of Statutes. While Section 2 declares that the unaided service rendered by an employee of a private aided educational institution shall not be taken into consideration for the purpose of the fixation of the pay and pension of such employee, Section 3 debars the claim of an employee of a private aided educational institution for the benefits of Automatic Advancement Scheme, Career Advancement Scheme and Pension taking into account the unaided service rendered by him. The learned Judge drew an artificial distinction between Sections 2 and 3 and held that Section is an "enacting provision" which did not make any reference to either the career advancement scheme or the automatic advancement scheme and came to a conclusion that therefore the reference to the career advancement scheme and the automatic advancement scheme occurring in Section 3 must be ignored. The relevant paras of the judgment read as follows:
20. Section 2 is enacting provision bringing the criteria for entitlement to pension and pay fixation retrospectively. The non-obstante clause is enacted in Section 3. There is always close proximation between enacting section and non-obstante clause. If the enacting statute is clear and unambiguous, its scope cannot be cut down or enlarged by resort to non-obstante clause (See: H.S. Raghunath v. State of Karnataka , and Dominion of India v. Shrinbai A. Irani . The Supreme Court further held that enacting part of the statute must, where it is clear, be taken to control the non-obstante clauses where both cannot be read harmoniously (See : Union of India v. Thamisharabi 1995 (3) SCALE 72.)
21. The expression in Section 2 is very clear and admits of no ambiguity that it applies to the pension under the schemes and also pay fixation.
22. When once Section 2 did not cover the automatic advancement scheme/ career advancement scheme, the criteria under Section cannot be made applicable. Consequently, Section 3 cannot embrace the automatic advancement scheme and it shall be deemed that the Ordinance was confined only to pay fixation and pension. Even though Section 3 refers to the automatic advancement scheme it has to be ignored as Section 2, the principal criteria laying section did not include these schemes. As already observed the scope of enacting section cannot be curtailed or widened by the non-obstante clause, what was not added in the enacting section, cannot be provided by the non-obstante clause.
34. The cardinal principle of the Interpretation of the Statutes is that no part of the Statute can be ignored and statute must be read as a whole to understand the scheme of the Statute. It was held by the Supreme Court in Aswini Kumar Ghorabinda Bose as under:
It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute.
In Rao Shiv Bahadur Singh v. State of U.P. it was held that It is incumbent on the Court to avoid a construction, if reasonably permissible on the language, which would render apart of the statute devoid of any meaning or application.
In J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of U.P. , it was held that In the interpretation of statutes, the Courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect.
If really there is any conflict between the various provisions of the Statutes laying down mutually destructive rights or obligations as the case may be, Courts are required to resort to the principle of harmonious construction of those various provisions in order to give effect to the basic scheme of the Act. The Legislature is deemed not to waste its words or to say anything in vain Quebec Railway, Light, Heat & Power Co. v. Vandry MB 1920 P.O. 181 and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons.
35. In our view, Section 2 of the Ordinance dealt with the aspect of the fixation of pay and pension of an employee of the private aided educational institution and the criterion that is required to be taken into consideration for the purpose of the fixation of pay and pension. Section 3 on the other hand dealt with the rights of an employee of a private aided educational institution to claim the benefit of automatic advancement scheme, career advancement scheme and pension taking into account the unaided service rendered by such an employee. Both the Sections deal with different aspects of the service of the employees of the private aided educational institutions. We do not see any overlapping of the areas of operation of the above mentioned two sections nor any conflict in their operation. We therefore see no compelling reasons for attributing redundancy to legislature to ignore the language of Section 3 and come to a conclusion such as the one reached by the learned Judge. However, it makes no difference to-day as the said Ordinance (which later was replaced by Act No. 9 of 2000) itself is repealed under the present impugned Ordinance 3 of 2005. We would not have embarked upon an examination of the correctness of the judgment as we are conscious of the fact that we are not sitting in appeal over the judgment but we feel compelled to do so since the Ordinance examined by the learned Judge and the present impugned Ordinance are substantially similar and operate on the same field and therefore normally the logic adopted by the learned Judge is persuasive while considering the constitutionality of the Ordinance impugned herein.
36. Ordinance No. 9 of 1999 was replaced by Act No. 9 of 2000 which came to be challenged in W.P. No. 3002 of 2001 and batch. It appears from the pleadings that when the matters came up for hearing before a Full Bench of this Court on 26-7-2001, the Advocate General placed a letter dated 25-7-2001 addressed to him by the Government indicating that the said Act would be implemented prospectively with effect from 25-4-2000 instead of 10-1-1980. It is to be mentioned here that Section 1(2) of the said Act stipulated that the Act shall be deemed to have come into force with effect from 10-1-1980. However, in view of the undertaking, the Full Bench disposed of the batch of writ petitions by a short order as follows:
When the cases were called, Sri D. Prakash Reddy, Learned Addl. Advocate General placed before us a letter bearing No. 9968/PS-1/2001, dated 25-7-2001, addressed to him by the Secretary to Government, Education (S.C. Department) wherein inter alia in para 5 it is stated:
Government therefore decide to implement the Act 9/2000 with prospective date i.e., from 25-4-2000 instead of 10-1-1980 and necessary amendment to the Act 9/2000 will be issued separately at the appropriate time.
Having regard to the fact that the State Government itself has taken a decision to implement Act 9 of 2000 with prospective effect i.e., from 25-4-2000 instead of 10-1-1980. We are of the opinion that the validity or otherwise of the Act 9 of 2000 need not be gone into.
By reasons of the aforementioned Act, the period of service of the concerned Teacher in unaided institution was not to be reckoned for the purpose of Automatic Advancement Scheme/ Career Advancement Scheme/pension. It is accepted at the Bar that in relation to some teachers, the Automatic Advancement Scheme/Career Advancement Scheme/pension has already been granted, but in relation to some others the said benefit has been denied. Having regard to the statement made by the learned Additional Advocate General, we have no doubt whatsoever that in terms of the aforementioned letter, all teachers would be treated equally irrespective of Act 9 of 2000.
With the observations, as aforementioned the writ petitions are disposed of. No costs.
37. Subsequently, in apparent compliance with the undertaking, the State made Act No. 5 of 2002 by which Sub-section (2) of Section 1 was omitted thereby making Act No. 9 of 2000 prospective from 25th April, 2000. Notwithstanding such an amendment, the State did not make the payments as directed by the various earlier judgments of this Court. Once again, a Contempt Case No. 172 of 2003 came to be filed. The matter was once again taken up by a Full Bench of this Court. The State placed G.O.Ms. No. 32, dated 5-4-2004. The Full Bench placing reliance on para 6 of the said G.O. disposed of the contempt case by a short order which reads as follows:
Heard learned counsel for the parties. This contempt case has been filed, as according to the petitioners, the respondents have not implemented the judgment in W.P. No. 3368 of 2001 and batch. The respondents have placed on record a G.O.Ms. No. 32, dated 5-4-2004 and para-6 of this G.O. reads as under, Accordingly, the Government hereby accord sanction for implementation of Act 5 of 2002 to the Teaching and Non-Teaching staff working in aided private Junior Colleges/Degree Colleges for the purpose of pension and Automatic Advancement Scheme provided the candidates were appointed as per the rules following the procedure and subject to the condition that the monetary benefit shall be only prospective.
The learned counsel for the petitioners submits that in terms of the judgment of this Court in addition to what has been granted to the petitioners, they were entitled to pay fixation after counting the service put by the petitioners on unaided post, which has not been done. The learned Government Pleader for Higher Education submits that although it is not specifically stated in the G.O., but for fixation of pension the pay will have to be fixed by granting increments from the date of initial appointment as against unaided post and this exercise shall be completed within a period of four weeks. In view of this submission by the learned Government Pleader for Higher Education, we do not think any purpose will be served by keeping this contempt case on board, which is accordingly disposed of. No costs.
38. Thereafter, a lot of correspondence took place between the Government and its various functionaries in a bid to assess the financial implications of implementing the Act No. 9 of 2000 prospectively, the details of which do not lend any assistance (in our view) for resolving the issues involved in the present case. The State of Andhra Pradesh, however, came up with one more Ordinance No. 3 of 2005 which is challenged in W.P. No. 8697 of 2005.
39. The petitioners challenged the present Ordinance principally on two grounds: (1) that the Ordinance annuls the various judgments of this Court where under this Court directed that the unaided service rendered by the teaching and non-teaching staff of the various private aided educational institutions, be counted for the purpose of conferring benefits under various schemes like automatic advancement scheme, career advancement scheme and also for the purpose of computing the pensionary benefits as and when such employees of the private aided educational institutions retire; (2) that the exercise of the power to promulgate an Ordinance retrospectively denying the benefit of the unaided service is a fraud on the power of contempt of this Court.
40. On the other hand, the learned Advocate General appearing for the State argued that the Ordinance did not nullify the judgments of this Court as it is well settled that the Legislature can never nullify the judgments of any Court. He submitted that the Ordinance only purports to take away the legal basis on which the various judgments of this Court came to be rendered directing that the unaided service be also counted for the purpose of conferring the benefits contemplated under the various schemes referred to earlier in this judgment and elaborated in the Preamble to the Ordinance.
41. Coming to the second submission of the petitioners, the learned Advocate General submitted that no doubt an undertaking was given by the Executive Government before the Full Bench of this Court earlier that the provisions of Act No. 9 of 2000 would be implemented prospectively with effect from 25-4-2000 and as a matter of fact, necessary steps were taken to amend the Act No. 9 of 2000 to make it prospective, but on a re-examination of the issue and having regard to the financial implications involved in implementation of the Act prospectively, the State thought it fit to abrogate its legal obligations created under the various Government orders enumerated in the Preamble to the Ordinance and therefore a legislative decision was taken to overrule the undertaking given by the Executive before a Full Bench of this Court. He submitted that Legislature can never be attributed fraudulent intentions.
42. Before we examine the various rival submissions, we deem it appropriate to notice the scheme of both Act No. 9 of 2000 and Ordinance No. 3 of 2005.
43. The relevant portion of Act No. 9 of 2000 reads as follows. Sections 2 and 3(1) of the Act are identical to the corresponding provisions of the Ordinance No. 9 of 1999 which are already noticed earlier. The other provisions of the Ordinance read:
Section 3(2) No Suit or any other proceedings shall be maintained or continued in any Court against the Government or any person or authority whatsoever for extending the benefit of Automatic Advancement Scheme, Career Advancement Scheme and Pension by reckoning the service rendered by any employee of Private Aided Educational Institutions prior to the date of approval of appointment in a post duly admitted to grant-in-aid.
(3) No Court shall enforce any decree or order directing to count the service rendered in any unaided or aided post prior to the date of approval of his appointment in a post duly admitted to grant-in-aid for the purpose of the extending the Automatic Advancement Scheme, Career Advancement Scheme and Pension.
4. The Andhra Pradesh Private Aided Educational Staff (Regulation of Pay) Second Ordinance, 1999 is hereby repealed.
44. Under Section 2, an employee of a Private Educational Institution is declared to be eligible to have his service, rendered after approval of his appointment in a post duly admitted to grant-in-aid (aided service), counted for the purpose of fixation of his pay and also Pension. Section 3(1) bars the claim, of any employee of a Private Aided Educational Institution, that the unaided service rendered by such employee be counted for the purpose of Automatic Advancement Scheme, Career Advancement Scheme and Pension. Sub-sections (2) of Section 3 purport to oust the jurisdiction of Courts to take into account the "unaided service"(now a defined expression under Section 2(7) of the Ordinance) of an employee of a Private Educational Institution while adjudicating a dispute regarding the extension of the benefit of Automatic Advancement Scheme, Career Advancement Scheme and Pension, and Sub-section (3) purports to oust the jurisdiction of the Court to execute any Decree or Order passed in any adjudication falling under Sub-section (2). One salient feature of Act 9 of 2000 is that it does not contain any definitions.
45. Coming to Ordinance 3 of 2005; Sub-section (2) of Section 1 creates a legal fiction making the Ordinance retrospective with effect from 10th January 1980. Section 2 contains definitions, which read as follows:
(1) "Aided post" means a post in a Private Educational Institution admitted to grant-in-aid.
(2) "Automatic Advancement Scheme" means higher scales granted to employees after completion of specified period of service in a post.
(3) "Career Advancement Scheme" means higher scale granted to a lecturer working in a college after completion of specified period of service in the post.
(4) "Government" means State Government of Andhra Pradesh.
(5) "Grant-in-aid: means any sum of money paid as aid out of State Funds to any post in a Private Educational Institution.
(6) "Private Aided Educational Institution" means a School or College established and administered or maintained by any Body of persons and recognized as Educational Institution by the Government and receiving grant-in-aid.
(7) "Unaided Service" means service rendered by an employee of Private Educational Institution in a post prior to date of admission to grant-in-aid.
3. Notwithstanding anything contained in any order of the Government or any judgment of any Court or Tribunal, every employee of a Private Aided Educational Institution, shall, from the date of approval of his appointment in an aided post, be eligible to count the service rendered after such date of approval, for fixation of pay in the said post and Automatic Advancement Scheme, Career Advancement Scheme, Pension made applicable or extended to such employee from time to time.
4. Notwithstanding anything contained in any order of the Government or any judgment of any Court or Tribunal, the claims of employees of the Private Aided Educational Institutions for counting the service rendered, or as the case may be, the increments drawn in the post prior to the date of approval of their appointment in a post to grant-in-aid, for the purposes of fixation of pay in the Aided Post, reckoning for Automatic Advancement Scheme, Career Advancement Scheme and Pension shall stand extinguished from the date of commencement of this Ordinance and accordingly, -
(1) The orders issued by the Government directing to take into account the increments earned by an employee of Private Aided Educational Institution prior to the date of admission of post to grant-in-aid for the purpose of fixation of pay in the aided post shall stand cancelled:
Provided that any amount paid as per the orders now cancelled shall not be recovered.
(2) No suit or other proceedings shall be maintained or continued in any court against the Government or any person from authority whatsoever by any employee of Private Aided Educational Institution claiming for extending the benefit of unaided service rendered in a post for the purposes of fixation of pay in the Aided Post, reckoning for Automatic Advancement Scheme, Career Advancement Scheme or Pension.
(3) No Court shall enforce any decree or directing to count the service rendered by any employee of Private Aided Educational Institutions in any post prior to the date of admission to grant-in-aid for the purposes of fixation of pay in the aided post reckoning for Automatic Advancement Scheme, Career Advancement Scheme and Pension.
In our view, the present Ordinance is the product of confluence of Executive errors and judicial pronouncements consequent on such executive errors.
46. Establishment of a private educational institution is a voluntary act of either individuals or association of individuals who choose to establish and manage a private educational institution. For a long time, it was believed that State owes no legal obligation to render any financial assistance to private educational institutions, a belief which is reflected in the Division Bench judgment of this Court in Secretary to Government v. K.C. Venkateswarlu [supra - (D.B.)]. The consequence is that if the State decides to extend any financial assistance to any particular private educational institution or a class of private educational institutions, it is a policy choice of the State. It goes without saying that such a policy can vary from time to time.
47. The statutory provisions insofar as the State of Andhra Pradesh is concerned which deal with the extension of financial assistance are to be found only in Chapter VIII of the Andhra Pradesh Education Act, 1982 which deals with "Grant-in-aid". The expression "grant-in-aid' is defined under Sub-section (22) of Section 2 of the said Act which reads as follows:
(22) "grant" or "grant-in-aid" means any sum of money paid as aid out of State funds to any educational institution;
Sections 42 to 47 occur in Chapter VIII. Section 42 stipulates that the Government shall set apart a sum of money annually for being given as grant-in-aid to the various institutions run by either private bodies or local authorities (Chapter VIII - Grant-in-aid - Sec. 42. Government to set apart sum for giving apart-in-aid to certain recognized institutions - The Government shall, within the limits of its economic capacity, set apart a sum of money annually for being given as grant-in-aid (hereinafter in this Act referred to as grant) to local authority institutions and private institutions in the State, recognized for this purpose in accordance with rules made in this behalf.) It can be seen from the language of this Section that such obligation is not absolute, but is subject to the limits of the economic capacity of the State. The extension of such grant is an annual affair. Therefore, for each year, the economic capacity of the State is required to be assessed by the Government and set apart a certain sum of money for being given as 'grant-in-aid'. There may be innumerable considerations in arriving at the sum that is to be set apart towards grant-in-aid like the revenue of the State for a particular year, the several priorities of the State for the year, the demand of various institutions seeking financial assistance, the justification for such demand with reference to each of the educational institutions, the working conditions of the employees of private educational institutions etc. The above mentioned factors are only illustrative of the factors that may legitimately be taken into account by the Government from year to year while setting apart money towards the grant-in-aid programme. In fact, Section 46 expressly recognizes such a possibility. Under Section 46(1), the Government is empowered to withhold, reduce or withdraw any grant payable to an educational institution having regard to the funds at the disposal of the Government or the conduct and efficiency and financial condition of such institution (Section 46. Power of Government to withhold, reduce or withdraw grant:-(1) Notwithstanding anything in this Chapter, the Government may, after such enquiry as they may deem fit, withhold, reduce or withdraw any grant payable to an educational institution having regard to the funds at the disposal of the Government or the conduct and efficiency and the financial condition of such institution, after giving an opportunity to the manager of the institution concerned of making a representation against such withholding, reduction or withdrawal).
48. The principle that no private educational institution or an employee of an educational institution has a legal right to compel financial assistance by the State is recognized by the Supreme Court in Ajit Kumar Sarma's case (supra 1) -"... What grants the State should make to private educational institutions and upon what terms are matters for the State to decide." However, we have already noticed that an exception to this principle came to be recognized in State of H.P. v. H.P. State Recognised & Aided Schools Managing Committees and Ors. (supra 8) wherein the Supreme Court categorically held that insofar as the educational institutions which impart education to children below 14 years of age are concerned, the State owes a constitutional obligation to substantially reimburse the management of such schools.
49. With reference to educational institutions other than those imparting education to children below 14 years, the State owes no legal obligation to extend financial assistance either partially or wholly. If the State renders such assistance in any particular year that is a policy choice of the State for the particular year and the State in our view cannot be compelled to continue the assistance for ever to an educational institution which had received some assistance.
50. The above being the correct legal position as we understand, the decision of the learned single Judge in K.C. Venkateswarlu's case (2 supra) in coming to the conclusion that there was a reduction of the pay of the employees of a junior college (we can take judicial notice of the fact that in the State of Andhra Pradesh, children attending the junior colleges and other colleges are above the age of 14 with rare exceptions) by virtue of the extension of grant-in-aid is wholly unjustified. The learned Judge ignored the fact - inspite of a specific pleading by the State - that it was basically the obligation of the Management to pay the salary in accordance with law and failed to see that the State's decision to render some financial assistance to the management does not in any why alter the legal obligations of the employer. However, the decision stood reversed in appeal by the Division Bench. Therefore, the obligation of the State to provide grant-in-aid by fully reimbursing the private aided educational institutions as laid down by the learned single Judge in K.C. Venkateswarlu's case (2 supra) stood obliterated by the judgment of the Division Bench in Secretary to Government and Anr. v. K.C. Venkateswarlu (5 supra). All the subsequent decisions of this Court in various writ petitions whereunder similar claims of the writ petitioners were accepted placing reliance on the judgment of the learned single Judge in K. C. Venkateswarlu's case (5 supra) are obviously erroneous decisions.
51. We already noticed the 1st decision of this Court which dealt with this issue the unaided service also to be taken into consideration for the purpose of extending the benefit either under the Career Advancement Scheme or Automatic Advancement Scheme is reported in N. Hanumantha Rao's case (10 supra).
52. These schemes popularly called the 'Career Advancement Scheme' and 'Automatic Advancement Scheme' were formulated by the State of Andhra Pradesh primarily for benefiting the employees of the State. The Career Advancement Scheme initially came to be propounded in G.O.Ms. No. 117, Finance and Planning (FW.PRC.I) Department, dated 25-5-1981. The substance of the scheme is that the employees who complete 10 years of service in a particular scale of pay are made eligible to a Special Grade Post carrying a higher scale of pay. The benefits of the said scheme were extended to teachers working in private aided educational institutions by G.O.Ms. No. 164, Finance and Planning (F.W.PRC.I) Department, dated 1-6-1982.
53. Apparently in a bid to avoid the unrest resulting from stagnation in Government service, this scheme was evolved by the State which was further liberalized by G.O. (P) No. 2, Finance and Planning (FW.PRC.I) Department, dated 4-1-1988 by creating another level of Automatic Advancement which scheme was later extended to the private aided educational institutions in G.O.Ms. No. 347, Finance and Planning (FW PRC.I) Department, dated 17-11-1989.
54. These schemes were extended to Junior Lecturers, a new cadre created in G.O.Ms. No. 137, dated 15-2-1982. This extension was by G.O.Ms. No. 343, Education Department, dated 31-10-1989. The benefit of the said schemes was further extended to the teachers of the aided colleges.
55. It must be remembered that all the schemes were the product of the exercise of the executive power of the State. Assuming for the sake of argument, such orders did create an obligation on the Government to meet the financial commitment arising out of such schemes, such a decision by the Executive can always be disapproved by the Legislature and any judgment of a Court including this Court which declared the rights on the basis of the executive orders, would conferm either greater sanctity nora legislative status to executive instruments. In the various judgments of this Court starting from N. Hanumantha Rao's case (10 supra), this Court only declared the legal rights of the parties before the Court qua executive orders. The legal obligations of the State to extend the necessary financial assistance to the educational institutions to which those schemes were made applicable was never at issue and this Court never decided the said question. However, in our view, those schemes did not create any legal obligation on the State to extend the financial assistance to meet the expenditure to be incurred by the managements of the private aided educational institutions on account of the implementation of those schemes. Those schemes only declared the entitlement of the employees for certain higher scales on the completion of the qualifying service. Necessarily those schemes impose obligations on the employers (private educational institutions) to pay salaries at such higher scales for all the eligible employees. Nothing is brought to our notice either from the language of any one of those schemes or any other law which create legal obligation on the State to render financial assistance to the private educational institutions to meet the expenditure to be incurred by virtue of the application of those various schemes. As we have already pointed out, everybody concerned i.e., the State, the employers and the employees continue to believe that the State would take the whole financial obligation. In order to get over the situation resulting from such decisions, the State claims to have promulgated the impugned Ordinance.
56. Even to-day the State does not take a clear stand on the matter. It somehow wants to get over the recurring financial liability arising out of such mistaken understanding of the legal position. Hence the present impugned Ordinance. The schemes propounded by the various G.Os. referred to earlier are not terminated by the present impugned Ordinance. The impugned ordinance recognizes the continued existence of those schemes.
57. If the Legislature decides to abrogate rights created by the various Government orders, in our view, the Legislature exercises an eminently available power. The Legislature cannot be said to be sitting in judgment over the decisions of this Court. The Legislature in such cases is merely disapproving the decisions of the Executive found in the various Government orders issued earlier, thereby removing the basis of the various judgments of this Court which came to be rendered placing reliance on those Government orders.
58. Such an exercise, in our view is constitutionally permissible. The law is well settled in this regard. Retrospective Legislation is a constitutionally approved legislative process. Whenever, the legislature decides to alter the existing rights and obligations of the subjects, the legislature resorts to legislative action. The rights and obligations which are sought to be altered may be creations of a contract, subordinate legislation, custom or of prior legislation. The Constitution does not prohibit retrospective alteration of such rights and obligations by an appropriate legislative action. The limitations known to constitutional law on such legislative action are that the Legislature must have the necessary competence - in the context of a Federal Constitution like the Indian Constitution - the field of legislation is assigned by the Constitution to the Legislature and such retrospective legislation does not offend any of the provisions of the Constitution.
59. The fact that the rights and obligations of the parties sought to be governed by the retrospective legislation stood adjudicated in accordance with the law applicable to the parties on the date of the adjudication does not per se debar the Legislature from resorting to retrospective legislation for altering such rights and obligations if it is otherwise constitutionally permissible. The mere fact that the legislation has the effect of nullifying the rights declared by the Courts of the parties-sought to be governed by the retrospective legislation does not amount to encroachment upon the judicial power of the State by the Legislature. It is a well settled principle of law that Courts only declare the rights and obligations of the parties litigating before the Courts whether such rights are based on a custom, contract or legislation including subordinate legislation. Courts do not create rights. They only recognize and declare the rights of the litigants whatever be the source of such rights and obligations. See I.N. Saksena v. State of M.P. I.N. Saksena v. State of M.P. :
21. The distinction between a "legislative" act and a "judicial" act is well known, though in some specific instances the line which separates one category from the other may not be easily discernible. Adjudication of the rights of the parties according to law enacted by the legislature is a judicial function. In the performance of this function, the Court interprets and gives effect to the intent and mandate of the legislature as embodied in the statute. On the other hand, it is for the legislature to lay down the law, prescribing norms of conduct which will govern parties and transactions and to require the Court to give effect to that law.
22. While, in view of this distinction between legislative and judicial functions, the legislature cannot be a bare declaration, without more, directly overrule, reverse or override a judicial decision, it may, at any time in exercise of the plenary powers conferred on it by Article 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law on a topic within its legislative field fundamentally altering or changing with retrospective, curative or neutralizing effect the conditions on which such decision is based. As pointed out by Ray, C.J. in Indira Nehru Gandhi v. Raj Narain 1975 Supp. SCC 1 - the rendering ineffective of judgments or orders of competent Courts and Tribunals by changing their basis by legislative enactment is a well-known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment on judicial power.
60. Retrospective legislation is a frequent practice in the field of the Law of Taxation. The Legislature occasionally resorts to retrospective legislation seeking to validate a levy of collection of tax which had already been declared to be illegal. Such validating acts have been upheld by the Courts provided such acts are otherwise constitutionally permissible. The various decisions in the context of the Statute retrospectively validating the levy and collection of the tax were considered by the Supreme Court in P.C. Mills Ltd. v. Broach Borough Muni and the Supreme Court held at para 4 as under:
4. Before we examine Section 3 to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. When a Legislature sets out to validate a tax declared by a Court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the Legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a Court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the Legislature gives its own meaning and interpretation of the law under which tax was collected and by legislative fiat makes the new meaning binding upon Courts. The Legislature may follow any one method or all of them and while it does so it may neutralize the effect of the earlier decision of the Court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the legislature and legal and adequate to attain the object of validation. If the Legislature has the power over the subject-matter and competence to make a valid law, it can at anytime make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a Validating Law, therefore, depends upon whether the Legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the Court had found in the existing law and makes adequate provisions in the Validating Law for a valid imposition of the tax.
While in the field of Law of Taxation, the State resorts to retrospective legislation to validate an impost that was held by the Courts to be illegal on account of the infraction of some constitutional or other legal obligation owed by the State and the resultant violation of some right of the Subject, in other areas of law making, the State resorts to abrogation of its legal obligations declared by the Courts, on the basis of some pre-existing custom, contract or law, by the device of retrospective legislation. In either case, the purpose of such retrospective legislation is to alter the existing rights and obligations with an anterior date. It is in the above mentioned legal background, ,the constitutionality of the impugned Ordinance is required to be examined.
61. At the cost of repetition, we would like to extract Section 3 of the Ordinance again, to understand as to what exactly the State seeks to achieve by the impugned Ordinance.
3. Notwithstanding anything contained in any order of the Government or any judgment of any Court or Tribunal, every employee of a Private Aided Educational Institution, shall from the date of approval of his appointment in an aided post, be eligible to count the service rendered after such date of approval, for fixation of pay in the said post and Automatic Advancement Scheme, Career Advancement Scheme, Pension made applicable or extended to such employee from time to time.
The Section purports to deal with four aspects of the service of the employees of private aided educational institution. (1) Fixation of pay (2) Automatic advancement scheme (3) Career Advancement Scheme and (4) Pension. The Section purports to declare the eligibility of such employees to have only the "aided service "to be taken into account for the above mentioned four purposes. It must be noticed at the outset that, having regard to the definition of the expression "private aided educational institution" the Ordinance has not taken note of the distinction between the two classes of educational institutions imparting education to children above and below 14 years. We have already noticed that the constitutional obligations of the State vis-a-vis the above mentioned two classes of educational institutions are different. The Section which opens with a non-obstante clause recognizes the existence of certain earlier government orders and judgments of the Courts or Tribunals to the contra. We are told that the attempt of the Legislature is to take away the basis of the earlier judgments of this Court. Whether the Ordinance achieved the purpose, within the permissible framework of law is a different question which requires an examination.
62. Insofar as the fixation of pay is concerned, we fail to understand the intention of the Legislature. There is nothing in the law which requires the employer to refix the pay scales after a post is admitted to grant-in-aid. As we have already noticed, fixation of pay is a matter of contract between the institution and the employee or at the best a matter of regulation by the State by a law. However, the learned Advocate General submitted that that the Legislative intent in making a reference to the fixation of pay is that the State does not undertake the obligation to take into consideration the actual salary that was being drawn by such an employee prior to the admission of the post to grant-in-aid for the purpose of computing the amount of grant-in-aid to be extended to the institution, but the State would extend only that much of financial assistance to the institution computed at the minimum of pay scales relevant to each of those employees.
63. The intention of the Legislature insofar as the "fixation of pay" as projected by the Learned Advocate General is not clear from the language of Section 3. The Legislature could have spelt it out more categorically. The drafting of the Section leaves much to be desired. However, at the same time, we are conscious of the fact that inelegant drafting of the Statute does not render the same unconstitutional. If the intention of the Legislature can otherwise be culled out from the scheme of the Act, a purposive construction of the various parts of the Act in tune with the identified scheme of the Act is always permissible. [To accept the submission of the learned Advocate General this Court will have to rewrite the whole section or read into the section ideas which are not conveyed by the language employed by the legislature. We are afraid that such an exercise is not permissible.
64. Insofar as the other three aspects of the service referred to earlier are concerned, the Section purports to declare that only the "aided" service rendered would be taken into consideration for determining the eligibility of the employee for the benefits of those various schemes. We do not understand the purpose sought to be achieved by such stipulation insofar as the automatic advancement scheme and career advancement scheme are concerned. We have already noticed that those schemes only declare the entitlement of the employees for a higher scale of pay on completion of a certain period of service. Necessarily the payment in such higherscale will have to be made by the management (educational institution). If the intention of Legislature is to disapprove the burden undertaken by the State of the financial liability arising out of the extension of those schemes to the employees of the private aided educational institutions, the Legislature need not declare that the unaided service of such employees shall not be counted for the purpose of application of those schemes. The Legislature could have simply declared the limits of the financial liability of the State while extending aid to private educational institution employees to whom the above mentioned schemes are made applicable. The submission of the State as can be seen from the counter affidavit in this regard that there is no authentic way of verifying the "unaided service' rendered by the employees in our view is wholly irrelevant. When the primary liability to make the payment in accordance with the terms of the above mentioned schemes is on the managements, it is the look out of the management to maintain a proper record of the length of the service of the employees. By making a declaration such as the one made under Section 3 insofar as the career advancement scheme and the automatic advancement scheme are concerned, the Legislature in our view only made an arbitrary declaration that the unaided service shall not be counted for the purpose of conferring the benefits of the above mentioned schemes without there being any rational State purpose. On the other hand such a declaration only enables the employer to defer the benefit of those schemes to the employees though the employee rendered long service which but for the arbitrary legislative declaration entitles the employee for the benefits of the above mentioned two schemes. The professed purpose of the above mentioned two schemes is to give some monetary benefit to the employees who have no opportunity of any promotions in the service and consequent stagnation in their income. The two schemes are still in force and the State thinks it fit to continue the same, but by the terms of the Ordinance the employees are irrationally deprived of the benefits of the schemes. [We therefore hold that Section 3 to the above mentioned extent is unconstitutional].
65. Coming to the pension aspect, a categoric statement is made by the learned Advocate General before the Court that the State undertakes the liability to pay pension to the employees of the private educational institutions which are admitted to grant-in-aid and there is no obligation on the employer created so far by any law to pay pension. Therefore, the Legislature thought it fit to declare only the aided service to be taken into consideration for the purpose of deciding the service which entitles an employee of a private educational institution to receive pension from the State thereby eliminating the possibility of any mischief by the employers and the employees to create false claims of eligibility.
66. In view of the statement of the learned Advocate General that as a matter of fact the State has been undertaking the entire financial liability towards the payment of pension of the employees of private aided educational institution, (though there is nothing in the law which compels to undertake such liability), we do not see any illegality or unconstitutionality in the declaration contained under Section 3 insofar as it pertains to pension. The fact that the State was directed to take into account entire service of the employees i.e., both aided and unaided earlier by the various judgments of this Court on an interpretation of the various executive orders, does not in our view disable the Legislature to disapprove such executive orders. If the Legislature has such competence, it necessarily includes with it the competence to make such declaration of rights and obligations, with retrospective effect. But pursuant to such a retrospective legislation if any amount already paid to the employees in the past is sought to be recovered, a question of rationality of such a decision might arise. But, in the present case, that question does not arise as under Section 4(1) proviso, the Legislature has categorically mandated that any amounts already paid shall not be recovered.
67. Under Section 4, the Legislature purports to extinguish the rights created under the automatic advancement scheme and the career advancement scheme, the benefits of which are made available to those employees who had rendered certain minimum qualifying service. Section 4 of the Act purports to extinguish the claims of the employees of the private aided educational institutions with regard to the above mentioned four aspects of the service based on any government order or any judgment of the Court below or tribunal. A plain reading of the section purports to extinguish the rights of the employees through the various orders on the basis of which such rights were created. Though the learned Advocate General argued that the intention of the Legislature is only to extinguish such rights vis-a-vis the State, the section does not make any distinction between the obligation of the State and the obligation of the management to give the benefits as contemplated under the various GOs. It mainly purports to extinguish the right itself thereby relieving even the managements from the obligation to extend the benefits conferred under the various government orders. We fail to understand the whole exercise undertaken by the State. On one hand, the continued existence of the benefits created under the automatic advancement scheme and career advancement scheme is recognized in the Ordinance, but on the literal construction of Section 4, it purports to extinguish the rights flowing from such schemes. In our view, the enactment is a product of an absolute misconception of law and inability of the draftsman to handle the problem. The State in an attempt to escape the financial liability arising out of a plethora of ill-conceived orders issued earlier resorted to the impugned retrospective legislation by which it not only proposes to escape the financial liability - we make it clear the State indeed is entitled to escape - but also extinguish the rights of the employees vis-avis the managements. The State also ignored the fact that it owes a constitutional obligation to extend the necessary financial support to the educational institutions imparting education to children below 14 years. The Ordinance does not make any distinction between the educational institutions imparting education to the children below 14 years and those imparting education to children above 14 years. This kind of grouping of SUBJECTS ignoring the constitutionally settled differentia, in our view, itself renders the legislation irrational and arbitrary. In our view, therefore, the Ordinance, as it is, is required to be declared unconstitutional as violating the Article 14 of the Constitution of India. We accordingly declare so. The Writ Petition is allowed as prayed for.
68. We have already recorded the conclusion that the State owes no constitutional obligation to pay employees of private educational institutions which impart education to the children above 14 years. Therefore we do not understand the purpose sought to be achieved by the State in making the declaration such as the one made under Section 4 of the Ordinance at least insofar as it pertains to the employees of the aided private educational institutions which impart education to the children above 14 years. By making such a declaration the State is creating an artificial classification of the service rendered by the employee into two blocks, aided and unaided without there being any compelling Government purpose. Therefore, we are of the opinion Section 4(1) of the Ordinance is irrational and arbitrary and consequentially is liable to struck down. Accordingly we strike down Section 4(1) of the impugned Ordinance.
69. In view of our conclusions recorded above, we hold that the Ordinance insofar as it deals with the aspect of pension is valid, the rest of the Ordinance must be held unconstitutional.
70. Before parting with the case, we would like to place on record our disgust of the situation. The procedure of creating rights and obligations of far-reaching consequences both for the exchequer and the citizen by successive executive fiats as was done in the case on hand, in our view is highly detrimental to the public interest as is demonstrated by this case. We are conscious of the fact that in the areas not covered by legislation, the State's constitutional authority to take executive decisions under Article 162 is well recognized. We are only concerned with the desirability of the exercise of such power on adhoc basis without any examination by the legislature. This case illustrates the catastrophic consequences of such adhocism.