DELHI HIGH COURT: PRIVATE SCHOOL CANNOT WITHHOLD TEACHER’S RETIREMENT BENEFITS ON CONDITION OF WITHDRAWING PENDING LITIGATION
Court
Directs Payment of Gratuity and Leave Encashment with 9% Annual Interest;
Imposes ₹20,000 Costs on School
NEW
DELHI | 27 May 2025
In
a significant judgment safeguarding the statutory rights of teachers employed
in private recognised schools, the Delhi High Court has held that a school
cannot make the payment of retirement benefits conditional upon an employee
withdrawing pending legal proceedings.
Justice
Prateek Jalan, while deciding Shashi Kiran v. Siddharth International Public
School & Others, W.P.(C) 12991/2022, directed the school to release the
retired teacher’s gratuity and leave encashment, together with interest at
9% per annum from the date of retirement until final payment. The Court
also imposed costs of ₹20,000 on the school.
Background
of the Case
The
petitioner, Shashi Kiran, had been employed as a teacher at Siddharth
International Public School since 1 January 2011 and retired on 31 March 2021.
During
her employment, she and other school employees had instituted separate
proceedings before the Delhi High Court seeking implementation of the pay
scales recommended by the Seventh Central Pay Commission.
Immediately
before her retirement, the school issued a communication dated 30 March 2021
offering to release her gratuity and leave encashment on the basis of her last
drawn salary. However, the communication stipulated that, upon receiving these
benefits, she would withdraw her pending writ petition concerning the Seventh
Pay Commission.
Unwilling
to surrender her legal rights, the teacher declined the conditional offer and
approached the Delhi High Court seeking payment of her retirement benefits
along with interest.
High
Court Rejects School’s Objections to Maintainability
The
school argued that the petitioner should have approached the Directorate of
Education or instituted a civil suit instead of invoking the writ jurisdiction
of the High Court under Article 226 of the Constitution.
Rejecting
these objections, the High Court observed that the school was a private
recognised unaided institution governed by the Delhi School Education Act and
Rules, 1973.
The
Court held that where the terms and conditions of employment are statutorily
regulated, the High Court can exercise its writ jurisdiction under Article 226,
notwithstanding the private and unaided character of the institution.
The
judgment reaffirmed that employees of private recognised schools are not
necessarily deprived of constitutional remedies merely because their employer
is a private institution.
Condition
Imposed by School Held Illegal and Mala Fide
Examining
the school’s communication dated 30 March 2021, the High Court found that the
institution had expressly acknowledged its liability to pay gratuity and leave
encashment.
However,
the condition linking those payments to the withdrawal of pending litigation
was held to be “wholly irregular, illegal, and mala fide.”
The
Court rejected the school’s contention that no condition had been imposed and
observed that the petitioner had rightly approached the Court rather than
accepting an arrangement that could compromise her pending legal proceedings.
Payment
with 9% Interest and ₹20,000 Costs
The
High Court directed the school to release the petitioner’s gratuity and leave
encashment, calculated on the basis of her last drawn salary, within four weeks
of the judgment.
The
Court further ordered that the outstanding amount would carry interest at 9%
per annum from 31 March 2021 until the date of final payment.
In
addition, the school was directed to pay ₹20,000 towards litigation costs.
Importantly,
the Court clarified that the payment would be without prejudice to the
petitioner’s rights in her pending Seventh Pay Commission litigation. If she
succeeds in those proceedings, appropriate consequential relief concerning
enhanced gratuity or leave encashment may also be considered.
Significance
of the Judgment
The
decision reinforces two important principles of service jurisprudence.
First,
private recognised unaided schools operating under statutory service
regulations may be subjected to the writ jurisdiction of the High Court in
matters involving enforcement of those regulations.
Second,
an employer cannot make the release of admitted retirement dues conditional
upon an employee abandoning separate legal claims.
The
ruling is particularly relevant to teachers and other employees of private
recognised schools who face delays in receiving retirement benefits or are
pressured to compromise their legal rights.
Legal
Representation
The
petitioner was represented by Ms. Kritika Matta, Mr. Nikhil Parmar and Mr.
Pradeep Kumar, Advocates, appearing for Mr. Anuj Aggarwal, Advocate.
Case
Details
Shashi
Kiran v. Siddharth International Public School & Others
Court:
High Court of Delhi
Case No.: W.P.(C) 12991/2022
Coram: Hon’ble Mr. Justice Prateek Jalan
Date of Judgment: 27 May 2025
ANUJ
AGGARWAL & COMPANY
ADVOCATES
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