THE STATE OF UTTAR PRADESH & ORS. versus PRINCIPAL ABHAY NANDAN INTER COLLEGE & ORS.

THE STATE OF UTTAR PRADESH & ORS.

PRINCIPAL ABHAY NANDAN INTER COLLEGE & ORS.

(Civil Appeal No. 865 of 2021)

SEPTEMBER 27, 2021

[SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]

The Intermediate Education Act, 1921 – ss.9, 16G –Regulations framed under Act – Regulation 101 – Amendment –Permanent posts abolished – Recruitment by way of Outsourcing –Permissibility of – Government passed Orders, applicable to govt.departments and aided schools, followed by amended Regulation101 – Accordingly, posts of Class IV employees were to be filled upby the institutions through Outsourcing, permanent posts wereabolished – Recruitments made by the institutions de hors the same

– Writ petitions – High Court held Regulation 101 to beunconstitutional – On appeal, held: By the policy decision made,the appellants abolished the post though in an indirect way byproviding for outsourcing – court cannot create or sustain thesaid post – Nothing on record to hold that the decision made isextraneous as it is applicable not only to the aided institutions butalso to all government departments – Entire litigation is triggeredonly by the institutions – Idea was to create new set of employeesintroduced through Outsourcing – Impugned Regulation is onlyreiteration, as the Government Orders by way of policy take care ofthe aforesaid view – Further, an institution receiving aid is boundby the conditions imposed and therefore expected to comply –Appellants justified in passing the relevant Government Ordersfollowed by the impugned Regulation – Impugned Regulation upheld– Judgment of the Division Bench and the consequential orderspassed are set aside – Service Law – Constitution of India – Articles14, 30, 226 – Equity – Uttar Pradesh High Schools and IntermediateColleges (Payment of Salaries of Teachers and Other Employees)Act, 1971.

The Intermediate Education Act, 1921 – Object of – Discussed.Constitution of India – Article 30 – Held: Article 30 is subjectto its own restrictions being reasonable – protection cannot be

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Aexpanded into better right than one which non-minority institutionenjoys.

Educational Institutions – Right of Institutions qua the aid –Held: Right to get an aid is not fundamental right, the challengeto decision made in implementing it, shall only be on restrictedBgrounds – Further, when it comes to aided institutions, there cannotbe any difference between minority and non-minority one.

Administrative Law – Subordinate legislation – Policy decision– When cannot be challenged – Discussed.

Service Law – Recruitment by way of outsourcing – Held:COutsourcing per se is not prohibited in law– recruitment by wayof outsourcing may have its own deficiencies and pit falls, however,a decision to take “outsourcing” cannot be declared as ultra viresof the constitution on the basis of mere presumption and assumption.

Constitution of India – Article 14 – Nature of – Discussed.DInterpretation of Statutes – Old enactment – Constructive &purposive interpretation – Principle of interpretation – “Alwaysspeaking” principle – Discussed – The Intermediate Education Act,1921.

Allowing the appeals, the CourtE

HELD: 1. RIGHT TO AID: -

decision to grant aid is by way of policy. While doing so,the government is not only concerned with the interest of theinstitutions but the ability to undertake such an exercise. FinancialFconstraints and deficiencies are the factors which are consideredrelevant in taking any decision qua aid, including both the decisionto grant aid and the manner of disbursement of an aid. Once it isheld that right to get an aid is not fundamental right, thechallenge to decision made in implementing it, shall only be onrestricted grounds. Therefore, even in case where policyGdecision is made to withdraw the aid, an institution cannot questionit as matter of right. Maybe, such challenge would still beavailable to an institution, when grant is given to one institutionas against the other institution which is similarly placed.Therefore, with the grant of an aid, the conditions come. If anH

institution does not want to accept and comply with the conditionsaccompanying such aid, it is well open to it to decline the grantand move in its own way. On the contrary, an institution can neverbe allowed to say that the grant of aid should be on its own terms.In the present case aid is not denied in toto but sought to begiven in different form. The reason for such decision is bothefficiency and economy. When such decision is made as matterof policy and is being applied not only to educational institutionsbut spanning across the entire State in every department, onecannot question it and that too when there is no expressarbitrariness seen on the face of it. [Paras 29-31][708-G-H;709-A-E]

2. MINORITY AND NON-MINORITY: -

When it comes to aided institutions, there cannot be anydifference between minority and non-minority one. Article 30of the Constitution of India is subject to its own restrictions beingreasonable. protection cannot be expanded into better rightthan one which non-minority institution enjoys. An institutionreceiving aid is bound by the conditions imposed and thereforeexpected to comply. Once it is held so, the challenge made onvarious grounds, falls to the ground. [Paras 32, 33][709-F-G]

SK Md. Rafique vs. Management Committee ContaiRahamania High Madrasah & Ors. (2020) 6 SCC 689: [2020] 1 SCR 185 – relied on.

3. POLICY DECISION: -

The challenge is to the amendment to the Regulation 101.This regulation is in the form of subordinate legislation. Asubordinate legislation can also be in the form of policy decision.A policy decision had come into force in the year 2010 itself. Apolicy decision is presumed to be in public interest, and such adecision once made is not amenable to challenge, until and unlessthere is manifest or extreme arbitrariness, constitutional courtis expected to keep its hands off. challenge to regulationstands on different footing than the one that can be made to anenactment. However, when the regulation is nothing but areiteration of policy reinforcing the decision of the Governmentmade earlier, then the parameters required for testing the validity

Aof an Act are expected to be followed by the Court. An executivepower is residue of legislative one, therefore the exercise ofsaid power i.e., the amendment of the impugned regulation, cannotbe challenged on the basis of mere presumption. Once rule isintroduced by way of policy decision, demonstration on theexistence of manifest, excessive and extreme arbitrariness isBneeded. [Paras 36-39][714-G-H; 715-A-C]

4.1 Section 9(4) of the Act is certainly of wider import.The power conferred to the State Government to give effect tothe Act is unbridled. It is the very same regulation, based uponwhich, recruitments have been made by the management. It isConly by way of abundant caution, that the amendment has comeinto force. Section 9(4) of the Act is to be read in conjunctionwith Section 16G, as the provisions will have to be read keepingin view all the objects of the enactment. If the practice ofrecruitment, prior to the amendment of the impugned regulation,Dwas done by tracing the power under it, then it is not open to therespondents to contend to the contrary. [Paras 40, 41][715-D-E;717-B-C]

Ramji Dwivedi vs. State of Uttar Pradesh (1983) 3 SCC52 : [1983] 2 SCR 971 – relied on.

4.2 Regulation 101, prior to the amendment, imposes strictcompliance of getting prior approval. Except in Civil AppealNo.2753 of 2021, no such approval has been granted. Obviously,it only indicates the real intention of the respondents/managementwhich is to have their own recruitment other than anything else.F“Outsourcing” as matter of policy is being introduced throughoutthe State. It is one thing to say that it has to be given effect towith caution as recommended by the Seventh Central PayCommission, and another to strike it down as unconstitutional.“Outsourcing” per se is not prohibited in law. recruitment byway of “Outsourcing” may have its own deficiencies and pit falls,Ghowever, decision to take “Outsourcing” cannot be declaredas ultra vires of the constitution on the basis of mere presumptionand assumption. Obviously, the nature of the scheme andsafeguards attached to it are not known. [Paras 42, 43][717-C-F]

Catering Cleaners of Southern Railway vs. Union ofIndia & Anr. (1987) 1 SCC 700: [1987] 2 SCR 164– held inapplicable.

Manish Kumar vs. Union of India, (2021) 5 SCC 1 :[2021] 1 SCALE 646 – relied on.

4.3 Article 14 is positive in nature. Adequate leverage is tobe provided to the law maker in making the classification. Article14 does not prohibit discrimination, what is required is validdiscrimination against hostile one. [Para 46][718-C]

4.4 By the policy decision made, the appellants haveabolished the post though in an indirect way by providing for“Outsourcing”. Now, court cannot create or sustain theaforesaid post. There is nothing on record to hold that the decisionmade is extraneous as it is obviously made applicable not only tothe aided institutions but also to all government departments aswell. Admittedly, no challenge has been made to the decisiontaken in 2010 and 2011 which was to be made applicable to allthe recruitments for Group ‘IV’ posts in the Government, andnot only for the institutions and the persons recruited by them.The entire litigation is triggered only by the institutions. Theidea was to create new set of employees introduced through“Outsourcing”. The impugned Regulation is only reiteration, asthe Government Order dated 08.09.2010 and 06.01.2011 by wayof policy, takes care of the aforesaid view. When challenge ismade either to regulation, rule or an Act, it is for the personswho challenged, to satisfy the Court that they cannot be sustainedin the eyes of law. The appellants are justified in passing therelevant Government Order followed by the impugnedRegulation. Institutions should be held responsible for the judicialadventurism undertaken. The judgment of the Division Benchdated 19.11.2018 and the consequential orders passed are setaside. The impugned Regulation is upheld. The respondents/writpetitioners in Civil Appeal No 2753 of 2021 are to be confirmedby granting adequate approval as Class “IV” employees, havinggiven prior approval. Further directions issued. [Paras 47, 48,50, 51, 56 and 58][718-G-H; 719-B, E-F; 721-B-C, D-E]

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T.M.A Pai Foundation vs. State of Karnataka (2002) 8SCC 481: [2002] 3 Suppl. SCR 587 – followed.

Keshav Chandra Joshi vs. Union of India 1992 Supp(1) SCC 272; Syed Khalid Rizvi vs. Union of India 1993Supp (3) SCC 575; Kerela Samsthana Chethu ThozhilaliUnion vs. State of Kerela (2006) 4 SCC 327; Vasu DevSingh vs. Union of India (2006) 12 SCC 753;Ahmedabad St. Xavier’s College Society & Ors. vs. Stateof Gujarat & Ors. (1974) 1 SCC 717: [1975] 1 SCR173; St. Stephens College vs. University of Delhi (1992)1 SCC 558 : [1991] 3 Suppl. SCR 121; Secy.Malankara Syrian Catholic College vs. T. Jose & Ors.(2007) 1 SCC 386: [2006] 9 Suppl. SCR 644; ChadanaDas vs. State of West Bengal (2020) 13 SCC 411: [2019]12 SCR 631 – held inapplicable.

Dharani Sugars and Chemicals Ltd. vs. Union of India,(2019) 5 SCC 480 : [2019] 6 SCR 307 – relied on.

Federation of Railway Officers Association & Ors. vs.Union of India (2003) 4 SCC 289: [2003] 2 SCR 1085;Directorate of Film Festivals & Ors. vs. Gaurav AshwinJain & Ors. (2007) 4 SCC 737: [2007] 5 SCR 7; StateEof Punjab & Ors. vs. Ram Lubhaya Bagga & Ors.(1998) 4 SCC 737; Vasavi Engineering College ParentsAssociation vs. State of Telangana & Ors. (2019) 7 SCC172: [2019] 8 SCR 927; Union of India vs. PushpaRani (2008) 9 SCC 242 : [2008] 11 SCR 440; TamilFNadu Education Department Ministerial and GeneralSubordinate Services Association & Ors. vs. State ofTamil Nadu & Ors. (1980) 3 SCC 97 : [1980] 1 SCR1026 – referred to.

THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDANINTER COLLEGE

referred toPara 21Arelied onPara 21referred toPara 21held inapplicablePara 25held inapplicablePara 25Bheld inapplicablePara 25held inapplicablePara 25held inapplicablePara 26Cheld inapplicablePara 26followedPara 26held inapplicablePara 26held inapplicablePara 26Dheld inapplicablePara 28relied onPara 52

[2008] 11 SCR 440[2020] 1 SCR 185[1980] 1 SCR 1026(1992) Supp 1 SCC 272(1993) Supp 3 SCC 575(2006) 4 SCC 327(2006) 12 SCC 753[1975] 1 SCR 173[1991] 3 Suppl. SCR 121[2002] 3 Suppl. SCR 587[2006] 9 Suppl. SCR 644[2019] 12 SCR 631[1987] 2 SCR 164[2019] 6 SCR 307

CIVIL APPELLATE JURISDICTION: Civil Appeal No.865 of2021.

From the Judgment and Order dated 19.11.2018 of the High Courtof Judicature at Allahabad in Writ No.45060 of 2015.

With

Civil Appeal Nos.2816, 2817, 2753, 866, 2754, 2819, 2820, 2818,2815 of 2021

Ms. Aishwarya Bhati, ASG, Harish Pandey, Nischal Kumar Niraj,Ms. Kirti Khangotra, Sanjay Kumar Tyagi, Kameshwar Nath Mishra,Advs. for the Appellants.

Huzefa A. Ahmadi, V. K. Shukla, Sr. Advs., Rajat Singh, ApoorvaTewari, Prashast Puri Ms. Rohan Sharma, Samarth Mohanty, ShivpatiB. Pandey, V. N. Raghupathy, Narender Kumar Verma, PraveenAgrawal, Ms. Parul Shukla, Saket Gogia, Prateek Bhandari, ManishKumar Gupta, Tripurari Ray, Balwant Singh Billowria, NithyanandaMurthy P., Ms. Bhanuprabha, Vivekanand Singh, Anirudh Ray, Ms. ShilpaSingh, Yatish Mohan, Subash Chandra Sagar, E. C. Vidya Sagar,

AMs. Preetika Dwivedi, Naveen Kumar Tripathi, Udayan Pratap Singh,Abhishek Kumar Singh, Ms. Saroj Tripathi, Kabir Dixit, Waheb Hussaini,Anand Varma, Ms. Astha Ahuja, Manoj K. Mishra, R. K. Singh Kaosik,Umesh Dubey, D. N. Dubey, Alok Pandey, Sudhir S. Rawat, Dr. BheemPratap Singh, V. K. Jain, Shashank Tripathi, Dipesh Dwivedi, Ms. DivyaRoy, Dhananjay Garg, Abhay Kumar, Sidharth Iyer, Rajat Khattry, VishalBNautiyal, Kumar Milind, Shagun Ruhil, Abhimanyu Singh, SunnyChoudhary, Udayaditya Banerjee, Ajay Kumar Pandey, Santosh KumarPandey, Danish Zubair Khan, Advs. for the Respondents.

The Judgment of the Court was delivered by

CM. M. SUNDRESH, J.

1. Heard learned counsel for the parties.

2. We have also perused the documents filed and carefullyconsidered the affidavits of the parties along with the written argumentsfiled.D

3. Appeals have been preferred by the State of Uttar Pradeshlaying challenge to the judgment of the Division Bench of the AllahabadHigh Court dated 19.11.2018 holding that Regulation 101 framed underThe Intermediate Education Act, 1921 (hereinafter referred to as “theAct”) as amended is unconstitutional. Incidentally, few other appealsEwere disposed of by taking note of the aforesaid decision. Applicationshave also been filed to intervene/implead by such of those persons whoare also appointed by these institutions as Class “IV” employees. Thus,appositely all these appeals are disposed of by common order.

THE ACT: -F

4. The Intermediate Education Act, 1921 is of vintage origin havingits existence prior to independence and surviving to date. The object ofthe enactment is to regulate and supervise high schools and intermediateeducation. Sub-Section 4 of Section 9 of the Act speaks of the powersof the State Government and facilitates the State Government to passGappropriate orders or to take adequate action consistent with the provisionsof the Act and the State Government may modify or rescind or makeany regulation in respect of any matter:

“Section 9- Power of State Government

… (4) Whenever, in the opinion of the State Government, it isHnecessary or expedient to take immediate action, it may,

without making any reference to the Board under the foregoingprovisions, pass such order or take such other actionconsistent with the provisions of this Act as it deems necessary,and in particular, may by such order modify or rescind ormake any regulation in respect of any matter and shallforthwith inform the Board accordingly.”

5. Section 16G of the Act deals with conditions of service of thehead of institutions, teachers and other employees. Sub-section (2)facilitates the introduction of regulation which could be extended to variousactivities such as probation, scale of pay, transfer of service, grant ofleave etc. Needless to state that this provision speaks of the conditionsof service of the person employed in such institutions:

“Section 16G- Conditions of Service of Head of Institutions,teachers and other employees

(1) Every person employed in recognized institution shallbe governed by such conditions of service as may beprescribed by regulations and any agreement between themanagement and such employee insofar as it is inconsistentwith the provisions of this Act or with the regulations shall bevoid.

(2) Without prejudice to the generality of the powers conferredby sub-section (1), regulations may provide for-

(a) the period of probation, the conditions of confirmationand the procedure and conditions for promotion andpunishment 2[(including suspension pending or incontemplation of inquiry or during the pendency ofinvestigation, inquiry or trial in any criminal case for anoffence involving moral turpitude)] and the emolumentsfor the period of suspension and termination of servicewith notice;

(b) the scales of pay and payment of salaries;

(c) transfer of service from one recognized institution toanother;

(d) grant of leave and Provident Fund and other benefits;and

(e) maintenance of record of work and service.”

6. Regulations have been framed under the Act dealing with varioussubjects, however, for the present case only Chapter III of the saidregulations is relevant, which deals with “conditions of service”.

REGULATION 101: -

7. Regulation 101 was inserted vide Parishad 9/592 datedB28.08.1992 and was notified by way of Govt. Notification No. 400/15-7-2(1)-90 dated 30.07.1992 in the following manner:

“Appointing Authority except with prior approval of Inspectorshall not fill up any vacancy of non-teaching post of anyrecognized aided institution.”

C8. It was substituted through the Notification No. 300/XV-7-2(1)/90 dated 02.02.1995 as under:

“Appointing Authority except with prior approval of Inspectorshall not fill up any vacancy of non-teaching post of anyrecognized aided institution:

DProvided that filling of the vacancy on the post of Jamadarmay be granted by the Inspector.”

9. On 23.01.2008 with view to regulate and curtail staffexpenditure policy decision was taken by the State of Uttar Pradesh(the 1[st] Appellant) to not create any new post in Class ‘IV’ category andEwherever it may be necessary, the work may be carried out through“Outsourcing”. Thereafter, the recommendation was made by the SixthCentral Pay Commission in the month of March, 2008 to the effect thatit would only be appropriate to have “Outsourcing” of Class ‘IV’employees instead of seeking any new recruitment.

F10. Regulation 101 once again went through an amendment byway of Notification No.9/898 dated 31.12.2009, which reads as under:

“The appointing authority shall not fill any vacancy of thenon-teaching staff of recognised aided institutions, exceptwith the approval of Inspector, subject to restriction thatDistrict Inspector of Schools shall make available total numberGof vacancies to Director of Education (Secondary Education),and showing the number of students put forth justificationfor the filling of the vacancies. On receipt of order from theDirector of Education (Secondary Education), the DistrictInspector of Schools shall, for filling said vacancies, giveHpermission to the appointing authority; and while giving such

permission he shall ensure to follow the reservation rulesspecified by the government and the prescribed norms injustification for the posts.

The aforesaid amendment in the Regulation shall come intoforce immediate effect.”

11. Taking into consideration the recommendations made by theSixth Central Pay Commission, Government Orders were passed on08.09.2010 and 06.01.2011 making it applicable to all Governmentdepartments and aided schools, thus, deciding not to go for freshrecruitment of Class “IV” employees and further directing that anyarrangement concerning the post to be vacated may be made onlythrough “Outsourcing”. Appropriate communications were sent to allthe stakeholders intimating them of the decision taken.

12. Following the said decision, Regulation 101 was once againamended by Government Order dated 04.09.2013, which was accordinglynotified on 24.04.2014. The effect of the said amendment is to make thepost of Class “IV” employees which was hitherto supposed to be filledup by the institutions through “Outsourcing”. Therefore, the permanentposts were accordingly abolished, thereby, replacing the method ofappointment by way of “Outsourcing”. An exception has been carvedout only for the dependants of those employees died in harness duringemployment.

AMENDED REGULATION:

“101. The appointing authority, except for the prior approvalof the inspector, shall not fill any vacant post of non-teachingstaff (clerical cadre) in any recognised or aided institution;with the restriction that the District Inspector of Schools shallmake available the total number of vacancies to the Directorof Education (Secondary Education) and also put forthjustification for filling of the posts, showing the strength ofthe students in the institution. On receipt of the order fromDirector of Education (Secondary Education), the DistrictInspector of Schools shall give permission to the appointingauthority for filling the said vacancies (except the vacanciesof Class-IV posts) and while giving the permission, he shallensure compliance of the reservation rules specified by thegovernment as also of the prescribed norms in justificationfor the posts.

With respect to the Class-IV vacancies, arrangements shallbe made by way of outsourcing only; but the relevant rules,1981, as amended from time to time, for recruitment ofdependants of teaching or non-teaching staff of thenongovernment aided institutions dying in harness shall beapplicable in relation to the appointments to be made on thevacant posts of Class-IV category.”

SEVENTH CENTRAL PAY COMMISSION: -

13. By the Seventh Central Pay Commission Report, therecommendations made in the Sixth Central Pay Commission wereCreiterated with word of ‘caution’ in its implementation. Accordingly,the need to go for “Outsourcing”, keeping in view of the financialconstraints and efficiency, was once again reiterated:

PARAGRAPH 3.72 AND 3.83 OF THE REPORT

“3.72 The General Financial Rules provide for outsourcingof services in the interest of economy and efficiency. Broadguidance is provided in the Rules on identification ofcontractors and the tendering process.

There are three kinds of contractual appointments:

i. Tasks of routine nature, typically those relating tohousekeeping, maintenance, related activities, dataentry, driving, and so on, which are normally bundledand entrusted to agencies. These agencies then deputethe necessary persons to carry out these tasks…

F3.83 The Following are the conclusions andrecommendations:

…vii. The Commission is of the view that clearguidance from the government on jobs that can andshould be contracted out would be appropriate. Whiledoing so the concerns of confidentiality andaccountability may be kept in view. Further, to bringabout continuity and to address the concerns regardingexploitation of contractual manpower, uniformguidelines/model contract agreements may be devisedby the government…”

14. From the aforesaid facts it is abundantly clear that decisionwas made way back on 08.09.2010 to do away with the recruitment tothe post of Class “IV” employees, by replacing the process with theutilization of the service through “Outsourcing”. It was accordingly madeby taking note of the recommendations of the Pay Commission, with theprimary concern being financial difficulty, followed by efficiency. Theregulation was brought forthwith as an abundant caution by way of asubsequent act to complete the formalities. Institutions were being puton notice about the decision to withhold any fresh recruitment. However,recruitments have been made de hors the same either with or withoutthe court orders, by the institutions. It was also done without obtainingthe prior permission as per the mandate of the un-amended Regulation101 except in one case which is the subject matter of Civil Appeal No.2753of 2021. In Civil Appeal No.2754 of 2021 direction to grant priorpermission was obtained from the High Court.

BEFORE THE HIGH COURT: -

15. With the aforesaid backdrop, writ petitions have been filedbefore the Allahabad High Court. The Division Bench of the AllahabadHigh Court in the lead judgment dated 19.11.2018 was pleased to allowthe writ petitions filed, inter alia holding that there is violation of Article14 of the Constitution of India. Incidentally, reliance has also been madeon the provisions of Uttar Pradesh High Schools and IntermediateColleges (Payment of Salaries of Teachers and Other Employees) Act,1971 (hereinafter referred to as ‘UP Act, 1971’) which speaks aboutthe payment of salary including the manner of disbursement. The DivisionBench was of the opinion that Regulation 101 is unconstitutional beingrepudiate to Section 16G of the Act and the provisions of the UP Act,1971, and went onto observe that “Outsourcing” as concept of makingavailable the staff to perform Class “IV” jobs is unconstitutional, arbitraryand illegal. Section 9(4) of the Act cannot be interpreted to give sufficientammunition to sustain the impugned regulation. Seeking to impugn andset aside the said judgment which ratio was followed in other cases,these appeals are before us.

16. Having narrated the background facts, we would place onrecord the respective contentions of the counsel.

SUBMISSIONS OF THE APPELLANT: -

17. Ms. Aishwarya Bhati, Ld. Additional Solicitor Generalappearing for the appellants raised the primary objection on the right of

Athe writ petitioners to challenge the impugned regulation. According tothe Ld. ASG, this being policy decision carefully introduced afterconsidering the relevant materials based on the opinion of experts in thefield of finance and administration and widespread consultation withstakeholders, including the recommendations made by the Sixth CentralPay Commission and Seventh Central Pay Commission, is not amenableBto challenge by invoking the jurisdiction of the High Court under Article226 of the Constitution of India. The institutions being the recipients ofaid are bound by the conditions attached, as there exists neither afundamental right to receive aid nor vested one. It is not open to therespondents to question the policy decision of the appellants, consideringCthe fact that the said policy is applicable uniformly across all departmentsof the State and does not in any manner affect the rights of the existingemployees.

18. The Ld. ASG has further submitted that the other respondentshaving been selected contrary to law cannot seek equity. This situationDhas been created only by the overzealous management in recruiting themdespite clear directions by the appellants to the contrary. Even otherwise,any appointment made is subject to the orders of the Court.

19. The Division Bench has taken the role of an expert in goinginto the wisdom of the appellants, while dealing with policy decisionEbased on various relevant factors. Section 9(4) of the Act gives adequatepower to the State Government to change, modify and rescind theregulation accordingly without reference to the Board under the Act. Itis submitted that the amendment is only consequence to the decisionmade by the appellants.F20. The Order of the Division Bench would have far-reachingfinancial and economic impact on the entire recruitment processthroughout the State of Uttar Pradesh in view of its interpretation of“Outsourcing”. Article 162 of the Constitution has got no rationale toimpugned amendment. This is case of the abolishment of the posts andas such, Section 9(4) of the Act being of wider import, the impugnedGregulation is sustainable in the eyes of law.

21. To strengthen the aforesaid submissions, reliance has beenplaced on the following decisions:

i.Federation of Railway Officers Association & Ors. vs.Union of India (2003) 4 SCC 289;H

ii.Directorate of Film Festivals & Ors. vs. Gaurav AshwinAJain & Ors. (2007) 4 SCC 737;

iii.State of Punjab & Ors. vs. Ram Lubhaya Bagga & Ors.(1998) 4 SCC 737;

iv.Vasavi Engineering College Parents Association vs. StateBof Telangana & Ors. (2019) 7 SCC 172.

v.Ramji Dwivedi vs. State of Uttar Pradesh (1983) 3 SCC52;

vi.Union of India vs. Pushpa Rani (2008) 9 SCC 242;

vii.SK Md. Rafique vs. Management Committee ContaiCRahamania High Madrasah & Ors. (2020) 6 SCC 689;

viii.Tamil Nadu Education Department Ministerial and GeneralSubordinate Services Association & Ors. vs. State of TamilNadu & Ors. (1980) 3 SCC 97.

SUBMISSIONS OF BEHALF OF RESPONDENTS:-

22. Submissions on behalf of the respondents would include thatof the management and the candidates selected by them. Thesecandidates obviously came into picture through the recruitment processadopted by the management, notwithstanding, the orders dated 08.09.2010and 06.01.2011 followed by the impugned Regulation 101.

23. Regulation 101 as framed under the Act, as it stands, is aclear violation of Article 14 of the Constitution of India in filling thesanctioned post of Class “IV” employees alone by way of “Outsourcing”.Before the Division Bench, the appellants were not able to place therelevant material to substantiate the rationale behind the implementationof the policy of “Outsourcing” in filling the post of Class “IV” employeesand the method of implementation.

24. There is no power or authority for the introduction of theamended Regulation 101 under Section 16G of the Act. The poweravailable to the State Government under Section 9 of the Act cannot beextended to make the impugned regulation.

25. Section 16G of the Act is sought to be impliedly overruled bythe impugned regulation. As the term recruitment and conditions of serviceare not synonyms, the power given to the State Government cannot beextended to alter the conditions of recruitment itself. It is further

Acontended that the exercise of the power under Section 9(4) of the Act,especially while amending the regulations has to be consistent with theother provisions, as such, the impugned subordinate legislation is boundto be struck down. In support of the aforesaid contention the followingjudgments have been relied upon, namely. (i) Keshav Chandra Joshi vs.Union of India 1992 Supp (1) SCC 272; (ii) Syed Khalid Rizvi vs. UnionBof India 1993 Supp (3) SCC 575; (iii) Kerela Samsthana Chethu ThozhilaliUnion vs. State of Kerela (2006) 4 SCC 327; and (iv) Vasu Dev Singhvs. Union of India (2006) 12 SCC 753.

26. distinction has to be carved out among the institutions vizminority institutions on one hand, as against non-minority institutions,Cotherwise the main regulation violates the fundamental rights granted tominority institutions under Article 30(1) of the Constitution of India, inlight of the judgments of this Court in the case of, (i) Ahmedabad St.Xavier’s College Society & Ors. vs. State of Gujarat & Ors. (1974) 1SCC 717; (ii) St. Stephens College vs. University of Delhi (1992) 1 SCCD558; (iii) T.M.A Pai Foundation vs. State of Karnataka (2002) 8 SCC481; (iv) Secy. Malankara Syrian Catholic College vs. T. Jose & Ors.(2007) 1 SCC 386; and (v) Chadana Das vs. State of West Bengal(2020) 13 SCC 411.

27. The respondents who were recruited had the bona fide beliefEthat they were employed in accordance with law, and they cannot bemade to suffer, especially in light of the fact that some of them havebeen recruited in pursuance to prior approval given, thereby found to bequalified. Principle of undue hardship is to be applied while dealing withmarginalized poor persons. Article 162 would stand infringed if theimpugned amendment is allowed to be sustained.F

28. As held by this Court in Catering Cleaners of Southern Railwayvs. Union of India & Anr. (1987) 1 SCC 700, “Outsourcing” as methodof recruitment itself is illegal and unconstitutional as it attempts to bringback contract labour.DISCUSSION AND CONCLUSION:-GRIGHT TO AID: -

29. We will first take up the right of institutions qua the aid. Adecision to grant aid is by way of policy. While doing so, the governmentis not only concerned with the interest of the institutions but the ability toHundertake such an exercise. There are factors which the government is

expected to consider before taking such decision. Financial constraintsand deficiencies are the factors which are considered relevant in takingany decision qua aid, including both the decision to grant aid and themanner of disbursement of an aid.

30. Once we hold that right to get an aid is not fundamentalright, the challenge to decision made in implementing it, shall only beon restricted grounds. Therefore, even in case where policy decisionis made to withdraw the aid, an institution cannot question it as matterof right. Maybe, such challenge would still be available to an institution,when grant is given to one institution as against the other institutionwhich is similarly placed. Therefore, with the grant of an aid, the conditionscome. If an institution does not want to accept and comply with theconditions accompanying such aid, it is well open to it to decline thegrant and move in its own way. On the contrary, an institution can neverbe allowed to say that the grant of aid should be on its own terms.

31. We are dealing with case where aid is not denied in toto butsought to be given in different form. The reason for such decision isboth efficiency and economy. When such decision is made as matterof policy and is being applied not only to educational institutions butspanning across the entire State in every department, one cannot questionit and that too when there is no express arbitrariness seen on the face ofit.

MINORITY AND NON-MINORITY: -

32. When it comes to aided institutions, there cannot be anydifference between minority and non-minority one. Article 30 of theConstitution of India is subject to its own restrictions being reasonable.A protection cannot be expanded into better right than one which anon-minority institution enjoys. Law has become quite settled on thisissue and therefore does not require any elaboration.

33. Thus, on the aforesaid issue we have no hesitation in reiteratingthe principle that an institution receiving aid is bound by the conditionsimposed and therefore expected to comply. Once we hold so, thechallenge made on various grounds, falls to the ground.

34. The haze between minority and non-minority institution is nolonger in existence. This Court in SK Md. Rafique(supra) has dealtwith the same through the following paragraphs:

“41. In the backdrop of the decisions of this Court referredto hereinabove, we must now consider whether the relevantprovisions of the Commission Act, 2008 transgress upon therights of minority institution or the said provisions can betermed as “tenable as ensuring the excellence of the institutionwithout injuring the essence of the right” [ Expression usedby Krishna Iyer J. in Gandhi Faiz-e-am-College v. Universityof Agra, (1975) 2 SCC 283 : 1 SCEC 277] of minorityinstitution. Right from Kerala Education Bill, 1957, In re case[Kerala Education Bill, 1957, In re, 1959 SCR 995 : AIR 1958SC 956] the issue that has engaged the attention of this Courtis about the content of rights of minority educational institutionand the extent and width of applicability of regulations andwhat can be said to be permissible regulations. If the cases inthe first segment i.e. up to the decision in T.M.A. PaiFoundation [T.M.A. Pai Foundation v. State of Karnataka,(2002) 8 SCC 481 : 2 SCEC 1] are considered…

42. We now turn to T.M.A. Pai Foundation case [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481: 2 SCEC1] and consider the principles that it laid down and whetherthere was reiteration of the principles laid down in thedecisions of this Court in the earlier segment or whether there

Ewas any change or shift in the emphasis:

42.1. In para 50, five incidents were stated to comprisethe “right to establish and administer” and three of themwere stated to be:

(a) right to admit students;

(b) right to appoint staff — teaching and non-teaching;and

(c) right to take disciplinary action against the staff.

The discussion in the leading judgment was under variousheadings and the important one being “5. To what extentcan the rights of aided private minority institutions toadminister be regulated?”

42.2. The earlier decisions of the Court were consideredand while considering the judgment of this Court in

Sidhrajbhai Sabhai case [Sidhrajbhai Sabhai v. State ofGujarat, (1963) 3 SCR 837: AIR 1963 SC 540] it wasobserved: (T.M.A. Pai Foundation case [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481: 2SCEC 1] , SCC p. 563, para 107)

“107. … If this is so, it is difficult to appreciate how theGovernment can be prevented from framing regulationsthat are in the national interest, as it seems to beindicated in the passage quoted hereinabove. Anyregulation framed in the national interest mustnecessarily apply to all educational institutions, whetherrun by the majority or the minority. Such limitationmust necessarily be read into Article 30. The right underArticle 30(1) cannot be such as to override the nationalinterest or to prevent the Government from framingregulations in that behalf. It is, of course, true thatgovernment regulations cannot destroy the minoritycharacter of the institution or make the right to establishand administer mere illusion; but the right underArticle 30 is not so absolute as to be above the law.”

42.3.Thus, the principle laid down in Sidhrajbhai Sabhai[Sidhrajbhai Sabhai v. State of Gujarat, (1963) 3 SCR 837:AIR 1963 SC 540] that the right under Article 30(1) cannotbe whittled down by the so-called regulative measuresconceived in the interest not of the minority educationalinstitution, but of the public or the nation as whole wasnot accepted in T.M.A. Pai Foundation [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481: 2SCEC 1] . The emphasis was clear that any regulationframed in the national interest must necessarily apply toall educational institutions, whether run by the majorityor the minority and put the matter beyond any doubt. Acaveat was however entered and it was stated that thegovernment regulations cannot destroy the minoritycharacter of the institution.

42.4. The leading judgment then observed that the correctapproach would be—what was laid down by Khanna, J. inAhmedabad St. Xavier’s College case [Ahmedabad St.

ABC

Xavier’s College Society v. State of Gujarat, (1974) 1 SCC717: 1 SCEC 125]: (T.M.A. Pai Foundation case [T.M.A.Pai Foundation v. State of Karnataka, (2002) 8 SCC 481:2 SCEC 1], SCC p. 570, para 122)

“122. … balance has to be kept between the twoobjectives — that of ensuring the standard of excellenceof the institution, and that of preserving the right of theminorities to establish and administer their educationalinstitutions. Regulations that embraced and reconciledthe two objectives could be considered to be reasonable.This, in our view, is the correct approach to theproblem.”

42.5. The majority judgment then summed up the matterand stated: (T.M.A. Pai Foundation case [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481: 2SCEC 1], SCC p. 578, paras 135 & 137)

“135. … It is difficult to comprehend that the Framersof the Constitution would have given such an absoluteright to the religious or linguistic minorities, whichwould enable them to establish and administereducational institutions in manner so as to be inconflict with the other Parts of the Constitution.

xxx

137. … The right under Article 30(1) has, therefore,not been held to be absolute or above other provisionsof the law, and we reiterate the same. By the sameanalogy, there is no reason why regulations orconditions concerning, generally, the welfare ofstudents and teachers should not be made applicablein order to provide proper academic atmosphere, assuch provisions do not in any way interfere with theright of administration or management under Article30(1).”

It was further laid down: (SCC p. 579, para 138)

“138. … In other words, the essence of Article 30(1) isto ensure equal treatment between the majority and the

minority institutions. … Laws of the land, including rulesand regulations, must apply equally to the majorityinstitutions as well as to the minority institutions.”

43. The decision in T.M.A. Pai Foundation [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481 : 2 SCEC1] , rendered by eleven Judges of this Court, thus put thematter beyond any doubt and clarified that the right underArticle 30(1) is not absolute or above the law and thatconditions concerning the welfare of the students and teachersmust apply in order to provide proper academic atmosphere,so long as the conditions did not interfere with the right ofthe administration or management. What was accepted ascorrect approach was the test laid down by Khanna, J. inAhmedabad St. Xavier’s College case [Ahmedabad St. Xavier’sCollege Society v. State of Gujarat, (1974) 1 SCC 717: 1 SCEC125] that balance be kept between two objectives—one toensure the standard of excellence of the institution and theother preserving the right of the minorities to establish andadminister their educational institutions. The essence of Article30(1) was also stated — “to ensure equal treatment betweenthe majority and the minority institutions” and that rules andregulations would apply equally to the majority institutionsas well as to the minority institutions...

xxxxxxxxx

59. In our considered view going by the principles laid downin the decision in T.M.A. Pai Foundation case [T.M.A. PaiFoundation v. State of Karnataka, (2002) 8 SCC 481: 2 SCEC1], the provisions concerned cannot, therefore, be said to betransgressing the rights of the minority institutions. Theselection of the teachers and their nomination by theCommission constituted under the provisions of theCommission Act, 2008 would satisfy the national interest aswell as the interest of the minority educational institutionsand the said provisions are not violative of the rights of theminority educational institutions.”

35. We would also like to point out two additional paragraphs ofthe lead judgment in T.M.A. Pai Foundation vs. State of Karnataka,

A(2002) 8 SCC 481 that would put quietus to the issue before us quagrant of aid and the conditions that may be imposed by the State in lightof the protection granted to minority institutions under Article 30 of theConstitution of India:

“143. This means that the right under Article 30(1) impliesBthat any grant that is given by the State to the minorityinstitution cannot have such conditions attached to it, whichwill in any way dilute or abridge the rights of the minorityinstitution to establish and administer that institution. Theconditions that can normally be permitted to be imposed, onthe educational institutions receiving the grant, must be relatedCto the proper utilization of the grant and fulfilment of theobjectives of the grant. Any such secular conditions so laid,such as proper audit with regard to the utilization of thefunds and the manner in which the funds are to be utilized,will be applicable and would not dilute the minority status ofDthe educational institutions. Such conditions would be validif they are also imposed on other educational institutionsreceiving the grant.

144. It cannot be argued that no conditions can be imposedwhile giving aid to minority institution. Whether it is anEinstitution run by the majority or the minority, all conditionsthat have relevance to the proper utilization of the grant-in-aid by an educational institution can be imposed. All thatArticle 30(2) states is that on the ground that an institution isunder the management of minority, whether based on religionor language, grant of aid to that educational institution cannotFbe discriminated against, if other educational institutions areentitled to receive aid. The conditions for grant or non-grantof aid to educational institutions have to be uniformly applied,whether it is majority-run institution or minority-runinstitution…”

GPOLICY DECISION: -

36. The challenge before us is the amendment to the Regulation101. This regulation is in the form of subordinate legislation. Asubordinate legislation can also be in the form of policy decision. Wehave already noted that policy decision has come into force in the yearH2010 itself.

37. policy decision is presumed to be in public interest, and sucha decision once made is not amenable to challenge, until and unlessthere is manifest or extreme arbitrariness, constitutional court is expectedto keep its hands off.

38. challenge to regulation stands on different footing thanthe one that can be made to an enactment. However, when the regulationis nothing but reiteration of policy reinforcing the decision of theGovernment made earlier, then the parameters required for testing thevalidity of an Act are expected to be followed by the Court.

39. An executive power is residue of legislative one, thereforethe exercise of said power i.e., the amendment of the impugned regulation,cannot be challenged on the basis of mere presumption. Once rule isintroduced by way of policy decision, demonstration on the existenceof manifest, excessive and extreme arbitrariness is needed.

OTHER CONTENTIONS: -

40. Section 9(4) of the Act is certainly of wider import. Thepower conferred to the State Government to give effect to the Act isunbridled. It is the very same regulation, based upon which, recruitmentshave been made by the management. One has to understand theimpugned regulation in the context along with the setting. It is only byway of abundant caution, that the amendment has come into force. Theexistence of the power under Section 9(4) of the Act has been dealtwith by this court in Ramji Dwivedi’s case (supra):“12. Sub-section (4) of Section 9 which has been extractedhereinbefore confers power on the State Government withoutmaking any reference to the Board to make an order or takesuch other action consistent with the provisions of the Act asit deems necessary and in particular, may by such order modifyor rescind or make any regulation in respect of any matter. Itwould thus unquestionably transpire that while enacting theRegulations prior sanction of the State Government isnecessary and under sub-section (4) of Section 9 the StateGovernment enjoys the power to make, modify or rescind anyregulation. Armed with this power the State Government issuedan order dated July 7, 1981 stopping all fresh selections andappointments of Principals etc. in all non-government-aided

schools. Shrinath Intermediate College is non-government-aided school. The effect of the order conveyed by theradiogram would be to rescind the regulation conferringpower on the Committee of Management to make appointmentand withdrawing and/or suspending power of appointmentof Principal and teachers. The issuance of the order is not indispute. The argument, in the High Court, was that the StateGovernment had no such power and that even if sub-section(4) is deemed to confer such power it has to be read injuxtaposition with the power conferred on the StateGovernment by sub-sections (1), (2), (3) preceding sub-section(4) of Section 9. The High Court therefore had to examine thewidth and ambit of the executive power of the StateGovernment in exercise of which, according to the High Court,the order contained in the radiogram was issued. We neednot go that far because in our opinion sub-section (4)specifically confers power on the State Government withoutmaking any reference to the Board to make, modify or rescindany regulation as also make such other order consistent withthe provisions of the Act. This power of wide amplitude willcomprehend the power to stop all appointments for the timebeing. And the power appears to have been exercised asGovernment was contemplating taking away the power ofprivate management of non-government-aided schools tomake appointment of teachers including Principals. In orderto avoid forestalling of governmental action by privatemanagements, the power to make appointments wassuspended for the time being. As pointed out earlier, theRegulation confers power on the Committee of Managementto make appointment. That Regulation was enacted by theBoard with the prior sanction of the State Government. TheState Government could be said to have rescinded thatRegulation conferring power of appointment or at any ratesuspended the power conferred on the Committee ofManagement to make appointment. The order became effectivethe moment it is issued. The effect of this order is that theSelection Committee had no right to select the appellant northe Committee of Management had any power to make theappointment.

14. In view of the finding that sub-section (4) of Section 9 didconfer power on the State Government to make, modify orrescind the regulation or make any other order consistentwith the provisions of the Act, the second contention of MrSanghi is equally bound to fail.”

41. Section 9(4) of the Act is to be read in conjunction with Section16G, as the provisions will have to be read keeping in view all the objectsof the enactment. In this connection, we need to point out that if thepractice of recruitment, prior to the amendment of the impugnedregulation, was done by tracing the power under it, then it is not open tothe respondents to contend to the contrary.

42. Regulation 101, prior to the amendment, imposes strictcompliance of getting prior approval. We find that except in Civil AppealNo.2753 of 2021, no such approval has been granted. Obviously, it onlyindicates the real intention of the respondents/management which is tohave their own recruitment other than anything else.

43. The Division Bench in considering the view has entered intoan arena which was not required to be done. Much labouring was donein interpreting the word “Outsourcing”, however, such an exercise oughtto have been avoided as it stands outside the scope of judicial review.We have already noted the fact that “Outsourcing” as matter of policyis being introduced throughout the State. It is one thing to say that it hasto be given effect to with caution as recommended by the Seventh CentralPay Commission, and another to strike it down as unconstitutional.“Outsourcing” per se is not prohibited in law. It is clear that recruitmentby way of “Outsourcing” may have its own deficiencies and pit falls,however, decision to take “Outsourcing” cannot be declared as ultravires of the constitution on the basis of mere presumption and assumption.Obviously, we do not know the nature of the scheme and safeguardsattached to it.

44. Reliance is made on decision of this court in the case ofCatering Cleaners of Southern Railway (supra), wherein thePetitioners were “catering cleaners” employed for cleaning in variousrailway station, and they were not even paid the minimum wages. Theirgrievance was that they had no security of service, while being paid apaltry sum as wages. The aforesaid decision has no application qua thepresent regulation, which has got its own laudable object, introduced onthe basis of economic criteria apart from efficiency.

A45. We are also not dealing with the scheme per se, and therefore,are in dark on the conditions of service. The challenge in the presentcase is not by the employee, recruited by way of “Outsourcing”, andhence, we hold the said decision on which much reliance is sought to bemade by the respondents will not be of any help. One cannot simplypresume that “Outsourcing” as method of recruitment would necessarilyBbe adopting contract labour and that there exists an element of unfairtrade practice, as sought to be contended by the respondents.

46. Article 14 is positive in nature. Adequate leverage is to beprovided to the law maker in making the classification. Article 14 of theConstitution of India does not prohibit discrimination, what is required isCa valid discrimination against hostile one. We do not wish to multiplythe aforesaid principle of law except quoting the following paragraph inManish Kumar vs. Union of India, (2021) 5 SCC 1:

“249. We see considerable merit in the stand of the Union.This is not case where there is no intelligible differentia.DThe law under scrutiny is an economic measure. As laid downby this Court, in dealing with the challenge on the anvil ofArticle 14, the Court will not adopt doctrinaire approach.Representatives of the people are expected to operate ondemocratic principles. The presumption is that they areEconscious of every fact, which would go to sustain theconstitutionality of the law. law cannot operate in vacuum.In the concrete world, when the law is put into motion inpractical experiences, bottlenecks that would flow from itsapplication, are best envisaged by the law givers. Solutionsto vexed problems made manifest through experience, wouldFindeed require good deal of experimentation, as long as itpasses muster in law. It is no part of court’s function toprobe into what it considers to be more wise or better wayto deal with problem.”47. The entire issue has to be looked at from different perspectiveGas well. By the policy decision made, the appellants have abolished thepost though in an indirect way by providing for “Outsourcing”. Now, acourt cannot create or sustain the aforesaid post. There is nothing onrecord to hold that the decision made is extraneous as it is obviouslymade applicable not only to the aided institutions but also to all governmentHdepartments as well.

48. Arguments are advanced to the effect that interest of poorand needy is affected by the impugned Regulation. We do not knowhow the interest of the poor and needy is affected by the impugnedRegulation. Admittedly, no challenge has been made to the decision takenin 2010 and 2011 which was to be made applicable to all the recruitmentsfor Group ‘IV’ posts in the Government, and not only for the institutionsand the persons recruited by them. The entire litigation is triggered onlyby the institutions.

49. Whenever lis is raised before the Court the grievance alongwith interest of the party concerned while laying challenge has to bekept in mind. The aforesaid principle is expected to be kept in mind.More so, while invoking Article 226 of the Constitution of India beingextraordinary and discretionary in nature. The aforesaid principle wouldhelp the Court to understand the actual reason behind seeking relief bya party. Keeping the said principle in mind we could only say that therespondents/petitioners, being the institutions endowed with the powerof recruitment, do not wish to let go of their hold.

50. The Division Bench has also taken into consideration Section9 of the Payment of Salary Act, 1971. We may only state that the aforesaidact has got nothing to do with the impugned Regulation. The idea was tocreate new set of employees introduced through “Outsourcing”. Asstated, the impugned Regulation is only reiteration, as the GovernmentOrder dated 08.09.2010 and 06.01.2011 by way of policy, takes care ofthe aforesaid view.

51. The High Court has placed the onus on wrong premise onthe appellants represented by their pleader. When challenge is madeeither to regulation, rule or an Act, it is for the persons who challenged,to satisfy the Court that they cannot be sustained in the eyes of law.Such challenge has to be considered within the contours of law. Merefact that counsel representing the State is not able to satisfy the Courton the policy challenged would not ipso facto lead to declaration thatit is unconstitutional. Having said that, we do believe that such an exerciseis also not warranted at the hands of the High Court.

52. The fact that the Act of 1921 is of pre-independent originhas been taken note of by us already. The regulations have been introducedin tune with the powers conferred under the Act. The concept of “alwaysspeaking” as principle of interpretation is to be applied for proper

Aunderstanding of an old enactment. After all, such statute having itsintended object which certainly includes regulating the functions of aidedinstitutions requires to be interpreted to deal with the past, present andfuture situations. Therefore, an interpretation which is reasonable,constructive and purposive would serve the purpose. We draw referenceto the decision of this Court in the case of Dharani Sugars andBChemicals Ltd. vs. Union of India, (2019) 5 SCC 480.

53. The counsel appearing for the respondents did place relianceupon few decisions of this Court. Having gone through the said decisionsand in the light of our discussion, we do not find any help flowing fromthem, strengthening the contentions raised by them. Reliance has beenCmade on the decision rendered by this Court in Matankara SyrianCatholic College vs. T. Jose, (2007) 1 SCC 386. Having gone throughthe said judgment, we do not find that the same has got any applicationto the case at hand. The said decision deals with the right of the minorinstitutions to choose the Principal of its choice. We have already heldDthat we are dealing with the case of aided institutions and, therefore,there is no need for any sub-classification by separating them as minorityand non-minority institutions. The impugned regulation is sought to beenforced against all the aided institutions. It is also to be noted that thisdecision was taken into consideration by this Court in S.K. Md. Rafique’scase (supra).E

RELIEF: -

54. We have one more issue to be considered before ourconclusion. That is, whether the institutions should be held responsible,with respect to the interest of those who were recruited though contraryFto the Impugned Regulation or not. These persons are innocent civilianswho got embroiled in the legal battle initiated by the management andmade to fight as front-line soldiers. It is the management which foundthese persons suitable to hold the post. Therefore, this court will have toapply the theory of justice and adopt problem-solving approach. Havingappointed persons and found them suitable, while creating situationGwhich could have been avoided, the managements will have to take uptheir responsibility. If imparting education is seen to be in public interest,such institutions have duties to their employees as well. Certainly, theappellants cannot be made to continue them by making contributiontowards their salary by way of aid.H

55. We may also note that even the Division Bench in its ownwisdom has observed that the impugned Regulation can only be appliedto the aided institutions alone. This finding has not been challengedseriously before us. We are conscious of the legal position governingequity when pitted against law. Though both can travel in the samechannel, their waters do not mix very often.

56. Having found that the appellants are justified in passing therelevant Government Order followed by the impugned Regulation, wedo not wish to impose any further liability on them. On the contrary, wedo feel that institutions should be held responsible for the judicialadventurism undertaken.

57. However, we would also like to observe that the appellantswill have to seriously consider paragraph 3.72 and 3.83 of the SeventhCentral Pay Commission. We expect the appellants to create an adequatemechanism to see to it that the persons employed by the process of“Outsourcing” are not exploited in any manner.

58. Accordingly, we have no difficulty in setting aside the judgmentof the Division Bench dated 19.11.2018 and the consequential orderspassed while upholding the impugned Regulation. The appeals are allowedwith the following directions:

(i)The respondents/writ petitioners in Civil Appeal No 2753of 2021 are directed to be confirmed by granting adequateapproval as Class “IV” employees, having given priorapproval.

(ii)The respondents/writ petitioners and similarly placed personswho are recruited by the institutions including therespondents shall be continued with the same scale of payas if they are recruited prior to 08.09.2010 for which theentire disbursement will have to be made by the institutionsalone.

(iii)The appellants shall undertake the necessary exercise tosee to it that there is mechanism available for the properimplementation of “Outsourcing” with specific referenceto the conditions of service of those who are employed whiletaking note of the recommendations made in the SeventhCentral Pay Commission.

722SUPREME COURT REPORTS[2021] 10 S.C.R.

A59. The impleadment /intervention applications are allowed

accordingly.

60. There shall be no order as to costs.

BDivya Pandey

Appeals allowed.