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Sri Jayadeva Institute of Commerce Vs. Commissioner of Public Instruction - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKarnataka High Court
Decided On
Case NumberWP 14238 of 1984
Judge
Reported inILR1986KAR398
ActsRules for Commerce Education - Rule 3(A)
AppellantSri Jayadeva Institute of Commerce
RespondentCommissioner of Public Instruction
Appellant AdvocateG. Gangadharaiah, ;Janardhan, ;M.V. Balasubramanyam, ;G. Shanthappa, ;M.G. Sathyanarayanamurthy, ;R.B. Sadashivappa, ;C.M. Nagabhushana, ;B.S. Raikote, ;Indrajit Shah, ;H. Subramanya Jois, ;B. Ashwath
Respondent AdvocateN. Devadas, HCGP
DispositionPetition allowed
Excerpt:
rules for commerce education - rule 3(a)(ix) -- of conditions for recognition & appendix iii -- order dated 30-4-1984 -- downward revision of fees -- initial fixation as well as revisions arbitrary in the absence of necessary data to fix rational and optimum fee structure to subserve interest of managements and students -- order violative of rules of natural justice --procedure to be adopted and steps to be taken for rationalisation of fee structure.;(i) it is the entrepreneurship of the management of the commerce institute which provide the education and not so much the regulations brought about by the rules nor the efforts of the state.;(ii) it is evident and also obvious from the records that the necessary data to fix a rational fees structure was not at all available to the..........and facts raised in these petitions are common. the petitioners are all proprietary managements of commerce institutes in the state of karnataka. they come from different parts of the state, the majority are probably from the city of bangalore. they are all what are called commerce institutes essentially offering tuition and training in typewriting and shorthand both in english as well as in kannada. there may be some among the petitioners who impart education in other allied subjects like accountancy and secretarial practice with which this court need not be concerned in these writ petitions. but what is useful to state before summarising the averments of the petitioners and the counter-affidavit filed by the respondent-state and others is that there are said to be about 1100 and odd.....
Judgment:
ORDER

Chandrakantaraj Urs, J.

1. These Petitions are disposed of by this common order as the questions of law and facts raised in these Petitions are common. The petitioners are all proprietary managements of Commerce Institutes in the State of Karnataka. They come from different parts of the State, the majority are probably from the City of Bangalore. They are all what are called Commerce Institutes essentially offering tuition and training in typewriting and shorthand both in English as well as in Kannada. There may be some among the petitioners who impart education in other allied subjects like Accountancy and Secretarial Practice with which this Court need not be concerned in these Writ Petitions. But what is useful to State before summarising the averments of the petitioners and the counter-affidavit filed by the respondent-State and others is that there are said to be about 1100 and odd Commerce Institutes in the State of Karantaka of which 9 only are run by the State. The rest of the Commerce Institutes are run by the private managements like the petitioners.

2. The commerce education as it is officially known is regulated by administrative Rules made by the respondent-State and are known as the 'Rules for Commerce Education' (hereinafter referred to as the Rules). The Government approved the Rules by a latter bearing No. ED 17 TCE 75 dated 3rd September 1975. The said Rules provide for the Constitution and Functions of the Board for Commerce Education, the manner in which the meetings of the Board should be convened and the quorum for the meetings of the Members of the Board. It also provides for emergency powers being exercised by the Chairman of the Board, (But it is stated since the issuance of the Rules, the Board is abolished and is now directly administered by the Department of Public Instructions in Karnataka). The Rules further provide the manner in which the applications may be made for starting Commerce Institutes and seek recognition. It also provides the conditions for recognition which are 15 in number. It further provides the manner in which the Typewriting class and Shorthand class should be convened and the education should be imparted. The Rules also provide for temporary and permanent recognition, the manner in which the recognition has to be refused and the manner in which the recognition may be withdrawn. The Rules also provide for the minimum qualifications of the staff. The Rules also provide for admissions, refusal of admission of students, the manner in which the applications may be made by the students, the production of leaving certificate. The Rules also provide for supply of school Rules to the Parent or Guardian, admission of students to the Institutes, the school candidates, practising students, private candidates and the manner in which the examinations for the various subjects may be held by the prescribed authority. What is normally provided in such Rules for regulating the education in other subjects is generally provided in the Rules for Commerce Educatoin.

3. What we are mainly concerned with is Sub-rule (ix) of Rule 3(A) of the Rules dealing with conditions for recognition. That Rule is as follows :--

'(ix) The rates of fee charges, scales of pay and other service conditions shall be in accordance will the instructions issued by the Department from time to time. The rates of fee and the scales of pay prescribed at present by the Government are shown in Appendix III.'

Appendix III provided fee structure as follows

'Junior

Typewriting (English)

Rs. 6-00

Junior

Shorthand (English)

Rs. 5-00

Junior

Typewriting (Kannada)

Rs. 6-00

Junior

Shorthand (Kannada)

Rs. 4-00

Any other subject

Rs. 4-00

Senior

Typewriting (English)

Rs. 7-00

Senior and Intermediate

Shorthand (English)

Rs. 6-00

Senior

Typewriting (Kannada)

Rs. 7-00

Senior

Shorthand (Kannada)

Rs. 5-00

Senior

Any other subject

Rs. 4-50

Proficiency

Typewriting (English)

Rs. 9-00

Proficiency

Typewriting (Kannada)

Rs. 7-00

Proficiency

Shorthand (English)

Rs. 7-00

Proficiency

Shorthand (Kannada)

Rs. 6-00'

That was with effect from 3rd September 1975, the date on which the Rules came to be approved by the Government. It is averred by the petitioners generally that the petitioners and others through the Association known as Karnataka Commerce Institutes Association represented to the Government to revise the tuition fee structure having regard to the rise in the cost of the typewriting machines, the increased demand for higher salaries etc. Notwithstanding the fact that there were earlier revisions of the tuitions fee upwards in 1979, the Government by its order dated 4-1-1982 once again revised the tuition fee upwards whereby the English and Kannada Typewriting and Shorthand was to be charged at Rs. 9-00 per mensum in the Junior Grade and Rs. 10/- per mensum in the Senior Grade and Rs. 14-00 in the Proficiency Grade. Other subjects at Junior level were kept at Rs. 9/-per mensum and Senior Level at Rs. 10/-per mensum. After this revision of 1982 on a further representation made by the Commerce Institutes Association, the fee was again revised upward providing for charging of Rs. 12/- per mensum for Junior Grade, Rs. 14/- per mensum for Senior Grade and Rs. 16/- per mensum for Proficiency Grade in both Typewriting and Shorthand and in the two languages in question. On account on this third revision since 1975, the Commerce Institute students appear to have gone on strike and demonstrated representing against the upward revision which had made it impossible for the members of the poorer sections of the society to seek this job oriented training. That is the assertion made by the respondent-State in the statement of objections common to all the Petitions. It is seen from the records produced by the Learned Government Pleader that questions were also asked on the floor of the Legislative Assembly of Karnataka questioning the propriety of the upward revision of as much as 40 per cent, making it impossible for all scheduled castes and scheduled tribes people and other members of the backward communities and castes to equip themselves with this skill in typewriting and shorthand.

4. The view of the Government at that point of time will be referred to by me a little later in the course of this order. But the numerous representations with which the Government was flooded from the students from all over the State have all become part of the records. In the light of the representation made by the students, the Government once again revised, this time downwards, the tuition fee as per the order dated 30-4-1984 at Annexure-D to the petition by which Junior Grade was uniformly brought down to Rs. 10/- per mensum while Senior Grade was brought down to Rs. 12/- per mensum and the Proficiency Grade was brought down to Rs. 16/- per mensum. The petitioners are all aggrieved by this downward revision as per the memo dated 30-4-1984 which is Annexure-D to the first mentioned petition in the batch of Petitions.

5. It is assailed inter alia contending that, the downward revision is arbitrary, without application of mind and rendering the Commerce education totally uneconomical to the extend of making it more a restriction than regulation by fixing low fees not having regard to the increase in the cost of machines, higher pay scale sanctioned to the teachers after the revision made in February 1984 in favour of increase in salaries of the staff. It is also assailed on the ground that the order violates the rules of natural justice.

6. In the counter affidavit filed by the respondent-State the details of the upward revision from 1975 onwards have been set out. It is also pointed out that as soon as the representations from various student bodies were received, the Association of Commerce Institutes was addressed a letter calling for its views on the question of reduction of the fees. It is only after hearing from the Association of Commerce Institutes, representing the Commerce Institutes in the State, that the Government decided to make the impugned order dated 30-4-1984 recommending the downward revision. It it contended for the State, it is not arbitrary having regard to the conditions obtaining in the State that the education in Commerce Institutes is essentially sought by those who are already in employment but want to qualify for better employment, the Government had to revise the fees downward to enable the poorer sections of the society to have access to this education. It is therefore contended that revision is after due application of mind to the situation that existed on account of the various upward revisions and the agitation by the students and after ascertaining the wishes of both the students and the managements of Commerce Institutes that the impugned order was passed. In the result, the respondent-State has prayed that the petitions may be dismissed.

7. In the light of the rival contentions that the matter has to be resolved. Before examining the merits of the rival contentions it would be useful to state some of the undisputed facts.

8. None of the Commerce Institutes in the State are given any kind of aid by the State. In fact the Rules governing commerce education does not provide for grant in aid at all. The service that the Government tenders is no more than according recognition to these institutes and holding the necessary examinations for the various grades and subjects which entitles successful candidate a diploma or a certificate as the case may be which is recognised not only by this State but also by the other States thus providing opportunity for the public and the Government alike to utilise service of the Stenographers and Typists who otherwise cannot be had, without such regulation and control over commerce education. But the investment to start, maintain and run the institute is entirely borne out of the pockets of the private managements, whether it be a joint enterprise of more than one individual or a single proprietory concern, barring the nine institutes in which the Government imparts more or less education in the same subjects.

9. It is seen from Annexures-A and B to Writ Petitions 14238 to 14255 that in Andra Pradesh, fees are fixed at Rs. 15/- for typewriting and Rs. 20/- for shorthand, duration of the class being one hour. This information is not from any Government Order but from the Hyderabad Commercial Institutes Association, at the request of Sri. T. R. Shamanna, who is a sitting member of the Karnataka Legislative Assembly who also happens to be the President of Commerce Institutes Association in Karnataka. Similarly the Secretary, Commercial Institutes Association, Karnataka has received a 'letter from his Kerala counterpart where for typewriting lower fee is fixed at Rs. 15/- and for higher at Rs. 20/- and for shorthand Lower is Rs. 12/- and for Higher Rs. 18/-. This fact in itself is not clinching or conclusive of any matter except that the rates of fees fixed by the Government obviously vary from State to State.

10. What really flows from the undisputed facts stated above is, it is the entrepreneurship of the managements of the Commerce Institutes which provide the education and not so much the regulations brought about by the Rules nor the efforts of the State. This is stated only in order to appreciate the contention advanced for the petitioners that the fee structure lowered by the impugned order gives no margin at all to make any profits and therefore in the absence of incentive it is impossible to carry on the trade and occupation guaranteed by Article 19(g) of the Constitution. Viewed thus, it is contended, the lowering of the fee is more a restriction than a mere regulatory measure. On account of this argument the Court was at a loss not knowing what the investment is, what the expenditure is; what the income is, of an average commerce institute in the State.

11. The Learned Government Pleader was directed to produce such information as the Government had in its possession. But he has submitted that there was no information available with the Government. This is a point to be kept in mind. In that circumstance, the Court directed all the petitioners to furnish their own statements, supply the copy to the Learned Government Pleader, with reference to their accounts, if any maintained which would enlighten the Court as to the investment, income and expenditure involved in the running of commerce institute. Certain guide lines were given in that order made by the Court calling for information. In response to that 102 of the petitioners have filed a kind of return giving the information. It is seen therefrom that the largest number of commerce institutes are located in the City of Bangalore. The City of Bangalore has also the pride to have the largest institute in the State - it goes by the name 'Udaya Institute of commerce' and it is the petitioner in W. P. No, 8419 of 1984.

12. From the statement furnished it is claimed that it has invested Rs.2,79,928/- in equipments and furniture consisting of chairs, tables and typewriting machines. This is housed in a rented building, the rent of which is Rs. 1,200/-per month ; total revenue expenditure per annum is shown at Rs. 1,27,704/- after including the depreciated value of furniture and typewrites. The other expenditure shown such as electrical energy, water charges, cost of servicing and maintenance of typewriters, the income tax paid etc., In the end it is shown that total income from all sources include fees Rs. 1,58,681-50 and the expenditure is shown at 1,27,704/-. Thus giving it a profit after tax of Rs. 30,977-50 which considering the investment is not very much of a return but it cannot be said to be a small income either. As against this, the largest of the institutes, it is useful to compare another located in the City of Bangalore, it is petitioner in Writ Petition No. 8421/1984. In its statement, it is pointed out in the abstract that it is running at a loss of Rs. 2000/- approximately. Its expenditure is Rs. 49,470/- and income is Rs. 47,550/-. As against these it would be useful to compare the return filed by Sri Manjunatha Institute of Commerce, which is located in a far corner of Shimoga District at a place called Channagiri. It is run in a rented premises paying Rs. 90/- per month. Its total expenditure is about Rs, 565/- per mensum. Its capital investment is Rs. 25,000/-. It only shows a total expenditure of Rs. 13,005/-per annum on all counts including the interest charged at 12% per annum on its capital investment which of course is impermissible in any method of accountancy. Therefore, it may be taken that in a small place like Channagiri also it costs about Rs. 809/- to Rs. 1000/- to run an institute on an investment of Rs. 25,000/-. But these are all statements filed at the directions issued by the Court. They are not statements which could be relied upon as reflecting the actual position. The rules do not require that accounts be maintained by the Commerce Institutes recognised by the Government and should be duly audited.

13. In the result, un-audited statements only are available. This lacuna in the rules may be considered to be overcome by the Government by making provision for auditing so that the information which the Government may require from time to time would always be available to the Government.

14. As already noticed, the Government has not produced anything on which this Court may rely upon in the matter of the estimated cost of running an Institute for a given number of students. However, Court found in the records the estimate made by a Students Association as an annexure to its representation for reduction of fees. Nothing is worked out on estimates made by the students on an average basis. Though I have made a reference to it, I do not think that the figures supplied by the students may be accepted by this Court as representing the correct position. In the absence of correct information in this behalf, it would be dangerous for this Court to accept the argument of the petitioners, though their right under Article 19(1)(g) is seriously affected by the reduction in the fee.

15. Therefore, without expressing finally anything on the merit of the contention, the relief must be denied on that contention only on the ground that the petitioners have not been able to place sufficient reliable material for this Court to come to the conclusion that their right to carry on trade and occupation so as to put an end to it. Perhaps it is safer to assume on the information available that the reduction in tuition fee certainly reduced the income and therefore the profits : But there is no denying that the other argument advanced by some of the petitioners that the fact that the earlier order not only increased the tuition fee but also increased the salaries of staff which was implemented As a result of which staff in most cases were given higher salary in terms of the Government order as a result of which the expenditure incurred increased and therefore the reduction without corresponding reduction in the staff salary subsequently by the impugned order did affect the income, and created a burden on the concerned Commerce Institute. Then again the question is not definite and no reliable information is available as to the increased expenditure on account of the increase in salary and the present revision in the tuition fee. The Court is in no better position. The fact is, the increase now permitted by the impugned order is definitely higher than the increase permitted in 1982. The resultant position is the Institutes have not suffered financially at a level below their income in 1982. The overheads and expenditure might have increased but so also the fee to the extent now provided in the impugned order. Therefore, even that contention must be left open and the relief denied until more reliable material is available to the Court.

16. The next argument is based on the arbitrariness of the order. From the facts narrated above and the comments made by this Court on those facts, it is evident and also obvious from the records that the necessary data to fix a rational fee structure was not at all available to the Government at any time from the time the Rules were brought into force in 1975 and at each stage of the revisions effected in 1979 and 1984. The very fixation of the initial fee in Appendix 3 of the Rules to my mind appears to have been arbitrarily fixed. Each of its subsequent revisions, therefore, must also be arbitrary.

17. In this behalf, it is useful to notice that when the 1984 Fee revision was made there was some hue and cry from the students which was reflected on the floor of the Legislative Assembly of Karnataka. On that occasion, if the answer given by the Hon'ble Education Minister (then) should guide this Court then the rise in fees was justified on grounds of higher pay for the staff. The Government would take steps to ameliorate the difficulties of the poor students who could not offer to pay higher fees. But that is not what has been done two months later resulting in the impugned order of April 1984. If in spite of Court collecting some data nothing reliable has been placed before this Court on which this Court has declined to act in terms of the arguments advanced based on Article 19, the Government must have been in a greater predicament when the impugned order was passed without any data on which a rational fee structure could be evolved having in mind the object sought to be achieved, i.e,, to promote education as well as keep the education accessible to all those who deserved to get that education rich or poor. Without further analysis of it, it is safe to assume that the Government passed the order without any relevant data.

18. If the rules read as a whole give the indication to the Court that the Government intends to regulate commerce education in the State, then the duty of the Government was to collect the relevant data required for the purpose of achieving a definite object, namely, a optimum fee structure with sufficient variable so that the students and the managements of Commerce Institutes could both be able to function without the interest of one impeding the other. That does not appear to have been done. Any order passed can be safely be said to be with proper application of mind if it is demonstrable that the Government did have proper material to pass such an order. That is not the case with the present impugned order. Therefore, I have no hesitation to come to the conclusion that the order is without application of mind and therefore arbitrary.

19. The next argument relates to opportunity, Each time a revision was made in favour of the management, they did acquire a right. That right could not be deprived without affording them an opportunity. Undoubtedly, the record discloses, by letter dated 3,0-3-1984 the Government addressed the Commerce Institutes about the views of the students. That view consisted of a laconic query that the students complained about the rise in the fees and what the Commerce Institutes had to state in. relation thereto. Whatever material the Government had in support of the students' claim was not made known to the Commerce Institutes so that they could properly reply. Though there is a formal opportunity, opportunity given cannot be said, on judicious scrutiny, to have been adequate and reasonable. Therefore, that opportunity given could be ignored though the statement of objections has not stated anything incorrectly. The opportunity given must be held to be inadequate and insufficient. Even on that ground, the petitioners must succeed as there has been violation of rules of natural justice while passing the impugned order.

20. It is only by virtue of the stay order given by this Court that the Institutes were allowed to collect fees enhanced by February 1984 order. In other words, the April 1984 order does not appear to have upset the student community so much as none have come forward to complain about the fee structure. That does not mean that this Court is in favour of the fee structure made in February 1984.

21. The proper thing for the Government is to collect the relevant data. It should not act on the data collected by this Court. It should independently collect the data, through its own agency, on working expenses, including capital expenses of the Commerce Institutes. It must pay due regard to the location of the Commerce Institutes. It may be wise to classify the Institutes as falling into Urban Area, Semi-Urban Area and Rural Area and determining the fee structure having, regard to the various factors which determine the cost of running an Institute and the ability of the rural, semi urban, and urban area residents to meet the obligation of the fixed fee payment. This is a field for specialists, not for judicial determination. It is a field in which accurate data has to be collected and mind applied and a fee structure rationalised. Despite the efforts of the Learned Government Pleader that this Court should lay down guide lines, the Court is reluctant to do so. The Court should not commit itself to favour one or the other. Guidelines may be many but the necessary criteria is for the Government to determine, which is the sovereign authority.

22. In the light of the above, I have no hesitation in quashing the order impugned in all these Writ Petitions, that is the order made in April 1984, further revising downwards the fee structure fixed in February 1984. With that it should be observed that the February 1984 fee structure will be operative till the Government revises the fee structure in a rational manner after due application of mind having collected all the material necessary to make such an order.

23. Petitions are allowed in terms above and Rule will be accordingly made absolute.


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