WELCOME TO LEGAL WORLD

WELCOME TO LEGAL WORLD

Friday, February 16, 2018

Corporate law - Education Act- taking over primary schools by state govt. which are intend to be closed by the management = whether the Notification issued by State of Kerala taking over the aided schools, which were managed by the appellants, is valid = The State decision to run the Primary schools which were decided to be closed by their respective management was in public interest and in the interest of the education. The High Court has rightly refused to interfere with the decision of the State Government taking over the schools to run the same directly by the Government. ; Payment of compensation for taking over schools intended to close - whether sec.15 of Education Act overridden the compensation Act 2013 - No = we conclude that Act, 1958 and Act, 2013 operate in different fields and Section 15 of the Act, 1958 in no manner is overridden or repugnant to Act, 2013. There was no invalidity in the exercise of the power of the State Government under Section 15 to take over the schools. The owners being entitled to compensation at the market rate on the date of notification, the procedure for taking over the property is in full compliance of requirement of Article 300A of the Constitution of India. We, thus, do not find any merit in this submission of learned counsel for the appellant.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2206 OF 2018
(arising out of SLP (C) No. 24386 of 2017)
A.A. PADMANBHAN …APPELLANT
VERSUS
THE STATE OF KERALA & ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO.2207 OF 2018
(arising out of SLP (C) No. 24565 of 2017)
AND
CIVIL APPEAL NO.2208 OF 2018
(arising out of SLP (C) No. 24722 of 2017)
J U D G M E N T
ASHOK BHUSHAN, J.
Leave granted.
2. These three appeals have been filed by Ex-Managers of
three private aided institutions questioning the common
2
judgment of Kerala High Court dated 01.08.2017 by which
judgment, the Division Bench of Kerala High Court while
dismissing the writ appeals filed by the appellants have
confirmed the judgment of learned Single Judge wherein the
appellants have questioned the Notification issued by State of
Kerala taking over the aided schools, which were managed by
the appellants.
3. The facts and issues raised in these appeals being
similar, reference of facts and pleadings in Civil Appeal
arising out of Special Leave Petition (C) No. 24386 of 2017
shall suffice for deciding all these appeals.
4. The appellant had been running P.M.L.P. School, Kiralur,
District of Thrissur in the State of Kerala, which was also an
aided institution. The appellant with intention to close down
the school gave a notice as required by Section 7(6) of the
Kerala Education Act, 1958 (hereinafter referred to as “the
Act”). The Education Authorities did not permit the appellant
to close the institution, which led to filing of writ petition
by the appellant being W.P. (C) No. 12873 of 2015. W. P. (C)
No. 12205 of 2015 was filed by the Headmistress incharge of
the Aided P.M.L.P. School and the President of the Parent
Teachers Association as also the President of the School
3
Samrakshanasamiti of the said school impugning the steps taken
by the manager of the aided school to close the aided school.
A direction was also prayed to the State Government to take
over the school. The Writ Petition was allowed by learned
Single Judge holding that appellant was entitled to close down
the school in accordance with the provisions of the Act and
Kerala Education Rules, 1959 (hereinafter referred to as “the
Rules”). Writ Appeals against the said judgment were
dismissed by the Division Bench on 22.07.2015, however, in
Writ Appeal filed by the Headmistress & others, a direction
was issued by the Division Bench directing the respondents to
consider their representations by which it was prayed that
school be taken over and run by the State Government. The
above order was questioned by the State of Kerala by filing
Special Leave Petition Nos. 27822-27827 of 2015. The Special
Leave Petitions were dismissed on 05.10.2015 by following
order:-
“The special leave petition is dismissed.
However, in the interest of the children in the
respondent-school, Mr. V. Giri, learned senior
counsel appearing for the respondent has fairly
stated that the respondent-school will continue
with them till the end of this academic year.
We make it clear that it would be the
responsibility of the State to shift these
children to another school from the next
academic year.”
4
5. The State Authorities did not take necessary steps to
close the institutions, hence the appellant filed a contempt
application being Contempt Case (C) No. 1045 of 2015, in which
contempt application, learned Government Pleader made
submission that the procedural formalities in connection with
the closing of the school have been complied with. Taking
note of which statement, the contempt case was closed down on
16.06.2016.
6. Before the aforesaid date, the Chief Minister of the
State took a decision on 07.06.2016 to take over the
institution of the appellant alongwith other three
institutions in exercise of power under Section 15 of the Act.
The decision of the Chief Minister taken on 07.06.2016 was
endorsed by the Council of the Ministers on 29.06.2016.
Kerala Legislative Assembly, unanimously passed the resolution
dated 18.07.2016 to take over the four schools under
sub-section (1) of Section 15 of the Act. A Notification
dated 27.07.2016 was issued as contemplated under Section
15(1). A further Notification dated 03.08.2016 was issued
modifying the earlier Notification dated 27.07.2016 to the
extent that the schools shall vest in Government absolutely
from the date of fixation of compensation. The appellant
aggrieved by Notification dated 27.07.2016 filed a writ
5
petition being Writ Petition (C) No. 25790 of 2016 questioning
the Notification dated 27.07.2016 as well as the Notification
dated 03.08.2016. Prayer for striking down Section 15 of the
Act as well as declaring Rules 6, 7 and 8 of the Rules, 1959
as repugnant was also made. However, the prayer for
challenging the provision of the Act and the Rules does not
appear to have been pressed. In the writ petition, counter
affidavit was filed where it was stated that a decision was
taken on 07.06.2016 to take over the institution by the State
Government, which was before the actual closure of the
institution. A resolution has been passed by Kerala
Legislative Assembly approving the proposal; Notification has
rightly been issued. Other three writ petitions were heard
alongwith connected writ petitions, which were filed by other
appellants in this group of appeals. All the writ petitions
were dismissed by learned Single Judge vide its judgment and
order dated 23.11.2016. Aggrieved against the judgment dated
23.11.2016, appellant filed Writ Appeal No. 2360 of 2016,
wherein it was contended that although the submission of the
appellant was made that on the date when the State Government
took over the schools under Section 15 of the Act, the closure
of the schools had already been effected but the said
submission has not been correctly understood by the learned
Single Judge. The Division Bench dismissed all the appeals on
6
09.12.2016 giving liberty to the appellants to apply for
review of the judgment of learned Single Judge. Against the
judgment dated 09.12.2016, Special Leave Petition was also
filed by the appellant in this Court, which Special Leave
Petition was withdrawn by the appellant. Appellant filed a
Review Petition before learned Single Judge for review of
judgment dated 23.11.2016, which Review Petition has been
dismissed by judgment and order dated 20.12.2016 of learned
Single Judge. Challenging the order dated 23.11.2016 as well
as the order dated 20.12.2016 passed on the review petition,
writ appeals have been filed before the Division Bench. The
writ appeals have been dismissed by the Division Bench vide
its judgment dated 01.08.2017, which judgment has been
questioned before us in these appeals.
7. Learned Counsel appearing for the appellant in support of
the appeal has raised the following submissions:
(a) The State Government could not have exercised power
under Section 15 of the Kerala Education Act, 1958 to
take over the school which has already been closed down.
The Notification under Section 15 has been admittedly
issued on 27.07.2016 whereas according to the own case
of the respondent the school was closed on 08.06.2016.
The power under Section 15 can be exercised with regard
7
to a school which is in existence. The closed down
school cannot be taken over by the State Government.
(b) The school and its properties could have been acquired
by the State only after resorting to Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (hereinafter
shall be referred to as “2013, Act”), after making
payment of compensation, determined in accordance with
the above-mentioned 2013, Act.
(c) Section 15 of the Kerala Education Act, 1958 made by the
Legislature of the State falling under Entry 20 List III
of the Concurrent List is in conflict and repugnant to
the provisions of the 2013, Act, made by the Parliament
under Entry 42 List III of the Concurrent List, is void
in view of the Article 254 of the Constitution of India.
The State Government has dispossessed the petitioner
under the guise of applying provision of law that is not
applicable to the subject matter and the procedure of
dispossessing the petitioner is in violation of Article
300A of the Constitution of India.
(d) The closure of the school had attained finality by
decision of dismissal of SLP (c) No. 27827 of 2015, when
this Court passed order on 05.10.2015.
8. Refuting the above submission learned Senior Counsel
appearing for the State of Kerala submits that the State
8
Government has validly exercised its power under Section 15 of
the Kerala Education Act, 1958. The decision was taken by the
Chief Minister to take over the school on 07.06.2016 on which
date the school was not actually closed down. Hence, there is
no substance in the contention of the appellant that school
had already been closed down and could not have been taken
over by the State Government. It is submitted that decision
of the Chief Minister dated 07.06.2016 was ratified by the
Council of Ministers vide decision dated 29.06.2016. The
issuance of notification is a step in consequence of decision
to take over the school and there is no illegality in the
issuance of Notification dated 27.07.2016. It is submitted
that the provision of Section 15 of the Kerala Education Act,
1958 operates in a different field to that of the provisions
of the 2013, Act. Neither there is a conflict nor Section 15
is in any manner repugnant to 2013, Act. Both the Acts
operate in their own fields. The action of taking over of the
schools by State is for running the school in compliance of
its obligation to provide education to the primary school
students. Section 15 itself, contemplates the payment of
compensation at market rate and the Collector has already
determined the market value of the schools, details of which
has already been brought on record by means of the counter
affidavit. One of the schools which were taken over accepted
9
the compensation. One of the institutions which had filed the
Writ Petition (C) No. 25622 of 2016 has not challenged the
judgment of the learned Single Judge and had accepted the
same.
9. We have considered the submissions of the learned counsel
for the parties and perused the record.
RELEVANT STATUTORY PROVISIONS
10. The Kerala Education Act, 1958 was enacted for the better
organisation and development of the educational institutions
in the State after obtaining the assent of the President.
Section 2 sub-section (1) defines the “Aided Schools” and the
“School” is defined in Section 2 sub-section (9) in the
following manner:
“2.(1). “aided school” means a private school
which is recognised by and is receiving aid
from the Government, but shall not include
educational institutions entitled to receive
grants under Article 337 of the Constitution of
India, except in so far as they are receiving
aid in excess of the grants to which they are
so entitled;
2.(9). “School” includes the land, buildings,
play-grounds and hostels of the school and the
movable properties such as furniture, books,
apparatus, maps and equipments pertaining to
the school:”
11. Section 7 of the Kerala Education Act, 1958, which deals
with the “Managers of Schools“, contains the provision under
10
Section 7 sub-section (6) prohibiting the Manager from closing
down school unless one year’s notice is given. Section 7
sub-section (6) is quoted as below:
“7.(6) No manager shall close down any school
unless one year’s notice, expiring with the 31st
May of any year, of his intention so to do, has
been given to the officer authorised by the
Government in this behalf.”
Further Rule 24 of the Kerala Education Rules, 1959
provides for closure of private schools which is to the
following effect:
“24. Closure of private schools: - (1) No
private school shall be closed down without
giving the Director one year’s notice expiring
with the 31st May of any year of the intention
to do so.
[(2) The Director may, after considering all
aspects of the question, grant permission for
the closure of the school and recognition of
such school shall lapse. No application for
withdrawal of the notice after the issue of
permission shall be entertained unless adequate
reasons are adduced to the satisfaction of the
Director. The order of the Director in the
matter shall be final.]”
12. Section 15 of the Act contains a heading “Power to
acquire any category of schools”. Section 15 which is relevant
for the present case is as follows:
“15. Power to acquire any category of schools -
(1) If the Government are satisfied that for
standardising general education in the State or
11
for improving the level of literacy in any area
or for more effectively managing the aided
educational institutions in any area or for
bringing education of any category under their
direct control in the public interest it is
necessary to do so, they may, by notification
in the Gazette, take over with effect from any
day specified therein any category of aided
schools in any specified area or areas; and
such schools shall vest in the Government
absolutely with effect from the day specified
in such notification;
Provided that no notification under this
sub-section shall be issued unless the proposal
for the taking over is supported by the
resolution of the Legislative Assembly.
(2) Where any school has vested in the
Government under sub-section (1), compensation
shall be paid to the persons entitled thereto
on the basis of the market value thereof as on
the date of the notification:
Provided that where any property, movable
or immovable has been acquired, constructed or
improved for the purpose of the school with the
aid or grant given by the Government for such
acquisition, construction or improvement,
compensation payable shall be fixed after
deducting from the market value the amounts of
such aids or grants:
Provided further that in the case of
movable properties the compensation payable
shall be the market value thereof on the date
of the notification or the actual cost thereof
less the depreciation, whichever is lower.
(3) In determining the amount of compensation
and its apportionment among the persons
entitled thereto the Collector shall follow
such procedure as may be prescribed.
(4) Any person aggrieved by an order of the
Collector may, in the prescribed manner, appeal
to the District Court within whose jurisdiction
the school is situated within sixty days of the
12
date of such award and the decision of the
Judge shall be final.
(5) Nothing in this section shall apply to
minority schools.”
13. One of the principle submissions, which has been raised
by counsel for the appellant, is that on the date when
notification under Section 15 was issued, i.e. on 27.07.2016,
the school having been already closed, the power under Section
15 of the Act could not have been exercised. Learned counsel
submits that after the writ petition filed by the management
was allowed by High Court permitting closure of the school,
which was affirmed by the Division Bench as well as by this
Court on 05.10.2015, school stood closed, which disabled the
State Government to exercise the power under Section 15. We
have already noticed the factum of filing of writ petition by
the management for closure of the school, which stood allowed
on 08.06.2015. Writ appeals were filed against the judgment
of learned Single Judge, which were decided by the Division
Bench on 22.07.2015. It is to be noticed that aggrieved by
the judgment of learned Single Judge, writ appeals were also
filed by the Headmistress of the institution as well as
Parent-Teachers Association praying for the relief directing
the State Government to take over the institutions. In this
context, it will be useful to refer to Para 27 of the judgment
of the Division Bench by which while affirming the judgment of
13
the learned Single Judge, the Division Bench also directed the
State Government to decide the representations, which were
submitted seeking directions to take over the schools by the
Government. Para 27 is as follows:-
“….. However, it essentially is a matter to be
decided by the Government and therefore, though
we cannot issue any binding direction to the
Government, but can only clarify that the
authorities before whom Exts.P17 and P18
representations in W.P.(C) 12205/15 are pending
will bestow their attention to this claim and
will take appropriate decision on the
representations.”
14. As noticed above, against the writ appeals, Special Leave
Petition was filed by the State of Kerala, which was dismissed
on 05.10.2015. However while dismissing the petition, a
direction was given that children of the schools shall be
allowed to continue till the end of the academic year and
thereafter they may be shifted to another school. The
management filed Contempt Petition alleging that orders of the
Court regarding closure of schools are not being given effect
to by the State, which contempt was closed on 16.06.2016
noticing the statement of Government pleader that all
formalities regarding closure of the school have been complied
with. In the writ petition filed by the manager, learned
Single Judge in its judgment dated 23.11.2016 has returned the
findings regarding the actual date of closure of the school.
14
In Para 9 of the judgment, following was held:-
“…..The closure of the schools was effected on
10.06.2016 in the case of W.P.(C) No.
25292/2016, on 09.06.2016 in the case of W.P.(C)
No.25619/2016, on 08.06.2016 in the case of W.P.
(C) No. 25622/2016, on 07.06.2016 in the case of
W.P.(C) No. 25695/2016 and on 10.06.2016 in the
case of W.P.(C) No. 25790/2016. The affidavits
filed on behalf of the State Government in the
Contempt cases indicate that the handing over of
all records and other procedural formalities for
effecting a closure of the schools was completed
shortly thereafter. The contempt of court
cases, that were filed by the petitioners
herein, were all disposed after recording the
fact of closure of the schools, based on the
affidavit filed on behalf of the State
Government. It deserves mention here that, in
the affidavit filed on behalf of the State, it
was clearly stated that the State Government had
already taken a decision to acquire the schools
in public interest by invoking the powers under
Section 15 of the KE Act.”
15. Learned Single Judge as well as the Division Bench has
also noticed that the Chief Minister has already taken a
decision on 07.06.2016 after consultation with the Finance
Minister regarding exercise of power under Section 15 to close
the schools. Section 15(1) of the Act used the words “If the
Government are satisfied …………… they may, by notification in
the Gazette, take over with effect from any day specified
therein ……………… provided that no notification under this
sub-section shall be issued unless the proposal for the taking
over is supported by the resolution of the Legislative
Assembly.” The above statutory scheme indicates that there are
15
three steps in exercise of power under Section 15, they are:
(a) satisfaction of the Government that in the public interest
it is necessary to take control of any category of
institution; (b) resolution of the Legislative Assembly
approving the proposal for taking over the schools; and (c)
issuance of notification in the Gazette to take over with
effect from any day specified therein any category of aided
schools.
16. The satisfaction of the Government in sub-section (1) of
Section 15 is the first phase of initiating the proceeding for
taking over of the institutions. The satisfaction is required
of “the Government”. The Government refers to in the
provision is the “State Government”. The State Government as
defined in Section 3(60) of the General Clauses Act,
1897 means the Governor in a State. The Governor, being head
of a State in whom all the executive power is vested under
Article 154, exercises the power either directly or through
officers subordinate to him in accordance with the
Constitution of India. Under Article 166(1), any action taken
in the exercise of executive power is taken by the State
Government in the name of the Governor. Under Article 166
sub-clause (3), the Governor is to make rules for the more
convenient transaction of the business of the Government of
16
the State, and for the allocation amongst the Ministers of the
said business in so far as it is not business with respect to
which the Governor is by or under the Constitution required to
act in his discretion. Except the discretionary functions of
the Governor, he does not exercise any executive functions
individually or personally. When a Minister takes an action
according to the Rules of Business, it is both in substance
and in form the action of the Governor. The Constitution
Bench of this Court in Samsher Singh Vs. State of Punjab &
Anr., (1974) 2 SCC 831 while considering the constitutional
provisions regarding function of the President of India and
Governor of the State laid down following in Paragraphs 30 and
31:-
“30. In all cases in which the President or the
Governor exercises his functions conferred on
him by or under the Constitution with the aid
and advice of his Council of Ministers he does
so by making rules for convenient transaction of
the business of the Government of India or the
Government of the State respectively or by
allocation among his Ministers of the said
business, in accordance with Articles 77(3) and
166(3) respectively. Wherever the Constitution
requires the satisfaction of the President or
the Governor for the exercise of any power or
function by the President or the Governor, as
the case may be, as for example in Articles 123,
213, 311(2) proviso (c), 317, 352(1), 356 and
360 the satisfaction required by the
Constitution is not the personal satisfaction of
the President or of the Governor but is the
satisfaction of the President or of the Governor
in the constitutional sense under the Cabinet
system of Government. The reasons are these. It
is the satisfaction of the Council of Ministers
17
on whose aid and advice the President or the
Governor generally exercises all his powers and
functions. Neither Article 77(3) nor Article
166(3) provides for any delegation of power.
Both Articles 77(3) and 166(3) provide that the
President under Article 77(3) and the Governor
under Article 166(3) shall make rules for the
more convenient transaction of the business of
the Government and the allocation of business
among the Ministers of the said business. The
Rules of Business and the allocation among the
Ministers of the said business all indicate that
the decision of any Minister or officer under
the Rules of Business made under these two
articles viz. Article 77(3) in the case of the
President and Article 166(3) in the case of the
Governor of the State is the decision of the
President or the Governor respectively.
31. Further the Rules of Business and allocation
of business among the Ministers are relatable to
the provisions contained in Article 53 in the
case of the President and Article 154 in the
case of the Governor, that the executive power
shall be exercised by the President or the
Governor directly or through the officers
subordinate. The provisions contained in Article
74 in the case of the President and Article 163
in the case of the Governor that there shall be
a Council of Ministers to aid and advise the
President or the Governor, as the case may be,
are sources of the Rules of Business. These
provisions are for the discharge of the
executive powers and functions of the Government
in the name of the President or the Governor.
Where functions entrusted to a Minister are
performed by an official employed in the
Minister’s department there is in law no
delegation because constitutionally the act or
decision of the official is that of the
Minister. The official is merely the machinery
for the discharge of the functions entrusted to
a Minister (see Halsbury’s Laws of England 4th
Ed., Vol. I, paragraph 748 at p. 170 and
Carltona Ltd. v. Works Commissioners).”
18
17. An earlier Constitution Bench judgment, i.e., A.Sanjeevi
Naidu, Etc. Vs. State of Madras & Anr., (1970) 1 SCC 443,
considered Section 68(C) of the Motor Vehicles Act, 1939,
which Section provided as follows:-
“…………Where any State transport undertaking is of
opinion that for the purpose, of providing an
efficient, adequate, economical and properly
co-ordinated road transport service, it is
necessary in the public interest that road
transport services in general or any particular
class of such service in relation to any area or
route or portion thereof should be run and
operated by the State transport undertaking,
whether to the exclusion, complete or partial of
other persons or otherwise, the State transport
undertaking may prepare a scheme giving
particulars of the nature of the services
proposed to be rendered, the area or route
proposed to be covered and such other
particulars respecting thereto as may be
prescribed, and shall cause every such scheme to
be published in the Official Gazette and also in
such other manner as the State Government may
direct.”
18. A perusal of Section 68 sub-clause(C) indicates that the
words used in the provision “where any State transport
undertaking is of opinion …………., the State transport
undertaking may prepare a scheme …………, and shall cause every
such scheme to be published in the Official Gazette”. In the
Rules of Business pertaining to Rule 23(A) of the Madras
Government Business Rules, powers and functions which State
Transport Undertaking may exercise under Section 68(C) were to
be discharged on behalf of the State Government by the
19
Secretary to the Government of Madras in the Industries,
Labour and Housing Department. The Constitution Bench held
that decision of the Secretary to the Government was the
decision of the Governor as per Business Rules. In Para Nos.
10, 11 and 12, following was stated:-
“10. The cabinet is responsible to the
Legislature for every action taken in any of the
Ministries. That is the essence of joint
responsibility. That does not mean that each and
every decision must be taken by the cabinet. The
political responsibility of the Council of
Ministers does not and cannot predicate the
personal responsibility of the Council of
Ministers to discharge all or any of the
Governmental functions. Similarly an individual
Minister is responsible to the Legislature for
every action taken or omitted to be taken in his
ministry. This again is a political
responsibility and not personal responsibility.
Even the most hard working Minister cannot
attend to every business in his department. If
he attempts to do it, he is bound to make a mess
of his department. In every well planned
administration, most of the decisions are taken
by the civil servants who are likely to be
experts and not subject to political pressure.
The Minister is not expected to burden himself
with the day-to-day administration. His primary
function is to lay down the policies and
programmes of his ministry while the Council of
Ministers settles the major policies and
programmes of the Government. When a civil
servant takes a decision, he does not do it as a
delegate of his Minister. He does it on behalf
of the Government. It is always open to a
Minister to call for any file in his ministry
and pass orders. He may also issue directions to
the officers in his ministry regarding the
disposal of Government business either generally
or as regards any specific case. Subject to that
over all power, the officers designated by the
“Rules” or the standing orders, can take
20
decisions on behalf of the Government. These
officers are the limbs of the Government and not
its delegates.
11. In Emperor v. Sibnath Banerji1 construing
Section 59(3) of the Government of India Act,
1935, a provision similar to Article 166(3), the
Judicial Committee held that it was within the
competence of the Governor to empower a civil
servant to transact any particular business of
the Government by making appropriate rules. In
that case their Lordships further observed that
the Ministers like civil servants are
subordinates to the Governor. In Kalyan Singh v.
State of U.P.2 this Court repelling the
contention that the opinion formed by an
official of the Government does not fulfil the
requirements of Section 68(C) observed:
“The opinion must necessarily be formed
by somebody to whom, under the rules of
business, the conduct of the business is
entrusted and that opinion, in law, will
be the opinion of the State Government.
It is stated in the counter-affidavit
that all the concerned officials in the
Department of Transport considered the
draft scheme and the said scheme was
finally approved by the Secretary of the
Transport Department before the
notification was issued. It is not
denied that the Secretary of the said
Department has power under the rules of
business to act for the State Government
in that behalf. We, therefore, hold that
in the present case the opinion was
formed by the State transport
undertaking within the meaning of
Section 68(C) of the Act, and that,
there was nothing illegal in the manner
of initiation of the said Scheme.”
12. In Ishwarlal Girdharlal Joshi, etc. v. State
of Gujarat3 this Court rejected the contention
that the opinion formed by the Deputy Secretary
under Section 17(1) of the Land Acquisition Act
cannot be considered as the opinion of the State
Government. After referring to the rules of
21
business regulating the Government business,
this Court observed at p. 282:
“In our case the Secretaries concerned
were given the jurisdiction to take
action on behalf of Government and
satisfy themselves about the need for
acquisition under Section 6, the urgency
of the matter and the existence of waste
and arable lands for the application of
sub-sections (1) and (4) of Section 17.
In view of the Rules of business and the
instructions their determination became
the determination of Government and no
exception could be taken.”
19. The decision to take over four Schools was taken by the
Chief Minister with the consultation of the Finance Minister
on 07.06.2016. It was not challenged before the High Court or
before this Court that Chief Minister was not competent to
take the decision under the Rules of Business of the State
regarding take over of the schools. What is being contended
is that the school was to continue to exist till the date the
notification under Section 15 is issued for taking over of the
school and in event the school is closed, any date prior to
the date of notification, the power under Section 15 cannot be
exercised. The management of the institution has also filed a
Review Petition after judgment of learned Single Judge
emphasising above issue. The learned Single Judge has
elaborately dealt the issue and held that satisfaction as
contemplated by Section 15 was arrived on at 07.06.2016 when
Chief Minister took the decision. Learned Single Judge
22
(Justice A.K.Jayasankaran Nambiar) extensively considered the
issue and expressed following opinion:-
“……… The exercise of the power is made
conditional only on the State Government being
satisfied that one or all of the factors
indicated therein exist, rendering it necessary
for the State Government to act in public
interest. In my view, it is at this stage alone
that an aided school must exist, as the subject
matter, in relation to which the power of the
State Government is exercised. The procedure to
be complied with in connection with the take
over, such as the framing of a proposal and
placing it before the Legislative Assembly of
the State for its approval, before issuing a
formal notification, only ensures a valid
implementation, or execution, of the decision
that is taken in exercise of the power conferred
under the Section. It follows, therefore, that
once an aided school is identified as the
subject matter of a proposed take over, its
closure during the stage of implementation of
the decision of the State Government is of no
consequence, and will not affect a valid
exercise of power by the State Government. As
regards the exercise of power by the State
Government it needs to be noted that the Cabinet
decision on 29.06.2016 had the effect of
ratifying the decision of the Chief Minister
taken on 07.06.2016 and therefore the decision
of the State Government effectively relates back
to 07.06.2016…………..”
20. Looking to the statutory scheme under Section 15(1), we
are of the opinion that satisfaction of the Government as
contemplated by Section 15 is the satisfaction of the
competent authority, who can under the Rules of Business take
a decision. We have noticed above the findings of learned
Single Judge regarding the date of actual closure of the
23
school, which finding has been specially affirmed by the
Division Bench in writ appeal that closure of school took
place on 07.06.2015 or thereafter and on the date when the
Chief Minister took the decision, actual closure of the school
was not taken place. The fact that contempt petition was
filed by the management, which was closed on 16.06.2015
noticing that all formalities regarding closure had been taken
and in the contempt, the statement on behalf of the State was
also noted that the State has decided to take over the
institutions. Thus, on the date when the Chief Minister took
the decision, the existence of school cannot be denied.
21. The other two steps as noticed above, i.e. approval of
Legislative Assembly and issuance of notification in the
Gazette are further steps regarding completion of the process
and on the date when Government was satisfied that it is in
the public interest to take over the school, the school was in
existence, the said decision cannot be said to lose its
efficacy, even if the school was actually closed before
issuance of notification under Section 15. When the decision
taken on 07.06.2016 was valid to close the school, it was
valid exercise of power and no infirmity can crept in the said
decision even if as per the appellant, the school was closed
before Legislative Assembly passed the resolution or
24
notification was issued on 27.07.2016. It could have been
open to the Legislative Assembly not to approve the proposal
on account of any reason including any subsequent valid
reason, but Legislative Assembly having approved, no capital
can be gained by the appellant on the strength of the above
submission.
22. We fully endorse the view taken by the learned Single
Judge that on the date when the Government took the decision,
i.e., the Chief Minister took a decision on 07.06.2016 to take
over the schools; the schools were not actually closed.
23. There is one more reason due to which the decision taken
by the State Government as approved by the Legislative
Assembly and notified in the Gazette needs no interference.
The reason is that all the institutions, which have been taken
over were the institutions providing primary education. Under
Article 21(A) of the Constitution of India as well as under
the Right of Children to Free and Compulsory Education Act,
2009, the State has to take all steps for fulfilling the
objective to provide education to children upto 14 years of
age seeking Primary (Upper Primary and Lower Primary)
education. The State decision to run the Primary schools
which were decided to be closed by their respective management
25
was in public interest and in the interest of the education.
The High Court has rightly refused to interfere with the
decision of the State Government taking over the schools to
run the same directly by the Government.

24. Another limb of argument of the appellant forcefully
put is that acquisition of properties of the schools, if
at all, was to be undertaken by the State, the State
ought to have taken recourse of the provisions of the
Act, 2013. It is contended that owners of the schools are
being deprived of their right of property. They are
clearly entitled for compensation in accordance with the
provisions of Act, 2013. Learned counsel submits that
Act, 2013 being a Parliamentary Act shall override the
provision pertaining to acquisition of properties of
schools as contained in Section 15 of Act, 1958.
25. The Kerala Education Act, 1958 is a State enactment
referable to education. The Entry of Education prior to
its substitution in List III was contained in List II
Entry 11, by the Constitution (Forty-Second Amendment)
Act, 1976. Entry 11 List II was omitted and the subject
was transferred to be comprised in Entry 25 of List III,
26
which is as follows:
"25. Education, including technical
education, medical education and
universities, subject to the provisions of
entries 63, 64, 65 and 66 of List I;
vocational and technical training of
labour.”
26. Acquisition of property is covered by Entry 42 List
III. Entry 42 List III is as follows:
"42. Acquisition and requisitioning of
property.”
27. As noted above, the present is a case where school
is being taken over by the State in accordance with
Section 15 which is a part of the Scheme under the Kerala
Education Act, 1958. The State is entitled to take over a
school for the purpose and object as contained in Section
15. The Government is entitled to take over the school
for any of the following purposes that:
i) for standardising general education in the
State, or
ii) for improving the level of literacy in any
area, or
iii) for more effectively managing the aided
educational institutions in any area, or
iv) for bringing education of any category under
their direct control in the public interest.
27
28. In the present case the State Government has taken
over the school in the public interest in the interest of
education. The power under Section 15 given to the State
is distinct and separate from the power which is
possessed by the State under the provisions of the Act,
2013.
29. It is contended that Section 15 being repugnant to
Act, 2013 which being a Parliamentary enactment, it shall
override the Act, 1958 in view of Article 254 sub-clause
(1) of the Constitution of India.
30. The principles for ascertaining the inconsistency/
repugnancy between two statutes were laid down by this
Court in Deep Chand Vs. State of U.P and others, AIR 1959
SC 648. K. Subba Rao, J. speaking for the Court stated
following in paragraph 29:
“29……Repugnancy between two statutes may
thus be ascertained on the basis of the
following three principles:
(1) Whether there is direct
conflict between the two
provisions;
(2) Whether Parliament intended to
lay down an exhaustive code in
28
respect of the subject-matter
replacing the Act of the State
Legislature and
(3) Whether the law made by
Parliament and the law made by the
State Legislature occupy the same
field.”
31. This Court in State of Kerala and others Vs. Mar
Appraem Kuri Company Limited and another, (2012) 7 SCC
106, in paragraph 47 held that:
“47. The question of repugnancy between
parliamentary legislation and State
legislation arises in two ways. First, where
the legislations, though enacted with
respect to matters in their allotted
spheres, overlap and conflict. Second, where
the two legislations are with respect to
matters in the Concurrent List and there is
a conflict. In both the situations, the
Parliamentary legislation will predominate,
in the first, by virtue of non obstante
clause in Article 246(1); in the second, by
reason of Article 254(1)”.
There cannot be any dispute to the proposition laid
down by this Court to the State of Kerala case (supra).
32. This Court has time and again emphasised that in the
event any overlapping is found in two Entries of Seventh
Schedule or two legislations, it is the duty of the Court
to find out its true intent and purpose and to examine
29
the particular legislation in its pith and substance. In
Kartar Singh Vs. State of Punjab, (1994) 3 SCC 569, in
paragraphs 59 and 60 following has been held:
“59....But before we do so we may briefly
indicate the principles that are applied for
construing the entries in the legislative
lists. It has been laid down that the
entries must not be construed in a narrow
and pedantic sense and that widest amplitude
must be given to the language of these
entries. Sometimes the entries in different
lists or the same list may be found to
overlap or to be in direct conflict with
each other. In that event it is the duty of
the court to find out its true intent and
purpose and to examine the particular
legislation in its ‘pith and substance’ to
determine whether it fits in one or other of
the lists. [See : Synthetics and Chemicals
Ltd. v. State of U.P.; India Cement Ltd. v.
State of T.N.]
60. This doctrine of ‘pith and substance’ is
applied when the legislative competence of a
legislature with regard to a particular
enactment is challenged with reference to
the entries in the various lists i.e. a law
dealing with the subject in one list is also
touching on a subject in another list. In
such a case, what has to be ascertained is
the pith and substance of the enactment. On
a scrutiny of the Act in question, if found,
that the legislation is in substance one on
a matter assigned to the legislature
enacting that statute, then that Act as a
whole must be held to be valid
notwithstanding any incidental trenching
upon matters beyond its competence i.e. on a
matter included in the list belonging to the
other legislature. To say differently,
incidental encroachment is not altogether
forbidden.”
30
33. In A.S. Krishna and others Vs. State of Madras, AIR
1957 SC 297 this Court laid down following in paragraph
10:
“10. This point arose directly for decision
before the Privy Council in Prafulla Kumar
Mukherjee v. The Bank of Commerce, Ltd.
[1946 74 I.A. 23 There, the question was
whether the Bengal Money-Lenders Act, 1940,
which limited the amount recoverable by a
money-lender for principal and interest on
his loans, was valid in so far as it related
to promissory notes. Money-lending is within
the exclusive competence of the Provincial
Legislature under Item 27 of List II, but
promissory note is a topic reserved for the
center, vide List I, Item 28. It was held by
the Privy Council that the pith and
substance of the impugned legislation begin
money-lending, it was valid notwithstanding
that it incidentally encroached on a field
of legislation reserve for the center under
Enter 28. After quoting its approval the
observations of Sir Maurice Gwyer C.J. in
Subrahmanyan Chettiar v. Muttuswami Goundan,
(supra) above quoted, Lord Porter observed :
"Their Lordships agree that this
passage correctly describes the
grounds on which the rule is founded,
and that it applies to Indian as well
as to Dominion legislation.
No doubt experience of past difficulties has
made the provisions of the Indian Act more
exact in some particulars, and the existence
of the Concurrent List has made it easier to
distinguish between those matters which are
essential in determining to which list
particular provision should be attributed
and those which are merely incidental. But
31
the overlapping of subject-matter is not
avoided by substituting three lists for two,
or even by arranging for a hierarchy of
jurisdictions. Subjects must still overlap,
and where they do, the question must be
asked what in pith and substance is the
effect of the enactment of which complaint
is made, and in what list is its true nature
and character to be found. If these
questions could not be asked, must
beneficent legislation would be satisfied at
birth, and many of the subjects entrusted to
Provincial legislation could never
effectively be dealt with.”...”
34. Further in Union of India and others Vs. Shah
Goverdhan L. Kabra Teachers' College, (2002) 8 SCC 228 in
paragraph 7 following was laid down:
“7. It is further a well-settled principle
that entries in the different lists should
be read together without giving a narrow
meaning to any of them. Power of Parliament
as well as the State Legislature are
expressed in precise and definite terms.
While an entry is to be given its widest
meaning but it cannot be so interpreted as
to override another entry or make another
entry meaningless and in case of an
apparent conflict between different
entries, it is the duty of the court to
reconcile them. When it appears to the
court that there is apparent overlapping
between the two entries the doctrine of
“pith and substance” has to be applied to
find out the true nature of a legislation
and the entry within which it would fall.
In case of conflict between entries in List
I and List II, the same has to be decided
by application of the principle of “pith
and substance”. The doctrine of “pith and
substance” means that if an enactment
32
substantially falls within the powers
expressly conferred by the Constitution
upon the legislature which enacted it, it
cannot be held to be invalid, merely
because it incidentally encroaches on
matters assigned to another legislature.
When a law is impugned as being ultra vires
of the legislative competence, what is
required to be ascertained is the true
character of the legislation. If on such an
examination it is found that the
legislation is in substance one on a matter
assigned to the legislature then it must be
held to be valid in its entirety even
though it might incidentally trench on
matters which are beyond its competence. In
order to examine the true character of the
enactment, the entire Act, its object,
scope and effect, is required to be gone
into. The question of invasion into the
territory of another legislation is to be
determined not by degree but by substance.
The doctrine of “pith and substance” has to
be applied not only in cases of conflict
between the powers of two legislatures but
in any case where the question arises
whether a legislation is covered by
particular legislative power in exercise of
which it is purported to be made.”
35. Even if it is assumed that, in working of two
legislations which pertain to different subject matters,
there is an incidental encroachment in respect of small
area of operation of two legislations, it cannot be held
that one legislation overrides the other. When we look
into the pith and substance of both the legislations,
i.e., Act, 1958 and Act, 2013, it is clear that they
33
operate in different fields and it cannot be said that
Act, 1958 is repugnant to Act, 2013. It is also relevant
to note that under Section 15(2) it is provided that
where any school has vested in the Government under
sub-section (1), compensation shall be paid to the
persons entitled thereto on the basis of the market value
thereof as on the date of the notification.
36. In the counter-affidavit in the present case, the
State has clearly mentioned that compensation has been
determined by the Collector. In paragraph 12 of the
counter-affidavit following has been stated:
"12.Out of the 4 schools that have been
taken over by Government, compensations
have been sanctioned to the erstwhile
Managers of the following 3 schools as per
market value.
(i) A.U.P. School, Malaparamba
Rs.5,85,86,710/- as per G.O.(Rt)
No.181/2017(GEdn dated 25.01.2017.
(ii)A.U.P. School, Palat, Kozhikode -
Rs.56,09,947/- as per G.O.(Rt)No.
2289/2017/Gedn dated 11.07.2017
& G.O.(Rt)No.6047/2017/Fin dated
31.07.2017.
(iii)P.M.L.P. School, Kiraloor,
 Thrissur Rs.79,54,550/- as per
G.O.(Rt)No. 2289/2017/Gedn dated 
34
11.07.2017 & G.O. (Rt) No.
6047/2017/Fin dated 31.07.2017.
37. It is also relevant to note that under Section 15
sub-section (4), any person aggrieved by an order of the
Collector has a right to appeal to the District Court.
38. Applying the ratio as laid down by this Court in the
above noted cases, we conclude that Act, 1958 and Act,
2013 operate in different fields and Section 15 of the
Act, 1958 in no manner is overridden or repugnant to Act,
2013. There was no invalidity in the exercise of the
power of the State Government under Section 15 to take
over the schools. The owners being entitled to
compensation at the market rate on the date of
notification, the procedure for taking over the property
is in full compliance of requirement of Article 300A of
the Constitution of India. We, thus, do not find any
merit in this submission of learned counsel for the
appellant.
39. Learned counsel for the appellant has placed reliance
on the judgment of this Court in Bhusawal Municipal
Council Vs. Nivrutti Ramchandra Phalak and others, (2015)
35
14 SCC 327. Bhusawal Municipal Council had filed the
appeal against the interlocutory order passed by the
Bombay High Court by which interim relief was granted to
the appellant to the extent of payment of 50% of the
enhanced amount of compensation as awarded by the
Reference Court in the land acquisition proceedings. The
Council challenged the said order and contended that the
land was acquired for the public purpose, the
Council-appellant does not have sufficient funds to pay
the enhanced compensation, this Court may grant stay of
payment of the enhanced amount of compensation awarded by
the Reference Court. In the above context following
observation was made by this Court in paragraph 8:
“8. We see no justification to accept the
submissions so advanced on behalf of the
appellant Council. Undoubtedly, the
appellant might be willing to meet its
constitutional or legal obligation to open
a primary school for imparting education to
children below 14 years of age but the
question does arise as to whether the
appellant Council has a right to meet a
public purpose or a constitutional
obligation at the cost of individual
citizens by depriving them of their
constitutional rights under Article 300-A
of the Constitution?”
40. This Court dismissed the appeal filed by the Council
and had made the observation that right to property is
36
not only a constitutional or a statutory right but also a
human right. Therefore, in case the person aggrieved is
deprived of the land without making the payment of
compensation, it would be tantamount to forcing the said
uprooted persons to become vagabond. There cannot be
any dispute to the proposition laid down by this Court as
above. For the land acquired under the Land Acquisition
Act compensation determined under the provisions of the
Land Acquisition Act, 1894 is required to be paid to the
land owner. The order granting interim relief to the
appellant was held to be just order in which this Court
refused to interfere.
41. In the above case no such proposition has been laid
down by this Court which may help the appellant. The
present is not a case of acquisition under the Land
Acquisition Act. As noted above, under Section 15
sub-section (4) of Act, 1958, the payment of compensation
has to be made in accordance with the market value on the
date of notification under Section 15.
42. In view of the foregoing discussion, we do not find
any ground to interfere with the judgments of the learned
37
Single Judge as well as Division Bench of the Kerala High
Court dismissing the writ petition and writ appeal of the
appellant.
43. In the result, all the appeals are dismissed.
..........................J.
( A.K. SIKRI )
..........................J.
 ( ASHOK BHUSHAN )
NEW DELHI,
FEBRUARY 16, 2018.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.