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Maharaja Lakshman Sen Memorial College and Others Vs. State of H.P. and Others - Court Judgment

LegalCrystal Citation
CourtHimachal Pradesh High Court
Decided On
Case NumberCWP No.1932 of 2008, with CWP Nos. 2332 of 2008, 1749 of 2010, 1874 of 2010, 2996 of 2010 & 5996 of 2011
Judge
AppellantMaharaja Lakshman Sen Memorial College and Others
RespondentState of H.P. and Others
Excerpt:
himachal pradesh aided colleges (security of employees) act, 1994 -a.m. khanwilkar, c.j. all these six petitions can be disposed of together by this common judgment as the issues and reliefs are overlapping. 2. the petitioners have essentially challenged the himachal pradesh grant-in-aid to non-government colleges rules, 2008 (in short called the rules of 2008) and the amendment to rule 4 thereof, vide notification dated 6.10.2009 titled as himachal pradesh grant-in-aid to non-government colleges (2nd amendment) rules, 2009 (in short called the rules of 2009), in particular to the extent the grant-in-aid has been restricted to teaching and non-teaching staff for whom the grant-in-aid was being provided prior to coming into force of the rules of 2008 and without providing any grant-in-aid towards the enactments and other benefits and also to the post upon.....
Judgment:

A.M. Khanwilkar, C.J.

All these six petitions can be disposed of together by this common judgment as the issues and reliefs are overlapping.

2. The petitioners have essentially challenged the Himachal Pradesh Grant-in-aid to non-Government Colleges Rules, 2008 (in short called the Rules of 2008) and the amendment to Rule 4 thereof, vide Notification dated 6.10.2009 titled as Himachal Pradesh Grant-in-aid to non-Government Colleges (2nd Amendment) Rules, 2009 (in short called the Rules of 2009), in particular to the extent the grant-in-aid has been restricted to teaching and non-teaching staff for whom the grant-in-aid was being provided prior to coming into force of the Rules of 2008 and without providing any grant-in-aid towards the enactments and other benefits and also to the post upon superannuation of the staff. The petitioners instead are seeking directions against the respondents to continue to pay 95% grant-in-aid to the petitioner-Colleges as was paid under Himachal Pradesh non-Government Affiliated Colleges Grant-in-aid Rules, 1994 and release commensurate amount towards grant-in-aid to the petitioner College forthwith.

3. CWP No. 2332 of 2008 is filed by the teaching and non-teaching employees of the petitioner College in the leading petition seeking similar reliefs as claimed by that College.

4. In CWP No. 1749 of 2010, the same reliefs are claimed with little variation. Besides prayer for quashing of Rules of 2008, in so far as it takes away the right of the petitioner therein to get 95% grant-in-aid to meet its expenditure for the purposes such as salary of the teaching/non-teaching staff in the revised pay scales of University Grants Commission, salary of approved non-teaching staff, ACP of non teaching staff etc. It is also prayed that the action of respondents of initiating steps for recovery of EPF to reclaiming 10% which it sets to be paid by the College towards EPF, would be contrary to Rule 12 of the Rules of 1994.

5. CWP No. 1874 of 2010 is filed by St. Bedes College. Besides the reliefs claimed in the leading petition, it is also prayed that the respondents be directed to exercise powers under the rules of 2008 to grant relaxation and pay full 95% grant-in-aid to the said College as was paid before coming into force of the Rules of 2008, as per the Rules of 1994. It is also prayed that the respondents be directed to release the arrears of salary and other allowances in respect of the petitioner College from 1.4.2008 onwards @ 95% grant-in-aid including the selection grade arrears on account of ACP, gratuity and CPF etc. Further, to consider the successive representations made by the petitioner College for relaxation. It is also prayed that the respondents be directed to further amend Rule 4 of the Notification dated 2.8.2008 to the extent that the petitioner-College employees already covered under grant-in-aid Rules 1994 are eligible to grant-in-aid 95% till their retirement and further the post filled after 1.4.2008 to be eligible for grant-in-aid as per Notification dated 2.8.2008 so as to apply the provisions of Rules of 1994 qua the existing employees covered under the said Rules.

6. CWP No. 2996 of 2010 is filed by petitioner Dayanand Anglo-Vedic College Management Committee. Moreless, praying for the same reliefs as claimed in CWP No. 1874 of 2010. The relief claimed in this petition is to direct respondents No. 1 and 2 to release the Notification of Revision of UGC pay-scales w.e.f. 1.1.2006 for all employees of the petitioner-College.

7. In CWP No. 5996 of 2011 filed by the Himachal Pradesh Non-Government College Lecturers Association comprising of College Lecturers of 5 Colleges, namely Maharaja Laxman Sen Memorial College, Sundernagar; Sh. Vishnu Sanatan Dharam Post Graduate College Bhatoli; Mehar Chand Mahajan DAV College, Kangra; St. Bedes College, Shimla and DAV College, Kotkhai also prays for the same reliefs as in the leading petition and for direction to the respondents to implement the judgment of the Honble Court as well as the provisions of Himachal Pradesh Aided Colleges (Security of Employees) Act, 1994 in its letter and spirit, thereby directing the State Government to provide 95% grant-in-aid to Colleges of the petitioner-Association with respect to salary, allowances etc. as ordered by the respondents while sanctioning the stated posts of teaching personnel and to pay all the arrears to the members of the petitioner-Association alongwith interest in pursuance to the implementation of revision.

8. In substance, the grouse of all the petitioners about the impugned Rules, is that, the same are repugnant to the provisions of the Himachal Pradesh Aided Colleges (Security of Service Employees) Act, 1994 and therefore, ultra-vires. It is also urged that the field of legislation covered by the impugned Rules is covered by the provisions of Act of 1994 and for which reason, no delegated legislation nor any executive instructions can override the provisions of the said Act of 1994. It is submitted that the subordinate legislation must be in consonance with the principal Statute hence, it is ultra vires. Further, the impugned Rules of 2008 as amended in 2009 are violative of Article 14 of the Constitution of India being arbitrary and irrational. For, it not only takes away the rights of the Colleges to receive grant-in-aid but that has been done without resorting to any analytical study and bereft of any empirical data which necessitated repeal of provisions in Rules of 1994. The impugned rules have been framed on the basis of the decision of this Court in the case of Dr. Harish Lakhanpal and others versus State of HP and others decided on 14.8.2006 in CWP No. 519 of 2000 which decision in turn makes no reference to the provisions of the Act of 1994 and is ex-facie per incurium and not binding. As a necessary corollary, the impugned rules are void. According to the petitioners, in view of the revision of pay scales, and at the same time, withdrawal and/or reduction of the grant-in-aid would have cascading effect on the financial position of the Colleges making it impossible to perform or to impart quality education rather the Colleges would be forced to close down having become unviable. Taking over all view of the matter, the State Government must invoke its powers under Rule 13 to grant relaxation to Colleges who were already availing benefit of grant-in-aid up to 95% in terms of Rules of 1994. The Government ought to do so because being grant-in-aid Colleges, the Government would continue to have deep and pervasive control on the Colleges. It is submitted that the impugned Rules completely defeat the objectives for which Rules of 1994 were framed and were given effect to. Much emphasis was placed on the instructions issued by the University with regard to non-charging of tuition fees from girl students. It is also submitted that the only way forward in the Colleges is to enhance the fees which would be against the public interest and in particular deny higher education to middle class families in rural areas as the Colleges will have to resort to steep hike in the fees making higher education for those class of persons un-affordable.

9. To buttress the above submissions, the petitioners have placed reliance on the decisions of the Apex Court in Government of Andhra Pradesh and others versus P. Laxmi Devi ((2008) 4 SCC 720), (paras 32 to 35); Indian Express Newspapers (Bombay) Pvt. Ltd. and ors. Versus Union of India and others ((1985) 1 SCC 641), (paras 76 and 77); I. T. C. Bhadrachalam Paper Boards and another versus Mandal Revenue Officer, A.P. and ors. ((1996) (6) SCC 634), (para 30); Mayuram Subramanian Srinivasan versus CBI ((2006) 5 SCC 752), (para 9 to 11); and Union of India and anr. versus Manik Lal Banerjee ((2006) 9 SCC 643), (para 18).

10. Per contra, the respondents have refuted the claim of the petitioners. As regards the petition filed by the employees or association of employees, it is submitted that they cannot be heard on the issue of grant or non-grant of grant-in-aid to the Colleges in which they have been employed. As regards the claim of the Colleges to continue to receive 95% grant-in-aid, as was being received under the Rules of 1994, it is submitted that the said Colleges cannot claim any vested right to receive grant-in-aid from the State Government. Moreover, the State Government has to give priority to finance the elementary education across the State. It is for the management of the College of Higher Education such as the petitioners before this Court to decide whether they must continue to receive grant-in-aid as offered by the State Government. It is open to the Colleges to be completely autonomous and un-aided. Further, it is submitted that the impugned Rules of 2008 is the product of the direction given by this Court in the case of Dr. Harish Lakhanpal (supra), which was binding on the State Government. The fact that the said decision does not refer to the provisions of the Act of 1994, would make no difference to the correctness of the said decision, which has attained finality. Further, the Act of 1994 is not pertaining to the subject of grant-in-aid as such, but is limited to the matters concerning security of services of employees and their service conditions in respect of aided Colleges. The provisions of the said enactment cannot be taken aid by the aided Colleges to contend that it has vested right to receive grant-in-aid from the State Government. The recipient of grant-in-aid cannot claim any right in that behalf as it is complete discretion and prerogative of the State Government to bestow such benefit on the Private Colleges and there is nothing wrong if that power is exercised in terms of the guidelines provided under the Rules of 2008, which have been evolved on the basis of directions given by this Court. According to the respondents, the Rules of 1994 cover different field and concerned only 5 Colleges. The benefits made available under the said Rules, in law, could be withdrawn by the State Government, taking into account all the attending circumstances and in public interest. No theory of prejudice can be pressed by the Colleges as they are free to fix and determine appropriate fees within the specified limits to meet the deficit of excess expenditure incurred by it. The impugned Rules of 2008 attempt to provide for the manner of equitable distribution of the Government funds in the form of grant-in-aid to the Colleges. The Colleges, in law, cannot compel the government to pay grant-in-aid on the same terms for ever or in perpetuity. It is submitted that reliance placed on the provisions of the Act of 1994 and that on the Ordinance/Statutes issued by the University concerning the service conditions to be observed is inapposite and would have no bearing on the question of right of management of the College to receive grant-in-aid from the State Government. The employees of the concerned Colleges are fully protected by the terms and conditions of their service by virtue of the provisions of the Act of 1994 and the ordinance issued by the University and the Colleges are under legal obligation to abide by the said norms. It is submitted that the argument of financial difficulty posed by the petitioner-Colleges can be no basis to force the State Government to take the additional liability of the concerned Colleges and at the same time to deny the benefit of those funds, which are scarce to be availed by more deserving Colleges. Withdrawal or rejection of grant-in-aid to the concerned Colleges cannot be the basis to countenance the argument that there will be deterioration in the quality of education imparted by the Colleges. For, the Colleges, in any case, are obliged to adhere to the standards and quality specified by the Central Authorities and the University as condition precedent.

11. Learned Advocate General has placed reliance on the decision of the Apex Court in the case of Brij Mohan Lal versus Union of India and others ((2012) 6 SCC 502), (para 96 to 106) to buttress the abovenoted contentions.

12. The principal issue is about the withdrawal/reduction of grant-in-aid to be received from the State Government by the petitioner-Colleges. No doubt, grant-in-aid is a sum of money given by governmental agency to a person or institution for a specific purpose such as education or research. However, it is for the State Government to draw up a perspective plan and set apart funds from the available resources keeping in mind its other obligations to be discharged under the constitutional scheme and other statutory provisions from time to time. It is not for the Courts to dictate to the State as to how much amount should be set apart for providing grant-in-aid to the Colleges for imparting higher education across the State. That is a matter within the domain of the State Government. The State is not only required to set apart commensurate amount from the available resources for this purpose but also ensure equitable distribution of the funds so earmarked whilst disbursement of grant-in-aid.

13. This Court in the case of Dr. Harish Lakhanpal (supra) had occasion to observe as follows:

“It is well settled law that no authority can have absolute discretion in the matter of distribution of Government funds. There must be some rational and reasonable guidelines framed on the basis of which the Government largesse is to be distributed. This cannot be left to the whims or fancies of a particular officer or authority. The Rules only lay down the eligibility criteria, but do not lay down the norms as to how the aid is to be distributed or paid. From a perusal of the pleadings, it is apparent that seven Colleges are being given Grant-in-aid right from the very beginning. Thereafter, two more Colleges were added to the list and no other private College is being granted the aid and the rejection is only on the ground that it is for the Government to decide which College is to be given aid and which is not. In my opinion, it would be most salutary and appropriate if the Government frames certain guidelines and fixes the norms on the basis of which the grant-in-aid under the Rules is to be paid to certain Colleges. The said Grant-in-aid cannot be paid only to few private Colleges leaving all other private Colleges in a lurch. One can understand that the State is not in a financial position to give complete Grant-in-aid to all the Colleges in the State. However, that does not mean that only a few chosen Colleges are to be given Grant-in-aid in perpetuity. There must be equitable distribution on the basis of well established criteria. Therefore, I am of the considered view that directions are required to be issued to the State in this regard and accordingly direct respondents No.1 and 2 to frame guidelines and lay down the norms and criteria for bringing a private college in the Grant-in-aid list and for distribution of the Grant-in-aid under the Rules. The Government has already fixed the eligibility criteria. The colleges which fulfill the eligibility criteria may through the Principal or the Management apply for Grant-in-aid on or before 30th October of the previous year for the subsequent financial year. The respondents No.1 and 2 shall prepare on or before 30th November of the previous year, a list of the colleges who have applied for the Grant-in-aid for the next financial year.

Thereafter, keeping in view the amount available for being distributed as Grant-in-aid, the same shall be allotted equitably to all the eligible Colleges on the basis of some norms such as; (a) the date of establishment of the College; (b) the date since when the College has been granted affiliation. The State may also lay down other guidelines wherein preference may be given to Colleges which are opened in Backward Areas or areas where there is no Government College existing. Similarly, the State may take a decision to give preference or weightage to the Colleges established in Rural Areas. In fact the State can go as far as to decide that Colleges privately established in Urban Areas where Government Colleges are already existing, shall not be given Grant-in-aid.

The State in its wisdom may also frame the norms giving preference to those private Colleges which are either established in areas where a large number of students belong to Scheduled Castes/Scheduled Tribes or other backward categories. Other criteria, such as, the number of students, number of courses run, the academic results of previous years etc. can also be taken into consideration while framing the norms. It is obvious that in case such norms are framed, then the Rules will require certain amendments and the Colleges may not get (complete) 95% Grant-in-aid because of the equitable distribution involved. It is clarified that the various suggestions and guidelines enumerated above are some of those which have been suggested by the parties and which this Court felt necessary and appropriate. The State may while framing the norms take the suggestion of the Court into consideration and may also frame other guidelines in consonance with the suggestion given hereinabove.”

(emphasis supplied)

14. As a result of this decision, the Rules of 2008 have been framed and brought into effect from 16.3.2008. Before we turn to these Rules, let us analyze the Rules of 1994. The said Rules were framed in exercise of executive power of the State and not in terms of Rule making power given to the State Government under any Statute. The extent of application of the said Rules was to determine, regulate and relax grant-in-aid to non-government Colleges affiliated to the Himachal Pradesh University, Shimla, located in the State of Himachal Pradesh. Rule 4 deals with the eligibility criteria. Besides Rule 4, read with Rule 9 provides for the Colleges who would be eligible to receive grant-in-aid. The said Rules 4 and 9 read thus:

“4. Eligibility:- A Non-Government College having acquired the affiliation with the Himachal Pradesh University shall be entitled to be governed by the provisions of these Rules automatically, but the State Government shall have such discretionary power to bring any College on the Grant-in-aid list after careful consideration of merits of each case and position of the funds earmarked for the purpose of Grant-in-aid.

9. Colleges on Grant-in-aid List:- Only such Colleges shall be eligible for the grant-in-aid under these Rules which are granted regular affiliation by the Himachal Pradesh University and are on the grant-in-aid list of the Government of Himachal Pradesh.”

15. The Colleges in the State of Himachal Pradesh fulfilling the above eligibility criteria thus became entitled for grant-in-aid. The object of grants has been stated in Rule 5. The same reads thus:

“ 5. Object of Grants:- The object of Grant-in-aid contemplated under these Rules is of encouraging and promoting private enterprise in Education. Such Grant shall be given only for the purpose connected with secular Institutions without reference to any religious instruction.”

16. The object of providing grant-in-aid to non-Government Colleges was to encourage and promote private enterprises in education. Rule 8 specified the amount of grant-in-aid that could be received by the private Colleges. Clause (a) of Rule 8 spells out the quantum to be received as grant-in-aid by the private Colleges. The same reads thus:

“8. Quantum of the Grant-in-aid.-

(a) The amount of grant-in-aid to be released to a College shall be limited to 95% of the deficit of the estimated income (as detailed under) and the expenditure likely to be incurred on payment of the salary of the approved staff (teaching and non-teaching) during one financial year subject to adjustments of over and under payments, in accordance with the norms at which the salary is being paid to the staff in Government Colleges. The requirements of Grant-in-aid in respect of the Colleges for the ensuing year shall be submitted by each College in the form of budget to the Director of Education by 31st October (on a date notified by the Director) of each year, stating numbers of post of Principal, Lecturers (subject-wise), Superintendent, Assistant, Clerks and others and financial implications alongwith similar statistical data for atleast two previous years with reasons to justify each increase and decrease.

(b) The budget estimates received from the Colleges shall be scrutinized in the Directorate and shall be forwarded to the Government by 15th November and budgetary provisions shall be made accordingly. The Government shall then sanction the release of three quarterly installments as on 1st April, 1st July and 1st October, on the basis of the cases submitted.

(c) A College on Grant-in-aid list shall send actual figures of Income and Expenditure first six months of the financial year i.e. upto 30th September, by 31st October to the Director and the Director will put the cases of each such College to the Government for release of Fourth installment of Grant-in-aid on the basis of actual figures, so received from the College, and the Government will decide and release the 4th and final installment after making necessary adjustments of over payments or under payments made for the earlier three quarters of the year.

(d) The Colleges on the Grant-in-aid list shall also submit actual figures based on the income and expenditure during the last financial year duly audited by charted Accountants by 30th of April positively to Director of Education.”

Besides this Rule, it may be apposite to refer to Rule 12. The same reads thus:

“12. Managements Share.- The amount payable by the College management i.e. 5% of the deficit as share of the deficit shall have to be deposited on that account by the College management/Principal within a specified time in the ‘PERSONAL LEDGER ACCOUNT as mentioned in section-13 below.”

17. It is true that these Rules do not specify any time period for which the benefits of grant-in-aid were to be extended to the private Colleges. Even Rule 11, which dealt with determination of the amount of grant-in-aid does not specify any time frame during which the grant-in-aid would be paid by the State Government to the  concerned College. This was the precise issue considered by this Court in the case of Dr. Harish Lakhanpal (supra); and this Court observed that it may not be reasonable, just and rational to distribute government largess to only few selected Colleges perpetually, which inevitably would result in denial of similar benefit to other more deserving Colleges.

18. There are other provisions in the Rules of 1994 imposing strict conditions and stipulations to be observed by Colleges receiving grant-in-aid from the State Government which provisions may not be of any assistance for deciding the matter in issue before us. We may also note that Rule 22 of the Rules of 1994 which provided for power to stop/reduce grant-in-aid was circumscribed only in the event of the concerned College failing to abide by any of the provisions of the Act/Rules or the directives issued by the State Government or Director of Education, from time to time. This, however, is a specific provision. It is not a general provision contemplating withdrawal or reduction of grant-in-aid dehors the situation specified in Rule 22. Even Rule 23 regarding power of the Government to divert payment out of grant-in-aid was circumscribed in case of non-compliance of an order of competent authority.

19. No doubt, the Notification issued on 6.5.1994 gives an impression that the Government of Himachal Pradesh had framed Rules. But, the same is only in exercise of executive power of the State and not a piece of delegated legislation in exercise of power conferred by the Statute enacted by the Legislature of the State. Even the impugned Rules of 2008 have been framed and issued in exercise of executive powers of the State on the subject of grant-in-aid, which have repealed the Rules of 1994. Notwithstanding the repeal of Rules of 1994, the impugned Rules of 2008 purport to save anything done or action taken under the repealed Rules of 1994 . It provides that the same shall be deemed to have been done or taken under the Rules of 2008. This saving, however, would be of no avail to the petitioner-Colleges to contend that they must continue to get 95% grant-in-aid of the deficit to the estimated income of the College muchless after coming into force of Rules of 2008 which unambiguously provide that the grant-in-aid to a College shall not exceed 50% of the revenue gap (total expenditure on salary of persons, teaching and non-teaching staff minus the income from all sources). Not only that, proviso to Rule 4 contemplates that actual amount of grant-in-aid will, however, depend upon the availability of resources and budgetary allocation with the Government for this purpose. That means even if the College, ordinarily, would be entitled to receive up to 50% of the revenue gap amount as grant-in-aid; but if the Government does not have enough resources and budgetary allocation, it is free to deny that facility in the given situation. What is significant to notice is the objects of grant spelt out in the Rules of 2008. It is to financially assist non-government Colleges teaching in Arts, Commerce and Science subjects at undergraduate level “till they become self-reliant”, subject to the prescribed time frame. By the very nature of provision contained in Rule 3, spelling out the objectives of grant, it is obvious that the policy decision of the State Government is to provide grant to Colleges only until they become self-reliant and upto maximum five years time. The eligibility criteria specified in Rule 5 of these Rules predicates that the private Colleges receiving grant-in-aid must continually take steps to improve its financial position. The eligibility criteria has also been limited to “5 years from the year of eligibility or from the date of coming into force of the Rules of 2008”, whichever is later. This period, in the opinion of the State, gave enough time to the private Colleges to become selfreliant. If the private Colleges have failed to take corrective measures to improve their financial position, they cannot be heard to complain about the condition so imposed. For, five years time frame is a reasonable period given to the Colleges receiving grant-in-aid to become self-reliant. This is a matter of Policy of the State Government, keeping in mind the limited resources available to the State for promotion of higher education.

20. Then, Rule 7 of the Rules of 2008 provides for equitable distribution in the case of insufficiency of funds. For the sake of completion of record, it may be appropriate to reproduce Notification dated 16.3.2008 which introduced the Rules of 2008, the same reads thus:

“GOVERNMENT OF HIMACHAL PRADESH

HIGHER EDUCATION DEPARTMENT

No.EDN-A-Ga-(10)-5/98 Dated 16th March, 2008

NOTIFICATION

In compliance with the direction of Honble High Court dated 14-8-2006 in CWP No. 519 of 2000 titled Dr. Harish Lakhanpal and Others v/s State of H.P and others the Governor, Himachal Pradesh is pleased to make the following rules namely the Himachal Pradesh Non-Government College Grant-in-aid Rules, 2008.

1. Short Title and Commencement

i) These rules may be called the Himachal Pradesh Grant-in-aid to non-Government Colleges Rules, 2008.

ii) These rules shall come into effect from the date they are published in the Rajpatra.

2. Definitions

In these rules, unless there is anything repugnant to the subject or the context:-

(a) “Government” or “State Government” means the Himachal Pradesh Government in the Higher Education Department;

(b) “Directorate” or “Directorate of Higher Education” means the office of the Director of Higher Education, Himachal Pradesh;

(c) “Director” or “Director of Higher Education” means the executive Head of Higher Education Directorate;

(d) “University” means the Himachal Pradesh University.

(e) “College” means an institution in which education is imparted in courses prescribed by the Himachal Pradesh University.

(f) “Affiliated college” means a college affiliated with the Himachal Pradesh University.

(g) “Non-Government College” means a college which is not owned or controlled by the State Government.

(h) “Management” means a duly constituted management committee of a non-Government college.

3. Objects of Grants

The object of the grants-in-aid contemplated by these rules is to financially assist non-Government colleges teaching in Arts, Commerce and Science subjects at under Graduate levels till they become self-reliant.

4. Extent of Application

Grants-in-aid will be admissible for meeting, a part of the salary expenses in respect of approved staff (teaching and non-teaching).

Provided that the grant –in-aid to a College shall not exceed 50% of the revenue gap (total expenditure on salary of approved teaching and non-teaching staff minus the total income from all sources). The actual amount of grant-in-aid will however, depend upon the availability of resources and budgetary allocation with the Government for this purpose.

5. Eligibility

A non- Government college would be eligible for grant-in-aid in a financial year provided:-

i) It is affiliated since five years to the HP University. ii) It has not violated any of the Universitys statutes/regulations in the previous three years;

iii) The pass percentage of its students of each class of each faculty getting grant in the university examinations in the previous three years is not less than 75%;

iv) The accounts of the college have been duly audited by a qualified Chartered Accountant.

v) The college does not discriminate amongst students applying for admission on grounds of caste, creed or religion;

Provided that the college may reserve seats for weaker sections of society like Scheduled Castes, Scheduled Tribes, Other Backward Castes, etc., on the pattern of similar reservations in Government service.

vi) The total income from all sources collected by the college are insufficient to meet the salary of approved staff (teaching and non-teaching).

vii) The College has taken steps to improve its financial position.

viii) Further release of GIA to the concerned College will be made only in case the College has submitted requisite Utilisation Certificate in respect of previous grants released to the concerned College. This certificate will be required to be submitted to the appropriate authority in the prescribed format as per provisions of HPFR and instructions issued there under.

ix) The College is not situated within the radius of 15 km. from any other college except where the Government has approved it for to be covered under these rules in view of special location before it is setup.

Provided, however, that this clause shall not be applicable to the Colleges affiliated with HPU on the date of commencement of these rules irrespective of the fact that these Colleges may be situated within the radius of 15 k.m. of a another College.

x) The maximum period for which a College will be eligible for grant will be five years from the year of eligibility or from the date of coming into force of these rules whichever is later.

6. Last date of receipt of requests

Requests for grant-in-aid from the management of the college should reach the Director, Higher Education latest by 30th of September of the year in which the grant-in-aid is sought.

7. Equitable distribution in case of insufficiency of funds

The total amount of grants-in-aid sanctioned during a financial year shall not exceed the amount voted for this purpose by the State Legislature; provided that in case the amount available for distribution in a financial year is insufficient to meet all the eligible requests received, then the amount available shall be distributed amongst applicant institutions as per following manner:

i) 40 points will be given to the College whose average percentage of marks of classes in Arts, Commerce and Science is the maximum and for other Colleges it will be proportionate.

ii) 40 points will be given to the College having maximum students strength in Arts, Commerce and Science in undergraduate classes. Other Colleges will be given proportionate marks subject to minimum of 10 points.

iii) Balance 20 points/ marks will be given as under:

a) Colleges located in Tribal Area 20 marks

b) Colleges located in areas identified for the 15 marks purpose of Difficult Area Sub Cadre other than Tribal Area.

c) Rural Areas 10 marks

iv) The total grant will be divided based on the cumulative points obtained as above. Base year for above purpose will be the previous year.

8. The maximum grant to all eligible colleges will be limited to the amount provided for this purpose in the budget and no liability shall get carry forward to next years.

9. Inspection of accounts

The accounts and other records of a college which applies for grant-in-aid or which receives grant-in-aid shall be open for inspection by the Director of Higher Education or an official authorized by him.

10. Audit of Accounts

The accounts of the College shall also be open to audit by Government agencies/Departments like the Local Audit Department/AG or by SAS personnel from the Higher Education Directorate.

11. Subjects

Grant-in-Aid will be admissible only in respect of salaries of teaching staff in under graduate courses in Arts, Commerce and Science for which affiliation of the university has been received.

12. Finality of Government decisions

The decision of the Government shall be final and binding upon the applicant institution.

13. Power to relax

Where the Government is of the opinion that it is necessary or expedient to do so, it may relax any of the provisions of these rules.

14. Repeal and Savings

i) The Himachal Pradesh Grant-in-aid to Non Government Colleges Rules, 1994 notified vide notification No. EDNC(10)5/80-part dated 6th May, 1994 are hereby repealed.

ii) Notwithstanding such repeal, anything done, or action taken under rules repealed under sub rule (i) supra shall be deemed to have been done or taken under these rules.

By Order

P.C. Dhiman

Secretary (Higher Education) to the Government of Himachal Pradesh.”

21. Rule 4 was, however, amended by the second amendment to Rules of 2008 vide Rules of 2009, which came into force by virtue of Notification dated 6.10.2009. The same reads thus:

“GOVERNMENT OF HIMACHAL PRADESH

HIGHER EDUCATION DEPARTMENT

No.EDN-A-Ga-(10)-3/2008 Dated 6th October, 2009

NOTIFICATION

The Governor, Himachal Pradesh is pleased to make the following rules further to amend the Himachal Pradesh Grant-in-aid to Non-Government Colleges Rules, 2008 notified vide this Department Notification No. EDN-A-GA-(10)-5/98 dated 16th March, 2008 and published in the Rajpatra, Himachal Pradesh dated 24th March, 2008.

1. Short Title:

These rules may be called the Himachal Pradesh Grant-in-aid to non-Government Colleges (2nd Amendment) Rules, 2009.

2. Amendment of rule 4.- in rule 4 of the Himachal Pradesh Grant-in-aid to Non-Government Colleges Rules,2008, after first proviso the following proviso shall be inserted, namely:-

“Provided further that colleges which were getting Grant-in-aid under the Himachal Pradesh Non-Government Affiliated Colleges Grant-in-aid Rules, 1994 shall be provided Grant-in-aid only for those teaching and non-teaching staff for whom grant-in-aid was being provided prior to notification of Himachal Pradesh Grant-in-aid to non-Government Colleges Rules, 2008 and the amount of annual Grant-in-aid to these colleges shall be restricted up to the amount of annual Grant-in-aid provided against each of these teaching and non-teaching staff in these colleges prior to 31.3.2008. On accrual of any incremental and other benefits after 31.3.2008, no additional Grant-in-aid shall be provided to these colleges. Further, the Grant-in-aid shall be reduced as and when the staff gets retired.

Provided further that the Grant-in-aid shall be provided w.e.f. 1.4.2008”.

By Order

P.C. Dhiman

Pr. Secretary (Hr. Education) to the Government of Himachal Pradesh.”

22. After coming into force of Rules of 2009, the application of the provisions of 2008 have been further circumscribed by virtue of induction of second proviso to Rule 4.

23. The principal argument of the petitioners is that these Rules are repugnant to the provisions of the Act of 1994. Reverting to the Act of 1994 on the plain language of the said enactment, it is clear that the same deals with the subject to security of services of employees in aided Colleges in the State of Himachal Pradesh. No more and no less. Section 2(a) defines the term “aided College” or “College” to mean a College affiliated to and admitted to the privileges of University and receiving financial assistance not less than 50% of the salary component for both teaching and non-teaching staff from the State Government. Notably, the Rules of 2008 have been framed, in particular, first proviso to Rule 4, keeping in mind the definition of aided College in Rule 2(a) of the Act of 1994. Any College receiving grant-in-aid less than 50% of the revenue gap towards salary component for both teaching and non-teaching staff from the State Government will necessarily loose the tag of aided College within the meaning of Act of 1994. That does not mean that the provisions in the Rules of 2008 are in conflict with the Act of 1994. In that case, the concerned College and the employees of such College would be governed by the provisions in the shape of the University Act and the Rules made thereunder, as well as Ordinances/Statutes issued by the University, as applicable to the unaided Private Colleges in the State of Himachal Pradesh. The fact remains that the Act of 1994 is not in relation to the subject matter of grant or non-grant of grant-in-aid to private Colleges by the State Government. Indeed, reference is found to the manner of receiving and disbursing of grant-in-aid, salaries of the employees in the Act of 1994. That cannot be the basis to hold that this Act of 1994 is also enacted by the Legislature to cover the field of grant-in-aid to be paid by the State Government to private or non-Government Colleges.

24. The sum and substance of the provisions contained in the Act of 1994 are regarding the qualifications to be possessed by the concerned employees of the College, method of recruitment and conditions of their service, code of conduct with which the employees of such Colleges will be governed, their salary and the manner of dismissal, removal or reduction in rank etc. The Act of 1994 is also in respect of the matter of probation, suspension, retrenchment of the employees in the Colleges to which Act of 1994 would apply. Section 13 of the Act of 1994, on which much emphasis was placed reads thus:

“13. Procedure for payment of salary.

(1) The Managing Committee of a College shall, for the purpose of disbursement of salaries to its employees, open in a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934) or a cooperative bank or a Government treasury or sub-treasury a separate ''Salary Payment Account" to be operated by the Principal :

Provided that the State Government may, on receipt of a report from the Director of any irregularity in the operation of the "Salary Payment Account”, instruct the bank or treasury, as the case may be operated by a person authorised by the State Government.

(2) The State Government may, from time to time, require by general or special order that the Managing Committee shall deposit in the "Salary payment Account" such portion of the amount received from students as fees and also such portion, if any, of the income received from any property, movable or immovable, belonging to or endowed wholly or partly for the benefit of the College, and by such date, as may be specified in that order and thereupon the Managing Committee shall be bound to comply with such directions.

(3) Where the Director is of the opinion that the Managing Committee has failed to deposit the fees in accordance with the provisions of sub-section (2) or the orders issued thereunder, the Director may, by order prohibit the Managing Committee from realising any fee from the students and thereupon, the Director may realise the fees either through the employees of the College or in such other manner as he thinks fit, directly from the students and shall deposit the fees so recovered in the "Salary Payment Account" .

(4) The State Government shall also pay into the "Salary Payment Account" such amount as maintenance grant which, after taking into consideration, the amount deposited under sub-sections (2) and (3), is necessary for making payment in accordance with sub-section (5).

(5) The salary of an employee shall be paid by transfer of the amount from "Salary Payment Account" to his account, if any, in the bank, or if he has no account in that bank, then by cheque.”

25. Even on plain reading of this provision, it is not possible to infer that the same is in respect of matter concerning eligibility quantum and the manner of distribution of grant-in-aid to be paid by the State Government to the private or non-government Colleges. For, sub Section (1), refers to the manner of disbursal of salaries to the employees of the College covered by the Act of 1994. The fact that the State Government would operate the specified bank account for salary payment of the employees or deficits, or for that matter, the State Government directs management of the College to deposit portion of the amount received from the students as fees or other specified income for payment of amount for salary and the person authorized by the State Government operates that account would be of no avail. Further, the fact that Section 13 refers to three components constituting the salary payment account for disbursement of salaries to the employees of the Colleges to which the Act of 1994 applies, which includes the contribution to be made by the State Government as maintenance grant, does not mean that this provision is the law on the subject of the eligibility, quantum and manner of disbursal of grant-in-aid by the State Government. At best, it is a provision specifying the three sources from where funds could be generated in the account of salary payment account for disbursal of salaries to the employees of the concerned College.

26. Similarly, provisions such as Section 17 of the said Act, which authorises the State Government to stop, reduce or suspend the grant-in-aid to a College for the violation of any of the provisions of the Act of 1994 or the Rules made thereunder or of any directive issued under Section 16, by the Managing Committee, Principal or any other Authority charged with the administration thereof, cannot be the basis to hold that it is a law covering the subject of grant-in-aid as such. This is only an enabling provision empowering the State Government to stop, reduce or suspend the grant-in-aid to the concerned College in the specified situation, in particular on account of violation of the mandate pertaining to the service conditions and security of service of employees of the College dealt with by the Act of 1994. For the same reason, even Section 18 of the Act of 1994 will be of no avail to the petitioners. The overriding provision in the form of Section 18, will have to be understood to mean that the provisions of Act of 1994 would govern the field in respect of security of services of employees in the Colleges to which the said Act applies notwithstanding a contrary provision in any other law in that behalf. That, however, does not mean that no law on the subject of grant-in-aid to be paid to the Private or non-government Colleges can be enacted by the State Legislature. That field is not occupied by the Act of 1994 at all nor this enactment can preclude the State from exercising executive power to frame rules/guidelines on the subject matter of grant-in-aid to be paid to private or non-government Colleges.

27. Besides the referred provisions, no other provision in the Act of 1994 has relevance to the matter in issue. Reliance was then placed on Ordinance 38.5 issued by the University, in Chapter XXXVIII. Sub-clause (e) of Clause A thereof refers to the requirement of observance of Rules laid down by the University regarding admission to Colleges/Institutions, strength of students in a class or section and the residence and discipline of students in every affiliated College or Institution. The fact that the said provision requires the private or non-Government affiliated Colleges to observe the specified norms regarding service conditions and security of services of employees of such Colleges cannot be the basis to accept the grievance of the petitioners or to take the view that the provisions in Rules of 2008 are repugnant with the provisions of the Act of 1994 or entrench upon the field occupied by the provisions of the said Act of 1994 in any manner.

28. The next question is: whether the provisions of Rules of 2008 are arbitrary. The Apex Court in the case of Brij Mohal Lal vs. Union of India and ors. (supra) has observed that it is settled principle of law that matters relating to framing and implementation of Policy primarily fall in the domain of the Government. Further, the policy should be framed which is fair and beneficial to the public and at best that it is for the Government to adopt any particular policy as it may deem fit and proper and law gives it freedom and liberty in framing the same. The Courts must be loath to exercise power of judicial review in relation to such matters unless the decision is arbitrary, capricious or malafide. The Apex Court further opined that the Court must act in accordance with law and determine whether the State has acted within the power and functions assigned to it under the Constitution and that the Government had authority and power. The Court also held that the Government has the authority and power to not only form its policies “but also to change the same”. The power of the government is very wide except it should not be arbitrary and unreasonable.

29. A priori, it is not as if the State could not have exercised its executive power on the subject regarding grant-in-aid to be paid to private or non-governmental colleges. The issue is essentially about the withdrawal of that benefit which has been availed by the petitioner Colleges since 1994 as per the scheme enunciated in Rules of 1994.

30. In the present cases, no case is made out that the exercise of executive power by the State on the subject of grant-in-aid payable to private or non-government Colleges is malafide. Besides, we find that the Rules of 2008 could be legitimately framed by the State in exercise of its executive power. Further, it is indisputable that the said Rules have been framed pursuant to the directions issued by this Court in the case of Dr.Harish Lakahanpal (supra), thereby repealing the Rules of 1994, as it did not contain the provision for equitable distribution of government funds by way of grants-in-aid. It became necessary for the State to change its Policy to bring it in conformity with the observations of the Court and in particular, to provide for proper mechanism for equitable distribution of resources of the State and not to benefit only select few or chosen institutions perpetually. The object of grant and the eligibility criteria, the Policy is to provide benefit of grant-in-aid to Institutions for limited period; and that the Institution must become self reliant during such time. The changed policy predicates that Colleges availing of grant-in-aid should endeavour to improve their financial condition in due course of time and not perennially depend on the aid from the Government, so that the funds can be made available to more deserving cases. This is further reinforced from the amendment carried out in 2009, vide Second Amendment Rules, 2009.

31. Considering the avowed objects of the Rules of 2008, it is not possible to countenance the grievance that the said Rules are irrational or arbitrary. It was also argued by the petitioners that the Rules of 2008 have been framed without any analytical study and in absence of empirical data. Merely because the amount payable to the Colleges towards grant-in-aid has been reduced to not exceeding 50% of the revenue gap and for limited period, that cannot be the basis to assume that the said criterion has been evolved without any analytical study. The State is the best judge to know about the availability of funds for disbursal on any given head across the State for the relevant period. It is not as if the facility has been completely withdrawn, nor it is a case where unilateral decision has been taken. Instead, it appears to us that the provisions of Rules of 2008 read with (2nd Amendment) Rules, 2009 postulate progressive withdrawal of benefit of grant-in-aid to the respective Colleges so that the available funds, can be redistributed equitably to support other aspiring Colleges. Considering the condition specified in Rule 5 regarding eligibility, in particular, Clause 10 thereof, as per the changed Policy of the State, sufficient time frame has been provided to the concerned Colleges to become self reliant and generate its own funds for efficient administration of the Colleges and not depend on the Government aid at all. There can be no vested right in receiving grants-in-aid. It is only a matter of concession given by the Government. As a concomitant, there is nothing wrong if the Rules of 2008 read with Second Amendment to the Rules of 2009 provide for withdrawal of the grant-in-aid in a phased manner and more so, when time frame of five years has been provided, which is more than sufficient for any management of the College to rearrange its affairs to make its College self reliant. This change can neither be said to be arbitrary or capricious or for that matter malafide in law. In one sense, it is not a unilateral action of the Government, but was necessitated in the wake of the decision of this Court referred to earlier.

32. Suffice it to observe that the provisions contained in Rules of 2008 are neither in conflict with the provisions of the Act of 1994 nor can be said to be unjust, arbitrary or capricious. The fact that the petitioner Colleges were receiving grants-in-aid from inception or from 1994 as per the Rules of 1994, does not mean that the Government was obliged to continue the same dispensation perpetually; and more so, even if it entails in inequitable distribution of Government largess. The argument of the petitioners that the grant-in-aid as was made available to them in terms of the Rules of 1994 should be continued in the same manner, therefore, deserves to be stated to be rejected. There can be no estoppel against the law. For, the Policy of the State as translated in the form of Rules framed in exercise of executive powers is held to be just and valid. Further, no reliance can be placed on the Rules of 1994 after coming into force of Rules of 2008 in view of the express repeal of the said Rules by virtue of Rule 14 of the Rules of 2008.

33. That takes us to the argument of the petitioners that due to the changed policy of the Government, the petitioner-Colleges may not be able to financially sustain themselves and will be forced to close down. If the petitioners are disinterested in raising the fees upto a reasonable and permissible level, that is the conscious decision of the petitioners. Having failed to do so, the petitioners cannot blame the State.

34. The argument of the petitioners that the Colleges cannot collect any fees from girl students and the fees collected from the boy students is meager amount of Rs.50/-, which is not sufficient for the running of the College and to meet the deficit, the Colleges may end up in increasing the fees in multiples upto 40 times of the existing fees cannot be the basis to hold that the policy decision of the State is arbitrary or unreasonable. It is not the grievance of the petitioners that on the one hand, the Government has threatened to withdraw the grants-in-aid and on the other hand, it is not permitting the petitioner Colleges to increase its fee structure so as to make it affordable and viable to run of the Colleges. The fact that there has been revision of pay scales of employees and will have to be implemented by the private Colleges sans any grant-in-aid also cannot be the basis to absolve the Management from complying with the service conditions of its employees specified by the Act and Rules and Ordinances issued by the University. Compliance thereof is a condition precedent for continuation of affiliation of the Colleges irrespective of College receives grant-in-aid or otherwise.

35. The petitioners are misdirected in placing reliance on the exposition of the Apex Court in the case of Government of Andhra Pradesh and others (supra), wherein the Apex Court considered the question whether the Courts have power to declare an Act of the Legislature to be invalid. In paragraphs 34 and 35, the Court observed thus:

“34. In India the Grundnorm is the Indian Constitution, and the hierarchy is as follows :

(i) The Constitution of India;

(ii) Statutory law, which may be either law made by Parliament or by the State Legislature;

(iii) Delegated legislation, which may be in the form of Rules made under the Statute, Regulations made under the Statute, etc.;

(iv) Purely executive orders not made under any Statute.

35. If a law (norm) in a higher layer in the above hierarchy clashes with a law in a lower layer, the former will prevail. Hence a constitutional provision will prevail over all other laws, whether in a statute or in delegated legislation or in an executive order. The Constitution is the highest law of the land, and no law which is in conflict with it can survive. Since the law made by the legislature is in the second layer of the hierarchy, obviously it will be invalid if it is in conflict with a provision in the Constitution (except the Directive Principles which, by Article 37, have been expressly made non enforceable).”

36. In the present case, the petitioners have raised question about the validity of Rules of 2008 and Rules of 2009 on the touchstone of provisions of the Act of 1994. As has been noted earlier, the Act of 1994 deals with entirely different subject matter and has nothing to do with the subject of grant-in-aid. The Rules of 2008 are framed in exercise of executive power on the subject of grant-in-aid. There is no statute pertaining to the said subject as of now, except the broad principles flowing from the provisions of the Constitution of India, such as, Article 14 of the Constitution. We have already examined the challenge to the provisions of Rules of 2008 with reference to Article 14 of the Constitution and negatived the same.

37. More or less, the view taken by the Apex Court in the aforesaid judgment is restated in the case of Indian Express Newspapers (Bombay) Private Ltd. and others (supra), in paragraph 77 of which reliance was placed, which reads thus:

“77. In India arbitrariness is not a separate ground since it will come within the embargo of Article 14 of the Constitution. In India any enquiry into the vires of delegated legislation must be confined to the grounds on which plenary legislation may be questioned, to the ground that it is contrary to the statute under which it is made, to the ground that it is contrary to other statutory provisions or that it is so arbitrary that it could not be said to be in conformity with the statute or that it offends Article 14 of the Constitution.”

38. For the reason already noted, even this decision of the Apex Court is of no avail. Reliance is then placed in the case of I.T.C. Bhadrachalam Paper Boards and another (supra) in support of the argument that when the field is occupied by an enactment, the Executive has to act in accordance therewith, particularly, where the provisions are mandatory in nature. Further, there is no room for any administrative action or for doing the thing ordained by the statute otherwise than in accordance therewith. This decision would have been of some use if we were to hold that the Act of 1994 governs the subject of grant-in-aid and including the matters pertaining to its distribution, eligibility and qualifications therefor.

39. The argument of the petitioners that the decision of this Court on the basis of which the Rules of 2008 have been framed is per incurium as it does not refer to the provisions of the Act of 1994, also deserves to be rejected for the same reason. In the circumstances, the exposition of the Apex Court relied upon in the cases of Union of India and another versus Manik Lal Banerjee (supra), and Mayuram Subramanian Srinivasan (supra) will be of no avail.

40. Considering the above, we are of the considered opinion that the petitioners are not entitled for the reliefs as claimed to invalidate the Rules of 2008 and Rules of 2009 and for issuing direction for continuing to pay grants-in-aid to the petitioner-Colleges, as was paid in the past in conformity with the Rules of 1994.

41. Accordingly, all these petitions ought to fail. The same are dismissed, with no order as to costs.


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