1

2025 INSC 374

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2025

(@ SPECIAL LEAVE PETITION (CIVIL) NO.17595 OF 2024)

INDIAN COUNCIL OF SOCIAL SCIENCE

RESEARCH (ICSSR) …APPELLANT

VERSUS

NEETU GAUR & ORS. …RESPONDENTS

WITH
CIVIL APPEAL NO. OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 22022 OF 2024)

WITH
CIVIL APPEAL NO(S). OF 2025
(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO(s). 54273/2024)
AND

CIVIL APPEAL NO(S). OF 2025

(@ SLP(C) NO(S). OF 2025)
(@ DIARY NO.(s) 54276/2024)

JUDGMENT
Signature Not Verified

Digitally signed by
Jayant Kumar Arora

SUDHANSHU DHULIA, J.
Date: 2025.03.20
18:23:45 IST
Reason:

1. Delay condoned. Leave granted.

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Heard Mr. K. M. Nataraj, learned Additional Solicitor General

and Mr. Ranbir Singh Thakur, learned counsel appearing for

the appellant(s) as well as Mr. Narender Hooda and Mr. Sanjeev

Sharma, learned senior counsel and Ms. Ana Upadhyay,

learned counsel appearing for the respondents(s).

2. These appeals challenge the order dated 16.05.2024 passed by

the Division Bench of the High Court of Punjab and Haryana at

Chandigarh. For the sake of convenience, facts have been noted

from SLP(C) No.17595 of 2024 by considering it as the main

matter.
3. The appellant­Indian Council of Social Science Research

(hereinafter ‘ICSSR’) before this Court is a society established in

1969 and registered under the Societies Registration Act, 1860

but under the total financial and administrative control of

Ministry of Education, Government of India (‘GOI’). As per the

Memorandum of Association of ICSSR, its objectives are as

follows:
(i) reviewing the progress of social science research and

giving advice to GOI and other users;

(ii) sponsoring social science research programs and

administering grants to research institutions and

individuals for research in social sciences, indicating areas

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and topics on which social science research is to be

promoted;
(iii) advising GOI on all such matters pertaining to social

science research etc.

ICSSR consists of twenty­seven members including social

scientists and ex­officio members from various departments

and bodies of GOI. The chairman of ICSSR, appointed by GOI,

has to be a person of national eminence in the field of social

sciences with proven contributions to research. The funds of

ICSSR consist of grants made by the GOI, contributions from

other sources and income from the assets of ICSSR.

4. Respondent No.19­Centre for Research in Rural and Industrial

Development (hereinafter ‘CRRID’) was established in the year

1978, and is an autonomous Research Institute in Chandigarh.

It is registered as a scientific and educational charitable society

under the Societies Registration Act, 1860. The working of

CRRID is administered, directed and controlled by its main body,

known as the Governing Body. This Governing Body of CRRID

can have a maximum of twelve members including seven life

members.
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5. Whereas ICSSR, as referred above, provides grants to institutions

involved in social science research and since one of the aims of

CRRID is to conduct and promote research in various subjects

including social sciences, CRRID is under the grant­in­aid of the

ICSSR. CRRID receives 45% grants from ICSSR and equally

45% from the State of Punjab. The remaining 10% is generated

by CRRID through its own resources. CRRID is hugely

dependent upon these grants­in­aid, which it has been receiving

since 1984. The ICSSR’s Rules of Grant­in­Aid to Societies and

Institutions Doing Research in the field of Social Sciences

(hereinafter ‘Grant­in­Aid Rules’), govern the manner in which

grants are to be given by ICSSR.

6. In the year 2015­2016, several complaints were received by

ICSSR against CRRID alleging malpractices in the functioning of

CRRID including violation of rules and regulations, and misuse

of resources including the grants paid by ICSSR. Pursuant to

these complaints, ICSSR constituted a committee to enquire into

allegations against CRRID. The terms of reference of the

Committee inter alia included:

1. Recruitment/promotion of staff allegedly on the

basis of fake degrees, placement of faculty to
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higher grades and grant of additional

increments against MHRD norms.
2. Alleged violation of ICSSR Grant­in­Aid rules in
amending MoA and its misuse by BOG members
of CRRID for availing large benefits.
3. Audit objections particularly about the elevation
of faculty/staff to higher grades.
4. Alleged discrepancies in the implementation of
6th CPC and submission of incorrect records for
this purpose.
5. Issues related to alleged violation of service
rules including retirement age.
6. Non­response of the queries forwarded by
MHRD and other authorities of Govt. of India
about CRRID.
7. Complaints about alleged violation of building
bye­laws by CRRID.
8. Alleged nepotism and misuse of office facility
and funds by Executive Vice Chairman of CRRID
on purposeless abroad visits and visits within
India.
9. Any other violation of ICSSR Grant­in­aid Rules
applicable to the CRRID as mentioned in the
complaint.

7. In its report dated 29.05.2017, the Committee highlighted

various irregularities and malpractices within CRRID. CRRID

was found to be in violation of its Rules as there were

appointments of unqualified persons with either fake or

dubious degrees. Promotions and increments of staff were also

made against the norms. There were findings of non­

maintenance of proper office records, etc. The Committee

recommended several corrective measures to be taken by

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CRRID including the recovery of excess payments made by

CRRID to some of its employees.

8. Thereafter, between 2017 and 2021, we have a long list of

correspondence between ICSSR and CRRID about the

implementation of the directions suggested by ICSSR largely to

employ corrective measures including rectifying academic

qualifications of the staff, recovering excess salaries paid to

employees, taking action against guilty persons etc. In January

2021, CRRID had submitted an action­taken report to ICSSR. A

Fact­Finding Committee was also constituted by ICSSR to

enquire into the compliances by CRRID and this fact­finding

committee concluded that CRRID Management has been non­

cooperative and responses/compliances made by CRRID are

evasive, ambiguous and incomplete. In sum and substance,

ICSSR was not satisfied with the actions taken by CRRID and

since CRRID did not submit its clarification as sought by ICSSR

regarding deficiencies in the action­taken report, ICSSR finally

stopped releasing its grant in favour of CRRID April 2021

onwards. Once the grant was stopped by ICSSR, we are told

that the Government of Punjab followed suit and stopped 45%

of its share of grant to CRRID.

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9. In July 2022, seventeen employees of CRRID (Respondent Nos.1

to 17) filed a Writ Petition before the High Court for the release

of their salary. In their Writ Petition, Respondent Nos.1­17

pleaded that they have been working on different academic and

non­academic posts in CRRID, but they have not been paid the

salaries and thus prayed for the release of their salaries. The

plea taken by the CRRID before the High Court was that the

salaries of its employees are paid from the grant given by ICSSR

and since ICSSR has stopped the payment of the grant, CRRID

could not pay the salaries of employees. Meanwhile, during the

pendency of proceedings before the High Court, in January

2023, ICSSR constituted a high­level committee consisting inter

alia of a retired High Court Judge to look into the matter

related to CRRID. The terms and reference of this High­Level

Committee read as follows:

1. To comprehensively look into all the issues
pointed out in various enquiry reports, actions
taken by the CRRID in compliance of these
reports and observations recorded by Fact­
Finding Committee; and
2. To suggest comprehensive resolution of the
matter including any punitive action that
needs to be initiated by ICSSR or by CRRID
against concerned officers responsible for
irregular appointments and promotions by
CRRID.
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10. This High­Level Committee was informed by CRRID that Rs.55

lacs and Rs.189 lacs have been withheld by ICSSR for the year

2020­2021 and 2021­2022, respectively. The Committee gave

its findings that the faith of the ICSSR in CRRID was misused

by the management of CRRID and the Committee suggested

that the grant already withheld by the ICSSR, to the tune of

Rs.55 lacs for the year 2020­2021 and Rs.189 lacs for the year

2021­2022, may not be released as a punitive measure against

CRRID. There were some other recommendations for ICSSR to

be imposed on CRRID like incorporating restrictions on the

tenure of members of the Governing Body including the life

members. However, considering that CRRID is a research and

educational institution, and many Ph.D. scholars are getting

the assistance of CRRID in their research work, this High­Level

Committee recommended the release of future grants so that

payment of salaries be made to the employees including Ph.D.

supervisors, librarians etc. Consequently, April 2023 onwards,

grants were released.

11. Meanwhile, vide order dated 17.10.2023, the learned Single

Judge of the High Court allowed the Writ Petition filed by

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employees as it had come to the conclusion that ICSSR has the

ultimate responsibility of releasing the grant for the salaries of

the employees of CRRID for the reason that ICSSR has a ‘deep

and pervasive’ control over CRRID as it has its nominee in the

Governing Body, which had taken all the important decisions

which have now been questioned by ICSSR for violating its

rules and norms. The learned Single Judge of the High Court

was of the opinion that there is no justification for ICSSR to

withhold the grant. The Writ Petitions were allowed, and

direction was given to release the grant. Aggrieved by the same,

ICSSR filed a Writ Appeal before the Division Bench of the High

Court. The Division Bench dismissed the Writ Appeal on

16.05.2024 reiterating the findings of the Single Judge and

directing that the amount, deposited by ICSSR before the

Registry of the High Court, be disbursed in favour of the

employees as their salaries.

12. We have heard Mr. K.M Nataraj, Additional Solicitor General for

Appellant­ICSSR, Mr. Narender Hooda, Senior Advocate, for

respondent no. 1 to 17 (employees) as well as for the CRRID

and Mr. Sanjeev Sharma, Senior Advocate, for the State of

Punjab. We have also perused the material on record.

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13. The learned Single Judge as well as the Division Bench of the

High Court, to our mind, have erred in observing that since the

governing body of CRRID had a nominee of ICSSR, ICSSR has a

‘deep and pervasive’ control over the functioning of CRRID and

ICSSR is equally at fault for irregularities within CRRID. In

other words, the High Court was of the opinion that

appointments were made on the posts sanctioned by ICSSR and

with the approval of the Governing Body which consisted of a

nominee of ICSSR, thus ICSSR is not justified in withholding

the grant by alleging irregularities in such appointments or

promotions. It is our respectful opinion that the High Court has

not considered the matter in its right perspective.

14. We have gone through the Rules and Regulations of CRRID

(hereinafter ‘CRRID Rules’) by which CRRID is governed as a

society. As per Rule 22(a)(i) of the said Rules, the total number

of members in the Governing Body cannot exceed twelve

including the seven life members. Rule 22(d) provides the

Governing Body to accept the nominees by the ICSSR or the

State Governments in the society and the Governing Body.

Here, the relevant portion of Rule 22(d) of CRRID Rules is

reproduced below:
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The Governing Body shall have the authority to

accept the nominees in the Society and the
Governing Body who are deputed by the Indian
Council of Social Science Research (ICSSR) or the
State Governments.

Similarly, Rule 17 of Grant­in­Aid Rules of ICSSR, by which

grants given by ICSSR are governed, read as follows:

17. Condition of Grants­in­Aid (Special):
A Research Institution which receives a recurring
grant of Rs. One lakh or more shall be subject to
the following additional conditions:
(1) …
(2) The Council shall nominate not more than two
representatives on the governing body of the
research Institution.
(3) …

15. The learned Single Judge and the learned judges of the Division

Bench of the High Court have considered the above provision to

be amounting to a ‘deep and pervasive’ control by the State!

However, it is to be noted that the second part of Rule 22(d) of

CRRID Rules empowers the Governing Body to reject the names

of nominees proposed by ICSSR or State Governments without

giving any reason. It is like a proviso to the general part

embodied under Rule 22(d) of CRRID Rules. It reads as follows:

The Governing Body shall, however, have the right
to reject/or refer back to the deputing authorities
the names of the proposed nominees(s) should it
feel that the said nominee is not acceptable to the
Governing Body. The Governing Body shall not be
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obliged to give the reason for rejecting or referring

back any such name.

This shows that CRRID is an autonomous body without much

control of ICSSR. The Governing Body of CRRID has the

authority to reject and refer back the names of proposed

nominees and while doing so, CRRID is not even required to

give any reasons.

16. The presence of one or even two members of ICSSR in a Governing

Body of twelve does not amount to ‘deep and pervasive’ control

of the State. Even assuming an additional two nominees from

the Government of Punjab in the Governing Body will at best

make four such members in a Governing Body of twelve. We

have been informed that as of today there are only three

nominees together from ICSSR and State of Punjab in all. This

is not ‘deep and pervasive’ control.

17. We have no doubt in our mind that ICSSR is indeed an “authority”,

within the purview of Article 12 of the Constitution of India. It

also controls CRRID to an extent inasmuch as CRRID depends

on the funds released by ICSSR as grants. But this itself

cannot be called a ‘deep and pervasive’ control. A ‘deep and

pervasive’ control would require much more than just financing

an institution or a body. Even guiding, controlling or regulating

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affairs of an institution will not be called a ‘deep and pervasive’

control. The ‘deep and pervasive’ control requires

administrative, financial and functional control of such a body

to a much higher degree including interference into its day­to­

day working, and mere regulatory control cannot mean ‘deep

and pervasive’ control. [See: S.S Rana v. Registrar Coop.

Societies and Anr. (2006) 11 SCC 634; Chander Mohan

Khanna v. NCERT (1991) 4 SCC 578; Balmer Lawrie & Co.

Ltd. v. Partha Sarathi Sen Roy (2013) 8 SCC 345].

18. Moreover, the crucial question here is not whether the control

exercised by ICSSR on CRRID is ‘deep and pervasive’ but

whether ICSSR was justified in withholding its grant. CRRID

has not answered this question with any degree of satisfaction.

The High Court has also failed to address this crucial issue.

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. Once ICSSR gives

its grant to CRRID it does not have much interference in the

management of these funds. Nor is the administration of

CRRID controlled by ICSSR. CRRID, in any case, is not an

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authority within the purview of Article 12 of the Constitution of

India. Merely because CRRID is under the control of an

authority (as defined under Article 12) will not make CRRID an

authority. In fact, this is neither the case of the respondents­

employees nor does CRRID in any manner assert itself as an

Authority.
19. The grant­in­aid provided by ICSSR to any research institution

comes with certain conditions which are required to be followed

by the beneficiary institution. Rule 3 of the Grant­in­Aid Rules

of ICSSR makes this position very clear. It states that ‘the

Indian Council of Social Science Research (hereinafter referred to

as the Council) shall have authority, with prior approval of the

Government of India, to extend grant­in­aid under these Rules to

Research Institutions (…) provided that they fulfill all the

conditions laid down in Rule 4 below’. Thereafter, Rule 4 lays

down certain conditions that make an institution eligible for a

grant by ICSSR. Certain other Rules prescribing conditions for

grants are as follows:

16. CONDITIONS OF ASSISTANCE (General):

…
(2) Grant under a particular head shall not be
utilized for a purpose other than that for which it is
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intended except with the previous approval of the

Council.
(3) The Council may require a Research
Institution to refund a grant given under specific
conditions, if the Research Institution does not
comply with these conditions. The Council may, in
such cases, also stop any further grant to the
Research Institution.
…
(10) It shall be obligatory for the Research
institutions to surrender any unspent balance of
the grant after expiry of the period within which
the grant I required to be spent.

17. CONDITION OF GRANTS­IN­AID (Special):

A Research Institution which receives a

recurring grant of Rs. One lakh or more shall be
subject to the following additional conditions:
(3) The constitution of the Research Institute
shall be got approved by the Council and the
Research Institution shall agree not to make any
change therein without the prior approval of the
Council.

20. A reading of these Grant­in­Aid Rules makes it clear that the grants

by ICSSR are discretionary and institutions like CRRID cannot

claim grants as a matter of right. It is made more apparent by

Rule 11 which explicitly states that ‘all grants under these rules

are discretionary and cannot be claimed as a matter of right.’

Further, Rule 16(3) of said Rules, as reproduced above, even

empowers ICSSR to the extent that, in cases of violation of

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conditions of grants by any institution, ICSSR can demand the

refund of grants from such institution and can stop any further

grant to such an institution. Rule 6 reads as follows:

6. WITHDRAWAL OF ASSISTANCE:

If an aided Research Institution ceases to

fulfill the conditions of eligibility laid down in Rule
4, or persistently violates any of the conditions of
grant­in­aid, the Council may, after giving due
notice to the Institution, declare the Institution as
in eligible to receive assistance under these Rules
under intimation to the Government of India, and
may pass such orders as it may deem necessary
regarding the disposal of the assets created with
grant­in­aid given earlier to the Institution.

21. Besides grants being discretionary, these Grant­in­Aid Rules and

CRRID Rules also tell us something about the kind of control

that ICSSR has over the CRRID. The only control that ICSSR

has over CRRID is in the form of certain conditions under

which grant­in­aid is provided to CRRID. Otherwise, there is no

reason for ICSSR to assert any control over this autonomous

private society i.e. CRRID and in fact, it is the essence of any

private society registered under the Societies Registration Act,

that societies should be governed and restricted only by its own

Rules or some general principles of law applicable to all such

societies. CRRID, therefore, has absolute authority over its

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financial as well as administrative matters. Thus, as far as

‘deep and pervasive’ control of ICSSR over CRRID is concerned,

we are afraid that the findings of the High Court are totally

misplaced. There is a very loose control over the large affairs of

the CRRID, which would include both financial and

administrative. The financial control by both ICSSR and the

State of Punjab is limited only to their grant­in­aid. ICSSR does

not have any power to interfere with the day­to­day functions of

CRRID. Under these circumstances, it cannot be said that

CRRID is under a ‘deep and pervasive’ control of the State. At

the same time, it cannot be denied that there is some control of

the State in the form of the State of Punjab and ICSSR which is

an instrumentality of State. But this control is not of such

nature as to make it ‘deep and pervasive’ as has been held by

the High Court. What ICSSR has in its control, definitely, is

that it can stop the grant in case of violation of the conditions

under which the grant is being given and this is exactly what

has happened in the present case.

22. After the enquiry report of the year 2017, CRRID was repeatedly

asked by ICSSR to take proper and prompt corrective

measures. However, for one reason or another, CRRID did not

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follow the recommendations given by ICSSR and consequently,

the grant in favour of CRRID was stopped. With regard to

recoveries from employees to whom excess salaries were paid,

CRRID has tried to make an excuse that many of such

employees have by now retired from service. Although much

later, CRRID issued certain recovery notices, but it never took

recourse to any Court proceedings when such notices were not

complied by the employees. All three committees constituted by

ICSSR: the enquiry committee, the fact­finding committee and

the High­Level Committee, had given reports against CRRID,

highlighting anomalies in the working of CRRID. CRRID was

provided with ample opportunities to improve its functioning by

rectifying the deficiencies, but CRRID failed to do so. In such

circumstance, we see no fault on the part of ICSSR if it has

withheld the grant from April 2021 to March 2023, after which

the grant was again released by ICSSR in favour of CRRID. By

withholding the grant, ICSSR has only taken recourse to the

law which allowed it to exercise such power in case of detection

of anomalies in the functioning of the beneficiary research

institution, which is CRRID in the present case. This

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withholding of grants for a certain period was even suggested

by the High­Level Committee as a punitive measure.

23. There is also another aspect to this matter. The grant was withheld

in the year 2021 but that decision of withholding the grant has

never been challenged by CRRID before any forum. The picture

is therefore very clear and CRRID also understands it very well

that the grant­in­aid is a discretion of ICSSR and CRRID is not

in a position to assert a claim on receipt of the grant­in­aid

particularly when there is a clear finding of various committees

that it is CRRID which has defaulted and has violated the

mandate and the directions under which it had to work to

receive the aid without any interruption. This we have already

discussed in the preceding paragraphs of this judgment and it

needs no further elaboration.

24. Another point which has been argued before us as well as before

the High Court is that respondents nos.1 to 17 are employees of

CRRID and not of ICSSR. It has been argued on behalf of the

ICSSR that these employees do not have any right against

ICSSR and ICSSR is not under any kind of obligation to pay

salaries to these persons who are employees of CRRID. This

contention of ICSSR has to be kept in mind because it is a fact

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that the private respondents are employees of CRRID and they

may have their rights against their employer i.e. CRRID, but

they cannot claim any right to salary from ICSSR, which is just

a body providing grant­in­aid to their employer. In other words,

there is no employer­employee or master­servant relationship

between respondents nos.1 to 17 and appellant­ICSSR. Thus,

ICSSR cannot be held liable for providing salaries of these

respondents­employees as it is the responsibility of CRRID to

pay them the salaries irrespective of whether it gets a grant

from ICSSR or not.

25. Although CRRID has taken a stand before the High Court as well as

before this Court that it had followed the directions of ICSSR

and whatever anomalies were committed during the past were

in the period of a particular Director, but the Institution is

running well as of now and ICSSR is liable to release the grant

for the period for which it has been withheld. All the same, the

learned counsel for CRRID, who could only appear before us

after much persuasion, when asked by this Court as to why

employees have raised their claim for salary before the High

Court and why CRRID did not directly move the Court for the
 21

release of its grants, very candidly answered that this was not

done as CRRID cannot compel ICSSR to release the grants.

In other words, therefore, ICSSR is not bound to release the

grant in favour of CRRID and the employees of CRRID have no

master­servant relationship with ICSSR.

26. We can understand that both the learned Single Judge and Division

Bench of the High Court have taken a compassionate view as

employees, who may have had nothing to do with the

anomalies, should not be deprived of remuneration for the work

done by them. The High Court ordered the ICSSR to release the

grant so that employees could get their salaries as withholding

of grants amounted to withholding of salaries of these

employees. All the same, at the risk of repetition we would note

that this Court cannot lose sight of the fact that it is ultimately

the responsibility of CRRID to pay salaries to its employees.

This liability cannot be shifted to ICSSR.

27. We have also been informed that CRRID has, in its account, funds

which it has received from sources other than Punjab

Government or ICSSR as grants. This amount has admittedly

been received by CRRID from other sources. It has been

admitted by CRRID that they do research for other entities for

which they engage ad hoc employees on a need to basis.

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However, it cannot be said that the respondents­employees

were not engaged in such other work especially since some of

the respondents­employees are occupying pivotal positions in

the autonomous private institution i.e. CRRID. This is evident

from the fact that one of these employees has filed an affidavit

on behalf of CRRID, representing it in the present matter; in

support of the claim of the respondents­employees. The

audited balance sheet also indicates sufficient funds being

available with CRRID to settle the dues of the employees before

us. It is the submission of the learned counsel for CRRID that

the funds shown in the balance sheet are those available with

CRRID for the other assignments. If that is so, definitely

CRRID cannot claim that the salary of the employees is only

dependent on the grant­in­aid made by the appellant­ICSSR.

As already stated earlier, ultimately, the responsibility to pay

the salary to its employees, lies on CRRID and not on ICSSR or

Government of Punjab.
28. Consequently, we allow these appeals and set aside the order of

learned Single Judge dated 17.10.2023 as well as the impugned

order dated 16.05.2024 passed by the Division Bench.

This would not mean that now respondent Nos. 1 to 17 will not
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be given their salaries for the period they worked. We direct

CRRID to ensure payment of salaries to all its employees which

were withheld between April, 2021 to March, 2023 from its own

resources within a period of three weeks from the date of this

order. In case, CRRID fails to release this amount in favour of

the employees, we direct ICSSR to withhold all further grant­in­

aid in favour of CRRID. The CRRID will not only have to release

the amount in favour of employees but shall also file a

compliance report before ICSSR stating that this has been done

within the stipulated period. This we do as we cannot lose sight

of the fact that anomalies have been committed at the end of

CRRID.
29. The Registry of this Court is directed to release the amount which

has been deposited by ICSSR in this Court, in favour of ICSSR

along with the interest, if any, within a week from today.

30. All connected matters stand disposed of in the light of the decision

made in the main matter and we make it clear that what has

been determined in the case of ICSSR as to its liabilities of

payment of grants will also apply to the State of Punjab as well.

31. ICCSR and the State of Punjab are at liberty to move applications

before the High Court to get back the amount, if any, deposited
 24

by them and the High Court shall decide such applications in

the light of this order.

32. Pending application(s), if any, stand(s) disposed of.

.......………………………….J.
[SUDHANSHU DHULIA]

..….....………………………….J.
[K. VINOD CHANDRAN]

NEW DELHI,
MARCH 20, 2025.