THE STATE OF UTTAR PRADESH & ORS.versusPRINCIPAL ABHAY NANDAN INTER COLLEGE & ORS.

                        [2021] 10 S.C.R. 693                              693


           THE STATE OF UTTAR PRADESH & ORS.                              A
                                  v.
   PRINCIPAL ABHAY NANDAN INTER COLLEGE & ORS.
                    (Civil Appeal No. 865 of 2021)
                       SEPTEMBER 27, 2021                                 B

   [SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]
       The Intermediate Education Act, 1921 – ss.9, 16G –
Regulations framed under Act – Regulation 101 – Amendment –
Permanent posts abolished – Recruitment by way of Outsourcing –           C
Permissibility of – Government passed Orders, applicable to govt.
departments and aided schools, followed by amended Regulation
101 – Accordingly, posts of Class IV employees were to be filled up
by the institutions through Outsourcing, permanent posts were
abolished – Recruitments made by the institutions de hors the same
– Writ petitions – High Court held Regulation 101 to be                   D
unconstitutional – On appeal, held: By the policy decision made,
the appellants abolished the post though in an indirect way by
providing for outsourcing – A court cannot create or sustain the
said post – Nothing on record to hold that the decision made is
extraneous as it is applicable not only to the aided institutions but     E
also to all government departments – Entire litigation is triggered
only by the institutions – Idea was to create a new set of employees
introduced through Outsourcing – Impugned Regulation is only
reiteration, as the Government Orders by way of policy take care of
the aforesaid view – Further, an institution receiving aid is bound
by the conditions imposed and therefore expected to comply –              F
Appellants justified in passing the relevant Government Orders
followed by the impugned Regulation – Impugned Regulation upheld
– Judgment of the Division Bench and the consequential orders
passed are set aside – Service Law – Constitution of India – Articles
14, 30, 226 – Equity – Uttar Pradesh High Schools and Intermediate        G
Colleges (Payment of Salaries of Teachers and Other Employees)
Act, 1971.
      The Intermediate Education Act, 1921 – Object of – Discussed.
       Constitution of India – Article 30 – Held: Article 30 is subject
to its own restrictions being reasonable – A protection cannot be         H
                                 693
694            SUPREME COURT REPORTS                      [2021] 10 S.C.R.


A     expanded into a better right than one which a non-minority institution
      enjoys.
            Educational Institutions – Right of Institutions qua the aid –
      Held: Right to get an aid is not a fundamental right, the challenge
      to a decision made in implementing it, shall only be on restricted
B     grounds – Further, when it comes to aided institutions, there cannot
      be any difference between a minority and non-minority one.
           Administrative Law – Subordinate legislation – Policy decision
      – When cannot be challenged – Discussed.
             Service Law – Recruitment by way of outsourcing – Held:
C     Outsourcing per se is not prohibited in law– A 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.
            Constitution of India – Article 14 – Nature of – Discussed.
D
            Interpretation of Statutes – Old enactment – Constructive &
      purposive interpretation – Principle of interpretation – “Always
      speaking” principle – Discussed – The Intermediate Education Act,
      1921.
            Allowing the appeals, the Court
E
            HELD: 1. RIGHT TO AID: -
             A decision to grant aid is by way of policy. While doing so,
      the government is not only concerned with the interest of the
      institutions but the ability to undertake such an exercise. Financial
F     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. Once it is
      held that right to get an aid is not a fundamental right, the
      challenge to a decision made in implementing it, shall only be on
      restricted grounds. Therefore, even in a case where a policy
G     decision is made to withdraw the aid, an institution cannot question
      it as a matter of right. Maybe, such a challenge would still be
      available to an institution, when a grant is given to one institution
      as against the other institution which is similarly placed.
      Therefore, with the grant of an aid, the conditions come. If an
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 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                   695
                     INTER COLLEGE

institution does not want to accept and comply with the conditions      A
accompanying such aid, it is well open to it to decline the grant
and move in its own way. On the contrary, an institution can never
be allowed to say that the grant of aid should be on its own terms.
In the present case aid is not denied in toto but sought to be
given in different form. The reason for such a decision is both
                                                                        B
efficiency and economy. 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. [Paras 29-31][708-G-H;
709-A-E]                                                                C
      2. MINORITY AND NON-MINORITY: -
      When it comes to aided institutions, there cannot be any
difference between a minority and non-minority one. Article 30
of the Constitution of India is subject to its own restrictions being
reasonable. A protection cannot be expanded into a better right         D
than one which a non-minority institution enjoys. An institution
receiving aid is bound by the conditions imposed and therefore
expected to comply. Once it is held so, the challenge made on
various grounds, falls to the ground. [Paras 32, 33][709-F-G]
      SK Md. Rafique vs. Management Committee Contai                    E
      Rahamania High Madrasah & Ors. (2020) 6 SCC 689
      : [2020] 1 SCR 185 – relied on.
      3. POLICY DECISION: -
      The challenge is to the amendment to the Regulation 101.          F
This regulation is in the form of a subordinate legislation. A
subordinate legislation can also be in the form of a policy decision.
A policy decision had come into force in the year 2010 itself. A
policy decision is presumed to be in public interest, and such a
decision once made is not amenable to challenge, until and unless
there is manifest or extreme arbitrariness, a constitutional court      G
is expected to keep its hands off. A challenge to a regulation
stands on a different footing than the one that can be made to an
enactment. However, when the regulation is nothing but a
reiteration of a policy reinforcing the decision of the Government
made earlier, then the parameters required for testing the validity
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696           SUPREME COURT REPORTS                     [2021] 10 S.C.R.


A     of an Act are expected to be followed by the Court. An executive
      power is residue of a legislative one, therefore the exercise of
      said power i.e., the amendment of the impugned regulation, cannot
      be challenged on the basis of mere presumption. Once a rule is
      introduced by way of a policy decision, a demonstration on the
      existence of manifest, excessive and extreme arbitrariness is
B
      needed. [Paras 36-39][714-G-H; 715-A-C]
            4.1 Section 9(4) of the Act is certainly of a wider import.
      The power conferred to the State Government to give effect to
      the Act is unbridled. It is the very same regulation, based upon
      which, recruitments have been made by the management. It is
C     only by way of abundant caution, that the amendment has come
      into force. Section 9(4) of the Act is to be read in conjunction
      with Section 16G, as the provisions will have to be read keeping
      in view all the objects of the enactment. If the practice of
      recruitment, prior to the amendment of the impugned regulation,
D     was done by tracing the power under it, then it is not open to the
      respondents to contend to the contrary. [Paras 40, 41][715-D-E;
      717-B-C]
            Ramji Dwivedi vs. State of Uttar Pradesh (1983) 3 SCC
            52 : [1983] 2 SCR 971 – relied on.
E            4.2 Regulation 101, prior to the amendment, imposes strict
      compliance of getting prior approval. Except in Civil Appeal
      No.2753 of 2021, no such approval has been granted. Obviously,
      it only indicates the real intention of the respondents/management
      which is to have their own recruitment other than anything else.
F     “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.
      “Outsourcing” per se is not prohibited in law. A recruitment by
      way of “Outsourcing” may have its own deficiencies and pit falls,
G     however, a decision to take “Outsourcing” cannot be declared
      as ultra vires of the constitution on the basis of mere presumption
      and assumption. Obviously, the nature of the scheme and
      safeguards attached to it are not known. [Paras 42, 43][717-C-F]

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 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                  697
                     INTER COLLEGE

      Catering Cleaners of Southern Railway vs. Union of               A
      India & Anr. (1987) 1 SCC 700: [1987] 2 SCR 164
      – held inapplicable.
      Manish Kumar vs. Union of India, (2021) 5 SCC 1 :
      [2021] 1 SCALE 646 – relied on.
      4.3 Article 14 is positive in nature. Adequate leverage is to    B
be provided to the law maker in making the classification. Article
14 does not prohibit discrimination, what is required is a valid
discrimination against a hostile one. [Para 46][718-C]
       4.4 By the policy decision made, the appellants have
abolished the post though in an indirect way by providing for          C
“Outsourcing”. Now, a court cannot create or sustain the
aforesaid post. There is nothing on record to hold that the decision
made is extraneous as it is obviously made applicable not only to
the aided institutions but also to all government departments as
well. Admittedly, no challenge has been made to the decision           D
taken in 2010 and 2011 which was to be made applicable to all
the recruitments for Group ‘IV’ posts in the Government, and
not only for the institutions and the persons recruited by them.
The entire litigation is triggered only by the institutions. The
idea was to create a new set of employees introduced through
“Outsourcing”. The impugned Regulation is only reiteration, as         E
the Government Order dated 08.09.2010 and 06.01.2011 by way
of policy, takes care of the aforesaid view. When a challenge is
made either to a regulation, rule or an Act, it is for the persons
who challenged, to satisfy the Court that they cannot be sustained
in the eyes of law. The appellants are justified in passing the        F
relevant Government Order followed by the impugned
Regulation. Institutions should be held responsible for the judicial
adventurism undertaken. The judgment of the Division Bench
dated 19.11.2018 and the consequential orders passed are set
aside. The impugned Regulation is upheld. The respondents/writ
petitioners in Civil Appeal No 2753 of 2021 are to be confirmed        G
by granting adequate approval as Class “IV” employees, having
given prior approval. Further directions issued. [Paras 47, 48,
50, 51, 56 and 58][718-G-H; 719-B, E-F; 721-B-C, D-E]

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698          SUPREME COURT REPORTS                      [2021] 10 S.C.R.


A          T.M.A Pai Foundation vs. State of Karnataka (2002) 8
           SCC 481: [2002] 3 Suppl. SCR 587 – followed.
           Keshav Chandra Joshi vs. Union of India 1992 Supp
           (1) SCC 272; Syed Khalid Rizvi vs. Union of India 1993
           Supp (3) SCC 575; Kerela Samsthana Chethu Thozhilali
B          Union vs. State of Kerela (2006) 4 SCC 327; Vasu Dev
           Singh vs. Union of India (2006) 12 SCC 753;
           Ahmedabad St. Xavier’s College Society & Ors. vs. State
           of Gujarat & Ors. (1974) 1 SCC 717: [1975] 1 SCR
           173; St. Stephens College vs. University of Delhi (1992)
           1 SCC 558 : [1991] 3 Suppl. SCR 121; Secy.
C          Malankara Syrian Catholic College vs. T. Jose & Ors.
           (2007) 1 SCC 386: [2006] 9 Suppl. SCR 644; Chadana
           Das vs. State of West Bengal (2020) 13 SCC 411: [2019]
           12 SCR 631 – held inapplicable.
           Dharani Sugars and Chemicals Ltd. vs. Union of India,
D          (2019) 5 SCC 480 : [2019] 6 SCR 307 – relied on.
           Federation of Railway Officers Association & Ors. vs.
           Union of India (2003) 4 SCC 289: [2003] 2 SCR 1085;
           Directorate of Film Festivals & Ors. vs. Gaurav Ashwin
           Jain & Ors. (2007) 4 SCC 737: [2007] 5 SCR 7; State
E          of Punjab & Ors. vs. Ram Lubhaya Bagga & Ors.
           (1998) 4 SCC 737; Vasavi Engineering College Parents
           Association vs. State of Telangana & Ors. (2019) 7 SCC
           172: [2019] 8 SCR 927; Union of India vs. Pushpa
           Rani (2008) 9 SCC 242 : [2008] 11 SCR 440; Tamil
F          Nadu Education Department Ministerial and General
           Subordinate Services Association & Ors. vs. State of
           Tamil Nadu & Ors. (1980) 3 SCC 97 : [1980] 1 SCR
           1026 – referred to.
                           Case Law Reference
G     [2003] 2 SCR 1085            referred to              Para 21
      [2007] 5 SCR 7               referred to              Para 21
      [2019] 8 SCR 927             referred to              Para 21
      [1983] 2 SCR 971             relied on                Para 21
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 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                   699
                     INTER COLLEGE

[2008] 11 SCR 440              referred to             Para 21          A
[2020] 1 SCR 185               relied on               Para 21
[1980] 1 SCR 1026              referred to             Para 21
(1992) Supp 1 SCC 272          held inapplicable       Para 25
(1993) Supp 3 SCC 575          held inapplicable       Para 25          B
(2006) 4 SCC 327               held inapplicable       Para 25
(2006) 12 SCC 753              held inapplicable       Para 25
[1975] 1 SCR 173               held inapplicable       Para 26
                                                                        C
[1991] 3 Suppl. SCR 121        held inapplicable       Para 26
[2002] 3 Suppl. SCR 587        followed                Para 26
[2006] 9 Suppl. SCR 644        held inapplicable       Para 26
[2019] 12 SCR 631              held inapplicable       Para 26
                                                                        D
[1987] 2 SCR 164               held inapplicable       Para 28
[2019] 6 SCR 307               relied on               Para 52
        CIVIL APPELLATE JURISDICTION: Civil Appeal No.865 of
2021.
                                                                        E
      From the Judgment and Order dated 19.11.2018 of the High Court
of Judicature at Allahabad in Writ C No.45060 of 2015.
        With
      Civil Appeal Nos.2816, 2817, 2753, 866, 2754, 2819, 2820, 2818,
2815 of 2021                                                            F
      Ms. Aishwarya Bhati, ASG, Harish Pandey, Nischal Kumar Niraj,
Ms. Kirti Khangotra, Sanjay Kumar Tyagi, Kameshwar Nath Mishra,
Advs. for the Appellants.
      Huzefa A. Ahmadi, V. K. Shukla, Sr. Advs., Rajat Singh, Apoorva
Tewari, Prashast Puri Ms. Rohan Sharma, Samarth Mohanty, Shivpati       G
B. Pandey, V. N. Raghupathy, Narender Kumar Verma, Praveen
Agrawal, Ms. Parul Shukla, Saket Gogia, Prateek Bhandari, Manish
Kumar Gupta, Tripurari Ray, Balwant Singh Billowria, Nithyananda
Murthy P., Ms. Bhanuprabha, Vivekanand Singh, Anirudh Ray, Ms. Shilpa
Singh, Yatish Mohan, Subash Chandra Sagar, E. C. Vidya Sagar,
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700             SUPREME COURT REPORTS                          [2021] 10 S.C.R.


A     Ms. Preetika Dwivedi, Naveen Kumar Tripathi, Udayan Pratap Singh,
      Abhishek Kumar Singh, Ms. Saroj Tripathi, Kabir Dixit, Waheb Hussaini,
      Anand Varma, Ms. Astha Ahuja, Manoj K. Mishra, R. K. Singh Kaosik,
      Umesh Dubey, D. N. Dubey, Alok Pandey, Sudhir S. Rawat, Dr. Bheem
      Pratap Singh, V. K. Jain, Shashank Tripathi, Dipesh Dwivedi, Ms. Divya
      Roy, Dhananjay Garg, Abhay Kumar, Sidharth Iyer, Rajat Khattry, Vishal
B
      Nautiyal, Kumar Milind, Shagun Ruhil, Abhimanyu Singh, Sunny
      Choudhary, Udayaditya Banerjee, Ajay Kumar Pandey, Santosh Kumar
      Pandey, Danish Zubair Khan, Advs. for the Respondents.
            The Judgment of the Court was delivered by
C           M. M. SUNDRESH, J.
            1. Heard learned counsel for the parties.
             2. We have also perused the documents filed and carefully
      considered the affidavits of the parties along with the written arguments
      filed.
D            3. Appeals have been preferred by the State of Uttar Pradesh
      laying a challenge to the judgment of the Division Bench of the Allahabad
      High Court dated 19.11.2018 holding that Regulation 101 framed under
      The Intermediate Education Act, 1921 (hereinafter referred to as “the
      Act”) as amended is unconstitutional. Incidentally, few other appeals
E     were disposed of by taking note of the aforesaid decision. Applications
      have also been filed to intervene/implead by such of those persons who
      are also appointed by these institutions as Class “IV” employees. Thus,
      appositely all these appeals are disposed of by a common order.
            THE ACT: -
F            4. The Intermediate Education Act, 1921 is of vintage origin having
      its existence prior to independence and surviving to date. The object of
      the enactment is to regulate and supervise high schools and intermediate
      education. Sub-Section 4 of Section 9 of the Act speaks of the powers
      of the State Government and facilitates the State Government to pass
G     appropriate orders or to take adequate action consistent with the provisions
      of the Act and the State Government may modify or rescind or make
      any regulation in respect of any matter:
            “Section 9- Power of State Government
            … (4) Whenever, in the opinion of the State Government, it is
H           necessary or expedient to take immediate action, it may,
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                           701
           INTER COLLEGE [M. M. SUNDRESH, J.]

      without making any reference to the Board under the foregoing             A
      provisions, pass such order or take such other action
      consistent with the provisions of this Act as it deems necessary,
      and in particular, may by such order modify or rescind or
      make any regulation in respect of any matter and shall
      forthwith inform the Board accordingly.”
                                                                                B
        5. Section 16G of the Act deals with conditions of service of the
head of institutions, teachers and other employees. 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. Needless to state that this provision speaks of the conditions
of service of the person employed in such institutions:                         C

      “Section 16G- Conditions of Service of Head of Institutions,
      teachers and other employees
      (1) Every person employed in a recognized institution shall
      be governed by such conditions of service as may be                       D
      prescribed by regulations and any agreement between the
      management and such employee insofar as it is inconsistent
      with the provisions of this Act or with the regulations shall be
      void.
      (2) Without prejudice to the generality of the powers conferred
                                                                                E
      by sub-section (1), regulations may provide for-
          (a) the period of probation, the conditions of confirmation
          and the procedure and conditions for promotion and
          punishment 2[(including suspension pending or in
          contemplation of inquiry or during the pendency of
          investigation, inquiry or trial in any criminal case for an           F
          offence involving moral turpitude)] and the emoluments
          for the period of suspension and termination of service
          with notice;
          (b) the scales of pay and payment of salaries;
                                                                                G
          (c) transfer of service from one recognized institution to
          another;
          (d) grant of leave and Provident Fund and other benefits;
          and
          (e) maintenance of record of work and service.”                       H
702            SUPREME COURT REPORTS                        [2021] 10 S.C.R.


A           6. Regulations have been framed under the Act dealing with various
      subjects, however, for the present case only Chapter III of the said
      regulations is relevant, which deals with “conditions of service”.
            REGULATION 101: -
            7. Regulation 101 was inserted vide Parishad 9/592 dated
B     28.08.1992 and was notified by way of Govt. Notification No. 400/15-7-
      2(1)-90 dated 30.07.1992 in the following manner:
            “Appointing Authority except with prior approval of Inspector
            shall not fill up any vacancy of non-teaching post of any
            recognized aided institution.”
C           8. It was substituted through the Notification No. 300/XV-7-2(1)/
      90 dated 02.02.1995 as under:
            “Appointing Authority except with prior approval of Inspector
            shall not fill up any vacancy of non-teaching post of any
            recognized aided institution:
D           Provided that filling of the vacancy on the post of Jamadar
            may be granted by the Inspector.”
             9. On 23.01.2008 with a view to regulate and curtail staff
      expenditure a policy decision was taken by the State of Uttar Pradesh
      (the 1st Appellant) to not create any new post in Class ‘IV’ category and
E     wherever it may be necessary, the work may be carried out through
      “Outsourcing”. Thereafter, the recommendation was made by the Sixth
      Central Pay Commission in the month of March, 2008 to the effect that
      it would only be appropriate to have “Outsourcing” of Class ‘IV’
      employees instead of seeking any new recruitment.
F           10. Regulation 101 once again went through an amendment by
      way of Notification No.9/898 dated 31.12.2009, which reads as under:
            “The appointing authority shall not fill any vacancy of the
            non-teaching staff of recognised aided institutions, except
            with the approval of Inspector, subject to a restriction that
            District Inspector of Schools shall make available total number
G
            of vacancies to Director of Education (Secondary Education),
            and showing the number of students put forth justification
            for the filling of the vacancies. On receipt of order from the
            Director of Education (Secondary Education), the District
            Inspector of Schools shall, for filling said vacancies, give
H           permission to the appointing authority; and while giving such
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                     703
           INTER COLLEGE [M. M. SUNDRESH, J.]

      permission he shall ensure to follow the reservation rules          A
      specified by the government and the prescribed norms in
      justification for the posts.
      The aforesaid amendment in the Regulation shall come into
      force immediate effect.”
       11. Taking into consideration the recommendations made by the      B
Sixth Central Pay Commission, Government Orders were passed on
08.09.2010 and 06.01.2011 making it applicable to all Government
departments and aided schools, thus, deciding not to go for fresh
recruitment of Class “IV” employees and further directing that any
arrangement concerning the post to be vacated may be made only
                                                                          C
through “Outsourcing”. Appropriate communications were sent to all
the stakeholders intimating them of the decision taken.
       12. Following the said decision, Regulation 101 was once again
amended by Government Order dated 04.09.2013, which was accordingly
notified on 24.04.2014. The effect of the said amendment is to make the
post of Class “IV” employees which was hitherto supposed to be filled     D
up by the institutions through “Outsourcing”. Therefore, the permanent
posts were accordingly abolished, thereby, replacing the method of
appointment by way of “Outsourcing”. An exception has been carved
out only for the dependants of those employees died in harness during
employment.                                                               E
      AMENDED REGULATION:
      “101. The appointing authority, except for the prior approval
      of the inspector, shall not fill any vacant post of non-teaching
      staff (clerical cadre) in any recognised or aided institution;
      with the restriction that the District Inspector of Schools shall   F
      make available the total number of vacancies to the Director
      of Education (Secondary Education) and also put forth
      justification for filling of the posts, showing the strength of
      the students in the institution. On receipt of the order from
      Director of Education (Secondary Education), the District
      Inspector of Schools shall give permission to the appointing        G
      authority for filling the said vacancies (except the vacancies
      of Class-IV posts) and while giving the permission, he shall
      ensure compliance of the reservation rules specified by the
      government as also of the prescribed norms in justification
      for the posts.                                                      H
704            SUPREME COURT REPORTS                       [2021] 10 S.C.R.


A           With respect to the Class-IV vacancies, arrangements shall
            be made by way of outsourcing only; but the relevant rules,
            1981, as amended from time to time, for recruitment of
            dependants of teaching or non-teaching staff of the
            nongovernment aided institutions dying in harness shall be
            applicable in relation to the appointments to be made on the
B
            vacant posts of Class-IV category.”
            SEVENTH CENTRAL PAY COMMISSION: -
             13. By the Seventh Central Pay Commission Report, the
      recommendations made in the Sixth Central Pay Commission were
C     reiterated with a word of ‘caution’ in its implementation. Accordingly,
      the need to go for “Outsourcing”, keeping in view of the financial
      constraints and efficiency, was once again reiterated:
            PARAGRAPH 3.72 AND 3.83 OF THE REPORT
               “3.72 The General Financial Rules provide for outsourcing
D              of services in the interest of economy and efficiency. Broad
               guidance is provided in the Rules on identification of
               contractors and the tendering process.
               There are three kinds of contractual appointments:

E                 i. Tasks of a routine nature, typically those relating to
                  housekeeping, maintenance, related activities, data
                  entry, driving, and so on, which are normally bundled
                  and entrusted to agencies. These agencies then depute
                  the necessary persons to carry out these tasks…

F              3.83 The Following           are   the   conclusions     and
               recommendations:
                  …vii. The Commission is of the view that a clear
                  guidance from the government on jobs that can and
                  should be contracted out would be appropriate. While
G                 doing so the concerns of confidentiality and
                  accountability may be kept in view. Further, to bring
                  about continuity and to address the concerns regarding
                  exploitation of contractual manpower, uniform
                  guidelines/model contract agreements may be devised
                  by the government…”
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 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                               705
           INTER COLLEGE [M. M. SUNDRESH, J.]

       14. From the aforesaid facts it is abundantly clear that a decision          A
was made way back on 08.09.2010 to do away with the recruitment to
the post of Class “IV” employees, by replacing the process with the
utilization of the service through “Outsourcing”. It was accordingly made
by taking note of the recommendations of the Pay Commission, with the
primary concern being financial difficulty, followed by efficiency. The
                                                                                    B
regulation was brought forthwith as an abundant caution by way of a
subsequent act to complete the formalities. Institutions were being put
on notice about the decision to withhold any fresh recruitment. However,
recruitments have been made de hors the same either with or without
the court orders, by the institutions. It was also done without obtaining
the prior permission as per the mandate of the un-amended Regulation                C
101 except in one case which is the subject matter of Civil Appeal No.2753
of 2021. In Civil Appeal No.2754 of 2021 a direction to grant prior
permission was obtained from the High Court.
       BEFORE THE HIGH COURT: -
       15. With the aforesaid backdrop, writ petitions have been filed              D
before the Allahabad High Court. The Division Bench of the Allahabad
High Court in the lead judgment dated 19.11.2018 was pleased to allow
the writ petitions filed, inter alia holding that there is a violation of Article
14 of the Constitution of India. Incidentally, reliance has also been made
on the provisions of Uttar Pradesh High Schools and Intermediate                    E
Colleges (Payment of Salaries of Teachers and Other Employees) Act,
1971 (hereinafter referred to as ‘UP Act, 1971’) which speaks about
the payment of salary including the manner of disbursement. The Division
Bench was of the opinion that Regulation 101 is unconstitutional being
repudiate to Section 16G of the Act and the provisions of the UP Act,
1971, and went onto observe that “Outsourcing” as a concept of making               F
available the staff to perform Class “IV” jobs is unconstitutional, arbitrary
and illegal. Section 9(4) of the Act cannot be interpreted to give sufficient
ammunition to sustain the impugned regulation. Seeking to impugn and
set aside the said judgment which ratio was followed in other cases,
these appeals are before us.                                                        G
      16. Having narrated the background facts, we would place on
record the respective contentions of the counsel.
       SUBMISSIONS OF THE APPELLANT: -
      17. Ms. Aishwarya Bhati, Ld. Additional Solicitor General
appearing for the appellants raised the primary objection on the right of           H
706              SUPREME COURT REPORTS                        [2021] 10 S.C.R.


A     the writ petitioners to challenge the impugned regulation. According to
      the Ld. ASG, this being a policy decision carefully introduced after
      considering the relevant materials based on the opinion of experts in the
      field of finance and administration and widespread consultation with
      stakeholders, including the recommendations made by the Sixth Central
      Pay Commission and Seventh Central Pay Commission, is not amenable
B
      to challenge by invoking the jurisdiction of the High Court under Article
      226 of the Constitution of India. The institutions being the recipients of
      aid are bound by the conditions attached, as there exists neither a
      fundamental right to receive aid nor a vested one. It is not open to the
      respondents to question the policy decision of the appellants, considering
C     the fact that the said policy is applicable uniformly across all departments
      of the State and does not in any manner affect the rights of the existing
      employees.
            18. The Ld. ASG has further submitted that the other respondents
      having been selected contrary to law cannot seek equity. This situation
D     has been created only by the overzealous management in recruiting them
      despite clear directions by the appellants to the contrary. Even otherwise,
      any appointment made is subject to the orders of the Court.
             19. The Division Bench has taken the role of an expert in going
      into the wisdom of the appellants, while dealing with a policy decision
E     based on various relevant factors. Section 9(4) of the Act gives adequate
      power to the State Government to change, modify and rescind the
      regulation accordingly without reference to the Board under the Act. It
      is submitted that the amendment is only a consequence to the decision
      made by the appellants.

F           20. The Order of the Division Bench would have a far-reaching
      financial and economic impact on the entire recruitment process
      throughout the State of Uttar Pradesh in view of its interpretation of
      “Outsourcing”. Article 162 of the Constitution has got no rationale to
      impugned amendment. This is a case of the abolishment of the posts and
      as such, Section 9(4) of the Act being of wider import, the impugned
G     regulation is sustainable in the eyes of law.
            21. To strengthen the aforesaid submissions, reliance has been
      placed on the following decisions:
            i.     Federation of Railway Officers Association & Ors. vs.
                   Union of India (2003) 4 SCC 289;
H
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                        707
           INTER COLLEGE [M. M. SUNDRESH, J.]

      ii.     Directorate of Film Festivals & Ors. vs. Gaurav Ashwin         A
              Jain & Ors. (2007) 4 SCC 737;
      iii.    State of Punjab & Ors. vs. Ram Lubhaya Bagga & Ors.
              (1998) 4 SCC 737;
      iv.     Vasavi Engineering College Parents Association vs. State
              of Telangana & Ors. (2019) 7 SCC 172.                          B

      v.      Ramji Dwivedi vs. State of Uttar Pradesh (1983) 3 SCC
              52;
      vi.     Union of India vs. Pushpa Rani (2008) 9 SCC 242;
      vii.    SK Md. Rafique vs. Management Committee Contai                 C
              Rahamania High Madrasah & Ors. (2020) 6 SCC 689;
      viii.   Tamil Nadu Education Department Ministerial and General
              Subordinate Services Association & Ors. vs. State of Tamil
              Nadu & Ors. (1980) 3 SCC 97.
                                                                             D
      SUBMISSIONS OF BEHALF OF RESPONDENTS:-
      22. Submissions on behalf of the respondents would include that
of the management and the candidates selected by them. These
candidates obviously came into picture through the recruitment process
adopted by the management, notwithstanding, the orders dated 08.09.2010
and 06.01.2011 followed by the impugned Regulation 101.                      E

       23. Regulation 101 as framed under the Act, as it stands, is a
clear violation of Article 14 of the Constitution of India in filling the
sanctioned post of Class “IV” employees alone by way of “Outsourcing”.
Before the Division Bench, the appellants were not able to place the
relevant material to substantiate the rationale behind the implementation    F
of the policy of “Outsourcing” in filling the post of Class “IV” employees
and the method of implementation.
      24. There is no power or authority for the introduction of the
amended Regulation 101 under Section 16G of the Act. The power
available to the State Government under Section 9 of the Act cannot be       G
extended to make the impugned regulation.
      25. Section 16G of the Act is sought to be impliedly overruled by
the impugned regulation. As the term recruitment and conditions of service
are not synonyms, the power given to the State Government cannot be
extended to alter the conditions of recruitment itself. It is further        H
708             SUPREME COURT REPORTS                           [2021] 10 S.C.R.


A     contended that the exercise of the power under Section 9(4) of the Act,
      especially while amending the regulations has to be consistent with the
      other provisions, as such, the impugned subordinate legislation is bound
      to be struck down. In support of the aforesaid contention the following
      judgments have been relied upon, namely. (i) Keshav Chandra Joshi vs.
      Union of India 1992 Supp (1) SCC 272; (ii) Syed Khalid Rizvi vs. Union
B
      of India 1993 Supp (3) SCC 575; (iii) Kerela Samsthana Chethu Thozhilali
      Union vs. State of Kerela (2006) 4 SCC 327; and (iv) Vasu Dev Singh
      vs. Union of India (2006) 12 SCC 753.
             26. A distinction has to be carved out among the institutions viz
      minority institutions on one hand, as against non-minority institutions,
C     otherwise the main regulation violates the fundamental rights granted to
      minority institutions under Article 30(1) of the Constitution of India, in
      light of the judgments of this Court in the case of, (i) Ahmedabad St.
      Xavier’s College Society & Ors. vs. State of Gujarat & Ors. (1974) 1
      SCC 717; (ii) St. Stephens College vs. University of Delhi (1992) 1 SCC
D     558; (iii) T.M.A Pai Foundation vs. State of Karnataka (2002) 8 SCC
      481; (iv) Secy. Malankara Syrian Catholic College vs. T. Jose & Ors.
      (2007) 1 SCC 386; and (v) Chadana Das vs. State of West Bengal
      (2020) 13 SCC 411.
             27. The respondents who were recruited had the bona fide belief
E     that they were employed in accordance with law, and they cannot be
      made to suffer, especially in light of the fact that some of them have
      been recruited in pursuance to prior approval given, thereby found to be
      qualified. Principle of undue hardship is to be applied while dealing with
      marginalized poor persons. Article 162 would stand infringed if the
      impugned amendment is allowed to be sustained.
F
             28. As held by this Court in Catering Cleaners of Southern Railway
      vs. Union of India & Anr. (1987) 1 SCC 700, “Outsourcing” as a method
      of recruitment itself is illegal and unconstitutional as it attempts to bring
      back contract labour.

G            DISCUSSION AND CONCLUSION:-
             RIGHT TO AID: -
              29. We will first take up the right of institutions qua the aid. A
      decision to grant aid is by way of policy. While doing so, the government
      is not only concerned with the interest of the institutions but the ability to
H     undertake such an exercise. There are factors which the government is
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                            709
           INTER COLLEGE [M. M. SUNDRESH, J.]

expected to consider before taking such a decision. Financial constraints        A
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.
        30. Once we hold that right to get an aid is not a fundamental
right, the challenge to a decision made in implementing it, shall only be        B
on restricted grounds. Therefore, even in a case where a policy decision
is made to withdraw the aid, an institution cannot question it as a matter
of right. Maybe, such a challenge would still be available to an institution,
when a grant is given to one institution as against the other institution
which is similarly placed. Therefore, with the grant of an aid, the conditions
                                                                                 C
come. If an institution does not want to accept and comply with the
conditions accompanying such aid, it is well open to it to decline the
grant and move in its own way. On the contrary, an institution can never
be allowed to say that the grant of aid should be on its own terms.
       31. We are dealing with a case where aid is not denied in toto but
                                                                                 D
sought to be given in different form. The reason for such a decision is
both efficiency and economy. 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.                                                                              E
       MINORITY AND NON-MINORITY: -
       32. When it comes to aided institutions, there cannot be any
difference between a minority and non-minority one. Article 30 of the
Constitution of India is subject to its own restrictions being reasonable.       F
A protection cannot be expanded into a better right than one which a
non-minority institution enjoys. Law has become quite settled on this
issue and therefore does not require any elaboration.
       33. Thus, on the aforesaid issue we have no hesitation in reiterating
the principle that an institution receiving aid is bound by the conditions       G
imposed and therefore expected to comply. Once we hold so, the
challenge made on various grounds, falls to the ground.
       34. The haze between a minority and non-minority institution is no
longer in existence. This Court in SK Md. Rafique(supra) has dealt
with the same through the following paragraphs:                                  H
710      SUPREME COURT REPORTS                       [2021] 10 S.C.R.


A     “41. In the backdrop of the decisions of this Court referred
      to hereinabove, we must now consider whether the relevant
      provisions of the Commission Act, 2008 transgress upon the
      rights of a minority institution or the said provisions can be
      termed as “tenable as ensuring the excellence of the institution
      without injuring the essence of the right” [ Expression used
B
      by Krishna Iyer J. in Gandhi Faiz-e-am-College v. University
      of Agra, (1975) 2 SCC 283 : 1 SCEC 277] of a minority
      institution. Right from Kerala Education Bill, 1957, In re case
      [Kerala Education Bill, 1957, In re, 1959 SCR 995 : AIR 1958
      SC 956] the issue that has engaged the attention of this Court
C     is about the content of rights of minority educational institution
      and the extent and width of applicability of regulations and
      what can be said to be permissible regulations. If the cases in
      the first segment i.e. up to the decision in T.M.A. Pai
      Foundation [T.M.A. Pai Foundation v. State of Karnataka,
      (2002) 8 SCC 481 : 2 SCEC 1] are considered…
D
      42. We now turn to T.M.A. Pai Foundation case [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481: 2 SCEC
      1] and consider the principles that it laid down and whether
      there was reiteration of the principles laid down in the
      decisions of this Court in the earlier segment or whether there
E     was any change or shift in the emphasis:
         42.1. In para 50, five incidents were stated to comprise
         the “right to establish and administer” and three of them
         were stated to be:

F        (a) right to admit students;
         (b) right to appoint staff — teaching and non-teaching;
         and
         (c) right to take disciplinary action against the staff.
         The discussion in the leading judgment was under various
G
         headings and the important one being “5. To what extent
         can the rights of aided private minority institutions to
         administer be regulated?”
         42.2. The earlier decisions of the Court were considered
         and while considering the judgment of this Court in
H
THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                    711
          INTER COLLEGE [M. M. SUNDRESH, J.]

      Sidhrajbhai Sabhai case [Sidhrajbhai Sabhai v. State of           A
      Gujarat, (1963) 3 SCR 837: AIR 1963 SC 540] it was
      observed: (T.M.A. Pai Foundation case [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481: 2
      SCEC 1] , SCC p. 563, para 107)
         “107. … If this is so, it is difficult to appreciate how the   B
         Government can be prevented from framing regulations
         that are in the national interest, as it seems to be
         indicated in the passage quoted hereinabove. Any
         regulation framed in the national interest must
         necessarily apply to all educational institutions, whether
         run by the majority or the minority. Such a limitation         C
         must necessarily be read into Article 30. The right under
         Article 30(1) cannot be such as to override the national
         interest or to prevent the Government from framing
         regulations in that behalf. It is, of course, true that
         government regulations cannot destroy the minority             D
         character of the institution or make the right to establish
         and administer a mere illusion; but the right under
         Article 30 is not so absolute as to be above the law.”
      42.3.Thus, the principle laid down in Sidhrajbhai Sabhai
      [Sidhrajbhai Sabhai v. State of Gujarat, (1963) 3 SCR 837:        E
      AIR 1963 SC 540] that the right under Article 30(1) cannot
      be whittled down by the so-called regulative measures
      conceived in the interest not of the minority educational
      institution, but of the public or the nation as a whole was
      not accepted in T.M.A. Pai Foundation [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481: 2             F
      SCEC 1] . The emphasis was clear 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             G
      government regulations cannot destroy the minority
      character of the institution.
      42.4. The leading judgment then observed that the correct
      approach would be—what was laid down by Khanna, J. in
      Ahmedabad St. Xavier’s College case [Ahmedabad St.                H
712   SUPREME COURT REPORTS                      [2021] 10 S.C.R.


A     Xavier’s College Society v. State of Gujarat, (1974) 1 SCC
      717: 1 SCEC 125]: (T.M.A. Pai Foundation case [T.M.A.
      Pai Foundation v. State of Karnataka, (2002) 8 SCC 481:
      2 SCEC 1], SCC p. 570, para 122)
         “122. … a balance has to be kept between the two
B        objectives — that of ensuring the standard of excellence
         of the institution, and that of preserving the right of the
         minorities to establish and administer their educational
         institutions. Regulations that embraced and reconciled
         the two objectives could be considered to be reasonable.
         This, in our view, is the correct approach to the
C
         problem.”
      42.5. The majority judgment then summed up the matter
      and stated: (T.M.A. Pai Foundation case [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481: 2
      SCEC 1], SCC p. 578, paras 135 & 137)
D
         “135. … It is difficult to comprehend that the Framers
         of the Constitution would have given such an absolute
         right to the religious or linguistic minorities, which
         would enable them to establish and administer
         educational institutions in a manner so as to be in
E        conflict with the other Parts of the Constitution.
         xxx                         xxx              xxx
         137. … The right under Article 30(1) has, therefore,
         not been held to be absolute or above other provisions
F        of the law, and we reiterate the same. By the same
         analogy, there is no reason why regulations or
         conditions concerning, generally, the welfare of
         students and teachers should not be made applicable
         in order to provide a proper academic atmosphere, as
         such provisions do not in any way interfere with the
G        right of administration or management under Article
         30(1).”
         It was further laid down: (SCC p. 579, para 138)
         “138. … In other words, the essence of Article 30(1) is
         to ensure equal treatment between the majority and the
H
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                     713
           INTER COLLEGE [M. M. SUNDRESH, J.]

            minority institutions. … Laws of the land, including rules    A
            and regulations, must apply equally to the majority
            institutions as well as to the minority institutions.”
      43. The decision in T.M.A. Pai Foundation [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481 : 2 SCEC
      1] , rendered by eleven Judges of this Court, thus put the          B
      matter beyond any doubt and clarified that the right under
      Article 30(1) is not absolute or above the law and that
      conditions concerning the welfare of the students and teachers
      must apply in order to provide proper academic atmosphere,
      so long as the conditions did not interfere with the right of
                                                                          C
      the administration or management. What was accepted as
      correct approach was the test laid down by Khanna, J. in
      Ahmedabad St. Xavier’s College case [Ahmedabad St. Xavier’s
      College Society v. State of Gujarat, (1974) 1 SCC 717: 1 SCEC
      125] that a balance be kept between two objectives—one to
      ensure the standard of excellence of the institution and the        D
      other preserving the right of the minorities to establish and
      administer their educational institutions. The essence of Article
      30(1) was also stated — “to ensure equal treatment between
      the majority and the minority institutions” and that rules and
      regulations would apply equally to the majority institutions
                                                                          E
      as well as to the minority institutions...
      xxx                       xxx              xxx
      59. In our considered view going by the principles laid down
      in the decision in T.M.A. Pai Foundation case [T.M.A. Pai
      Foundation v. State of Karnataka, (2002) 8 SCC 481: 2 SCEC          F
      1], the provisions concerned cannot, therefore, be said to be
      transgressing the rights of the minority institutions. The
      selection of the teachers and their nomination by the
      Commission constituted under the provisions of the
      Commission Act, 2008 would satisfy the national interest as
      well as the interest of the minority educational institutions       G
      and the said provisions are not violative of the rights of the
      minority educational institutions.”
       35. We would also like to point out two additional paragraphs of
the lead judgment in T.M.A. Pai Foundation vs. State of Karnataka,
                                                                          H
714            SUPREME COURT REPORTS                         [2021] 10 S.C.R.


A     (2002) 8 SCC 481 that would put a quietus to the issue before us qua
      grant of aid and the conditions that may be imposed by the State in light
      of the protection granted to minority institutions under Article 30 of the
      Constitution of India:
            “143. This means that the right under Article 30(1) implies
B           that any grant that is given by the State to the minority
            institution cannot have such conditions attached to it, which
            will in any way dilute or abridge the rights of the minority
            institution to establish and administer that institution. The
            conditions that can normally be permitted to be imposed, on
            the educational institutions receiving the grant, must be related
C           to the proper utilization of the grant and fulfilment of the
            objectives of the grant. Any such secular conditions so laid,
            such as a proper audit with regard to the utilization of the
            funds and the manner in which the funds are to be utilized,
            will be applicable and would not dilute the minority status of
D           the educational institutions. Such conditions would be valid
            if they are also imposed on other educational institutions
            receiving the grant.
            144. It cannot be argued that no conditions can be imposed
            while giving aid to a minority institution. Whether it is an
E           institution run by the majority or the minority, all conditions
            that have relevance to the proper utilization of the grant-in-
            aid by an educational institution can be imposed. All that
            Article 30(2) states is that on the ground that an institution is
            under the management of a minority, whether based on religion
            or language, grant of aid to that educational institution cannot
F           be discriminated against, if other educational institutions are
            entitled to receive aid. The conditions for grant or non-grant
            of aid to educational institutions have to be uniformly applied,
            whether it is a majority-run institution or a minority-run
            institution…”
G           POLICY DECISION: -
             36. The challenge before us is the amendment to the Regulation
      101. This regulation is in the form of a subordinate legislation. A
      subordinate legislation can also be in the form of a policy decision. We
      have already noted that a policy decision has come into force in the year
H     2010 itself.
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                            715
           INTER COLLEGE [M. M. SUNDRESH, J.]

        37. A policy decision is presumed to be in public interest, and such     A
a decision once made is not amenable to challenge, until and unless
there is manifest or extreme arbitrariness, a constitutional court is expected
to keep its hands off.
       38. A challenge to a regulation stands on a different footing than
the one that can be made to an enactment. However, when the regulation           B
is nothing but a reiteration of a policy reinforcing the decision of the
Government made earlier, then the parameters required for testing the
validity of an Act are expected to be followed by the Court.
       39. An executive power is residue of a legislative one, therefore
the exercise of said power i.e., the amendment of the impugned regulation,       C
cannot be challenged on the basis of mere presumption. Once a rule is
introduced by way of a policy decision, a demonstration on the existence
of manifest, excessive and extreme arbitrariness is needed.
       OTHER CONTENTIONS: -
                                                                                 D
      40. Section 9(4) of the Act is certainly of a wider import. The
power conferred to the State Government to give effect to the Act is
unbridled. It is the very same regulation, based upon which, recruitments
have been made by the management. One has to understand the
impugned regulation in the context along with the setting. It is only by
                                                                                 E
way of abundant caution, that the amendment has come into force. The
existence of the power under Section 9(4) of the Act has been dealt
with by this court in Ramji Dwivedi’s case (supra):
       “12. Sub-section (4) of Section 9 which has been extracted
       hereinbefore confers power on the State Government without                F
       making any reference to the Board to make an order or take
       such other action consistent with the provisions of the Act as
       it deems necessary and in particular, may by such order modify
       or rescind or make any regulation in respect of any matter. It
       would thus unquestionably transpire that while enacting the
       Regulations prior sanction of the State Government is                     G
       necessary and under sub-section (4) of Section 9 the State
       Government enjoys the power to make, modify or rescind any
       regulation. Armed with this power the State Government issued
       an order dated July 7, 1981 stopping all fresh selections and
       appointments of Principals etc. in all non-government-aided
                                                                                 H
716     SUPREME COURT REPORTS                     [2021] 10 S.C.R.


A     schools. Shrinath Intermediate College is a non-government-
      aided school. The effect of the order conveyed by the
      radiogram would be to rescind the regulation conferring
      power on the Committee of Management to make appointment
      and withdrawing and/or suspending power of appointment
      of Principal and teachers. The issuance of the order is not in
B
      dispute. The argument, in the High Court, was that the State
      Government had no such power and that even if sub-section
      (4) is deemed to confer such a power it has to be read in
      juxtaposition with the power conferred on the State
      Government by sub-sections (1), (2), (3) preceding sub-section
C     (4) of Section 9. The High Court therefore had to examine the
      width and ambit of the executive power of the State
      Government in exercise of which, according to the High Court,
      the order contained in the radiogram was issued. We need
      not go that far because in our opinion sub-section (4)
      specifically confers power on the State Government without
D
      making any reference to the Board to make, modify or rescind
      any regulation as also make such other order consistent with
      the provisions of the Act. This power of wide amplitude will
      comprehend the power to stop all appointments for the time
      being. And the power appears to have been exercised as
E     Government was contemplating taking away the power of
      private management of non-government-aided schools to
      make appointment of teachers including Principals. In order
      to avoid forestalling of governmental action by private
      managements, the power to make appointments was
      suspended for the time being. As pointed out earlier, the
F
      Regulation confers power on the Committee of Management
      to make appointment. That Regulation was enacted by the
      Board with the prior sanction of the State Government. The
      State Government could be said to have rescinded that
      Regulation conferring power of appointment or at any rate
G     suspended the power conferred on the Committee of
      Management to make appointment. The order became effective
      the moment it is issued. The effect of this order is that the
      Selection Committee had no right to select the appellant nor
      the Committee of Management had any power to make the
      appointment.
H
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                           717
           INTER COLLEGE [M. M. SUNDRESH, J.]

      14. In view of the finding that sub-section (4) of Section 9 did          A
      confer power on the State Government to make, modify or
      rescind the regulation or make any other order consistent
      with the provisions of the Act, the second contention of Mr
      Sanghi is equally bound to fail.”
       41. Section 9(4) of the Act is to be read in conjunction with Section    B
16G, as the provisions will have to be read keeping in view all the objects
of the enactment. In this connection, we need to point out that if the
practice of recruitment, prior to the amendment of the impugned
regulation, was done by tracing the power under it, then it is not open to
the respondents to contend to the contrary.
                                                                                C
      42. Regulation 101, prior to the amendment, imposes strict
compliance of getting prior approval. We find that except in Civil Appeal
No.2753 of 2021, no such approval has been granted. Obviously, it only
indicates the real intention of the respondents/management which is to
have their own recruitment other than anything else.
                                                                                D
       43. The Division Bench in considering the view has entered into
an arena which was not required to be done. Much labouring was done
in interpreting the word “Outsourcing”, however, such an exercise ought
to have been avoided as it stands outside the scope of judicial review.
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    E
to be given effect to with caution as recommended by the Seventh Central
Pay Commission, and another to strike it down as unconstitutional.
“Outsourcing” per se is not prohibited in law. It is clear that a recruitment
by way of “Outsourcing” may have its own deficiencies and pit falls,
however, a decision to take “Outsourcing” cannot be declared as ultra           F
vires of the constitution on the basis of mere presumption and assumption.
Obviously, we do not know the nature of the scheme and safeguards
attached to it.
       44. Reliance is made on a decision of this court in the case of
Catering Cleaners of Southern Railway (supra), wherein the                      G
Petitioners were “catering cleaners” employed for cleaning in various
railway station, and they were not even paid the minimum wages. Their
grievance was that they had no security of service, while being paid a
paltry sum as wages. The aforesaid decision has no application qua the
present regulation, which has got its own laudable object, introduced on
the basis of economic criteria apart from efficiency.                           H
718             SUPREME COURT REPORTS                          [2021] 10 S.C.R.


A            45. We are also not dealing with the scheme per se, and therefore,
      are in dark on the conditions of service. The challenge in the present
      case is not by the employee, recruited by way of “Outsourcing”, and
      hence, we hold the said decision on which much reliance is sought to be
      made by the respondents will not be of any help. One cannot simply
      presume that “Outsourcing” as a method of recruitment would necessarily
B
      be adopting contract labour and that there exists an element of unfair
      trade practice, as sought to be contended by the respondents.
             46. Article 14 is positive in nature. Adequate leverage is to be
      provided to the law maker in making the classification. Article 14 of the
      Constitution of India does not prohibit discrimination, what is required is
C     a valid discrimination against a hostile one. We do not wish to multiply
      the aforesaid principle of law except quoting the following paragraph in
      Manish Kumar vs. Union of India, (2021) 5 SCC 1:
            “249. We see considerable merit in the stand of the Union.
            This is not a case where there is no intelligible differentia.
D           The law under scrutiny is an economic measure. As laid down
            by this Court, in dealing with the challenge on the anvil of
            Article 14, the Court will not adopt a doctrinaire approach.
            Representatives of the people are expected to operate on
            democratic principles. The presumption is that they are
E           conscious of every fact, which would go to sustain the
            constitutionality of the law. A law cannot operate in a vacuum.
            In the concrete world, when the law is put into motion in
            practical experiences, bottlenecks that would flow from its
            application, are best envisaged by the law givers. Solutions
            to vexed problems made manifest through experience, would
F           indeed require a good deal of experimentation, as long as it
            passes muster in law. It is no part of a court’s function to
            probe into what it considers to be more wise or a better way
            to deal with a problem.”
             47. The entire issue has to be looked at from different perspective
G     as well. By the policy decision made, the appellants have abolished the
      post though in an indirect way by providing for “Outsourcing”. Now, a
      court cannot create or sustain the aforesaid post. There is nothing on
      record to hold that the decision made is extraneous as it is obviously
      made applicable not only to the aided institutions but also to all government
H     departments as well.
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                           719
           INTER COLLEGE [M. M. SUNDRESH, J.]

       48. Arguments are advanced to the effect that interest of poor           A
and needy is affected by the impugned Regulation. We do not know
how the interest of the poor and needy is affected by the impugned
Regulation. Admittedly, no challenge has been made to the decision taken
in 2010 and 2011 which was to be made applicable to all the recruitments
for Group ‘IV’ posts in the Government, and not only for the institutions
                                                                                B
and the persons recruited by them. The entire litigation is triggered only
by the institutions.
       49. Whenever a lis is raised before the Court the grievance along
with interest of the party concerned while laying a challenge has to be
kept in mind. The aforesaid principle is expected to be kept in mind.
                                                                                C
More so, while invoking Article 226 of the Constitution of India being
extraordinary and discretionary in nature. The aforesaid principle would
help the Court to understand the actual reason behind seeking a relief by
a party. Keeping the said principle in mind we could only say that the
respondents/petitioners, being the institutions endowed with the power
of recruitment, do not wish to let go of their hold.                            D
       50. The Division Bench has also taken into consideration Section
9 of the Payment of Salary Act, 1971. We may only state that the aforesaid
act has got nothing to do with the impugned Regulation. The idea was to
create a new set of employees introduced through “Outsourcing”. As
stated, the impugned Regulation is only reiteration, as the Government          E
Order dated 08.09.2010 and 06.01.2011 by way of policy, takes care of
the aforesaid view.
        51. The High Court has placed the onus on a wrong premise on
the appellants represented by their pleader. When a challenge is made
either to a regulation, rule or an Act, it is for the persons who challenged,   F
to satisfy the Court that they cannot be sustained in the eyes of law.
Such a challenge has to be considered within the contours of law. Mere
fact that a counsel representing the State is not able to satisfy the Court
on the policy challenged would not ipso facto lead to a declaration that
it is unconstitutional. Having said that, we do believe that such an exercise
                                                                                G
is also not warranted at the hands of the High Court.
       52. The fact that the Act of 1921 is of a pre-independent origin
has been taken note of by us already. The regulations have been introduced
in tune with the powers conferred under the Act. The concept of “always
speaking” as a principle of interpretation is to be applied for a proper
                                                                                H
720             SUPREME COURT REPORTS                           [2021] 10 S.C.R.


A     understanding of an old enactment. After all, such a statute having its
      intended object which certainly includes regulating the functions of aided
      institutions requires to be interpreted to deal with the past, present and
      future situations. Therefore, an interpretation which is reasonable,
      constructive and purposive would serve the purpose. We draw reference
      to the decision of this Court in the case of Dharani Sugars and
B
      Chemicals Ltd. vs. Union of India, (2019) 5 SCC 480.
             53. The counsel appearing for the respondents did place reliance
      upon few decisions of this Court. Having gone through the said decisions
      and in the light of our discussion, we do not find any help flowing from
      them, strengthening the contentions raised by them. Reliance has been
C
      made on the decision rendered by this Court in Matankara Syrian
      Catholic College vs. T. Jose, (2007) 1 SCC 386. Having gone through
      the said judgment, we do not find that the same has got any application
      to the case at hand. The said decision deals with the right of the minor
      institutions to choose the Principal of its choice. We have already held
D     that we are dealing with the case of aided institutions and, therefore,
      there is no need for any sub-classification by separating them as minority
      and non-minority institutions. The impugned regulation is sought to be
      enforced against all the aided institutions. It is also to be noted that this
      decision was taken into consideration by this Court in S.K. Md. Rafique’s
      case (supra).
E
             RELIEF: -
              54. We have one more issue to be considered before our
      conclusion. That is, whether the institutions should be held responsible,
      with respect to the interest of those who were recruited though contrary
F     to the Impugned Regulation or not. These persons are innocent civilians
      who got embroiled in the legal battle initiated by the management and
      made to fight as front-line soldiers. It is the management which found
      these persons suitable to hold the post. Therefore, this court will have to
      apply the theory of justice and adopt a problem-solving approach. Having
      appointed persons and found them suitable, while creating a situation
G
      which could have been avoided, the managements will have to take up
      their responsibility. If imparting education is seen to be in public interest,
      such institutions have duties to their employees as well. Certainly, the
      appellants cannot be made to continue them by making a contribution
      towards their salary by way of aid.
H
 THE STATE OF UTTAR PRADESH v. PRINCIPAL ABHAY NANDAN                         721
           INTER COLLEGE [M. M. SUNDRESH, J.]

       55. We may also note that even the Division Bench in its own           A
wisdom has observed that the impugned Regulation can only be applied
to the aided institutions alone. This finding has not been challenged
seriously before us. We are conscious of the legal position governing
equity when pitted against law. Though both can travel in the same
channel, their waters do not mix very often.
                                                                              B
      56. Having found that the appellants are justified in passing the
relevant Government Order followed by the impugned Regulation, we
do not wish to impose any further liability on them. On the contrary, we
do feel that institutions should be held responsible for the judicial
adventurism undertaken.
                                                                              C
       57. However, we would also like to observe that the appellants
will have to seriously consider paragraph 3.72 and 3.83 of the Seventh
Central Pay Commission. We expect the appellants to create an adequate
mechanism to see to it that the persons employed by the process of
“Outsourcing” are not exploited in any manner.
                                                                              D
       58. Accordingly, we have no difficulty in setting aside the judgment
of the Division Bench dated 19.11.2018 and the consequential orders
passed while upholding the impugned Regulation. The appeals are allowed
with the following directions:
      (i)     The respondents/writ petitioners in Civil Appeal No 2753        E
              of 2021 are directed to be confirmed by granting adequate
              approval as Class “IV” employees, having given prior
              approval.
      (ii)    The respondents/writ petitioners and similarly placed persons
              who are recruited by the institutions including the             F
              respondents shall be continued with the same scale of pay
              as if they are recruited prior to 08.09.2010 for which the
              entire disbursement will have to be made by the institutions
              alone.
      (iii)   The appellants shall undertake the necessary exercise to        G
              see to it that there is a mechanism available for the proper
              implementation of “Outsourcing” with specific reference
              to the conditions of service of those who are employed while
              taking note of the recommendations made in the Seventh
              Central Pay Commission.                                         H
722             SUPREME COURT REPORTS                  [2021] 10 S.C.R.


A           59. The impleadment /intervention applications are allowed
      accordingly.
            60. There shall be no order as to costs.


B     Divya Pandey                                         Appeals allowed.




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