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Title: Vineet Saraf v. Rural Electrification Corpn. Ltd.
Decided on: 21st July, 2023

+ W.P. (C) 3293 of 2023

CORAM: HON’BLE MR. JUSTICE Purushaindra Kumar Yadav

Introduction

The case of Vineet Saraf v. Rural Electrification Corpn. Ltd. involves a writ petition filed by the petitioner to challenge an impugned demand notice issued by the respondent under Rule 7(1) of the Insolvency and Bankruptcy Application to Deciding Authority for Insolvency Resolution Procedure for Personal Guarantors to Corporate Debtors Rules, 2019. The petitioner, acting as a personal surety for a debt backed by a corporate guarantee, initiated a Corporate Insolvency Resolution Process against FACOR Power Ltd. The resolution process resulted in a Resolution Plan approved by NCLT, Cuttack, and upheld by NCLAT and the Supreme Court. The petitioner contended that the respondent had promised to transfer the entire debt and related rights to FACOR Power Ltd. The respondent, on the other hand, argued that the financial creditors retained the right to pursue securities, citing continuous personal guarantees and third-party collateral provided as security for the debt. The respondent issued a demand notice based on the petitioner’s personal guarantee, which was contested by the petitioner.

Facts

The petitioner, a personal guarantor, challenged the respondent’s demand notice under the 2019 Rules, arguing that the respondent had assigned all obligations to FACOR Power Ltd. without excluding personal guarantees. The petitioner claimed that this assignment hindered the use of his guarantee. The Court emphasized the distinction between an unconditional release and a commitment not to sue, stating that a reserve clause in a deed that releases the primary borrower protects the creditor’s right to pursue action against the guarantor.

Analysis of Court Order

Justice Purushaindra Kumar Yadav of the Delhi High Court’s Single Judge Bench rejected the petitioner’s argument that the guarantor had a legal right to be heard at a later stage. The Court opined that granting the petition would violate the procedural requirements of the Insolvency and Bankruptcy Code of 2016 and deprive the respondent of the opportunity to present their case before the relevant NCLT. The Court set down important guidelines for consideration but left the decision on the case’s merits to NCLT.

Held

The Delhi High Court denied the writ petition and refused to issue a writ of prohibition, emphasizing that it was not appropriate to create private commercial law to demonstrate the respondent’s lack of jurisdiction. The Court’s decision reiterated that the petitioner’s argument of having the right to be heard at a later stage was insufficient to proceed with the petition. The issue was left to NCLT’s determination based on the merits of the case.

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Written by- Ankit Kaushik

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Title: BHARAT MATA SARASWATI BAL MANDIR SENIOR SECONDARY SCHOOL vs VINITA SINGH AND ORS.

Date of Decision: 07th July, 2023

+ LPA 601/2022 & CM APPLs. 45446-45447/2022

CORAM: HON’BLE MR. JUSTICE MANMOHAN HON’BLE MS. JUSTICE MINI PUSHKARNA

Introduction

Delhi High Court dismissed the appeal filed against the judgement dated 14th December, 2021, whereby the writ petition filed by three teachers seeking payment of 7th Central Pay Commission (hereinafter referred to as ‘7th CPC’) has been allowed and held that teachers of unaided private schools are entitled to the same pay and emoluments as those of government schools, in terms of the obligation enjoined upon the private recognized schools under the DSE Act, 1973. The schools cannot evade their statutory responsibility and are bound to pay the statutory dues.

Facts of the case

The pertinent information is that respondents 1 through 3 have been regularly employed by the appellant institution. Respondent No. 5/Directorate of Education (DOE) issued a notification on October 17, 2017, requesting that all private recognised schools adopt the recommendations of the 7th CPC. Respondents 1 to 3 sought this Court by filing a writ case after the appellant school refused to extend the benefit of the 7th CPC. By the impugned judgement on 14th December 2021, the learned Single Judge found that the respondents 1 through 3 herein were entitled to arrears of their benefits/salaries beginning on January 1, 2016, and also required the school to give them in accordance with the 7th CPC’s rules. Hence, the current appeal has come to be filed by the school.

Analysis of the court

The Delhi High court held that the writ petition filed by the three teachers was maintainable as it involves a public law element, inasmuch as, the original writ petitioners were seeking the implementation of Section 10(1) of the Delhi School Education Act, 1973 (DSE Act, 1973)

In reality, the writ petitioners sought implementation of the circular/order/notification dated October 17, 2017 issued by DOE requiring the schools to pay teachers’ wages in line with the 7th CPC through the underlying writ petition. In reality, the Supreme Court has unequivocally stated the following in the case of St. Mary’s Education Society (Supra):

“75.1. An application under Article 226 of the Constitution is maintainable against a person or a body discharging public duties or public functions. The public duty cast may be either statutory or otherwise and where it is otherwise, the body or the person must be shown to owe that duty or obligation to the public involving the public law element. Similarly, for ascertaining the discharge of public function, it must be established that the body or the person was seeking to achieve the same for the collective benefit of the public or a section of it and the authority to do so must be accepted by the public.”

Hence the present writ was maintainable.

This Court further believes that, given the recurrent nature of the claim, the writ petition submitted by the original writ petitioners is not precluded by laches or delay.

In Union of India v. Tarsem Singh (supra), the Supreme Court itself said by way of an example that remedy should be given regardless of delay if the problem relates to pay payment as it does not impact third party rights.

Furthermore, because the decision in Rushibhai Jagdishbhai Pathak v. Bhavnagar Municipal Corporation (above) deals with a matter of a higher grade pay scale in the following promotional post, which is not the situation in the present issue, it is of no use to the appellant.

To sum up, it should be stated once again that the respondents in the writ case requested the payment of their entire salaries in accordance with the 7th CPC’s recommendations. According to Section 10 of the DSE Act, a recognised private school’s pay scale and allowances, medical services, pension, gratuity, provident fund, and other permitted benefits must not be less than those of the employees in the same position at the public school. According to a statement from the DOE dated October 17, 2017, all recognised schools are required to follow the 7th CPC’s recommendations in compliance with the DSE Act, 1973. at light of this, it is unquestionable that instructors at unassisted private schools are entitled to the same pay and benefits as emoluments as those of government schools, in terms of the obligation enjoined upon the private recognized schools under the DSE Act, 1973. The schools cannot evade their statutory responsibility and are bound to pay the statutory dues.

Written By – Shreyanshu Gupta

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Delhi High Court held that teachers of unaided private schools are entitled to the same pay and emoluments as those of government schools.