|REPORTABLE |
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3019-3020 OF 2016
(Arising out of SLP (C.) Nos. 14705-14706 of 2015)
ANDHRA PRADESH STATE
COUNCIL OF HIGHER EDUCATION ……APPELLANT
Vs.
UNION OF INDIA & ORS. ETC. ……RESPONDENTS
WITH
CIVIL APPEAL NO. 3021 OF 2016
(Arising out of SLP (C.) No.14712 of 2015)
J U D G M E N T
V. GOPALA GOWDA, J.
Leave granted in the Special Leave Petitions.
The present appeals arise out of the common impugned judgment and order
dated 01.05.2015 passed by the High Court of judicature at Hyderabad for
the States of Telangana and Andhra Pradesh in Writ Petition Nos. 1873 and
2882 of 2015, wherein it was held that the assets, properties and funds
lying at the present location of the Andhra Pradesh State Education Council
of Higher Education now belong exclusively to the Telangana State Education
Council for Higher Education.
The relevant facts which are required for us to appreciate the rival legal
contentions are stated in brief hereunder:
The Andhra Pradesh State Council of Higher Education (hereinafter referred
to as the “APSC”) was constituted under Section 3 of the Andhra Pradesh
State Council of Higher Education Act, 1988, to advise the State government
in matters relating to Higher Education in the State and to oversee its
development with Perspective Planning. The APSC continued carrying out the
various functions assigned to it under the Act of 1988, including
conducting common entrance examinations for various courses in the State of
Andhra Pradesh.
On 02.06.2014, the Andhra Pradesh Reorganisation Act, 2014 (hereinafter
referred to as the “Reorganisation Act, 2014”) came into force, which
bifurcated the existing State of Andhra Pradesh into two separate States,
namely, the State of Andhra Pradesh and the State of Telangana. The
statement of objects and reasons of the Act provides, inter alia, as under:
“a) it provides for the territories of the two successor states of Andhra
Pradesh and Telangana, and necessary provisions relating to representation
in Parliament and State Legislatures, distribution of revenues,
apportionment of assets and liabilities, mechanisms for the management and
development of water resources, power and natural resources and other
matters.
……
c) it provides that Hyderabad in the existing State of Andhra Pradesh shall
be the common capital of both the successor States from the appointed day
for a period not exceeding ten years, and puts in place legal and
administrative measures to ensure that both the State Governments can
function efficiently from the common capital……”
Section 75 of the Reorganisation Act, 2014 provides as under:
“75. Continuance of facilities in certain State institutions.
(1) The Government of the State of Andhra Pradesh or the State of
Telangana, as the case may be, shall, in respect of the institutions
specified in the Tenth Schedule to this Act, located in that State,
continue to provide facilities to the people of the other State which shall
not, in any respect, be less favorable to such people than what were being
provided to them before the appointed day, for such period and upon such
terms and conditions as may be agreed upon between the two State
Governments within a period of one year from the appointed day or, if no
agreement is reached within the said period, as may be fixed by order of
the Central Government.
(2) The Central Government may, at any time within one year from the
appointed day, by notification in the Official Gazette, specify in the
Tenth Schedule referred to in subsection (1) any other institution existing
on the appointed day in the States of Andhra Pradesh and Telangana and, on
the issue of such notification, such Schedule shall be deemed to be amended
by the inclusion of the said institution therein.”
APSC figures as item 27 in the Tenth Schedule to the Reorganisation Act,
2014. Thus, in terms of Section 75, APSC was required to continue its
functions in respect of both the States, i.e. Andhra Pradesh and Telangana
until an agreement was reached between the two successor States.
Vide G.O.M. No. 5 dated 02.08.2014, the Government of Telangana adapted the
Act of 1988 in the following terms:
“Whereas by Section 101 of the Andhra Pradesh Re-Organisation Act, 2014
(Central Act No. 6 of 2014), the appropriate Government i.e. the State of
Telangana is empowered by order, to make such adaptations and modifications
of any law (as defined in section 2(f) of the Act)made before 02.06.2014,
whether by way of repeal or amendment as may be necessary or expedient, for
the purpose of facilitating the application of such law in the State of
Telangana before expiration of two years from 02.06.2014; and thereupon
every such law shall have effect subject to the adaptations and
modifications so made until altered, repealed or amended by a competent
Legislature or other Competent Authority;
And whereas, it has become necessary to adapt the Andhra Pradesh State
Council of Higher Education Act, 1988 and the Rules and Regulations made
thereunder for the purpose of facilitating their application in relation to
the State of Telangana……”
Thus, the Telangana State Council of Higher Education (hereinafter referred
to as the “TSC”) came into existence to discharge the same functions for
the State of Telangana as the APSC for the State of Andhra Pradesh.
Pursuant to the creation of the TSC, the Secretary to the Government,
Higher Education (UE) Department, Telangana, wrote Letter No.263/UE/2014-2
dated 05.09.2014, to the Principal Secretary to Government, Higher
Education (UE) Department, Andhra Pradesh outlining a provisional
allocation of assets as well as posts between the two States, in terms of
the proposal already submitted by the APSC, to divide the assets in the
ratio of population as 52:48, as provided for under Section 2(h) of the
Reorganisation Act, 2014. These were to include:
“
Distribution of posts in the ratio of 58:42
Allocation of fixed deposits
Allocation of bank balances in various accounts
Number of employees based on nativity
Number of vehicles
Number of equipments
Number of movable assets etc.”
The details of the proposed allocation are provided as under:
“ Fixed Deposits
|S.No. |Category |Total Amount in |58% to APSCHE |42% to TSCHE |
| | |Rs. | | |
| |General |607796365 |352521892 |255274473 |
| |Accounts | | | |
| |College |61502021 |35671172 |25830849 |
| |Accounts | | | |
| |CETs |489531581 |283928317 |205603264 |
| |Accounts | | | |
| |Total |115,88,29,967 |67,21,21,381 |48,67,08,586 |
Bank Balances in various accounts
|S.No. |Category |Total Amount in |58% to APSCHE |42% to TSCHE |
| | |Rs. | | |
| |General |18405959 |10675456 |7730503 |
| |Accounts | | | |
| |College |164524435 |95424172 |69100263 |
| |Accounts | | | |
| |CETs |1207229 |700193 |507036 |
| |Accounts | | | |
| |Total |18,41,37,623 |10,67,99,821 |7,73,37,802 |
Cadre wise allocation of posts between APSCHE & TSCHE
|S.No. |Post/Cadre |Total |Allocation of posts |
| | |Sanctioned |after bifurcation |
| | |Posts | |
| | | |58% to APSCHE |42% to |
| | | | |TSCHE |
|1. |Finance Officer |1 |1 |0 |
|2 |Deputy Director |1 |1 |0 |
|3 |Asst. Directors |3 |2 |1 |
|4 |Lecturers |4 |2 |2 |
|5 |Asst. Secretary |1 |0 |1 |
|6 |Consultants |3 |2 |1 |
|7 |Superintendent |1 |1 |0 |
|8 |Private Secretary |1 |0 |1 |
|9 |Senior Accountant |3 |2 |1 |
|10 |Senior Steno |1 |0 |1 |
|11 |Jr. Stenographer |2 |1 |1 |
|12 |Jr. Assistant |1 |0 |1 |
|13 |Clerk-cum-Typist |1 |1 |0 |
|14 |Typist-cum-Asst. |1 |0 |1 |
|15 |Computer Operator |1 |1 |0 |
|16 |Data Entry Operator |1 |1 |0 |
|17 |Drivers |3 |2 |1 |
|18 |Record Asst. |1 |0 |1 |
|19 |Roneo Operator |1 |1 |0 |
|20 |Office Subordinates |3 |2 |1 |
| |Total |34 |20 |14 |
Cadre wise posts to APSCHE & TSCHE
|S.No. |Category |Total Number |58% to APSCHE |42% to TSCHE |
| | |of posts | | |
|1 |Gazetted |10 |6 |4 |
| |Cadres | | | |
|2 |Other cadres |24 |14 |10 |
| |Total |34 |20 |14 |
Number of employees based on nativity
( only Council employees)
|S.No. |Category |Total |Andhra |Telangana |
| | |Employees | | |
| | |Working | | |
|1 |Gazetted |4 |4 |0 |
| |cadres | | | |
|2 |Other cadres |19 |5 |14 |
| |Total |23 |9 |14 |
Number of vehicles (working and condemned)
|S.No. |Category |Total Vehicles|58% to APSCHE |42% to TSCHE |
|1 |Serviceable |4 |2 |2 |
|2 |Condemned |5 |3 |2 |
| |Total |9 |5 |4 |
Number of Equipments
|S.No. |Category |Total |58% to APSCHE |42% to TSCHE |
| | |Equipments | | |
|1 |Computers |37 |21 |16 |
|2 |Printers |18 |10 |8 |
|3 |Others |27 |16 |11 |
| |Total |82 |47 |35 |
Number of Movable Assets
|S.No. |Total Assets |58% to APSCHE |42% to TSCHE |
|1 |676 |392 |284 |
”
On 30.10.2014, the Government of Telangana issued a Circular Memo to the
senior management of the banks in which the bank accounts of the government
were operating to ensure that the provisions of the Reorganization Act,
2014, especially with respect to the institutions listed in Schedules VII,
IX and X were not violated. On 05.01.2015, TSC sent a communication to the
Manager, Andhra Bank, Saifabad, Hyderabad Branch, stating that TSC is the
successor organization to APSC as per the Reorganisation Act, 2014 and
requested the Bank to freeze the operation of Account No. 0533100110978 and
all other accounts operating in the name of APSC. The Bank sent a letter
dated 07.01.2015 to APSC, informing them about the letter from TSC. In its
reply dated 08.01.2015, APSC denied that TSC was its successor and informed
the Bank that if it were to freeze its accounts, it would be constrained to
take the appropriate legal action. Accordingly, the Bank sent a letter
dated 14.01.2015 to the TSC declining to freeze the accounts of APSC. On
28.01.2015, the State Bank of Hyderabad, Shantinagar, Hyderabad Branch,
without giving prior notice to APSC froze the accounts at the behest of
TSC.
Aggrieved of the said action of the Bank in freezing the accounts, APSC
filed Writ Petition No. 1873 of 2015 before the High Court of Andhra
Pradesh, praying for the action of the State Bank of Hyderabad,
Shantinagar, Hyderabad Branch in freezing the accounts of APSC to be
declared as illegal, arbitrary and contrary to the principles of natural
justice and setting it aside. The State of Telangana also filed Writ
Petition No. 2882 of 2015 praying for a declaration that APSC and the State
of Andhra Pradesh be not allowed to withdraw money from the bank accounts
of APSC. By way of the impugned common judgment and order dated 01.05.2015,
the High Court held that TSC would be allowed to operate the concerned bank
accounts, and that the claim made by APSC was not sustainable since it was
now located in the State of Telangana. The High Court held as under:
“6. It is the settled position of law that institutions located in the
successor States are governed by the law of successor State-laws of the
land namely, principle of land, known as lex situs.
7. Under Article 246 (2) & (3) of the Constituion of India, the State
Legislatures are competent to make laws in respect of their territory
covered by the entries in List-II & III of the 7th schedule of the
Constitution. Therefore, in terms of Section 75 of the Act, 2014, the
specified institutions under the tenth schedule are governed by the laws of
the respective States where they are located. Having regard to the
aforesaid legal position, the institutions specified in the tenth schedule
located in Telangana are governed by the law of the State of Telangana.
8…… The office of institution of petitioner No.2 formerly known as APSC, is
now situated in the State of Telangana at Hyderabad. Therefore, the law
enacted by the State of Telangana alone, necessarily, has application for
administration of the institution. Consequently, any action taken or order
now passed by the erstwhile body of the institution specified at Item No.
27 of tenth schedule is without jurisdiction and would be ultra vires.
9. The APSC, at the instance of the State of Andhra Pradesh, is now
asserting its power and authority and physically occupying the premises
without any authority of law. The APSC is not entitled to operate the bank
accounts or withdraw any amount. Notwithstanding the aforesaid legal
status, even after 2nd June 2014, the APSC has withdrawn considerable
amounts from the State Bank of Hyderabad, Shantinagar Branch, in respect of
the above two saving bank accounts. As such, the petitioner No.2 wrote a
letter to the State Bank of Hyderabad and Andhra Bank for freezing of the
said accounts. Accordingly, a decision was taken by the Bank and rightly
so.”
(emphasis laid by this Court)
On the question of ownership and control of the erstwhile APSC, the High
Court held as under:
“38.On a fair reading of Section 5 of the Act, 2014, as correctly contended
by the learned A.G. for the state of Telangana, the State of Andhra Pradesh
is a mere user of the city of Hyderabad for a maximum period of ten years.
It has no proprietary right, title and interest in this city and none of
the assets which belong to the erstwhile State of Andhra Pradesh, located
at Hyderabad, can be claimed by the State of Andhra Pradesh except in
accordance with the Act, 2014……
XXX XXX XXX
40……Because of the adaptation with amendments in the eye of law, APSC has
no existence, at least in Hyderabad, or in any part of Telangana State…
41. Under such circumstances, the assets and properties and funds whatever
lying at the present location of the APSC belong to TSC.”
The High Court held that the claim made by APSC is not sustainable in law
and that present TSC be allowed to operate the bank accounts of the
erstwhile APSC. Hence, the present appeals filed by the State of Andhra
Pradesh and APSC.
Mr. P.P. Rao, learned senior counsel appearing on behalf of the APSC,
contends that it is essential to first understand the correct purport of
Section 75 of the Reorganisation Act, 2014. Section 75 (extracted above)
deals only with the continuance of facilities in respect of the
Institutions specified in the Tenth Schedule. It can, by no means, be
stretched to deal with either ‘apportionment of assets and liabilities’ of
the Institutions specified in Tenth Schedule of the Reorganisation Act,
2014 or allocation of the Institutions to one State or the other.
The learned senior counsel contends that the assets and liabilities of the
existing State are dealt with in Part-VI, consisting Sections 47-67 of the
Reorganisation Act, 2014, under heading ‘apportionment of assets and
liabilities’.
Section 47 of the Reorganisation Act, 2014 reads as under:
“47. (1) The provisions of this Part shall apply in relation to the
apportionment of the assets and liabilities of the existing State of Andhra
Pradesh immediately before the appointed day.
XXX XXX XXX
(3) The apportionment of assets and liabilities shall be subject to such
financial adjustment as may be necessary to secure just, reasonable and
equitable apportionment of the assets and liabilities amongst the successor
States.
(4) Any dispute regarding the amount of financial assets and liabilities
shall be settled through mutual agreement, failing which by order by the
Central Government on the advice of the Comptroller and Auditor-General of
India.”
(emphasis laid by this Court)
Further, Section 49, which deals with Treasury and Bank Balances, reads as
under:
“49. The total of the cash balances in all treasuries of the existing State
of Andhra Pradesh and the credit balances of the existing State of Andhra
Pradesh with the Reserve Bank of India, the State Bank of India or any
other bank immediately before the appointed day shall be divided between
the States of Andhra Pradesh and Telangana on the basis of population
ratio……”
Population ratio has been defined in Section 2(h) as under:
“2.
(h) “population ratio”, in relation to the States of Andhra Pradesh and
Telangana, means the ratio of 58.32 : 41.68 as per 2011 Census”
The learned senior counsel contends that the assets of APSC need to be
divided in the population ratio between the successor States of Andhra
Pradesh and Telangana in a fair and equitable manner.
Mr. Basava Prabhu S. Patil, the learned senior counsel appearing on behalf
of the State of Andhra Pradesh contends that the impugned judgment and
order passed by the High Court is erroneous in law. The learned senior
counsel contends that the funds collected by APSC post the creation of
Telangana, i.e., post 02.06.2014 cannot be appropriated by the State of
Telangana simply by way of the order of the High Court, on the basis of
faulty interpretation of the provisions of the Reorganisation Act, 2014. It
is submitted that this has effectively resulted in the State of Telangana
stopping the State of Andhra Pradesh from utilising the funds it had
collected even post the bifurcation, in respect of the thirteen districts
which formed part of its territory. The learned senior counsel further
draws our attention to Section 64 of the Reorganisation Act, 2014, which
reads as under:
“64. Residuary Provision: The benefit or burden of any asset or liability
of the existing State of Andhra Pradesh not dealt with in the foregoing
provisions of this Part shall pass to the State of Andhra Pradesh in the
first instance, subject to such financial adjustment as may be agreed upon
between the States of Andhra Pradesh and Telangana or, in default of such
agreement, as the Central Government may, by order, direct.”
(emphasis laid by this Court)
The learned senior counsel further contends that the impugned judgment and
order has been passed on a faulty consideration of the provisions of
Sections 5, 75 and 101 of the Reorganisation Act, 2014, and in ignorance
and non consideration of the provisions of Part VI of the Act, which deal
with apportionment of assets and liabilities. The learned senior counsel
contends that the overarching principle of the Reorganisation Act, 2014 is
a twofold basis of bifurcation, namely reasonableness and equity, and
population ratio, and the same must be implemented in its true spirit.
On the other hand, Mr. T.R. Andhyarujina, the learned senior counsel
appearing on behalf of the State of Telangana contends that the term
‘facilities’ used in Section 75 of the Reorganisation Act, 2014 should also
be understood to include assets and liabilities of those respective
institutions. If an institution falls within the territory of Telangana,
then it cannot be disturbed, and the new State of Andhra Pradesh cannot
stake any claim in it whatsoever.
Mr. K. Ramakrishna Reddi, learned Advocate General for the State of
Telangana contends that the specified institutions in the tenth Schedule of
the Reorganisation Act, 2014 are partly corporate personalities, in the
nature of state owned institutions, without any commercial element and are
non-profit in nature. The learned Advocate General places reliance on the
decision of this Court in the case of Electricity Employees Union v. Union
of India[1], wherein this Court, while interpreting the provisions of the
Punjab Reorganisation Act held as under:
“11. Part VI of the Act as stated above deals with apportionment of assets
and liabilities of the erstwhile State of Punjab. This Part is not
applicable for apportionment of assets and liabilities of the existing
Punjab State Electricity Board, as there is specific provision for this
purpose viz., Section 67 and moreover the Board has a separate legal
entity.”
Further, the learned Advocate General contends that the apportionment of
assets and liabilities as per the Reorganisation Act, 2014 has been made on
the basis of territory and location. The Tenth Schedule state institutions
have to be maintained as per the location of the respective States. Thus,
purely on the basis of the principle of territoriality also, the funds and
assets of the erstwhile APSC now belong to the TSC.
Mr. Ranjit Kumar, the learned Solicitor General appearing on behalf of
Union of India, submits that APSC is a statutory body constituted under the
Andhra Pradesh State Council for Higher Education Act, 1988. Since the
Council has to discharge statutory responsibilities under the relevant Act,
both the States should adopt the Act of 1988 under Section 101 of the
Reorganisation Act, 2014, in the interest of students, till such time as
they enact their own laws. While the government of Telangana has already
adopted this, the Government of Andhra Pradesh is still to do so. The
learned Solicitor General further submits that the ownership and division
of the assets of the erstwhile APSC would be governed by Section 47 of the
Reorganisation Act, 2014.
The learned Solicitor General draws our attention to a crucial provision
which governs the assets and liabilities of the institutions incorporated
under Central or State Act, i.e. Section 52(4), which reads as under:
“52(4) Where anybody corporate constituted under a Central Act, State Act
or Provincial Act for the existing State of Andhra Pradesh or any part
thereof has, by virtue of the provisions of Part II, become an inter-State
body corporate, the investments in, or loans or advances to, any such body
corporate by the existing State of Andhra Pradesh made before the appointed
day shall, save as otherwise expressly provided by or under this Act, be
divided between the States of Andhra Pradesh and Telangana in the same
proportion in which the assets of the body corporate are divided under the
provisions of this Part.”
(emphasis laid by this Court)
The learned Solicitor General further submits that since all statutory
corporations and Public Sector Undertakings are the instrumentalities
created by the existing State of Andhra Pradesh in the context of
reorganization of the existing State, their assets and liabilities are
liable to be apportioned between the two States as per the population ratio
stipulated under the provisions of Section 2(h) of the Reorganisation Act,
2014. The APSC, being an asset of the existing State, created by the Act of
1988, it became necessary to provide for bifurcation of APSC and allocation
of fixed deposits, Bank balances, cadre strength, vehicles, equipment,
movable assets etc. The learned senior counsel submits that subsequent to
the impugned judgment and order passed by the High Court, TSC has been
operating the bank accounts of APSC, which includes the money collected
from the thirteen districts of the successor State of Andhra Pradesh.
We have heard the learned senior counsel appearing on behalf of the
parties. The short point which arises for our consideration is whether the
High Court was right in upholding the action of the Banks in freezing the
accounts of APSC.
We are unable to agree with the contentions advanced by the learned senior
counsel appearing for the State of Telangana.
The Constitution of India envisages a federal feature, which has been held
to be a part of the basic structure of the Constitution of India, as has
been held by the seven Judge Bench of this Court in the case of S.R. Bommai
& Ors. v. Union of India[2], wherein Justice K. Ramaswamy in his concurring
opinion elaborated as under:
“247. Federalism envisaged in the Constitution of India is a basic feature
in which the Union of India is permanent within the territorial limits set
in Article 1 of the Constitution and is indestructible. The State is the
creature of the Constitution and the law made by Articles 2 to 4 with no
territorial integrity, but a permanent entity with its boundaries alterable
by a law made by Parliament. Neither the relative importance of the
legislative entries in Schedule VII, Lists I and II of the Constitution,
nor the fiscal control by the Union per se are decisive to conclude that
the Constitution is unitary. The respective legislative powers are
traceable to Articles 245 to 254 of the Constitution. The State qua the
Constitution is federal in structure and independent in its exercise of
legislative and executive power. However, being the creature of the
Constitution the State has no right to secede or claim sovereignty. Qua the
Union, State is quasi-federal. Both are coordinating institutions and ought
to exercise their respective powers with adjustment, understanding and
accommodation to render socio-economic and political justice to the people,
to preserve and elongate the constitutional goals including secularism.
248. The preamble of the Constitution is an integral part of the
Constitution. Democratic form of Government, federal structure, unity and
integrity of the nation, secularism, socialism, social justice and judicial
review are basic features of the Constitution.”
(emphasis laid by this Court)
Article 3 of the Constitution of India confers the power of formation of
new states on the Parliament. The scope of Article 3 was elaborated upon by
a five judge bench of this Court in the case of Raja Ram Pal v. Hon’ble
Speaker, Lok Sabha[3] as under:
“India is an indestructible Union of destructible units. Article 3 and
Article 4 of the Constitution together empower Parliament to make laws to
form a new State by separation of the territory from any State or by
uniting two or more States or parts of States or by uniting any territory
to a part of any State, and in so doing to increase or diminish the area of
any State and to alter its boundaries……”
The issue of bifurcation of states is both sensitive as well as tricky.
Adequate care has to be taken by the legislature while drafting
legislations such as the Reorganisation Act, 2014 to ensure a smooth
division of all assets, liabilities and funds between the states to make
sure that the interests of the citizens living in these states are
protected adequately. Therefore, care must be taken to ensure that no
discrimination is done against either of the successor state. Thus while
interpreting statutes of such nature, the courts must ensure that all parts
of the statute are given effect to. An eleven Judge Bench of this Court in
the case of H.H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur of
Gwalior & Ors. v. Union of India[4] has held as under:
“The Court will interpret a statute as far as possible, agreeably to
justice and reason and that in case of two or more interpretations, one
which is more reasonable and just will be adopted, for there is always a
presumption against the law maker intending injustice and unreason. The
Court will avoid imputing to the Legislature an intention to enact a
provision which flouts notions of justice and norms of fairplay, unless a
contrary intention is manifest from words plain and unambiguous. A
provision in a statute will not be construed to defeat its manifest purpose
and general values which animate its structure. In an avowedly democratic
polity, statutory provisions ensuring the security of fundamental human
rights including the right to property will, unless the contrary mandate be
precise and unqualified, be construed liberally so as to uphold the right.
These rules apply to the interpretation of Constitutional and statutory
provisions alike.”
(emphasis laid by this Court)
In the case of Prakash Kumar@ Prakash Bhutto v. State of Gujarat[5], a
constitution bench of this Court held as under:
“By now it is well settled Principle of Law that no part of a statute and
no word of a statute can be construed in isolation. Statutes have to be
construed so that every word has a place and everything is in its place. It
is also trite that the statute or rules made thereunder should be read as a
whole and one provision should be construed with reference to the other
provision to make the provision consistent with the object sought to be
achieved.
In Reserve Bank of India v. Peerless General Finance and Investment Co.
Ltd. this Court said:
"33. Interpretation must depend on the text and the context. They are the
basis of interpretation. One may well say if the text is the texture,
context is what gives the colour. Neither can be ignored. Both are
important. That interpretation is best which makes the textual
interpretation match the contextual. A statute is best interpreted when we
know why it was enacted. With this knowledge, the statute must be read,
first as a whole and then section by section, clause by clause, phrase by
phrase and word by word. If a statute is looked at, in the context of its
enactment, with the glasses of the statute- maker, provided by such
context, its scheme, the sections, clauses, phrases and words may take
colour and appear different than when the statute is looked at without the
glasses provided by the context. With these glasses we must look at the Act
as a whole and discover what each section, each clause, each phrase and
each word is meant and designed to say as to fit into the scheme of the
entire Act. No part of a statute and no word of a statute can be construed
in isolation. Statutes have to be construed so that every word has a place
and everything is in its place." "
(emphasis laid by this Court)
It is natural that when an existing State if bifurcated to form two new
States, there must be an equitable bifurcation of the assets and
liabilities of the statutory bodies among the two successor States as well,
to ensure welfare of the public at large residing within these territories.
In the instant case, the State of Telangana has claimed ownership over the
entire funds and assets of the (erstwhile) APSC. This could surely not have
been the intention of the legislature while enacting the Reorganisation
Act, 2014. The main thrust of the argument of both the learned senior
counsel appearing on behalf of State of Telangana, as well as the impugned
judgment and order passed by the High Court is that the successor State of
Andhra Pradesh has absolutely no right over the institutions in the city of
Hyderabad, by virtue of the fact that Hyderabad falls in the successor
State of Telangana. Heavy reliance has also been placed on Section 75 of
the Reorganisation Act, 2014, on the ground that the assets belonging to
the specified institutions of the Tenth Schedule exclusively belong to the
State institutions, since the Act does not provide any apportionment to
them. We are wholly unable to agree with this contention advanced on behalf
of the State of Telangana. If this contention is accepted, it would render
Section 47 of the Act, which provides for the apportionment of assets and
liabilities among the successor States, useless and nugatory.
The action of the Banks of freezing the bank accounts of APSC is wholly
untenable in law, which must be set aside. By no stretch of imagination can
it be assumed that the complete takeover of assets of the erstwhile APSC by
TSC, on the ground that the State institution happens to be in Hyderabad,
which is now a part of Telangana, was what the legislature had in
contemplation while enacting the Reorganisation Act, 2014.
For the reasons stated supra, the common impugned judgment and order passed
by the High Court of judicature at Hyderabad for the States of Telangana
and Andhra Pradesh in Writ Petition Nos. 1873 and 2882 of 2015, upholding
the freezing of the bank accounts of APSC being unsustainable in law is
liable to be set aside and set aside. Accordingly, the appeals filed by the
State of Andhra Pradesh and APSC are allowed.
Having allowed the appeal filed by APSC, we also hold that the action of
freezing of the bank accounts of APSC is bad in law on account of the fact
that what has been frozen is not just the pre bifurcation amount, but also
the amounts collected by APSC for the period after the bifurcation in
relation to the thirteen districts of the successor State of Andhra
Pradesh. Accordingly, APSC must be allowed to operate their bank accounts
in respect of the thirteen districts which fall within State of Andhra
Pradesh now, in which the amounts collected post the date of bifurcation
have been deposited. The assets of APSC of the undivided State of Andhra
Pradesh, that is, assets existing up to the date of bifurcation may be
divided between the two successor States in the population ratio of 58:42,
as provided under Section 2(h) of the Reorganisation Act, 2014, if the two
successor States are agreeable to the same. If the two successor States are
unable to arrive at an agreement, the Central Government may constitute a
committee, which may be directed to arrive at an agreement, in accordance
with the provisions of the Reorganisation Act, 2014 within a period of two
months from the date such representation is made to the Central Government.
All pending applications are disposed of. No costs.
………………………………………J.
[V. GOPALA GOWDA]
………………………………………J.
[ARUN MISHRA]
New Delhi,
Dated: March 18, 2016
-----------------------
[1]
[2] (2000) 7 SCC 339
[3]
[4] (1994) 3 SCC 1
[5]
[6] (2007) 3 SCC 184
[7]
[8] (1971) 1 SCC 85
[9]
[10] (2005) 2 SCC 409
