A reading from The Register.

When a Jain School Kept Its Principal Past 60, the State Stopped Paying. The Supreme Court Just Said: That's Legal.

In 1999, a Jain minority institution in Gujarat called 'The New High School' had a problem. Its principal, Mr. H.H. Kapadia, was turning 58 — the standard retirement age for teachers in the state. The school's management wanted him to stay. The District Education Officer (DEO) agreed, but with a catch: the principal could work until 60, but the school would have to pay his salary itself, not from government grants. The institution accepted. Then, in 2001, it asked for another extension — beyond 60. The DEO refused. The school stopped getting grant-in-aid for the principal's salary from 2001 to 2012. Sixteen years of litigation later, the Supreme Court of India has now ruled that the State was right. The school's Article 30(1) rights, the Court held, do not entitle it to government money for an employee kept on past the superannuation age set by the Grant-in-Aid Code.

The Principal Who Wouldn't Retire

The facts are straightforward. The H.B. Kapadia Education Trust ran 'The New High School' — a government-aided secondary school in Gujarat. In 1999, the principal, H.H. Kapadia, turned 58. Under Regulation 36 of the Gujarat Secondary Education Regulations, 1974, that was the compulsory retirement age. But Regulation 43 of the same Regulations exempted minority institutions from Regulation 36. So the school could keep him. The DEO allowed it, but on the explicit condition that the salary would be borne by the institution, not the government grant.

In 2001, the school asked for another extension — this time beyond 60. The DEO said no. The school then moved the Gujarat High Court, arguing that as a minority institution, its right under Article 30(1) to administer its affairs meant it could decide who its principal was, and the State had to pay the grant-in-aid for that principal's salary regardless of age.

The High Court's View: Article 30(1) Trumps the Grant Code

The Single Bench of the Gujarat High Court agreed with the school. On June 24, 2016, it held that stopping the grant-in-aid violated Article 30(1) of the Constitution. It directed the State to pay the grant arrears from 2001 to 2012 — a period of over a decade. The Division Bench upheld this on April 2, 2018, in Letters Patent Appeal No. 175 of 2017. The State of Gujarat appealed to the Supreme Court.

What the Regulations Actually Say

The Supreme Court, in a judgment authored by Justice Bela M. Trivedi (with Justice Dinesh Maheshwari concurring), went back to the text. The key provisions were these:

• Regulation 36 of the Secondary Education Regulations, 1974: An employee of a registered secondary school shall be compulsorily retired at 58.
• Regulation 43 of the same Regulations: Nothing in Regulation 36 (among others) shall apply to any educational institution established and administered by a minority.
• Regulation 42: The provisions of these Regulations shall prevail over the Grant-in-Aid Code insofar as they relate to any matters provided in these Regulations.
• Paras 81.1 and 81.2 of the Grant-in-Aid Code for Secondary Schools, Gujarat (1964): A teacher shall ordinarily retire at 58. The management may grant extensions up to 60.

The school's argument was simple: Regulation 43 exempts minority institutions from Regulation 36. Regulation 42 says Regulations prevail over the Grant-in-Aid Code. Therefore, the Grant-in-Aid Code's superannuation provisions don't apply to minority institutions. The school could set its own retirement age, and the State had to pay.

The Supreme Court's Syllogism: Why the School Lost

The Court rejected that argument. Here's the logic, step by step:

Step 1: Regulation 43 exempts minority institutions from Regulation 36. That means the compulsory retirement age of 58 does not apply to them. The school could keep the principal beyond 58 — that part was correct.

Step 2: But Regulation 42 says Regulations prevail over the Grant-in-Aid Code only "in so far as they relate to any matters provided in these regulations." Since Regulation 36 (the matter of superannuation age) is exempted for minority institutions, the Regulations do not provide any superannuation rule for minority schools. Therefore, the field is left open for the Grant-in-Aid Code to operate.

Step 3: The Grant-in-Aid Code's paras 81.1 and 81.2 set the superannuation age at 58, with extensions possible up to 60. Since the Regulations do not cover this area for minority institutions, the Grant-in-Aid Code applies. The school, by keeping the principal beyond 60, violated the Code's conditions.

Step 4: The consequence: "If an employee is continued in service by the management of any registered minority Secondary School receiving Grant-in-Aid from the State Government, then such school would not be entitled to receive any grant in respect of the expenditure incurred for continuing such employee beyond the stipulated superannuation age."

Article 30(1) Is Not a Blank Cheque

The school's constitutional argument was that Article 30(1) — the right of minorities to establish and administer educational institutions — gave it the power to decide who its principal was, and the State could not interfere by withholding grants. The Supreme Court turned to two key precedents.

In T.M.A. Pai Foundation and Others v. State of Karnataka and Others (2002) 8 SCC 481, the Court had held that the right under Article 30(1) is not absolute. Conditions for grant or non-grant of aid must be uniformly applied to majority and minority institutions alike. Conditions relating to proper utilization of grant and fulfillment of grant objectives are permissible.

In State of Uttar Pradesh and Others v. Principal Abhay Nandan Inter College and Others (2021 SCC Online SC 807), the Court had reinforced that when it comes to aided institutions, there cannot be any difference between minority and non-minority institutions. An institution receiving aid is bound by conditions imposed and must comply.

Applying these, the Court held that refusal to pay grant-in-aid to a minority institution on the ground that an employee has reached superannuation age as per the Grant-in-Aid Code does not constitute interference with the affairs of the institution or violation of Article 30(1), as conditions for grant or non-grant of aid must be uniformly applied to all institutions.

The Operative Order: High Court Orders Set Aside

The Supreme Court allowed the State's appeal. The Division Bench order dated April 2, 2018, and the Single Bench order dated June 24, 2016, were both set aside. The school's claim for grant-in-aid arrears from 2001 to 2012 was rejected.

THE PLAY: If you are a minority institution receiving government aid, you cannot use Article 30(1) to override the Grant-in-Aid Code's superannuation conditions. Keep an employee past the Code's retirement age, and you pay the salary yourself — the State is not obliged to fund it.

What This Means for Practitioners

For advocates advising minority educational institutions, this judgment draws a sharp line. The right to administer under Article 30(1) is real, but it does not extend to demanding government money for employees the institution chooses to retain beyond the uniform superannuation age set by the Grant-in-Aid Code. The key distinction is between regulation (which can be exempted for minorities) and conditions of aid (which apply uniformly). If the institution wants the grant, it must follow the grant's rules.

For CFOs and founders of such institutions, the practical takeaway is clear: check the Grant-in-Aid Code of your state. If it sets a retirement age, and you want to keep an employee past that age, budget for the salary from your own funds. The State will not reimburse you, and Article 30(1) will not help you recover it.

The bottom line: A minority school receiving government aid cannot claim grant-in-aid for a principal it keeps past the Grant-in-Aid Code's superannuation age — Article 30(1) protects your right to administer, not your right to the State's money on your own terms.