TMI Blog1988 (3) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... il) No. 439 of 1987. As disposal of Writ Petition (Civil) No. 431 of 1987 wherein the constitutional validity of the Act has been challenged and Writ Petition (Civil) No. 439 of 1987 in which the legality of the order of termination of service of the said Dr. Jagadanand Jha has been challenged will virtually mean disposal of the other writ petitions and appeals, we propose to deal with these two writ petitions. The Institute, Lalit Narayan Mishra Institute of Economic Development and Social Change, Patna, hereafter referred to as 'Institute', was initially named Bihar Institute of Economic Development and was started in 1973 under the Chairmanship of Dr. Jagannath Mishra, the then Minister of Irrigation and later on the Chief Minister of Bihar. It was named as Lalit Narayan Mishra Institute of Economic Development and Social Change to commemorate the memory of late Shri Lalit Narayan Mishra, once upon a time, Union Railway Minister. It may be noticed at this stage that the name of the Institute and the name of the Society are the same. The Institute was basically started as a research institute. In 1974, the Magadh University recognised the Institute for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WHEREAS, the State of Bihar has bright prospects of rapid growth of Industrial and Economic Development, the relevancy and importance of specialised knowledge of Business Management has assumed great importance AND, WHEREAS, for that purpose it is necessary to ensure a high level of educational and training facilities and the co-ordination of the training with important industrial and business units; AND, WHEREAS, it has been resolved to nationalize this branch of education in phases. Clause (a) of section 2 of the Act defines Private Educational Institutions as follows: S. 2(a). Private Educational Institution means a private educational college, institute or school, affiliated to any University of the State of Bihar or recognised by the State Government and imparting education, and/or training in Business Management or Business Administration or matter connected with Economic and Social Development and/or conducting degree or diploma course in one or the other branch of education mentioned above; Chapter II of the Act relates to taking over of Private College/ Institute. Section 3 of chapter II runs as follows: S. 3(1) With effect from the date of this Act, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, but in phases, the first phase having started with the take over of the Institute. This, in short, is the scheme of the Act. The first attack to the validity of the Act and the said two ordinances is founded on the plea of violation of Article 14 of the Constitution. It is submitted by Mr. Sorabjee, learned Counsel appearing on behalf of the petitioner-Society, that while it is true that Article 14 forbids class legislation, it does not, however, forbid reasonable classification. We are reminded of the principle of law as laid down in State of Rajasthan v. Mukandchand, [1964] 6 SCR 903; Maganlal Chaganlal (P) Ltd. v. Municipal Corporation of Greater Bombay, [1975] 1 SCR 1 and in re The Special Courts Bill, 1978, [1979] 2 SCR 476. In all these cases, it has been laid down that in order to satisfy the test of permissible classification under Article 14, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (2) that the differentia must have a rational relationship to the object sought to be achieved by the statute i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made within 90 days of the commencement of the said amendment Act whereupon the old Vice-Chancellor would cease to hold office. It was held by this Court that there was no justification for the impugned legislation, that is, the provision of section 13A, resulting in a classification of the Vice-Chancellors into two categories, namely, the appellant as the existing Vice-Chancellor and the future Vice-Chancellors to be appointed under the Osmania University Act. It was held that both these categories constituted one single group or class, and that even assuming that the classification of these two types of persons as coming under two different groups could be made, nevertheless, it was essential that such a classification must be founded on an intelligible differentia which would distinguish the appellant from the Vice Chancellors appointed under the Osmania University Act. The Court held that there was no intelligible differentia on the basis of which the classification could be justified. On the basis of the above principles of law as laid down by this Court, it is submitted by the learned Counsel for the petitioner that while it is true that a single individual may be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in a phased manner, the Legislature has started with the Institute. Therefore, the question of singling out the Institute or treating it as a class by itself does not arise, for as the provisions of the Act and the ordinances go, all the private educational institutions, as defined in section 2(a) of the Act, A will be nationalised in a phased manner. It is the legislative decision that the Institute should be taken over in the first phase of the nationalisation. The Legislature has not left it to the discretion of the executive Government for the purpose of selecting the private educational institution for the first phase. It is very difficult to assail a legislative decision. Of course, there can be no doubt that a legislative decision can be assailed if it is violative of any provision of Part III of the Constitution. So far as Article 14 is concerned, we do not think that it has any manner of application inasmuch as the question of discrimination does not arise as soon as it is conceded that it is case of nationalisation in a phased manner and for the first phase the Institute has been chosen by the Legislature itself. The decision of this Court in the cases of Dalmia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e works out to about ₹ 1.60 crores. Facts also disclose that not only the State had changed the name of the Institute, but also provided the site for the Institute, got the building constructed through its own agencies and funds and even supervised the prescription of syllabi. There is much force in the contention of Mr. Kacker that in a sense the State Government was running the entire Institute without nationalisation and when it decided to nationalise such institutions for the purposes mentioned in the Preambles of the Act and ordinances, this Institute was chosen to be the very first with all sense of justification and propriety. In considering the propriety of legislative wisdom in selecting the Institute in the first phase of nationalisation, we cannot exclude the fact that since 1975 it is the State of Bihar which has been nurturing the Institute spending a considerable sum of money and exercising necessary control over it, as contended on behalf of the petitioner-Society. The facts stated above, in our opinion, fully justify the propriety of legislative wisdom in selecting the Institute as the subject-matter of nationalisation in the first phase. It is, however, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken. It is common knowledge that when any litigation ensues and remains pending, the Government generally does not take any step till the final disposal of the litigation. It is also the case of the respondents that because of the pendency of the litigation challenging the validity of the ordinances and the Act, the Government did not take any steps for nationalisation of similar institutes for the second phase. A grievance has been made on behalf of the petitioner- Society that even after the promulgation of the ordinances, three other Institutes, the details of which have been set out in the additional affidavit, have been recognised. An explanation for the recognition of the three Institutes has been given in paragraph 25 of the counter-affidavit of the respondents Nos. 1, 3 and 4. The explanation is that the affiliation is granted under the Bihar State University Act by the University with the approval of the State Government. Three Institutes mentioned in paragraph 4 of the additional affidavit of the petitioner-Society were recommended by the concerned university for affiliation. The State Government has concurred in the grant of temporary affiliation subject to certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n totally displaced and its composition changed. All assets and properties are vested in the State Government and the Commissioner is deemed to have taken charge of the Institute. It is submitted that all incidents of ownership and management have been taken over by the State and what is being left to the company is paper ownership and management and, as such, in substance and effect the right of association of the Society is clearly affected. It is submitted that the Act is not saved under Article 19(4) of the Constitution because the fundamental right of the Society to form association has been interfered with not in the interests of the sovereignty and integrity of India or public order or morality. At this stage, it may be pertinent to refer to the fact that by the impugned ordinances and the Act, what has been taken over is the Institute. Although the name of the Society and of the Institute is the same, these are two different entities. It is not disputed that by the impugned legislations the Institute and not the Society has been taken over. No restriction whatsoever has been imposed on the functioning of the Society. Indeed, the provisions of the ordinances and the Act d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not surely mean and it was not the intention of this Court to lay down that in construing the provisions relating to fundamental rights, it should be stretched to the extent of covering even certain extraneous matters which would be far from the ambit and scope of the fundamental rights. Article 19(1)(c) confers a right on the citizens to form association. In exercise of such a right the petitioner-Society has constituted itself into an association. That right of the Society remains unimpaired and uninterfered with by the impugned Act and ordinances. It is, however, complained that the only activity of the Society was its right of management of the Institute which was founded in implementation of its objects. Having been taken over, the Society only exists in paper. Such interference with the activity of the Society is really, interference with the right of the Society to form association. It is submitted that Article 19(1)(c) not only guarantees the fundamental right to form association, but also its continuation. It is further submitted that in law interfering with or divesting the management of the Society of the Institute is clear interference with its right to continue the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een infringed. Mr. Sorabjee, learned Counsel for the petitioner- Society, has placed strong reliance upon the decision of this Court in Damyanti Naranga v. Union of India, [1971] 3 SCR 840. In that case, by a legislative enactment, namely, the Hindi Sahitya Sammelan Act, 1962, the institution known as the Hindi Sahitya Sammelan was declared an institution of national importance. By the said Act a statutory Sammelan was constituted as a body corporate by the name of the Hindi Sahitya Sammelan. Under section 4(1) of the Act, the Sammelan was to consist of the first members of the Hindi Sahitya Sammelan, which was a registered Society founded for the development and propagation of Hindi and all persons who might become members thereafter in accordance with the rules made in that behalf by the first governing body to be constituted by the Central Government by notification. The Act provided for vesting in the Sammelan of all property, movable or immovable, of or belonging to the Society. The constitutionality of the Act was challenged accordingly on the ground that it interfered with the right of the petitioners to form association under Article 19(1)(c) of the Constitution. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity. The right under Article 19(1)(c) extends only to the formation of an association or union and in so far as the activities of the association or union are concerned or as regards the step which the union might take to achieve its object, they are subject to such laws as may be framed and such laws cannot be tested under Article 19(4). This observation supports the view we have taken that the fundamental right guaranteed under Article 19(1)(c) does not extend to or embrace within it the objects or purposes or the activities of an association. In other words, it does not carry with it a further guarantee that the objects or purposes or activities of an association so formed shall not be interfered with by law except on grounds as mentioned in Article 19(4), namely, sovereignty and integrity of India or Public order or morality. In the circumstances, the contention made on behalf of the petitioner-Society that because of the acquisition of the Institute, the Society lost its right of management over the Institute and the Institute being the main or the only activity of the Society, the impugned legislations interfere with the right of the Society to form and continue the associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture on any of the subjects mentioned in the Entry. In the instant case, as has been noticed already, the impugned Act does not lay down any law touching the subject referred to in Entry 66, List 1, or Entry 25, List III. In our opinion, therefore, neither of these two Entries applies. Even assuming that one of these two Entries applies. then it is Entry 25, List III, and not Entry 66, List I; as contended on behalf of the respondents. The impugned legislation if held to be one on education or technical education, is surely not relating to any matters referred to in Entry 66, List I. We are, however, of the view that Entry 25 also has no application. The Entry that applies to the impugned legislation is Entry 42 of List III pertaining to acquisition and requisition of property. The taking over of the private educational institutions and of the Institute in the first phase is nothing but acquisition of property. The Institute was the property of the petitioner-Society and by the impugned Act the property stands transferred to and vested absolutely in the State Government free from all encumbrances. Thus, the Institute has been acquired by the impugned legislation and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, ordinance No. 15 of 1986, was promulgated by the Governor on April 19, 1986 and the service of Dr. Jha were terminated by an order dated April 21, 1986 which is extracted below: The Governor of Bihar in exercise of power under section 6 and sub-sections (2), (3) (4) of Bihar Private Educational Institutions (Take over) Ordinance, 1986 and Bihar Ordinance No. 15 of 1986 and Education Department Notification No. 99/C has considered the report of the Committee and has come to the conclusion appointment and promotion of officers and workers was not done as per rules of the University, nor in accordance with Government directions and notifications and their stay in the Institute was not in the interest of the said Institute. Therefore, the services of following persons are dispensed with immediate effect: 1. Dr. Jagannath Mishra-Chairman-cum- Director General. 2. Sri Jagadanand Jha-Registrar. Paragraph 6 of the ordinance, which is verbatim the same as section 6 of the Act, reads as follows: A 6. Determination of terms of services of the teaching staff and other employees of the institution.-(1) As from the date of the notified order, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment service or to terminate his service or to allow him to continue on an ad-hoc basis for a fixed term or on contract etc. Subparagraphs (2) and (3) relate to the members of teaching staff of the concerned institution. Sub-paragraph (4) of paragraph 6 of the ordinance deals with the cases of other categories of staff of the institution. It provides that the State Government shall similarly determine the term of appointment and other conditions of service of other categories of staff of the institution. It is clear that there is some distinction between sub-paragraph (3) and sub-paragraph (4). While under subparagraph (3), the State Government is to decide, among other things, whether the service of a member of teaching staff will be terminated or not, under sub-paragraph (4), the State Government has not been enjoined to decide whether the service of any member of a nonteaching staff will be terminated or not, all that has been directed to be decided by the State Government under sub-paragraph (4) relates to the term of appointment and other conditions of service. Admittedly, the petitioner Dr. Jagadanand Jha was not a member of the teaching staff, but, as noticed already, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administrative act. In this connection, we may refer to our decision in K.I. Shephard v Union of India Ors., [1987] 4 SCC 431 wherein it has been held that the scheme-making process under section 45 of the Banking Regulation Act, 1949 being administrative in nature, the rules of natural justice are attracted, as the scheme provides for the termination of services of the employees. It is clear from the provision of sub-paragraph (4) of paragraph 6 that the services of the members of non-teaching staff have been intended to be continued. The petitioner Dr. Jha has been working in the post of Registrar of the Institute for a pretty long time. We are, therefore, of the view that his services cannot be terminated without giving him an opportunity of being heard. The learned Counsel, appearing on behalf of the respondents, also do not seriously oppose the view that in such circumstances, the petitioner Dr. Jha should have been given an opportunity of being heard. It is alleged in the impugned order of termination that the appointment and promotion of the petitioner were not done as per the rules of the University nor in accordance with the Government directions and notifications an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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