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Secretary Mahatama Gandhi Mission & Anr. v. Bhartiya Kamgar Sena & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal Nos. 115-116 of 2017)Decided 5 Jan 2017
Civil Appeal Nos. 115-116 of 2017
Justice J. Chelameswar · Justice Abhay Manohar Sapre

Background

The appellant, a charitable trust, ran two engineering colleges in Maharashtra. Its non-teaching staff had earlier won a 2003 Bombay High Court order (upheld by the Supreme Court) directing implementation of Fifth Pay Commission-linked pay scales, followed by a 2006 settlement where staff gave up past arrears in exchange for the management's promise to implement future government pay revisions. When the Sixth Pay Commission's revised scales (adopted by UGC/Government of India and extended by the State of Maharashtra under its university legislation) came due, the college resisted applying them, arguing among other things that AICTE rather than the State was the competent regulatory authority and that as an unaided institution with revenue only from student fees, it could not afford the increase.

Decision Breakdown

The Supreme Court held that the State of Maharashtra had validly exercised its own power under Section 8(3) of the Maharashtra Universities Act to extend the revised pay scales to employees of such colleges, making the appellants' argument about AICTE's competence "irrelevant and academic", even if AICTE were held not competent, it would only confirm the State legislature's authority, which it had already exercised. On the financial-hardship argument, the Court held the appellants could not resist paying their non-teaching staff at all, since they had contractually bound themselves in the 2006 settlement to implement future government pay revisions, and in any event it was for the management to find the means to meet an obligation the law imposed on it (including seeking fee revisions through the appropriate Fee Regulatory Committee). The appeals were dismissed as devoid of merit, with no order as to costs.

Lesson Learnt

A private institution that has formally agreed by settlement to apply future government pay revisions to its staff cannot later resist that obligation on affordability grounds: financial hardship is not, by itself, a legal defense to a binding commitment or a statutory pay obligation.

Official source (sci.gov.in)View Judgment (PDF)

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