INDEPENDENT SCHOOLS’ FEDERATION OF INDIA (REGD.) versus UNION OF INDIA AND ANOTHER

Citation: [2022] 13 S.C.R. 776 · Decided: 29-08-2022 · Supreme Court of India · Bench: SANJIV KHANNA · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 13 S.C.R.
   [2022] 13 S.C.R. 776
776
INDEPENDENT SCHOOLS’ FEDERATION OF INDIA (REGD.)
v.
UNION OF INDIA AND ANOTHER
(Civil Appeal No. 8162 of 2012)
AUGUST 29, 2022
[SANJIV KHANNA AND BELA M. TRIVEDI, JJ.]
Payment of Gratuity Act, 1972: ss.1(3)(c), 2(e), 13, 13A –
Payment of Gratuity (Amendment) Act, 2009 – Amendment to s. 2(e)
and insertion of s. 13A to the 1972 Act with retrospective effect
from 3.04.1997 vide the Amendment Act of 2009 whereby benefit of
gratuity to the teachers of private schools who have rendered
continuous service for not less than 5 years, on their superannuation,
retirement or resignation, or on their death or disablement due to
accident or disease – Constitutional validity of – High Court
dismissed the petitions of the several private schools challenged
the constitutional validity of the amendments – In appeal before
this Court, challenged on the ground that the Amendment Act, 2009
overrules the judicial decision in Ahmedabad Private Primary
Teachers’ Association, 2004 and violates the doctrine of separation
of powers; and that the retrospective amendments are unreasonable,
excessive and harsh, and thus, unconstitutional – On appeal, Held:
Legislature has constitutional powers to amend the language of the
provision that was the subject matter of the court decision, and
such an amendment does not overrule the court decision –
Overruling assumes a decision based on the same law – In the instant
case, law is amended, and the defects are removed or cured, the
law has changed, and therefore, the earlier interpretation is no
longer applicable and becomes irrelevant – Doctrine of separation
of powers demarcates the exclusive domains of the legislature, which
enacts the laws, and the courts which interpret the enacted law –
When the legislature acts within its power to usher in a valid law
and rectify a legal error, even after a court ruling, the legislature
exercises its constitutional power to enact the law and does not
overrule an earlier court decision – As regards the challenge, that
the retrospective amendments are unreasonable there are upper-
cap limits on payment of gratuity –Though gratuity is computed
with reference to years of service, in view of upper cap limit, the
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payment towards gratuity cannot exceed the specified amount, even
if the employee would be entitled to higher amount in view of the
years of the service rendered to the employer – Hence, the
amendment is not unreasonable or harsh – The teachers were
discriminated to be denied benefit of gratuity, a terminal benefit,
which was payable to other employees of the private schools/
educational institutions, including those engaged in administrative
and managerial work – Amendment with retrospective effect remedies
the injustice and discrimination suffered by the teachers on account
of a legislative mistake – Amendment was necessary to ensure that
something which was due and payable to the teachers is not denied
to them due to a defect in the statute.
Retroactive effect and retrospective operation – Distinction
between – Discussed.
Dismissing the appeals, the Court
HELD: 1.1 The first ground should not hold for long, as
the legislation in question rectifies the infirmities and defects
pointed out by the Court, and the amended clause (e) to Section
2, defining the word “employee” and the newly inserted Section
13A with retrospective effect from 3rd April 1997, effectuate and
catalyse the object and purpose of the Notification No. S-42013/
1/95-SS.(II). This power to legislate with retrospective effect,
which vests in every sovereign legislature, is not taken away by
a court decision. However, a court decision cannot be overruled
by the legislature. The legislature can amend the language of the
provision that was the subject matter of the court decision, and
such an amendment does not overrule the court decision.
Overruling assumes a decision based on the same law. Where
the law, as in the present case, has been amended, and the defects
have been removed or cured, the law changes, and therefore,
the earlier interpretation is no longer applicable and becomes
irrelevant. Doctrine of separation of powers demarcates the
exclusive domains of the legislature, which enacts the laws, and
the courts’, which interpret the law as enacted. The earlier
decision in Ahmedabad Private Primary Teachers’ Association by
this Court had interpreted the law, that is, Section 2(e) of the
P

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