Karnataka High Court
The Management Of A.M. Shaikh ... vs The Workmen Of A M Shaikh on 9 February, 2024
Author: N.S.Sanjay Gowda
Bench: N.S.Sanjay Gowda
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NC: 2024:KHC-D:3019
WP No. 65310 of 2010
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 9TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE N.S.SANJAY GOWDA
WRIT PETITION NO. 65310 OF 2010 (L-RES)
BETWEEN:
THE MANAGEMENT OF
A.M. SHAIKH HOMEOPATHIC,
MEDICAL COLLEGE AND HOSPITAL,
NEHRU NAGAR, BELGAUM-590010.
... PETITIONER
(BY SRI. S.N. MURTHY, SR. COUNSEL FOR
SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
AND:
1. THE WORKMEN OF A.M. SHAIKH
HOMEOPATHIC MEDICAL COLLEGE AND HOSPITAL,
NEHRUNGAR, BELGAUM-590010.
Digitally
signed by 2. STATE OF KARNATAKA,
KIRAN
KUMAR R R/BY ITS PRINCIPAL SECRETARY,
Location:
HIGH EDUCATION DEPARTMENT,
COURT OF
KARNATAKA VIDHANA SOUDHA,
BANGALORE-560001.
... RESPONDENTS
(BY SRI. VIVEKANANDA HOSMATH, ADV. FOR R1;
SRI. BHOJEGOUDA T. KOLLER, AGA FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
CALL FOR RECORDS LEADING TO THE PASSING OF THE
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WP No. 65310 of 2010
AWARD DATED 29/04/2010, PASSED BY THE INDUSTRIAL
TRIBUNAL, HUBLI, IN I.D.NO.61/2003 (ANNEXURE-Q)
AND ETC.
THIS PETITION, HAVING BEEN HEARD AND
RESERVED FOR ORDERS AND COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
1. The petitioner is the Management of A.M. Shaikh Homeopathic Medical College and Hospital, which is a private un-aided College.
2. On 14.08.1990, the Governing Council of the People's Education Society and Trust, which owns the Homeopathic College, passed a resolution adopting the Government scales of pay and Dearness Allowance.
3. On 17.07.1994, the Governing Council revised the pay scales of its employees and resolved to pay Dearness Allowance at the very same rate at which the Government employees would be paid with retrospective effect. It was also resolved that Dearness Allowance -3- NC: 2024:KHC-D:3019 WP No. 65310 of 2010 ("DA") would be paid on the basis of the performance evaluation and not automatically, and would be paid only once in a year.
4. On 01.04.1999, the Governing Council also passed a resolution regarding grant of annual increments. By this resolution, annual increments were given to the employees with retrospective effect from 01.04.1999, which was a performance-based incentive and would be paid in cash (lump sum) for twelve months.
5. On 13.05.2002, the Governing Council resolved to revise the pay scales to all the employees. By this resolution, the Council sought to divide the salary package into two components i.e., a fixed component and a variable component. The fixed component comprised of the Basic Pay and DA, while the variable component comprised of a 'performance based surplus sharing scheme' and a hike of 20% was given to the total in lumpsum, with effect from 01.04.2001. This revision of -4- NC: 2024:KHC-D:3019 WP No. 65310 of 2010 pay scales was with effect from 01.04.1994, and the DA at the rate of 43%, which was the Government rate, was made applicable from 01.04.2002.
6. On 24.12.2002, it appears that the teaching staff demanded a hike of 12.5% of Basic Pay, as a one- time measure instead of the earlier system of 'performance based salary sharing scheme'. This demand was accepted by the Governing Council and 12.5% hike in the Basic Pay was given with effect from 01.04.2002. It was also agreed that the DA would be released at the rate of 49% i.e., at the Government rate with effect from 01.04.2002. The hike of the basic pay at 12.5% was, however, subject to certain conditions.
7. It is the case of the Management that out of 70 teaching and non-teaching staff, 41 employees had accepted this offer and had given up their demands for Government Pay Scales, but six (6) non-teaching staff raised a dispute, which was then referred to the Industrial -5- NC: 2024:KHC-D:3019 WP No. 65310 of 2010 Tribunal by the Government on 27.09.2003 and was registered as I.D. NO.61/2003. The main dispute referred by the Government in this regard, was as follows:
"1) DqÀ½vÀªÀUÀðzÀªÀgÁzÀ J.JA. ±ÉÃSï ºÉÆëÄAiÉÆÃ¥ÀrüPï ªÉÄrPÀ!ï PÁ!ÉÃeï ªÀÄvÀÄÛ D¸ÀàvÉæ £ÉºÀgÀÄ£ÀUÀgÀ, ¨É¼ÀUÁ« EªÀgÀÄ PÁ«ÄðPÀgÁzÀ 1) ªÉÊ.©.¥ÁnÃ!ï, 2) ²æà J.PÉ.¹AzsÉ, 3)²æà ©.©. ºÀħâ½î, 4)²æà J£ï.J¸ï.¥ÁnÃ!ï, 5) ²æà JA.r. dªÀiÁzÁgï, ªÀÄvÀÄÛ 6) ²æêÀÄw «dAiÀÄ®Qëöä zsÀgÀänÖ EªÀgÀÄUÀ½UÉ ¢:1-7-1998 jAzÀ vÀÄnÖ¨sÀvÉåAiÀÄ£ÀÄß ¤ÃqÀ¨ÉÃPÉAzÀÄ ªÀÄvÀÄÛ ¸ÀPÁðgÀ ¤UÀ¢ ¥Àr¹zÀ ªÉÃvÀ£À ±ÉæÃt ºÁUÀÆ EvÀgÉ ¨sÀvÉåAiÀÄ£ÀÄß ¤qÀ¨ÉÃPÉAzÀÄ, ¸ÀzÀj PÁ«ÄðPÀgÀ£ÀÄß ¥Àæw¤¢ü¸ÀÄwÛgÀĪÀ ±ÉÆõÀt ªÀÄÄQÛzÀ¼À, gÁªÀÄ°AUÀ RAqÀ UÀj, ¨É¼ÀUÁ« EªÀgÀÄ ªÀiÁAr¹gÀĪÀ ¨ÉÃrPÉAiÀÄÄ £ÁåAiÀĸÀªÀÄä vɪÉÃ?"
8. Subsequently, on 30.12.2003, the State Government also referred a dispute raised by the Union, which came to be registered as I.D. No.10/2004.
9. The disputes that were referred to the Labour Court at the instance of the Union was - whether the Union was entitled to the grant of demands made by them in the Charter of Demands that had been annexed to the order of reference. For the sake of convenience, they are restated hereunder:
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 "STATEMENT OF DEMANDS and Grievances in respect of Industrial Dispute between the workmen and management A. M. Shaikh H. M. College and Hospital, BELGAUM 590010.
1. The management has unjustly and unlawfully discontinued or withheld a part of the D.A. payable to some of the workmen. The D.A. withheld w.e.f. 1.7.1998 be retrospectively be restored.
2. The management had decided to introduce the Govt Scales to it's employees and to pay D. A. at Govt rates, Vide it's decision made on / resolution passed on 19.7.1990. The management had implemented the resolution/ decision in respect of some of the workmen. It is not just and lawful on its part now to unilaterally withhold the revised scales of pay granted by the Govt to it's employees and also to withhold any increase in D.A. announced and paid by the Govt to it's employees. Hence the Govt Scales of pay and all allowances, including D.A., wrongly withheld be restored retrospectively.
3. The Workmen demand that the management should take immediate steps to put an end to the three different rates of wages and D.A. to workmen of same categories doing same work or work of similar nature, which have been prevailing in the institution. The practice is clearly discriminatory, unfair, unjust and unlawful. All the employees who have been doing the work of permanent nature be given Scales of Pay and allowances being paid by the State Govt to its employees of comparable categories.-7-
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4. All the employees employed on contract basis have been differently treated and gravely discriminated against for the purposes of pay, allowances and other benefits. This hostile discrimination be abolished and they be brought on par with the other employees in respect of whom the Govt scales of pay and allowances were made applicable in the year 1990 by the management.
5. As a consequence of our persistent demand to apply State Govt scales of pay and allowances etc to all its employees, the management is stated to have given, w.e.f. 1.5.01, to all its employees except those appointed on contract basis, an adhoc wage increase equal to 20% of their emoluments existing immediately before that date. Though this has brought some relief to the workmen, they were unable to accept the arbitrary wage increase given by the management without protest. Hence they accepted the same under protest for the following reasons:-
1) The wage increase is too short of the demands and expectations of the workmen.
2) The wage increase does not redress the workmen's grievance about the unreasonable, unjust, inequitable and unlawful disparity between the rates of wages applicable to different sets of employees in the management's services.
3) The wage increase is arbitrary. It has no rational basis.-8-
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4) The employees appointed on contract basis are unjustly and unlawfully excluded from the benefit.
5) The most basic demand of the workmen to apply the State Govt Scales of pay and allowances etc to all the employees.
6. Demanded that the most basic demand all the workmen, as stated in para 5.5) above be granted in full, not withstanding the adhoc wage increase."
10. Thereafter, the Labour Court framed 7 issues on the basis of the claim statement, counter and the order of reference.
11. The Labour Court found that the essential dispute raised by the 6 workmen and the Union was - whether the Charter of Demand made by the Union claiming Government payscales, Dearness Allowance from 01.07.1998 and other allowances were justified.
12. At this stage itself, it is to be noticed that first two issues framed in the dispute, which was referred to by the Government at the instance of six workmen were as to whether the claim of the workman that they were entitled -9- NC: 2024:KHC-D:3019 WP No. 65310 of 2010 to Dearness Allowance from 01.07.1998 and that they were entitled to Government Pay Scale and other allowances, were justified.
13. It may be pertinent to state here that though two references had been made by the Government, the first one made at the behest of the six workmen (I.D. No.61/2003) and the second one at the behest of the Union (I.D. No.10/2004), an application was made by the Union to close the subsequent reference i.e., I.D. No.10/2004, since two cases had been registered in respect of the same dispute.
14. The Labour Court proceeded to pass an order on 07.07.2004 to close the subsequent reference i.e., I.D. No.10/2004 in view of the pendency of the reference in I.D. No.61/2003. Thus, the Labour Court, at the request of the Union, proceeded to close the dispute raised by the Union on the misconception that it was actually closing the reference made at the behest of the six workmen.
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15. Learned senior counsel Mr. S.N. Murthy, at the outset, submitted that since the reference of the dispute raised by the Union in relation to the extension of the DA on par with Government servants had been closed, the dispute would therefore necessarily be restricted only to six workmen and could not be made applicable to all the employees.
16. This argument does not merit acceptance. The reference made at the behest of the Union was sought to be closed only because of the existence of an identical reference and it was unnecessary to have two proceedings. The Labour Court has merely accepted this plea and closed one of the references since the decision of one reference would itself determine the controversy. Therefore, this argument does not lead to an inference that the claim of the Union stood rejected. It is also to be borne in mind that the entitlement of one workman, if found to be lawful, would have to be extended to all similarly placed workmen.
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17. After holding an enquiry, the Labour Court, by the impugned award, has come to the conclusion that the Management had introduced the Government Pay Scale in the year 1990, but it had erroneously reduced the payment of pay scale with effect from 01.07.1998.
18. The Labour Court held that there had been a further hike of pay in the year 2001-02 and all the workers had accepted the hike of 20%, but some of the workers had not accepted the hike of 12.5%. It thus took the view that the workmen who had not accepted the hike of 12.5% were entitled to accept the same. It proceeded to take the view that and since the workmen had filed the claim statement only on 04.03.2004, they were entitled to the Government pay scale, as well as DA and other allowances with effect from 04.03.2004.
19. The Management was accordingly directed to pay the Government Pay Scale and allowances to its entire non-teaching staff with effect from 04.03.2004, within four weeks.
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20. The Management, being aggrieved by this award of the Industrial Tribunal, has preferred the present petition.
21. Apart from challenging the award, the Management is also challenging the validity of Rule 5 of the Karnataka Private Educational Institutions (Discipline and Control) Rules, 1978 (for short, "the 1978 Rules")
22. Senior counsel-Mr. Murthy contended that prior to the Karnataka Education Act, 1983 ("the 1983 Act") coming into force on 01.06.1995, educational institutions in the State were governed by the Karnataka Private Educational Institutions (Discipline and Control) Act, 1975 ("the 1975 Act") and the Rules framed thereunder. He submitted that Rule 5 of the 1978 Rules mandated that the scale of pay of an employee of an institution shall not be lower than the scale of pay of an employee of a corresponding post in Government educational institutions (both aided and un-aided) which posed a huge financial
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 burden on the institutions and was, hence, liable to be struck down.
23. He submitted that after the 1975 Act was repealed and replaced by the 1983 Act, the State had framed the Karnataka Educational Institutions (Collegiate Education) Rules, 2003 ("the 2003 Rules"), which was, however, specifically made applicable only to the aided Institutions. It was his submission that the lawmakers took cognizance of the financial burden that had been cast on the institutions of paying its employees on par with Government servants and, therefore, proceeded to frame the 2003 Rules and made it applicable only to aided institutions, thereby excluding the unaided institutions from a huge financial burden.
24. He submitted that the consequence of framing the 2003 Rules was that the 1978 Rules stood impliedly repealed, insofar as unaided colleges were concerned, and only the aided colleges were subjected to a statutory framework.
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25. He averred that Rule 5 of the 1978 Rules no longer subsisted and could not be made applicable to unaided colleges. He submitted that by virtue of this implied repeal of the 1978 Rules, the un-aided colleges were at liberty to fix their own pay scales and were not obligated to pay their employees on par with Government servants.
26. In short, his basic submission was that the 1978 Rules, which had been framed under the 1975 Act, stood automatically repealed by framing of the 2003 Rules under the Act of 1983, and the unaided colleges were thus not liable to pay their employees on par with Government servants holding corresponding posts.
27. Learned senior counsel further submitted that the requirement of a private unaided college to pay to its employees the same scale of pay, as that compared to the corresponding posts in the Government Educational Institutions, could not be enforced and the Industrial Tribunal was in error by passing an award that the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 employees would be entitled to pay scales on par with Government servants.
28. It is his submission that private un-aided educational institutions were at liberty to pay their employees the wages that the institutions thought was feasible, so as to ensure that the institutions being run by them were financially viable.
29. Learned senior counsel also highlighted the fact that the Government cannot impose a financial burden that the colleges cannot bear, especially when the Government is also conferred with the right to prescribe the fees that the educational institutions could charge under the Rules.
30. He submitted that the petitioner-Institution had fixed a scale of pay which was reasonable, and as could be seen by the fact that a majority of the employees had also accepted it, the Labour Court was not justified in holding that the petitioner was entitled to the pay scale equivalent
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 to that of a corresponding Government post, along with allowances (including DA).
31. Learned counsel appearing for the workmen, however, contended that when the 1983 Act was brought into force, the Rules which were required to make the Act functional were yet to be framed and it therefore included a provision in Section 146 to ensure that the Rules framed under the 1975 Act would continue to operate. He therefore submitted that the Rules which were framed under the 1975 Act would subsist unless they were replaced by a new set of Rules.
32. He submitted that the Rules framed under the 1975 Act applied to all educational institutions, whether aided or unaided, and said Rules governed the running of all the education institutions even after the 1983 Act was brought into force, until new Rules were framed.
33. He submitted that since the State had consciously decided to frame a new set of Rules only in respect of un-aided private colleges, it was clear that the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 1978 Rules (framed under the 1975 Act), insofar as it related to unaided colleges, would continue to subsist. He submitted that when a statutory provision specifically saved the operation of the earlier Rules made under the earlier Act, it could never be contended that the entire set of Rules framed under the earlier enactment also stood repealed.
34. He submitted that it was permissible for the State to frame new Rules under the 1983 Act and in those rules, it was also permissible for the State to make it applicable only to one class of institutions and thereby ensure that the earlier Rules would still continue to apply in respect of other classes of institutions. He submitted that the effect of the 2003 Rules was simply that there was one set of rules in respect of aided colleges (the 2003 Rules) and one set of rules in respect of unaided colleges (the 1978 Rules). He submitted that this was basically because State Government intended that the earlier provisions would continue for unaided colleges as there
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 was no need for framing of a fresh set of rules in respect of unaided colleges.
35. The counsel for the petitioner has relied on the following citations:
i. Hari Prakash S.P. v. the State of Karnataka and Ors., W.P.805-824/2014 c/w W.P.825-835/2014 and W.P.5693-5780/2014 disposed on 29.12.2016;
ii. Peoples Education Society and Anr. V. Thimmaiah G., W.A.805/2017 c/w W.A.806/2017 and W.A.807/2017, disposed on 11.07.2023 - preferred against Hari Prakash S.P. (supra). The matter has been remitted to the Single Judge for reconsideration and, for this reason, has not been examined in this order;
iii. N.D. Narasimha Prasad v. Bangalore University & Anr., W.A.1659/1992 disposed of on 05.01.1996;
iv. Sushmitha Basu & Ors. v. Ballygunge Siksha Samity & Ors., (2006) 7 SCC 680;
v. Satimbla Sharma & Ors. v. St. Paul's Senior Secondary School & Ors., (2011) 13 SCC 760;
vi. Oshiar Prasad & Ors. v. the Employees in relation to Management of Sudamdih Coal Washery of BCCL, (2015) 4 SCC 71; and vii. Karnataka Lingayat Education Society, Belgaum & Anr. v. Siddappa Namba, ILR 2017 KAR 5139.
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36. In light of the above arguments, the only question which will have to be considered in this case is as to whether the 1978 Rules framed under the 1975 Act stood repealed in respect of the unaided colleges by virtue of the framing of the 2003 Rules under the 1983 Act.
37. In order to appreciate the true perspective of the issue at hand, an overview of the 1975 Act would be necessary.
38. The 1975 Act was enacted to provide for better discipline and in control over private educational institutions in the State, which were recognized by the State Government. A private educational institution, as defined under said Act, would be an educational institution not owned by the State Government or the Central Government or Local Authority or any other Authority designated or sponsored by the State Government. Thus, the Act was meant to provide for a legal framework for
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 educational institutions which were not owned or controlled by the State entities.
39. Section 31 of the 1975 Act conferred power on the State Government to make model rules and also for their adoption by private educational institutions private educational institutions private educational institutions. The said provision stated that the Government was required to make Model Rules in respect of the matters relating to the conduct and the conditions of service of employees, after publishing a draft set of rules. 1 Power of State Government to make model rules and adoption of such rules by a private educational Institution :- (1) Subject to the other provisions of this Act, the State Government shall, after previous publication of the draft for not less than one month, make, by notification model rules in respect of matters relating to the code of conduct and the conditions of service of employees.
(2) Every private educational institution shall :-
a) If it has not before the date of commencement of this Act made rules on the subject, adopt the model rules; and
b) If it has made such rules, modify the rules to bring them in conformity with the modelrules.
(3) Within three months from the date the model rules are notified by the State Government every private educational institution shall send intimation of having adopted the model rules or modified its rules to :-
i) The Director of Technical Education, Bangalore, if the private educational institution is an engineering or other technical institution;
ii) The Director of Pre-University Education, Bangalore, if such institution is an independent junior college;
iii) The Director of Collegiate Education, Bangalore, if such institution is a college other than a institution or college referred to in clauses (i) and (ii);
iv) The Director of Public Instruction, Bangalore or to an officer not below the rank of a District Deputy Director of Public Instruction as may be specified by the State Government, if such institution is a pre-primary or secondary school or high school upgraded as a junior college or an institution for teacher's training at all levels including collegiate education; and
v) The authority specified in this behalf by the State Government, if such institution is an institution or college, other than those referred to in clause (i) to (iv).
(4)If a private Educational Institution fails to take action as required by sub-section (2) the model rules shall be deemed to have been adapted by such institution and they shall be the governing its employees.
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40. On the Model Rules being enacted, the provision further provided that every private educational institution would have to adopt the rules and if it had any existing rules, they had to ensure that those rules were modified to be in conformity with the Model Rules. The provision also required that within three months of the Model Rules being modified, every educational institution was required to intimate the concerned authority of having adopted the Model Rules or having modified the existing rules.
41. Sub-Section (4) of Section 3 of the 1975 Act, however, categorically declared that if a private educational institution failed to adopt the Model Rules or modify its existing rules in conformity with the Model Rules, the Model Rules would be deemed to have been adopted by such institution and said Rules would govern its employees. Thus, the Model Rules framed by the State Government in exercise of its powers under Section 3 of the 1975 Act, by a deeming provision, became the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 statutory rules which governed the conditions of service of the employees.
42. In other words, the conditions of service of employees of private educational institutions would be governed by the Model Rules that were framed by the State Government and even if there were some existing rules framed by a private educational institution, they would be of no consequence unless they were brought in conformity with the Model Rules.
43. In exercise of the powers conferred under Section 3, the Government framed the Model Rules i.e., the 1978 Rules. These Model Rules provide for rules relating to the service conditions of employees, their discipline, their leave and other aspects. Service conditions of private educational institutions would thus have to be in accordance with these Model Rules.
44. Viewed from this legal position, it becomes clear that every employee of a private educational institution
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 recognised by the State of Karnataka would necessarily be governed by the statutory Model Rules.
45. Chapter-II of these the 1978 Rules provided for Qualifications, Age, Scale of Pay, Method of Recruitment, Period of Probation, Seniority, Termination, and Resignations. Thus, the entire gamut of service conditions of an employee was provided for under these Rules and the rules would therefore have to be construed as a complete code in respect of the service conditions.
46. Rule 5 of the 1978 Rules, which would be relevant for this case, reads as under:
"5. Scale of Pay.- the scale of pay of an employee of an institution shall not be lower than the scale of pay of an employee of a corresponding post in the Government Educational Institutions."
47. A plain reading of said rule leaves no room for doubt that the pay of an employee of a private educational institution cannot be lower than the scale of pay of an employee of a corresponding post in a government
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 educational institution. To put it differently, every employee of a private educational institution would, by law, be entitled to the same pay that an employee of a corresponding post in a government educational institution was drawing.
48. It is to be noticed here that the 1975 Act applied to all private educational institutions and the clear underlying intent of the State was that an employee of a private educational institution should not be earning a lesser pay than an employee holding a corresponding post in a government educational institution. This is obviously because the State was aware of the fact that if an employee in a private educational institution were to get a lesser pay, the quality of teachers in that private educational institution would obviously be of a lesser caliber, and this would in turn reflect on the quality of education that the children would be given. It is precisely for this reason that the Government made it clear that there was parity in the pay of an employee of a private
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 educational institution and the employee of a government educational institution.
49. The 1975 Act was repealed by the 1983 Act. This Act was a more comprehensive Act and was applicable to all institutions except those which were exempted under the Act and the institutions which were under the direct management of the university or of the Central Government. Thus, the 1983 Act sought to govern both government educational institutions as well as private educational institutions.
50. Section 36 of the Act provided for recognition to the education institutions registered under the Act. The granting of recognition was made subject to the fulfilment of certain conditions, one of which related to the conditions that may be prescribed with regard to appointment of teaching and other staff, the code of conduct to be accepted and absorbed by the Governing Council.
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51. Section 39(f) states that when any local authority or Governing Council of any private educational institution contravenes any of the provisions of this Act, the Rules and the orders made thereunder, their existing recognition was liable to be withdrawn. Thus, under the 1983 Act, if an institution failed to adhere to the provisions of the Act and its Rules, such educational institution would face the prospect of losing its very recognition. It is therefore clear that adherence to the Rules is mandatory for a college to have a valid and subsisting recognition.
52. The 1983 Act was brought into force with effect from the 01.06.1995 and, as on the date the Act was brought into force, all the rules necessary for making the Act completely functional were obviously not framed. In the year 1995, the first set of rules pertaining to classification, regulations, prescription of curricular etc., were framed. In the year 1997, the Classification and Registration rules were framed, and it was followed by the Appeal, Revision and Review Rules in 1998.
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53. The legislature was acutely aware that the Act could not be made operational in its entirety in the absence of the Rules. It was also aware that framing of the rules would consume a certain amount of time, and it is for this reason that Section 146(3) was incorporated into the Act. Section 146(3) expressly declared that, notwithstanding anything contained in this Act, all rules, orders, notifications, Grant-in-aid Codes, appointments, schemes, bye-laws, regulations, official memoranda, circulars or any other orders made or issued, either before the commencement of the 1983 Act and/or were in force as on the date of the 1983 Act coming into force, would continue to be effective and in force as if they were made under the 1983 Act, and this would be so until they were superseded by any notification, code or rule made under the 1983 Act.
54. In essence, Section 146 was a transitional provision which enabled the existing set of rules to continue to be in operation till new and appropriate rules
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 were framed under the 1983 Act. This was obviously to ensure that there was a sense of continuity and to avoid the vacuum until the new rules were framed.
55. Thus, as a consequence, the rules that were framed under the 1973 Act statutorily become the rules that had been framed under the 1983 Act and those Rules would continue to operate until they are superseded by a fresh set of rules made under the 1983 Act.
56. The State Government, in exercise of its powers under the 1983 Act, proceeded to frame the Karnataka Educational Institutions (Collegiate Education) Rules, 2003, which came to force with effect from 07.08.2003, and Rule 1(3) of said Rules states as follows:
1. Title, application and commencement.-
(1) XXXX (2) XXXX (3) Notwithstanding anything contained in the rules made under the Karnataka Education Act, 1983 (Karnataka Act 1 of 1995), these rules shall apply to all government, Local authority, private aided affiliated colleges under the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 control of the Department of Collegiate Education in Karnataka. Where the provision of these rules are silent on any aspect of regulation, the provisions contained in other rules made under the Act may with the previous approval of the Government be applied to private aided institutions under the Department of Collegiate Education, with the modification that the Commissioner of Collegiate Education or the Director of Collegiate Education as the case may be shall be the Head of the Department of Collegiate Education.
57. As could be seen from the above, sub-Rule (3) under Rule 1 of the 2003 Rules was specifically made applicable to all government/local authority, private aided affiliated colleges under the control of the Department of Collegiate Education in Karnataka. Thus, the 2003 Rules were expressly made applicable to three categories of institutions - firstly, the institutions run by the government; secondly, the institutions run by the local authority; and thirdly, the private aided affiliated colleges. By making the rules applicable only to these three classes of institutions, the Government made its intent clear that these rules would not be applicable to unaided private colleges. In other words, private un-aided colleges were
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 consciously and deliberately kept out of the purview of the 2003 Rules.
58. The Rules also made it clear that if the 2003 Rules were silent on any aspect of regulation, the provision contained in other rules made under the Act could be made applicable to private aided institutions, with the prior approval of the Government.
59. A plain reading of this sub-rule makes it extremely clear that the whole intent of the rule was to regulate the functioning of private aided colleges and nothing said in the rules was therefore, by implication, made applicable to unaided private colleges.
60. The consequence of the Rules being enacted in the year 2003, in respect of the aforementioned three classes of institutions only, would simply be that the 1978 Rules, which were applicable to all institutions earlier, including un-aided private institutions, would continue to apply only to un-aided institutions.
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61. If it is to be argued that the 2003 Rules repealed the 1978 Rules in its entirety, the result would be that there would be no statutory rules governing or regulating the functioning of un-aided private educational institutions. This would obviously lead to an absurd situation where there is a substantive Act which requires the institutions covered under the Act to be governed by the rules framed under the Act, but yet, there would be no rules in place in respect of un-aided private educational institutions. It is settled law and a largely followed rule of statutory interpretation that any interpretation which leads to an absurd situation would have to be avoided completely.
62. The fact that the rule-maker was conscious of the fact that the 2003 Rules may itself be silent on certain aspects of regulating aided colleges and, therefore, also made the other rules applicable, indicates that it was the singular intention of the government to have a fresh set of rules only in respect of private aided educational
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 institutions and the government/local authority owned institutions while at the same time, any lacunae in the Rules would be governed by the Rules framed under the earlier Act i.e., the 1978 Rules.
63. If it was the intent of the State to ensure that private un-aided institutions were not governed by any rules, the 2003 Rules would obviously contain a repealing provision or a rule which stated that private un-aided institutions were at liberty to prescribe their own procedure. As stated earlier, when the law governing educational institutions specifies that the institutions recognised under the Act are to be governed by statutory rules, it is impermissible for any institution to contend that the State had decided in the year 2003 to do away with all the rules in relation to regulating the running of un-aided private educational institutions.
64. Yet another fact to be noticed here is that the 1978 Rules were in force till 07.08.2003 i.e., for a period of nearly 8 years after the 1983 Act was brought into
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 force, thereby meaning that for a period of 8 years, all the private educational institutions were governed by the 1978 Rules. By framing the Rules in 2003 specifically for aided private educational institutions, it is unmistakably clear that the State Government was of the view that the rules that had already been made in the year 1978, which were to apply to both aided and unaided educational institutions, were adequate to regulate the running of an un-aided private educational institution.
65. It is also to be noticed here that the 1978 Rules more or less covered all the requirements which ensured better discipline and control over private educational institutions and, therefore, the State Government did not feel it necessary to frame a fresh set of rules.
66. It is to be kept in mind that when an Act is replaced by a new Act, normally, the rules framed under the old enactment stand automatically repealed by virtue of the repeal of Act under which such rules were framed. However, when a specific provision is made in the new
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 enactment which categorically states that the rules made under the repealed Act would continue to be in operation until they were superseded by a fresh set of rules made under the new Act, it is clear that the intent of the law was to ensure the continuance of the Rules framed under the repealed Act.
67. It is clear that the continuance of the earlier rules would not, in any way, affect the running of an educational institution under the new Act, essentially because, the Act and the Rules which were framed earlier were also designed to ensure that the educational institutions are run in an effective and proper manner.
68. The new Act was basically dealing with the entire field of education in a more comprehensive manner as against the earlier Act which sought to control only private educational institutions. The ultimate intent of both the Acts was to ensure that the educational institutions are regulated in a proper and effective manner. Therefore, it is clear that the mere promulgation of the 2003 Rules and
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 making them applicable only to three categories of institutions cannot, by any stretch of imagination, lead to an inference that the 1978 Rules stood repealed. The argument of the learned counsel for the petitioner regarding the repeal of the 1978 Rules would not be acceptable.
69. In view of the above, it is absolutely clear that the 1978 Rules would continue to apply to private un- aided educational institutions. As a consequence, the mandate of Rule 5 which declares that the scale of pay of an employee of an institution should not be lower than the scale of pay of an employee of a corresponding post in a government educational institution would have to be adhered to, if such institution's recognition is to be continued even under the 1983 Act.
70. As already stated above, it is the clear intent of the State that employees of private educational institutions should be paid on par with those employees in the corresponding government educational institutions. It
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 is no doubt true that the fees that had to be collected by the managements are prescribed under the Rules. It is also equally true that while determining the fee, the requirement of the management to pay salaries on par with government employees is also taken into consideration and the fee is accordingly fixed. The management would not therefore be entitled to put forth the contention that they are at liberty to fix their own scales of pay. If this argument is accepted, this would basically mean that there would be no rules regulating their functions, insofar as it relates to service conditions of its employees, and this is obviously impermissible.
71. Private un-aided institutions would have to necessarily pay their employees on par with the employees in government institutions, and as stated above, this is to ensure that the quality of its employees is on par with, if not better than, the staff in government institutions, which would in turn result in better imparting of education.
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72. It is also to be kept in mind that the wording of Rule 5 is to ensure that the minimum pay that is to be ensured to an employee is that of an employee of a government educational institution and there is no bar for private un-aided educational institutions to pay a higher pay-scale. In other words, what is prescribed is the minimum pay that is required to be paid to the employees of private educational institutions who discharge the same functions as that of an employee of a corresponding post in a government institution. If the argument that there should be no minimum pay-scale prescribed is accepted, it would fundamentally offend the doctrine of "equal pay for equal work", insofar as the employees of unaided colleges vis-à-vis the employees of government institutions are concerned, though both of them discharge the same functions.
73. The judgment in Oshiar Prasad (supra) cited by the counsel for the petitioner would be of no avail for the reason that the Apex Court therein considered the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 issue regarding the powers of the appropriate Government while making a reference under Section 10 of the Industrial Disputes Act, 1947, and has not dealt with the application of the Karnataka Education Act as has been considered in the present case. Furthermore, N.D. Narasimha Prasad (supra) also cannot be considered since the case therein was regarding availing benefits conferred by way of a Government Order and does not discuss the applicability of the Karnataka Education Act, as required in the case at hand.
74. The argument of the management that it would have the discretion to decide the pay structure and the extent of DA also cannot be accepted. It is to be noticed here that the pay structure of a government employee is prescribed by Pay Commissions which are periodically set up in this regard, and those Pay Commissions take a comprehensive view of the entire salary structure and also the requirements of employees, and thereafter determine the pay-scale. Once the pay-scale is determined, the
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 component of DA is added to the scale of pay in order to set-off the effect of inflation and the DA would therefore become a part and parcel of the pay of an employee, and it cannot be segregated or treated independent of the salary, though it is paid as a percentage of the pay scale.
75. It is to be kept in mind that the DA is paid as a percentage of the salary and is dependent on the rate of inflation that the country faces every year. If the management of a private educational institution were to state that it is only bound to match the scales of pay but not the DA, it would basically mean that the management would be permitted to pay a far lesser wage to its employee as compared to an employee of a government educational institution, and this is contrary to the basic objective that the employees of both private educational institutions and those in corresponding posts in government institutions get the same pay.
76. It is also to be kept in mind that the DA keeps progressively increasing and at times, it is almost
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 equivalent to the basic salary itself and if, as a result, private un-aided educational institutions were to state that they are liable only to match the pay scales, that would mean that they would be defeating the basic intent of Rule 5 in its entirety.
77. In view of the above, it is clear that the 1978 Rules which require private educational institutions (such as the petitioner) to ensure that the pay provided to their employees is not lower than the scale of pay of an employee in a corresponding post in a government educational institution, would continue to apply and it is also obvious that the basic intent of this rule is to ensure that an employee of an un-aided college gets the same take-home pay as that of an employee holding a corresponding post in a government educational institution.
78. The reliance placed on the decision rendered by the Apex court in the cases reported in Satimbla Sharma and Sushmitha Basu (both cited supra) can be of no
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NC: 2024:KHC-D:3019 WP No. 65310 of 2010 assistance, because in both the cases the Supreme Court considered a situation in the states of Himachal Pradesh and Delhi whereby there was no enactment such as the Karnataka Education Act which mandated private unaided colleges to ensure that salaries to the staff were not less than the salaries paid to corresponding staff in Government institution.
79. The reliance placed on the decision rendered in the case reported in KLE Society, Belgaum (supra) can also be of no avail. In that case, a coordinate bench of this Court relied upon the decision rendered in the case reported in Sri. Siddartha Education Society2, wherein the employees were claiming parity of pay scales. In this case, the institution itself had adopted the pay scales of Government employees and had thereafter sought to modify it and, therefore, the question involved in the above-mentioned two cases have no application. 2 Sri. Siddartha Education Society v. Tumkur District Technical Institutions Non-Teaching Employees' Union, ILR 2003 Kar 163.
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80. In the present case, the Industrial Tribunal, after taking into consideration all these factors, has rightly come to the conclusion that the management was not justified in contending that it had the right to determine the pay scale and also the extent of DA payable.
81. In my view, it has been rightly held that the management was liable to pay the respondent-workmen herein the same pay as an employee holding a corresponding post in a government educational institution. The question framed above is thus answered in favour of the respondent-workmen.
82. Further, for the reasons mentioned above, the challenge to Rule 5 of the 1978 Rules is also without any merit. Consequently, I see no grounds to entertain this writ petition and the same is therefore dismissed.
Sd/-
JUDGE VNP*:1-32/EM:33 to end CT:BCK