“‘No Deep and Pervasive Control’: Supreme Court Holds ICSSR Not Liable for CRRID Salaries, Says Grants Cannot Be Claimed ‘As a Matter of Right’”
Kiran Raj
The Supreme Court has set aside the orders of the Punjab and Haryana High Court, which had directed the Indian Council of Social Science Research (ICSSR) to release grants to the Centre for Research in Rural and Industrial Development (CRRID) to facilitate payment of salaries to CRRID’s employees. The Division Bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran held that ICSSR is not under a legal obligation to release grants where the beneficiary institution has violated conditions attached to the grants.
The Court directed CRRID to pay the withheld salaries of its employees for the period between April 2021 and March 2023 from its own resources. The Bench further directed that, in the event of non-compliance, ICSSR shall withhold all future grants to CRRID.
ICSSR, a society under the Ministry of Education, Government of India, provides grants-in-aid to research institutions engaged in social science research. CRRID is one such institution, receiving 45 percent of its funding from ICSSR, 45 percent from the State of Punjab, and the remainder through its own resources. The grants are regulated under the ICSSR Grant-in-Aid Rules.
In 2015-2016, ICSSR received complaints alleging malpractices at CRRID, including irregular appointments, misuse of grants, and non-compliance with service rules. ICSSR constituted a committee to investigate the matter, which found CRRID in violation of ICSSR norms and recommended corrective measures, including the recovery of excess payments made to employees. Despite subsequent correspondence and directions, ICSSR found CRRID’s responses evasive and non-compliant. In April 2021, ICSSR ceased disbursing grants to CRRID, followed by the Government of Punjab withholding its share.
In July 2022, seventeen employees of CRRID filed a writ petition before the High Court seeking release of their salaries. CRRID stated that due to the suspension of grants by ICSSR, it was unable to pay its employees. The High Court allowed the writ petition, holding that ICSSR had "deep and pervasive" control over CRRID and thus bore responsibility for the salary payments. ICSSR challenged this decision before the Division Bench, which upheld the Single Judge’s order.
Appearing for ICSSR, learned Additional Solicitor General K.M. Nataraj submitted that ICSSR is not responsible for CRRID’s internal salary obligations and that the grants are discretionary under Rule 11 of the Grant-in-Aid Rules. It was argued that CRRID is an autonomous body that must comply with the conditions attached to such grants.
Respondents, represented by senior counsel Narender Hooda and Sanjeev Sharma, argued that ICSSR had sufficient control over CRRID through its nominee on CRRID’s Governing Body, rendering it responsible for ensuring payment of salaries.
The Supreme Court examined the CRRID Rules and ICSSR Grant-in-Aid Rules. The Court recorded that as per Rule 22(d) of CRRID Rules, the Governing Body of CRRID retains the authority to reject nominees proposed by ICSSR or the State Government, noting, “the Governing Body shall not be obliged to give the reason for rejecting or referring back any such name.”
The Bench observed, “The presence of one or even two members of ICSSR in a Governing Body of twelve does not amount to ‘deep and pervasive’ control.” The Court added that, even with the presence of State of Punjab nominees, “this is not ‘deep and pervasive’ control.”
The Court recorded that ICSSR is an authority under Article 12 of the Constitution but stated, “A ‘deep and pervasive’ control would require much more than just financing an institution or a body. Even guiding, controlling or regulating affairs of an institution will not be called a ‘deep and pervasive’ control.”
The Bench held that the High Court erred in concluding that ICSSR’s grant obligations extended to fulfilling CRRID’s salary liabilities. It observed, “Simply because ICSSR has some control over CRRID, it cannot be a reason for directing ICSSR to release the grants when it has been withheld for just and valid reasons.”
Referring to the Grant-in-Aid Rules, the Court recorded, “The grants by ICSSR are discretionary and institutions like CRRID cannot claim grants as a matter of right.” Rule 16(3) empowers ICSSR to stop grants and demand refunds in case of violations, and Rule 6 allows for withdrawal of assistance when eligibility conditions are not met.
The Court further recorded, “CRRID, therefore, has absolute authority over its financial as well as administrative matters.” The Bench noted that CRRID’s failure to rectify anomalies identified by ICSSR justified the withholding of grants. It stated, “By withholding the grant, ICSSR has only taken recourse to the law which allowed it to exercise such power.”
The Court found that CRRID has sufficient funds from other sources to pay its employees, as indicated in its balance sheet. It recorded, “Ultimately, the responsibility to pay the salary to its employees lies on CRRID and not on ICSSR or Government of Punjab.”
The Bench allowed the appeals, set aside the orders of the High Court, and directed CRRID to pay the withheld salaries within three weeks. The Court stated, “In case, CRRID fails to release this amount in favour of the employees, we direct ICSSR to withhold all further grant-in-aid in favour of CRRID.”
The Court further directed the Registry to return the amount deposited by ICSSR to the appellant along with interest. Additionally, ICSSR and the State of Punjab were granted liberty to approach the High Court for recovery of any amounts deposited pursuant to the High Court’s earlier orders.
Advocates Representing the Parties
For the Appellant: K.M. Nataraj, Additional Solicitor General, Ranbir Singh Thakur
For the Respondents: Narender Hooda and Sanjeev Sharma (Senior Advocates), Ana Upadhyay
Case Title: Indian Council of Social Science Research (ICSSR) v. Neetu Gaur & Ors.
Neutral Citation: 2025 INSC 374
Case Number: Civil Appeal No. of 2025 (@ SLP(C) No. 17595 of 2024)
Bench: Justice Sudhanshu Dhulia, Justice K. Vinod Chandran
[Read/Download order]
