Punjab: High Court quashes law stopping terminal benefits
Nearly a decade after the Punjab Privately Managed Aided Colleges (Non-Payment of Grant-in-Aid on Account of Terminal Benefits) Act came into force, the Punjab and Haryana High Court has quashed the same. Among other things, the petitioners, Non-Govt College Managements Federation of Punjab and Chandigarh, had contended that the Act stopped grant-in-aid for leave encashment, gratuity and other terminal benefits to private aided colleges.
Terminal benefits refer to the entitlements an employee receives upon leaving his job. “The impugned Act of 2016 is quashed and set aside, being illegal, arbitrary and ultra vires the Constitutional provisions relating to non-discrimination and reasonableness,” the Bench of Justice Sureshwar Thakur and Justice Vikas Suri ruled.
Allowing the bunch of 34 writ petitions, the Bench held that the Act amounted to legislative overreach, enacted during the pendency of litigation to circumvent final adjudication and nullify binding directions regarding reimbursement of gratuity and leave encashment to private aided colleges.
The HC categorically declared that the state’s attempt to exclude terminal benefits from the purview of the grant-in-aid scheme, introduced in 1979 to reimburse 95 per cent of private colleges’ deficit expenditure, was not only illegal, but also a breach of legitimate expectations, promissory estoppel, and solemn judicial undertakings.
The Bench was of the view that legislative intervention could not be permitted to override binding court orders or undermine the rule of law. The 2016 Act was a direct attempt to defeat judicial directions that had attained finality.
The court also took note of the fact that the state had earlier provided an undertaking in a contempt petition not to take coercive steps contrary to court rulings, an assurance now blatantly violated.
Noting that teachers’ appointment letters specifically mentioned parity with government service rules and entitlements, including gratuity and leave encashment, the court asserted that colleges were obligated to pay such benefits upfront and seek reimbursement under the grant-in-aid mechanism.
Directing the State to process reimbursement claims, the Bench clarified that only audited accounts certified by an auditor appointed by the Comptroller and Auditor General (CAG) would be admissible for release of funds.
