1. Respondent No. 2 Mr. Q. S. Saifuddin was an Assistant Teacher in the petitioner school known as Bishop Cotton Schools. On 20-11-1967 the school management served a letter on the respondent No. 2 containing allegations regarding neglect of duties and misconduct, and he was asked to submit his written explanation before 28-11-1967. Apart from the other allegations made in the letter, it was alleged.
'That in total and flagrant contravention of Ss. 76.1.1 to 76.1.5 of the Secondary Schools Code and without any permission you have been engaged in and/or associated with the active supervision and management of the educational body known as 'The National Education Society' and the schools (s) and hostel run by this Society, and that you have been engaged in teaching and/or associated with such schools, namely. 'The English Primary School and Nagpur Residential Schools' with offices situate at Boy's Home, Sadar, Nagpur.'
The respondent No. 2 submitted his explanation on 28-11-67 and thereafter an Inquiry Committee was constituted to inquire into the allegations against him. A charge-sheet was also served on the respondent No. 2 and the respondent No. 2 participated in the inquiry. After recording oral and documentary evidence, the Inquiry Committee recorded its findings and decision on 17-1-1968 and the respondent No. 2 was found guilty. The Inquiry Committee was of the opinion that the action of the respondent No. 2 constituted serious misconduct and, therefore, the said charge namely, the charge relating to his association with and the active supervision and management of another school, was in itself enough to impose the penalty of dismissal. Therefore, the Committee recommended that the respondent No. 2 should be dismissed from service. The Management Committee of the school accepted this finding and recorded a decision and communicated their decision to the respondent No. 2 that he was being removed from service. Thereafter the respondent No. 2 filed an appeal under Rule 77(3)(3)(vii) of the Secondary Schools Code before the respondent No. 1. The Deputy Director of Education, Vidarbha, Nagpur. According to the petitioner, several months after the dismissal of the respondent No. 2, they received a copy of the memo dated 3-2-1969 sent to them by the Deputy Director of Education informing them that the appeal filed by the respondent No. 2 was rejected as barred by limitation and, therefore, the decision taken by the Inquiry Committee must be taken to be final and binding on both the parties. A grievance is made by the petitioner in this petition that thereafter the Deputy Director of Education reviewed his own order and held that the appeal filed by the respondent No. 2 was within limitation. A contention is raised before us by the learned counsel for the petitioner that the Deputy Director of Education had no power, authority or jurisdiction to review his own order. According to the learned counsel, the power to review an order by a quasi-judicial authority is neither inherent nor implied unless it is specifically conferred on it. The provisions of the Secondary Schools Code do not confer any such power of review upon the Deputy Director of Education and, therefore, the order passed by him in that behalf is without jurisdiction. An alternative submission was also made by the learned counsel that even if it is assumed that he had power to review his own order, he could not have done so without giving a reasonable opportunity to the petitioner of being heard and, therefore, in any case the said order is against the principle of natural justice. Against this order of the Deputy Director of Education reviewing his own earlier order, the petitioner addressed a representation to the Education Department of the Government of Maharashtra but the Government informed the petitioner that they were not willing to interfere with the said order. Against this order the petitioner had filed a writ petition before this Court but it seems that it was subsequently withdrawn.
2. It was then contended by the petitioner that even before passing the final order allowing the appeal the petitioner was not given a reasonable opportunity of being heard. According to the petitioner, the hearing of the appeal was fixed on 1-7-1969 when a prayer for adjournment was made which was refused. Ultimately, without affording any reasonable opportunity of being heard, the respondent No. 1 Deputy Director of Education passed an order dated 9-7-1969 by which the Deputy Director of Education held that none of the charges levelled against the respondent No. 2 could be proved and he had not done anything which was of such a serious nature that could result in his dismissal. In view of this finding recorded by the Deputy Director of Education, he allowed the appeal preferred by the respondent No. 2 and directed the Management of the Bishop Cotton School to reinstate him in service with immediate effect. It is this order passed by the Deputy Director of Education which is challenged in this petition.
3. Though various contentions were raised in the petition and argued before us, ultimately Shri Manohar, learned counsel for the petitioner, limited his submission before us by contending that even on the basis of the admissions of the respondent No. 2 and the finding recorded by the Deputy Director of Education, it is obvious that the respondent No. 2 is directly associated with the National Education Society and the schools and the hostel run by the said society and this itself constitutes a serious misconduct for which the petitioner No. 2 could be legally dismissed from service. In this context, he has drawn our attention to the findings recorded by the Inquiry Committee. From the report of the Inquiry Committee it is quite clear that the respondent No. 2 was the sole trustee of the National Education Society. He was also the President of the Society and in that capacity was appointing teachers for the schools run by the said Society. From the prospectus of the English Primary School and the Nagpur Residential School (English Medium), Sadar, Nagpur, run by the National Education Society, it is quite clear that the respondent No. 2 is the founder and the Managing Trustee of the said Society. It is further clear from the evidence on record that without taking necessary permission from the Management of the petitioner-school, he had engaged himself in or had actively associated with the active supervision and management of the educational body known as the National Education Society and the schools and the hostel run by the said Society. It is further clear from the evidence on record that the said Society is running two schools and respondent No. 2 is closely associated with the said schools. He was also acting as the Manager of the schools. In this view of the matter, it is quite obvious that the respondent No. 2 was engaged in or was associated with the management and supervision of the educational body known as the National Education Society and the schools and the hostel run by the said Society. It was not possible for Shri Kukday, learned counsel for the respondent No. 2, to dispute these facts.
4. However, it is contended by Shri Kukday, that as found by the Deputy Director of Education , Rule 71.4 of the Secondary Schools Code has no application to the facts and circumstances of the present case According to him, none of these Rules, namely, 71(4) and 76(1) to 76(1)(v) are applicable in the case of the respondent No. 2 and, therefore, the Deputy Director of Education was right in coming to the conclusion that the said charge was not proved. It is not possible for us to accept this contention of Shri Kukday. Under the provisions of the Secondary Schools Code it is open for the Management of a school to dismiss its employee including a teacher from service if, after due inquiry, he is found guilty of insubordination, neglect of duties or misconduct which is of a serious nature. The term 'misconduct' is not defined in the rules. Rule 76(1) which deals with the duties and responsibilities of the full-time teaching staff reads as under :
'76(1)(i) Heads and Assistant Heads of schools may give guidance to their pupils occasionally outside schools hours, if absolutely necessary, without any remuneration. But they should not undertake any regular private tuition even without remuneration. The Heads/Assistant Heads may, however, be permitted by managements in writing to undertake the following items of work :
(a) Working as guides for post-graduate research (with the approval of the University).
(b) Working as part-time lecturers in colleges or in the post-graduate departments of Universities; provided that (i) the work involved is small and does not interfere with their regular work in the school or with the their presence in the school for the requisite period and (ii) their legitimate work is generally not allowed to suffer in any matter.
(c) Supervision of the primary section of the school, if any; and
(d) Any other similar type of work.
76(1)(ii) No teacher should do private tuition for more than two hours in a day or teach more than five pupils during his whole period of tuition in the day. The expression 'five pupils' means the same five pupils and not batches of pupils. Day school teachers working in night schools may work for full duration of the night schools instead of two hours as mentioned in this rule provided they do not undertake private tuitions.
76(1)(iii) Every teacher must obtain the previous permission of the Head of the school before he undertakes any tuition. He should also submit to the Head of the school at the end of every month a statement signed by him showing the names of the pupils to whom he has been giving tuition the period per day for which he is giving tuition, the standards in which they are studying and the amount of remuneration received. These reports shall be available for inspection to the appropriate authority.
76(1)(iv) No teacher will be allowed to associate himself directly or indirectly with any coaching classes to prepare pupils for the internal or external examination of secondary schools or any other examining body. When the number of pupils taking private tuition from a teacher for internal or external examination exceeds five, it shall be deemed to be coaching class.
76(1)(v) School building or any part thereof or of the premises should not be allowed to be utilized for private coaching classes, excepting for classes conducted by teachers for examinations in languages held by associations or bodies recognised by the Department. The time which the teachers spend in teaching these classes will be set off against the limit of two hours of private tuitions admissible under the rules.'
From the bare reading of these rules it is obvious that the Secondary Schools Code expects from a full-time teacher that he will devote all his time and energy to his teaching job in the school. Rule 76(1)(i) lays down that Heads and Assistant Heads of schools should not undertake any regular private tuition even without remuneration. Rule 76(1)(ii) then states that no teacher should do private tuition for more than two hours in a day or teach more than five pupils during his whole period of tuition in the day, and for that also he must obtain the previous permission of the Head of the school. Rule 76(1)(iv) then makes it clear that no teacher will be allowed to associate himself directly or indirectly with any coaching classes to prepare pupils for the internal or external examination of secondary schools or any other examining body. Then in Rule 77(3)(1) the procedure for inquiry is prescribed providing for punishment of removal or dismissal if ultimately on an inquiry it is found that an employee of a school including a teacher is guilty of insubordination, neglect of duties or misconduct (in each case of serious nature). As to what would constitute misconduct is neither defined nor specified in the Secondary Schools Code. In the absence of a definition of the term 'misconduct' it would be open to the employer to consider reasonably as to what conduct can be properly treated misconduct. As observed by the Supreme Court in Again v. Badri Das and others, 1963 I L.L.J. 684, what is misconduct will entirely depend upon the circumstances of each case and it is not possible to lay down any general rule in that behalf. In the absence of any specification or definition, therefore, the question will have to be dealt with reasonably and in accordance with the commonsense having regard to the nature of employment and the corresponding duties and obligations. A conduct which would be quite incompatible with the express and implied norms of the relationship of the employee with the employer will obviously amount to misconduct. Certain species of misconduct are enumerated in the Secondary Schools Code itself which, to some extent, provides guidelines in that behalf. Chapter III, Section III, of the Secondary Schools Code prescribes the rules of discipline and leave. Rule 71(2) lays down that all employees shall, during the period of their service, employ themselves honestly and efficiently under the orders of the Head of the school and shall make themselves in all respects useful to the school. The rule further says that they shall not on their own account or otherwise, either directly or indirectly, carry on or be concerned in any trade or business. Rule 73(1) casts a duty on a full-time teacher that he shall be present on the school premises during the working hours of the school. From the various rules incorporated in Section III of Chapter III of the Code, it is quite clear that the School Management has a right to expect from its full-time teacher that he will devote all his time and energy to his duties as a teacher. In this view of the matter, in our opinion, it will not be open to a full-time employee to carry on such activities which are inconsistent with the faithful discharge of his obligations undertaken by him either expressly or impliedly in accepting the full-time job. When a teacher accepts a full-time job, by necessary implication he agrees to so conduct himself that his activities would not be inconsistent with the nature of his job. This aspect of the matter has been considered by this Court in Madhosingh v. State of Bombay, : (1960)ILLJ291Bom , though in a different context. While considering the law relating to disciplinary action, this Court observed as under :
'The law relating to the disciplinary action which could be taken by a private individual against his servant is not that no disciplinary action can be taken by his master against the servant for any misconduct of his servant outside the employment. In considering the case of dismissal of a private servant Lord Easher, M. R. in Pearce v. Foster,  17 Q.B.D. 536 observed : The rule of law is, that where a person has entered into the position of servant, if he does anything incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him. The relation of master and servant implies necessarily that the servant shall be in a position to perform his duty duly and faithfully, and if by his own act he prevents himself from doing so, the master may dismiss him .... what circumstances will put a servant into the position of not being able to perform in a due manner, his duties, or of not being able to perform his duty in a faithful manner, it is impossible to enumerate. Innumerable circumstances have actually occurred which fall within that proposition, and innumerable other circumstances which never have yet occurred will occur, which also will fall within the proposition. But if a servant is guilty of such a crime outside his service as to make it unsafe for a master to keep him in his employ the servant may be dismissed by his master; and if the servant's conduct is so grossly immoral that all reasonable men would say that he cannot be trusted, the master may dismiss him.'
Dealing with the same question in the same case Lord Justice Lopes observed :
'If a servant conducts himself in a way inconsistent with the faithful discharge of his duty in the service, it is misconduct which justifies immediate dismissal. That misconduct, according to my view, need not be misconduct in the carrying on of the service or the business. It is sufficient if it is conduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of the master.
We are not aware of any decision taking a contrary view, and none is shown to us :
(5) The ratio deducible then is that in order to enable a master to take disciplinary action against his servant it is not a condition precedent that the misconduct on the part of the servant must arise within his employment and not outside his employment. The test in each case will be whether the servant is conducting himself in a way inconsistent with the faithful discharge of his obligations undertaken by him either expressly or impliedly in accepting the service. The inconsistency may arise on account of any act of the servant, either in the course of his employment or outside it which injures or has the tendency to injure his master's business or interests or reputation.
As observed by Lord Easher, M. R. in Pearce v. Foster, (supra) what circumstances will put a servant into the position of not being able to perform, in a due manner, his duties, or of not being able to perform his duty in faithful manner it is impossible to enumerate. However, from the relationship of master and servant a liability directly flows from the contract of employment itself that the employee has impliedly agreed that he will not do anything which might injure or undermine the trade, business or activity of his master. This is an implied condition of fidelity which means that an employee will perform his duty faithfully. Where the act of an employee is prejudicial or is likely to be prejudicial to the interests of his master or his conduct is such that the master cannot rely on the faithfulness, or his act or conduct is such that it results in opening the doors of temptations for not doing his duty faithfully, then the said conduct will be inconsistent and incompatible with the due discharge of his duties. It is a well-established principle that when an employee is working in a concern which deals in a particular line of business, then the employee should not engage himself in that line of activity, because if he does so, then there is a likelihood of conflict between his interest and duty. In such a case a possibility cannot be ruled out that he may be tempted to utilise his position to further his own interest. Not only this, but any association, direct or indirect, with the competing institution also might place him in such a position which might give rise to such a conflict between his interest and duty. In any case, it will be incompatible with his duty to consider his employer's interest first in preference to his own interests. In the present case, the respondent No. 2 is running a parallel educational institution not only within the same local area but in the vicinity of the petitioner school. Because of this he has placed himself in such a position that there is a likelihood of a conflict between his interests and duties, which, in a given case, can result in a unhealthy competition. By using his position as a full time teacher, he might try to divert the students to his own school who are either studying in the petitioner-school or intend to seek admission to the petitioner-school in this context, a reference may usefully be made to Rule 3(2)(1) of the Secondary Schools Code, under which a school seeking recognition of the department has to satisfy that the school for which recognition is sought is actually needed in the locality and it does not involve any unhealthy competition with any existing institution of the same category in the neighborhood. Therefore, from the bare perusal of the various provisions of the Secondary Schools Code, it is obvious that it intends and wants to avoid any unhealthy competition with any existing institution and also requires a full-time employee to devote all his time and energy to his teaching job. Rule 76(1)(iv) clearly lays down that no teacher will be allowed to associate himself directly or indirectly with any coaching classes to prepare pupils for the internal or external examination of secondary schools or any other examining body. A teacher is not permitted to do private tuition for more than two hours in a day, and this also he has to seek previous permission of the Head of the school. If a teacher cannot be permitted to associate himself directly or indirectly with any coaching classes, in our opinion, it is implicit in the said provision that he cannot be permitted to associate himself directly or indirectly with any other school also. In the present case, the Management of the Bishop Cotton School are running classes right from the primary standard up to the Higher Secondary standard. It is not disputed before us that the respondent No. 2 is the Managing Trustee of the National Education Society and the Manager of the schools run by the said Society which are also imparting the same education. If this is so, it is obvious to us that the respondent No. 2 is directly associated with a parallel educational institution which is running a school in competition with the petitioner-school. This conduct of the respondent No. 2 is obviously incompatible with his contract of employment with the petitioner Management. As a full-time teacher, he was expected to devote all his time to the teaching in the petitioner-school. It is obvious from the record that the respondent No. 2 is not only the Managing Trustee of the Society but is also acting as the Manager of the schools run by the said Society. If this is so, in our opinion, the Management of the school was right in coming to the conclusion that the respondent No. 2 was guilty of a misconduct which was of a serious nature, for which he could have been legally dismissed from service.
5. It is now well-settled that even though an employee is dismissed from service for more than one charge and ultimately it is found that the other charges could not be sustained, still it is open for the Management to support its order of dismissal on the charges proved against the employee if it could be shown that the order of dismissal could be legally passed for the said misconduct : see Railway Board, New Delhi v. N. Singh, 1966 II L.L.J. 743 and State of Orissa v. Bidyabhushan Mohapatra, 1963 II L.L.J. 239. As observed by the Supreme court in State of Orissa v. Bidyabhushan Mohapatra, referred to hereinbefore, if an order can be supported on any finding as to substantial misdemeanour for which the punishment imposed can lawfully be imposed it is not for the Court to consider whether that ground alone would have weighed with the authority in imposing the punishment in question. In the present case, it is obvious that separate and distinct charges were levelled against the respondent No. 2. The charge which related to his running a parallel school was a serious charge because it involved a conflict between the duty and self-interest. In the opinion of the Inquiry Committee also the said charge was of a serious nature for which he was liable to be dismissed. As already observed, with the sole object of avoiding such a conflict a provision is made in the Code that no teacher should be allowed to associate himself directly or indirectly even with a coaching class. These provisions are made in the Code with the sole object that the full-time teaching staff should devote all its time and energy to the teaching itself. In the present case, from the material placed before us it is obvious that not only the respondent No. 2 was directly associated with the running of a parallel school but from his chart produced before the Inquiry Committee regarding the absence from the school it is obvious that it was not possible for him to devote all his time and energy to teaching in the petitioner-school. In this view of the matter, the Deputy Director of Education has committee an error apparent on the face of the record in putting up narrow interpretation upon the provisions of Rule 77(3)(1) of the Secondary Schools Code. In our opinion, the conduct of the respondent No. 2 clearly amounted to misconduct which was of a serious nature, for which the punishment of dismissal could have been legally imposed on him by the petitioner school Management. In this view of the matter, it is not possible for us to sustain the order passed by the Deputy Director of Education, and therefore, the said order is liable to be quashed and set aside.
6. However, a contention was raised by Shri Kukday that the writ petition filed by the petitioner-school is not maintainable under Arts. 226 and 227 of the Constitution of India. According to Shri Kukday, the provisions of the Secondary Schools Code are merely administrative instructions and any right or obligation flowing from the said provisions of the Code are not enforceable in a writ petition under Arts. 226 and 227 of the Constitution of India. For this proposition Shri Kukday has relied on a decision of this Court in Sohanlal Fulchand v. Deputy Director of Education, 6, 1975 Mh. L.J. 20. It is not possible for us to accept this contention. It is no doubt true that it has been held by this Court as well as by the Supreme Court that the rules contained in the Secondary Schools Code are only executive instructions issued by the State Government for the purposes of managements of schools receiving grant-in-aid. However, Sohanlal Fulchand's case on which reliance is placed by the learned counsel for the respondent No. 2 was a case which was filed by a teacher. In this context, it was observed by this Court that a breach of any of the provisions of the Secondary Schools Code does not confer any right on a third party like a teacher in a private school. This Court further found that so far as a teacher in a privately managed school receiving grant-in-aid is concerned, even if his dismissal is held, to be wrongful being in breach of Rules of the Secondary Schools Code or for non-observance of rules of natural justice, he is not entitled to a relief of reinstatement as the case does not fall within the well recognised exceptions to the general rule that a contract of personal service is incapable of specific performance as this is not a case of a Government servant enforcing fundamental right under Art. 311 of the Constitution of India. It was further held that the contract of service is the basis on which the relief could be granted in such a case and for breach of contract of personal service the only relief the servant would be entitled to would be a claim for damages and, therefore, such a contract is not enforceable under Art. 226 of the Constitution of India. The earlier decision of this Court in Mithailal v. S. V. Joag, (1974) Mh. L.J. 220, was, therefore, distinguished. In Mithailal's case, a reference was made to a decision of the Gujarat High Court in Amratlal v. State, : AIR1972Guj260 . In the said case a petition was entertained by the Gujarat High Court under Art. 226 of the Constitution of India. The learned Judge of the Gujarat High Court in this context observed as under :
'The distribution of grant is governed by the provisions of the Code. These provisions have been made to achieve uniformity and certainty in the exercise of power and avoid discrimination. Schools which seek recognition and grant do so relying upon these rules. The managements of schools agree to abridgement of their rights to manage the institutions because they known that they are entitled to apply for grants from public funds and once taken on the list of aided schools they will continue to get the grant-in-aid from year to year so long as they continue to fulfil the conditions in respect of recognition or grant. The managements agree to all restrictions in respect of their right to manage the institutions because of the representations contained in the rules in the Grant-in-Aid Code, relating to the distribution of grants and on the expectation or belief that they shall on the fulfilment of the said conditions are entitled to grants in future. As representations are made by the Government by framing rules for distribution of grant, the management feel certain about the reception of grant from the Government in future without any discrimination. The rules relating to the distribution of grants as contained in the Code are in the nature of promises made by the Government to the managements of the secondary schools, and because of these promises and assurances the managements agree to restrictions of their right to manage the institutions. The uppermost idea of the Government in providing rules for recognition and grant is controlling of secondary education in the State. It is because of these promises or assurances given by the State as evidenced by the rules relating to grant that the secondary school managements agreed to the abridgement of their rights to manage the institutions. Thus the managements of the schools agree to act to their prejudice because of the representations relating to the grants made by the Government. The managements of the secondary school act upon the promise the terms whereof are to be found in the rules contained in the Code and also agreed to bind themselves to act in future as per the said rules. As between the management and the Government such promises and assurances would be enforceable because they are intended to be binding or intended to be acted upon. They are also binding to the Government because no term is implied to indicate that the Government is at liberty to revoke them. There is an obligation on the Government to give grants to the managements if the managements satisfy the conditions set out in the Code. The grants to be given by the Government depend upon the availability of the funds but it cannot mean that the Government can escape it obligation to pay the amount when the same is budgeted. Thus a right to entitle to receive grant arises in enquiry in favour of the managements of the schools. The Court in such cases is not powerless and can in appropriate cases compel the obligation arising out of the representations made by the Government. To concede in such cases to the claim that the rules are executive and not enforceable would strike at the very root of law. It must be remembered that in our Constitution the central and characteristics feature is the concept of rule of law, i.e., the authority of law to test the administrative action by the standard of legality. The administrative or executive action that does not meet the standard will be set aside if the aggrieved person brings appropriate action in the Court. The rule of law rejects the conception that the Government action is placed in privileged position of immunity from the control by law. Such a notion is foreign to the basic constitutional concept. As between the managements of schools and the Government because of the representations or promises or assurances given by the Government as evidenced by the rules contained in the Code, a right to receive grant is on the fulfilment of the conditions thereto created in favour of the managements of schools and it is the duty of the Court to enforce the said equitable right when it finds that the claim based on such right is arbitrarily rejected.'
After making a reference to the Gujarat decision, the learned Judge in Mithailal's case observed in paragraph 14 of the judgment as under :
'The acceptance of the Secondary Schools Code is condition precedent imposed by the State Government to the recognition of a school or of a grant in aid to it. It cannot be said that the school can refuse to carry out the decision of the Deputy Director and the consequence would at the most be that it would be deprived of the aid. In the field of education, it is extremely difficult for an educational institution to survive without the Stare aid and to extend educational facilities at reasonable fees to people of average means. It is the duty of the State to aid educational institutions in the State from public funds. Even if the rules contained in the Secondary Schools Code are mere executive instructions, the Government issues those executive instructions as a condition precedent to the disbursement of public funds. I agree with the learned Judge of the Gujarat High Court which he observes that we are not living in ancient times or in an autocratic regime where an educational institution must carry out the unjust behests of the authority in order to get aid. The executive instructions are contained in rules framed by the Government which provide for, an appeal against an order in an inquiry against a member of the staff of a school and I have no doubt in my mind that in hearing the appeal the appellate authority must observe rules of natural justice and if it does not do so its decision will be liable to be corrected by the High Court in exercise of its powers under Art. 226 of the constitution of India. This is the only safeguard that the educational institutions have against the arbitrary actions of officers of the Government hearing appeals under R. 77 of the Secondary Schools Code. The concept of rule of law would undoubtedly lose its vitality if the authorities are not charged with the duty of discharging their functions in a fair and just manner and are allowed to foist an unwanted employee or a corrupt teacher on the Management arbitrarily or in a despotic manner. This would do harm to the cause of education itself. I, therefore, hold that the present petition is maintainable.'
From the bare reading of the provisions of the Secondary Schools Code it is quite clear that so far as the Management is concerned, it stands on a different footing than a third party like a teacher. As observed by the Supreme Court in Regina v. St. A. H. E. Schools, : AIR1971SC1920 , ordinarily, the relations between the management of a school and the teachers employed in it would be governed by the terms of the contract of employment and the law of master and servant in the absence of any statute controlling or abrogating such a contract of employment and providing to the contrary. In this context, the Supreme Court observed.
'12. Ordinarily, the relations between the management of an elementary school and the teachers employed in it would be governed by the terms of the contract of employment and the law of master and servant in the absence of any statute controlling or abrogating such a contract of employment and providing to the contrary. The mere fact that such a school has obtained recognition and aid from the education department would not mean that the relationship between its management and its employees has ceased to be governed by the contracts of employment under which the employees are recruited and by the law of master and servant unless there is some provisions in the Act overriding that law as one finds in statutes dealing with industrial disputes and similar other matters. There is in fact no such provision in the Act and none was pointed out to us. The result is that the relations between the management and the teachers even in a recognised elementary school have to be regarded as being governed by the contracts of employment and the terms and conditions contained therein. Part II Rules, which cannot be regarded as having the status of statutory rules made under S. 56, cannot be said to have the effect of controlling the relations between the management of a school and its teachers or the terms and conditions of employment of such teachers or abrogating the law of master and servant which ordinarily would govern those relations.
13. But it cannot also be gainsaid that as the Government has the power to admit schools to recognition and grants-in-aid, it can, de hors the Act, lay down conditions under which it would grant recognition and aid. To achieve uniformity and certainty in the exercise of such executive power and to avoid discrimination, the Government would have to frame rules which, however, would be in the form of administrative instructions to its officers dealing with the matters of recognition and aid. If such rules were to lay down conditions, the Government can insist that satisfaction of such conditions would be condition precedent to obtaining recognition and aid and that a breach or non-compliance of such conditions would entail either the denial or withdrawal of recognition and aid. The management of a school, therefore, would commit a breach of non-compliance of the conditions laid down in the rules on pain of deprivation of recognition and aid. The rules thus govern the terms on which the Government would grant recognition and aid and the Government can enforce these rules upon the management. But the enforcement of such rules is a matter between the Government and the management and a third party, such as a teacher aggrieved by same order of the management cannot derive from the rules any enforceable right against the management on the ground of a breach or non-compliance of any of the rules. To illustrate the point, suppose the management of a school were to terminate the service of a teacher after giving one month's notice, or one month's salary in lieu thereof in accordance with the contract of employment between the teacher and management, such a termination would be valid. But the Government can insist that since its rules provide for three months' terminate the service of a teacher by giving only one months' notice. Though, in the absence of a statutory provision having the effect of controlling or superseding the contract of employment agreed to between the parties, the termination would in law be valid, nevertheless the Government can withdraw, under Part II Rules, the recognition and aid it has given to the school since its rules governing recognition and aid were not complied with. But that does not mean that Part II Rules confer upon a third party, viz., an aggrieved employee of a school, any remedy enforceable at law, in the event of the management of an elementary school refusing to comply with these rules which, inter alia, enjoin upon a school to abide by the directions given thereunder by the education officers of the Government named therein.
14. In the absence of any provision in the Act governing the relations between the management and a teacher employed by it or controlling the terms of employment of such a teacher and Part II Rules not being statutory rules, the appellant could not be said to have had a cause of action for enforcing the directions given by the Divisional Inspector to restore her as the Head Mistress in the appeal filed by her. Appeals against orders passed by the management against a teacher are provided for under Rules 13 so as to enforce the satisfaction of conditions under which recognition and aid would be granted or withdrawn, and not for regulating as between the teacher and the management, the relations of master and servant arising under the contract of employment.'
From these observations of the Supreme Court, it is obvious that the appeals which are provided by the Secondary Schools Code against an order passed by the management against a teacher are limited to enforce the satisfaction of the condition under which recognition and aid would be granted and withdrawn an not for regulating as between the teacher and the management the relations of master and servant arising under the contract of employment. If the direction given by the Deputy Director of Education in appeals is not enforced, then the result would be that the grant-in-aid which is given to the petitioner-school could be withdrawn. Manifestly, in the absence of recognition by the Government the school will have little practical utility. It cannot be forgotten that a school is a non-profit making institution and depends primarily upon the fees and by the students, donations and the Government grant for meeting its expenses. Without such a grant it will be extremely difficult, if not impossible, for an institution to function. It that is so, it is obvious that if the order passed by the Deputy Director of Education in appeal is not set aside, it will be binding upon the school, and if the school refuse to obey the said order, its recognition and aid could be withdrawn. Therefore, such an order could result in a drastic action. In our opinion, therefore, so far as the School Management is concerned, it stands on an altogether different footing and, therefore, the law laid down by the Court in Sohanlal Fulchand's case (supra) is not applicable to the case of Management. In what circumstances and subject to what conditions a writ petition could be entertained by this Court under Art. 226 or 227 of the Constitution of India will depend on the facts and circumstances of each case. It is neither possible nor advisable to lay dawn any general rule in that behalf. However, so far as the present case is concerned while deciding the appeal filed by the respondent No. 2 teacher, the Deputy Director was acting as a non-statutory tribunal discharging the functions of a public nature and was expected to decide the appeal in conformity with the provisions of the Secondary Schools Code. In the present case, the Deputy Director of Education has wholly misconstrued the provisions of the Code and has, therefore, passed an arbitrary order. It is by now fairly settled that even an administrative act of authority which directly affects the rights or interests of a person can be challenged in a proceeding under Art. 226 or 227 of the Constitution of India. If this is so, in our opinion, such an order can be corrected by this Court in exercise of its power under Art. 226 or 227 of the Constitution of India. In our opinion, the claim made by the Management before the Deputy Director of Education has been arbitrarily rejected by him on the basis of misinterpretation and misconstructions of the rules themselves. It is no doubt true that the provisions of the Secondary Schools Code are in the nature of executive instructions, but it is also well-settled that even in such cases it is not open to the Government or its officers to depart from its declared policy at it sown sweet will without any rational justification.
7. In this context, a reference be usefully made to the decision of the Supreme Court in Amarjit Singh v. State of Punjab, : (1975)ILLJ228SC . While dealing with such a question the Supreme Court observed :
'The sweep of Articles 14 and 16 is wide and pervasive. These two articles embody the principle of rationality and they are intended to strike against arbitrary and discriminatory action taken by the 'State' Where the State Government departs from a principle of seniority laid down by it, albeit by administrative instructions, and the departure is without reasons and arbitrary, it would directly infringe the guarantee of equality under Articles 14 and 16. It is interesting to notice that in the United States it is now well-settled that an executive agency must be rigorously held to the standards by which it professes its action to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. Vide the judgment of Mr. Justice Frankfurter in Vitaralli v. Seaton,  350 U.S. 535. This view is of course not based on the equality clause of the United States Constitution and it is evolved as a rule of administrative law. But the principle is the same, namely, that arbitrariness should be eliminated in State action.'
The powers which are being exercised by the Deputy Director of Education as appellate authority must be exercised reasonably and in conformity with the provisions of the Secondary Schools Code. To say the least, the said function is in the nature of a quasi-judicial function. If an order passed by the Deputy Director of Education is contrary to the provisions of the Secondary Schools Code, the action could be termed as arbitrary and discriminatory. It amounts to departing from the declared policy of the Government incorporated in the Secondary Schools Code and, therefore, in our opinion, the Management of a school which is likely to lose its grant-in-aid as well as recognition if such an order is not obeyed is entitled to approach this Court for invoking its extraordinary jurisdiction under Arts. 226 and 227 of the Constitution of India. In this view of the matter, in our opinion, the present writ petitioner is maintainable.
8. In the result, therefore, the petition is allowed and the order passed by the Deputy Director of Education, Vidarbha, Nagpur, dated 9th July, 1969 and incorporated in Annexure No. D17 is set aside. Consequently, therefore, the order passed by the petitioner-school Management dismissing the respondent No. 2 from service will have to be upheld. However, in the circumstances of the case, there will be no order as to costs.