Financial Aid Does Not Establish Employment | Chhattisgarh High Court Holds SECL Not Employer of School Teachers Despite Funding
Isabella Mariam
The High Court of Chhattisgarh Single Bench of Justice Narendra Kumar Vyas has held that teachers appointed in schools managed by the Singhi Colliery Education Society cannot maintain writ petitions against South Eastern Coalfields Limited (SECL) seeking salary arrears or reinstatement, in the absence of an employer-employee relationship. The Court held that mere financial assistance from SECL does not constitute supervisory or disciplinary control necessary to establish such a relationship. The petitions were dismissed, with liberty to approach competent civil forums where appropriate.
The matter pertains to two writ petitions, WP No. 285 of 1996 and WP No. 1675 of 2001, involving multiple petitioners who served as teachers and lecturers in schools run by the Singhi Colliery Education Society, Bilaspur. The Society, a registered body, received financial assistance from SECL, a Government of India undertaking.
The first writ petition, WP No. 285 of 1996, was filed by teachers seeking parity in salary with government teachers and payment of salary withheld due to their refusal to sign an agreement dated 08.11.1995 between SECL and a trade union. They claimed to have been working since 1991 and argued that SECL withheld their salaries arbitrarily from November 1995 onwards.
They further alleged that SECL compelled them to pay union subscription fees and insurance premiums against their will, and that the union pressured them to sign agreements. They contended that SECL was their de facto employer, given its control and funding of the schools, and that denial of salary and parity with other teachers constituted arbitrary discrimination.
In the second petition, WP No. 1675 of 2001, a petitioner challenged his termination order dated 26.06.1996 from the same school. He claimed his dismissal was mala fide and without following principles of natural justice, stating he was not afforded an opportunity of being heard or issued any show cause notice. The order had been passed by the principal of the school, allegedly without authority.
In both cases, SECL filed detailed replies denying the employer-employee relationship and asserting that the Singhi Colliery Education Society was a separate legal entity. SECL stated that it provided financial aid but did not exercise administrative control or issue any appointment letters to the petitioners. SECL also raised objections to the maintainability of the writ petitions, stating that the Society is not “State” under Article 12 of the Constitution and that the writ did not lie against it.
The petitioners placed reliance on various internal correspondences and policies to claim that SECL exercised effective control over the appointments and functioning of the schools. They argued that even if they were not formally appointed by SECL, its financial and supervisory role in the functioning of the Society schools rendered it liable as the real employer.
The State Government was also made a party, but it filed a short reply stating that the schools were not under its jurisdiction, and the petitioners were neither appointed nor paid by it.
The Court undertook a comprehensive analysis of the legal framework governing writ jurisdiction, employer-employee relationships, and maintainability. Justice Vyas began by stating: “It is well settled proposition of law that in order to entertain a petition under Article 226 of the Constitution of India, there must be a public law element involved. It is equally well settled that a writ petition does not lie against a private body unless it discharges public functions.”
The Court noted that the petitioners had failed to produce any appointment letters issued by SECL or show that SECL exercised disciplinary or supervisory control over them. “Mere financial aid by SECL to the society for the functioning of the school will not establish employer-employee relationship between SECL and the petitioners.”
Justice Vyas cited the Supreme Court’s ruling in Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State of Tamil Nadu, (2004) 3 SCC 514, to hold: “The question of who is the employer depends upon who has the ultimate control over the workman. Ultimate supervision and control is a strong factor to establish employer-employee relationship.”
The Court also referred to National Aluminium Co. Ltd. v. Ananta Kishore Rout, (2014) 6 SCC 756: “Financial assistance by itself cannot be said to be proof of employer-employee relationship.”
On the issue of delay in WP No. 1675 of 2001, the Court recorded: “The petitioner has challenged the termination order dated 26.06.1996 after a period of 15 years without proper explanation. Though amendment was allowed by this Court, delay cannot be condoned solely on that basis.”
Justice Vyas invoked Mrinmoy Maity v. Chhanda Koley, 2024 LiveLaw (SC) 318, to state: “Equity aids the vigilant and not the indolent.”
The Court noted that the petitioners had not availed any remedy under the Societies Registration Act, 1860, against the Education Society.
It was also stated: “This Court finds that the dispute raised is not amenable to writ jurisdiction in the absence of a public law element and the presence of disputed questions of fact.”
The Court held that the petitioners’ remedy, if any, lies before appropriate civil courts or industrial forums.
The Court issued the following directions:
“In view of the above-stated facts and after careful consideration of submissions and applicable law, the writ petition being WP No. 285 of 1996 is dismissed so far as South Eastern Coalfields Ltd. is concerned, with liberty to the petitioners to avail appropriate remedy against the Singhi Colliery Education Society under law, if so advised.”
Regarding the second case, the Court ruled: “So far as WP No. 1675 of 2001 is concerned, the same is liable to be and is hereby dismissed on account of delay and laches as well as absence of any employer-employee relationship with SECL.”
The judgment concluded: “Both the writ petitions stand disposed of accordingly.”
Advocates Representing the Parties
For the Petitioners: Shri Ashok Kumar Sharma, Advocate; Shri R.S. Ghildiyal, Advocate
For the Respondents: Shri Vikram Sharma, Advocate for SECL; Shri Anil Dhruv, Advocate for the State of Chhattisgarh
Case Title: Satya Prakash Lal & Others v. South Eastern Coalfields Ltd. & Others
Neutral Citation: 2025:CGHC:22585
Case Numbers: WP No. 285 of 1996 and WP No. 1675 of 2001
Bench: Justice Narendra Kumar Vyas
[Read/Download order]
