Supreme Court of India
KHALSA UNIVERSITY AND ANOTHERversusTHE STATE OF PUNJAB AND ANOTHER
- Citation
- 2024 INSC 751
- Decided
- 3 October 2024
- Disposal
- Appeal(s) allowed
Holding
A law that singles out a single entity must be based on a reasonable classification and special circumstances; absent such justification, the Khalsa University (Repeal) Act, 2017 is unconstitutional and must be struck down.
Summary
The Punjab government enacted the Khalsa University (Repeal) Act, 2017 to repeal the Khalsa University Act, 2016, singling out Khalsa University among sixteen private universities. The appellants challenged the repeal on the grounds that the Act arbitrarily discriminated against them and violated Article 14 of the Constitution. The Supreme Court examined whether a law that treats a single entity differently is permissible and whether the Act was manifestly arbitrary. Relying on precedents, the Court held that such legislation is valid only if it rests on a reasonable classification and special circumstances, which were absent here. The Court found no intelligible differentia or material justification for singling out Khalsa University and concluded that the Act was both discriminatory and arbitrarily enacted. Consequently, the Act was struck down and the status quo of the 2016 Act was restored.
Issues considered
- Whether an enactment that gives differential treatment to a single entity is constitutionally valid under Article 14.
- Whether the Khalsa University (Repeal) Act, 2017 is liable to be struck down on the ground of manifest arbitrariness.
Legislation cited
Subjects
differential treatmentreasonable classificationArticle 14manifest arbitrarinesssingle entity legislationdiscriminationPunjab private universities policylegislative validity
Judgment
[2024] 10 S.C.R. 445 : 2024 INSC 751
Khalsa University and Another
v.
The State of Punjab and Another
(Civil Appeal No. 10999 of 2024)
03 October 2024
[B.R. Gavai* and K.V. Viswanathan, JJ.]
Issue for Consideration
The High Court dismissed the writ petition filed by the appellants
inter-alia seeking a writ in the nature of certiorari praying for
quashing “The Khalsa University (Repeal) Act, 2017” dated 17th
July 2017. The issues which arises for consideration are: Whether
an enactment for giving out a differential treatment to a single
entity is valid in law or not; whether the Impugned Act is liable to
be struck down on the ground of manifest arbitrariness.
Headnotes†
Khalsa University (Repeal) Act, 2017 – Whether an enactment
for giving out a differential treatment to a single entity is
valid in law or not:
Held: It is a settled position of law that though a legislation
affecting a single entity or a single undertaking or a single person
would be permissible in law, it must be on the basis of reasonable
classification having nexus with the object to be achieved –
There should be a reasonable differentia on the basis of which
a person, entity or undertaking is sought to be singled out from
the rest of the group – Further, if a legislation affecting a single
person, entity or undertaking is being enacted, there should be
special circumstances requiring such an enactment – Such special
circumstances should be gathered from the material taken into
consideration by the competent legislature and shall include the
Parliamentary/Legislative Debates – Also, wherever this Court
has upheld the legislation affecting the single entity, institution or
undertaking, it found that it was done in emergent and extreme
circumstances preceded by enquiries, parliamentary debates,
etc. – It was done when the legislature took into consideration the
relevant material and found it expedient to do so – In the instant
* Author
446 [2024] 10 S.C.R.
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case, the impugned Act is a single entity legislation repealing the
2016 Act by which the Khalsa University was established – The
Khalsa University has specifically averred that it has been singled
out by the State Government amongst 16 Universities – It has also
been averred that there is absolutely no reason or justification
whereby the Khalsa University could be ordered to be shut down in
such a discriminatory manner – The reply filed by the respondent
no.1 does not deal with the submissions made by the appellants
on the ground of discrimination – No material is placed on record
as to what was the compelling and emergent situation so as to
enact a law which could affect the Khalsa University (appellant
No.1) – No material is placed on record to show that there were
any discussions prior to the Impugned Act being passed or as
to what material was placed and taken into consideration by
the competent legislature – Since the Khalsa University had
specifically pleaded a ground regarding discrimination, it was
incumbent upon the respondents to have dealt with the said
challenge – Therefore, the Impugned Act singled out the Khalsa
University (appellant No.1) amongst 16 private Universities in the
State and no reasonable classification has been pointed out to
discriminate the Khalsa University (appellant No.1) against the
other private Universities – The Impugned Act therefore would
be discriminatory and violative of Article 14 of the Constitution.
[Paras 48, 53, 58, 59]
Khalsa University (Repeal) Act, 2017 – Constitution of
India – Art.14 – Whether the Impugned Act (Khalsa University
(Repeal) Act, 2017) is liable to be struck down on the ground
of manifest arbitrariness:
Held: The only reasoning given in the Statement of Objects and
Reasons of the Impugned Act is that the Khalsa College has, over
a period of time, become a significant icon of Khalsa heritage and
the University established in 2016 is likely to shadow and damage
its character and pristine glory – It is to be noted that the Khalsa
College which was established in 1892 is not a part of the Khalsa
University – During the course of hearing, a specific statement
has been made by the appellants that the Khalsa College would
not be affiliated with the Khalsa University – The maps have been
placed on record which show the placement of Khalsa College in
the campus along with the other institutions – The perusal of the
[2024] 10 S.C.R. 447
Khalsa University and Another v. The State of Punjab and Another
said map would clearly reveal that it is only the Khalsa College
established in 1892 which is a heritage one – All other buildings
have been subsequently constructed having no resemblance with
the Khalsa College building – It can thus be seen that the very
foundation that Khalsa University would shadow and damage the
character and pristine glory of Khalsa College which has, over a
period of time, become a significant icon of Khalsa heritage is on
a non-existent basis – It could thus be seen that the Impugned
Act, which was enacted with a purpose which was non-existent,
would fall under the ambit of manifest arbitrariness and would
therefore be violative of Article 14 of the Constitution – Therefore,
this Court is of the considered view that the Impugned Act is also
liable to be set aside on the same ground. [Paras 64, 65]
Khalsa University (Repeal) Act, 2017 – Khalsa University Act,
2016 – Punjab Private Universities Policy, 2010 – Whether
Khalsa University (Repeal) Act, 2017 is unconstitutional:
Held: Khalsa University (Repeal) Act, 2017 is struck down as being
unconstitutional – The consequent direction is also issued to the
effect that the Khalsa University Act, 2016 would be deemed to
be in force and status quo as it obtained on 29.05.2017 would
stand restored. [Para 66(iii)]
Constitution of India – Art.14 – Differential treatment to a
single entity – Charanjit Lal Chowdhury v. Union of India
[1950] 1 SCR 869 – discussed. [Paras 26-39]
Case Law Cited
Chiranjit Lal Chowdhuri v. Union of India [1950] 1 SCR 869 : 1950
SCC 833 : AIR 1951 SC 41; D.S. Reddy v. Chancellor, Osmania
University and Others [1967] 2 SCR 214 : 1966 INSC 259; S.P.
Mittal v. Union of India and Others [1983] 1 SCR 729 : (1983)
1 SCC 51 : 1982 INSC 81; Shayara Bano v. Union of India and
Others (Ministry of Women and Child Development Secretary
and Others [2017] 9 SCR 797 : (2017) 9 SCC 1 : 2017 INSC
785 – followed.
Chandan Banerjee and Others v. Krishna Prosad Ghosh and
Others [2021] 11 SCR 720 : (2022) 15 SCC 453 : 2021 INSC
516; State of Tamil Nadu and Another v. National South Indian
River Interlinking Agriculturist Association [2021] 7 SCR 479 :
448 [2024] 10 S.C.R.
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(2021) 15 SCC 534 : 2021 INSC 777; Dharam Dutt and Others
v. Union of India and Others [2003] Supp. 6 SCR 151 : (2004) 1
SCC 712 : 2003 INSC 667; P. Venugopal v. Union of India [2008]
8 SCR 1 (2008) 5 SCC 1 : 2008 INSC 607; Natural Resources
Allocation, In re, Special Reference No. 1 of 2012 [2012] 9 SCR
311 : (2012) 10 SCC 1; Ajay Hasia and Others v. Khalid Mujib
Sehravardi and Others [1981] 2 SCR 79 : (1981) 1 SCC 722 :
1980 INSC 218; Ram Krishna Dalmia v. Justice S.R. Tendolkar
[1959] 1 SCR 279 : [AIR 1958 SC 538 : 1959 SCR 279]; Raja
Bira Kishore Deb v. State of Orissa [1964] 7 SCR 32 – referred to.
List of Acts
Khalsa University (Repeal) Act, 2017; Khalsa University Act, 2016;
Sholapur Spinning and Weaving Company (Emergency Provisions)
Act, 1950; The Sholapur Mill Act; Companies Act; Essential Supplies
Act; Osmania University (Second Amendment) Act, 1966; Auroville
(Emergency Provisions) Act, 1980; Indian Council of World Affairs
Act, 2001; Societies Registration Act, 1860; All-India Institute of
Medical Sciences Act, 1956; Delhi Special Police Establishment
Act, 1946; Constitution of India.
List of Keywords
Khalsa University (Repeal) Act, 2017; Differential treatment;
Reasonable classification; reasonable differentia; Parliamentary/
Legislative Debates; Arbitrariness; Article 14 of the Constitution;
Special treatment; Discriminatory character; Equal protection;
Mismanagement; Maladministration.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10999 of 2024
From the Judgment and Order dated 01.11.2017 of the High Court
of Punjab & Haryana at Chandigarh in CWP No. 17150 of 2017
Appearances for Parties
P.S. Patwalia, Sr.Adv., Ashok K. Mahajan, Advs. for the Appellants.
Shadan Farasat, A.A.G., Siddhant Sharma, Abhishek Babbar, Ms.
Sheetal Dubey, Ravinder Agarwal, Lekh Raj Singh, Advs. for the
Respondents.
[2024] 10 S.C.R. 449
Khalsa University and Another v. The State of Punjab and Another
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, J.
1. Leave granted.
2. The present appeal challenges the final judgment and order dated
1st November 2017 passed by the Division Bench of the High Court
of Punjab and Haryana at Chandigarh in C.W.P. No. 17150 of 2017
(O&M), whereby the High Court dismissed the writ petition filed by
the appellants inter-alia seeking a writ in the nature of certiorari
praying for quashing “The Khalsa University (Repeal) Act 2017”
dated 17th July 2017.
FACTS:
3. The facts giving rise to this appeal lie in a narrow compass.
3.1 In the year 2010, the State of Punjab framed the Punjab Private
Universities Policy, 2010.1
3.2 The Khalsa College Charitable Society, Amritsar,2 (appellant
No.2 herein), which was in existence since 1892, submitted a
proposal to the State Government for setting up a self-financing
University in the State of Punjab on the basis of the 2010 Policy.
3.3 On 5 th March 2011, the Higher Education Department,
Government of Punjab, after examining the proposal, issued a
Letter of Intent to Khalsa Society for establishing and running
the Khalsa University, Amritsar.3
3.4 On 7th November 2016, the Punjab Vidhan Sabha passed The
Khalsa University Act, 20164 (Punjab Act No. 44 of 2016). The
2016 Act received the assent of the Hon’ble Governor of Punjab
on 7th November 2016 and the same was published in the Punjab
Government Gazette Extraordinary on 17th November 2016.
1 Hereinafter referred to as the “2010 Policy”
2 Hereinafter referred to as the “Khalsa Society”
3 Hereinafter referred to as “Khalsa University”
4 Hereinafter referred to as “2016 Act”
450 [2024] 10 S.C.R.
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3.5 The Khalsa University (appellant No.1 herein), after its
establishment, was imparting courses in 26 programmes and
215 students were admitted for the Academic Session 2016-17.
3.6 On 18th January 2017, the Registrar of Khalsa University
communicated to the Principal Secretary, Department of Higher
Education, Government of Punjab, that they have enacted
the Statutes of the Khalsa University in consonance with the
2010 Policy, the 2016 Act and University Grants Commission5
guidelines.
3.7 On 6th April 2017, the Superintendent of Higher Education
Department, Government of Punjab, communicated to Khalsa
University that no admission process will be started till the Statues
of the University are approved by the State Government. The same
was reiterated by another communication dated 17th May 2017.
3.8 On 30th May 2017, the State Government promulgated an
Ordinance thereby repealing the 2016 Act. Shortly thereafter, the
Punjab Vidhan Sabha passed The Khalsa University (Repeal)
Act 2017.6 The Impugned Act received assent of the Hon’ble
Governor on 4th July 2017 and the same was published in the
Punjab Government Gazette Extraordinary on 17th July 2017.
3.9 Aggrieved by the communications dated 6th April 2017 and 17th
May 2017, the promulgation of the Ordinance and passing of
the Impugned Act, the Khalsa University and Khalsa Society
(hereinafter referred to as “appellants”) filed a Writ Petition
being C.W.P. No. 17150 of 2017 (O&M) before the Punjab and
Haryana High Court.
3.10 Vide final judgment and order dated 1st November 2017, the
High Court dismissed the Writ Petition filed by the appellants.
Being aggrieved thereby, the present appeal arises.
SUBMISSIONS:
4. We have heard Shri P.S. Patwalia, learned Senior Counsel appearing
on behalf of the appellants and Shri Shadan Farasat, learned
5 Hereinafter referred to as “UGC”
6 Hereinafter referred to as the “Impugned Act”
[2024] 10 S.C.R. 451
Khalsa University and Another v. The State of Punjab and Another
Additional Advocate General (AAG) appearing on behalf of the
respondents.
5. Shri Patwalia, learned Senior Counsel appearing on behalf of the
appellants submits that the Impugned Act is patently arbitrary, mala
fide, discriminatory and violative of Article 14 of the Constitution of
India.
6. Shri Patwalia submits that the mala fides in passing of the Impugned
Act are apparent inasmuch as the statements made by Captain
Amarinder Singh, who at the relevant time was in the opposition,
would clearly show that he was opposed to the establishment of
the Khalsa University. It is submitted that Captain Amarinder Singh
had made public statements that he was “touchy” about the Khalsa
College, that he would not permit the ruling party to tinker with the
status of the same and that, after he comes to power, he will reverse
the decision. It is submitted that immediately after Captain Amarinder
Singh became the Chief Minister of Punjab in 2017, an Ordinance
was promulgated repealing the 2016 Act, and shortly thereafter, the
said Ordinance got the imprimatur of the legislature by the passing
of the Impugned Act dated 17th July 2017.
7. Shri Patwalia further submitted that the State of Punjab had come
up with the 2010 Policy and under the said Policy, 16 Universities
were established, however, it was only the Khalsa University which
was picked up and abolished. He submitted that picking up a single
University out of 16 Universities which were established as per the
2010 Policy is patently arbitrary, discriminatory and violative of Article
14 of the Constitution.
8. Shri Patwalia further submitted that the Impugned Act is passed
on a non-existent factual matrix. He submitted that the Statement
of Objects and Reasons7 of the Impugned Act shows that the only
reason for passing it is to “protect the heritage character of Khalsa
College”. He submitted that the SOR shows that the Impugned Act
was passed on the basis that the Khalsa College has, over a period
of time, become a significant icon of Khalsa Heritage and the Khalsa
University established in 2016 was likely to shadow and damage its
character and pristine glory. He submitted that the Khalsa College
7 Hereinafter referred to as “SOR”
452 [2024] 10 S.C.R.
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was established in 1892 and the appellants had clearly given an
undertaking that the establishment of the Khalsa University would
not touch the Khalsa College. He submitted that the Khalsa Society
comprises of various other establishments apart from Khalsa College
and that the Khalsa University was established to provide affiliation
for only three colleges namely Khalsa College of Pharmacy, Khalsa
College of Education and Khalsa College for Women. He submits
that all the three institutions were started after more than half a
century of establishment of Khalsa College. It is submitted that
Khalsa University (appellant No.1) had also planned/established
various other colleges or institutions which would be affiliated to it,
however, the same was to be done without in any way affecting the
Khalsa College. As such, it is submitted that the reasoning given in
the SOR that the Impugned Act was being passed only to protect
the heritage character of Khalsa College is formed on a factually
erroneous matrix.
9. Shri Patwalia further submitted that the Impugned Act was patently
arbitrary, discriminatory and violative of Article 14 of the Constitution.
It is submitted that the Constitution Bench of this Court in the case
of Shayara Bano v. Union of India and Others (Ministry of
Women and Child Development Secretary and Others) 8 has
held that the ground of manifest arbitrariness is also available for
examining the validity of a legislation. It is submitted that if it is
found that the legislative enactment is not based on an intelligible
differentia, then such a classification would not be permissible and
the enactment would be liable to be struck down on the ground of
manifest arbitrariness.
10. Per contra, Shri Farasat, learned AAG appearing on behalf of the
respondents submits that a reasonable classification having a nexus
with the object to be achieved is permissible under Article 14 of the
Constitution. He submits that merely because Khalsa University
(appellant No.1) has been singled out as against the other Universities
established under the 2010 Policy cannot be a ground for holding
the Impugned Act to be invalid.
11. The learned AAG submits that there is a presumption with regard to
the validity of a legislative action. He submits that the burden with
8 [2017] 9 SCR 797 : (2017) 9 SCC 1 : 2017 INSC 785
[2024] 10 S.C.R. 453
Khalsa University and Another v. The State of Punjab and Another
regard to invalidity is on the person who challenges it. It is submitted
that the classification is based on the fact that the Khalsa College
had, over a period of century, received a heritage status. The name
“Khalsa” was identified with the Khalsa College. He submitted that
the establishment of Khalsa University tinkered with the heritage
status of Khalsa College.
12. The learned AAG further submitted that the Khalsa University and
the Khalsa College have been established in the same premises
and therefore there is a possibility of confusion being caused in the
minds of a general observer. He further submitted that it was, over
a period of time, the Khalsa College had earned a huge reputation
and was playing a leading role in Punjabi socio-religious society.
It is submitted that the establishment of a private University could
diminish its nature. It is submitted that there was further a possibility
that Khalsa Society (appellant No.2) would allocate greater attention
and resources to the private university and neglect Khalsa College
which has a historic value. To buttress his submissions, he relies on
the judgments of this Court in the cases of Chandan Banerjee and
Others v. Krishna Prosad Ghosh and Others9 and State of Tamil
Nadu and Another v. National South Indian River Interlinking
Agriculturist Association.10
13. Shri Farasat further submitted that the appellants had no vested
right in their status as a University. It is submitted that shortly after
the 2016 Act was enacted, the Impugned Act came to be enacted.
During that short period, a few students were admitted, however,
the Impugned Act also took care of the said students inasmuch as
the colleges where they were studying were affiliated with the other
Universities. He therefore submits that there is no merit in the appeal
and the appeal deserves to be dismissed.
CONSIDERATION:
14. The facts in the present case are not in dispute. The Government
of Punjab, Department of Higher Education had come up with the
2010 Policy. The 2010 Policy was framed in order to attract high
quality private sector investment and expertise in the realm of higher
9 [2021] 11 SCR 720 : (2022) 15 SCC 453 : 2021 INSC 516
10 [2021] 7 SCR 479 : (2021) 15 SCC 534 : 2021 INSC 777
454 [2024] 10 S.C.R.
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education and provides for establishment and incorporation of private
self-financed Universities in the State of Punjab. By the 2010 Policy,
it was decided to permit establishment of self-financed universities
which shall not receive any grant or aid from the State Government.
However, it provided for laying down a rationale proposal and well-
defined conditions for the establishment of such universities in order
to safeguard the interest of the stakeholders, ex-students, staff
members and genuine promoters.
15. In furtherance of the 2010 Policy, Khalsa Society (appellant No.2)
applied to the State Government for establishing Khalsa University.
The State Government vide communication dated 5th March 2011
issued Letter of Intent to the Khalsa Society on various conditions
mentioned therein.
16. Subsequently, the 2016 Act came to be enacted on 7th November
2016. It will be relevant to refer to the SOR of the 2016 Act, which
read thus:
“STATEMENT OF OBJECTS AND REASONS
As the Punjab Private Universities Policy - 2010 has been
formulated to provide greater access and to ensure quality
in higher education, the Government of Punjab wishes to
allow the establishment of self financed private universities
to supplement the efforts of the State Universities. The
object of the Khalsa University is to impart comprehensive
education at all levels to achieve excellence and to promote
research and teaching in areas of Education, Engineering
and Technology, Languages, Laws, Life Sciences and
other courses under the general heads of the Arts and
Humanities, Social Sciences etc.
2. As the establishment of such private self financed
universities requires a broadly uniform set of guidelines
for ensuring academic standards, prevention of
commercialization and mismanagement etc., it deemed,
therefore, expedient to provide for promulgation of ‘The
Khalsa University Bill- 2016.”
17. Subsequent to the enactment of the 2016 Act, Khalsa University
(appellant No.1) received a communication dated 15th February 2017
from the UGC informing it that, in view of its establishment, its name
[2024] 10 S.C.R. 455
Khalsa University and Another v. The State of Punjab and Another
has been included in the list maintained by the UGC. It was also
informed to it that it was required to follow the UGC (Establishment
of and Maintenance of Standards in Private Universities) Regulations,
2003.
18. It appears that thereafter there was a change of regime in the
Government of Punjab. It further appears that from April, 2017
onwards, Khalsa University started receiving communications that it
should not admit any more students till the Statutes of the University
were approved by the State Government.
19. Thereafter on 30th May 2017, the State Government promulgated an
Ordinance thereby repealing the 2016 Act. The Impugned Act came
to be passed by Punjab Vidhan Sabha, which received the assent of
the Hon’ble Governor on 4th July 2017 and published in the Punjab
Government Gazette (Extraordinary) on 17th July 2017.
20. The SOR of the Impugned Act read thus:
“STATEMENT OF OBJECTS AND REASONS
The Khalsa University (Repeal) Ordinance, 2017 aims
to repeal the Khalsa University Act, 2016 with a view to
protect heritage character of Khalsa College, Amritsar.
The Khalsa College, Amritsar has, over a period of time,
become a significant icon of Khalsa Heritage and the
University established in 2016 is likely to shadow and
damage its character and pristine glory. Therefore, the
Act ibid is proposed to be repealed.”
21. The Impugned Act, which consists of three sections, reads thus:
“Be it enacted by the Legislature of the State of Punjab in
the Sixty-eight year of the Republic of India as follows: -
1. (1) This Act may be called the Khalsa University (Repeal)
Act, 2017.
(2) It shall be deemed to have come into force with effect
from the 30th day of May, 2017.
2. The Khalsa University Act, 2016 (Punjab Act No.44 of
2016), is hereby repealed: -
Provided that admission to the affected students shall be
given in other appropriate educational institutions of the
456 [2024] 10 S.C.R.
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State of Punjab as per their eligibility, so that the interests
of the students are not prejudicially affected.
3. The Khalsa University (Repeal) Ordinance, 2017 (Punjab
Ordinance No. l of 2017), is also hereby repealed.”
22. It is thus clear that by the 2016 Act under the 2010 Policy of the
State Government, Khalsa University was established as one of the
private universities. The Impugned Act has been enacted with the sole
purpose of repealing the 2016 Act by which the Khalsa University
was established. It is also clear that the Impugned Act deals with
only a single entity/institution i.e. the Khalsa University.
23. At the outset, we clarify that we do not propose to go into the question
with regard to the allegation of mala fides attributed to any individual
involved in the passing of the Impugned Act. In fact, the former
Chief Minister of Punjab Captain Amarinder Singh was arrayed as
respondent No.2 in the present appeal, however, by an order dated
8th August 2018, the name of Captain Amarinder Singh was deleted.
Be that as it may, for the purpose of the present appeal, we propose
to examine only two questions.
24. The first question is, whether an enactment for giving out a differential
treatment to a single entity is valid in law or not and secondly,
whether the Impugned Act is liable to be struck down on the ground
of manifest arbitrariness.
A. Whether an enactment for giving out a differential treatment
to a single entity is valid in law or not?
25. For considering the first issue, we propose to examine certain
landmark judgments of this Court on the issue.
26. In the case of Chiranjit Lal Chowdhuri v. The Union of India and
Others,11 the Constitution Bench of this Court was faced with a
situation where the Governor General of India had promulgated an
Ordinance on the basis of a finding that, on account of mismanagement
and neglect, a situation had arisen concerning the affairs of the
Sholapur Spinning and Weaving Company Ltd.12 which had not only
prejudicially affected the production of an essential commodity but
11 [1950] 1 SCR 869 : 1950 INSC 36
12 Hereinafter referred to as “Sholapur Mill”
[2024] 10 S.C.R. 457
Khalsa University and Another v. The State of Punjab and Another
also had caused serious unemployment amongst a certain section
of the community. On account of such an emergency, a situation
had arisen which rendered it necessary to make a special provision
for the proper management and administration of the Sholapur Mill.
The aforesaid Ordinance was subsequently re-enacted in the form of
an Act of the Legislature called the Sholapur Spinning and Weaving
Company (Emergency Provisions) Act, 1950.13 The net result of the
Sholapur Mill Act was that the Managing Agents of the Sholapur Mill
were dismissed and the Directors holding the office automatically
vacated their office.
27. The Sholapur Mill Act was challenged on various grounds. One of
the grounds was that since the application of the said Act was found
to affect only one person, it was, therefore, plainly discriminatory
in character and within the constitutional inhibition of Article 14 of
the Constitution. The said ground was rejected by the Constitution
Bench by a majority of 3:2.
28. One of the arguments that was made before this Court was that
there would be other companies wherein similar allegations of mis-
management and neglect would be available. It was sought to be
argued that the provisions of the Companies Act were sufficient to
deal with the said situation. However, the passing of an enactment
whereby the Sholapur Mill was singled out for giving a “special
treatment” was not permissible under Article 14 of the Constitution.
While rejecting the said contention, Saiyid Fazl Ali, J. (one of the
Judges forming part of the majority) observed thus:
“…….The Government of India, as a matter of precaution
and lest it should be said that they were going to interfere
unnecessarily in the affairs of the Company and were not
allowing the existing provisions of the law to take their own
course, consulted other interests and placed the matter
before the Standing Committee of the Industrial Advisory
Council where a large number of leading industrialists of
the country were present, and ultimately it was realised
that this was a case where the Government could rightly
and properly intervene and there would be no occasion
for any criticism coming from any quarter. It appears
13 Hereinafter referred to as “Sholapur Mill Act”.
458 [2024] 10 S.C.R.
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from the discussion on the floor of the House that the
total number of weaving and spinning mills which were
closed down for one reason or the other was about 35 in
number. Some of them are said to have closed for want of
cotton, some due to overstocks, some for want of capital
and some on account of mismanagement. The Minister
for Industry, who sponsored the Bill, in explaining
what distinguished the case of Sholapur Mill from
the other mills against whom there might be charges
of mismanagement, made it clear in the course of
the debate that “certain conditions had to be fulfilled
before the Government can and should intervene”,
and he set out these conditions as follows:
(1) The undertaking must relate to an industry
which is of national importance. Not each and
every undertaking which may have to close
down can be taken charge of temporarily by
the Government.
(2) The undertaking must be an economic unit.
If it appears that it is completely uneconomic
and cannot be managed at all, there is no
sense in the Government taking charge of
it. If anything, it will mean the Government
will have to waste money which belongs to
the taxpayer on an uneconomic unit.
(3) There must be a technical report as regards
the condition of the plants, machinery, etc.,
which either as they stand, or after necessary
repairs and reconditioning can be properly
utilised.
(4) Lastly, and this is of considerable importance,
there must be a proper enquiry held before
the Government takes any action. The
enquiry should show that managing agents
have so misbehaved that they are no
longer fit and proper persons to remain in
charge of such an important undertaking.
[Parliamentary Debates, Vol. III, No. 14, 31-
3-1950 at pp. 2394-95]
[2024] 10 S.C.R. 459
Khalsa University and Another v. The State of Punjab and Another
It appears from the same proceedings that Sholapur
Mill is one of the largest mills in Asia and employs
13,000 workers. Per shift, it is capable of producing
25 to 30 thousand pounds of yarn, and also one lakh
yards of cloth. It was working two shifts when it was
closed down on 29-8-1949. The closure of the Mill
meant a loss of 25 lakhs yards of cloth and one-and-
a-half lakhs pounds of yarn per month. Prior to 1947,
the highest dividend paid by the Company was Rs 525
per share and the lowest Rs 100, and, in 1948, when
the management was taken over by the managing
agents who have been removed by the impugned
Act, the accounts showed a loss of Rs 30 lakhs, while
other textile companies had been able to show very
substantial profits during the same period.
Another fact which is brought out in the proceedings
is that the managing agents had acquired control over
the majority of the shares of the Company and a large
number of shareholders who were dissatisfied with
the management had been rendered powerless and
they could not make their voice heard. By reason of
the preponderance of their strength, the managing
agents made it impossible for a Controller under the
Essential Supplies Act to function and they also made
it difficult for the Company to run smoothly under the
normal law.
It was against this background that the Act was passed,
and it is evident that the facts which were placed
before the legislature with regard to Sholapur Mill
were of an extraordinary character, and fully justified
the Company being treated as a class by itself. There
were undoubtedly other mills which were open to the
charge of mismanagement, but the criteria adopted by
the Government which, in my opinion, cannot be said
to be arbitrary or unreasonable, is not applicable to
any of them. As we have seen, one of the criteria was
that a mere allegation of mismanagement should not
be enough and no drastic step such as is envisaged in
the Act should be taken without there being a complete
460 [2024] 10 S.C.R.
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enquiry. In the case of Sholapur Mill, a complete
enquiry had been made and the revelations which
were made as a result of such enquiry were startling.”
[emphasis supplied]
29. It can thus be seen that Fazl Ali, J. found that before the Act was
passed, the matter was placed before the Standing Committee of
the Industrial Advisory Council where a large number of leading
industrialists of the country were present. It was ultimately realized
that, that was a case where the Government could rightly and
properly intervene. It was further found that when the matter was
discussed on the floor of the House, it emerged that there were about
35 weaving and spinning mills which were closed for one reason
or the other. Some of them were closed for want of cotton, some
due to overstock, some for want of capital and some on account
of mismanagement. However, while singling out the Sholapur Mill,
the Parliament had taken into consideration various factors. One of
them was that the undertaking was related to an industry which was
of national importance. It was found that the Sholapur Mill was one
of the largest mills in Asia and employed 13,000 workers. Another
factor was that it was an economic unit and was working in two shifts
before it was closed down. It was further found that prior to 1947,
the highest dividend paid by the Company was Rs. 525/- per share
and the lowest was Rs. 100/-. It was further noticed that only when
the management was taken over by the Managing Agents, Sholapur
Mill started showing losses. It was further found that the Managing
Agents had acquired the control over the majority of the shares of
the Sholapur Mill and a large number of shareholders who were
dissatisfied with the management had been rendered powerless.
It was further found that, by reason of the preponderance of their
strength, the managing Agents made it impossible for a Controller
under the Essential Supplies Act to function. In the totality of the
circumstances, the Court found that a situation of an extraordinary
character had arisen which fully justified the Sholapur Mill being
treated as a class by itself. It was further found that though the other
companies were also open to the charge of mismanagement, however,
the criterion made applicable by the Government to Sholapur Mill for
singling out could not be said to be arbitrary or unreasonable. It could
further be noticed that 4 reasons were given by the Government for
singling out the Sholapur Mill.
[2024] 10 S.C.R. 461
Khalsa University and Another v. The State of Punjab and Another
30. It will also be pertinent to note the observations made by Mukherjea,
J. (who again formed a part of the majority) in the said judgment,
which read thus:
“It must be admitted that the guarantee against the
denial of equal protection of the laws does not mean
that identically the same rules of law should be made
applicable to all persons within the territory of India in
spite of differences of circumstances and conditions.
As has been said by the Supreme Court of America, “equal
protection of laws is a pledge of the protection of equal
laws [Yick Wo v. Hopkins, 30 L Ed 220 : 118 US 356 at
p. 369 (1886) : 1886 SCC OnLine US SC 188] ” (L Ed p.
226), and this means “subjection to equal laws applying
alike to all in the same situation [Southern Railway Co.
v. Greene, 54 L Ed 536 : 216 US 400 at p. 412 (1910) :
1910 SCC OnLine US SC 59] ” (L Ed p. 539). In other
words, there should be no discrimination between one
person and another if as regards the subject-matter of
the legislation their position is the same. I am unable
to accept the argument of Mr Chari that a legislation
relating to one individual or one family or one body
corporate would per se violate the guarantee of the
equal protection rule. There can certainly be a law
applying to one person or to one group of persons
and it cannot be held to be unconstitutional if it is not
discriminatory in its character [ Willis : Constitutional
Law at p. 580.] . It would be bad law: “if it arbitrarily
selects one individual or a class of individuals, one
corporation or a class of corporations, and visits a
penalty upon them which is not imposed upon others
guilty of like delinquency [Gulf, Colorado and Santa Fe
Railway Co. v. Ellis, 41 L Ed 666 : 165 US 150 at 159
(1897) : 1897 SCC OnLine US SC 20] ….” (L Ed p. 669
: US p. 159) The legislature undoubtedly has a wide field
of choice in determining and classifying the subject of its
laws, and if the law deals alike with all of a certain class,
it is normally not obnoxious to the charge of denial of
equal protection; but the classification should never be
arbitrary. It must always rest upon some real and substantial
462 [2024] 10 S.C.R.
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distinction bearing a reasonable and just relation to the
things in respect to which the classification is made; and
classification made without any substantial basis should
be regarded as invalid [Southern Railway Co. v. Greene,
54 L Ed 536 : 216 US 400 at p. 412 (1910) : 1910 SCC
OnLine US SC 59].
The question is whether judged by this test the impugned
Act can be said to have contravened the provision
embodied in Article 14 of the Constitution. Obviously, the
Act purports to make provisions which are of a drastic
character and against the general law of the land as laid
down in the Indian Companies Act, in regard to the
administration and management of the affairs of one
Company in Indian territory. The Act itself gives no reason
for the legislation but the Ordinance, which was a precursor
of the Act, expressly stated why the legislation was
necessary. It said that owing to mismanagement and
neglect, a situation had arisen in the affairs of the Company
which prejudicially affected the production of an essential
commodity and caused serious unemployment amongst
a certain section of the community. Mr Chari’s contention
in substance is that there are various textile companies
in India situated in a similar manner as Sholapur Company,
against which the same charges could be brought and
for the control and regulation of which all the reasons that
are mentioned in the Preamble to the Ordinance could
be applied. Yet, it is said, the legislation has been passed
with regard to this one Company alone. The argument
seems plausible at first sight, but on a closer examination
I do not think that I can accept it as sound. It must be
conceded that the legislature has a wide discretion in
determining the subject-matter of its laws. It is an accepted
doctrine of the American courts and which seems to me
to be well founded on principle, that the presumption is
in favour of the constitutionality of an enactment and the
burden is upon him who attacks it to show that there has
been a transgression of constitutional principles. As was
said by the Supreme Court of America in Middleton v.
Texas Power and Light Co. [Middleton v. Texas Power
[2024] 10 S.C.R. 463
Khalsa University and Another v. The State of Punjab and Another
and Light Co., 63 L Ed 527 : 249 US 152, 157 (1919) :
1919 SCC OnLine US SC 50] : (L Ed p. 531) “… [It must
be presumed] that a legislature understands and correctly
appreciates the needs of its own people, that its laws are
directed to problems made manifest by experience and
that its discriminations are based upon adequate grounds.”
(US p. 157) This being the position, it is for the
petitioner to establish facts which would prove that
the selection of this particular subject by the
legislature is unreasonable and based upon arbitrary
grounds. No allegations were made in the petition
and no materials were placed before us to show as
to whether there are other companies in India which
come precisely under the same category as Sholapur
Spinning and Weaving Company and the reasons for
imposing control upon the latter as mentioned in the
Preamble to the Ordinance are applicable to them as
well. Mr Chari argues that these are matters of common
knowledge of which we should take judicial notice. I do
not think that this is the correct line of approach. It is
quite true that the legislature has, in this instance,
proceeded against one company only and its
shareholders; but even one corporation or a group
of persons can be taken as a class by itself for the
purpose of legislation, provided it exhibits some
exceptional features which are not possessed by
others. The courts should prima facie lean in favour of
constitutionality and should support the legislation if it is
possible to do so on any reasonable ground, and it is for
the party who attacks the validity of the legislation to place
all materials before the court which would go to show that
the selection is arbitrary and unsupportable. Throwing out
of vague hints that there may be other instances of similar
nature is not enough for this purpose. We should bear in
mind that a corporation, which is engaged in production
of a commodity vitally essential to the community, has a
social character of its own, and it must not be regarded
as the concern primarily or only of those who invest their
money in it. If its possibilities are large and it had a
464 [2024] 10 S.C.R.
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prosperous and useful career for a long period of time
and is about to collapse not for any economic reason but
through sheer perversity of the controlling authority, one
cannot say that the legislature has no authority to treat
it as a class by itself and make special legislation
applicable to it alone in the interests of the community at
large. The combination of circumstances which are
present here may be of such unique character as
could not be existing in any other institution. But all
these, I must say, are matters which require investigation
on proper materials which we have not got before us in
the present case. In these circumstances I am constrained
to hold that the present application must fail on the
simple ground that the petitioner made no attempt to
discharge the prima facie burden that lay upon him
and did not place before us the materials upon which
a proper decision on the point could be arrived at. In
my opinion, therefore, the attack on the legislation on the
ground of the denial of equal protection of law cannot
succeed. We have not even before us any statement
on oath by the petitioner that what has been alleged
against this particular Company may be said against
other companies as well. If there was any such
statement, the respondents could have placed before
us the whole string of events that led up to the passing
of this legislation. If we are to take judicial notice of the
existence of similar other badly managed companies, we
must take notice also of the facts which appear in the
parliamentary proceedings in connection with this
legislation which have been referred to by my learned
Brother, Fazl Ali, J. in his judgment and which would go
to establish that the facts connected with this
corporation are indeed exceptional and the
discrimination that has been made can be supported
on just and reasonable grounds. I purposely refrain
from alluding to these facts or basing my decision thereon
as we had no opportunity of investigating them properly
during the course of the hearing. As matters stand, no
proper materials have been placed before us by either
[2024] 10 S.C.R. 465
Khalsa University and Another v. The State of Punjab and Another
side and as I am unable to say that the legislature cannot
be supported on any reasonable ground, I think it to be
extremely risky to overthrow it on mere suspicion or vague
conjectures. If it is possible to imagine or think of cases
of other companies where similar or identical conditions
might prevail, it is also not impossible to conceive of
something “peculiar” or “unusual” to this corporation which
led the legislature to intervene in its affairs. As has been
laid down by the Supreme Court of America, “The
Legislature is free to recognise degrees of harm and it
may confine its restrictions to those classes of cases
where the need is deemed to be the clearest [Radice v.
New York, 68 L Ed 690 : 264 US 292 (1924) : 1924 SCC
OnLine US SC 62] .” (L Ed p. 695). We should bear in
mind that a corporation, which is engaged in production
of a commodity vitally essential to the community, has a
social character of its own, and it must not be regarded
as the concern primarily or only of those who invest their
money in it. If its possibilities are large and it had a
prosperous and useful career for a long period of time
and is about to collapse not for any economic reason but
through sheer perversity of the controlling authority, one
cannot say that the legislature has no authority to treat
it as a class by itself and make special legislation
applicable to it alone in the interests of the community at
large. The combination of circumstances which are present
here may be of such unique character as could not be
existing in any other institution. But all these, I must say,
are matters which require investigation on proper materials
which we have not got before us in the present case. In
these circumstances I am constrained to hold that the
present application must fail on the simple ground that
the petitioner made no attempt to discharge the prima
facie burden that lay upon him and did not place before
us the materials upon which a proper decision on the
point could be arrived at. In my opinion, therefore, the
attack on the legislation on the ground of the denial of
equal protection of law cannot succeed.”
[emphasis supplied]
466 [2024] 10 S.C.R.
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31. It can be seen that His Lordship rejected the arguments that the
legislation relating to one individual or one family or one body
corporate would violate the guarantee of the equal protection rule.
His Lordship further held that there can be certainly a law applying
to one person or to one group of persons and it cannot be held to be
unconstitutional if it is not discriminatory in its character. However, it
would be bad law if it arbitrarily selects one individual or a class of
individuals, one corporation or a class of corporations, and visits a
penalty upon them which is not imposed upon others guilty of like
delinquency. The contention of the appellants therein as recorded
by His Lordship was that there were various textile companies in
India situated in a similar manner as the Sholapur Mill, but the
legislation was passed only with regard to one Company i.e. the
Sholapur Mill. While dealing with the said contention, His Lordship
observed that neither any allegations were made in the petition nor
any materials were placed before the Court to show as to whether
there were other companies in India which came precisely under the
same category as that of Sholapur Mill. His Lordship found that the
legislature can enact a law in respect of one undertaking or a group
of persons by treating them as a class by itself provided it exhibits
some exceptional features which are not possessed by others. His
Lordship further observed that the courts should prima facie lean in
favour of constitutionality and support the legislation if it is possible
to do so on any reasonable ground. It has been held that it is for the
party who attacks the validity of the legislation to place all materials
before the court which would go to show that the selection was
arbitrary and unsupportable. His Lordship specifically noticed that
leave aside placing any material on record, there was not even any
allegation/statement placed on record by the petitioner therein.
32. Patanjali Sastri and Das, JJ. disagreed with the majority in the said
case. Sastri, J. observed thus:
“It is obvious that the legislation is directed solely
against a particular Company and shareholders and
not against any class or category of companies and
no question, therefore, of reasonable legislative
classification arises. If a law is made applicable to a
class of persons or things and the classification is
based upon differentia having a rational relation to the
object sought to be attained, it can be no objection to
[2024] 10 S.C.R. 467
Khalsa University and Another v. The State of Punjab and Another
its constitutional validity that its application is found
to affect only one person or thing. For instance, a law
may be passed imposing certain restrictions and burdens
on joint stock companies with a share capital of, say, Rs
10 crores and upwards, and it may be found that there is
only one such Company for the time being to which the law
could be applied. If other such companies are brought into
existence in future the law would apply to them also, and no
discrimination would thus be involved. But the impugned
Act, which selects this particular Company and imposes
upon it and its shareholders burdens and disabilities
on the ground of mismanagement and neglect of duty
on the part of those charged with the conduct of its
undertaking, is plainly discriminatory in character and
is, in my judgment, within the constitutional inhibition
of Article 14. Legislation based upon mismanagement or
other misconduct as the differentia and made applicable to
a specified individual or corporate body is not far removed
from the notorious parliamentary procedure formerly
employed in Britain of punishing individual delinquents by
passing bills of attainder, and should not, I think, receive
judicial encouragement.
It was next urged that the burden of proving that the
impugned Act is unconstitutional lay on the petitioner,
and that, inasmuch as he has failed to adduce any
evidence to show that the selection of this Company and
its shareholders for special treatment under the impugned
Act was arbitrary, the application must fail. Whilst all
reasonable presumption must undoubtedly be made in
support of the constitutional validity of a law made by a
competent legislature, the circumstances of the present
case would seem, to my mind to exclude such presumption.
Hostile discrimination is writ large over the face of the
impugned Act and it discloses no grounds for such
legislative intervention. For all that appears no compelling
public interests were involved. Even the Preamble to the
original Ordinance was omitted. Nor did Respondents 1 and
2 file any counter-statement in this proceeding explaining
the circumstances which led to the enactment of such an
468 [2024] 10 S.C.R.
Digital Supreme Court Reports
extraordinary measure. There is thus nothing in the record
even by way of allegation which the petitioner need take
steps to rebut. Supposing, however, that the impugned
Act was passed on the same grounds as were mentioned
in the Preamble to the repealed Ordinance, namely,
mismanagement and neglect prejudicially affecting the
production of an essential commodity and causing serious
unemployment amongst a section of the community, the
petitioner could hardly be expected to assume the burden
of showing, not that the Company’s affairs were properly
managed, for that is not his case, but that there were also
other companies similarly mismanaged, for that is what,
according to the respondents, he should prove in order to
rebut the presumption of constitutionality. In other words,
he should be called upon to establish that this Company
and its shareholders were arbitrarily singled out for the
imposition of the statutory disabilities. How could the
petitioner discharge such a burden? Was he to ask for an
investigation by the Court of the affairs of other industrial
concerns in India where also there were strikes and lockouts
resulting in unemployment and cessation of production of
essential commodities? Would those companies be willing
to submit to such an investigation? And even so, how is
it possible to prove that the mismanagement and neglect
which is said to have prompted the legislation in regard
to this Company was prevalent in the same degree in
other companies? In such circumstances, to cast upon
the petitioner a burden of proof which it is as needless
for him to assume as it is impracticable to discharge is to
lose sight of the realities of the case.”
[emphasis supplied]
33. His Lordship Sastri, J. found that the enactment dealing with the
single entity i.e., Sholapur Mill was plainly discriminatory in character
and within the constitutional inhibition of Article 14 of the Constitution.
His Lordship observed that if a law is made applicable to a class
of persons or things and the classification is based upon differentia
having a rational relation to the object sought to be attained, there
can be no objection to its constitutional validity. In such cases, even
legislation dealing with single entity would be valid.
[2024] 10 S.C.R. 469
Khalsa University and Another v. The State of Punjab and Another
34. While disagreeing with the majority view with regard to burden of
proving that the impugned enactment was unconstitutional lay on the
petitioner and that the petitioner had failed to adduce any evidence
in that regard, His Lordship observed that though all reasonable
presumption must be made in support of the constitutional validity of
a law made by a competent legislature, the facts and circumstances
of the said case would seem to exclude such a presumption.
35. His Lordship further observed that hostile discrimination was writ
large over the face of the impugned enactment and it disclosed no
grounds for such legislative intervention. It was further observed
that asking the petitioner therein to establish that the Sholapur Mill
and its shareholders were arbitrarily singled out for imposition of
statutory disabilities cast upon the petitioner a burden of proof which
was needless for him to assume and impracticable to discharge and
was to lose sight of the realities of the case.
36. Das, J., while giving separate dissenting opinion, observed thus:
“…… But if mismanagement affecting production
and resulting in unemployment is to be the basis
of a classification for making a law for preventing
mismanagement and securing production and employment,
the law must embrace within its ambit all companies
which now are or may hereafter become subject to the
vice. This basis of classification by its very nature cannot
be exclusively applicable to any particular company and
its shareholders but is capable of wider application and,
therefore, the law founded on that basis must also be
wide enough so as to be capable of being applicable
to whoever may happen at any time to fall within that
classification. Mismanagement affecting production can
never be reserved as a special attribute peculiar to a
particular company or the shareholders of a particular
company. If it were permissible for the legislature to
single out an individual or class and to punish him or
it for some delinquency which may equally be found
in other individuals or classes and to leave out the
other individuals or classes from the ambit of the
law the prohibition of the denial of equal protection
of the laws would only be a meaningless and barren
470 [2024] 10 S.C.R.
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form of words. The argument that the presumption
being in favour of the legislature, the onus is on
the petitioner to show there are other individuals
or companies equally guilty of mismanagement
prejudicially affecting the production of an essential
commodity and causing serious unemployment
amongst a certain section of the community does not,
in such circumstances, arise, for the simple reason
that here there has been no classification at all and,
in any case, the basis of classification by its very
nature is much wider and cannot, in its application,
be limited only to this Company and its shareholders
and, that being so, there is no reason to throw on the
petitioner the almost impossible burden of proving that
there are other companies which are in fact precisely
and in all particulars similarly situated. In any event,
the petitioner, in my opinion, may well claim to have
discharged the onus of showing that this Company and
its shareholders have been singled out for discriminating
treatment by showing that the Act, on the face of it, has
adopted a basis of classification which, by its very nature,
cannot be exclusively applicable to this Company and its
shareholders but which may be equally applicable to other
companies and their shareholders and has penalised this
particular Company and its shareholders, leaving out other
companies and their shareholders who may be equally
guilty of the alleged vice of mismanagement and neglect
of the type referred to in the preambles. In my opinion the
legislation in question infringes the fundamental rights of the
petitioner and offends against Article 14 of our Constitution.”
[emphasis supplied]
37. It can be seen that His Lordship observed that if the mismanagement
affecting production and resulting in unemployment is to be the basis
of a classification for making a law for preventing mismanagement
and securing production and employment, then the law must embrace
within its ambit all companies which now are or may hereafter become
subject to the vice. His Lordship held that the basis of classification
by its very nature cannot be exclusively applicable to any particular
company and its shareholders but was capable of wider application
[2024] 10 S.C.R. 471
Khalsa University and Another v. The State of Punjab and Another
and, therefore, the law founded on that basis must also be wide
enough so as to be capable of being applicable to whoever may
happen at any time to fall within that classification. His Lordship
observed that the basis of classification by its very nature was much
wider and that there would be no classification at all and, therefore,
there was no reason to throw on the petitioner the almost impossible
burden of proving that there were other companies which were in
fact precisely and in all particulars similarly situated. His Lordship
observed that in the facts of the said case, the petitioner could
very well claim to have discharged the onus of showing that the
Company and its shareholders had been singled out for discriminating
treatment, by showing that the Act, on the face of it, had adopted
a basis of classification which, by its very nature, could not have
been exclusively applicable to the Company and its shareholders,
but which could also be equally applicable to the other companies
and their shareholders.
38. It can thus be seen that though there appears to be disagreement
on other aspects but all the opinions unanimously hold that even a
legislation dealing with a single entity or an undertaking would be
permissible in law, if it is based on a reasonable classification having
nexus with the object to be achieved. The classification should be
such wherein an entity or an undertaking to whom a special treatment
is provided can be singled out on the basis of some reasonable
classification from the others in the same class.
39. However, there appears to be disagreement with regard to the
discharge of burden. Whereas the majority is of the view that there
is a presumption with regard to validity of the enactment and that
the burden is on the person who challenges the validity thereof, the
minority holds that in such cases wherein an entity has been singled
out, then once the petitioner points out that he has been singled
out from a class similarly circumstanced, the same should be taken
as having discharged the burden. It has been held by the minority
that asking the petitioner to discharge the burden by placing the
evidence in such cases would be asking him to do an impossibility.
However, even from the majority view, it appears that in the facts
and circumstances of the said case, the majority found that quite
apart the petitioner placing any material on record to discharge the
burden, there was not even a single statement on affidavit with
regard to discrimination.
472 [2024] 10 S.C.R.
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40. In the case of D.S. Reddy v. Chancellor, Osmania University and
Others,14 the Constitution Bench of this Court was considering the
constitutional validity of Section 5 of the Osmania University (Second
Amendment) Act, 1966 which introduced Section 13A into the original
Act. The challenge of the petitioner therein was that, by virtue of
Section 13A, a differentiation was made between the appellant who
was a Vice-Chancellor on the date of the commencement of the said
Act and other persons who were to be appointed Vice-Chancellors
thereafter. It was argued that the differentiation was without any basis
and that such a classification did not have any reasonable relation
to the main object of the legislation.
41. It will be relevant to refer to the observations of the Constitution
Bench in the said case, which read thus:
“There can be no controversy that Section 13-A, introduced
by Section 5 of the Second Amendment Act, deals only
with the appellant. In fact, the stand taken on behalf of the
respondents in the counter affidavit filed before the High
Court, was to the effect that the legislature had chosen
to treat the Vice-Chancellor holding office at the time of
the commencement of the Second Amendment Act, as a
class by himself and with a view to enable the Chancellor
to make fresh appointments, Section 13-A of the Act was
enacted.
Therefore, it is clear that Section 13-A applies only to the
appellant. Though, no doubt, it has been stated, on behalf of
the respondents, that similar provisions were incorporated,
at about the same time, in two other Acts, relating to two
other Universities viz. the Andhra University and the Sri
Venkateswara University, and though this circumstance
has also been taken into account by the learned Judges
of the High Court, in our opinion, those provisions have no
bearing in considering the attack levelled by the appellant
on Section 13-A of the Act.
This is a clear case where the statute itself directs
its provisions by enacting Section 13-A, against one
14 [1967] 2 SCR 214 : 1966 INSC 259
[2024] 10 S.C.R. 473
Khalsa University and Another v. The State of Punjab and Another
individual viz. the appellant; and before it can be
sustained as valid, this Court must be satisfied that
there is a reasonable basis for grouping the appellant
as a class by himself and that such reasonable basis
must appear either in the statute itself or must be
deducible from other surrounding circumstances
according to learned Counsel for the appellant, all Vice-
Chancellors of the Osmania University come under one
group and can be classified only as one unit and there
is absolutely no justification for grouping the appellant
under one class and the Vice-Chancellors to be appointed
in future under a separate class. In any event, it is also
urged that the said classification has no relation or nexus
to the object of the enactment.
……………
In our view, the Vice-Chancellor, who is appointed under the
Act, or the Vice-Chancellor who was holding that post on
the date of the commencement of the Second Amendment
Act, form one single group or class. Even assuming that
the classification of these two types of persons as coming
under two different groups can be made nevertheless, it
is essential that such a classification must be founded on
an intelligible differentia which distinguishes the appellant
from the Vice-Chancellor appointed under the Act. We are
not able to find any such intelligible differentia on the basis
of which the classification can be justified.
……………..
For the above reasons, we accept the contentions
of the learned Counsel for the appellant, and hold
that Section 5 of the Second Amendment Act (Act
11 of 1966), introducing Section 13-A in the Act,
is discriminatory and violative of Article 14 of the
Constitution and, as such, has to be struck down as
unconstitutional. The result is that the appeal is allowed,
and the appellant will be entitled to his costs in the appeal,
payable by the respondents, here and in the High Court.”
[emphasis supplied]
474 [2024] 10 S.C.R.
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42. It can thus be seen that the Constitution Bench found that Section
13A was applied only to the appellant therein. The Court further found
that the Vice-Chancellor, who was appointed under the said Act or
the Vice-Chancellor who was holding that post on the date of the
commencement of the Second Amendment Act, formed one single
group or class. The Court found that though the classification of these
two types of persons as coming under two different groups could be
made, however, the same could not be made unless the classification
was founded on an intelligible differentia which distinguished the
appellant from the Vice-Chancellor appointed under the Act. The
Court found that before upholding an enactment applicable to one
individual, this Court must be satisfied that there is a reasonable basis
for grouping such an individual as a class by himself and that such
reasonable basis must appear either in the statute itself or must be
deducible from other surrounding circumstances. The Court found
that there was no such intelligible differentia on the basis of which
such classification could be justified.
43. In the case of S.P. Mittal v. Union of India and Others,15 the
Constitution Bench of this Court was considering the provisions of
Auroville (Emergency Provisions) Act, 1980. In the said case also, an
argument was advanced that a legislation singling out Sri Aurobindo
Society amounted to hostile treatment. Dealing with the said argument,
speaking for the majority, R.B. Misra, J. observed thus:
“163. It was further contended by Mr Venugopal that if
the management of the institution had been taken over
by the Government on the ground of mismanagement,
there could be other institutions where similar situation
might be prevailing. There should have been a general
legislation rather than singling out Sri Aurobindo Society
for hostile treatment.
164. The argument cannot be accepted for two reasons.
Firstly, because it has not been pointed out which were the
other institutions where similar situations were prevailing.
Besides, there is a uniqueness with this institution inasmuch
as the Government is also involved. Even a single
institution may be taken as a class. The situation
15 [1983] 1 SCR 729 : (1983) 1 SCC 51 : 1982 INSC 81
[2024] 10 S.C.R. 475
Khalsa University and Another v. The State of Punjab and Another
prevailing in the Auroville had converted the dream of
the Mother into a nightmare. There had arisen acute law
and order situation in the Auroville, numerous cases
were pending against various foreigners, the funds
meant for the Auroville had been diverted towards other
purposes and the atmosphere was getting out of hand.
In the circumstances the Government intervened and
promulgated the Ordinance and later on substituted
it by the impugned enactment. It cannot be said that it
is violative of Article 14 on that account…..
……………
171. We are afraid the argument has no substance.
Obviously, there were serious irregularities in the
management of the said Society as has been pointed
out in the earlier part of the judgment. There has been
misutilisation of funds and their diversion to other purposes.
This is evident from the audit report. There was no material
change in the situation on the date of the impugned
Ordinance or the Act, rather the situation had grown from
bad to worse and the sordid situation prevailing in the
Auroville so pointed out by the parties fully justified the
promulgation of the Ordinance and the passing of the
enactment. Of course, each party tried to apportion the
blame on the other. Whosoever be responsible, the fact
remains that the prevailing situation in the Auroville was far
from satisfactory. The amount donated for the construction
of the cultural township Auroville and other institutions was
to the tune of Rs 3 crores. It was the responsibility of the
Government to see that the amount was not misutilised
and the management was properly carried out. So, the
basis of the argument that the facts as pointed out in the
Preamble were non est is not correct.”
[emphasis supplied]
44. No doubt that the Court held that even a single institution may be
taken as a class, in the facts of the said case, the Court found that
from the Preamble of the impugned enactment itself, it was clear that
there were serious irregularities in the management of the society. The
Court found that there had arisen acute law and order situation in the
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Auroville, numerous cases were pending against various foreigners,
the funds meant for the Auroville had been diverted towards other
purposes and the atmosphere was getting out of hand. It was found
that in such circumstances, the intervention of the Government
by promulgating the Ordinance and later on substituted it by the
impugned enactment could not be held to be violative of Article 14
of the Constitution.
45. In the case of Dharam Dutt and Others v. Union of India and
Others,16 the Court was considering the validity of Indian Council of
World Affairs Act, 2001. In the said case, again a similar argument
was advanced before the Division Bench of this Court. Rejecting the
said argument, the Court observed thus:
“56. Article 14 of the Constitution prohibits class legislation
and not reasonable classification for the purpose of
legislation. The requirements of the validity of legislation
by reference to Article 14 of the Constitution are : that the
subject-matter of legislation should be a well-defined class
founded on an intelligible differentia which distinguishes
that subject-matter from the others left out, and such
differentia must have a rational relation with the object
sought to be achieved by the legislation. The laying down
of intelligible differentia does not, however, mean that the
legislative classification should be scientifically perfect or
logically complete.
57. We have already pointed out in an earlier part of
this judgment that in the present case successive
Parliamentary Committees found substance in the
complaints received that an institution of national
importance was suffering from mismanagement and
maladministration. The Central Government acted on
such findings. Circumstances warranting an emergent
action satisfied the President of India, resulting in
his promulgating ordinances which earlier could
not culminate in legislative enactments on account
of fortuitous circumstances. At the end Parliament
exercised its legislative power under Article 245 of the
16 [2003] Supp. 6 SCR 151 : (2004) 1 SCC 712 : 2003 INSC 667
[2024] 10 S.C.R. 477
Khalsa University and Another v. The State of Punjab and Another
Constitution read with Entries 62 and 63 of List I. The
legislation cannot be said to be arbitrary or unreasonable.
58. It was further submitted that the provisions of the
Societies Registration Act, 1860 were effective enough
which, if invoked, could have taken care of the alleged
grievances. If there was any truth or substance therein
the same could have been found on enquiries being held.
In our opinion, in a given set of facts and circumstances,
merely because an alternative action under the Societies
Registration Act, 1860 could have served the purpose, a
case cannot be and is not made out for finding fault with
another legislation if the same be within the legislative
competence of Parliament, which it is, as will be seen
hereinafter.
59. A similar submission was made and repelled in S.P.
Mittal case [(1983) 1 SCC 51] . The contention there was
that provisions in the Societies Registration Act were
available to meet the situation in Auroville and that the
law and order situation could be controlled by resorting
to provisions of the Code of Criminal Procedure. The
Constitution Bench held : (SCC p. 116, para 169)
“169. Whether the remedies provided under the Societies
Registration Act were sufficient to meet the exigencies
of the situation is not for the Court to decide but it is for
the Government and if the Government thought that the
conditions prevailing in the Auroville and the Society can
be ameliorated not by resorting to the provisions of the
Societies Registration Act but by a special enactment,
that is an area of the exercise of the discretion of the
Government and not of the Court.”
The Constitution Bench also observed that assuming the
facts brought to the notice of the legislature were wrong,
it will not be open to the Court to hold the Act to be bad
on that account.
60. It was then submitted that the institution ICWA was
singled out and though there were several other institutions
run by societies or other organizations which were in the grip
478 [2024] 10 S.C.R.
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of more serious mismanagement and maladministration,
they were not even touched and Parliament chose to
legislate as to one institution only. This submission too
holds no merit. Firstly, no other institution is named or
particularized so as to be comparable with ICWA. Secondly,
there can be a legislation in respect of a single institution
as is clear from the language itself of Entries 62 and 63
of List I. A single institution is capable of being treated
as a class by itself for the purpose of legislation if
there are special circumstances or reasons which
are applicable to that institution and such legislation
would not incur the wrath of Article 14. In S.P. Mittal
[(1983) 1 SCC 51] the impugned legislation brought with
the object and purpose of taking away the management of
Auroville from the Aurobindo Society and to bring it under
the management of the Central Government under the
provisions of the impugned Act was held to be valid. The
exercise of legislative power by Parliament was sought to
be justified as falling within the field of Entry 63 of List I.
Their Lordships referred to several decisions wherein the
constitutional validity of similar legislations was upheld. In
Ram Krishna Dalmia v. Justice S.R. Tendolkar [AIR 1958
SC 538 : 1959 SCR 279] legislation relating to a single
“individual”, in Raja Bira Kishore Deb v. State of Orissa [AIR
1964 SC 1501 : (1964) 7 SCR 32] legislation in respect of
a single “temple” and in Charanjit Lal Chowdhury v. Union
of India [1950 SCC 833 : AIR 1951 SC 41 : 1950 SCR 869]
a separate law enacted for one company were held not
to offend Article 14 of the Constitution on the ground that
there were special reasons for passing such legislation.”
[emphasis supplied]
46. It can thus clearly be seen that in the said case also, the Court took
note of the successive Parliamentary Committees finding substance
in the complaints received that an institution of national importance
was suffering from mismanagement and maladministration. It was
found that the Central Government acted on such findings. It was
also found that the circumstances warranted an emergent action.
Relying on the case of S.P. Mittal (supra), the Court found that a
single institution was capable of being treated as a class by itself
[2024] 10 S.C.R. 479
Khalsa University and Another v. The State of Punjab and Another
for the purpose of legislation if there were special circumstances
or reasons which were applicable to that institution and in such
circumstances, the legislation would not incur the wrath of Article
14 of the Constitution.
47. In the case of P. Venugopal v. Union of India,17 this Court was
considering the proviso to Section 11 (1-A) of the All-India Institute
of Medical Sciences Act, 1956 vide which the tenure of the petitioner
therein was sought to be curtailed. Relying on the other judgments
of this Court, the Court held the said proviso to Section 11 (1-A)
unconstitutional and ultra vires. It was found that the facts of the
said case were similar to that of D.S. Reddy (supra).
48. It is thus a settled position of law that though a legislation affecting
a single entity or a single undertaking or a single person would be
permissible in law, it must be on the basis of reasonable classification
having nexus with the object to be achieved. There should be a
reasonable differentia on the basis of which a person, entity or
undertaking is sought to be singled out from the rest of the group.
Further, if a legislation affecting a single person, entity or undertaking
is being enacted, there should be special circumstances requiring
such an enactment. Such special circumstances should be gathered
from the material taken into consideration by the competent legislature
and shall include the Parliamentary/Legislative Debates.
49. In the case of Chiranjit Lal Chowdhuri (supra), this Court found that
the Sholapur Mill was an undertaking of national importance employing
13,000 people, it was found that till the Managing Agents took over,
it was running in profits and only thereafter, it started running in
losses. It was further found that the Managing Agents were indulging
in serious mismanagement and irregularities. The Court found that
before the enactment was passed, the matter was placed before
the Standing Committee of the Industrial Advisory Council where a
large number of leading industrialists of the country were present.
It was further found that before such an enactment was passed, it
was persuaded by wide-scale consultations with the stakeholders.
The Court also took note of the 4 factors taken into consideration by
the Government for singling out the petitioner therein from the other
industries facing mismanagement. They were: (i) that the undertaking
17 [2008] 8 SCR 1 : (2008) 5 SCC 1 : 2008 INSC 607
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was of national importance; (ii) the undertaking was an economic
unit; (iii) the technical report showed that the condition of the plants,
machinery etc., which either as they stand, or after necessary repairs
and reconditioning can be properly utilized; and (iv) there was a
proper enquiry held before the Government took any action. It was
further found that the enquiry had shown that the Managing Agents
had so mismanaged that they were no longer fit and proper persons
to remain in charge of such an important undertaking.
50. Insofar as the case of S.P. Mittal (supra) is concerned, this Court
found that not only there was serious mismanagement in the society
but the situation had become precarious and had also led to law
and order situation wherein the Government found it necessary to
take emergent and extreme steps.
51. Similarly, in the case of Dharam Dutt (supra), this Court found
that the Indian Council of World Affairs was an institute of national
importance and the Parliamentary Committee Report found that
there was mismanagement and as such, it was necessary to take
an emergent action.
52. Per contra, in the case of D.S. Reddy (supra), the Court held that
a legislation pertaining to a single individual which was not based
on a reasonable basis for grouping one person as a class by itself
and that such a classification was not founded on an intelligible
differentia and as such was violative of Article 14 of the Constitution.
Similarly, in the case of P. Venugopal (supra), the Court struck down
a legislation which was made singly applicable to the appellant therein
being violative of Article 14 of the Constitution.
53. It can thus be seen that wherever this Court has upheld the legislation
affecting the single entity, institution or undertaking, it found that it was
done in emergent and extreme circumstances preceded by enquiries,
parliamentary debates, etc. It was done when the legislature took into
consideration the relevant material and found it expedient to do so.
54. It is also settled by this Court that there will be a presumption with
regard to the validity of the enactment and the burden would be
on the person who challenges the same. In the case of Chiranjit
Lal Chowdhuri (supra), the majority found that quite apart from
not discharging the burden of hostile discrimination, the petitioners
therein had not even averred with regard to such a discrimination by
[2024] 10 S.C.R. 481
Khalsa University and Another v. The State of Punjab and Another
a statement on affidavit. No doubt that Shastri and Das, JJ. disagreed
and held that in such cases asking the petitioner to discharge the
burden would be asking him to do an impossibility.
55. In the light of the aforesaid legal position, we have to examine the
present case.
56. Undisputedly, the Impugned Act is a single entity legislation repealing
the 2016 Act by which the Khalsa University was established. The
only reasoning as could be found in the SOR of the Impugned Act is
that the Khalsa College, Amritsar has, over a period of time, become
a significant icon of Khalsa Heritage and the appellant was likely to
shadow and damage its character and pristine glory.
57. In the writ petition filed before the High Court, the appellants have
specifically placed on record their challenge on the ground of
discrimination which reads thus:
“There are 16 apart from the petitioner private Universities
are operating in the State of Punjab. These are detailed
as under: -
(i) Shri Guru Granth Sahib World University, Fatehgarh
Sahib.
(ii) Chandigarh University, Chandigarh.
(iii) Desh Bhagat University, Mandi Gobindgarh.
(iv) RIMT University, Mandi Gobindgarh.
(v) Rayat Bahara University, Mohali.
(vi) Adesh Medical University, Bathinda.
(vii) Akal University Bathinda.
(viii) Guru Kanshi University, Bathinda.
(ix) Thapar University, Patiala
(x) CT University, Ludhiana .
(xi) Chitkara University, Rajpura
(xii) Khalsa University, Amritsar
(xiii) Shri Guru Ramdas Medical University, Amritsar.
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(xiv) LPU, Jalandhar.
(xv) D.A.V. Jalandhar.
(xvi) GNA University, Phagwara.
(xvii) Baba Bhag Singh University, Padhiana Sahib,
Phagwara.
All the private Universities apart from the Thapar University,
Lovely Professional University have been established in
the past 10 years. It is only the petitioner University which
is being singled out by the State Government. There is
absolutely no reason or justification whereby the petitioner
University can be ordered to be shut down in such a
discriminatory manner.
Still further it is respectfully submitted that in the Malwa
region of Punjab with population share of 52 per cent
there are 22 Universities. In the Doaba region with 19
per cent population there are 7 Universities; but in the
Majha region with 29 per cent population there are only
3 Universities one being the Guru Nanak Dev University,
Amritsar, the second being Sri Guru Ramdas University
wherein only B.D.S., M.B.B.S., M.D., M.D.S. and Nursing
courses are imparted and the third being the petitioner
Khalsa University which by virtue of the impugned Act
today stands shut down. The action is thus violative of
Article 14 of the Constitution of India as well.”
58. It can thus clearly be seen that the Khalsa University has specifically
averred that it has been singled out by the State Government amongst
16 Universities. It has also been averred that there is absolutely
no reason or justification whereby the Khalsa University could be
ordered to be shut down in such a discriminatory manner. The
Khalsa University has also made specific averments with regard to
discrimination inasmuch as there are more number of Universities
in Malwa region and Doaba region as against the Majha region.
59. Though a detailed reply has been filed on behalf of respondent No.1
before the High Court, the reply does not deal with the submissions
made by the appellants on the ground of discrimination. In any case,
no material is placed on record as to what was the compelling and
[2024] 10 S.C.R. 483
Khalsa University and Another v. The State of Punjab and Another
emergent situation so as to enact a law which could affect the Khalsa
University (appellant No.1). No material is placed on record to show
that there were any discussions prior to the Impugned Act being
passed or as to what material was placed and taken into consideration
by the competent legislature. Even going by the law laid down by
the majority in the case of Chiranjit Lal Chowdhuri (supra), since
the Khalsa University had specifically pleaded a ground regarding
discrimination, it was incumbent upon the respondents to have dealt
with the said challenge. We therefore find that the Impugned Act
singled out the Khalsa University (appellant No.1) amongst 16 private
Universities in the State and no reasonable classification has been
pointed out to discriminate the Khalsa University (appellant No.1)
against the other private Universities. The Impugned Act therefore
would be discriminatory and violative of Article 14 of the Constitution.
B. Whether the Impugned Act is liable to be struck down on
the ground of manifest arbitrariness?
60. The next ground on which the Impugned Act is challenged is that
the Impugned Act suffers from manifest arbitrariness. Reliance in
this respect is placed on the Constitution Bench judgment of this
Court in the case of Shayara Bano (supra). In the said case, R.F.
Nariman, J., speaking for himself and Uday U. Lalit, J., after referring
to various earlier judgments, in para 70 onwards, observed thus:
“95. On a reading of this judgment in Natural Resources
Allocation case [Natural Resources Allocation, In re,
Special Reference No. 1 of 2012, (2012) 10 SCC 1] , it
is clear that this Court did not read McDowell [State of
A.P. v. McDowell and Co., (1996) 3 SCC 709] as being an
authority for the proposition that legislation can never
be struck down as being arbitrary. Indeed the Court, after
referring to all the earlier judgments, and Ajay Hasia
[Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722
: 1981 SCC (L&S) 258] in particular, which stated that
legislation can be struck down on the ground that it is
“arbitrary” under Article 14, went on to conclude that
“arbitrariness” when applied to legislation cannot be
used loosely. Instead, it broad based the test, stating that if
a constitutional infirmity is found, Article 14 will interdict such
infirmity. And a constitutional infirmity is found in Article 14
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itself whenever legislation is “manifestly arbitrary” i.e. when
it is not fair, not reasonable, discriminatory, not transparent,
capricious, biased, with favouritism or nepotism and not in
pursuit of promotion of healthy competition and equitable
treatment. Positively speaking, it should conform to norms
which are rational, informed with reason and guided by
public interest, etc.
96. Another Constitution Bench decision in Subramanian
Swamy v. CBI [Subramanian Swamy v. CBI, (2014) 8 SCC
682 : (2014) 6 SCC (Cri) 42 : (2014) 3 SCC (L&S) 36]
dealt with a challenge to Section 6-A of the Delhi Special
Police Establishment Act, 1946. This section was ultimately
struck down as being discriminatory and hence violative
of Article 14. A specific reference had been made to the
Constitution Bench by the reference order in Subramanian
Swamy v. CBI [Subramanian Swamy v. CBI, (2005) 2 SCC
317 : 2005 SCC (L&S) 241] and after referring to several
judgments including Ajay Hasia [Ajay Hasia v. Khalid
Mujib Sehravardi, (1981) 1 SCC 722 : 1981 SCC (L&S)
258], Mardia Chemicals [Mardia Chemicals Ltd. v. Union
of India, (2004) 4 SCC 311], Malpe Vishwanath Acharya
[Malpe Vishwanath Acharya v. State of Maharashtra, (1998)
2 SCC 1] and McDowell [State of A.P. v. McDowell and
Co., (1996) 3 SCC 709], the reference, inter alia, was as
to whether arbitrariness and unreasonableness, being
facets of Article 14, are or are not available as grounds
to invalidate a legislation.
97. After referring to the submissions of the counsel, and
several judgments on the discrimination aspect of Article 14,
this Court held: (Subramanian Swamy case [Subramanian
Swamy v. CBI, (2014) 8 SCC 682 : (2014) 6 SCC (Cri) 42 :
(2014) 3 SCC (L&S) 36] , SCC pp. 721-22, paras 48-49)
“48. In E.P. Royappa [E.P. Royappa v. State of
T.N., (1974) 4 SCC 3 : 1974 SCC (L&S) 165], it
has been held by this Court that the basic principle
which informs both Articles 14 and 16 are equality
and inhibition against discrimination. This Court
observed in para 85 as under: (SCC p. 38)
[2024] 10 S.C.R. 485
Khalsa University and Another v. The State of Punjab and Another
‘85. … From a positivistic point
of view, equality is antithetic to
arbitrariness. In fact equality and
arbitrariness are sworn enemies;
one belongs to the rule of law in a
republic while the other, to the whim
and caprice of an absolute monarch.
Where an act is arbitrary, it is implicit
in it that it is unequal both according
to political logic and constitutional law
and is therefore violative of Article 14,
and if it affects any matter relating to
public employment, it is also violative
of Article 16. Articles 14 and 16
strike at arbitrariness in State action
and ensure fairness and equality of
treatment.’
Court’s approach
49. Where there is challenge to the constitutional
validity of a law enacted by the legislature,
the Court must keep in view that there is
always a presumption of constitutionality of
an enactment, and a clear transgression of
constitutional principles must be shown. The
fundamental nature and importance of the
legislative process needs to be recognised by
the Court and due regard and deference must be
accorded to the legislative process. Where the
legislation is sought to be challenged as being
unconstitutional and violative of Article 14 of the
Constitution, the Court must remind itself to the
principles relating to the applicability of Article
14 in relation to invalidation of legislation. The
two dimensions of Article 14 in its application
to legislation and rendering legislation invalid
are now well recognised and these are: (i)
discrimination, based on an impermissible
or invalid classification, and (ii) excessive
delegation of powers; conferment of uncanalised
486 [2024] 10 S.C.R.
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and unguided powers on the executive, whether
in the form of delegated legislation or by way of
conferment of authority to pass administrative
orders—if such conferment is without any
guidance, control or checks, it is violative of
Article 14 of the Constitution. The Court also
needs to be mindful that a legislation does not
become unconstitutional merely because there is
another view or because another method may be
considered to be as good or even more effective,
like any issue of social, or even economic policy.
It is well settled that the courts do not substitute
their views on what the policy is.”
98. Since the Court ultimately struck down Section 6-A
on the ground that it was discriminatory, it became
unnecessary to pronounce on one of the questions referred
to it, namely, as to whether arbitrariness could be a ground
for invalidating legislation under Article 14. Indeed the
Court said as much in para 98 of the judgment as under:
(Subramanian Swamy case [Subramanian Swamy v. CBI,
(2014) 8 SCC 682 : (2014) 6 SCC (Cri) 42 : (2014) 3 SCC
(L&S) 36] , SCC p. 740)
“98. Having considered the impugned provision
contained in Section 6-A and for the reasons indicated
above, we do not think that it is necessary to consider
the other objections challenging the impugned
provision in the context of Article 14.”
99. However, in State of Bihar v. Bihar Distillery Ltd.
[State of Bihar v. Bihar Distillery Ltd., (1997) 2 SCC 453],
SCC at para 22, in State of M.P. v. Rakesh Kohli [State
of M.P. v. Rakesh Kohli, (2012) 6 SCC 312 : (2012) 3
SCC (Civ) 481] , SCC at paras 17 to 19, in Rajbala v.
State of Haryana [Rajbala v. State of Haryana, (2016) 2
SCC 445], SCC at paras 53 to 65 and in Binoy Viswam
v. Union of India [Binoy Viswam v. Union of India, (2017)
7 SCC 59] , SCC at paras 80 to 82, McDowell [State of
A.P. v. McDowell and Co., (1996) 3 SCC 709] was read
as being an absolute bar to the use of “arbitrariness” as
[2024] 10 S.C.R. 487
Khalsa University and Another v. The State of Punjab and Another
a tool to strike down legislation under Article 14. As has
been noted by us earlier in this judgment, McDowell [State
of A.P. v. McDowell and Co., (1996) 3 SCC 709] itself is
per incuriam, not having noticed several judgments of
Benches of equal or higher strength, its reasoning even
otherwise being flawed. The judgments, following McDowell
[State of A.P. v. McDowell and Co., (1996) 3 SCC 709]
are, therefore, no longer good law.
100. To complete the picture, it is important to note that
subordinate legislation can be struck down on the ground
that it is arbitrary and, therefore, violative of Article 14 of
the Constitution. In Cellular Operators Assn. of India v.
TRAI [Cellular Operators Assn. of India v. TRAI, (2016) 7
SCC 703] , this Court referred to earlier precedents, and
held: (SCC pp. 736-37, paras 42-44)
“Violation of fundamental rights
42. We have already seen that one of the tests for
challenging the constitutionality of subordinate
legislation is that subordinate legislation should
not be manifestly arbitrary. Also, it is settled law
that subordinate legislation can be challenged
on any of the grounds available for challenge
against plenary legislation. [See Indian Express
Newspapers (Bombay) (P) Ltd. v. Union of India
[Indian Express Newspapers (Bombay) (P) Ltd.
v. Union of India, (1985) 1 SCC 641 : 1985 SCC
(Tax) 121] , SCC at p. 689, para 75.]
43. The test of “manifest arbitrariness” is well
explained in two judgments of this Court. In
Khoday Distilleries Ltd. v. State of Karnataka
[Khoday Distilleries Ltd. v. State of Karnataka,
(1996) 10 SCC 304] , this Court held: (SCC p.
314, para 13)
‘13. It is next submitted before us
that the amended Rules are arbitrary,
unreasonable and cause undue
hardship and, therefore, violate Article
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14 of the Constitution. Although the
protection of Article 19(1)(g) may
not be available to the appellants,
the Rules must, undoubtedly, satisfy
the test of Article 14, which is a
guarantee against arbitrary action.
However, one must bear in mind that
what is being challenged here under
Article 14 is not executive action
but delegated legislation. The tests
of arbitrary action which apply to
executive actions do not necessarily
apply to delegated legislation. In
order that delegated legislation can
be struck down, such legislation must
be manifestly arbitrary; a law which
could not be reasonably expected to
emanate from an authority delegated
with the law-making power. In Indian
Express Newspapers (Bombay) (P)
Ltd. v. Union of India [Indian Express
Newspapers (Bombay) (P) Ltd. v.
Union of India, (1985) 1 SCC 641
: 1985 SCC (Tax) 121] , this Court
said that a piece of subordinate
legislation does not carry the same
degree of immunity which is enjoyed
by a statute passed by a competent
legislature. A subordinate legislation
may be questioned under Article 14
on the ground that it is unreasonable;
“unreasonable not in the sense of
not being reasonable, but in the
sense that it is manifestly arbitrary”.
Drawing a comparison between the
law in England and in India, the Court
further observed that in England the
Judges would say, “Parliament never
intended the authority to make such
[2024] 10 S.C.R. 489
Khalsa University and Another v. The State of Punjab and Another
rules; they are unreasonable and
ultra vires”. In India, arbitrariness is
not a separate ground since it will
come within the embargo of Article 14
of the Constitution. But subordinate
legislation must be so arbitrary that it
could not be said to be in conformity
with the statute or that it offends
Article 14 of the Constitution.’
44. Also, in Sharma Transport v. State of A.P.
[Sharma Transport v. State of A.P., (2002) 2
SCC 188] , this Court held: (SCC pp. 203-04,
para 25)
‘25. … The tests of arbitrary action
applicable to executive action do
not necessarily apply to delegated
legislation. In order to strike down
a delegated legislation as arbitrary
it has to be established that there
is manifest arbitrariness. In order to
be described as arbitrary, it must be
shown that it was not reasonable and
manifestly arbitrary. The expression
“arbitrarily” means: in an unreasonable
manner, as fixed or done capriciously
or at pleasure, without adequate
determining principle, not founded in
the nature of things, non-rational, not
done or acting according to reason
or judgment, depending on the will
alone.’ ”
(emphasis in original)
101. It will be noticed that a Constitution Bench of this Court
in Indian Express Newspapers (Bombay) (P) Ltd. v. Union
of India [Indian Express Newspapers (Bombay) (P) Ltd. v.
Union of India,, (1985) 1 SCC 641 : 1985 SCC (Tax) 121]
stated that it was settled law that subordinate legislation
can be challenged on any of the grounds available for
490 [2024] 10 S.C.R.
Digital Supreme Court Reports
challenge against plenary legislation. This being the case,
there is no rational distinction between the two types of
legislation when it comes to this ground of challenge under
Article 14. The test of manifest arbitrariness, therefore,
as laid down in the aforesaid judgments would apply to
invalidate legislation as well as subordinate legislation
under Article 14. Manifest arbitrariness, therefore, must be
something done by the legislature capriciously, irrationally
and/or without adequate determining principle. Also, when
something is done which is excessive and disproportionate,
such legislation would be manifestly arbitrary. We are,
therefore, of the view that arbitrariness in the sense of
manifest arbitrariness as pointed out by us above would
apply to negate legislation as well under Article 14.”
[emphasis supplied]
61. It is to be noted that Nariman, J. wrote the judgment for himself
and Lalit, J., and concurred with the judgment delivered by Kurian
Joseph, J. As such, the views expressed by Nariman, J. would be
part of the majority view.
62. It can thus be seen that in the said case, it was held that the test of
manifest arbitrariness as laid down by this Court in various judgments
would also apply to invalidate legislation as well as subordinate
legislation under Article 14. It was held that manifest arbitrariness must
be something done by the legislature capriciously, irrationally and/or
without adequate determining principle. It further goes on to hold that
when something is done which is excessive and disproportionate,
such a legislation would be manifestly arbitrary. It, in unequivocal
terms, held that arbitrariness in the sense of manifest arbitrariness
would apply to negate legislation under Article 14 of the Constitution.
In para 95, it was observed that the case of Natural Resources
Allocation, In re, Special Reference No. 1 of 2012,18 did not lay
down a proposition that legislation can never be struck down as
being arbitrary. This Court, after referring to all the earlier judgments
including Ajay Hasia and Others v. Khalid Mujib Sehravardi and
Others,19 stated that legislation can be struck down on the ground
18 [2012] 9 SCR 311 : (2012) 10 SCC 1
19 [1981] 2 SCR 79 : (1981) 1 SCC 722 : 1980 INSC 218
[2024] 10 S.C.R. 491
Khalsa University and Another v. The State of Punjab and Another
that it is arbitrary under Article 14 of the Constitution. However,
arbitrariness when applied to legislation cannot be used loosely.
63. In touchstone of the aforesaid parameters, let us examine the
Impugned Act.
64. The only reasoning given in the SOR of the Impugned Act is that
the Khalsa College has, over a period of time, become a significant
icon of Khalsa heritage and the University established in 2016 is
likely to shadow and damage its character and pristine glory. It
is to be noted that the Khalsa College which was established in
1892 is not a part of the Khalsa University. The only colleges which
were affiliated with the Khalsa University are the Khalsa College of
Education, Amritsar established in 1954, Khalsa College for Women,
Amritsar established in 1968 and Khalsa College of Pharmacy,
Amritsar established in 2009. Apart from that, the appellants have
given a specific undertaking stating thus:
“It is accordingly respectfully submitted that the majestic
façade and visual appeal of the building of the Khalsa
College has not been touched or adversely affected by
the establishment of the Khalsa University in any way
what so ever. The Khalsa University has been established
by converting the pre-existing 3 colleges viz College of
Pharmacy, College for Women and College of Education
into departments in the Khalsa University.”
65. Though it is the stand of the appellants that they were in the
process of establishing new institutions for getting them affiliated
with the Khalsa University, a specific undertaking was given that the
Khalsa College would not be touched or adversely affected by the
establishment of the Khalsa University. Even during the course of
hearing, a specific statement has been made by the appellants that
the Khalsa College would not be affiliated with the Khalsa University.
The maps have been placed on record which show the placement
of Khalsa College in the campus along with the other institutions.
The perusal of the said map would clearly reveal that it is only the
Khalsa College established in 1892 which is a heritage one. All other
buildings have been subsequently constructed having no resemblance
with the Khalsa College building. It can thus be seen that the very
foundation that Khalsa University would shadow and damage the
character and pristine glory of Khalsa College which has, over a
492 [2024] 10 S.C.R.
Digital Supreme Court Reports
period of time, become a significant icon of Khalsa heritage is on
a non-existent basis. It could thus be seen that the Impugned Act,
which was enacted with a purpose which was non-existent, would
fall under the ambit of manifest arbitrariness and would therefore
be violative of Article 14 of the Constitution. We are therefore of the
considered view that the Impugned Act is also liable to be set aside
on the same ground.
66. In the result, we pass the following order:
(i) The appeal is allowed;
(ii) The impugned judgment and order dated 1st November 2017
passed by the High Court of Punjab and Haryana at Chandigarh
in C.W.P. No. 17150 of 2017 (O&M) is quashed and set aside;
(iii) Writ Petition being C.W.P. No. 17150 of 2017 (O&M) is allowed
and the Khalsa University (Repeal) Act, 2017 is struck down
as being unconstitutional. The consequent direction is also
issued to the effect that the Khalsa University Act, 2016 would
be deemed to be in force and status quo as it obtained on 29th
May 2017 would stand restored; and
(iv) In the facts and circumstances of the case, no order as to costs.
67. We place on record our appreciation for the valuable assistance
provided by Shri P.S. Patwalia, learned Senior Counsel and Shri
Shadan Farasat, Additional Advocate General for the State of Punjab.
68. Pending application(s), if any, shall stand disposed of.
Result of the Case: Appeal allowed.
†
Headnotes prepared by: Ankit Gyan
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