Supreme Court sets aside Allahabad HC’s decision declaring Regulation 101 framed under Intermediate Education Act unconstitutional

Supreme Court: Sanjay Kishan Kaul and M.M. Sundresh*, JJ., had set aside Allahabad High Court’s decision whereby the High Court had declared the Regulation 101 framed under Intermediate Education Act, 1921 as unconstitutional. The Bench expressed,

“We have already noted the fact that “Outsourcing” as a matter of policy is being introduced throughout the State. It is one thing to say that it has to be given effect to with caution as recommended by the Seventh Central Pay Commission, and another to strike it down as unconstitutional.”

The State of Uttar Pradesh had preferred the instant appeals against the judgment of the Allahabad High Court wherein, it had held that Regulation 101 framed under the Intermediate Education Act, 1921 as amended is unconstitutional.

Sub-Section 4 of Section 9 of the Act, 1921 provides the State Government authority to modify or rescind or make any regulation in respect of any matter. Similarly, Section 16G of the Act deals with conditions of service of the head of institutions, teachers and other employees and Sub-section (2) facilitates the introduction of regulation which could be extended to various activities such as probation, scale of pay, transfer of service, grant of leave etc.

Regulation 101

Prior to amendment, Regulation 101 stated,

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

However, with a view to regulate and curtail staff expenditure a policy decision was taken by the State of Uttar Pradesh to not create any new post in Class ‘IV’ category and wherever it may be necessary, the work may be carried out through “Outsourcing” which was backed by the recommendations of Sixth and Seventh Central Pay Commission. Following the said decision, Regulation 101 was again amended in 2013 which was notified on 24-04-2014. The effect of the said amendment was to make the post of Class “IV” employees which was hitherto supposed to be filled up by the institutions through “Outsourcing”. Therefore, the permanent posts were accordingly abolished, thereby, replacing the method of appointment by way of “Outsourcing.

Before The High Court

The High Court was of the opinion that Regulation 101 was unconstitutional being repudiate to Section 16G of the Act and the provisions of the U.P. High Schools and Intermediate Colleges (Payment of Salaries of Teachers and Other Employees) Act, 1971, and went onto observe that “Outsourcing” as a concept of making available the staff to perform Class “IV” jobs was unconstitutional, arbitrary and illegal contrary to Article 14 of the Constitution. The High Court held that Section 9(4) of the Act could be interpreted to give sufficient ammunition to sustain the impugned regulation.

Analysis and Opinion

Right to Aid

The Bench observed,

“We are dealing with a case where aid is not denied in toto but sought to be given in different form…when such a decision is made as a matter of policy and is being applied not only to educational institutions but spanning across the entire State in every department, one cannot question it and that too when there is no express arbitrariness seen on the face of it.”

Holding that right to get an aid is not a fundamental right, the Bench stated that a decision to grant aid is by way of policy decision and financial constraints and deficiencies are the factors which are considered relevant in taking any decision qua aid, including both the decision to grant aid and the manner of disbursement of an aid. Hence, even in a case where a policy decision is made to withdraw the aid, an institution cannot question it as a matter of right. On the contrary, an institution can never be allowed to say that the grant of aid should be on its own terms.

Minority and Non-Minority

“When it comes to aided institutions, there cannot be any difference between a minority and non-minority. A protection cannot be expanded into a better right than one which a non-minority institution enjoys.”

Thus, the Bench held that an institution receiving aid is bound by the conditions imposed and therefore expected to comply. Reliance was placed by the Court on T.M.A. Pai Foundation v. State of Karnataka, (2002) 8 SCC 481, wherein it was held that, “any regulation framed in the national interest must necessarily apply to all educational institutions, whether run by the majority or the minority and put the matter beyond any doubt. A caveat was however entered and it was stated that the government regulations cannot destroy the minority character of the institution.”

Policy Decision

Noticing that Regulation 101 was in the form of a subordinate legislation, the Bench stated that challenge to a regulation stands on a different footing than the one that can be made to an enactment. Since, an executive power is residue of a legislative one, the exercise of said power i.e., the amendment of the impugned regulation, cannot be challenged on the basis of mere presumption. The Bench opined, once a rule is introduced by way of a policy decision, a demonstration on the existence of manifest, excessive and extreme arbitrariness is needed to challenge it.

Other Contentions

The Bench held that Section 9(4) of the Act is certainly of a wider important and power conferred to the State Government to give effect to the Act is unbridled.  Noticing that Regulation 101 had, prior to the amendment, imposed strict compliance of getting prior approval of the government, however except in Civil Appeal No. 2753 of 2021, no such approval had been granted, the Bench was of the view that it only indicated the real intention of the respondents/management which was to have their own recruitment other than anything else. The State had abolished the post though in an indirect way by providing for “Outsourcing”, holding that a court cannot create or sustain the aforesaid post, the Bench expressed,

 “‘Outsourcing’ per se is not prohibited in law. It is clear that recruitment by way of “Outsourcing” may have its own deficiencies and pit falls, however, a decision to take “Outsourcing” cannot be declared as ultra vires of the constitution on the basis of mere presumption and assumption.”


On the issue as to whether the institutions should be held responsible with respect to those who were recruited though contrary to the Impugned Regulation or not, the Bench stated,

“These persons are innocent civilians who got embroiled in the legal battle initiated by the management and made to fight as front-line soldiers.”

Accordingly, the impugned judgement was set aside and the Regulation 101 was upheld.  The appeals were allowed with the following directions:

(i) The respondents in Civil Appeal No 2753 of 2021 were directed to be confirmed by granting adequate approval as Class “IV” employees, having given prior approval.

(ii) The respondents and similarly placed persons who were recruited by the institutions were directed to be continued with the same scale of pay as if they were recruited prior to the amendment for which the entire disbursement was directed to be made by the institutions alone.

(iii) The State was directed to ensure that adequate mechanism is available for the proper implementation of “Outsourcing” while taking note of the recommendations made in the Seventh Central Pay Commission.

[State of Uttar Pradesh v. Principal Abhay Nandan Inter College, 2021 SCC OnLine SC 807, decided on 27-09-2021]


Report by Kamini Sharma, Editorial Assistant, EBC Publishing Pvt. Ltd. 


Appearance by:

Counsel for State of U.P.: Aishwarya Bhati, Additional Solicitor General and Advocate Harish Pandey

Counsel for the Respondents: Advocate Manish Kumar Gupta

*Judgment by: Justice M.M. Sundresh

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