'Sought To Negate Court Orders': Karnataka High Court Strikes Down State Laws Denying Pension Benefits To Private Aided School Employees

Highlighting the parity between government and aided school employees, the Karnataka High Court has struck down two state enactments that sought to deny pensionary benefits and additional increments to teachers and non-teaching staff of private aided educational institutions.

The Division Bench of Justice Pradeep Singh Yerur and Justice S.G Pandit in its order held that the two state enactments were violative of Article 14, terming it 'manifestly arbitrary' and an attempt of the legislative to overrule court judgments.

“…The impugned enactments…do not cure any defect pointed out by the Court. Nor do they fundamentally alter the legal framework upon which the earlier judgments were rendered. The enactments merely seek to negate the effect of the earlier judgments and deprive the employees of the benefits recognised thereunder. Such an exercise amounts to legislative overruling simpliciter and not a valid exercise of removal of legal basis….”, the court observed.

The Division Bench dismissed over 100 writ appeals filed by the State Government, upholding the orders of single judge benches that had quashed the Karnataka Private Aided Educational Institutions Employees (Regulation of Pay, Pension and Other Benefits) Act, 2014 (Act No. 7 of 2014) and the Karnataka Education Amendment Act, 2014 (Act No. 4 of 2015).

“…On reading of both the above enactments, on the face of it, would appear that only to overcome the orders or judgments of this Court confirmed by the Hon'ble Apex Court, Act No.7 of 2014 and Act No.4 of 2015 are enacted. It is not pointed out as to what was the defect in the earlier legislation and what is the defect removed by enacting the above two enactments. In fact, Act No.7 of 2014 is based on a mandamus issued by this Court in several writ petitions to count the past service i.e. service rendered prior to grant in-aid on the basis of parity and Article 14 of the Constitution of India….”

The Private Aided Educational Institutions Employees Act fixed grant-in-aid at the minimum of the pay scale from the date of admission to grant, and excluded service rendered prior to grant-in-aid for purposes of pay, leave, seniority, and pension. The provisions of the Act also extinguished all claims for reckoning non-grant period service

Similarly, the amendment to Section 87 of the Karnataka Education Act, 1983 removed the words 'and benefits of retirement' from the first proviso, and inserted a third proviso denying additional increment for passing Kannada Language Examination to aided institution employees.

In the order, the court noted that prior to these enactments, several judgments of the High Court had consistently held that employees of private aided educational institutions were entitled to parity with government employees.

“…mere financial constraints or burden on the State exchequer cannot be a reason to deny a benefit to a similarly situated employee. A perusal of the Statement of Objects and Reasons appended to Act No. 7 of 2014 and Act No. 5 of 2015 would indicate that the predominant object behind the enactment of the impugned Acts was to avoid the substantial financial liability that would arise upon implementation of the orders/judgments rendered by this Court. However, once it has been held that the employees of private aided educational institutions are similarly situated to government employees, possessing the same qualifications and discharging identical duties, mere financial difficulties cannot amount to a constitutionally permissible basis for denying them parity in service benefits…”, the court reasoned by relying on The Chandigarh Administration v. Mrs. Rajni Vali And Others. on 12 January, 2000.

The court also emphasised that the new laws under challenge did not remove any defect in the earlier legislation but merely sought to nullify judicial decisions that had attained finality.

Relying on the recent Constitution Bench decision in Anurag Krishna Sinha v. State of Bihar (2026), the Court held that manifest arbitrariness would be reason enough to strike down legislation under judicial review of Article 14 of the Constitution of India.

The Court also opined that the subsequent enactments were effected 'capriciously, irrationally and/or without adequate determining principle'.

“…In the instant case, by the decisions referred to in the statement of objections of Act No.4 of 2015 as well as Act No.7 of 2014, this Court had directed the State to count the pre-grant period for the purpose of pension and pensionary benefits taking into account the control of the State Government from the stage of recognition including at the stage of appointment and also on the touchstone of Article 14 of the Constitution of India. However, by enacting Act No 7….as well as Act No.4…, in the guise of removing the legal basis, the State has resorted to nullify or abrogate the decisions of this Court. Thus, we are of the considered opinion that Act No.7…and Act No.4…were rightly struck down by the learned Single Judges on the ground of violation of Article 14…as it suffers from manifest arbitrariness and as it has been passed solely to overcome the judgments rendered by this Court which have attained finality….”

Further, the High Court also rejected the State's argument that it had no control over employees prior to grant-in-aid. Examining the Grant-in-Aid Code, Rules, 1999, and the Karnataka Education Act, 1983, the Court observed:

“…A cumulative reading of all the above provisions would indicate the control of the State Government from the stage of registration, recognition, appointment of teaching and non-teaching staff... which clearly establishes the control of the State Government over the management and staff of the private educational institutions…”, the court said.

Applying the test of intelligible differentia, the court also inferred that employees of aided institutions and government employees possess the same qualifications, teach the same syllabus and discharge identical duties during the grant in and non grant period, and that the object of reducing financial burden bears no rational nexus to the discriminatory classification.

Before parting, the court clarified that the current order is confined to whether the service rendered by employees during the non-grant period is liable to be reckoned for the purpose of fixation of pay and other consequential service benefits.

“…Neither the provisions governing grant-in-aid nor the statutory framework casts any liability upon the State to pay salary for the period prior to admission of the post to grant-in-aid…”, the court reasoned.

“…The management shall be liable for payment of salary and other benefits till the date such posts are admitted into grant-in-aid. Consequently, the service rendered during the said period shall be taken into account only for the purpose of notional fixation of pay as on the date of admission of the post to grant-in-aid and for extending consequential benefits such as pension and other service benefits…The employees shall not be entitled to claim arrears of salary or any other monetary benefits from the State for the period preceding the admission of the post to grant-in-aid…”, the court concluded in the order.

As a result, the Service rendered prior to grant-in-aid would be counted for pension and pensionary benefits. Similarly, employees of aided institutions would be entitled to one additional increment on par with government employees upon passing the Kannada Language Exam. The state will also bear the financial burden in proportion to grant-in-aid scheme. On the other hand, salary for non-grant period would continue to be borne by management though the service would be counted notionally.

Hence, the court dismissed all 101 writ appeals filed by the State and confirmed the orders of learned Single Judges in W.P.No.21216/2014 and connected matters.

Advocates Sudharsan Suresh, Neha Venkatesh, Pavana NM and Nandan P appeared for the respondents in WA 2467/2015.

Case Title: State of Karnataka & Authorities v. Employees of Private Aided Educational Institutions

Case No: W.A.No.2476/2015 and 101 connected matters

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