A) ABSTRACT / HEADNOTE

The case of Nutan Bharti Gram Vidyapith v. Government of Gujarat & Anr., (2024 INSC 935), addresses the legal liability of a private college under the Grant-in-Aid Scheme to pay retiral benefits to a dismissed employee. The dispute arose when the respondent, a lecturer, was dismissed from service on misconduct grounds, including instigating student strikes and violating institutional regulations. The appellate authority found dismissal too severe, reinstating the respondent. The High Court upheld reinstatement, awarding 75% back wages, later reducing it while holding both the college and the State responsible for retiral benefits. The Supreme Court ruled in favor of the appellant, clarifying that pensionary benefits of Grant-in-Aid institutions are to be paid by the State Government, not the institution.

Keywords

1. Retiral benefits
2. Grant-in-Aid Scheme
3. Dismissal and reinstatement
4. Pensionary benefits
5. Liability of aided institutions

B) CASE DETAILS

• i) Judgment Cause Title: Nutan Bharti Gram Vidyapith v. Government of Gujarat & Anr.

• ii) Case Number: Civil Appeal No(s). 13958-13959 of 2024

• iii) Judgment Date: 2nd December 2024

• iv) Court: Supreme Court of India

• v) Quorum: Justice J.K. Maheshwari and Justice Rajesh Bindal

• vi) Author: Justice Rajesh Bindal

• vii) Citation: 2024 INSC 935, [2024] 12 S.C.R. 366

• viii) Legal Provisions Involved:

  • Grant-in-Aid Scheme, Gujarat Education Department Resolution No. GUS/1089-5369/B (1990)
  • Service Rules and Pension Scheme for Aided Institutions
  • Relevant principles of Service Law and Administrative Law

• ix) Judgments Overruled by the Case: None explicitly overruled

• x) Case Related to Law Subjects:

  • Service Law
  • Administrative Law
  • Education Law
  • Constitutional Law (State’s obligations in Grant-in-Aid Institutions)

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This case pertains to a dispute involving a private educational institution covered under the Grant-in-Aid Scheme of Gujarat. The primary issue revolves around who bears the financial burden of retiral benefits when a dismissed employee is reinstated after superannuation. The respondent was dismissed for misconduct, but upon appeal, was reinstated with retirement benefits granted. The High Court initially placed the liability on both the institution and the State, but the Supreme Court reversed this finding, ruling that pension obligations under the Scheme rest solely with the State Government.

D) FACTS OF THE CASE

1. The respondent was a lecturer at Nutan Bharti Gram Vidyapith, an institution receiving Grant-in-Aid from the State Government.
2. He was dismissed on 6th June 1994 due to misconduct charges, including:
   • Instigating students to strike
   • Violating institutional regulations
   • Engaging in inappropriate behavior
3. The respondent appealed, but his appeal was initially dismissed as non-maintainable.
4. The High Court later held the appeal maintainable and referred it back to the appellate authority.
5. The appellate authority ruled the punishment excessive and ordered reinstatement in 2000.
6. By the time the matter reached the High Court in 2010, the respondent had superannuated. The High Court upheld reinstatement and ordered 75% back wages.
7. Upon further appeal, back wages were removed, but the college and the State were held liable for retiral benefits.
8. In Review Petitions, the State was excluded from liability, shifting the full burden to the college.
9. The Supreme Court ruled that pensionary liability falls exclusively on the State, not the Grant-in-Aid institution.

E) LEGAL ISSUES RAISED

i) Whether the Grant-in-Aid institution is liable to pay retiral benefits to its employees?

ii) Whether the High Court erred in modifying its previous order and shifting the liability solely to the institution?

iii) Whether the dismissal of the respondent was justified based on the charges framed against him?

iv) Whether the appellate authority acted correctly in reinstating the respondent despite proven misconduct?

F) PETITIONER/APPELLANT’S ARGUMENTS

i) The counsels for the appellant submitted that:

1. The Grant-in-Aid Scheme places retiral liability on the State, as per Clause 11 of the 1990 Gujarat Education Department Resolution.
2. The High Court’s modification in the Review Petition wrongly burdened the institution, contradicting the Scheme provisions.
3. The respondent was dismissed for grave misconduct after proper inquiry, including proven charges of student instigation and rule violations.
4. The appellate authority overstepped its jurisdiction in reinstating an employee whose dismissal was based on misconduct.
5. The Education Society, Tumsar case (2016) 3 SCC 512 relied upon by the State is inapplicable, as no jurisdictional overreach occurred in this case.

G) RESPONDENT’S ARGUMENTS

i) The counsels for the respondent submitted that:

1. The appellate authority correctly reinstated the employee, as dismissal was too harsh.
2. The institution delayed compliance with the appellate order, causing financial hardship to the respondent.
3. As the institution benefited from State Aid, it could not escape financial responsibility towards the employee.
4. The High Court’s review order was justified, considering the institution’s prolonged litigation approach.

H) RELATED LEGAL PROVISIONS

i) Grant-in-Aid Scheme, Gujarat Education Department Resolution No. GUS/1089-5369/B (1990)

• Clause 11: State bears liability for retiral benefits of Grant-in-Aid employees.

ii) Service Law Precedents

• Educational Society, Tumsar & Ors. v. State of Maharashtra & Ors. (2016) 3 SCC 512
  • Distinguished in the present case as no jurisdictional excess by the institution was found.

I) JUDGEMENT

a) RATIO DECIDENDI

1. The Grant-in-Aid Scheme expressly places pension liability on the State, making the High Court’s review decision legally unsustainable.
2. Reinstatement does not transfer pension liability to the institution unless explicitly stated under the Scheme.
3. The institution’s litigation conduct does not warrant overriding statutory provisions governing pension liability.
4. Appellate authority did not find the dismissal illegal, merely excessive, making State liability applicable.

b) OBITER DICTA (IF ANY)

• The Supreme Court cautioned against modifying orders without statutory backing, emphasizing strict adherence to financial obligations under pension schemes.

c) GUIDELINES

1. State liability for pension must be determined as per the governing Grant-in-Aid Scheme.
2. Reinstatement post-superannuation does not create additional obligations for institutions.
3. Review Petitions cannot alter financial obligations in contradiction to governing laws.

J) REFERENCES

a) Important Cases Referred

• Educational Society, Tumsar v. State of Maharashtra (2016) 3 SCC 512

b) Important Statutes Referred

• Grant-in-Aid Scheme, Gujarat Education Department Resolution (1990)
• Pension Scheme for Teaching/Non-teaching Staff of Aided Institutions