Holding

The teacher was not entitled to the Fifth Central Pay Commission recommendations with retrospective effect, and the doctrine of promissory estoppel does not apply.

Summary

The appellant, a trained graduate teacher, was offered a post with pay protection and later joined the school. He claimed that the school was bound to grant him the revised pay scale of the Fifth Central Pay Commission retrospectively from his date of appointment, invoking promissory estoppel based on a letter stating his pay would be automatically protected. The school argued that the letter only promised protection of his existing salary, not the future revised scale, and that the commission's recommendations were applied only from July 1999. The Supreme Court held that no promise of retrospective pay existed, the doctrine of promissory estoppel did not apply, and the school was not bound to grant the revised scale from the date of appointment. Consequently, the appeal was dismissed, upholding the High Court’s decision.

Issues considered

Whether the teacher is entitled to the Fifth Central Pay Commission pay scale retrospectively from his date of appointment.
Whether the school’s letter promising automatic protection of pay creates a binding promise enforceable under promissory estoppel.
Whether the High Court could set aside the Tribunal’s order granting retrospective pay.
Whether parity of pay between a private educational institution and state employees can be mandated.

Subjects

pay protectionFifth Central Pay Commissionpromissory estoppelservice lawteacher appointmentretrospective payprivate educational institutioncontract

Judgment

• )>
M. RAJA A
v.
CEERI EDUCATIONAL SOCIETY PILANI & ANR.

OCTOBER 31, 2006

[S.B. SINHA AND MARKANDEY KA TJU, JJ.] B

Service Law-Pay protection-Revised pay scale, claim of~Teacher
given pay protection with other benefits on jfJining school and he accepted
it-Recommendations of Fifth Pay Commission made applicable to the school
at a later date, if can be given retrospective effect-Held: Letter from the
c
school stated that recommendations of Pay Commission was likely to be
implemented, after its announcement, teacher's pay would be automatically
protected, is not a promise to extend the benefits of recommendation coming
in force in future-It stated that in case teacher joins earlier than the
implementation difference in the last salary drawn and salGJy at school on D
his joining, would be paid, does not mean that school was bound to implement
the same with retrospective effect-Revision took place subsequently, as such
a subsequent development-Principle of promissory estoppel would not be
~ attracted-School is ready and willing to extend the benefit of revised pay
scale from the date it was implemented-Thus, order of Division Bench of
High Court setting aside tribunal's order granting relief to the teacher from
E
the date of appointment, calls for no interference.

Appellant-teacher applied for appointment to the post of TGT in
respondent no. 1 school. He was assured pay protection and was offered
appointment with salary as per the Rules. Appellant did not join and demanded
F
for settlement of the terms. Respondent offered basic salary of Rs. 1700/-
with seven advance increments. Appellant submitted that he was promised pay
protection till implementation of Fifth Pay Commission report by way of
personal pay and the same was not mentioned in the appointment letter; and
t that he would be drawing 1600/- basic pay in the same grade in March 1997
in the present school and his last drawn pay was to be protected. Respondent G
no. 1 by letter dated 21.01.1997 stated that as the pay commission report is
likely to be implemented in its school from April, 1997, after its
announcement appellant's pay would be automatically protected and in case
he joins earlier than the implementation of the report the difference between

H

"
2 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A last drawn salary and salary payable at respondent's school on joining would
be given. Appellant joined the school on 30.4.1997. Fifth Central Pay
Commission revised the pay scale with effect from 1.01.l~J96.
Recommendations were applied by respondent with effect from 1.07.1999.
Pursuant thereto, appellant was put in the scale of Rs. 5000-8000 but he
.claimed that he was entitled to pay scale of Rs. 5500-9000. Aggrieved, appellant
B filed an application. Tribunal partly allowed the same holding that the appellant
was entitled to pay as per the recommendations of the Fifth Central Pay
Commission with effect from the date of appointment Respondents filed writ K
petition which was dismissed. However, Division Bench of High Court alHowed
their appeal. Hence, the present appeal.
c Dismissing the appeal, the Court

HELD: 1.1. The Division Bench of the High Court in the impugned
judgment has assigned reasons for interfering with the findings of the
Tribunal and the Single Judge of High Court that the appeitant-teacher was
D entitled to pay as per the recommendations of the Fiftt. Central Pay
Commission with effect from the date of appointment. There is no legal
infirmity therein. (10-E-Fl
I .2. Appellant-teacher had bet:n given the benefit of pay protecl:ion. He ~
accepted the same. Moreover, he had also been given additional benefits.
E Appointment offer cannot be read so as to extend such benefits in regard to
the applicability of the recommendations of the Fifth Central Pay Commission
which would come into force in future. There being no commitment in that
behalf, respondents were not bound by the purported commitment. Revision
of pay took place subsequently. Therefore, it was a subsequent devellopment.
(7-A-C)
F
1.3. Respondents expected that the recommendations of the Pay
Commission would be implemented from April, 1997, but if for one reason or
the other, the same was given effect to from 1.07.1999, a promise cannot be
said to have been made out that ir.-espective of the implementation of the report
of the Pay Commission, appeilant would be given the benefit thereof.
G Respondents in its letter dated 21.01.1997 stated "as the Pay Commission
Report is likely to be implemented in their school from Ap~il, 1997, after its
announcement, your pay will be automatically protected", cannot s.aid to be a
clear promise which would attract the principle of promissory estoppel.
Appellant was not entitled to the benefit of the recommendations of the Fifth
H Central Pay Commission with effect from 1.01.1996. (7-C-EI
- .. ~
M. RAJA v. CEERI EDUCATIONAL SOCIETY PILANI 3

1.4; It is one thing to say that the benefit of pay protection was accorded A
to him on the basis of his last drawn pay but it is another thing to say that he
should be given the benefit of.revised scale of pay with effect from 1997. They
stand on differfnt footings. The matter which was never contemplated by the
parties could not have beewth~ ~ubject matter of contract and, thus, could not
have been the basis for making a promise. [7-G-H; 8-A]
B
1.5. A parity in payment of scale of pay between a private institution and
the employees of the State cannot be directed as the same does not pertain to
any legal right of a teacher. Rights of the parties are not governed by any
statutory provisions. They have to be considered having regard to the terms
and conditions contained in the offer of appointment as also the subsequent
correspondences of the parties. Letter dated 21.01.1997 speaks of payment of
c
difference between the last drawn salary and salary payable to the appellant
on his joining respondent-school, on implementation of the Report of the Pay
Commission. The same did not mean that the respondents were bound to
implement the same with retrospective effect. (7-F-G; 8-HJ
D
Sushmita Basu and Ors. v. Ballygunge Siksha Samity and Ors., (2006) 9
Scale 459, referred to.

1.6. Only a limited notice had been issued by this Court whether the
revised pay is being paid to the appellant with effect from 1.07.1999.
Respondent-school is ready and willing to extend the benefit of revised scale E
of pay to the appellant with effect from the date when it was implemented by it,
in the event he enters into an agreement. Thus, it has not treated the appellant
very unfairly or unreasonably. There is no reason as to why scope of appeal
be enlarged at this stage. There is no need to pass further order. There is no
reason to consider applicability of doctrine of promissory estoppel. The
F
applicability of the doctrine of promissory estoppel is a question of law in a
given situation. The Division Bench of High Court did not enter into any
question of fact, although it was entitled to do so. r6-C; 8-G; 9-C-EJ

t UP. SRTC v. Mahendra Nath Tiwari and Anr., [2006[ l SCC 118 and
Management of Madurantakam Coop. Sugar Mills Ltd. v. S. Viswanathan, G
(2005) 3 sec 193, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4614 of2006.

From the Judgment and final Order dated 27.10.2005 of the High Court
of Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil Special Appeal H

,
4 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Writ No. 615/2004.

V. Sivasubramanian and Bikas Kar Gupta for the Appellant.

Sonia Mathur, Pankaj Prasad and Shritika Malik for the Respondents.

B The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted.

Appellant was working as a Trained Graduate Teacher (TGT for short)
(English) in Atomic Energy Central School, Rawatbhata in the State of
C Rajasthan. An advertisement was issued by Respondent No. l - Sociiety for
recruitment and appointment to the post of TGT in its school. The appellant
applied therefor. An interview was held. Allegedly, he asked for pay protection.
It was assured that his pay would be protected.

An offer of appointment was made to him on 17.12.1996 wherein it was
D stated:
"2. You will be paid salary which includes Basic Pay+ DA as per CES
Rules.

*** *** ***
E 14. You shall abide by the service rules of CEERI Educational Society
as decided from time to time."

The respondent, however, by a letter dated 8.01.1997 offered a basic
salary of Rs. 1700/- with seven advance increments as also accommodation,
F etc. to the appellant as he did not join and demanded for settlement of terms
and conditions in service to be spelt out clearly. It appears that the wife of
the appellant was also offered an appointment. In his letter dated 15.01.1997,
the appellant contended:

"I was promised pay protection till the implementation of Pay
G Commission Report by way of personal pay (by the Interview Committee,
of which you were also a member). There is no mention about it in
both your letters i.e. dated 17.12.96 and 8.1.97.

I am greatly obliged that you have offered me seven advance -
increments in the pay scale of Rs. 1400-40-1600-50-2300-EB-60-2600,
H but I wish to bring to your kind notice that I would be drawing 1600
M. RAJA v. CEERI EDUCATIONAL SOCIETY PILANI [S.B. SINHA, J.] 5
basic pay in the same grade in March, 1997. Henceforth my request A
to you is that you have to protect my last drawn pay of Atomic
Energy Central School (under AEES), as. agreed upon by the
Committee."

In response thereto, Respondent No. l - Society by a Jetter dated
2l.O1.1997 clarified the queries raised by the appellant inter alia in the B
following terms:

"Your basic salary of Rs. 1600 in March, 1997 with your present
employer has been well protected by offering you Rs. 1700 basic pay
as soon as you join us at CVM. As the pay commission report is likely
to be implemented in our school from April, 1997 after its C
announcement, therefore, your pay will be automatically protected at
that time. However, if you are joining us earlier than the implementation
of pay commission report the difference in your last drawn salary and
the salary at CVM on joining would be given to you as additional
personal pay as per rules." D
Yet again by a letter dated 25.0 l.1997, pay protection was assured
stating:

"Yes, your pay will be protected in any way either providing personal
pay or fixing basic pay at suitably higher level. The appointment letter E
sent to you is not supposed to carry all these details.

Principal, CVM has already written to you in this Tegard in detail.
If you have further any query please feel free to contact Principal,
CVM."

The appellant joined the services in Respondent No. l - School on F
30.04.1997. It is not in dispute that the Fifth Central Pay Commission revised
the scale of pay with effect from l.Ol.1996 pursuant whereto the appellant
claimed that he was entitled to the scale of pay Rs. 5500-9000 whereas he was
t put in the pay scale of Rs. 5000-8000. The recommendations of the Fifth
Central Pay Commission, however, were applied by the respondent with effect G
from 1.07.1999.

Inter alia on the premise that the respondents were bound to protect
his scale of pay keeping in view the promises made and the Management
Committee backtracked therefrom, he moved the Rajasthan Non-Government
Educational Institutions Tribunal, Jaipur. The Tribunal allowed the said H
6 SUPREME COURT REPORTS [2006) SUPP .. 8 S.C.R.

A application in part holding the appellanMo be entitled to pay as per the
recommendations of the Fifth Central PayCommission with effect from the
date of appointment and directing·the respondents to calculate the amount
of difference and pay the same to him within three months. A writ petition
filed by the respondents thereagainst was dismissed by a learned Single
B Judge of the High Court. The respondents preferred an intra-court appeal and
the Division Bench by reason of the impugned judgment allowed the same.

The appellant is, thus, before us. ;{

A limited notice was issued by an order dated 23.01.2006 only in regard
C to tbe question as to whether the revised pay is being paid to the appellant
with effect from l.07.1999. In its counter affidavit, the respondents contend
that the appellant is entitled thereto but he must give his consent therefor by
way of a written agreement. It is, thus, not in dispute that once the appellant
signs the agreement, he would be given benefits of the revised scale of pay.
Our attention in this connection has also been drawn "to .a letter of the
D appellant dated 4.02. 1997 wherein he stated:

"I have gone through the following~ ... and I am pleased to·accept the
terms and conditions of appointment stated through the abovesaid
offer and letters. \.

E I have resigned from my present job/ assignment on 28. l.I 997,
giving three months notice, which expires on 28.4.1997.

I have requested them to relieve me at the earliest, if they could
do the same, by waiving the notice pay/ period.

I would join your organization as and when I am felieved,, but I
F assure you that I would join CEERI VIDYA MANDIR latiest by
30.04.1997 (i.e. on or before 30.04.1997)."

The learned counsel appearing on behalf of the apJ?ellant would :submit
that the respondents are bound by the doctrine of promissory estoppel and
G keeping in view the stand taken by the then Managing Committee regarding
benefit of the revised scale of pay by way of pay protection, the new
Managing Committee could not have resiled therefrom.

The learned counsel appearing on behalf of the respondents, on the
other hand, submitted that whereas the appellant was entitled to protection
H of pay, he had never been assured that the benefit of the revised scale of pay
M. RAJA v. CEERI EDUCATIONAL SOCIETY PILANI [S.B. SINHA, J.] 7

would also be given to him with retrospective effect. A
The appellant had been given the benefit of pay protection. He accepted
the same. He had moreover been given also additional benefits. However, the
offer of appointment cannot be read so as to extend such benefits in regard
to the applicability of the recommendations of the Fifth Central Pay Commission
which would come in force in future. The respondents in that sense are right B
in contending that their being no commitment in that behalf, the question of
being bound by the purported commitment did not arise. Revision of pay took
place subsequently. It was, therefore, a subsequent development.

It may be true that even the respondents expected that the
recommendations of the Pay Commission would be implemented from April, C
1997, but if for one reason or the other, the same was given effect to from
l.07 .1999, a promise cannot be said to have been made out that irrespective
of the implementation of the report of the Pay Commission, the appellant
would be given the benefit thereof.
D
It may be that the respondents in its letter dated 21.01.1997 stated "as
the Pay Commission Report is likely to be implemented in our school from
April, 1997, after its announcement, therefore, your pay will be automatically",
but the same cannot be said to be a clear promise which would attract the
principle.of promissory estoppel.
E
The appellant was not entitled to the benefit of the recommendations
of the Fifth Central Pay Commission with effect from 1.01.1996.
Recommendations of the Fifth Central Pay Commission were made applicable
by the respondent in its school only from l.07.1999.

Rights of the parties are not governed by any statutory provisions. F
They have to be considered having regard to the terms and conditions
contained in the offer of appointment as also the subsequent correspondences
of the parties. The letter dated 21.01.1997 speaks of payment of difference
between the last drawn salary and salary payable to the appellant on his
joining - Respondent School on implementation of the Report of the Pay G
Commission. The same did not mean that the respondents were bound to
implement the same with retrospective effect.
. It is one thing to say that the benefit of pay protection was accorded
to him on the basis of his last drawn pay but it is another thing to say that
he should be given the benefit of revised scale of pay with effect from 1997. H
8 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A They stand on different footings. The matter which was never contemplatf:d
by the parties could not have been the subject matter of contract and, thUts,
could not have been the basis for making a promise.

We may notice that the appellant in Ground I of Special Leave Petition
stated:
B
"Because the respondent in their special appeal have made a
categorical statement that after the Vth Central Pay Commissi:on
recommendations were implemented in their school w.e.f. I. 7.1999,
petitioner at par with other employees of the respondent school, !has
been paid salary in the scale revised in accordance with the Vth CPC
c recommendations ...."

Contention of the respondents in this behalf is:

"That the other staff of the appellant school, to whom benefit of Fifth
Central Pay Commission has been given entered into contract with
D the appellants. These contracts were entered by staff as per CES,
service rule. However, the respondent employee refused to sign such
contract. Such contract needs to be signed as per CBSE (with whom
appellant is affiliated) guidelines."

We may, however, notice that the appellant himself in paragraph 2C-D
E of the rejoinder affidavit stated:
"That it is submitted that it is not stated anywhere in the appointment
letter that signing of the contract was· essential for getting th1! pay
revision. Though it is not a part of the appointment letter, signing of
the contract would not have been a problem had the contract been
F in accordance with the CBSE Affiliation Bye-Laws. Further, the ri!vised
pay scale w .e. f. 0 l.07 .1999 is neither as per the Fifth Central Pay
Commission recommendations nor is it as per the State Government
pay scale which is arbitrary and unreasonable"

The legality of the contract entered into by and between the parties is
G
not in issue.

Respondent - School, as noticed hereinbefore, is ready and willing to ·
extend the benefit of revised scale of pay with effect from the date when it
was implemented by it. Respondent School, thus, has not treated the appellant
H very unfairly or unreasonably. A parity in payment of scale of pay between
M. RAJA v. CEERI EDUCATIONAL SOCIETY PILANI [S.B. SINHA, J.] 9

· a private institution and the employees of the State cannot be directed as the A
same does not pertain to any legal right of a teacher.

We may notice that in Sushmita Basu and Ors. v. Ballygunge Siksha
Samity and Ors., (2006) 9 SCALE 459 a Division Bench of this Court opined
that for issuing such a direction an existence of a legal right in the teacher B
is imperative.

This Court clearly held that interference in the affairs of a private
educational institution would be justified only if public law element is involved.

In this case, only a limited notice had been issued and as the respondents C
are ready and willing to extend the benefit of revised scale of pay to the
appellant in the event he enters into an agreement, we are of the opinion that

-
no further order need be passed.

Learned counsel for the appellant submitted that despite the fact that
a limited notice had been issued, this Court should consider the applicability D
of the doctrine of promissory estoppel in this case. We do not find any reason
so to do. Limited notice was issued by this Court so as to find out as to
whether the appellant was being discriminately dealt with vis-a-vis other
teachers. Once it is found that he has been dealt with fairly and reasonably,
then there is no reason as to why we would enlarge the scope of appeal at
this stage. E
Reliance placed by learned counsel on a decision of this Court in U.P.
SRTC v. Mahendra Nath Tiwari & Anr., [2006] I SCC 118, does not lay any
law in absolute terms. Even in that case, the Court refrained itself from doing
so stating:-
F
" ... Of course, when we are hearing the appeal on grant ofleave or the
petition for special leave to appeal after notice, we are entitled to
reopen the appeal in its entirety and consider the question of
punishment and the legality of the reinstatement ordered by the Labour
Court and affinned by the High Court. This could be done by giving G
a notice in that behalf to the respondent and giving him an opportunity
of being heard. But for the purpose of this case and at this distance
of time, we do not think that it is necessary to do so. Therefore,
somewhat reluctantly, we refrain from adopting that course, though,
according to us, this is a fit case where neither the Labour Court nor
the High Court had any justification in interfering with the order H
10 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A removing the respondent from service ..... "

The jurisdiction of this Court in this behalf is not in dispute, but
exercise thereof would depend on the facts and circumstances of each case.

It was also submitted that the Division Bench of the High Court failed
B to properly construe the respondent's letter dated 21.1.1997. We do not think
so.

The applicability of the doctrine of promissory estoppel is a quest'ion
of law in a given situation. The Division Bench for the said purpose did not
enter into any question of fact, although it was entitled to do so.
c
In Management of Madurantakam Coop. Sugar Mills Ltd. v. S.
Viswanathan, [2005] 3 SCC 193, this Court did not say that the High Court
in exercise of its power of judicial review can never enter into questions of
fact but merely stated that it has a limited jurisdiction in this regard stating:-

D "Normally, the Labour Court or the Industrial Tribunal, as the case
may be, is the final court of facts in these types of disputes, but if
a finding of fact is perverse or if the same is not based on 1,egal
evidence the High Court exercising a power either under Article 226
or under Article 227 of the Constitution can go into the question of
fact decided by the Labour Court or the Tribunal. But before going
E into such an ,exercise it is necessary that the writ court must record
reasons why it intends reconsidering a finding of fact..."

The Division Bench of the High Court in the impugned judgment has
assigned reasons for interfering with the findings of the Tribunal and the
learned Single Judge. We do not find any legal infirmity therein.
F
The appeal is dismissed. No costs.

N.J. Appeal dismissed.