In a decisive ruling, the Supreme Court rejected Gujarat’s stance that it bore no obligation to provide retiral benefits to an employee of a state-aided educational institution whose dismissal was overturned. The Court emphasized that under the state’s pension scheme, the financial responsibility lies squarely with the government.
This case originated from a challenge brought by Nutan Bharti Gram Vidyapeeth, a Gujarat-based aided private institution, against a High Court directive requiring both the institution and the state to jointly compensate the retired employee. The employee had been dismissed but was later reinstated and granted benefits after reaching superannuation.
The institution argued that the state’s pension scheme clearly designated the government as the party accountable for such payments. It pointed to provisions mandating that the Director of Higher Education sanction pensions and forward them to the treasury for disbursal.
The state, however, sought to shift the burden back to the institution, contending that its prolonged litigation delayed resolution, leaving the employee to retire before matters were settled. Drawing on precedent, the state claimed this justified requiring the institution to bear the costs.
Rejecting these arguments, the Supreme Court highlighted the lack of exceptions in the pension scheme that would permit such a transfer of responsibility. The bench noted that while the institution had pursued litigation to enforce discipline within its jurisdiction, this action did not violate the scheme’s framework or undermine its entitlement to government funding for pensionary obligations.
The Court clarified that the state’s cited precedent differed significantly, as the earlier case involved actions outside institutional jurisdiction. By contrast, Nutan Bharti’s decision to challenge the dismissal fell within its administrative rights.
Ultimately, the Court set aside the High Court’s order and directed the state government to fulfill its financial obligations, underscoring the statutory framework’s primacy in safeguarding employee rights. This ruling reinforces the principle that state-aided institutions can rely on government-backed schemes to honor retiree entitlements, even amid complex legal disputes.
