Supreme Court of India

NEDURIMILLI JANARDHANA REDDYversusPROGRESSIVE DEMOCRATIC STUDENTS UNION AND ORS.

Citation: 1994 INSC 401
Decided: 20 September 1994
Disposal: Dismissed
Bench: P B SAWANT

Holding

The grant of permission without a constituted competent authority was invalid, the disjunctive "or" in Section 20(1) must be read as "and", and the State’s reliance on the Rules was ultra vires.

Summary

The Supreme Court examined the Andhra Pradesh Government's grant of permission to twenty societies to establish unaided private medical and dental colleges. The Court found that the State had framed the 1992 Rules and invited applications before constituting the "competent authority" mandated by the Andhra Pradesh Education Act, 1982, rendering the entire exercise void. It held that Section 20(1) of the Act must be read with "and" rather than "or" to avoid excessive delegation, and that the Rules could not supplant the Act’s provisions. The expert committee’s spot inspections and recommendations were deemed perfunctory, lacking collective deliberation and application of mind, indicating a pre‑determined approach. Consequently, the Court affirmed the High Court’s order quashing the permissions as the government’s actions were ultra vires and the competent authority’s role was essential.

Issues considered

The validity of granting permission for establishment of unaided private medical and dental colleges without a constitution of the competent authority under the Andhra Pradesh Education Act, 1982.
Whether Section 20(1) of the Act contains excessive delegation and should be interpreted with "and" instead of "or".
Whether the expert committee’s procedure complied with statutory requirements of applying mind and collective deliberation.
The ultra vires nature of the State Government’s reliance on the 1992 Rules in lieu of the Act.

Legislation cited

Andhra Pradesh Education Act, 1982s. 20(1), s. 20(3)(b), s. 21, s. 2(12), s. 24, s. 26, s. 27, s. 31, s. 45, s. 49, s. 51, s. 60, s. 64, s. 69, s. 72, s. 79, s. 80, s. 83, s. 99(xi), s. 99(xii)
Andhra Pradesh Educational Institutions (Regulation of Admission and Prohibition of Capitation Fee) Act, 1983s. 3A

Subjects

Administrative lawDelegated legislationExcessive delegationCompetent authorityUnaided private medical collegesUltra viresStatutory interpretationBiasPre‑determined approachExpert committee

Judgment

NEDURIMILLI JANARDHANA REDDY A
v.
PROGRESSIVE DEMOCRATIC STUDENTS' UNION AND ORS.

SEPTEMBER 20, 1994

[P.B. SAWANT, S. MOHAN AND B.P. JEEVAN REDDY, JJ.] B

Andhra Pradesh Education Act, 1982, Ss. 2(12), 20(1) and (3)(b), 99
(xi) and (xii)-Andhra Pradesh Unaided Private Medical and Dental Colleges
(Establishment, Management andA(lmission) Rules, 1992--Establishment of
unaided private medical and dental colleges-Power to grant recognition and C
prescribe adequate financial provision for maintenance of educational in-
stitution vested exclusively in competent authority under the Act-Societies
granted pennission by State Government to establish medical and dental col-
leges on recommendation of expert committee constituted under the
Rule~eld, in the absence of constitution of the competent authority the D
grant of pennission was invalid from inception.

... Administrative Law-l>elegated legislation-Excessive delega-
tion--:.4.ndhra Pradesh Education Act, 1982, S.20( 1), 99 (xi) and
(xii)-Andhra Pradesh Unaided Private Medical and Dental Colleges (Estab-
lishment, Management and Admission) Rules, 1992-Act providing that no E
educational institution be established except in accordance with the Act or
the Rules thereunder-Held, the disjunctive 'or' has to be read as adjunctive
'and' to save the provision from the vice of excessive delegation--lnterpreta-
tion of Statutes.

Administrative Law-Non-application of mind by authority-Govern- F
ment granting pennission to twenty societies to establish medical and dental
colleges on expert committee's recommendations-Societies fQnned only a
few days before framing of Rules-Committee making spot inspections in
casual manne~o collective application of mind by Committee or by
minister or Chief Minister-Held, the whole exercise spells out a pre- deter- G
mined approach and assumes a dubious nature-Held further, as head of
Council of Ministers Chief Minister cannot escape attn'bution of the said
approac~onstitution of India, Article llf-A.P. Government Business
Rules, Rule 7.

Based on the recommendations of an expert committee constituted H
691
692 SUPREME COURT REPORTS (1994] SUPP. 3 S.C.R.

A under the Andhra Pradesh Unaided Private Medical and Dental Colleges
(Establishment, Management and Admission) Rules, 1992 ('Rules') made
under S.99 (xi) an d(xii) of the Andhra Pra<Jesh Education Act, 1982
('Act'), twenty societies were granted permission by the Government of
Andhra Pradesh to establish medical and dental colleges. Among these was
Janapriya Educational Academy ('Academy') a society managed by the wife
B and brother of the Appellant who was, at the relevant time, the Chief
Minister of And.bra Pradesh.

Under S.20(1) of the Act, no private educational institution could
be established "except in accordance with the provisions of this Act or the
C Rules made thereunder". The power to prescribe adequate financial
provision for the establishment of an educational institution and grant or
withdrawal of recognition was vested exclusively in the competent authority
constituted under the Act. Without first appointing the competent
authority under the Act, the State Government on May 22, 1992 framed
D the Rules eleven days after the Academy was formed. Notifications inviting
~~m~~~oo~~~~~~~~~~
submission of applications was June 8, 1992. The Expert Committee was
constituted under Rule 4 of the Rules on June 6, 1992. After conducting
spot inspection of the land and other facilities offered by the applicants
from June 18 onwards, the Committee formulated guidelines on June 28
E
and submitted its report containing recommendations on July 26, 1992.
On the same day the Health Minister signed the file containing a summary
of the Committee's conclusions without expressiiig any opinion. The Chief
Minister or July 27, 1992 approved the names of the twenty societies
recommended for the grant of permission.
F
Allowing writ petitions filed by Respondent No. 1, the High Court
quashed the permission granted to the twenty societies. The High Court
on examining the records found that there were numerous irreconcilable
discrepancies between the spot inspection reports and the Committee's
G recommendations. There was nothing to show whether the guidelines
formulated by the Committee were seen by the Government or whether the
Committee had in scrutinising and forwarding the applications, followed
the guidelines. The Committee had not collectively deliberated to arrive at
their final report and further the .government has "reduced itself into a
H signing machine"~
NJ.REDDYv.PROGRESSIVEDEMOCRATICSIUDENI'SUNION 693

Dismissing the appeals, this Court A

HELD : 1.1. The whole exercise undertaken by the State government
for sanctioning the establishment of educational institutions in the ab-
sence of the constitution of the competent authority was invalid from its
inception. In the absence of adequacy of financial provision prescribed by B
the competent authority under the Act, the Expert Committee appointed
under the Rules could not scrutinise the applications nor could the govern-
ment grant permission for the establishment of any educational institu-
tion. (701-C, E, F]

1.2. The scheme of the Act cannot be carried out without the con- . C
stitution of the competent authority and in particular, no educational
institution can be established without its formation. The reliance placed
by the government on the Rules to justify its action of inviting applications
was not well merited. (696-F, 701-D]

2.1. The disjunctive 'or' in S.20(1) of the ~ct bas to be read as D
adjunctive 'and' to save it from the vice of excessive delegation. Even if the
word 'or' is read as it is, the Rules so made cannot be in consistent with
or contrary to the Act itself. (700-H, 701-A.B]

2.2. The power granted to the State Government under clauses (xi) E
and (xii) of S.99 of the Act cannot be utilised for displacing the competent
authority and its functions and powers under the Act. Any such exercise
will be a fraud upon the statute apart frollJ rendering the Rules ultra vires
the Act. (697-D]

3.1. The establishment of the grantee societies only a few days before F
the framing of the Rules, the invitation of application's within a few days
thereafter; the casual manner of conducting spot inspections, the absence
of any material to show application of mind by the Committee collectively
or even by the Health Minister or Chief Minister and the non-considera-
tion of another society which bad applied for establishing a dental college G
at Nellore all spelt out a pre-determined approach on the part of the
Government. The whole exercise reeks with ill!!galities and assumes
dubious nature. (708-E-H, 709-A]

3.2. As head of the Council of Ministers and as the final authority
who sanctioned the colleges to the respective societies, the appellant could H
,

694 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A not escape the attribution of the pre-determined approach. [709-B]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6121-22
of 1994.

From the Judgment and Order dated 18.9.92 of the Andhra Pradesh
B High Court in W.P. Nos. 9824-25 of 1992.
K. Parasaran, A.D.N. Rao, AT. Rao, B.S. Rao, Raghu and A.Subba
Rao for the Appellant.

V.R. Reddy, Additional Solicitor General, T.V.S.N. Chari, N. Nayyar
C and Vimal Dave for the Respondents.
The Judgment of the Court was delivered by

SAWANT, J. Leave granted.

D These two appeals are directed against the common judgment of the
High Court delivered, among others, in two writ petitions, viz., W.P. Nos.
9824 and 9825 of 1992. The appellant who was one of the respondents in
the said petitions was at the relevant time the Chief Minister of the State ·
of Andhra Pradesh. The High Court by its impugned decision has quashed
the permission granted to a society to start medical and dental colleges.
E The said Society was managed, among others, by the wife and brother of
the appellant. In order to appreciate the controversy it is first necessary to
refer to the relevant legal provisions.

The establishment, recognition and conduct of educational institu-
tions in the State are governed by the provisions of Andhra Pradesh
F
Education Act, 1982 [hereinafter referred to as the "Act"]. Section 2 [12]
of the Act defines "competent authority" to mean any person, officer or
authority authorised by the State Government by notification to perform
the functions of the competent authority under Act for such area or for
such purposes as may be specified in the notification. The competent
G authority so notified by the Government, is entrusted with several duties
and functions under the various provisions of the Act. These provisions are
contained in Sections 20, 21, 24, 26, to 29, 31, 45, 49, 51, 60, 64, 69, 72, 79,
80 and 83. Under Section 20(3)(b), the competent authority is to prescribe
adequate financi~ provision for the establishment of an educational institu-
H tion. Under Section 21(1), it is competent authority which is empowered
NJ. REDDYv. PROGRESSIVE DEMOCRATIC STIJDENfS UNION (SAWANf, J.]695

to grant recognition to the educational institution subject to such condi- A
tions as may be prescribed in regard to accommodation, equipment, ap-
pointment of teaching staff, syllabi, text books and other matters relating
thereto. Under Section 21 (2), the competent authority is empowered to
withdraw the recognition or to take such other action as is deemed neces-
sary on the occurrence of the event mentioned therein. Under Section
B
24(2), the management of every educational institution is required to
nominate a person to manage the affairs of the institution and intimate such
nomination to the competent authority. Under Section 24(3)(a), the com-
p~tent authority is empowered to suspend the management and appoint a
special officer till the reconstitution of the management. Under Section 24
(3)(b) the competent authority can take action against the manager of the c
educational institution if it is satisfied that he alone is responsible for the
lapses or irregularities of the institution. Under Section 24 (4), the com-
petent authority is even empowered to declare a person to be unfit to be
manager of private educational institution and thereupon the management
has to nominate another person as manager in his place. Under Section D
26, private educational institutions cannot close down unless a notice of
not less than one academic year has been given to the officer authorised
by the competent authority in that behalf. Under Section 27 in case the
private institution closes down or discontinues or its recognition is
withdrawn, the management of the institution has to hand over to the
E
competent authority the custody of all the properties, record and accounts
of the institution in its possession. Under Section 31, the Government or
the competent authority can authorise- any officer not below such rank as
may be prescribed, to exercise general powers of inspection over the
working of any educational institution. Section 50 gives to the competent
authority the right to cause an inspection of or an enquiry in respect of any F
educational institution, its accounts, its buildings, laboratories, libraries,
workshops and equipment and also of the examinations, teaching and other
work conducted or done by the institution and to cause an inquiry in
respect of any other matter connected with the institution and advise the
management on the action to be taken. The 1J1anagement has to report to G
the competent authority on the action taken within such time as the
competent authority may direct. Under Section 51, every management has
to furnish to the competent authority such returns, statistics and other
information as the competent authority may, from time to time, require.
V{hen the management of an educational institution vests in the Govern-
H
696 SUPREME COURT REPORTS [1994] SUPP. 3 S.C.R.

A ment, it is the competent authority under Section 60 (9) which pays to the
person interested in the educational institution the amount payable under
Section 60(8). Before the property of an education institution is requisi-
tioned under Section 64, the Government may require that the permission
of the competent authority has to be taken before the manager or any other
B person disposes of, structurally alters, leases or in any manner deals with
the property of the institution until the expiry of suclt period not exceeding
three months, as may be specified by the order of requisition. Again, under
Section 69, it is the competent authority which has to pay the amount
payable under the award of arbitrator when the property or the educational
institution is acquired or requisitioned. Section 72. empowers t~e com-
C petent authority to authorize any authority to enter and inspect any proper-
ty to be requisitioned or acquired, and to require any person to furnish
such information relating to such property as may be specified in the order.
While Section 79(2) requires a disciplinary inquiry against the delinquent
employee of a private institution to be completed within two months from
D the date of the communication charges to him, the proviso to sub-section
3(b) thereof gives powers to the competent authority to extend the said
period upto two months more. Section 80 gives power to the aggrieved
employee to appeal to the competent authority. Under· Sec,tion 83,
retrenchment of any employee can be effected by the competent authority
E with the approval of the next higher authority. If, however, the management
of the educational institution has to effect such retrenchment it has to take
the approval of the competent authority.

V{ e have referred to the; powers and functions of the competent
authority under the Act in extenso, to bring out the important position
F which it occupies in the scheme of the Act. It is clear from the said
provisions of the Act, that the scheme of the Act cannot be carried out
without the constitution of the competent authority and in particular, no
educational institution can be established without it formation. In consider-
ing the applications made for establishing educational institutions the
. G prescribed authority has to have due regard that there is adequate financial
provision for continued and efficient maintenance of the educational in-
stitutions as prescribed by the competent authority under Section 20 (3)
(b). It is further the competent authority alone which can grant recognition
to the educational institutions under Section 21 of the Act. Even if under
section 20(1) a private educational institution is established in accordance
H
NJ. REDDY v. PROGRESSIVE DEMOCRATIC SIUDENTS UNION [SAWANf, J.]697

with the rnles made under the Act, the said rules cannot displace the A
competent authority or entrust the powers and functions of the competent
authority to any other authority. It is true that Section 20 (1) of,jthe Act
states that no pri~ate educational institution shall he established ex~pt in
accordance with the provisions of thf'. Act or the rules made thereunder.
However, the rules made under the Act can only appoint an authority to B
accept the application for establishment of the educational institution and
to grant permission therefor. But while granting permission, the prescribed
authority has, among other things, to take into consideration under Section
20(3) (b) as stated above, the requirement of adequate financial provision
for continued and efficient maintenance of the institution as prescribed by
the competent authority. The power granted to the State Government C
under clauses (xi) and (xii) of Section 99 to make rules with regard to the
establishment or maintenance and administration of educational institu-
tions and the grant of recognition to educational institutions and the
conditions therefor cannot again be utilised for displacing the competent
authority and its functions and powers under the Act. Any exercise of such D
power will be a fraud upon the statute apart from .rendering such rules as
ultra vires the Act. It is against this backdrop of the legal status of the
competent authority and its functions and powers that we have to examine
whether the reliance placed by the State Government on the Andhra
Pradesh Unaided Private Medical and Dental Colleges (Establishment, E
Management and Admission) Rules, 1992 (hereinafter referred to as the
"Rules") for defending its action in establishing an Expert Committee under
the Rules to grant sanction for medical and dental colleges, is correct or
not.

3. The Rules in question, as the preface thereof shows, are purported F
to be made in exercise of the powers conferred by SeCtions 20 and 21 read
with Section 99 of the Act and they relate to the grant of permission for
establishment of unaided private medical and de~tal colleges under private
sector in the State. Rule 3 of the said Rules requires that a notification
shall be issued in daily newspapers calling for applications in the prescribed G
form from the societies desirous of establishing colleges under the private
sector and specifying the last date for submitting the applications. The
Societies have to make the applications to the Director of Medical Educa-
tion. The applications have to specify the place at which the co~ege is
proposed to be established, and separate applications have to be submitted H
698 SUPREME COURT REPORTS [1994] SUPP. 3 S.C.R.

A in respect of each place. Every such' application has to be accompanied by
(a) a copy of the Constitution and Bye- laws/memorandum and Articles of
· Association of the Society with the particulars of the executive members
thereof, (b) a list of members of the Society as on the date of making the
application, ( c) evidence of the financial viability of the Society and other
B requirements as prescribed in Annexure-1 thereof, ( d) in case the college
is proposed to be located in private accoinmodation, evidence to show
Society's .ownership or its right to be in exclusive possession of the site and
buildings, (e) in case the Society proposes to use a Government Hospital
and its. infrastructure facilities, it has to give an undertaking to Govern-
C ment to pay such charge as may be prescribed by Government; in addition,
the Society's willingness to have its own infrastructure facilities after the
maximum period of five years for which the Government may penajt the
use of such facilities, (t) evidence of other infrastructure facilities available,
(g) non-refundable application fee of Rs. 20,000 for Medical College/Rs.
10,000 for Dental College, (h) consent letters of the persons who have given
D their willingness to serve on the teaching staff of the College.

Rule 4 provides for constitution of a committee which is also called
by the Government as Expert Committee, consisting of the (i) Director of
Medical Education, (ii) eminent person from the medical field, and (iii)
E a representative of the University of Health Sciences, to scrutinize the
applications received and forward them to the Government. The rule also
provides that it is the Government which will select the Society for the
establishment of medical or dental college at a particular place from
amongst the applicants for the place and accord permission to the selected
'- Society with such conditions as may be deemed necessary including the
F number ,of seats allowed. Rule 5 provides that the Society so selected will
make its own arrangements to obtain affiliation from the University of
Health Sciences and to obtain recognition of Medical or Dental Council
of India after fulfilling the conditions laid down for them for the purpose.
Rule 6 states that no financial aid or grant shall be given by the Govern-
G ment for the establishment or management of the College or for any other
purpose. Rule 7 provides that the Society shall appoint a committee for the
management of the College consisting of not more than 9 members and
the committee shall include two nominees of Government and one nominee
of the University of Health Sciences. Rule 8 provides for the qualification
for the teaching staff and the teacher student ratio as per the standards
H laid down by University of Health Sciences and Medical or Dental Council
NJ.REDDYv. PROGRESSIVEDEMOCRATICSIUDENTSUNION[SAWANT,J.]699

India. Rule 9 empowers a committee constituted by the managing commit- A
tee to select the staff for appointment in the College. Rule 10 requires the
Government to arrange to review the functioning of the college every year
or at such other intervals as may be considered necessary and based on
such review to issue such directions as may be necessary for the proper
functioning or improvement in the functioning of the College. It also gives
power to the Government to cancel the permission given to the College in B
case the management committee fails to comply with the given directions.
It further prohibits the transfer of college from one place to another. It
provides that the number of admissions shall be limited to the number of
seats authorised, and shall not be exceeded without prior approval of the
Government and Medical or Dental Council of India. It also prevents the C
change of ownership and management of the College without prior permis-
sion of the Government. Rule 11 enjoins that the fee structure of the
College shall be as specified by the Government by an order from time to
time. The last rule, viz., Rule 12 provides for admission, and states that
admission to the colleges shall be per as the provisions in Section 3-A of
the Andhra Pradesh Educational Institutions (Regulation of Admission D
and Prohibition of Capitation Fee) Act, 1983 as amended by the Andhra
Pradesh Educational Institutions (Regulation of Admission and Prohibi-
tion of Capitation Fee) (Amendment) Act, 1992 and the Andhra Pradesh
Professional Educational Institutions (Regulation of Admission into
Under-graduate Professional Courses through Common Entrance Tests)
Rules, 1989. E

Annexure-1 referred to in Rule 3 refers separately to Medical and
Dental Colleges and documentary evidence required to be enclosed with
the application for the said colleges. ln'case of Medical College, it requires
documentary evidence of G) owning a minimum of 50 acres of land without F
encumbrances and buildings for the College(feaching Hospital/Hostels,
etc. OR availability of 50 acres of land and resources of Rs. 5 crores in
cash, assets, securities etc., to finance the construction of the required
buildings as envisaged by the Medical Council of India and the University
of Health Sciences, for maintenance thereof and for additions and altera-
tions thereto according to requirement from time to time, (ii) availability G
of resources by way of bank balances, securities, liquid assets, etc. for
procuring Medical equipment, Laboratory equipment, Library Books, Fur-
niture etc. and their maintenance/replacement, (iii) availability of resources
to meet recurring expenditure towards personnel employed, electricity and
telephones etc., and (iv) a sketch plan of the site already owned or H
700 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A proposed to be acquired and its location in relation to other land marks in
the area for locating the Collegeffeaching Hospital/Hostels and also rough
sketch plan of the buildings already available or proposed to be con-
structed thereon showing the location of each room/hall with dimensions
and the use to with it is proposed to be utilised. In case of Dental College,
the Annexure-I refers to (i) the requirement of owning a minimum of 10
B acres of land without encumbrances and building for the College(feaching
Hospital/Hostels, etc. OR availability of 10 acres of land and resources of
Rs. one crore in cash,, assets, securities etc., to finance the construction of
required building as envisaged by the Dental Council of India and the
University of Health Sciences, for maintenance thereof and for additions
c and alterations thereto according to requirement from time to time, (ii)
availability of resources by way of bank balances, securities, liquid assets,
etc. fox procuring Medical equipment, Laboratory equipment, Library
Books, Furniture etc. and their maintenance/replacement,· (iii) availability
of resources to meet recurring expenditure towards personnel employed,
D electricity and telephones etc., and (iv) a sketch plan of the site already
owned or proposed to be acquired and its location in relation to other land
marks in the area for locating the Collegeffeaching Hospital/Hostels and
also rough sketch plan of the buildings already available or proposed to be
constructed thereon showing the location of each room/hall with with
dimensions and the use to which it is proposed to be put. '
E
4. A survey of the provisions of the Act relating to the status,· powers
and functions of the competent authority and of the provisions of the
competent authority and of the provisions of the Rules shows that the rules
are not, as indeed they cannot be, made to supplant the provisions of the
Act but to supplement them and they have to be read as such. In the first
F instance, it has to be remembered that when the provisions of Section
20(1) read as :

"20. Permission for establishment of educational institution: - (1)
No private institution shall, after the commencement of this Act,
G be established except in accordance with the provisions of this Act
or the rules made thereunder,"

(Emphasis supplied)

they have to b~_yead with the disjunctive 'or' as adjunctive 'and'. Unless so
H read, the provisions will be invalid on account of excessive delegation
NJ. REDDYv. PROGRESSIVE DEMOCRATIC SlUDENfS UNION [SAWANT, J.)701

enabling the Government to make the rules supplant or substitute the A
provisions of the Act. To save the provisions of Section 20(1) from the said
vice, the word 'and' has to be read for the word "or" in the relevant

- expression in the provisions. Even if we rP.ad the word 'or' as it is in the
said provision, the expression"or the rules made thereunder" cannot be
understood to mean that the Rules so made can be inconsistent, much less
contrary, to the provisions of the Act itself. hence the rules made on any
B
of the subjects authorised by the Act including those made undex Section
20, 21 or 99 of the Act have to be read consistent with and as supplemen-
tary to, the provisions of the Act on the subjects concerned.

Thus read, it is obvious that in the absence of the competent c
authority which is to be constituted under the Act and not the Rules, no
private educational institution could be established after the commence-
ment of the Act. Hence the reliance place by the State Government on the
rules in question to justify the action of inviting applications for granting
permission to establish education institutions, is not well-merited. The rules D
so far as they make provision to invite applications, to prescribe forms in
which applications are to be made, to prescribe authority to whom the
applications are to be submitted, to appoint an Expert Committee to
scrutinise such applications and forward them to the State Government
only supplement the provisions of the Act and are not inconsistent with its
provisions. But in the absence of the adequacy of financial provision for E
continued and efficient maintenance of the educational ip.stitution
prescribed in the competent authority under the Act, the Expert Commit-
tee appointed under the Rules cannot scrutinize the said applications nor
can the Government grant permission for the establishment of any educa-
tional institution. The function of prescribing the adequate financial F
provision for the said purpose has been assigned by the Act to the com-
petent authority alone which as pointed out earlier, plays a dominant role
and has an important say in the matter of establishment, recognition and
the control and management of the educational institutio.ns. The legislature
has created such authority advisedly since it appears from the scheme of
the Act that it intended to established ·an independent authority for the G
purpose, free from political and other influences in its day to day function-
ing. As will appear from the provisions of the Act, the competent authority
is to be a permanent body for such area or for such proposes as may be
specified in the notification constituting it, for discharging the various
functions and exercising the various powers unlike the ad hoc Expert H
702 SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

A Committee under Rule 4 of the Rules which is to be appointed every year
for the limited purpose of scrutinising the applications received and for
forwarding them to the Government. It is further intriguing that when the
power of granting recognition to the educational institutions is entrusted
exclusively to the competent authority how in the absence of the competent
B . authority the institutions permitted to be established under the Rules, can
validly send up candidates for examination for the relevant courses of
study. It is not necessary for us to analyse provisions of the Act and the
Rules any further since according to us view of what is pointed out about
the whole exercise undertaken by the State Government in the present case
for sanctioning the establishment of the educational institutions in the
C absence of the constitution of the competent authority was invalid from its
inception. On this short ground, the writ petitions were entitled to succeed.

However, since allegations have been made in the writ petitions
against the appellant alleging bias in favour of one of the Societies was
granted permission to establish a medical and a dental college, it is
D necessary to refer briefly, to the relevant facts, and the findings of the High
Court on the same.

The Janapriya Educational Academy (the "Academy" for short) is a
Society of which, admittedly the appellant's brother is the Secretary and
E his wife is a Treasurer. The Academy was granted permission to set up
both a Medical and a Dental College at .Nellore and the allegation is that
permission is vitiated by personal mala fides of the appellant who was then
the Chief Minister. It was based, according to the allegation, on corrupt
and dishonest considerations smce the appellant himself was associated
F with the said Academy through his close relations. To this allegation, the
reply of the appellant is that it was the Expert Committee appointed under
the Rules which had made recommendations granting permission to
several other Societies to start educational institutions all over the State
and those recommendations were accepted by him in to while granting the
permission to the societies. The facts, in this behalf as are summarised in
G paragraph 15 of the impugned judgment are as follows :

The Academy was formed on 11th May, 1992 (it must be remem-
bered in this context ~t the Rules in question were framed on 22.5.1992).
Its Secretary, Shri N. Padmanabha Reddy is admittedly the appellant's
H brother and its Treasurer Smt. N. Rajyalakshri is the appellant's wife. The
NJ.REDDYv.PROGRE5SIVEDEMOCRATICSfUDENI'SUNION[SAWANI',J.]103

applications for starting the Medical and Dental Colleges was signed by A
the brother on behalf of the Academy. It is not disputed that while for
Medical College at Nellore there were no other applications, for the Dental
College at that place, there was one more application. It is further not
disputed that although the applications scrutinised by the Expert Commit-
tee went to the appellant as Chief Minister through the Minister of Health, B
it was the appellant's approval as per the AP. Government Business Rules
which gave finality to the decision to grant permission to establish the
colleges in question. Even otherwise, Rule 7 of the said Rules of Business
makes the entire Council or Minister collectively responsible for all execu-
tive orders whether such orders- are authorised by an individual Minister
on a matter pertaining to his portfolio or as a result of discussion at a C
meeting of the Council or otherwise. The further facts in this behalf are
that Andhra Pradesh Educational Institutions (Regulation of Admission
and Prohibition of Capitation Fee) Act. 1983, was amended by introducing
Section 3A therein which came into force on 15.4.1992. The said Section
reads as follows : -
D
"3A. Notwithstanding anything contained in section 3 but subject
to such rules as may be made in this behalf and the Andhra
Pradesh Educational Institutions (Regulation of Admission)
Order, 1974, it shall be lawful for the management of any unaided
private engineering college, medical college, dental college and E
such other class of unaided educational institutions as may be
notified by the Government in this behalf to admit students into
such colleges or educational institutions, to the extent to one half
of the total number of seats from among those who have qualified
in the common entrance test or in the qualifying examination, as p
the case may be, referred to iu sub-section (1) of section 3 irrespec-
tive of the ranking assigned to them in such test or examination
and nothing contained in section 5 shall apply to such admissions.

The intention of the amendment was obvious. It was tp permit the
managements to admit students irrespective of their ranking in the G
entrance examination and to enable them to collect capitation fee, i.e., fee
in excess of that permitted to be levied by the Government under Section
7 of that A:t. It is thereafter that most of the Societies which filed
applications were registered. As stated earlier, the Academy was registered
only on 11th May, 1992. The Rules in question were framed on 22nd May, H
704 SUPREME COURT REPORTS [1994] SUPP. 3 S.C.R.

A 1992 as pointed out above. The Government issued notifications on 25th
May, 1992 and 28th May, 1992 inviting applications for permission to
establish Medical, Dental and Engineering Colleges. Last date for submis-
sion of applications was 8th June, 1992, i.e., a margin of barely 15 days.
The Expert Committee was constituted on 6th June, 1992. The Rules
required the applicants for permission to establish Medical Colleges to
B have 50 acres of land without encumbrances and buildings for the Col-
lege/teaching hospital/hostels etc. or 50 acres of land and resources worth
Rs. 5 crores in cash, assets, securities etc. Tht land and the resources with
the applicants for dental colleges were expected to be of the order of 10
acres.and Rs. 1 crores respectively. All this had to be fulfilled before 8th
C June, 1992. On 17th June 1992 the Government took a deciSion that
Government land wherever available would be allotted to applicants at the
prevailing market price for establishment of Medical/Dental Colleges. The
members of the Expert Committee appointed under the Rules conducted
:
spot inspection of the land and other facilities offered by the appli~ants
D from 18th June, 1992. The Committee formulated its guidelines on 28th
June, 1992 and submitted its report on 26th July, 1992. On the same day;
the Health Minister saw and signed the file without expressing any opinion
one way or the other. The Chief Minister, ie., the appellant approved
paragraph 5 of the file on 27th July, 1992 which contained the nanies of 20
grantees for permission to open 12 Medical and 8 Dental Colleges. The
E ~ote in the file does not indicate that except the report of the Committee
there was any other material and it is· not disputed that the Government
accepted the l'eport of the Committee in toto. The High Court has further
recorded that the report which the Health Millister and the appellant as
Chief Minister saw purported to be a summary of the conclusions arrived
F at by the Expert Committee. ·

The High Court has then pointed out discrepancies between the spot
inspection reports, the scrutiny of those reports and the final recommen-
dations while referring to the applications of four societies as examples. In
G case of Rajaraja Narendra Academy of Science and T~chnology (Respon-
dent 6 to the writ petition) the comment about the enclosures relating to
financial liquidity of that Society is as follows :

"The above le.tter from the Bank is not a substitute for possession
H of Rs. 4.00 crores worth of liquid assets".
NJ. REDDYv. PROGRESSIVE DEMOCRA""ITC S'IUDENI'S UNION [SAWANf, J.)705

The remarks which were offered on the same comment were as A
follows:

"The Society has also not indicated whether it would be using the
facilities of the Government Hospital not furnished any under-
taking in that respect.
B
All other formalities as per Rules have been complied with."

- In respect of Indur Medical Educational Society, Nizamabad
(Respondent No. 17 in the writ petition) the Committee's comment is as
follows:
c
"Land 15.00 K.Ms away from Nizamabad town on Bondhan road.
Wet land. Sugar Cane cultivation, Road side location."

The remarks in respect of said comments were as follows :

"Very congested and polluted (Foul smell during sugarcane crush- D
ing season). Temporary facilities in other educational institutions."

In respect of Madugula Karistha Reddy Memorial Education Society
(Respondent No. 10 in the writ petition), the following comment appears:

"This is no substitute for a Bank Guarantee for Rs. 4.00 crores E
guaranteeing due performance of the commitment by the Society.

All other documents as required by Rules (Gazette Notification)
have been furnished"

In respect of land, the comment is as follows :
F

"The land has got access to the main road but the ownership is
disputed and has to be carefully verified."

As regards Sidhartha Academy of General and Technical Education G
(Respondent No. 21 in the writ petition), it is stated that the land is not
ideally situated·to locate Dental College or institution. Further comments
are as follows :

"The above enclosures appear to have been furnished in lieu of the
Rs. 80.00 lakhs requirement. This Cannot be accepted." H
706 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A (3) Sale Deeds (Registered) in respect of 10 Acres - 48 Cents of
land.

The remark is as follows :

"The requirement of liquid assets to the tune of Rs. 80.00 lakhs
B has not been properly met."

It hasto be remembered that all these institutions have been granted
permission to establish colleges.

The High Court after quoting these instances has stated that they
C have selected those instances only as sample examples of the other irrecon-
cilable discrepancies between the spot inspection reports, the alleged
summary of such reports and the conclusions based thereon which alone
were forwarded to the State Government. In other words, the Committee's
entire report was not forwarded for the State Government.
D
The High Court has also pointed out that it is not correct to say that
there was only the Academy which had applied for a Dental College
although it may be true with regard to its application for Medical College.
There was another institution called Nellore Education Foundation which
had applied for establishment of a Dental College at Nellore. That Society
E had produced bank deposit receipts of US $2 lakhs and Rs. 1.60 lakhs in
Indian currency. It had also offered 10 acres of land in Nellore with
agreements of sale to support their claim that they were in possession of
the necessary land. The sponsors and members of the Society were highly
qualified non-resident Indians including post-graduates in Medicines. The
F application was supported by sufficient financial liquidity. The Committee
had not made either in its report or in the summary of its conclusions even
a mention of the Society or of any inspection of the land or other facilities
which the Society had offered. No reason further was given by the Com-
mittee why the Society's application was not considered at all. The High
Court has, therefore, concluded that the Expert Committee had not ap-
G plied its mind to relevant considerations with any uniformly applicable
standards nor did it discharge its duty in a proper manner with seriousness
which the situation demanded. The High Court further found that the
inspections were conducted not by the Comn:iittee but by individual mem-
bers on their own separately and independently. In fact, the guidelines were
H formulated by the Committee on 28th June, 1992. The record also did not
NJ. REDDYv. PROGREsSIVEDEMOCRATICSTIJDENI'S UNION (SAWANf,J.]707

show that these guidelines for selection and elimination of applicants were A
seen by the Government. In other words, the Expert Committee set its own
standards. Therefore, whether the Committee had while scrutinising and
forwarding the applications followed its own guidelines or not was also not
scrutinised by the Government. The Committee, however, did not refer to
these guidelines in its report anywhere. There were also no proceedings of B
the Committee in the files which were given to the High Court to show that
they had collectively deliberated to arrive at their final report and recom-

- mendations. The High Court, therefore, faulted the entire proceedings and
the submission of the report of the Committee.

At the same time, the High Court had also observed as follows : C
"........ We are unable to accept this highly technical plea, once
we find that the impugned act amounted to mischievous executive
action as in Chatanya Kumar."

x x x x x x x x x D
"........ We do not propose to enter this controversial region for
the reason that we are not basing our decision on any allegations
of mala fides. We have made the position clear even at the
commencement of the judglllent."
E
x x x x x x x x x

"....... Suffice i.t for us to say that there is considerable force in the
submission of counsel for petitioners that, the report produced
earlier is not an exact reproduction of what is now claimed to be
the original which the Advocate General has produced later. We F
do not, however, propose to rest our conclusions on this aspect
alone. We will revert to this later."

Ultimately, the High Court has drawn the following conclusions in
the writ petitions which are the subjyct matter of the present appeals :
G
"We are of the opinion that the Government abdicated its
jurisdiction as the competent authority to grant or refuse permis-
sion to establish educational institutions under Sections 20 and 21
of AP. Education Act, 1982 read with Rule 4 of the 1992 Rules.
Professedly, it looked on in careless abandon, perhaps even en- H
708 SUPREME COURT REPORTS [1994] SUPP. 3 S.C.R.

A couraged the Committee to arrogate the power and jurisdiction ..
which the statute and the Rules confided only in the Government.
On the pleadings, the Government reduced itself into a signing
machine and issued the 20 orders impugned in these writ petitions
only because the Committee had selected the applicants. Obvious-
ly, it did not consider the applications in exercise of its statutory
B duty. Those orders are evidently invalid and are liable to be set
aside."

We are not concerned in these appeals with the part of the impugned
judgment which deals with the other writ petitions.
c
We have already pointed out that in the absence of the constitution
of the competent authority as defined under Section 2 (12) of he Act no
permission could have been given under the Act to establish any educa-
tional institution. Even the attempt made by the Government by framing
D the Rules in question to grant permission to the respective Societies· to
establish medical and dental colleges reeks with so many illegalities and
irregularities as pointed out by the High Court, that one cannot but come
to the conclusion that the whole exercise assumes a dubious nature. To
mention only a few of the factors which spell out a pre-determined ap-
proach on the part of the Government to sanction coµeges to the grantee-
£ Societies, they are: (1) the establishment of the grantee-Societies only a few
days before tlie framing of the Rules indicating the prior knowledge on tee
part of the said societies of the framing of the Rules indicating the prior
knowledge on the part of the said societies, of the proposed framing of the
rules, (2) invitation of the applications within a few days of the framing of
F the Rules and leaving a margin of not more than 15 days for making the
applications, (3) the casual and make-believe manner in which the Expert
Committee made the spot inspection of the details given by the applicant-
Societies in their applications, (4) the want of any record to show that any
collective mind was applied for making the report and the recommenda-
G tions on the basis of the spot inspection which was evidently done by
individual members of the Committee independently, (5) the absence of
any material to show that the inadequacies pointed out even in such spot
inspections were ever remedied, (6) the absence of material to show that
the guidelines which were formulated by the Committee and not referred
to in the report, were followed by it and were ever seen by the Government,
H (7) the absence of any material to show that the Government, whether the
NJ. EEDDY v. PROGRESSIVE DEMOCRATIC STUDENI'S UNION (SAWANT, J.]709

Minister for Health or the. appellant as the Chief Minister had applied his A
mind to the entire ·report and examined whether the recommendations
made by the Committee were in conformity with the guidelines formulated
by the Committee itself, and (8) the non-consideration by· the Committee
of another Society which had applied for Dental College at Nellore. As the
head to the Council of Minister and as the final authority who sanctiohed B
the colleges to the respective societies, the appellant cannot escape the
attribution of the said approach.
•
We are, therefore, satisfied that the impugned order of the High
· Court invalidating the sanction given for the establishment of. the Colleges
in question is both proper and valid and needs no interference. The appeals C
are, therefore, dismissed with costs.

S.M. Appeals dismissed

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