Who Is Liable To Pay Gratuity To Teachers Of Government Aided Schools? Supreme Court To Examine

Who is liable to pay gratuity in case of Government aided schools under the Payment of Gratuity Act? The Supreme Court will examine this issue raised in a Special Leave Petition filed against a Madhya Pradesh High Court judgment.

There appears to be contrary views of the Madhya Pradesh High Court and the Chhattisgarh High Court on the issue as to whose liability would it be to pay gratuity in case of Government aided schools under the Payment of Gratuity Act, 1972, the bench comprising Justices Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy noted while issuing notice.

The Madhya Pradesh High Court, in the impugned judgment, held that it is the institution, who has to pay the gratuity and not the State. 

To hold thus, the High Court relied on an earlier judgment of Division Bench in Suresh Kumar Dwivedi and others Vs. State of M.P.  1993 MPLJ 663, in which it was observed thus: "The teachers of the aided institutions are not appointed under the State Government. There is no relationship of master and servant between the State Government and the teachers. There is no provision in the Act or the rules applicable to such teachers or employees for payment of the aforesaid benefits. It is not clear how the State Government is accountable for extending such benefits and facilities. Since it is a policy matter involving financial burden, it is not the function of this Court to compel the Government to accord sanction, as the Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either."

In a Judgment delivered last year, the Chhattisgarh High Court, in Ambika Mission Boys Middle School vs. State of Chhattisgarh, held that the State would be employer within the definition of Payment of Gratuity Act, 1972 for the teachers/employees of aided educational institutions. 

Case: Shri Gujrati Samaj vs. State of Madhya Pradesh [SLP (C) No(s). 15331/2020]

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