Educational institution

The educational institution is not an “establishment” under the “Telangana Shops and Establishments Act”: Telangana High Court


The High Court of Telangana recently ruled that an educational institution is not covered by the meaning and definition of “institution” as defined in Section 2 (10) of the Telangana Stores and Establishments Act 1988.

The bench of Chief Justice Satish Chandra Sharma and Judge B. Vijaysen Reddy took into account the decisions of the Apex Court and the High Court of Kerala in reaching this conclusion.

The context of the case

The appellant institution is an educational institution and respondent 3 / employee was appointed in 1985 as an assistant in the laboratory department of nutrition. She resigned in December 2009, and the service charge has also been paid.

She appealed to the Deputy Labor Commissioner under the Telangana Shops and Establishments Act 1988, claiming that she had been unlawfully dismissed by the appellant institution.

The appellant institution filed a counter-affidavit indicating that the employee herself has submitted her resignation, that her contributions have been paid and that the appeal deserves to be rejected.

It was further argued that the employee’s preferred appeal under Section 48 (1) of the Stores and Establishments Act, 1988 was not sustainable, despite the aforementioned ground, the appeal was allowed by an order in July 2019, directing the appellant institution to reinstate the employee with full salary arrears.

The appellant institution preferred a brief request indicating that the appellant institution is not an establishment and is not covered by the provisions of the Law on businesses and establishments.

Court order

At the outset, the Court noted that the institution was governed by the provisions of the Telangana Education Law, 1982 and the said law provides for redress of a grievance of the nature involved in this appeal.

In addition, the Court observed that the question of whether or not an educational institution falls within the meaning of “establishment” had been considered by the Supreme Court in Ruth Soren v. Management Committee (2001) 2 SCC 115.

In that case, taking into account the definition of “establishment” under the Bihar Business and Establishment Law, which is similar to the definition in the Telangana Commercial and Establishment Law, the Supreme Court held that ‘an educational institution did not fall within the scope of the institution under the Act.

The Supreme Court ruled that an educational institution may fall within the meaning of “industry”, but certainly will not fall within the meaning and term of “establishment”, and therefore, the High Court of Telangana decided to set aside the order adopted by the Appeal Authority in July 2019 as well as the order issued by the single judge.

It may be noted that the High Court of Kerala had also taken a similar point of view in the case of Sree Narayana Educational Institution v. Assistant Labor Officer 2001 (91) FLR 284.

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