The court asked the director to permit professor T Gnanasambanthan to continue in service.
"For having acted mala fide, the director is directed to pay a cost of Rs 20,000 to Gnanasambhandan that too from his personal funds," Justice V Ramasubramnayan said in his order.
The court directed him to engage the services of the professor who was asked to retire in September 2013 as he was not holding a teacher's post.
An interim stay of two weeks was granted on his petition following which a petition to vacate it was filed.
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Justice V Ramasubramanyan said Article 226(3) was not mandatory and was only a directory and said Gnanasambhandan was certainly working on the academic side. The NITTTR and its director was attempting to take advantage of the nomenclature given to the post of him for setting scores with him, the judge said.
The petitioner was guiding Ph.D students and if he is retired those students will be put to irreparable loss and hardship and he should be permitted to continue in service, the judge added.
Earlier, the professor had challenged revision of his pay scale in May 2010 following audit objections, placing him in ordinary grade and not academic and interim stay of recovery alone was granted.