Honble TIBREWAL, J.–A short but important question is raised in both the petitions. The question is : Whether payment of gratuity to the employees of aided educational institutions in pursuance of Rule 82 of the Rajasthan Non-government Educational Institutions (Recognisation - Grant-in-Aid and Service Conditions Etc.) Rules, 1993 (hereinafter to be referred to as the Rules) is an approved expenditure for the assessment of grant-in-aid ? In other words, whether an aided educational institution is entitled to get proportionate grant-in-aid admissible to it under the Rules on the amount paid to its employees towards gratuity ? (2). The State Government vide its communication dated, May 26, 1994 to the General Secretary, Managing Committee, Shri Agrawal College, Jaipur, has taken the view that payment of gratuity to an employee of the institution is not included in approved expenditure, as such, no grant-in-aid is payable on it. The decision on the question is likely to have far reaching consequences, having its effect on thousands of aided educational institutions in Rajasthan, extensive arguments were heard from both the sides. (3). Shri N.K. Maloo, learned counsel appearing for the petitioners strongly contended that Rule-82 imposes a statutory obligation on all the aided educational institutions in Rajasthan to pay gratuity to their employees as admissible under Payment of Gratuity Act, 1972 with no discretion left to them, as such, payment towards gratuity cannot be treated as un-approved expenditure to be born by the management only. In support of this contention, stress is laid on Note-II appended to Rule-14. It was further contended that Rule 14 describes items to be included in approved expenditure, but they are not exhaustive and by inserting Rule-82, the scheme of gratuity stands approved by the Government. It was then contended that expression ``salary as defined in Rule-2(r) should be given wider connotation so as to treat the amount of gratuity paid to an employee as emoluments. This interpretation is necessary, contended by Shri Maloo, as payment towards gratuity is made to an employee as per government instructions and statutory obligation. (4). On the other hand, learned counsel appearing for the State of Rajasthan, defended the decision of the State Government excluding gratuity amount from approved expenditure for the purpose of grand-in-aid.
This interpretation is necessary, contended by Shri Maloo, as payment towards gratuity is made to an employee as per government instructions and statutory obligation. (4). On the other hand, learned counsel appearing for the State of Rajasthan, defended the decision of the State Government excluding gratuity amount from approved expenditure for the purpose of grand-in-aid. It was contended that the management of an institution is primarily responsible to pay salary and other benefits including the amount of gratuity, to its employees and it cannot take the plea that unless and until State compensates by contributing towards gratuity, it will not make payment to its employees. Learned counsel further contended that it is a matter of policy decision by the State Government whether aided educational institutions should be given grant-in-aid on the gratuity and till such decision is taken administratively or by framing statutory regulations, the State Government cannot be made liable to pay grant-in-aid towards gratuity. (5). At the out-set, it may be stated that in these petitions no dispute has been raised before me that the management of an aided educational institution has no obligation to pay gratuity to its employees. (6). After giving careful consideration to rival submissions made by the learned counsel on both sides, I am of the view that submissions made on behalf of the aided educational institutions have force to be accepted. (7). Rule-82 of the Rules confers entitlement of gratuity to all employees of the aided educational institutions. Rule-82 reads as under : ``82. Gratuity and Insurance. (1) The employees of the Aided educational institutions shall be entitled to gratuity as admissible under Payment of Gratuity Act, 1972 as amended from time to time. (2) The managing committee shall arrange for Group Insurance of its employees under the respective scheme of Life Insurance Corporation of India. (8). Thus, statutory obligation of the management of an aided educational institution to pay gratuity to its employee cannot be disputed after the Rules of 1993 having come into force. It is also undisputed that gratuity to an employee is a condition of service. The only question requiring consideration, therefore, is: whether the State Government should contribute towards the gratuity proportionately as per grant-in-aid given to an aided educational institution. (9). Undisputedly, to impart education to the citizens is a State function.
It is also undisputed that gratuity to an employee is a condition of service. The only question requiring consideration, therefore, is: whether the State Government should contribute towards the gratuity proportionately as per grant-in-aid given to an aided educational institution. (9). Undisputedly, to impart education to the citizens is a State function. Various provisions of the Constitution of India make it obligatory for the State to provide education of the citizens and every citizen has a right to get education. The State cannot deny its obligation to establish educational institutions to enable to the citizens to enjoy the right of education. In Bandhuwa Mukti Moracha vs. Union of India (1), the Apex Court of the country has laid down that the right to life guaranteed by Article 21 does take in its ambit educational facilities. Again, in Unikrishna J.P. vs. State of U.P. (2), it has been reaffirmed that right to education is implicit in and flows from the right to life guaranteed by Article 21. The right to education as one of transcendental importance in the life of an individual, has been recognised not only in this country since thousands of years, but all over the world. It was also observed that importance of education has been rightly stressed in Miss Mohini Jain vs. State of Karnataka (3). Though, it was qualified by saying that this right must be construed in the light of Directive Principles in Part-IV of the Constitution. This is right to education as an obligation of the State Government is subject to its economic capacity and development. (10). Since huge financial lay-out is involved in extending the benefit of education to all the citizens, the State Government has been discharging its obligation through State owned or State recognised educational institutions. By granting recognisation to private educational institutions, the State Government creates an agency to fulfill its obligation under the Constitution. The State Govt. exercises its power to regulate imparting of education by private institutions by granting recognisation to them and steps are taken by the State to protect interest of the teachers employed in such educational institutions by regulating conditions of their employment and other connected matters. In order to make the recognised educational institutions, financially viable in running schools properly the State Government has been providing grants-in-aid, though it is not obligatory for a private educational institution to accept grant-in-aid from the State.
In order to make the recognised educational institutions, financially viable in running schools properly the State Government has been providing grants-in-aid, though it is not obligatory for a private educational institution to accept grant-in-aid from the State. The grant-in-aid by the State facilitates and ensures the recognised educational institutions to function effectively and in a meaningful manner with proper infrastructure and well trained tea- chers. The aided educational institutions, therefore, discharge State functions as instrumentality of the State. (11). The Rajasthan Non-government Educational Institutions Act, 1989 (for short the Act of 1989) has been enacted by the State Government to provide for better organization and development of education in non-governmental educatio- nal institutions in the State of Rajasthan. Prior to this enactment, there was a consistent demand from various employees unions and other quarters to enact law to organise and control functioning of the private educational institutions where thousands of teachers are employed. Protection of their interest was being felt since long as there were complaints that several unscrupulous managements adopted different methods to exploit them by imposing on them unjust conditions of service. Different schools adopted different conditions of service. The Act of 1989 and the Rules framed thereunder now provide uniform pay scales and other service conditions to the employees of the recognised and aided educational institutions. Scheme of Grant-in-Aid under the Act of 1989 and the Rules framed thereunder : (12). The Act has come into force w.e.f. 1.1.93. As per Sec. 2(a), ``aid means any aid granted to a recognised educational institution by the State Government. ``Aided institution has been defined in Clause (b), to mean a recognised institution which is receiving aid in the form of maintenance grant from the State Government. - Expression ``employee as per clause (i), includes a teacher and every employee working in a recognised institution. `Maintenance grant has been defined in clause (n) which means, such recurring grant-in-aid to an institution as the State Government may, by general or special order, direct to be treated as such grant. Sec. 2(r) defines salary as under : ``Salary means the aggregate of the emoluments of an employee including dearness allowance or any other allowance or relief for the time being payable to him but does not include compensatory allowance. (13). Chapter-II deals with recognition, its refusal and withdrawal. Then, Section 7 deals with grant of aid to recognised institutions.
Sec. 2(r) defines salary as under : ``Salary means the aggregate of the emoluments of an employee including dearness allowance or any other allowance or relief for the time being payable to him but does not include compensatory allowance. (13). Chapter-II deals with recognition, its refusal and withdrawal. Then, Section 7 deals with grant of aid to recognised institutions. It reads as under : ``7. Grant of aid to recognized institutions–(1) No aid shall be claimed by an institution as a matter of right. (2) Unrecognised institutions shall not be eligible to receive any aid. (3) Subject to such terms and conditions as may be prescribed, the sanctioning authority may sanction and distribute aid to recognised institutions from time to time in accordance with the procedure as may be prescribed. (4) The aid may cover such part of the expenditure of the institution as may be prescribed. (5) No amount out of aid given for salary of the employees of an ins- titution shall be used for any other purpose. (6) The sanctioning authority may stop, reduce or suspend aid on breach of any of the terms and conditions prescribed in this behalf. (7) The amount of aid may normally be paid to the Secretary of the managing committee of an institution but, in special circumstances and for reasons to be recorded in writing, such amount may be paid to any person authorised by the Director of Education or by any other officer empowered by him in this behalf. (14). Chapter-VI contains conditions of service. Sec. 16, includes gratuity as condition of employment and it provides that the State Government may regulate recruitment and conditions of service, including conditions relating to qualification, pay, gratuity, insurance, age of retirement and entitlement of of leave, conduct and discipline of persons appointed as employees of aided institutions of the State. Then, Sec. 29 provides that the scales of pay and allowances except compensatory allowance with respect to all the employees of an aided institution shall not be less than those prescribed for the staff belonging to similar categories in Government institutions. Sec. 43 empowers the State Government to make rules for the purpose of carrying into effect the provisions of the Act, including such rules to provide for giving of grants- in-aid to recognised institutions. (15).
Sec. 43 empowers the State Government to make rules for the purpose of carrying into effect the provisions of the Act, including such rules to provide for giving of grants- in-aid to recognised institutions. (15). The aided institution has been defined in Rule 2 (c), as a recognised ins- titution, which is receiving regular aid in the form of maintenance grant from the State Govt. Chapter-III of the Rules makes provision relating to `grants-in-aid. Rule 10 states general conditions governing grant-in-aid. Rule-11 provides the precedure for seeking grant-in-aid. Rule 13 deals with assessment of annual recurring grant. Sub-rule (2) states that ``approved expenditure shall be arrived at according to these rules and such other instructions that may be issued from time to time. Then, sub-rule (3) categories institutions for grant-in-aid purposes as follows : ``Category-A 80% of the approved expenditure B 70% of the previous year plus C 60% likely annual increment of staff. D 50% Special Category- Institutions carrying on the work of education on experimental & pioneering lines in accordance with the criteria laid down by the Department of Education 90%. (16). Then, Rule-14 prescribes admissible items of the approved expenditure for the purpose of grant-in-aid. They include salary, provident fund contribution of teaching and non-teaching staff and other recurring expenses provided in items (a) to (v). After describing items from (a) to (v) as admissible items of the expenditure, Notes (I) to (IX) have been appended to clarify some other items to be included or not to be included for the purpose of grant-in-aid. Note-II is relevant for our purpose which reads as under : ``Note-II. Charges on account of contribution made by the Institution to a pension fund or a gratuity scheme or on account of the pension or gratuity paid to former teachers are ordinarily not admitted for the purpose of grant-in-aid unless the rules on the subject are approved by government. Provided that in the case of staff obtained on lent services from any State Government or Government of India pension and leave salary contribution shall be allowed as approved expenditure. (17). Rule 82 makes entitlement of the employees of an aided institution to get gratuity as admissible under the Payment of Gratuity Act, 1972 as amended from time to time. (18).
(17). Rule 82 makes entitlement of the employees of an aided institution to get gratuity as admissible under the Payment of Gratuity Act, 1972 as amended from time to time. (18). In back ground of the legal provisions referred to above, the basic ques- tion that requires consideration is, as to whether the amount of gratuity paid to an employee of the aided educational institution is an approved expenditure for assessment of grant-in-aid, as grant-in-aid is allowed on approved expenditure of the previous year plus likely annual increment of staff. The term ``approved expenditure is not defined either in the Act of 1989 or the Rules, though, Rule-14 describes admissible items of the approved expenditure. However, that is not exhaustive as stated earlier. (19). There is no dispute that gratuity is payable to the employees of the aided educational institutions by virtue of Rule 82, which makes it obligatory on the Management to pay gratuity to its employees. The State Govt., vide its impugned communication dated, May 26, 1994 addressed to the General Secretary, Managing Committee, Shri Agrawal College, Jaipur, has denied grant-in-aid on gratuity paid by the institution to its employees observing that it was not payable as per the Rules, though right of the employees to get gratuity from the management/institution has been reiterated. If payment towards gratuity to the employees is as a statutory obli- gation and under directions of the State Government, could such expenditure be unapproved for the purpose of grant-in-aid ? The term ``approve has been defined as per Legal Glossary published by the Central Government, Department of Law and Justice, (1988 Edn.) as ``to accept as good or sufficient for the purpose intended, to confirm authoritatively. (20). The Random House Dictionary of the English Language, College Edition, defines the term ``approve as `to speak or think favourable of, to confirm or sanction formally; ratify. Similar definition has been given in Chambers Concise Dictionary. (21). If Note-II of Rule 14 is read alongwith the above definition, there remains no doubt that gratuity scheme to the employees of aided educational institutions stands approved by the State Government after enforcement of rule-82. No other interpretation is susceptible on this point.
Similar definition has been given in Chambers Concise Dictionary. (21). If Note-II of Rule 14 is read alongwith the above definition, there remains no doubt that gratuity scheme to the employees of aided educational institutions stands approved by the State Government after enforcement of rule-82. No other interpretation is susceptible on this point. I, therefore, hold that payment of gratuity to an employee by an aided educational institution is an approved expenditure for the purpose of grant- in-aid and the institution shall be entitled to claim grant-in- aid as per contribution of the State Government towards approved expenditure. (22). The matter may be judged from another angle also. The grant-in-aid to an aided institution is given by the State Govt. to maintain such private institutions to be financially viable in running schools and colleges. The gratuity is payable to an employee on termination of his employment after he has rendered continuous service not less than five years of his superannuation or retirement or resignation or on his death or disablement due to accident or disease. Some times, an aided institution may be required to pay huge amount towards gratuity to its employees and if entire burden is placed on the management, it may not be financially viable for it to make payment, though, it is a statutory obligation on its part. As already observed, to impart education and provide educational facilities is a State function. Private educational institutions, in fact, discharge functions of the State while running schools and colleges and in doing so, they work as agent of the State. Denial of grant-in-aid to them on obligatory expenses would not be in consonance with the spirit and purpose for which grant-in-aid is given under the Rules of 1993. (23). The result of the above discussion is that both the petitions deserve to be allowed. It is held that the State Government is liable to proportionately contribute towards gratuity as per entitlement of grant-in-aid of the aided institutions. The petitions are allowed accordingly with no order as to costs.