The Securities and Exchange Board of India, also known as SEBI, is a regulatory body that plays a vital role in maintaining stable growth and development of the Indian capital market by protecting investors’ confidence, preventing malpractice, and providing transparency. Being established in the year 1988 and given statutory power in the year 1992, SEBI has its main headquarters in Mumbai and regional offices throughout the nation’s top-tier cities like New Delhi, Kolkata, Ahmedabad, and Chennai.
Background of SEBI
The Securities and Exchange Board of India (SEBI) is a regulatory body that reports to the Ministry of Finance and maintains the Indian stock market. It started as a non-statutory body that was established by the government of India on April 12, 1988. It was later established as a statutory body and given statutory powers to regulate the stock market through the SEBI ACT, 1992, by the Indian Parliament, which came into force on January 30, 1992. Before the establishment of the Securities and Exchange Board of India (SEBI), the stock market of India was regulated by the “Controller of Capital Issue,” administered by the Capital Issue (Control) Act of 1947, which was repealed in May 1992.
Objective of SEBI
The Securities and Exchange Board of India (SEBI) was established to prevent unfair practices, safeguard investors’ interests, and enforce regulation in the security market. SEBI mainly operates with three core objectives:
Protection of investors
To ensure that the investors are protected from fraud and malpractice. SEBI ensures the protection of investors by providing timely and accurate information that is relevant and reliable for the investors during investments in the public domain to have smooth and safe transactions and prevent them from unfair trade practices.
Promote market development
SEBI to increase development, promotes the stock market by introducing new products, modernising infrastructure, and encouraging a greater number of investors to participate.
Regulating the security market
SEBI’s main objective is to regulate the security market. By regulating the market, it ensures the proper and fair conduct of the market as well as the orderly functioning of the market. This includes regulating stock exchanges, portfolio managers, brokers, and other intermediaries in the security market.
Apart from these three main objectives, SEBI has several other objectives, such as promoting fair practices, education, awareness, etc.
SEBIs’ role in the Indian economy therefore becomes crucial to ensuring safe, fair, and transparent transactions of investment in the Indian capital market.
Jurisdiction of SEBI
The Securities and Exchange Board of India (SEBI) was established for the growth and development of the stock market but with development come unfair practices. To ensure that these unfair practices or malpractices are not exercised in the market and the interests of the investors are protected, the SEBI is provided with certain jurisdiction of its own:
Quasi-judicial
SEBI has the authority to act as a judicial body and adjudicate cases involving fraud and unfair practices in the security market. It can investigate violations, conduct hearings, render judgements, impose penalties, and take legal action.
Quasi- executive
SEBI has the executive powers that enable it to perform the executive functions necessary to regulate and supervise the securities market. SEBI can inspect the books maintained by the accounts and important documents of other participants, such as brokers, listed companies, and so on, to accumulate evidence of violation and fraud. SEBI continuously monitors market activities to identify irregularities and ensure that the market is free from unfair trade, providing transparency.
Quasi- legislative
SEBI quasi-legislative powers allow SEBI to create rules and regulations overseeing the security market. SEBI can develop and implement guidelines and regulations that are important for every participant to follow. SEBI constantly updates its regulations to adapt to the changing market, keep investors well-informed and provide transparency in fair trading.
SEBI’S power to investigate and enforce
The Securities and Exchange Board of India (SEBI) is a regulatory body that is established with the core objectives of protecting the investor’s interest, promoting market development, and regulating the security market. To maintain the security market and perform these duties effectively, SEBI is granted extended power of investigation and enforcement in the confines of the security market. However, to exercise these powers, SEBI needs to balance such power between strict enforcement and procedural fairness to protect market integrity and investor confidence.
Power of investigation
According to Section 11C of the SEBI Act, 1992, whenever the SEBI has reasonable grounds to believe that any act of fraud or unfair practices are being dealt with inside the market or any individual associated with the market has violated any rules and regulations or is against following any provision under this act, it may order in writing an investigating authority under Section 11C(1) to investigate such individual or intermediary. Investigative power empowers the regulator to take a wide range of actions to investigate violations of securities law. Such power allows the authority to:
Summon and examine individuals
Section 11C(3) of the Securities and Exchange Board of India (SEBI) Act, 1992, empowers the investigating authority with the ability to summon and examine any individual or intermediary under oath in order to gather information and evidence necessary for an investigation. This authority is specifically granted to ensure that the investigating authority can thoroughly and effectively carry out its duties.
The investigating authority can issue a summons to any person or intermediary that it believes possesses relevant information or can assist in the investigation. The summons can require the person to appear before the investigating authority at a specified time and place to provide testimony under oath. The person may also be required to produce any documents or records that are relevant to the investigation.
The authority to summon and examine individuals and intermediaries under oath is a crucial investigative tool that allows the investigating authority to obtain information from a wide range of sources. This information can be used to identify potential violations of securities laws and regulations, gather evidence against individuals or entities suspected of wrongdoing, and understand the underlying causes of misconduct.
The investigating authority can also use the information obtained through summons and examinations to identify potential witnesses and build cases against individuals or entities involved in securities law violations. Additionally, the information can assist the investigating authority in developing strategies to prevent future violations and enhance the overall effectiveness of the regulatory framework.
Demand production of document
Section 11C(5) of the SEBI Act of 1992 specifically authorises the investigating authority to demand books, accounts, and any other document that may be relevant to the investigation.
Key elements of Section 11C(5):
Authority to demand documents: Section 11C(5) explicitly authorises the investigating authority to demand books, accounts, and any other documents that may be relevant to the investigation. This broad scope of document collection ensures that the investigating authority has access to vital information and evidence necessary to uncover potential violations or irregularities.
Relevance to investigation: The authority to demand documents is not unlimited. The documents requested must have relevance to the investigation being conducted. The investigating authority must establish a connection between the documents sought and the specific matters under investigation to ensure that the document collection is targeted and focused.
Issuance of summons: To exercise this authority, the investigating authority typically issues a summons or formal notice to the person or entity in possession of the relevant documents. The summons specifies the documents required, sets a deadline for their submission, and may include additional instructions or requirements.
Obligation to comply: The recipient of the summons is legally obligated to comply with the investigating authority’s demands. Failure to comply may result in legal consequences, such as fines, imprisonment, or both. This obligation ensures that the investigating authority has access to the necessary documents to conduct a thorough investigation.
Confidentiality and protection of information: Section 11C(5) also recognises the importance of maintaining confidentiality and protecting sensitive information during the investigation process. The investigating authority is responsible for ensuring that the documents and information obtained are handled securely and in accordance with applicable laws and regulations.
Judicial oversight: The powers granted to the investigating authority under Section 11C(5) are subject to judicial oversight. If a person or entity believes that the document demand is excessive, irrelevant, or violates their rights, they may seek legal remedies through appropriate channels, such as filing a petition in court.
Interrogation
Section 11C(6) states that an investigating authority can order any individual or intermediary to appear for answers they think are relevant to the investigation. Any person who refuses to be present without any reasonable cause can face punishment that might extend up to one year of imprisonment with a fine, which may extend up to one crore rupees.
Conduct searches and seizures
Section 11C(8) of the Securities and Exchange Board of India (SEBI) Act empowers the investigating authority with significant powers to aid in the conduct of investigations. This provision authorises them to search any premises or seize any document, book, or asset that they deem relevant to the investigation. The purpose of this provision is to prevent the tampering or destruction of evidence that could hinder the investigation process.
The investigating authority has the discretion to determine what constitutes relevant material for the investigation. This flexibility allows the authority to gather a wide range of evidence, including financial records, correspondence, electronic data, and physical assets. The authority may also search and seize items from various locations, such as offices, homes, and warehouses.
The power to search and seize is subject to certain safeguards to protect the rights of individuals and entities. The investigating authority must obtain a warrant from a competent court before conducting a search or seizure. The warrant must specify the premises to be searched and the items to be seized. Additionally, the authority must provide a copy of the warrant to the person or entity whose premises are being searched or whose assets are being seized.
The authority must exercise its powers under Section 11C(8) reasonably and in accordance with the law. Any abuse of power or violation of due process rights could result in legal challenges and potential consequences for the investigating authority.
SEBI’s power of enforcement
After the completion of the investigation stage, if evidence is found against anything that is considered a violation under Section 11C(1), SEBI has several types of penalties provided under Section 15A to Section 15HB that it can enforce on the offender:
Monetary penalties
Under Sections 15HA and 15HB, SEBI is empowered to impose money or fine penalties for unfair trades, fraudulent cases, and contraventions where no specific penalty is described.
Cease and desist proceeding
Section 11D empowers SEBI to order any entity to cease work if violation allegations are proved against such work after inquiry.
Suspending and cancellation registration
Section 12(3) empowers SEBI to suspend or cancel the registration of any intermediaries for violation of any rule, regulation, or act.
Initiative prosecution
Section 24 empowers SEBI to initiate prosecution and imprison or impose a fine on any offender found to be violating the act, rules, or regulation.
Disgorgement
Section 11B empowers SEBI to order an offender to disgorge the profit gained through illegal activities, which helps ensure that the capital gained from the unfair practice does not go to the offender.
Procedural safeguards
The Securities and Exchange Board of India (SEBI) is endowed with a broad range of powers to regulate and supervise the Indian securities market. These powers include the authority to investigate violations of securities laws, initiate enforcement actions, impose penalties, and issue regulations. While these powers are essential for SEBI to effectively carry out its mandate, it is also crucial to ensure that these powers are exercised fairly and transparently and that no individual falls victim to their abuse.
To this end, SEBI has implemented a number of procedural safeguards to protect the rights of individuals and entities subject to its regulatory powers. These safeguards include:
Notice and hearing: Before SEBI can take any enforcement action, it must provide notice to the individuals or entities involved and give them an opportunity to be heard. This includes the right to present evidence, cross-examine witnesses, and make legal arguments.
Fairness and objectivity: SEBI is required to act fairly and objectively when exercising its powers. This includes avoiding bias, prejudice, or favoritism, and taking into account all relevant factors when making decisions.
Transparency: SEBI is committed to transparency in its operations. This includes making public its decisions, regulations, and enforcement actions, as well as providing access to information through its website and other channels.
Right to appeal: Individuals and entities affected by SEBI’s decisions have the right to appeal to the Securities Appellate Tribunal (SAT). The SAT is an independent quasi-judicial body that reviews SEBI’s decisions and can overturn them if they are found to be unlawful or unreasonable.
Independence: SEBI is an independent body that is not subject to the control or interference of the government or any other external entity. This independence is essential for SEBI to exercise its powers impartially and without fear or favor.
These procedural safeguards play a vital role in ensuring that SEBI’s powers are used fairly and transparently and that the rights of individuals and entities are protected. They also contribute to maintaining the integrity of the Indian securities market and promoting investor confidence.
Investigating process
The regulatory framework cannot impose penalties or fines without issuing a show-cause notice to the offender. A chance is given to the offender to present their side of the case for the violations listed in the notice and defend themselves. This is done to make sure every party has a fair chance of voicing their side and that fair justice is served.
During this process, SEBI secures the services of an adjudicating officer whose main agenda is to hear out both parties and make a decision based on evidence and legal principles without being biassed towards any of the parties.
Transparency and internal review
To ensure no decision of SEBI goes against an individual’s fundamental rights, SEBI is required to clearly state all the reasons why and how a decision is finalized, and these reasons are made public with the decision to maintain transparency as well as to dismiss any uncertainty and gain the investor’s confidence.
To keep SEBI’s power from being misused or abused by authorities, internal reviews are done to keep everything in check and fair.
Appeal against SEBi’s decision
Any party that thinks that the order given by SEBI was not fair can raise an appeal in the Security Appellate Tribunal (SAT). The security appellate tribunal will examine the legal principles and evidence and change or uphold the decision, therefore providing an independent review itself.
These decisions can further be appealed in the High Court and Supreme Court, showcasing the fact that different remedies are available for anyone who is affected by SEBI’s decision.
Legal Challenges
Despite SEBI having such a thorough investigative and enforcement process and with such detailed procedural safeguards, there are still many ways in which SEBI faces legal challenges. It can be:
One of the most common legal challenges that SEBI faces is not issuing proper notice, resulting in an improper hearing and violating the very first procedural safeguard of the issue of notice for a fair decision.
Another legal challenge that SEBI faces is an excessive amount of fines. SEBI can impose a larger sum of fines for violations that are not severe, resulting in parties seeking judicial relief.
Another legal challenge that SEBI faces is over jurisdictional disputes. Another regulatory body can challenge the actions of SEBI, whether they come under SEBI’s jurisdiction or not.
Another legal challenge that SEBI faces is the lack of evidence, where it becomes common for the aggrieved party to argue that SEBI has not collected a sufficient amount of evidence for the case, resulting in unfair justice.
Another one of the common legal challenges that SEBI faces is accusations of being biassed, where an aggrieved party can argue that SEBI is biassed and did not provide fair justice, seeking a review of the case from the court.
Conclusion
The Securities and Exchange Board of India (SEBI) is a regulatory body created to maintain the securities market and regain investors’ confidence, promote the development and growth of the market, regulate the market to free it from any fraud and unfair practices, and provide transparency to protect the investors.
SEBI has investigative and enforcement powers that help it regulate the market and overview other essentials it should survey, such as protecting investors, maintaining transparency, and preventing fraud and unfair practices. However, SEBI must balance the use of these powers with procedural safeguards so that fair justice can be served to everyone.
Though SEBI has procedural safeguards to balance out its powers, it still faces many legal challenges, such as lack of evidence, lack of proper notice, and so on.
This article is written by Subhangee Biswas. The article discusses the judgement of Gujarat University vs. Krishna Ranganath Mudholkar in the background of the entries related to education and the application of the principle of “harmonious construction” under the Constitution of India. The article proceeds to cover the facts of the case along with mentioning the contentions presented by both parties. Highlighting and explaining the legal concepts involved with the legal precedents, the article concludes with the judgement and an overall analysis of the case.
Table of Contents
Introduction
The case of The Gujarat University, Ahmedabad vs. Krishna Ranganath Mudholkar and Ors. (1963) revolves around the question of whether a university or an educational institution can impose a particular language as a medium to impart education and conduct examinations. The Gujarat University, in this case, wanted to impose Gujarati and Hindi as the medium of instruction for imparting education as well as for the conduct of examinations. When this issue came up before the Supreme Court, it harmoniously construed the provisions of the Constitution of India, thereby stating that, in cases of conflict between the power of Parliament under the Union List and the power granted to the State under the State List regarding education, the former takes precedence over the latter and that the power of the State will always be restricted and not absolute. Let us deal with the case in detail and look into the provisions involved.
Details of the case
Case name: The Gujarat University, Ahmedabad vs. Krishna Ranganath Mudholkar and others
Case number: Civil appeal numbers 234 and 262 of 1962
Bench: Chief Justice Bhuvneshwar Sinha, Justice J. C. Shah, Justice K. Subbarao, Justice K. N. Wanchoo, Justice N. Rajagopala Ayyangar, and Justice Syed Jaffer Imam.
Judgement date: 21st September 1962
Final decision: The majority bench, in a ratio of 5:1 rejected the appeals and reversed the ruling of the Gujarat High Court. The judgement was made in favour of the respondents, ordering that the university can rightfully mandate the use of two languages as mediums of education, but such power is restricted by the related provisions of the Act.
Facts of the case
Background
The son of the appellant, Shrikant, cleared his Secondary School Certificate Examination, conducted by the State of Bombay in March 1960, through the medium of Marathi, his mother tongue. Then, Shrikant was admitted to the arts class of St. Xavier’s College, which was affiliated with Gujarat University. In the section where he took admission, the medium of instruction was English language.
Shrikant completed his First arts course in March 1961. Further, he applied for admission to the classes preparing for the Intermediate Arts examination at the same university through English medium.
The principal informed him that, as per the Gujarat University Act, 1949 (hereinafter mentioned as “the Act”) and the Statutes 207, 208 and 209 formulated by the Senate of the university as amended in 1961, without the prior consent of the university, he could not be allowed to attend the classes that had English as the medium of instruction.
The appellant, who is the father of Shrikant, then approached the Vice-Chancellor of the university, asking for permission for Shrikant to attend the said classes. The Registrar of the university, though refusing to grant such permission, allowed Shrikant to keep English as a medium of examination but not as a medium of instruction.
On 22nd June 1961, a circular was issued by the Registrar of the university addressing the principals of the affiliated colleges. It was stated in the circular that the Vice-Chancellor, exercising his powers under Section 11(4)(a) of the Gujarat University Act, 1949, issued the following directions:
Only such students who have completed their secondary education in English medium and continued their studies in the First Year (Pre-university) Arts Class in 1960-1961 in English medium would be permitted to continue using English as a medium of examination in the Intermediate Arts Class for the year 1961-1962,
The colleges were directed to give instructions to the above-mentioned students in English medium for only one year, i.e., 1961-1962.
The principals need to make sure that only the mentioned students benefit from the arrangement of allowing English as a medium of examination.
Shrikant did not qualify to be allocated to this section of students since he had appeared at the Secondary School Certificate Examination in Marathi and not English. Despite this fact, if the principal still had given permission to Shrikant, then the college would have attracted the penalties given in Section 38A of the Act of 1949.
Petition before the Gujarat High Court
The appellant then filed a writ petition on behalf of himself and his son, who was then minor, in the Gujarat High Court for issuing a writ of mandamus or any other suitable writ, direction or order for the following-
Directing the Gujarat University to treat Section 4(27) (Power of the university to make special provision for spreading university education among educationally backward classes and communities), Section 18(1) (Power of the court to consider and decide upon matters of general policy regarding the progress and development of the university), 18(14) Section 18(13) of the amended Act (Power of the Senate to frame statutes to impose Gujarati or Hindi or both as medium or media of instruction), and Section 38A (Withdrawal of recognition of a university; its condition and procedure) of the Gujarat University Act, 1949 and Statues 207, 208, and 209 as void and inoperative and to refrain from acting upon such provisions or enforcing them;
To direct the Vice-Chancellor to treat the letters or circulars issued by him regarding the medium of instruction as illegal and to refrain from acting on those or enforcing the same;
Directing the university to refrain from opposing or prohibiting the admission of the son of the appellant, that is, Shrikant, to the “English medium Arts class”; and
To direct the principal of the college to accept the admission of Shrikant to the Intermediate Arts class in English medium on the grounds that Sections 4(27), 18(1), 18(14), 38A of the Act of 1949 and the Statutes 207, 208 and 209, as well as the letters and circulars issued by the Vice-Chancellor were all void and invalid.
Verdict of Gujarat High Court
The High Court of Gujarat issued the writs as prayed for by the father of Shrikant (respondents before the Supreme Court) through an order dated 24th January 1962. The High Court held the following-
Statutes 207 and 209, as much as they attempt to enforce Gujarati and/or Hindi in Devanagari script as a medium of instruction and as a medium for conducting education in institutions excluding the ones that are maintained by the present university, were held to be unauthorised and, thus, were declared to be null and void. This was held keeping in view that neither Section 4(27) of the Act of 1949 nor any other provision empowers the university to prescribe Gujarati or Hindi as a medium of instruction and examination in such institutions, nor do the provisions prohibit the usage of English for the same purpose;
The university has the power to include Gujarati or Hindi as one of the mediums but it cannot be made the sole medium, excluding other languages;
The proviso to Section 4(27) of the Act of 1949 (as amended by 1961) infringes Entry 66 of List I of the Seventh Schedule to the Constitution of India and, thus, is beyond the legislative authority of the State. Therefore, Statutes 207 and 209 are null and void; and
If, on a true construction of Section 4(27) and other provisions of the Act of 1949, it is seen that the university possesses the authority to prescribe a specific language or languages as a medium for its affiliated colleges and has the power to prohibit the usage of English for the same purpose in the colleges affiliated by it, then the provisions that provide the authority to impose an exclusive language and the statutes and circulars corroborating the same would be void and in violation of Articles 29(1) and 30(1) of the Constitution of India.
Dissatisfied with the decision of the High Court, the State of Gujarat and the Gujarat University filed separate appeals to the Supreme Court, stating Section 4 of the Act of 1949 did empower the university to impose Gujarati and Hindi as a medium of instruction and examination and that all the related provisions are valid. For these appeals, they had obtained the certificate of fitness as granted by the High Court.
Issues raised in the case
The two issues raised before the Supreme Court in this case are as follows-
Whether the university can impose Gujarati, Hindi or both as an exclusive language for conducting education and examinations in its affiliated colleges?
Whether the statute providing such power to the university would result in the infringement of Entry 66 of List I of the Seventh Schedule to the Constitution?
Arguments of the parties
Petitioners
The counsel on behalf of the university has contended the following-
According to Clause (10)(a) of Section 4, the university was empowered to sanction courses of study as per the statutes, ordinances and regulations.
Section 4(27) empowers the university, and Section 18(1)(14) provides power and duty to the Senate to make provisions for allotting Gujarati, Hindi or both as a medium to carry out instruction and examination.
The counsel for the university had presented a letter dated 7th August 1949, by the Government of India to various universities and provincial governments. Through this letter, various recommendations were made. One of them is the replacement of the English language as a medium of instruction at the university stage with a state or provincial language, which was also requested.
The power given under Entry 66 of List I under the Seventh Schedule is the power to “coordinate’ and “determine standards”. The words coordinate and determine have been interpreted to mean “evaluate” and “fix” respectively.
It was also contended that the state legislature, under Entry 11 of List II, possessed the power to legislate laws prescribing an exclusive medium of instruction in the colleges affiliated with the university.
Respondent
The respondent had contended the following arguments:
The counsel for the respondent accepted that the state legislature had the authority to empower a university to stipulate a language as a medium of instruction.
They contended that state law, which does not allow the use of English as a medium of instruction and directs using a regional language as the sole or additional medium along with other Indian languages, infringes upon Entry 66 of List I. Such a state law would make the fixation of standards and coordination on a national basis difficult or even impossible.
It was also contended that the doctrine of pith and substance was irrelevant when one entry was dependent on another entry. In such a case, when the matter is beyond the scope of one entry, it comes under the domain of the other one; hence, no overlapping takes place. This renders the invoking of the doctrine of pith and substance unnecessary for the interpretation of the entries.
The respondent had added that, in the above-mentioned case, a principal named “direct impact” comes into play, according to which, if a state law has a “direct impact” on an entry mentioned in the Union List, then that state law is held to be beyond the scope of the State List.
As for the interpretation of Entry 66 of List I, it was contended that the Parliament, under certain circumstances, has the power to make legislation that replaces the medium of instruction prescribed by the State law with their chosen medium.
Laws and concepts involved in Gujarat University, Ahmedabad vs. Krishna Ranganath Mudholkar and Ors. (1963)
Article 254(1) of the Constitution
This article states that if there is a law made by the state legislature and it is in contradiction to either-
A provision or law made by the Parliament, which is within the legislative competence of the Parliament, or,
Any provision of an existing law regarding any matter mentioned in the Concurrent List,
Then, the law made by the Parliament, irrespective of whether it came into force before or after the law made by the state legislature, will prevail over the law made by the state legislature. Moreover, the law made by the state legislature to the extent of the contradiction will be deemed to be void.
The three Lists of the Seventh Schedule
The Seventh Schedule of the Constitution of India allocates separate powers and functions between the Union and the state legislatures. It contains three lists, namely,
List I, also known as the Union List- The matters enumerated under this list come under the exclusive power of the Union Government, i.e., the Parliament. The Parliament has the sole and exclusive authority to make laws regarding the items mentioned thereunder.
List II, also known as the State List- As the name suggests and is similar to the concept of the Union List, the state legislatures hold the exclusive power to make laws regarding the matters enumerated under this list.
List III, also known as the Concurrent List- This list enumerates the matters that are under the joint authority of the Union as well as the States. This is a shared domain and both the Union and the state legislatures can legislate on these matters.
Entry 63 to 66 of List I
Since Entries 63 to 66 are concerned with the present case, it is necessary to mention these entries before going into the verdict of the Supreme Court. Entries 63 to 66 essentially list out certain universities and institutions which are given national importance and, hence, come under the domain of the Parliament for enactment of any legislation related to them.
Entry 63 of List I mentions certain institutions that are of national importance; it states that “The institutions known at the commencement of this Constitution as the Benares Hindu university, the Aligarh Muslim university and the Delhi university; the university established in pursuance of Article 371E; any other institution declared by Parliament by law to be an institution of national importance.”
Entry 64 also adds to the list of institutions of national importance, it states that “Institutions for scientific or technical education financed by the Government of India wholly or in part and declared by Parliament by law to be institutions of national importance.”
Entries 65 and 66 mention specific matters in the sphere of education which come under the exclusive power of the Parliament to make laws.
Entry 65 empowers the Parliament to legislate on matters regarding-
“Union agencies and institutions for-
(a) professional, vocational or technical training, including the training of police officers; or
(b) the promotion of special studies or research; or
(c) scientific or technical assistance in the investigation or detection of crime.”
Entry 66 empowers the Parliament to make laws regarding the “coordination and determination of standards in institutions for higher education or research and scientific and technical institutions.”
Entry 11 of List II
Entry 11 mentions that the state legislature has the power to enact laws with regard to “Education including universities, subject to the provisions of entries 63, 64, 65 and 66 of List I and entry 25 of List III”.
The provision gives power to the state legislature to enact laws with regard to education but it also mentions exceptions, thus, giving priority to the Parliament in certain matters. However, this Entry has now been omitted by the Constitution (Forty-second Amendment) Act, 1976.
Entry 25 of List III
Entry 25 states that the power to enact laws regarding “Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labour”lies with both the Union Parliament and state legislatures.
Similar to Entry 11 of List II, there are certain matters in which the Parliament has been given priority over the state legislatures. Apart from that, regarding subjects related to education, vocational and technical training, the union and the state legislature have a shared power to legislate.
Statutes 207, 208 and 209 formulated by the Senate of the university as amended in 1961
The Gujarat University framed certain regulations to deal with the medium of instruction in 1954. They were Statutes 207, 208 and 209.
Statute 207
Statute 207 provided the following-
The medium of instruction and examination shall be Gujarati language;
Despite Gujarati being the medium, English language shall continue to be a medium for a period of a maximum of 10 years from the date of enforcement of Section 3 of the Gujarat Universities Act, 1949, except as otherwise provided by the statutes from time to time;
Despite the inclusion of the Gujarati language as a medium, non-Gujarati students and teachers will have the option to use Hindi language as the medium. For this, the syndicate will enforce suitable ordinances for its regulation whenever necessary,
Irrespective of whatever has been mentioned in the above three points, the medium of instruction and examination for the modern Indian languages and English will be the respective languages.
Statute 208
Statute 208 provided the following-
Some courses were named where the medium of instruction and examination shall no longer be English and shall be according to Statute 207(1). For two different lists of courses, two different application dates were provided.
For the following courses, the above-mentioned arrangement was to be applicable from June 1955:
First Year Arts,
First Year Science, and
First Year Commerce.
For these below-mentioned courses, the arrangement was to be applicable from June 1956:
Inter Arts’ Inter Science,
Inter Commerce, and
First Year Science (Agriculture).
If any student or teacher felt that they could not use Gujarati or Hindi appropriately, then they would be permitted to use English as a medium until November 1960.
Statute 209
Statute 209 states the permitted use of English for Bachelor of Arts, Bachelor of Science, and other such examinations.
Amendment of 1961
Thereafter, with the 1961 Amendment of the Gujarat University Act, 1949, Statutes 207 and 209 were amended by the Senate of the university. Statute 207, as amended, provided the following-
Gujarati shall be the medium of instruction and examination. Hindi as an alternative medium will be permitted in the below-named faculties-
Faculty of Medicine,
Faculty of Technology and Engineering,
Faculty of Law, and
All faculties for post-graduate studies.
English will continue to be the medium of instruction and examination, but the period, subjects and courses of studies in respect of which such allowance will be permitted will be prescribed by the Statutes under Section 4(27) of the Gujarat University Act, 1949.
Students and teachers, whose mother tongue is not Gujarati, will be given the option to use Hindi as a medium for examination and instruction.
The affiliated colleges, recognised institutions and university departments will have the option to use Hindi as a medium for one or more subjects. This will be applicable to those students whose mother tongue is not Gujarati.
Irrespective of what has been mentioned above, for modern Indian languages and English, the medium of instruction and examination will be the respective languages.
Statute 209, after amendment, stated that the medium of instruction and examination would no longer be English but would be as per Statute 207, effective from the years mentioned therein with their respective examinations.
The doctrine of harmonious construction
The doctrine of “harmonious construction” is a method of interpreting a statute. It is based on a cardinal principle that every statute has been formulated with a specific purpose and intention and must be read as a whole. In simple terms, this doctrine rules that, when there is a conflict between two different statutes or two provisions under the same statute, the courts must try to interpret them in such a manner that they are harmonised, they remain in force together and any form of inconsistency is avoided.
To know more about the doctrine of harmonious construction, click here.
The doctrine of pith and substance
The doctrine of “pith and substance” is a legal doctrine used in constitutional interpretation. It is used in the federal system of government to determine under whose legislative competence the enacted law falls. The phrase “pith and substance” signifies “true nature and substance”.
The Union and the state legislatures have supreme power to legislate on their respective subjects, separated into their respective lists under the Seventh Schedule of the Constitution. If either of them tries to infringe upon the subject of the other, then the doctrine of pith and substance is applied to determine the true object of the legislation. If the legislation is fundamentally concerned with the subject that is within the power of the legislature that enacted it, then it is held to be intra vires (within the power to legislate), even though it happens to infringe on matters beyond its powers.
The doctrine of colourable legislation means that a legislature has enacted a law under the disguise of having the power to do so, though it does not possess the legislative competence to enact laws regarding the subject. The Constitution of India has demarcated subjects for legislation by the union and the states. If a legislature transgresses such demarcation and makes laws outside its assigned authority, this doctrine is used by the judiciary to identify such acts, review the law and declare them void if found to be unconstitutional.
The doctrine is derived from the Latin maxim “quando aliquid prohibetur ex directo, prohibetur et per obliquum”, which means that “things that cannot be done directly should not be done indirectly either”. It helps keep the legislative authority of the Union and the state legislatures in check. This doctrine is also known as “Fraud on the Constitution,” as the legislatures act beyond their powers entrusted by the Constitution.
To know in detail about this doctrine, click here.
The doctrine of direct impact
The doctrine of direct impact, also known as direct effect, is a European law-based doctrine that allows the people to invoke a provision of any European statute before a national or European court.
The provision which is to be invoked must be clear;
The provision must confer some negative obligation;
It must be unconditional; and
It must not be dependent on any other provision.
Upon the fulfilment of the above-mentioned conditions, the rights or rights provided under the provision can be enforced before the courts.
There are two aspects to the direct impact doctrine:
Vertical direct effect- In this case, a person can invoke a European law in relation to the State. If some provision of European law is vertically and directly effective, then it is relied upon while bringing an action against the state or public bodies. Such provisions concern the relationship between European law and national law.
Horizontal direct effect- In this case, a person can invoke European law in relation to another person. If some provision of European law is horizontally and directly effective, then a person can rely upon to bring an action against another person. Such provisions concern the relationship between individuals.
Precedents involved in the case
Hingir-Rampur Coal Co. Ltd. & Ors. vs. State of Orissa & Ors. (1961)– In this case, the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952 was questioned. The Court analysed the phrase “subject to” used in the entries of List II while subjecting such entry to some other entry of List I. It held that the state legislature is deprived of legislative power to the extent of restriction implied by the phrase “subject to” in a List II entry.
This case was referred to state that, in the present case, the power of the State to make laws regarding education is restricted and is only up to the extent of powers possessed by the Union. Applying this, it was inferred that, if a subject of legislation is within the larger scope of “education including universities” and it is also covered by Entries 63 to 66, the Union will be deemed to have the power to legislate on that subject.
Prafulla Kumar Mukherjee vs. Bank of Commerce, Khulna (1947)– Justice Subba Rao, in his dissenting opinion, had mentioned this case while discussing the doctrine of “pith and substance”. In this case, the conflict was between Entries 28 (promissory notes) and 38 (banking) of List I of the Seventh Schedule to the Government of India Act, 1935 and Entry 27 of List II (money lending). The doctrine of pith and substance was invoked to determine, if the Bengal Money-Lenders Act, 1940 was ultra vires (beyond the powers tolegislate) for the State legislature. In this case, it was held by the Judicial Committee that the pith and substance of the Act, that is, its true nature, was money lending, which came under Entry 27 of List II. Hence, the Act was held to be valid because the Act infringing upon matters under the exclusive power of the Union, i.e., promissory note and banking under Entries 28 and 38 of List I, was coincidental.
The Court had also highlighted the need to consider the extent of infringement by the states on the subjects mentioned in the Union List to determine the pith and substance of the concerned statute. If the extent of infringement is far into the Union domain, it might suggest that the true nature is not concerned with State-related matters.
The State of Bombay vs. F. N. Balsara (1951)– In this case, the issue was regarding the constitutional validity of the Bombay Prohibition Act, 1949. The question was whether this Act fell within Entry 31 of List II (intoxicating liquors- production, manufacture, possession, transport, purchase and sale) of the Seventh Schedule to the Government of India Act, 1935 or under Entry 19 of List I (import and export across customs frontier). An argument was advanced to validate the involvement of the doctrine of pith and substance, which stated that, if the purchase, use, transport and sale of liquor were prohibited, the import of the same would be affected. This contention was rejected by the Court on the ground that the argued infringement did not affect the “true nature and character” of the legislation. The Court held that the pith and substance of the Act fell within Entry 31 of List II though there was coincidental infringement into the scope of legislation of the Union.
A. S. Krishna vs. The State of Madras (1957)– In this case, the issue was regarding the validity of the Madras Prohibition Act (now named the Tamil Nadu Prohibition Act, 1937). It was contended that the provisions of the Act contradicted the existing Indian laws, namely, the Indian Evidence Act, 1872 and the Code of Criminal Procedure, 1898, regarding the same matter. The Court reiterated that, if a statute is related to a subject matter which is within the legislative competence of either the Union or the State, then it would be held to be intra vires that legislature, even though it might encroach upon the matters beyond the legislative competence. The extent of encroachment helps to determine whether the legislation is colourable. Otherwise, the encroachment does not affect the law.
Union Colliery Company of British Columbia, Limited, and others vs. John Bryden (1899)– In this case, the issue was whether Section 4 of the British Columbia Coal Mines Regulation Act, 1890, was ultra vires of the State legislature. Section 4 of the said Act prohibited the employment of Chinamen of full age in underground coal workings. The subject matter of “naturalisation and aliens” was under the exclusive authority of the Union Parliament as per Section 91(25) of the British North America Act, 1867.
It was observed by the Judicial Committee of the Privy Council that the Act only applied to Chinamen who were considered to be alien or naturalised subjects. The Act had no effect except prohibiting these Chinamen from working or allowing them to work in underground coal mines. This was very much within the power of the Province of British Columbia. According to Section 91(25), the Dominion Legislature had exclusive authority in matters directly related to the rights, privileges and disabilities of the Chinamen residing in Canada. Applying the doctrine of pith and substance, the Judicial Committee of the Privy Council concluded that the concerned Act was regarding the right and privileges of the Chinamen which was a subject within the exclusive power of the Parliament.
This judgement is also related to the doctrine of pith and substance and is not concerned with the doctrine of “direct impact”.
Bank of Toronto vs. Lambe (1882)– In this case, the Quebec Act, 1774 was questioned. Two contentions were raised. First is that the tax in question was not “taxation within the Province” and second is that the tax was not “direct tax”. The Judicial Committee had held that the Act was within the legislative competence of the Provincial Legislature.
Attorney General of Alberta vs. Attorney General for Canada (1939)– In this case, the Province of Alberta had passed an Act regarding the “taxation of banks”. The effect of the Act was that every corporation or joint stock company, except the Bank of Canada, which is incorporated for carrying out banking or savings bank business in the Province, would be charged an annual tax along with the usual tax payable under other statutes. Such annual tax was calculated to be half per cent on the paid-up capital and one per cent on the reserve fund and undivided profits.
It was held that the imposed tax was not to some regular taxation to “raise revenue for Provincial purposes” and, thus, could be said to be within the legislative competence of the Provincial Legislature in accordance with Section 92(2) of the British North America Act, but it was to prevent the operation of those banks that had been established by the proper authority of the Parliament in accordance with Section 91 of the British North America Act.
Thus, the Board had concluded that the Act, though a statute related to taxation, was a colourable legislation aimed to prevent the functioning of the banking institutions, which came under the authority of the Dominion Legislature. It was observed that the pith and substance of the Act were not related to taxation, which came under the power of the Provincial Legislature as per Section 92 as mentioned above, but were related to the subject of “banking”, which was under the power of the Dominion Legislature. The judges also formulated some guidelines to help in determining the class, i.e., Section 91 or Section 92 of the Act, in which a particular subject belonged. Three rules were suggested, which are:
The two lists given under Sections 91 and 92 are to be compared to determine where the concerned legislation prima facie falls within,
The effect of the legislation is to be examined, and,
The object or purpose of the concerned legislation is to be considered.
Calcutta Gas Company vs. The State of West Bengal (1962)– In this case, the issue was regarding the competence of the State legislature to enact the Oriental Gas Company Act, 1960. The Court had observed that Article 246 of the Constitution of India empowers the legislatures with the power to legislate. The three Lists provided under the Indian Constitution are the demarcated areas specifying the area of operation for the separate legislatures. The language of the entries under the Lists is to be given priority but there may be cases of overlapping or direct conflict. In such cases, it is the duty of the court to harmoniously interpret them. The Court had observed that it is a well-settled rule of construction that attempts are to be made to harmonise the conflicting entries, irrespective of whether they belong to the same List or different Lists.
Deuchar vs. Gas Light and Coke Company (1925)– In this case, it was held that, when a corporation created by legislation, while considering the purposes of the Act and in furtherance of fulfilling these purposes, the objects to be pursued by the corporation are to be based on the Act and the powers are also to be conferred by the Act directly or by reasonable implication.
Judgement of the case
Imposition of Gujarati or Hindi or both as exclusive medium
Section 4 and the Clauses under it
In this regard, the Supreme Court considered a few Clauses of Section 4 of the 1949 Act. The particular Clauses and the inferences from them are listed below in separate points for easy understanding:
Clause (1)- The 1949 Act originally contained the following provision under this Clause:
“to provide for instruction, teaching and training in such branches of learning and courses of study` as it may think fit to make provision for research and dissemination of knowledge”
The present Act, which is modified up to 2016, provides the following under Clause (1):
“to provide for instruction, including correspondence courses, teaching and training in such branches of learning and courses of study as it may think fit, to make provision for research, advancement, and dissemination of knowledge, and to conduct special under-graduate courses for talented students”
The Supreme Court did not agree with the High Court in its opinion that the power under Clause (1) is limited in application only to institutions set up by the university and excludes the affiliated colleges. The language of the provision does not support this restriction. However, the Court agreed with the High Court on the statement that this power is not related to the medium of instruction but to the curriculum in the various branches and courses offered.
It was concluded that, as per this Clause, the university can direct instruction, teaching and training in branches and courses but it does not provide an exclusive medium for carrying out such instruction.
Clause (2)- “to make such provision as would enable affiliated colleges and recognised institutions to undertake specialisation of studies”
The Supreme Court stated that this Clause has no effect on the topic of the exclusive medium of instruction.
Clause (7)- The Act as modified up to 2016, places this provision to Clause (10) presently. The provision states:
“to lay down the courses of instruction for various examinations”
Likewise, this Clause was also stated by the Supreme Court not to be related to the laying down of an exclusive medium of instruction.
Clause (8)- As per the latest amended Act, this provision is now contained in Clause (9) under the same section. The provision states:
“to guide teaching and research work in colleges, university Departments, university centres and recognised institutions”
In this provision as well, there have been some additions made after the amendment but, since this Clause also does not have any relation with the power to impose an exclusive medium, as stated by the Court, we are not discussing it in detail.
Clause (10)- It is to be noted that the provision contained in this Clause is shifted to Clause (12) as per the latest amendment. The provision states that:
“to hold examinations and confer degrees, titles, diplomas and other academic distinctions on persons who
(a) have, pursued approved courses of study in the university or in an affiliated college unless exempted therefrom in the manner prescribed by the Statutes, Ordinances and Regulations and have passed the examination prescribed by the university, or
(b) have carried on research under conditions prescribed by the Ordinances and Regulations”
This Clause has undergone slight changes as provided in the latest amended Act.
The Supreme Court had rejected the contention of the petitioner-university that Clause 10(a) expressly provides power to the university to impose a specific language of its choice, which in this case was Gujarati, Hindi or both, as an exclusive medium. The Court proceeded to state that such a provision by itself does not confer such empowerment. The Court clarified that, nevertheless, the university has the power to grant degrees or academic distinctions to persons who have pursued approved courses and passed the related examinations conducted by the university.
Clause (14)- The provision has now been shifted under Clause (20) and it provides the following:
“to inspect colleges, recognised institutions and approved institutions and to take measures to ensure that proper standards of instruction, teaching and training are maintained in them and that adequate library and laboratory provisions are made therein”
In short, this provision states that it is to be made sure that proper standards of teaching, instruction and training are maintained. Hence, it has no relation to the granting of an exclusive medium.
Clause (15)- This Clause has now been shifted under Clause (24)(a). Through this Clause, the university is empowered by stating:
“to control and co-ordinate the activities of, and give financial aid to affiliated colleges and recognised institutions.”
However, it is clear that the Clause does not mention any power to impose an exclusive medium of instruction and examination, as the university had contended.
Clause (27)- The unamended Clause states the following:
“to promote the development of the study of Gujarati and Hindi in Devnagari script and the use of Gujarati or Hindi in Devnagari script or both as a medium of instruction and examination
Provided that English may continue to be the medium of instruction and examination in such subjects and for such period not exceeding ten years from the date on which section 3 comes into force as may from time to time be prescribed by the Statutes.”
The Supreme Court interpreted this provision as giving importance to the word “promote”, thus, stating that the university was given the power to “promote” the usage of these languages. The power that the university possessed was to encourage the study of these particular languages and their usage as a medium but it did not confer the power to make them an exclusive medium of instruction and examination.
Again, considering the usage of the article “a” in the phrase “as a medium of instruction and examination”, the Court stated that the legislature intended to make Gujarati or Hindi one of the mediums of instruction. There was clearly no intention to create a power through which Gujarati or Hindi could be imposed as an exclusive medium of instruction. This is supported by the usage of “the” in the proviso to the Clause in the phrase “English may continue to be the medium of instruction and examination”.
In addition to this, the Supreme Court also highlighted the fact that the proviso shows that the legislature desired the continuation of an already existing exclusive medium of instruction and examination, that is, English.
Lastly, the Court mentioned that, as per the proviso, English was to continue as a medium of instruction in regard to certain subjects and, as per the operative part of the Clause, the use of Gujarati and Hindi as a medium was to be promoted. Thus, it can be inferred that Gujarati or Hindi was not to be used as an exclusive medium but was to be adopted along with English for instruction and examination.
Clause (28)- The unamended version as mentioned by the Court is:
“to do all acts and things whether incidental to the powers aforesaid or not as may be requisite in order to further the objects of the university and generally to cultivate and promote arts, science and other branches of learning and culture”
This provision is to further promote the objectives of the university. This Clause works together with Clause (27). It depends on Clause (27) to conclude if this Clause can be interpreted so as to promote the object of the university to impose Gujarati or Hindi as the exclusive medium of instruction and examination.
Section 18 and the powers and duties under it
The Supreme Court considered the contention of the university that, as per the powers and duties of the university under Section 18, the Senate had the power to make provisions regarding the usage of Gujarati or Hindi or both as a medium of instruction and examination. In this regard, the Court mentioned that, apparently, the language of the different Clauses mentioned does not confer the meaning that the Clauses provide a collateral duty along with authorising the Senate to exercise the powers of the university. However, the Court accepted the assumption that every power of the Senate has a corresponding duty, but it refused to accept that the power related to the usage of Gujarati, Hindi or both as a medium presumes a duty to make it an exclusive medium of instruction and examination. The usage of “a” in the phrase “as a medium of instruction and examination” in the provision points out that the usage of these languages would be an addition to the existing multiple mediums and not the sole medium. Apart from this, no other provisions of Sections 18, 20, or 22 that confer various powers and duties to the different organs of the university were mentioned by the parties and the Court also could not find any provision that empowered the university organs to impose Gujarati or Hindi as an exclusive medium of instruction.
The Court also stated that the power to provide for a medium of instruction in affiliated colleges does not necessarily include the power to impose an exclusive medium of instruction and examination.
Recommendation by the Government of India
The petitioner-university had relied upon a letter dated 7th August 1949, which was addressed by the Government of India to the universities and state governments. In that letter, the Government of India had made certain recommendations for the benefit of national education and directed the universities and the state governments to implement the same in a timely manner. Among the seven items recommended, two were discussed in this case, which were as follows:
The universities and the State Governments were requested to take steps to replace the English language with the language of the state, province or region as a medium of instruction and examination at the university stage during the coming five years gradually, and,
The universities were requested to conduct a mandatory test in the Federal language during the first degree course and also to arrange for teaching facilities in the Federal language for those students to choose it as an optional subject.
The Court stated that though the Government of India had proposed the above-mentioned recommendations in 1949 to replace the English language with a regional language for the purpose of using it as a medium of instruction and examination, the same cannot be considered a proper cause to interpret the provisions in a manner that opposes the intention of the Legislature clearly conveyed. The Court also mentioned that these recommendations were disregarded by most of the universities. The Statement of Objects and Reasons of the Act of 1949 mentioned that as suggested by the Committee, the Act was to empower the university to take up Gujarati or Hindi, which is the national language, as the medium of instruction. The only exceptions provided were those subjects in which English medium was considered necessary. In such subjects, the English language was allowed as a medium of instruction for the first ten years.
It was stated that, in the absence of a direct provision incorporated by the legislature, a proposal by the government mentioned in the Statement of Object and Reasons would not be reason enough to assume that such a proposal was given effect. The Object and Reasons specify the reason behind the enactment of a statute but in cases of interpretation of the statute, the Object and Reasons are to be disregarded.
The final decision in this regard
The Supreme Court mentioned that, when the operative part of Section 4(27) does not confer on the university a power to impose Gujarati or Hindi as an exclusive medium of instruction, the same cannot be said to have been independently conferred by its proviso, as amended by the Amendment of 1961. The proviso only declares an extension in the usage of English as a medium of instruction beyond the stipulated time of ten years for certain courses. The proviso also highlights the usage of the definite article “the” by the legislature when the intention was to portray the English language as the sole medium of instruction and the usage of indefinite article “a” when the intention was to portray the language to be one of the multiple media of instruction.
Thus, it was concluded by the Supreme Court that neither the unamended Act nor the amended Act conferred any such power to the university to impose Gujarati, Hindi or both as an exclusive medium or medium of instruction and examination. Thus, the Senate could not exercise such power since the Senate is a body that acts on behalf of the university and has only those powers that are within the scope of powers conferred on the university by the Act.
The Supreme Court concluded by agreeing with the High Court that the power to impose the languages Gujarati, Hindi or both as an exclusive medium of instruction and examination has not been conferred under any of the Clauses provided under Section 4 of the Act.
Infringement of Entry 66 of List I of the Seventh Schedule
Need for harmonious construction of Entry 66 of List I and Entry 11 of List II
The Supreme Court discussed that Entry 17 of List II of the Seventh Schedule of the Government of India Act, 1935, empowered the State Legislature of Bombay to enact the Act of 1949. Entry 17 provided, “Education including Universities other than those specified in paragraph 13 of List I.”
Paragraph 13 of List I mentions two universities, namely, the Benaras Hindu University and the Aligarh Muslim University. Thus, a state legislature was empowered to make laws regarding all matters related to education except the two mentioned universities. The term “education” is wide enough to include all related matters so the Supreme Court assumed that the state legislature also possessed the power to make laws imposing a federal or any regional language as the exclusive medium in a university. The Court opined that, if by Section 4(27) the State Legislature empowered the university to prescribe a language as an exclusive medium of instruction, then there would be no doubt regarding the validity of Statutes 207, 208 and 209. However, Section 4(27) does not empower the university to impose Gujarati or Hindi language as an exclusive medium of instruction.
The Constitution of India made a significant change in the classification of the legislative powers regarding the subject of education between the Union and the state legislatures. The power of the state legislature to make laws regarding “higher, scientific and technical education and vocational and technical training of labour” under the Government of India Act, 1935 is now mentioned under Entry 11 of List II and is made subject to five entries, namely, Entries 63 to 66 under List I and Entry 25 under List III, under the Constitution of India. Entries 63 to 66 of List I mention those matters related to the subject of education that come under the exclusive legislative power of the Parliament.
The Supreme Court took notice of the phrase “subject to” used in Entry 11 of List II, which excludes Entries 63 to 66 of List I and Entry 25 of List III from the scope of legislation of the state legislature. Thus, it can be said that the state legislature has restricted power with respect to education-related matters.
The Court rejected the contention of the parties that the laws prescribing the medium or media of instruction in higher educational institutions always fall within the scope of Entry 11 of List II. It further stated that, if the same is accepted and followed, then even for the excluded entries of 63 to 66, the power to legislate on the medium of instruction would lie with the State but, for the other areas of the excluded entries, apart from the medium of instruction, the power to legislate would continue to vest with the Union Parliament. This interpretation would lead to absurd results in the manner that, even for the national universities and institutions, the power to make laws relating to the medium of instruction would lie with the state legislature, though they would possess no other power with regard to those universities and institutions.
As a result, the Court suggested that the harmonious construction of Entry 11 of List II and Entry 66 of List I is to be done. It was accepted that the two entries are overlapping but, in the case of the intersection, Entry 66 of List I is to be given priority over the state power entrusted by Entry 11 of List II.
The Supreme Court further clarified that the state legislature has the power to legislate on matters regarding primary or secondary education, including the power to make laws regarding the medium of instruction therein. On the other hand, according to Entries 63 to 66, the institutions of national or special importance and the higher education institutions come under the purview of the Union, hence, the power to make laws regarding the medium of instruction is also vested with the Union.
Overriding power of the Union Legislature
The Court stated that, though the State has the power to decide the syllabi and courses of study in the institutions mentioned only in Entry 66, which includes deciding the medium of instruction, the Union Parliament exercises an overriding power. The Union Parliament has to ensure that the syllabi, courses, and medium of instruction maintain the standard of education and facilitate the coordination of the standards on a national basis. Though the legislatures have separate lists of powers, overlapping to some extent is unavoidable. The Court also observed that prescribing a common test to answer every emerging question in this regard is not attainable. Thus, the overlapping exists in the manner that, within a state, the state legislature will have the power to prescribe the syllabi, courses and medium of instruction, while the Union Government also withholds the power to ensure that the standards are met, maintained and improved.
Another point highlighted by the Supreme Court was that, even if the Union has not legislated to the full potential of its powers, the State does not assume the power to legislate on a matter which is the domain of the Union under the Constitution. Even in the separate matters allocated to the Union and the state legislatures, there may be laws enacted in the respective separate exclusive powers of both legislatures, whose provisions are in conflict with each other. In such cases of conflict, the doctrine of “pith and substance” is to be applied to the concerned statute to decide which legislature possesses supremacy. The validity of the State legislation depends on whether it is affecting the “coordination and determination of standard” under Entry 66. For example, the Court had mentioned that the state legislature can legislate on education in such institutions that are not of national importance, that is, which are excluded in Entry 64 of List I. However, this act of the state legislature will be subject to affecting the “coordination and determination of standard” under Entry 66.
Article 254(1) of the Indian Constitution supports the contention that the Union legislation has superiority over state-made laws. Thus, if the Union and State both formulated laws regarding coordination and determination of standards, the Union-made laws would be given priority over the state-made laws. Even if the Union Parliament has not legislated on a matter mentioned in the exclusive Union List, the State does not assume the power to make a law on that matter. Still, if the State Legislature formulates any law on the matter belonging to the Union List, such a law would be deemed invalid.
Interpretation of Entry 66 of List I
The Court rejected the interpretation suggested by the counsel for the university regarding Entry 66 of List I. It was stated that unless it is expressly mentioned or there is a necessity, Entry 66 is not to be allowed to have a narrow and restricted interpretation. The power to legislate on a matter extends to and includes all related angles which can reasonably be said to be included in that matter. Nothing in Entry 66 or the Constitution of India implies that “coordination” in Entry 66 means merely “evaluation”. Normally, the word “coordination” means balancing or harmonising. Thus, the power of coordination is not only the power to evaluate but also the power to harmonise or balance something. Moreover, the power granted by Entry 66 of List I is not dependent on the happening of an emergency or the presence of incompetent standards which demand the exercise of such power.
The Court stated that the power to make laws regarding “coordination and determination of standards” in higher education institutions includes the power to prevent and remove inconsistencies in standards. Through this provision, the Indian Constitution makers meant to authorise coordination and prevention of the existence of any condition acting as a barrier to the fulfilment of such coordination. The Court further defined this power as absolute and unconditional.
The concept of “medium of instruction” is included separately in both entries, that is, Entry 66 of List I and Entry 11 of List II. When it is included under Entry 66, it will fall under the excluding part of Entry 11. The role of the “medium of instruction” in maintaining the standard of education depends on the importance that the choice of medium holds for imparting instructions. The Court explained this matter by stating that if there is a law that imposes some regional language or Hindi as the medium of instruction, even though there are no study materials, teaching faculties or even students incapable of understanding the subjects, then it would lower the standards, and the law would then, fall within Entry 66 of List I and would be excluded from the power given under Entry 11 of List II.
Amendment to Section 4(27)
The Supreme Court disagreed with the High Court in declaring the amended proviso to Section 4(27) invalid on the ground that it was beyond the scope of the legislating power of the State. The Court reiterated that the purpose of the amended proviso was to allow the continuation of the usage of the English language as a medium of instruction beyond the stipulated period of ten years in certain selected subjects. Before the enactment of the Act of 1949, the English language was the only medium of instruction for all subjects in the universities. The proviso authorised the university to permit the usage of English as an exclusive medium of instruction in selected subjects. The amendment blocks the power to impose an exclusive medium other than the already existing medium.
Before the Act, there was a sole medium of instruction throughout the country. It was stated that the existence of a common medium of instruction cannot be said to have lowered standards and affected the coordination and determination of standards. The amendment aimed to allow the continuance of English as a medium for specific subjects and this cannot be considered to be a violation of the powers of the Union under Entry 66 of List I.
If the university does not possess the power to impose an exclusive medium of instruction, then Section 38A of the Act of 1949 also doubtlessly becomes not invalid.
Verdict regarding Gujarat High Court decision
The Supreme Court upheld the order of the High Court in declaring Statutes 207 and 209 invalid so far as they are related to the imposition of Gujarati, Hindi or both as an exclusive medium or media of instruction.
The order of the High Court declaring Section 4(27) proviso and Section 38A invalid was set aside by the Supreme Court.
Dissenting opinion by Justice Subba Rao
The dissenting opinion was given by Justice Subba Rao. Apart from discussing the relevance of the doctrine of pith and substance, he considered two issues, which are:
Whether the state legislature has authority under the Constitution of India to formulate a law which prescribes an exclusive medium of instruction in affiliated colleges, and
Whether the university has power under the Act of 1949, amended in 1961, to impose an exclusive medium of instruction.
Relevance of the doctrine of pith and substance
Justice Subba Rao refused to accept the contention that the doctrine of pith and substance is irrelevant when one entry is conditional upon another entry and both entries are under different lists. Instead, he proceeded to state that, in such a case, a part of the legislation has been made out of the scope of one entry and has been inserted in the other entry. This has the same effect as interpreting two entries in separate lists. The doctrine of pith and substance means that if the substance of legislation falls under matters within the power of a particular legislature, then it will be considered valid even though the legislation expands into matters beyond the scope of that legislature. The true character of the legislation is the concern and any coincidental infringement on other entries is not to be considered.
The Justice proceeded to summarise this entire discussion to state that, when the question is regarding the scope of power within which legislation falls, the court has to decide the scope, effect and pith and substance of the legislation. If any State law infringes the domain of a central subject so heavily that it severely curtails the central domain, then it has to be concluded that the state law is a colourable legislation and, in its pith and substance, it falls under the Union list and not the State list.
Authority of the State Legislature under the Constitution of India to formulate laws prescribing exclusive medium
Justice K. Subba Rao observed that, as per Entry 11 of List II, the entire field of education is entrusted to the state legislature. The only exceptions mentioned are Entries 63 to 66 of List I. The medium of instruction is an inseparable component of education, as there can be no education without it; it is the mode in which education is imparted. It is not reasonable that the subject of the medium of instruction is given under the power of the Parliament and the rest of the subject matter related to education is entrusted to the State.
It is a fact that the medium of instruction in specific universities is included in Entry 63 of List I. At the same time, there is no reason to exclude the medium of instruction from university education, as mentioned under Entry 11 of List II. It was also noted that Entry 66 of List I does not expressly, prima facie, include the topic of the medium of instruction.
The interpretation of the terms “coordination” and “determination of standards” by the appellant side was regarded as restrictive and, if accepted, completely ousted the Parliament from this scenario. The interpretation submitted by the respondent side was deemed to affect the State entry badly, which cannot be accepted unless the language of Entry 11 is clear and precise.
Justice K. Subba Rao stated that “to determine” means “to settle, decide or fix” and the term “coordination” means “to place in the same order, rank or division to place in proper position relatively to each other and to the system of which they form parts; to act in combined order for the production of a particular result”.
Entry 66 empowers the Parliament to make laws for the “determination of standards” in higher education institutions. This leads to the harmonious coordination of the institutions which, in turn, is expected to lead to an overall improvement in the quality of higher education. It was also observed that it is not necessary for a particular medium of instruction to be involved to secure such standards.
Justice K. Subba Rao discussed that education has multiple components and all are included when the term “education” is used. If the components are put under the heading of “coordination and determination of standards,” then the entry of “education” would be left with no content. It is necessary to apply the principle of harmonious construction and to draw a demarcation between the range of power and interference of the state legislatures and the Union Legislature. The Judge concluded that the State can make laws for imparting education and also to maintain the standards of education. On the other hand, the Parliament is to interfere only when there is a necessity to improve such standards to help in coordination. For example, the Parliament may make laws to provide better facilities, upgrade general standards, provide necessary financial help, etc., all of which are supposed to enhance the standards of the university.
The Parliament may also make a law that provides a mechanism to improve the language adopted as a medium of instruction so as to make it a useful means for higher education and technological and scientific studies. Even if the pith and substance of such a law is “coordination and determination of standards,” the inclusion of the medium of instruction would not be considered to be an impediment since the purpose of improvement is present. But a complete displacement cannot be allowed under the garb of “coordination” as in such a case, there is a direct infringement on the subject of education.
Entry 66 of List I does not allow the enforcement of any provision which results in direct interference by an external organisation in the education of a university, it allows such external body to prescribe standards and help to reach those standards.
Scheme of the Indian Constitution regarding the medium of instruction
Justice K. Subba Rao highlighted that the Indian Constitution is also against the Parliament possessing powers to legislate regarding the medium of instruction. When the Constitution of India came into force, there were many regional languages, which are also mentioned in the Eighth Schedule but English language was the medium of instruction as well as the official language of the administration. It was intended that English be replaced at all levels but it should be done in phases. Article 343 of the Constitution of India was mentioned, which declares Hindi in Devnagari script as the official language of the Union. Simultaneously, this Article also mentions that English is to continue for official purposes but for a limited period.
However, a similar procedure for the educational field was not mentioned and the reason can be presumed to be that the same was left to the free will of the state legislatures and educationists.
He further mentioned that many steps were taken by the Indian Constitution makers, which point to the fact that they were sure of the enrichment of the regional languages and had envisioned that the regional languages would become suitable means of instruction in education. Some of the steps, as mentioned in the judgement, are:
Urge to replace English with Hindi for all official purposes,
Recognition of regional languages,
Removal of the English language from the Eighth Schedule,
The presence of Article 351 directed the development of the Hindi language.
Entry 66 is to be interpreted as assuming that regional languages would take the place of the medium of instruction in all universities and in such a scenario, the law fixing standards for coordination is not to be given priority over the medium of instruction.
The petitioner-university had contended that, if other universities were influenced by the action of the Gujarat University and proceeded to impose some regional language in place of English, which has been the accepted medium of instruction, the standard of higher education might be negatively affected. If the contentions of the petitioner are accepted, then Parliament would be powerless in such a situation. The effect of this interpretation would result in the eradication of a considerable portion of “coordination”. The same contention, in a different manner, had also been presented by the respondent. What they meant was that a state law abolishing the English language as a medium of instruction falls under Entry 66 under the phrase “coordination”. Justice K. Subba Rao declared this argument to be void of any factual or legal backing. The Indian Constitution makers had entrusted the subject of the medium of instruction to the state legislatures because they considered it to be a better choice.
The aim was to replace the English language with a regional language as a medium of instruction. For that, all the other states had been proceeding gradually, whereas only the Gujarat Legislature adopted a hasty process and proposed the Gujarati language as the sole and exclusive medium of instruction. The Judge preferred to go with the natural meaning of “education” rather than extend the word “coordination” to face the possibility of all states discarding the English language as a medium of instruction. Further, he discarded the contention that continuing English as a medium of instruction would result in the collapse of the standards and inconceivable cooperation. He suggested that other regional languages could serve as a means to impart education but, for that, efforts and expenses would also be incurred. He relied on the state legislatures to make attempts to maintain the standards.
It was further stated that, if the state legislature can act on its own will and go against the interests of the universities, the Parliament can do the same. It has to be believed that, as a legislative body elected by the people, the bodies will act with wisdom and for the public good. For this reason, the Court must interpret the constitutional provisions without considering the irrelevant factors.
Justice K. Subba Rao finally held that the medium of instruction comes under Entry 11 of List II which means that the state legislature has the authority to make laws empowering a university to impose a regional language as the exclusive medium of instruction.
Power under the Gujarat University Act, 1949 to prescribe an exclusive medium of instruction
Justice K. Subba Rao analysed the scheme of the Act. The Gujarat University is a body corporate and a teaching and affiliating university. There are three instruments, namely, the Senate, the Syndicate (the legislative body) and the Academic Council (the executive), which carry out the essential activities and also possess various powers. The Judge also took into consideration the related Clauses of Section 4 of the Act.
He stated that, when an Act provides powers to a corporation created by itself, it also provides the power to do the acts necessary to exercise the said powers. If the same is accepted, then the university can be said to possess the power to impose an exclusive medium of instruction. The university decides the instruction, teaching, training, courses of study and examination, hence, it is natural that it would possess the power to prescribe a medium of instruction. If the university can prescribe multiple mediums of instruction, it can also prescribe the more suitable medium as the exclusive one.
Justice K. Subba Rao commented that, if the previous legislation applicable in Bombay and the comparable statutes related to other universities of India are considered, then it will be seen that the universities, applying similar powers, had prescribed the English language as a medium. This basic power of prescribing medium, if denied to the universities, will affect their autonomy and affect the rights provided to them under the Act. If such a power is not entrusted to the university, then all the affiliated colleges under it might adopt different languages as the medium, and then issues like in what language examinations are to be held would arise. However, the university must exercise this power reasonably.
He mentioned that Clause (27) to Section 4 expressly empowers the university to prescribe a medium of instruction but the exercise of such power has to be as per the conditions of the provision. The same has been tried to be established by bringing out the usage of different articles in the operative and substantive parts of the Clause. This argument was rejected by the judge, who stated that the power to prescribe mediums of instruction and examination is already provided under Clause (1) to Section 4 and Clause (27) provides additional power for promoting the development and prescribing the usage of the languages as a medium of instruction.
Clause (27) mentions “instruction” as well as “examination”. If it is considered that the power to prescribe a medium of instruction is provided by only this Clause, then it would mean that the power to prescribe a medium of instruction for examination is also provided by this Clause. In such a scenario, the result would be that the university would not have the capacity to conduct examinations in any other languages but Gujarati and Hindi. On the other hand, if the affiliated colleges have the capacity to use some other language as the medium of instruction apart from Hindi and Gujarati, the university would not have any power to conduct examinations through its chosen medium. Thus, considering these, the Judge concluded that Clause (27) only provides an additional power with a duty to promote the mentioned languages, and the Clause, in no way, is meant to affect the power of the university to prescribe its chosen medium of instruction.
Regarding the proviso, the Judge stated the meaning to be that English would continue as a medium of instruction but not as a sole medium. The university is to impose one or both of the mentioned languages as a medium of instruction.
Accepting the reasoning behind the usage of definite and indefinite articles in the operative and substantive part, he concluded that the fact that the university can prescribe the mentioned regional languages as an additional medium is apparent from the usage of the indefinite articles; and the fact that the English language is followed by definite article shows that it was in usage as the exclusive medium. Moreover, it is also implied by the proviso that the university has the power to continue English as a medium of instruction even after the period of termination mentioned. The proviso empowering the university to make English the sole medium for a definite period is presumed to have been enacted knowing that the university had the power to prescribe English as the medium.
The interpretation given by the Judge results in the university having the following powers:
Prescribing any medium or mediums of instruction;
Promoting Hindi and Gujarati;
Introducing the use of Hindi and Gujarati;
Continuing English as the sole medium of instruction for the mentioned period; and
After the completion of the mentioned period, prescribing English or some other language as the medium of instruction along with Hindi and Gujarati.
Final conclusions by the dissenting Judge, Justice K. Subba Rao
Justice K. Subba Rao concluded the following-
The university has the power to prescribe multiple mediums or an exclusive medium of instruction for higher education;
Clause (27) provides additional power and does not negatively affect the implied power derived from the other provisions;
The Constitution of India relies on the State legislatures and universities to look after education at the university level and the legislature, in turn, has entrusted the university with powers necessary for the upliftment of higher education;
The university has the authority to decide the pace at which regional language is to be introduced as the medium of instruction;
Since the university has the power to prescribe an exclusive medium of instruction, Section 38A of the Act stands valid;
The university was not acting ultra vires while allowing the replacement of English by Hindi and Gujarati as media of instruction; and
The order of the High Court was to be set aside and the appeals were allowed.
Analysis of the case
This case highlighted the extent of the power entrusted to the State and universities in the field of education. Though essentially it is seen that the Gujarat University Act, 1949 does empower the university to impose regional languages as a medium of instruction and education, the same is not an absolute and unrestricted power. If such an allowance is made, there will be a possibility that different universities adopt a different medium, thus, leaving no uniformity in education all over the country. For the same reason, the Supreme Court, in this case, interpreted the provisions, namely, Section 4 and 18 of the Gujarat University Act, 1949, in such a manner, taking into consideration the usage of constitutional provisions minutely, to lead to the conclusion that the universities have the power to look after the instruction, teaching, and medium used in its set-up colleges as well as the colleges affiliated by it, but the power to prescribe a medium is restricted in the manner that it cannot prescribe an exclusive medium. Referring to different Clauses under Section 4 and Section 18 of the Gujarat University Act, 1949, the Supreme Court concluded that the power of the university is to prescribe an additional medium, which was done to promote the usage of regional languages, but such a regional language cannot be made the sole medium.
Then, the Court proceeded to interpret the overlapping entries mentioned in the Constitution of India regarding education. It was debated in the case whether education and the related mediums of instruction and examination fall under the domain of the State or the Union Legislature. The two entries in question were Entry 66 of List I and Entry 11 of List II. Various interpretations were discussed and the interpretations forwarded by the parties were also considered, a few of them led to anomalous results. Hence, the Court deemed it appropriate to proceed with harmonious construction so that the best possible result is achieved which would work towards the standards of education in the country. Following the same, a clear demarcation was stated, that is, the state legislature being entrusted with the areas of primary and secondary education and the Union legislature being entrusted with the areas of higher education. Further, the Union was stated to exercise an overriding power over the State when it comes to matters falling under Entry 66, i.e., the Union is to have the upper hand in verifying whether the standards for higher education in institutions and universities are met. In this regard, the understanding of Entry 66 of List I in light of the “medium of instruction” becomes important. It was understood that, when the medium of instruction affects the standard of education, it would automatically come under the purview of Entry 66 of List I.
The decision given by the bench in this case was in the ratio of 5:1. The majority supported that Hindi or Gujarati cannot be made an exclusive medium. It was accepted that the university can prescribe any language as a medium but that would be as an additional medium; such language cannot be made the sole and exclusive medium of instruction and education.
If we look at the dissenting opinion, we find that Justice K. Subba Rao was of the view that the medium of instruction comes implied with education and is an inseparable element. Hence, when “education” as a subject is being entrusted to the State legislature, the medium of instruction remains affixed to it. The state possesses the power to legislate on matters related to education and the Parliament interferes when the improvement of standards is involved. He proceeded to mention the constitutional structure to conclude that the scheme of the Indian Constitution also supported the adoption of regional languages as a medium of instruction in education.
He further interpreted the provisions of the Gujarat University Act and opined that the university possessed the power to prescribe exclusive medium or media and, thus, in his opinion, the order of the High Court was to be negated, upholding that the university was well within its powers to replace English with the mentioned regional languages as a medium of instruction.
Conclusion
The case of TheGujarat University, Ahmedabad vs. Krishna Ranganath Mudholkar and Ors. (1963) discussed some important doctrines of interpretation in light of matters related to higher education. The doctrine of harmonious construction, in particular, was resorted to in separating the scope of power in the area of education between the Union and the state legislatures.
The uncertainty regarding the authority to impose a language as a medium of instruction and examination was considered and dealt with by the Supreme Court in this case. The supremacy of the Union was ensured over the state legislatures in intersecting matters. In the event that the state legislature makes any law concerning the subject of education, it is to be ensured that the law does not interfere with any matter mentioned under the Union domain.
The case serves as an important judicial decision regarding the subject of entries mentioned under the Indian Constitution and provides an insightful outlook on the interpretation of various provisions for the benefit of educational standards throughout the country.
Frequently Asked Questions (FAQs)
Which State Legislature enacted the Gujarat University Act, 1949?
The Act was enacted by the State Legislature of Bombay.
Where was the Act of 1949 applicable?
The Act was applicable in the province of Bombay.
Why was the Gujarat University Act, 1949 enacted?
The Act was enacted to establish a university for teaching and affiliating other colleges. It was done to decentralise and reorganise university education in the province of Bombay.
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This article has been written by Akanksha Singh. This article is an exhaustive piece of work on the detailed study and analysis of the landmark case of ‘The Punjab State Cooperative Agricultural Development Bank Ltd. vs The Registrar Cooperative Societies and Others (2022)’. The article provides a comprehensive learning experience for the readers as it also includes a thorough explanation of the provisions of ‘Entitlement to Pension’, along with other relevant case laws under the Service Law in the Indian jurisprudence.
Table of Contents
Introduction
The case of ‘The Punjab State Cooperative Agricultural Development Bank Ltd. vs The Registrar Cooperative Societies and Others (2022)’ is the latest and landmark case of pension to employees in service law. Service law covers a wide variety of topics, such as hiring, promotion, disciplinary measures, termination and pension, when it comes to cooperative societies and cooperative banks. The case of ‘The Punjab State Cooperative Agricultural Development Bank Ltd. vs The Registrar Cooperative Societies and Others (2022)’ put forth significant questions before the High Court of Punjab and Haryana at Chandigarh, and the Apex Court of the country, the Supreme Court of India regarding the ‘Entitlement of Pension Scheme’ of the retired employees and the serving employees. The case brought to light the need for a balance between the legal rights of the employees and the right of the organisation to amend rules. This case set a precedent in light of providing a safeguard put in place to shield the serving and retired employees from unfair or unreasonable conditions of employment with respect to the entitlement of pensions to employees. With its ruling, the Supreme Court of India sought to set a guideline in terms of how an organisation such as a cooperative bank can amend its rules regarding the terms and conditions and the benefits of such employment, while strict adherence to the general principles of fairness, reasonable and natural justice. The historic ruling of the Supreme Court of India highlights the intricate relationship that exists between rules governing cooperative banks and the rights of their employees.
This case also raised questions that intersected both service law and constitutional law of the country. The court examined whether certain decisions of ‘The Punjab State Cooperative Agricultural Development Bank Ltd.’ were violative of Article 14 and Article 16 of the Constitution of India. It dwells upon the concept of ‘legitimate expectation’ in the service law. It also talks about the vested or accrued rights of the employees with respect to the rights provided in any particular service as per the terms and conditions of the service. The application and interpretation of the concepts of service law with respect to pension schemes in the setup of a cooperative entity can be better understood by examining the particulars of this case in great depth.
Details of the case
Name of the Case: The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and others
Bench: Justice Ajay Rastogi and Justice Abhay S. Oka.
Name of Petitioner/Appellant: The Punjab State Coop. Agricultural Development Bank Ltd.
Name of the Respondent: The Registrar Coop. Societies
Subject-Matter of Case: Withdrawal of Pension Scheme
Date of the Judgement: January 11, 2022
Facts of the case
In this case, multiple appeals were filed on the same issue of dispute. In this batch of appeals, the appellant is the Punjab State Cooperative Agricultural Development Bank Ltd, while the original writ petition was filed by the retired employees of the Punjab State Cooperative Agricultural Development Bank Ltd.
29th July 2019: Special Leave Petition filed
At the same time, the serving employees of the Punjab State Cooperative Agricultural Development Bank Ltd. have preferred a special leave petition against the self-same common judgement dated 29th July 2019 and 4th October 2019 passed by the Division Bench of the High Court of Punjab and Haryana at Chandigarh. The Punjab State Cooperative Agricultural Development Bank Ltd. is a registered cooperative society. Under the Punjab State Cooperative Agricultural Development Bank Ltd., the service conditions of the employees are governed by the Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978.
The aggrieved retired employees became members of the Bank Pension Scheme, which was introduced with effect from 1st April 1989. The bank of the appellant in the present case is a registered cooperative society which was earlier known as “Punjab State Cooperative Land Mortgage Bank Ltd.” The bank is formed with the primary objective of providing long-term loans to farmers and their communities, with the aim of protecting them from the clutches of money lenders. In fulfilling its objective, the appellant bank receives its funding for the purpose of its functioning by way of loans from the National Bank for Agriculture and Rural Development (NABARD) as per the norms laid down. The Punjab State Cooperative Agricultural Development Bank Ltd. consists of a two-tier structure comprising of “Punjab State Cooperative Agricultural Development Bank Ltd.” at the Apex level (SADB) and “Primary Agricultural Development Bank Ltd.” (PADB) at the grass root level. The function of these two banks is to ensure timely delivery of credit to the farmers, who are its members and are direct beneficiaries of various schemes which provide such farmers long-term and short-term loans.
Scheme applicable to Bank before the year 1989
Before 1989, the employees of the appellant bank were covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “Act, 1952). The appellant bank duly adhered to the provisions of the scheme and a regular contribution was being paid by both the employer and the employee towards the pensions scheme. In a letter dated September 22, 1988, the Department of Finance, Government of Punjab, expressed its agreement to follow the recommendations of the Punjab Pay Commission to bring employees working for various public sector utilities and state-aided institutions under the State Pension Rules. The purpose of the inquiry was to get input from the relevant organisations regarding, among other things, the additional financial burden associated with each case and whether the organisation or organisations could afford the additional liability out of their own resources. These recommendations were presented to the bank administrator, who decided to implement the recommendations of the State Government by resolution dated June 22, 1989.
Scheme applicable to Bank from the year 1989
As a result, the Pension Scheme for employees and officers in the common cadre was introduced on 1st April 1989. In order to pursue this, the appellant bank wrote the Registrar of Cooperative Societies, Punjab, on 27th June 1989, requesting permission to implement a pension scheme for its workers who fall under the Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978. The Registrar of Cooperative Societies, Punjab, approved the launch of the proposed pension scheme of the appellant bank to its employees on 7th February 1990, by an official communication. In accordance with this, the Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978 were amended, and Rule 15(ii) was added, enabling the Board of Directors to create a pension scheme with the approval of the Registrar Cooperative Societies. In furtherance to it, the amended Rule 15 (ii) came into force with effect from 1st April 1989. For the purpose of reference, Rule 15 (ii) is given as below:
“PROVIDENT FUND: The employees shall be entitled to the benefit of the General Provident Fund as provided in the Employees Provident Fund Act, 1952 and scheme framed thereunder”.
Following the introduction of the implementation of the amended pension scheme, the contribution towards the pension scheme made by the appellant bank and the employees were transferred to establish the Pension Corpus Fund, which allowed the scheme to function. A trust was established by a trust deed dated 24th March 1993, to oversee and successfully implement the scheme.
Changes that took place after the introduction of the new scheme
According to the evidence presented in this case, the appellant bank workers who chose to get a pension became members of the pension scheme and were able to continue receiving benefits after they had opted for the pension scheme until 2010. However, later, the Punjab State Cooperative Agricultural Development Bank Ltd. started to feel difficulty in providing pensions under this scheme and the said bank found the pension scheme to be unviable on account of financial constraints on the said bank. The Board of Directors of the appellant bank held a meeting on 29th May 2010 in reference to Agenda Number 15 and decided to reconsider the matter of giving pensions to the employees of the bank. The appellant bank decided to seek approval regarding the aforementioned reconsideration of the pension scheme from the Registrar, Cooperative Societies, Punjab.
The Registrar, Cooperative Societies, Punjab issued directions to the Punjab State Cooperative Agricultural Development Bank Ltd. to review its proposal by way of a letter dated 3rd September 2010. On 30th March 2011, the appellant bank sent the revised proposal regarding the pension scheme concerned to the Registrar, Cooperative Societies, Punjab. Although, the proposal was turned down by the Registrar, Cooperative Societies, the Board of Directors with reference to the Resolution dated 17th August 2012 decided to discontinue the pension scheme and modify the pension scheme to a Contributory Provident Fund with a proposal of one-time settlement. In furtherance to this, the Board of Directors in the exercise of its power vested under Section 84A(2) of the Punjab Cooperative Societies Act, 1961 with the prior approval of the Registrar, Cooperative Societies made an amendment in Rule 15 of the Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978 and Rule 15 (ii) was deleted dated 11th March 2014.
Many employees had approached the High Court under Article 226 of the Constitution due to the non-payment of pension by the appellant bank much before the amendment of deleting Rule 15 (ii) of the Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978. Out of this case, a number of interim orders were issued from time to time, and at one point it was decided to introduce a one-time settlement proposal, which was provided by the appellant bank on October 16, 2012, in the pending proceedings before the High Court.
However, in reality, a very small number of employees have settled their claims under the one-time settlement, but it is appropriate to note at this point that, during the time the proceedings were pending before the Division Bench of the High Court, Punjab and Haryana at Chandigarh, an order dated January 24, 2014, made it clear that a one-time settlement that has been implemented after obtaining approval from the appropriate authority will not impair the applicant’s or respondent employee’s legal rights, with respect to other remedies. This fact can be further observed in that Rule 15 (ii) was deleted by the appellant bank by an Order dated March 11, 2014, while the proceedings were pending in Letter Patent Appeal before the High Court. The learned Single Judge of the High Court held that the employees of the appellant bank, having served the bank, were covered under the scheme which was applicable at the given time under the “Employees Provident Fund and Miscellaneous Provisions Act, 1952” (prior to 1989).
By the time the case reached the Division Bench of the High Court, Rule 15(ii) had been removed and an order dated March 11, 2014, had made the adjustment. The Division Bench at the High Court of Punjab and Haryana at Chandigarh took into consideration the fact that the appellant bank had made the decision to introduce Rule 15(ii) after enough deliberation and in such a circumstance, it was a conscious decision of the appellant bank.
The Division Bench of the High Court made certain observations and said that as per the decision of the appellant bank, Rule 15(ii) was introduced. This new rule was enforced on 1st April 1989. However, due to certain financial constraints faced by the appellant bank, the aforementioned rule, that is, Rule 15 (ii) was deleted on 11th March 2014. A large chunk of employees already became part of the said pension scheme. As a result, the right of pension had become a vested or accrued right by the time the new rule was deleted. The deletion of such a rule was against the interest of employees with regard to the entitlement to pension of retired employees.
It may be pertinent to mention that the Regional Provident Fund Commissioner filed various counter-affidavits before the High Court at various points in time, referring to the exemption grant after the Employees Pension Scheme of 1995 became a part of the Act 1952. An unconditional apology was given by the Regional Provident Fund Commissioner for mentioning regarding granting an exemption from the pension scheme as such a mention was factually inaccurate.
On 29th July 2019, the judgement of the Divison Bench of the High Court was challenged by the appellant bank and serving employees. The appellant bank and the serving employee challenged the decision of the Division Bench of the High Court on the ground that such a judgement would have a negative impact on their pension rights in the future. This concern was raised by the employees of the bank to the Supreme Court of India during the proceedings of this case.
Issues raised in the case
There were multiple issues in this case as it was a long-standing matter. They are listed below:
The primary issue in the case was whether the appellant bank (The Punjab State Cooperative Agricultural Development Bank Ltd.) could withdraw or discontinue midway the pension scheme which was originally planned to be effective till 2010.
The second question before the court was whether such action on the part of the appellant bank regarding the pension scheme is violative of Article 14 and Article 16 of the Constitution of India.
Arguments of the parties
Arguments by the Appellant
The Employee Provident Funds Scheme of 1952 and the Employee’s Pension Scheme of 1995, according to the EPFC, are both intended to provide a basic level of old age/terminal social security. Both of these schemes do not completely eliminate the right of an employee to the entitlement to social security benefits. It is essential to assess the bank’s assurance of providing additional pensions outside of EPF as per the EPFC.
The benefits under the pension scheme can only be understood as an additional benefit and not a substitutionary benefit as the pension system of the bank did not provide for withdrawal benefits, dependent’s benefits, nominee benefits, or children’s benefits. In this sense, the pension scheme is far more limited in its application. Section 17(1C) of the Act, 1952 did not allow its pension scheme to be excluded.
Additionally, the learned counsel for the appellant bank stated that the High Court did not take into consideration the fact that the pension scheme designed by the bank was contingent on approval from the appropriate authority. Although the appellant bank did not apply for approval or exemption from the authority, the fact remains that the retirees were entitled to pension payments until the scheme’s expiration date of October 31, 2013, provided the appropriate authority did not grant their request.
The learned counsel further argued that there will be a payment of double pension, which is illegal in any case, if the employees are allowed to receive a pension under the scheme of the bank after October 31, 2013, in addition to receiving a statutory pension from the Regional Province Fund Commissioner under the Act 1952.
The counsel further argued that the employee is entitled to a pension, but as to how that pension is to be calculated, learned counsel further maintains that no one may assert any vested or accumulated rights. The respondents do not claim that they are not receiving pension payments. It was paid earlier under the pension scheme of the bank, which was established in 1989 and was in effect until October 31, 2013. After that, the workers are eligible to receive a statutory pension under the terms of the Act 1952 through the Employees Pension Scheme 1995.
Therefore the counsel maintained that the consideration of the High Court of the plea of vested right is entirely misplaced. As long as the appellant bank satisfies its statutory liability under the provisions of the Act 1952, which they are required to comply with, the employees are not entitled to claim pension under the scheme introduced by the bank after it stands withdrawn with effect from October 31, 2013. Consequently, no vested or accrued right of the employee has been defeated in any way, and the finding of the High Court to continue the bank pension scheme after it was deleted is not sustainable in law and requires interference by the Supreme Court of India.
The learned counsel further argued that the pension scheme that the bank introduced later became financially unviable and that the number of retirees compared to the current employees hired after January 1, 2004, is almost three times. If the appellant bank is required to continue paying pensions under the Bank Pension Scheme, the bank will go out of business and will become defunct and the serving employees’ pension contributions will be in vain, and they will receive nothing upon retirement.
The appellant bank also argued that the bank made a low profit in recent years, the appellant bank would have no choice but to close the bank and the bank would become insolvent, in the given circumstances. The appellant bank further argued that in case, such a judgement is enforced, the bank would not be able to pay such an amount to the pension under the contested pension scheme. According to learned counsel, the Regional Provident Fund Commissioner has started distinct proceedings under Section 7A of the Act 1952 for the years, April 1989 to March 2015 and April 2015 to June 2017. These proceedings impose liability on the bank through orders dated August 31, 2017, and September 14, 2015, respectively.
Moreover, the learned counsel further submitted that multiple cases were filed under Section 14B for damages and Section 7Q for interest simultaneously. The demands were raised in accordance with the instructions granted by the authority of the appellant. As per the specified conditions, the compensation has been given to the Regional Provident Fund Commissioner for pension fund contributions, damages, and interest for the months of April 1989 and August 2017. In addition, the appellant has been instructed to pay pensions to retirees under the bank pension programme to employees who were formerly covered by the programme, in accordance with the contested judgement.
The learned counsel further submitted before the honourable Supreme Court of India that in addition to all the aforesaid issues, some employees have settled their accounts under a one-time settlement that was approved by the government. The counsel stated that if the judgement is implemented in rem, the bank will not only suffer significant financial hardship that is otherwise illegal, but it will also practically be a double payment to the employees, which is above and beyond the payment that was admissible to the employees under the statutory pension scheme 1995 under the Act 1952.
Arguments by the Respondent
On the other hand, Mr. P.S. Patwalia, the learned senior counsel for the respondents, argued that it is undeniable that the current respondents, who were writ petitioners before the High Court, are retired employees. The employees became part of the pension scheme under the 1978 Rules. Further, they began receiving pensions under the scheme with effect from 1st April 1989. In the year, 2010, the pension was unilaterally stopped to be given by the to the respondent pensioners without providing any justification. As a result, the retired employees had to file a writ petition before the High Court. The High Court decided that these pensioners are entitled to pension under the scheme. In order to overturn the August 31, 2013, ruling of the learned Single Judge of the Punjab and Haryana High Court, Rule 15(ii) was removed by order dated March 11, 2014. This removal of the rule has resulted in the vested rights of retired employees being taken away, and their service conditions have been changed retroactively to their detriment, which is against Article 14 and Article 21 of the Constitution.
Regarding the Act 1952 scheme, the learned counsel for the respondent further argued that it was not related to the pension scheme introduced by the appellant under its Resolution No. 24 dated June 22, 1989, which took effect on April 1, 1989, and that the appellant bank was not required to seek any exemption under Section 17(1C) of the Act 1952 because it introduced the pension scheme in 1989. The Division Bench held that the right to pension is a vested or accrued right of the retired employees and it cannot be taken away retrospectively in a manner which is detrimental to the interest of those beneficiaries.
In addition, learned counsel for respondents argued that one-third of the retirees have already passed away while the case is still pending and that more than half of the respondents are between the age group of 73 and 80 years.
Further, a third of the pensioners had already passed away while the lawsuit was pending, and the appellant bank was the one that voluntarily introduced the pension scheme, and the workers of the respondent have chosen to be controlled by it. They have also chosen not to participate in the Contributory Provident Fund. In the given situation, under no circumstances could the appellant arbitrarily take away the rights granted and vested in the respondent workers, in contravention of Article 14 of the Constitution. As for the one time settlement scheme, learned counsel contends that it was implemented as a temporary solution to address the issue caused by the withdrawal of the pension scheme in accordance with the interim measures issued by the High Court.
Moreover, several employees have accepted the one time settlement scheme because they had no other choice and were living paycheck to paycheck. However, in the interim order passed by the Division Bench, the Division Bench made it clear that the legal rights of the employees would not be affected by accepting the pension scheme and that in the specific circumstances, the money paid to a few employees under the one time settlement scheme is always refundable under the scheme to which they are legally entitled. This particular system of the appellant bank was an established practice for over the past twenty years and had become a vested right of the employee, and thus, it is not permissible for the appellant bank to arbitrarily take away their rights and deny them the benefit of the pension, which has been existing through the 1989 as far as the retirees are concerned.
As per the learned counsel for the Regional Provident Fund Commissioner, Mr Siddharth, the appellant bank is covered by the provisions of the Act 1952. The Act under which the concerned pension scheme comes under consists of three schemes in totality. The other two categories of pension schemes are given as follows:
The first is the “Employees Provident Fund Scheme 1952 (EPFS)”, which establishes a contributory provident fund under Section 5 and Section 6 of the Act. Under this scheme, an equal contribution has to be made to the provident fund at a specified rate by both, the employers and the employees. The specified rates are periodically announced by the appropriate authorities. Nevertheless, the current monthly wage for employees is 12%.
The second scheme is the “Employee’s Pension Scheme 1995 (EPS)”, which supersedes the “Employee’s Family Pension Scheme, 1971 (FPS)” and is framed under Section 6A of the Act, 1952. The Family Pension Scheme offered pensions to the dependant of the workers who died in harness.
The learned counsel for the Regional Provident Fund Commissioner also argued that the pension scheme under “Employee’s Pension Scheme 1995 (EPS)” is a comprehension and broader pension scheme as it consists of early retirement, dependents’ pension, and superannuation pension. Its funding comes from transferring a portion of the employer’s 8.33% monthly pay contribution to EPFS into the pension fund. Under EPS, employees do not make contributions. The 1976 Employee’s Deposit Linked Insurance Scheme is the third programme. The bank had requested an exemption from EDLIS under Section 17(2A) and from EPFS under Section 17(1)(b). It was also noted that the appellant bank explicitly mentioned that it did not request for an exemption from the operation of the Employee’s Pension Scheme after 16th November 1995.
Additionally, the learned counsel further stated that the appellant bank did not make a timely contribution under the Employee’s Pension Scheme for the period of 1st April 1989 to 31st March 2015. Further, the appellant bank also failed to make timely deposits for the period of on 1st April 1, 2015 to 6th June 2017 under the Family Pension Scheme. With regards to these defaults into making timely contributions by the appellant bank, separate proceedings were started under Section 7A, followed by damages under Section 14B, and interest under Section 7Q. A provision for the final assessments after giving the appellant bank a chance was also considered.
With regards to the concerns of the serving employees, Mr. Gurminder Singh, learned senior counsel for the employees argued that under the new pension scheme, the serving employees were required to make their own contributions. This comes as an adverse effect on the interest of the serving employees as the contributions made by the serving employees is being used against the payment of pensions to the retired employees. Moreover, there has been constant underfunding of the serving employees by the appellant bank. The actions of the appellant bank indicated that the retiring employees may not be able to receive their pension even after completion of their commitment during the employment. The learned counsel for the serving employees stressed the fact that the pension to the retired employees is being paid at the cost of the serving employees and such an action on the part of the appellant bank is against the interest of the serving employees.
The learned counsel also made an argument stating that the rules and regulations applicable to the serving and retired employees with regards to a pension shall be the same and it should be implemented to all the employees without any unreasonable discrimination. It would be unfair to allow the bank pension plan to continue at the expense of serving employees, depriving them of their legally mandated right to the pension that the bank introduced.
Judgment of the case
The Honorable Supreme Court of India recorded all the material available on record with the assistance of the learned counsel. It was determined that the unilateral amendment to retroactively remove Rule 15(ii) by the bank, which essentially cancelled the entitlement to the pension of the retired employees was invalid and unconstitutional. The ruling reaffirmed that once vested rights have been acquired under an established regulation, they cannot be revoked without going against the equality and right to life guarantees included in the Constitution.
Whether the vested or accrued rights can be divested with retrospective effect by the rule making authority, at any given time?
The Supreme Court of India noted the fact that the respondents are members of the Punjab State Cooperative Agricultural Development Bank Limited, Chandigarh. The court said that it is an undeniable fact that they were also members of the Employees Provident Fund Scheme under the Act 1952 before their retirement. The employees and the employer bank were properly adhering to the programme and making the appropriate contributions. Subsequently, the Administrator of the appellant bank decided, by Resolution dated June 22, 1989, to implement the recommendations of the State Government regarding the introduction of the pension scheme in response to the recommendations by the Punjab Pay Commission. As a result, the pension scheme for employees and officers in the Rules 1978 was introduced with effect from April 1, 1989.
As a result, Rule 15(ii) was added after the Rules of 1978 were modified. This action was taken by the Board of Directors with the prior approval of Registrar Cooperative Societies, Punjab. In accordance with this, an option was included in the amendment so that workers who choose to follow the regulations, that is the ‘Pension Scheme’ will be subjected to them. Employees who choose not to follow these guidelines at that point will be subjected to the Act of 1952. All respondent employees were, without dispute, offered the choice to join the pension scheme upon leaving their employment. They did so continuously until 2010, at which point the litigation began when the appellant bank ceased to pay pensions under the terms of the bank pension scheme. While under some circumstances the bank pension scheme will not apply to workers hired on or after January 1, 2004. Later, the bank decided to delete Rule 15(ii) of the pension scheme on 11th March 2014. This decision provided the basis for the grievances of the workers, which they used to challenge the conduct of the bank and take their case to court.
The Supreme Court of India further said that it is the appellant bank that accepted the recommendations of the State Government and put forward two options and solicited it from the employees, as to whether they wanted to opt for a pension scheme which became applicable after the amendment was made under the Rules 1978. The Supreme Court of India further said that the decision of introduction of Rule 15 (ii) was a conscious decision that was great discussion and deliberation. Thus, it could not be justified to nullify the effect of the amended rule and create a circumstance which would lead to defeating the rights which are conferred upon the employee to seek pension under the rules which became applicable with effect from 1st April 1989. Finally, the High Court of Punjab and Haryana at Chandigarh held that the employees are entitled to regular pensions including the pensions under the amended scheme of revised rates of dearness allowance, to all the employees who became members of the pensions scheme under the Rules 1978.
The court further said that the question that emerges for consideration is as to what is the concept of vested or accrued rights of an employee and whether such vested or accrued rights can be divested with retrospective effect by the rule making authority, at the given time.
On these questions, the Supreme Court of India made the following observation. The concept of vested/accrued right in the service jurisprudence and with respect to the pension particularly has been examined by the Constitution Bench of this court incase of Chairman, Railway Board and Others (1997).
The Supreme Court of India said that the decisions made by the Full Bench and those other Benches of the Tribunal are the subject of these appeals and requests for special leave.
A bench of three learned judges from this court heard some of these cases on March 28, 1995, and issued the following ruling. Two questions arise in the present case, that is:
What is the concept of vested or accrued rights so far as the government servant is concerned and;
Whether of the two, and to what degree, rules imposed under the proviso to Article 309 or an Act passed under that article may retroactively take away vested or accrued rights.
Whether action on the part of the appellant bank regarding the pension scheme is violative of Article 14, Article 16 and Article 21 of the Constitution of India?
The Supreme Court of India further said that therefore, it can be said that a rule that governs future rights of people who are already employed can be challenged on the grounds of retroactivity as violating Articles 14 and 16 of the Constitution. Moreover, the Supreme Court further said that an amendment to a particular rule that results in taking away a benefit that has been already vested can be challenged as violative of Articles 14 and Article 16 of the Constitution to the extent that it operates retrospectively. The terms “vested rights” and “accrued rights” have been used in numerous of these rulings. The aforementioned terms have been used in relation to a right arising under the applicable rule that was requested to be changed with effect from an earlier date. As a result, such an amendment eliminated the advantages granted by the rule that was in existence at that time. As per the ruling, any modification that operates retrospectively and eliminates a benefit that the employee was previously eligible for under the current regulation is considered to be unfair and biased. It is considered to be equally in violation of the rights guaranteed under Article 14 and Article 16 of the Constitution. The Supreme Court of India further observed that the judges on the bench are unable to hold that these decisions are not in consonance with the decisions in Roshan Lal Tandon (1968), B.S. Vedera (1968) and Raman Lal Keshav Lal Soni (1983). The Supreme Court of India said that in these situations, the court is concerned with the pension of the employees that they will get after their retirement. The employees were no longer in the service on the date of issuance of the impugned notifications. It meant that on the day the impugned notices were sent, the respondents had departed from their position. The Supreme Court of India then further made an important observation. It held that the modification to a regulation with regards to its future applicability is unrestricted. The Supreme Court of India clarified that the employees who were out of service and had already retired on the day the impugned notices were sent are covered by the amendments.
Precedents referred
U.P. Raghavendra Acharya and Others vs. State of Karnataka (2006)
The issue that later came up for consideration in U.P. Raghavendra Acharya and Others vs. State of Karnataka (2006)was whether the appellants who benefited from the revised pay scale that went into effect on January 1, 1996, could have had their retirement benefits computed with that effect for pension calculation purposes taken away from them. In that regard, this Court noted the following when reviewing the structure of the Rules and depending on the Constitution Bench Judgement in Chairman, Railway Board, and Others vs C.R. Rangadhamaiah (1997).
In the aforementioned case, one of the rules regarding pension schemes read as below;
“A pensionable; claim by a railway servant to pension is regulated by the rules in force at the time when he resigns or is discharged from the service of Government.”
The respondents in these cases are the employees who retired after January 1, 1973, but before December 5, 1988. Rule 2301 of the Indian Railway Establishment Code states that the employees have the right to have their pension calculated using Rule 2544. This is because the aforementioned rule was in effect at the time of their retirement. At that time, the calculation as per the aforementioned rule stated that while calculating average emoluments for the purpose of determining the amount of pension and other retiral benefits, Running Allowance, up to a maximum of 75% of the other emoluments, had to be considered. The amended Rule 2544 by the impugned notifications dated December 5 1988, takes away the aforementioned right of the employees to have their pension computed based on their average emoluments as calculated. Specifically, the maximum limit is now only 55% from April 1, 1979, down from 75% from January 1, 1973 to March 31, 1979, and 45% from January 1, 1973 to March 31, 1979. As a result, the respondents were receiving less amount of pension in compliance with the regulations in place at the time of their retirement.
The Supreme Court of India while referring to this judgement said that the different group of retired employees who were subject to a different set of regulations may be refused to be granted pension benefits under the new scheme while implementing it. A class of employees may also be refused to be granted pensionary benefits if it is not contradictory to any law at the time being.
On the other hand, the arguments of the appellants were of different nature. They said that the updated pay scales have helped them and are not a problem to them. The University Grant Commission and the Central Government have recommended that the State of Karnataka extend the advantages of the Pay Revision Committee in their favour.
A Constitution Bench of this Court rendered the following opinion in Chairman, Rly. Board vs C.R. Rangadhamaiah (1997). In addition to violating the rights then available under Articles 31(1) and 19(1)(f), the impugned amendments, to the extent that they have been given retrospective operation, are also violative of the rights guaranteed under Articles 14 and 16 of the Constitution on the grounds that they are unreasonable and arbitrary since the said amendments in Rule 2544 have the effect of reducing the amount of pension that had become payable to employees who had already retired from service on the date of issuance of the impugned notifications, in accordance with the provisions contained in Rule 2544 that were in force at the time of their retirement. The appellants were no longer on active duty. Because of this, the State was unable to retroactively change the statutory regulations in a way that would have negatively impacted their pension.
Bank of Baroda and Another vs G. Palani (2022)
While referring to the case of Bank of Baroda and Another vs G. Palani (2022), the court mentioned that the issue at hand in this case was to determine whether or not the employees who left the employment or deceased while still in employment between 1st April 1998 and 31st October 2022, who have a vested or accrued right over the pension scheme and benefits of pensions subsequently. In this regard, this Court made the following observations while acknowledging the viewpoint taken in the case of Chairman, Railway Board and Others (1997).
The Supreme Court of India said that the regulations that were in effect until 2003 would still remain enforced. In their opinion, the addition of Explanation (c) to Regulation 2(s) in the aforementioned regulation did not have the effect of changing the regulations pertaining to pensions, which were contained in Regulation 38 read in conjunction with Regulations 2(d) and 35 of the Regulations of 1995. Otherwise, it could not have acted retroactively and taken away vested rights, even if it had the effect of changing the salary and benefits “average emoluments”, as stated in Regulation 2(d). If not, it would have likewise constituted an arbitrary use of force. Furthermore, the so-called Joint Note of the Officer’s Association had no statutory force because, as the Officer’s Association admitted, the Industrial Disputes Act’s provisions did not apply to it, and the joint note lacked statutory support. It was also not permissible to deny officers who retired from 1.4.1998 to December 1999 and beyond the benefits of the Regulations, nor to forgo those benefits. Therefore, no estoppel is considered to have been formed by the Joint Note that has been relied upon. Estoppel in opposition to the application of legislative requirements does not exist. The Joint Note lacked legal effect and could not have violated the spirit of the Act of 1970’s regulations or the fundamental terms of employment as outlined in those regulations. As established by this Court in Central Inland Water Transport Corporation Limited & Anr. vs. Brojo Nath Ganguly & Anr., (1986)and Delhi Transport Corporation vs. D.T.C. Mazdoor Congress, (1991), they could not have been tampered with arbitrarily.
Marathwada Gramin Bank Karamchari Sanghatana and Another case (2011)
The court then referred to the case of Marathwada Gramin Bank Karamchari Sanghatana and Another case (2011), which was mentioned by the appellant bank while presenting their arguments. The court said that the subject under consideration in the Marathwada Gramin Bank Karamchari Sanghatana and Another case (2011) concerned the provident fund. The Marathawada Gramin Bank launched a provident fund system which was built on higher contribution rates than those required under the Employee’s provident fund programme. Moreover, Section 17(1) granted statutory recognition to the provident fund which has higher contribution rates. However, after some time, the Marathawada Gramin Bank switched back to the rates required by EPFS paragraph 26 after discontinuing its provident fund system due to financial unviability.
State of Himachal Pradesh and Others vs Rajesh Chander Sood (2016)
The appellant bank also made reference to the case of the State of Himachal Pradesh and Others vs Rajesh Chander Sood (2016). Regarding the ruling in State of Himachal Pradesh and Others vs Rajesh Chander Sood (2016), it was a case in which the State of Himachal Pradesh framed a different scheme for the Himachal Pradesh Corporate Sector Employees Pension (Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 in addition to the one under the terms of Act 1952. This pension scheme had came into existence on 1st April 1999. However, it was deleted on 2nd December 2004 before the employees could have taken any benefit of such a pension scheme. This took back the vested or accrued rights of the employees. The dispute emerged as to whether, even after being revoked by a subsequent notification dated December 2, 2004, the contingent right granted to the employee upon their initial opting under the 1999 system was binding or irreversible.
State of Rajasthan vs A.N. Mathur (2014)
In the State of Rajasthan vs A.N. Mathur (2014), the University, an autonomous body established under the Act’s provisions, introduced a pension scheme through a resolution. This pension scheme was introduced without any prior approval from the Chancellor, or the Governor of the State in accordance with Section 39 of the Act and Resolution 39 of the University. In the given circumstance, the Chancellor never gave his or her approval. Accordingly, the introduction of such a pension scheme without any prior consent from the concerned authorities was considered to be unauthorised and invalid. The implementation of such a pension scheme was stayed.
Regarding the submission of the appellant, which cited the financial difficulties of the bank as justification for the challenged amendment, stating that it might not be feasible to continue the pension grant going forward, it is sufficient to say that the rule-making body was presumed to be aware of the consequences of the specific piece of subordinate legislation and once the bank made a deliberate decision to introduce the pension scheme with effect from April 1, 1989, after receiving approval from the Punjab government and the cooperative’s registrar, it can be assumed that the relevant authorities were aware of the 40 resources from which the funds are to be created for paying its retirees. Furthermore, just because the bank was later unable to hold financial resources at its command to its retirees does not justify withdrawing the plan retroactively, which would be detrimental to the interests of the employees who not only became members of the scheme but also regularly received their pension until at least 2010 until the disagreement emerged between the parties and entered into litigation.
Critical Analysis
The Supreme Court of India provided a detailed explanation of the reasoning it applied in delivering the judgement in this long-standing matter. The Supreme Court of India believes that the appellant bank would not be able to use the lack of financial resources as a justification to deny the vested rights to the employees that they have accumulated, as it is a major part of their socio-economic security. A pension scheme is an assurance in terms of socio-economic security. Such pensionary benefits are not bounty and cannot be turned down without any valid ground. The Supreme Court directed the appellant bank to meet its obligations by paying pensions to its employees who retired under the previous pension scheme.
As per the serving employees are concerned, the Supreme Court of India further said that they have no locus standi to the issue in this case. The court further clarified that the concerns put forth by the serving employees are totally unfounded because the contributions of the employer and employee are made under the Employee’s Pension Scheme (EPS) of the Act 1952, which is applicable to all currently employed employees. Additionally, they are eligible for pension benefits in accordance with provisions of the 1952 Act.
With respect to the concerns regarding the payment of their contributions, the Supreme Court of India held that it will not be modified in any way for the purpose of paying pensions to respondents or retirees, who are entitled to receive their pensions under the terms of the pension scheme to which they belong. The appellant bank will be responsible for setting aside funds and paying retired employees who wish to receive pensions under the scheme that was in effect at the time they joined and began receiving benefits under it.
The Supreme Court of India also said an essential element of the dispute and stated the following;
“Before we part with the judgment, we cannot be oblivious of the situation that the complaint of the employees that they are not being paid their pension since 2013, at the given time few employees have been given benefit of one time settlement as introduced by the bank as an interim measure which was subject to their rights being preserved, in the pending litigation, taking 42 grievance of the either party into consideration, the financial constraints of the bank and the rights of the employees who are entitled to get pension under the bank pension scheme, we consider appropriate to observe that so far as the arrears towards element of pension to which the retired employees are entitled for, the appellant bank is at liberty to pay arrears towards pension upto 31st December, 2021 in 12 monthly instalments in the next one year by the end of December, 2022 and those employees who have accepted payment under one time settlement at a given point of time, what is being paid to them is always open for adjustment against arrears of their due pension.”
The Supreme Court of India further said that the bench deemed it appropriate to note that, in so far as the retired employee’s pension arrears are concerned, the appellant bank is free to settle any arrears until December 31, 2021, in twelve monthly instalments over the course of the following year, ending on December 31, 2022. Additionally, employees who have accepted payment under a one-time settlement at any given time are always eligible to have their benefits adjusted against arrears of their due pension. If there are still unpaid debts, they must be settled in twelve monthly instalments. The court stated that the pensions are to be paid to all the employees who are part of the pension scheme of the appellant bank at the same time, which is, from the month of January 2022.
The Supreme Court of India further clarified that the appeals with regard to the complaint of the appellant bank against orders made in accordance with Sections 7A, 14B, and 7Q of the Act 1955 are not the topic of dispute in the current proceedings. The appellant may seek any suitable legal action if they feel wronged. Therefore, the Supreme Court rejected the appeals with the previously mentioned remarks. The court dissmed all the applications in progress, if any.
The decision of the Honourable Supreme Court in this case has broader implications for the cooperative banks and the employees working for them throughout India. It serves as a caution for employers against any modification or amendments in the existing schemes or rules that are arbitrary and underlines the necessity for an institution to adhere to the basic principles of fairness, reasonableness and non-retrospectively. The Cooperative banks are required to now ensure that any changes to any benefit schemes of their employees are prospective and not remove any rights that has already been granted or vested to the employees.
“The principles of natural justice are easy to proclaim, but their precise extent is far less easy to define”
The Indian Constitution serves as the basis for the scope of the principle of reasonableness. It says that the grounds for the discrimination must be legitimate. Article 14 of the Constitution provides a foundation for creating acceptable categorization among various persons or groups within society. This conveys the idea that people are all unique from one another. Any comparable treatment is thus considered unfair and unjustifiable. In pursuance of this, it becomes necessary for the State to act as a guardian of such rights. Therefore, the concept of ‘intelligible differentia’ enables the legislature to pass such classified legislation that enables the protection of certain classified groups in a reasonable manner.
Reasonable classification finds its basis in the concept of intelligible differentia. It comprises identifying a group of people who share common characteristics. In other words, the distinction can be made on the fact that the people within a classified group are different from the ones outside the other groups. Furthermore, a causal link needs to be established between the reasonable classification and the rationale behind the adoption of any policy favouring such a classified group. As per Article 13 of the Constitution of India, any legislation on the basis of a class of people is not allowed. However, it does not restrict the parliament from classifying people, things, and transactions in a legitimate manner in order to accomplish certain goals. Such a categorization must be based on significant, genuine distinctions and cannot be contrived, arbitrary, or evasive. The purpose that the legislation aims to attain must have a fair and just relationship with it. As in the case of Saurabh Chaudhari vs Union of India (2004), the Supreme Court of India mentioned the following about the classification of reasonableness. It said that the classification of reasonableness contains two requirements:
The categorization must be based on intelligent differentia that distinguish the grouped individuals or items apart from those that are excluded from the group.
The disparity has to be reasonable related to the desired outcome of the action. Differentiation based on classification and the purpose of the act is two different things.
It is imperative that there exist a connection between the purpose of the act and the basis of classification. When a legitimate basis cannot be found for a classification made by the legislature, then such discrimination shall be declared discriminatory and unfair.
Now the concept of fairness under the Constitution of India is much broader than what it looks at once. The entire essence of the principle of natural justice is based on the concept of fairness and equality. The principles of natural justice are a tool to establish the principle of fairness in any legislative, administrative or judicial conduct. The principle of natural justice is given below which encompasses the essence of the principle of fairness;
The principle of ‘Nemo Judex In Causa Sua, or the Rule Against Bias’ is one of the central pillars of the concept of the principle of fairness and natural justice. Bias is defined as an operational prejudice, whether conscious or unconscious, against a party or topic. Consequently, the anti-bias rule removes any factors that can unfairly influence the ruling of a judge in a particular case. According to this rule, the judge must be impartial and make a decision that is based only on the information that is at hand. According to human psychology, people seldom make choices that are not in their best interests; consequently, in situations where they have an interest, people are unable to come to an unbiased judgement. As so, the proverb becomes: “No one is fit to judge another person.”
Another central principle in it is the principle of Audi Alteram Partem (Rule of Fair Hearing)
In essence, it says that no one may be punished or found guilty by the court without first having a fair opportunity to be heard. There are three Latin words in it. In a great number of jurisdictions, the majority of cases remain unresolved without receiving a fair hearing. It indicates that the trial must be conducted in a fair manner. Further, during a proceeding in a trial, all the parties must have an equal opportunity of being heard and present their relevant evidences. It is based on the principle that no one should be punished arbitrarily. It is an important pillar of the principle of natural justice. It also says that an accused should be provided with the information regarding the allegations raised ahead of time. This would enable the accused to prepare their defence at an appropriate time.
The foundation of the principle of fairness is ‘Equity’. It is based on the moral conscience and the idea of treating everyone fairly in accordance with natural law. Article 14 of the Constitution guarantees equality, and the court in Maneka Gandhi v Union of India (1978) said clearly that Article 14 upholds the notion of equality and reflects the principles of natural justice.
The Supreme Court decided in Suraj Mall Mohta and Co. vs A. vs Visvanatha Sastri (1958) that the assessment procedure of the income-tax officer qualifies as judicial proceedings. Before reaching a decision, all prerequisites for these legal actions must be satisfied as per the principle of equity and fairness. The income-tax officers have the right to inspect and review any record or document that the assessee may possess before asking to provide any evidence in rebuttal. There are no express provisions in the Income Tax Act that impair this entitlement. In the case of Manohar Lal Sharma vs. The Principal Secretary & Ors. (2014), it was held that in cases when there is an allegation raised by an anonymous complaint, there must be strict adherence to the principles of natural justice. In these situations, the accused must be given a fair opportunity of being heard.
Doctrine of Legitimate Expectation
The word “Legitimate Expectation” doctrine refers to anything that a person can reasonably or legitimately anticipate from another person without that person having any legal rights associated with it. The word “Legitimate Expectation” has no legal definition according to any statute. A person’s hope or desire to get a favourable order, motivated by prior precedent or encouraged by counsel, is known as a legitimate expectation. A valid expectation provides the petitioner with the standing to request a judicial review.
This doctrine has broad implications as it is based on the concept that a promise which is reasonable cannot be refused to be fulfilled subsequently at the time when the promise is supposed to be fulfilled. In other words, it is based on the concept that a promise must be kept. The doctrine of legitimate expectation also finds its basis in the principles of natural justice, social justice, reasonable, fairness, non-arbitrariness and fiduciary duty. According to the doctrine of legitimate expectation, even when a person does not have a private law right to obtain a certain treatment, he may have a legitimate expectation of receiving a right from an administrative body. He could reasonably anticipate obtaining the advantage or privilege even in situations in which he lacks the necessary legal rights. A promise or an established custom that the applicant has a reasonable expectation will be the basis for such an expectation, as well as the expectation that it will be applicable to him. The Court or Tribunal can step in and defend such a person if his legitimate expectation is not met, by enforcing rules that are comparable to the principles of natural justice and fair play.
If there was some explicit promise or representation made by the administrative body.
Such explicit promise or representation was clear and unambiguous.
There was an existence of a consistence practice in the past that the person relied on for having a reasonable expectation to operate in the same way.
However, in the case of ‘Food Corporation of India vs Kamdhenu Cattle Feed Industries (1992)’, the Honorable Supreme Court of India has observed the following as a cautionary approach and a balancing approach between the power of the court to judicial review in cases of alleged violation of the doctrine of legitimate expectation:
“There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is ‘fair play in action’. Due observance of this obligation as part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness is a state action, it is therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.”
Constitutional Rights with respect to the issues in the case
Article 14, Article 16 and Article 21
The Supreme Court of India emphasises much upon the general principles of natural justice. It mentioned that any amendment with retrospective effect shall not be such that prejudice the vested or accrued right of a person. Any such retrospective amendment would be deemed to be a violation of the rights protected by Articles 14 and 16 of the Constitution. In the present case, the pension scheme of the appellant bank was established on April 1st, 1989. Employees were provided with an option to join the pension scheme as per their choice. Several employees opted for the aforementioned pension scheme. In accordance with this, pension payments were made to the respondent employees without interruption until 2010. After 2010, the bank started to face financial constraints in making payments towards pensions. Due to this reason, the aggrieved employees filed a writ petition in the High Court. The Supreme Court further noted the fact that the bank later withdrew the pension scheme by deleting Rule 15 (ii) through an amendment dated 11th March 2014. This amendment was enforced on 1st April 1989. The Supreme Court further observed that there is no doubt to the fact that the aggrieved employees have a vested or accrued right to pension. The court further stated that any amendment to the existing pension scheme having a retrospective application in such a manner as to prejudice the interest of the employees is unquestionably a violation of both Article 14 and Article 21 of the Constitution.
To make its observation clear, the Supreme Court of India explained how such a retrospective application is against the ‘Legitimate Expectation’ of the employees. The court said that at the time when one joins a service or employment, it builds a certain level of expectation on the part of employees with regard to the benefits from the employment as per the terms and conditions of the service. The court also gave an example and said that a senior employee of an organisation may reasonably expect to be promoted to a higher post, based on his experience and qualifications. In a similar fashion, an employee who enters into a service with a particular scheme for pensionary benefit can reasonably expect such benefit to be received at the appropriate time. However, if there is any change to such expectation with regards to pension benefits, promotion or the age of retirement, then such change must not be against the interest of the employees, whether working or retired.
At the same time, if such a benefit which already existed throughout the employment of an employee has been taken away by amending a rule to have a retrospective effect is undoubtedly an infringement of the rights of those employees. This is a clear violation of the fundamental right guaranteed under Article 14 and Article 16 of the Constitution of India.
Conclusion
In the realm of service law, the ruling of the Supreme Court of India sets a noteworthy precedent, especially with regard to pension schemes for the employees of the cooperative bank. This decision demonstrates the dedication of the judiciary in upholding the vested or accrued rights of employees and making sure that retrospective amendments do not unfairly deprive accrued benefits.
The Supreme Court of India underlined the principle that amendments that have retrospective effect and eliminate advantages that employees have previously received are in violation of Articles 14 and 21 of the Indian Constitution. The Supreme Court of India distinguished vested rights from reasonable expectations in an uncomplicated way. According to the regulations in effect at the time of their employment, employees might reasonably expect benefits that they had entered with an expectation of certain benefits as per the terms and conditions of the employment, in such a situation, such reasonable expectation is to be honoured as well. The retrospective removal of such benefits is unfair and arbitrary for the employees who have planned their retirements around these reasonable expectations. The case serves as an example of the responsibility of the judiciary to closely examine legislative and administrative measures that retrospectively change employment conditions to the disadvantage of employees.
The ruling establishes a precedent requiring a thorough analysis of the constitutionality of such acts. The Supreme Court of India reaffirms the notion that legislation or modifications affecting accumulated benefits must pass the reasonableness and fairness test by declaring the retrospective amendment to Rule 15(ii) unlawful. This ruling affects cooperative banks and the people who work for them throughout India. It highlights the need for organisations to uphold the values of equity and non-retrospective and acts as a warning against the willful alteration of employee perks. The decision of the apex court, that is, the Supreme Court of the country to invalidate the constitutional validity of the retrospective amendment of Rule 15 (ii) upholds the principles of reasonable expectation and fairness by stating that laws or amendments having an impact which is detrimental to the benefit accrued must pass the test of reasonableness and fairness. The order of the Supreme Court of India to pay the arrears of pension up to December 2021 in instalments provides immediate relief to the affected retired employees. This comprehensive approach by the Supreme Court of India has not only addressed the issue of financial constraints of the bank but also ensured that the rights of retired employees are protected.
Therefore, ‘The Punjab State Cooperative Agricultural Development Bank Ltd. vs The Registrar Cooperative Societies and Others (2022)’ stands as a landmark judgement in the context of service law and the rights of the employees. It sends a clear message that the judiciary is not going to tolerate any attempts to undermine the rights and benefits that the employees have legitimately earned by way of their rights under the terms and conditions of the employment. By striking down the retrospective amendment that was in violation of the constitutional rights guaranteed under Article 14, Article 16 and Article 21 of the Constitution of India and upholding that the financial burden on the bank cannot be taken as a valid ground for amending the ruling taking away the rights already vested or accrued with the employees of the bank, the Supreme Court of India has once again reaffirmed its role as a guardian of the constitutional right of the people.
Frequently Asked Questions (FAQs)
Is any retrospective application of a law or a rule constitutional as per the fundamental rights guaranteed under the Constitution of India?
The Supreme Court of India in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and others, (2022)” held that any amendment to a right already granted or, in other words, a vested or accrued right cannot be amended in a manner to take away such vested or accrued rights. Any such amendment to existing rules would be unconstitutional and violative of Article 14, Article 16 and Article 19 of the Constitution of India.
What effect did the decision of the Supreme Court of India in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and others, (2022)” have on the retired employees of the State Cooperative Agricultural Development Bank?
With respect to the retired employees of the State Cooperative Agricultural Development Bank, the decision of the Supreme Court of India restored their pension payments. The Court ordered the bank to pay the pension arrears up until December 2021 in stages to the affected retired employees, giving them immediate financial relief. The ruling preserved the entitlement of employees to their vested pension payments.
What was the central dispute in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and Others (2022)”?
The main question, in this case, concerned the constitutionality of the retrospective amendment by the Punjab State Cooperative Agricultural Development Bank to its pension scheme, which essentially eliminated the payments of pensions to retired employees. The Court looked into whether this change infringed upon the rights of the employees as stipulated in Articles 14 and 21 of the Indian Constitution.
What are the constitutional principles referred by the Supreme Court in its judgement in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and Others (2022)”?
The Supreme Court of India referred to the fundamental principles of equality and the right to life under Articles 14 and 21 of the Indian Constitution. The Court emphasized that the vested rights, once accrued, cannot be arbitrarily taken away without violating these constitutional guarantees. The judgment placed significant emphasis on the doctrine of fairness, the doctrine of non-retrospectivity, and the protection of legitimate expectations.
What greater implications does this ruling have for cooperative banks in India?
This ruling has wider ramifications for Indian cooperative banks, such as a clear duty to uphold the vested rights of its staff members and refrain from making retrospective amendments that might impair any such rights. Any modifications to employee benefits or pension schemes must be prospective and compliant with constitutional requirements, according to cooperative banks. This ruling establishes a precedent that emphasises the responsibility of the judiciary to defend employee rights from unreasonable administrative acts.
What does the phrase vested rights mean, and how significant are they in this particular instance?
Vested rights are those that have been bestowed and are now unchangeable. In this instance, the vested rights relate to the pension benefits that, under the terms of the current regulations, the employees were entitled to upon retirement. Because once given, these rights cannot be revoked or changed in a way that would be detrimental to the employees, which makes them extremely important. Protecting these rights is crucial to ensuring justice and legal clarity for employees, as the Supreme Court determined that the retrospective amendment that removed these vested rights was unconstitutional.
Is the ruling in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and others (2022)” to extend to benefits other than pensions received by employees?
Yes, the rules set forth in this judgement also apply to various forms of employment advantages and not only pensions. A wide range of employment law issues can benefit from the Supreme Court’s emphasis on upholding procedural fairness, safeguarding legitimate expectations, and preserving vested rights. Employers must follow a fair and transparent procedure and make sure that any changes they make do not retrospectively impair the vested rights of their employees whether it comes to gratuities, provident funds, promotions, or other entitlements.
What is the importance of procedural fairness reflected in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and Others (2022)”?
Procedural fairness was a major factor in the ruling of the Supreme Court in the case of “The Punjab State Coop. Agricultural Development Bank Ltd. vs The Registrar Coop. Societies and others (2022)”. All modifications to the terms and conditions of service, particularly those that impact vested rights, must adhere to due process, the Court emphasised. Before making such modifications, this entails giving sufficient notice, a chance for representation, and a fair hearing. The Court concluded that the retrospective amendment of the pension scheme by the bank was arbitrary and unlawful in part because the bank disregarded these procedural protections.
In this case, how did the Supreme Court interpret the meaning of “legitimate expectation”?
In this instance, the term “legitimate expectation” refers to the expectations that workers had about their pension benefits based on the regulations in effect at the time of their enlistment. The Supreme Court recognised the rightful expectation of honouring these promised rewards for workers who had scheduled their retirements around them. The protection of reasonable expectations under service law was strengthened by the retrospective change that disregarded these expectations, which was viewed as a violation of administrative decorum and justice.
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This article is written by Paridhi Goel and further updated by Shefali Chitkara. This is an exhaustive article that covers the analysis of the case of Jarnail Singh vs. Lacchmi Narain Gupta (2018), exploring the requirements of Scheduled Castes and Scheduled Tribes for getting promotions in government jobs and the creamy layer filter. This article deals with the background of the case, relevant facts, issues that were raised before the Hon’ble Supreme Court and the judgement given by the court. The author has also highlighted the judgements that were referred to in this case and the subsequent judgements that referred to the present case. Further, the significance of this case in today’s time is also mentioned.
Table of Contents
Introduction
The Supreme Court delivered its verdict on September 26, 2018 in the case ofJarnail Singh vs. Lachhmi Narain Gupta, which is also known as the ‘Reservation in Promotion Case’. A five-judge bench, which consisted of former Chief Justice of India Dipak Misra, Justice Kurian Joseph, Justice RF Nariman, Justice SK Kaul and Justice Indu Malhotra, reviewed the judgement of a previous case of M. Nagaraj vs. Union of India (2006) dealing with the reservation for the Scheduled Castes and Scheduled Tribes in promotions to government jobs or public services. This case also looked into the application of the creamy layer among the Scheduled Castes and Scheduled Tribes when applying for reservations in promotions. This aspect of the case is important because the ‘creamy layer’ is an economic criterion based on the assumption that a person is liberated from his or her backwardness due to his or her economic progress, which leads to social advancements. With this social and economic standard of the creamy layer, many people view it as caste discrimination in institutions.
Reservations have always been a controversial topic in India. Its foundation started after the Poona Pact, when Doctor B.R. Ambedkar demanded separate electorates for the Dalit community. The then described “depressed classes” were given reservations in employment with joint electorates. Gradually, it was observed that the scheduled castes and the scheduled tribes or even the backward classes, are given reservations, not because of their poverty but because they are excluded mostly everywhere. Based on this, it was decided that they should be able to represent themselves in government jobs, public services or local bodies, which is why they were granted reservations in these jobs. Since the problem of exclusion still continued, they did get the job through reservation; however, they were not favoured for promotions. Reservations in promotions were introduced for the Scheduled Castes and the Scheduled Tribes, subject to certain conditions, until the need was felt to review these conditions. This case highlights the decision of the judiciary in this regard.
Historical background of reservations
Reservation has been seen as an affirmative action in India, which is given in order to ensure that historically discriminated, underprivileged and marginalised groups are not left behind and have representation in all areas, including education, politics, etc. As per the same, the Indian government is permitted to create reserved quotas based on the provisions of the Indian Constitution, which have decreased the standards required in examinations and other vacancies for several socially and economically backward citizens of India. In India, the Scheduled Castes, Scheduled Tribes and Other Backward Classes have been provided with reservations for many years. The reservations have also been created for economically weaker sections of society (EWS), as well as per the 103rd Constitutional Amendment Act. In the beginning, it was only for the Scheduled Castes and Scheduled Tribes but after the report given by the Mandal Commission in 1987, it was extended to citizens belonging to Other Backward Classes. These special provisions highlighting the benefits given to certain categories are mentioned under various Articles of the Indian Constitution, specifically Articles 15 and 16.
The only democracy in the world that provides such provisions dealing with compensatory discrimination to advance these oppressed and disadvantaged sections of society is India. These reservations can be said to be the result of the intense social conflict that has happened historically in the country and is still believed to be controversial.
Reservations in promotion
It refers to the kind of reservation that is given to people from backward classes for their promotions in government jobs. It has always been a hotly debated subject between the Hon’ble Supreme Court of India and Parliament. It has been settled by the Supreme Court in the Indira Sawhney vs. Union of India (1992) case that there cannot be any reservation in promotions under Article 16(4). The court gave the reason that it will have a negative impact by effecting and diminishing the zeal to work effectively among the lower class people and will definitely lead to decreasing the morale of the unreserved category candidates in that office. The concept of “creamy layer” was further established, which was even extended to the SCs and STs categories of citizens. After this judgement, the Parliament made a lot of amendments to the Constitution between 1995 and 2000 that even allowed the reservation of promotion for reserved category candidates.
As per Seventy-seventh Amendment Act, 1995, Article 16(4A) was inserted in the Constitution, which allows for granting reservations in promotion to the SCs and STs by the State. The Supreme Court upheld the constitutional validity of this Article in the case of M. Nagaraj vs. Union of India (2006) by a five judge bench. Finally, the Supreme Court was approached for reconsideration of the Nagaraj judgement by a seven judge bench and in the present case, it has been taken up by a five judge bench of the Supreme Court.
The debate on the question of reservations in promotion began even before the addition of Article 16(4A). It was answered in the case of General Manager, Southern Railway vs. Rangachari (1961), where it was held by the Supreme Court that adequate representation of the backward classes is essential for their advancement and it allowed for the reservation in promotion under Article 16(4). The plea for reconsidering this judgement was also filed in the case of State of Punjab vs. Hira Lal (1970) but the same was rejected. However, this position was finally overturned in the Indira Sawhney case, wherein it was held that reservations will not be applicable in promotions because they will lead to a violation of the right to equality. In response to this case, Article 16(4A) was added by the parliament, which was then challenged in the Nagaraj case.
Details of the case
Case Title
Jarnail Singh and Others vs. Lachhmi Narain Gupta and Others (2018)
Citation of the case
(2018), 10 SCC 396
Date of the judgement
September 26, 2018
Court
Supreme Court of India
Case Type
Special Leave Petition under Article 136 of the Indian Constitution
Name of the petitioner
Jarnail Singh
Name of the respondent
Lachhmi Narain Gupta
Bench
The then Chief Justice of India, Justice Dipak Mishra, Justice Kurian Joseph, Justice R.F. Nariman, Justice Sanjay Kishan Kaul and Justice Indu Malhotra (5-judges bench).
Provisions involved
Articles 14, 16, 16(4), 16(4A), 16(4B), 46, 335, 341 and 342 of the Indian Constitution.
Facts of the case
A decision was made in M. Nagaraj and Others vs. Union of India and Others in 2006, which was challenged by various states and the Centre. It was the petitioner’s view that the Nagraj judgement had made it unjustly difficult to grant reservations in promotion for government jobs and public services. With this view, it felt necessary to analyse the conditions established in the Nagraj case and refer it to a seven-judge bench. Reservation is seen as a serious topic in India. The Constitution laid down Article 16 providing for equality of opportunity in matters of public employment and this provision originally did not contain anything related to the reservation until the Indira Sawhney case of 1992. Few observations were made in this case, starting with Article 16(4), which allows the state to make provisions for the reservation of any backward class of citizens in appointments or posts but this did not apply to the promotions. This clearly affected the Scheduled Castes and the Scheduled Tribes and in order to continue the promotions, Clause 4A was introduced, saying that nothing in the mentioned Article shall prevent the State from making any reservations in matters related to the promotion. Through the 77th and 81st Amendments, Articles 16(4A) and 16(4B) were added.
The constitutional validity of these provisions was challenged in the Nagraj Case and delivered by a five-judge bench was a verdict stating that if the State wanted to make a provision for reservation in promotions for the Scheduled Castes and Scheduled Tribes, then it would have to collect ‘quantifiable data’ enough to show the backwardness of the class and the inadequacy of representation of that class in public employment. The state also has to see that its reservation provision does not, in any case, breach the ceiling limit of 50 percent or even wipe out the creamy layer. Since the need to collect quantifiable data to show backwardness is in contradiction to the Indira Sawhney case, it was seen as unconstitutional. Even the application of the creamy layer to scheduled castes and tribes seemed off because it was only restricted to the other backward classes. Introducing the concept of the creamy layer to promotions also raised questions about equality. Finally, a Special Leave Petition under Article 136 of the Constitution was filed to review the M. Nagaraj verdict.
Issues raised
Whether the Nagraj judgement needed reconsideration by a seven-judge bench?
Whether the States had to collect quantifiable data to prove the backwardness and inadequacy of the class while being promoted?
Whether the creamy layer among the Scheduled Castes and the Scheduled Tribes should be barred from obtaining promotions through the reservation?
Arguments advanced by the parties
Contentions raised by the appellants
The appellants raised the following arguments before the Supreme Court to prove that the judgement given in the M. Nagaraj case was unconstitutional and needed reconsideration:
Shri KK Venugopal appeared before the court. He stated that the need for collecting quantifiable data with the aim of showing the backwardness of the community was contradictory to the judgement delivered by the nine-judge bench in the Indira Sawhney case. It was stated that if the Scheduled Castes and Scheduled Tribes have been added to the presidential list as per Article 342 of the Indian Constitution, then there would not be any need to highlight the quantifiable data showing the backwardness all over again. The Attorney General, KK Venugopal, argued that the Constitution of India had already mentioned that the Scheduled Castes and the Scheduled Tribes were ‘backwards’ in nature, which is socially and economically excluded. A clear definition is laid down to distinguish the Scheduled Castes and Scheduled Tribes from the other classes. This means that there are no further tests that can be imposed to verify the backwardness and inadequacy of their class.
Another argument came up based on the assumption that the principle of creamy layer is applied to the Scheduled Castes and the Scheduled Tribes, which is a big risk that the court is willing to take. It is important to understand the differences between the other backward classes and the Scheduled Castes and Scheduled Tribes. These aspects cannot be ignored by a constitutional court and it has to keep in mind that equality is a fundamental right that needs to be safeguarded at all costs.
It was further contended that once the presidential list of Scheduled Castes and Scheduled Tribes is prepared by the President under Article 342, it can only be modified by the Parliament. The concept of the “creamy layer,” which was mentioned in the Indira Sawhney judgement, was not applied to the Scheduled Castes and Scheduled Tribes and the judges in the Nagaraj case misread that decision and have applied this concept to the Scheduled Castes and Scheduled Tribes.
It was further stated that the judgement in Nagaraj case did not mention any test for setting the “adequacy for representation in service,” which is of very much importance for determining the percentage of the Scheduled Castes and the Scheduled Tribes in the total population of India at every stage of promotion. For this purpose, they suggested that the roster in R.K. Sabharwal vs. The State of Punjab (1995)can be utilised.
Furthermore, Ms. Indira Jaising, on behalf of the appellants, claimed that the judgement given in the Nagaraj case needed reconsideration. Articles 16(4A) and 16(4B) do not flow from Article 16(4) but from Articles 16(1) and 14 of the Indian Constitution, and the claims that were made by the Scheduled Castes and Scheduled Tribes were based on the reading of Articles 14, 15, 16, 16(4A), 16(4B) and 335 of the Constitution.
Finally, they concluded by contending that the exercise that was done in the case of Nagaraj, reading down a constitutional amendment to make changes in the presidential list by the States valid,” was unconstitutional as only the Parliament has the power to amend the list under Articles 341 and 342 of the Constitution. Further, there could be no sub-grouping within the Scheduled Castes and Scheduled Tribes as the same is not acceptable, as has been held in the case of Indira Sawhney and E.vs. Chinnaiah vs. The State of A.P. (2004).
Contentions raised by the respondents
On the other hand, the following contentions were raised by the respondents. They wanted to prove that the judgement given in the case of Nagaraj was very valid and constitutional and, therefore, was not required to be reconsidered:
Shri Shanti Bhushan appeared before the court and defended the judgement of Nagaraj by contending that it did not talk about the Scheduled Castes and Scheduled Tribes while talking about the backwardness of classes. It referred to the class of posts and the requirement of quantifiable data was for the class of posts. They relied on the case of Keshav Mills Company Limited vs. Commissioner of Income Tax, Bombay (1965) and stated that reconsideration of Nagaraj case would also mean reconsideration of this case.
Further, Shri Rajeev Dhavan, on behalf of the respondents, stated that the judgement in Nagaraj case should be considered as upholding the constitutional changes that brought provisions like Articles 16(4A) and 16(4B). It was contended that they do not violate the basic structure and are thus constitutional. This judgement upheld equality by prohibiting indefinite extension of reservations, upholding the limits of 50% on reservations, and also by incorporating the concept of “creamy layer” on Scheduled Castes and Scheduled Tribes.
They stated that the concept of the creamy layer was made in order to ensure that only those people who deserved reservations actually received them, excluding others who were undeserving. It upheld the value of equality by excluding the unequals in a particular class who are not equals to the others in that category.
It was also contended that Articles 341 and 342 of the Constitution, as highlighted by the appellants, have nothing to do with the reservations in this particular case. These are exclusively for identifying the citizens who can be classified into the categories of Scheduled Castes and Scheduled Tribes. Even if the concept of the creamy layer is said to be within the scope of these Articles, the higher courts have the power to enforce fundamental rights. Since the case of Nagaraj involved constitutional amendment, the above-mentioned Articles cannot prevent such amendment from being put through the test of the basic structure doctrine.
Those who were in favour of collecting quantifiable data pointed out that people can go to large extents when it comes to getting a promotion and thus, a check on the backwardness of a person was only the right thing to do. Moreover, it did not harm the integrity of any person or cause any loss; instead, it worked as a double-check. Also, they saw the collection of data as a responsibility of the government, removing which would prove that the government only wanted to lessen its own burdens.
Those in favour of the inclusion of the creamy layer argued that the truly backward will be able to avail themselves of the benefits of the reservation in promotions even after including the creamy layer because, in the case of promotions, at a certain level of employment, all the Scheduled castes and Scheduled tribes fall into the same economic bracket. Thus, the argument of violation of equality only works at entry levels and not at promotions. Excluding the creamy layer might only be beneficial for the general class. Since India has a history of discrimination at the workplace where they do not consider the Scheduled castes and Scheduled tribes as meritorious, including all the backward classes, even from the creamy layer, they can be given a chance to prove their merit in front of the general categories.
The respondents also argued that the social backwardness of the Scheduled Castes and Scheduled Tribes must be evaluated at each stage since, when such candidates reach a high level in public services, they are done with their backwardness. Further, this absence of backwardness would be grounds for cancelling any further reservations for them. This was contended by Shri Rakesh Dwivedi, learned senior advocate, while he was supporting the claims of the respondents. He further stated that after promotion, there is a possibility that an employee may cast off his backwardness when he reaches a fairly high stage in any service. Thus, it would be appropriate to reserve nothing further for such candidates.
Laws discussed in Jarnail Singh vs. Lachhmi Narain Gupta (2018)
Article 14 of the Indian Constitution
Article 14 guarantees equality before the law and equal protection of laws under the right to equality. Equality before law is a negative concept since it does not permit for the special treatment of the unequals in society, whereas equal protection of laws is considered to be a positive concept that was adopted in America since it allows for the unequal treatment of the unequals in society, like people belonging to the backward classes. In this case, the court noted that the inclusion of creamy layers within the reserved category of candidates would violate the provisions of equality. They are on par with the general category and thus it demands the separation of creamy layers from the reservation, which is given exclusively to the scheduled castes and scheduled tribes.
Article 16(4) of the Indian Constitution
Article 16(4) gives power to the State to make special provisions regarding the reservation of appointments for backward classes who are not adequately represented by the State. This Article played an important role in the whole debate surrounding reservations for promotions. Before the introduction of Article 16(4A), the courts highlighted this article, which talked about reservations in appointments as well as in promotions but the same was later overruled in the Indira Sawhney case. It was later, through the amendments, that provisions were added to this article, specifically talking about reservations in promotion, consequential seniority and unfilled reserved vacancies.
Article 16(4A) of the Indian Constitution
Article 16(4A) was added through the Constitution (Seventy-seventh Amendment) Act, 1995, that even applied the reservation provisions to the promotion to any posts in services under the State for the people belonging to Scheduled Castes and Scheduled Tribes who are not adequately represented. This provision was challenged in the Nagaraj case but was upheld by the Supreme Court. However, this present case further reconsidered the judgement of Nagaraj, favoured the same and held this provision to be valid.
Article 16(4)B of the Indian Constitution
This provision was added through the Constitution (Eighty- first Amendment) Act, 2000, which talked about the unfilled vacancies of reservations in a particular year. This was also challenged in the Nagaraj case and contended to be violative of the Indira Sawhney judgement, but the court in the Nagaraj case held it to be constitutionally valid and even in the present case, the Supreme Court agreed with the conclusions reached in the Nagaraj judgement and rejected it to be reconsidered. This clause states that the unfilled reserved vacancies from one year will be treated as a separate class of vacancies that are to be filled in the next year and will not be included in the 50% ceiling limit for that year.
Article 46 of the Indian Constitution
This is one of the directive principles that provides for the duty of the State to promote the educational and economic interests of the Scheduled Castes and the Scheduled Tribes and further protect them from injustice and any form of exploitation in society. According to Article 46, provisions have been added under Articles 15 and 16 in order to advance and promote their interests in society. This was one of the reasons for which Articles 16(4A) and 16(4B) were added, which were in conflict in the present case. Even the court highlighted this objective with which amendments to the Constitution were made.
Article 335 of the Indian Constitution
Article 335 states that when making appointments under the state or union, the claims of the scheduled castes and scheduled tribes must be taken into consideration. Further, it also provides for the proviso that was added through the Constitution (Eighty-second Amendment) Act, 2000, to ensure relaxation of marks and reservations in promotions in the services under the Union or the State. This insertion or extension of rights, even in promotions, was challenged before the court in the Nagaraj case but the same was upheld.
Articles 341 and 342 of the Indian Constitution
This case revolves around the constitutional validity of the reservation in promotions for the scheduled castes and scheduled tribes and these two categories are specifically mentioned under Articles 341 and 342 of the Constitution. These provisions give power to the president to prepare a list of those who shall be deemed to be Scheduled Castes and Scheduled Tribes. Further, it also gives power to the Parliament to include or exclude any group or tribe from that presidential list.
Judgement delivered by the Supreme Court
Though the case of M. Nagaraj was requested by the petitioners to be reviewed by the seven judge bench, it was laid down before a five judge bench of the Supreme Court.
The Supreme Court concluded that the judgement in the Nagraj case does not need to be referred to a seven-judge bench. Along with this, the provision that the State has to collect quantifiable data showing the backwardness of the Scheduled Castes and Scheduled Tribes is contrary to the nine-judge bench in the Indira Sawhney case, making this provision invalid. It was also seen in the Indira Sawhney Case that any discussion on the ‘creamy layer’ has no relevance in the context of Scheduled Castes and Scheduled Tribes. Further, the Supreme Court confirmed the application of the creamy layer to promotions for Scheduled Castes and Scheduled Tribes as held in the Nagraj Judgement. It had resulted in thousands of employees being denied their due promotions. The court viewed the principle of the creamy layer as a principle of identification and not of equality.
Justice Nariman observed that the whole purpose of reservation is to give a chance to the backward classes to move forward so they can be on an equal footing with the other citizens of India. If the individuals of the creamy layer are included in this reservation, then the backward classes will remain as backward as they were, as they will likely not get many opportunities in front of the advanced backward layer of people. He also pointed out that those people who do not form a part of the backward classes because they are classified under the creamy layer are excluded from the benefits of reservation.
The court noted that only when people belonging to the creamy layer are excluded will the real backward people be given a chance because those belonging to the creamy layer are seen as on par with the general category candidates. Thus, providing them with the reservations will prove to be futile and it would violate the principles of equality under Article 14 of the Indian Constitution.
Rationale behind the judgement
The Supreme Court analysed the Nagaraj judgement and even the other judgements that were argued by the appellants and the respondents. It concluded that the collection of the quantifiable data on backwardness was contradictory to the Indira Sawhney judgement and therefore invalid as per law. The court also clarified that if the topmost people under Scheduled Castes and Scheduled Tribes claimed all the opportunities, then it would not serve the purpose, thus the concept of creamy layer would be applied in the reservation system for promotions. They further clarified that it would not affect the presidential list anyhow because it would only lead to the exclusion of the creamy layer from the benefit of reservations.
The Supreme Court noted that there is no need for reconsideration of the Nagaraj judgement since every concept regarding the reservations has been made clear enough. The court considered the concept of a creamy layer not only as an identifying principle but also as an equality principle. It also reflected upon its authority to deny the benefit of reservations to certain groups falling within the creamy layer and also the authority of the Parliament for deciding on the presidential lists.
Precedents relied on
There are a number of important cases referred by the parties and even the court while deciding on the issues raised before a five-judge bench of the Supreme Court in this case. Few landmark judgements that were referred and considered by the court are-
Indira Sawhney vs. Union of India (1992)
In this case, the Supreme Court held that the reservation as per Article 16(4) of the Constitution is only applicable to initial appointments and does not extend to promotions because it would then have a bad effect on the efficiency of service of co-workers and would amount to a violation of the right to equality. Further, a 50% ceiling for reservations was provided by the court and it cannot in any event exceed the limit of 50% reservations in any job or service under the Union or State. These two legal points were essentially highlighted by the parties and noted by the Supreme Court in the present case. The Court also noted that the reservations now extend to promotion as well, since they were upheld in the case of Nagaraj.
M. Nagaraj vs. Union of India (2006)
This is the landmark judgement wherein the court upheld the constitutional validity of Articles 16(4A), 16(4B) and 335 that talked about the reservation in promotion. However, the court also noted that the backwardness of Scheduled Castes and Scheduled Tribes must be proved before giving them reservations, which was in direct conflict with the earlier decision in the Indira Sawhney case and thus called for reconsideration. The Court stated that three limitations would apply before giving any reservation in promotion: firstly, proving the inadequate representation of a class through quantifiable data; secondly, showing that the class that is benefiting from the reservation is backward; and lastly, ensuring that the efficiency of service is not compromised.
However, the court in the present case held that since it was in direct conflict with the Indira Sawhney judgement, the backwardness need not be proved.
Keshav Mills Company Limited vs. Commissioner of Income Tax, Bombay (1965)
In this case, there was a tussle on the question of whether the contention of the respondent to reconsider the case before it was correct and on what grounds it should go for reviewing or revising its earlier view taken in two of the cases. The court in the present case considered those grounds, which stated that the court should reconsider only when it is in the interests of the public good or for any other compulsive reason. When the Supreme Court decides any question of law, it is binding on the other courts as per Article 141 of the Constitution of India and thus, certainty must also be maintained. The reconsideration should depend on the nature of the error for which a plea for reconsideration has been filed, the impact of that error on the public good and whether the reversal of the decision would lead to inconvenience and difficulties.
E.vs. Chinnaiah vs. State of A.P. (2005)
The issue involved in this case was whether the legislature of the state can sub-classify Scheduled Castes for their reservation in public employment and education in order to achieve an equitable reservation goal. The Supreme Court denied the further classification of scheduled castes and scheduled tribes by the state legislature, noting the exclusive right of the president to caste notification under Article 341. This decision ensured that the Scheduled Castes and Scheduled Tribes were to be treated as a unitary group with no further classification. However, the court in the present case noted that the judgement in the Nagaraj case recognised the concept of the creamy layer and thus this will be applicable and those falling under the creamy layer will not be given the reservations. This contradicted the E.vs. Chinnaiah case, which prohibited any sub-classification within the Scheduled Castes and Scheduled Tribes communities.
Judgements that further discuss Jarnail Singh vs. Lachhmi Narain Gupta (2018)
B.K. Pavitra vs. Union of India (B.K. Pavitra II case) (2019)
In this case, a writ petition was filed that challenged the validity of the Karnataka Determination of Seniority of Government Servants Promoted on the Basis of the Reservation Act, 2002. This Act ensured consequential seniority for the government’s Scheduled Castes and Scheduled Tribes’ employees. The major issue was whether inadequacies were shown by the State of Karnataka in relation to reservation in promotion and whether the act was valid as per Articles 14 and 16 of the Constitution. Earlier, the two judge bench of the Supreme Court noted that there was a lack of quantifiable data to support the assertion of the State for providing reservations in promotions. The Karnataka government made a new law, i.e., the Reservation Act of 2018, relying on the report of the Ratna Prabha Committee. So, another petition was filed against this legislation.
The Supreme Court held that the current Act was in compliance with the decision given in the Nagaraj case, where it was noted that the concept of creamy layer applied to the OBCs but was exclusive to Scheduled Castes and Scheduled Tribes. It was also noted that the State had now even collected the quantifiable data and did not intend to overrule the earlier decision of this court. Thus, the court upheld the validity of the Act of 2018.
In the present case, the court had done away with the collection of quantifiable data to be collected by the State.
Jarnail Singh vs. Lachhmi Narain Gupta (2022)
This case is also referred to as Jarnail Singh II and it was a clarificatory judgement given by a three judge bench of the Supreme Court. In this case, the court clarified four major points. Those were:
The tool for determining inadequacy in representation is at the discretion of the State, and it is a matter of executive discretion.
It is mandatory and not merely discretionary to determine the inadequacy of representation as a prerequisite for giving the benefit of reservation.
The unit for determining inadequacy was not the service but the cadre.
The judgement given in the case of M. Nagaraj will operate prospectively and not retrospectively.
The court in this case clarified the position held in Nagaraj and further in Jarnail Singh I (the present case); however, it failed to consider the point of issue in the creamy layer concept. Also, through the judgement given in Jarnail Singh I and M. Nagaraj, it can be said that the concept of creamy layer that was imposed on the OBCs has also been imposed on the Scheduled Castes and Scheduled Tribes. Though Jarnail Singh I ruled that the concert of quantifiable data for Scheduled Castes and Scheduled Tribes was invalid, it will not impact the M. Nagaraj judgement. This is because the concept of creamy layer applicable to OBCs will also be applicable to SCs and STs mechanically.
Criticism against the judgement
It has been presumed by the court in this case that the case of M. Nagaraj applied the creamy layer concept to the Scheduled Castes and the Scheduled Tribes but this was not the case in reality as it did not expressly apply this test. Thus, it is to be noted that there is ambiguity around the reservation policy in promotions. Further, it has been criticised for giving vague and unwarranted conclusions on the test of the creamy layer. It did not make clear whether the test of creamy layer should be applied only to the reservations in promotion or also to the reservations during the selection of jobs. It was said to have muddled the law dealing with reservations in promotions. Thus, this called for a reference of the M. Nagaraj case to a larger bench of the Supreme Court in order to give more clarity to the reservation policy for promotions.
It was also argued by the people after this landmark judgement that this also freed the state government from the responsibility of collecting quantifiable data, which should be done in order to maintain transparency and effectiveness of decisions on reservations. This gave excessive authority to the government over the subject of reservations.
Conclusion
India has a disturbing history of caste and class-based discrimination. The backward classes, the Scheduled castes and tribes, and the untouchables were all ill-treated and denied opportunities in every field of work or education. They required reservations not as a welfare measure but as a right of representation, a right that had been denied to them for many years. The circumstances did not change by giving them reservations in government jobs and posts, as they still face discrimination and could never achieve a high rank no matter what their merit was. A reservation in promotion was a major step taken by the judiciary, as not everyone was in favour of this reservation. It is commendable that our government safeguards the interests of the less privileged classes and that our Judiciary is strong enough to make the right decisions after facing a lot of criticism. Even the Judiciary is not perfect but as seen in this case, it kept reviewing cases and amending laws so that the people of our country could get what they each deserved. However, it is often said that the case failed to analyse and consider the applicability of the creamy layer test in depth. Due to some uncertainty, the current government also requested that the Supreme Court reconsider the judgement given in the case of Jarnail Singh. This judgement stands as a pivotal ruling that balances the need for social justice through reservations with the principles of equality and meritocracy. By removing the requirement to prove backwardness for Scheduled Castes and Scheduled Tribes, the Supreme Court reinforced the constitutional mandate of uplifting historically marginalised communities while preserving the integrity of public administration.
Frequently Asked Questions (FAQs)
Which case is known as the ‘reservation in promotion’ case?
The case of Jarnail Singh vs. Lacchmi Narain Gupta (2018) is known as the reservation in promotion case.
Which judgement was contested in the present case?
The judgement given in the case of M Nagaraj vs. Union of India (2006) was contested in the present case.
Is reservation in promotion allowed?
Yes, reservation in promotion is allowed as per Section 16(4A) of the Constitution.
What was the landmark judgement in which the 50% ceiling limit was prescribed?
Indira Sawhney vs. Union of India (1992) was the main landmark judgement which set the ceiling limit of 50% for reservations.
Is it mandatory to determine the inadequacy of representation as a prerequisite for giving the benefit of reservation?
Yes, it is mandatory and not discretionary to determine the inadequacy of representation as a prerequisite for giving the benefit of reservation.
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This article was written by Hemang Mohanlal Doshi, pursuing the Personal Branding Program for Corporate Leaders Course from Skill Arbitrage, and edited by Koushik Chittella.
Table of Contents
Introduction
Independent directors are the “watchdogs” of the corporate world, who are always striving to ensure that companies and promoters follow rules and regulations to protect the interests of investors and stakeholders. They manage the conflicting short-term interests of promoters and the long-term interests of investors while abiding by the ever-changing rules and regulations. The job is challenging and can be compared to the role of an umpire in a T20 cricket match or an undercover agent in hostile territory. Supervising a board of directors requires strict oversight and sharp business acumen.
Role of an Independent Director
The role of independent director was first introduced in the Companies Act, 2013; before that, it was just part of the listing agreement from SEBI. This role is introduced to add objectivity in the decision-making, i.e., independently, from the perspective of the company, minority shareholders, and even promoters. The primary intention of the role is to protect the long-term interest of the investors vis-a-vis the short-term interest of the promoters. A person who is known for integrity and has relevant experience and expertise, is not related to promoters directly, and does not have any pecuniary relationship can be appointed as an independent director.
Schedule IV of the Companies Act, 2013 has defined the following roles and responsibilities for an independent director:
Provide unbiased and independent judgement, opinion, and views during board discussions on strategy, performance, risk management, resources, and key appointments, and maintain high ethical conduct.
Bring objectivity when evaluating the performance of the board and senior management.
Review and monitor how management has performed on agreed goals and report on performance improvement.
As part of the audit committee, ensure that all financial statements reported are correct and, as such, report the current status of the company.
As a watchdog, he should protect the rights and interests of the minority stakeholders.
Maintain a balance between the expectations of various stakeholders and promoters.
Decide and support compensation for all executives based on performance, their appointment, and removal.
Act as a mediator in conflicts arising between various stakeholders.
Challenges faced and possible solutions
An independent director faces a mirage of challenges from the moment of joining a boardroom, including getting acquainted with the company’s business model and operation. Transparency, accountability, and upholding high ethical standards become obstacles too. Below are the key challenges and potential solutions that an independent director can adopt to ensure good corporate governance.
Lack of transparency in decision-making
Challenge: Being an independent director can sometimes feel like being asked to solve a puzzle with missing pieces and insufficient information.
Solution: Independent directors should work on gathering and collecting all the necessary information related to any issue to reach a well-informed conclusion. If needed, they should consult industry experts whenever possible.
Boardroom pressure from senior management
Challenge: Facing subtle pressure from management to align with their expectations is a common practice.
Solution: Independent directors should support each other in decision-making and ensure that they adhere to principles and ethics to ensure smooth operations of the company.
Legal liabilities
Challenge: The threats of mismanagement, oppression, and violation of legal processes can turn any director into a cautious cat.
Solution: Independent directors should be risk-averse in all legal and regulatory procedures mandated by the government. If necessary, they should procure indemnity insurance for the company.
Regulatory changes
Challenge: Keeping up with regulatory changes can be like catching a greased pig—a nightmare.
Solution: Independent directors should continuously keep learning and developing professionally through training and industry programs.
Schedule management
Challenge: Managing multiple commitments can turn a schedule into a circus act.
Solution: Independent directors should prioritise commitments effectively and ensure proper time management. Haste should be avoided in decision-making.
Boardroom meetings & dynamics
Challenge: Dealing with the internal politics of a boardroom is tricky, and handling this “family reunion” can be demanding.
Solution: Open and transparent communication can help build trust among board members.
Risk management
Challenge: Predicting hurricanes and identifying and mitigating risks can sometimes feel equally challenging.
Solution: Independent directors should emphasise the enterprise risk management framework. Risk should be identified for all business goals with mitigation plans.
Stakeholder management
Challenge: Meeting and balancing expectations of a pool of industry experts and stakeholders is challenging.
Solution: Independent directors should understand the perspective of all stakeholders and balance the expectation in the best interest of the company.
Ethical dilemmas
Challenge: Sticking to ethics while deciding who gets the benefit can be like sharing the last slice of pizza.
Solution: Independent directors should follow strong personal morals and adhere to established ethical guidelines.
Succession planning
Challenge: Leadership transitions are like preparing for a chess match without knowing the rules—daunting.
Solution: Independent directors should have a succession plan ready, and it should be reviewed regularly.
Performance review of the Board of Directors
Challenge: Conducting a performance review of the Board of Directors can feel like asking a chicken to vote for dinner party tonight—awkward.
Solution: Independent directors should conduct performance reviews tactfully and focus on highlighting growth areas rather than shortcomings.
Key challenges in board committee vigilance
Independent directors must be alert, mindful, and careful about the details and discussions during the exchange of information in the boardroom meetings. Independent directors should remain composed and committed to fact-finding and truth-speaking when preparing various reports and financial statements. Independent directors have to be vigilant on following committees.
Audit Committee:
Independent directors are expected to oversee the audit and internal financial controls of a company to ensure the integrity of its financial statements. If needed, external independent expert advice and consultation can be sought to prevent any financial misstatements and fraudulent reporting in quarterly and annual reports of the company. This will ensure the safety of investors and stakeholders in the long run.
Nomination and Remuneration Committee:
Independent directors have to ensure fair and transparent processes are followed in selecting, promoting, and compensating top executives. Their oversight will ensure to help retain talent in the company and contribute towards the growth of the company.
Risk Management Committee:
Independent directors should play a key role in identifying and mitigating top risks impacting business goals and helping in the long-term sustainability of the company. Their vigilance ensures potential risks are addressed early and opportunities are explored accordingly.
Corporate Social Responsibility Committee:
Independent directors should ensure that all the policies and activities undertaken by the company genuinely benefit society and are impactful in serving a cause. Their oversight should ensure that the legal obligations of the company are fulfilled wisely.
Stakeholder Committee:
Independent directors should ensure that the grievances of stakeholders relating to transfer of shares, non-payment of dividends, issue of duplicate share certificates, etc. are handled cordially. Reporting of the grievances to SEBI and the registrar office should be done timely as per the legal processes.
Merger and Acquisition:
Though mergers and acquisitions are not typically managed by a committee, independent directors are supposed to be active rather than reactive in the transfer process. They are expected to be vigilant and cautious in obtaining independent valuation and creditors reports to ensure the safety and protection of minority stakeholders and the creditor’s interests.
Related party transactions:
Related party transactions fall under the jurisdiction of the Audit Committee, and independent directors play a key role in the process. Independent directors should carefully validate all the details and approve the transactions, taking into consideration the overall benefit of the company in the process. Favouring a few promoters and directors for personal benefits should be avoided.
Liabilities of independent directors
For any mishandling, misstatements, or any faults in their roles and duties, as per the Companies Act, 2013, Section 149(12), an independent director will only be liable for an act of omission/commission that has occurred with his knowledge, attributable to board processes, with his consent/connivance, or where he had not acted diligently. Further, under Section 164, independent directors can be disqualified under non-compliance. Under Section 447, any director involved in fraud is liable for imprisonment that can extend to 10 years and a fine that could be three times the amount involved in the fraud. Section 34 and Section 35 detail the criminal and civil liabilities in case of any misstatement in the issue of prospectus. In case of any oppression by the board, independent directors can approach the tribunal under Section 242.
Suggestions
The role and duties of independent directors are challenging and demanding in nature, as upholding high ethical standards requires more than just due diligence. Hence, independent directors should be granted the power of a supervisor over the boardroom. This special power and privilege would enable them to scrutinise the company with authority and complete independence as expected. This change is expected to be amended in the Companies Act, 2013, in the near future.
Conclusion
To conclude, the role of an independent director is that of an “watchdog”—an undercover agent who is vigilant from the onset of the boardroom. This article has covered the known challenges faced by the independent directors and offers potential solutions. Independent directors should also be aware of the penalties and fines levied by the SEBI and Central government in case of mishandling, misstatements, and faults in their roles and duties. By exercising due diligence and business acumen, independent directors can contribute effectively to the company’s board and achieve success.
This article is written by Soram Agrawal. It deals with the case of Masum Ali and Ors. vs. Abdul Aziz and Ors. (1914), which is an interesting precedent in the field of Indian contract law, particularly when applied to the enforceability of promises made for charitable purposes in India. The case revolves around the movement carried out in Agra in 1907 by the Islam Local Agency Committee towards repairing and reconstructing Masjid Hammam Alawardi Khan. This article delves into the facts, arguments put forth by the parties, and an analysis of the judgement passed, along with the relevant legal concepts involved.
Introduction
The judgement in the case of Masum Ali vs. Abdul Aziz and Ors. (1914) assumes a great deal of significance for interpreting certain aspects of contract law in India, particularly with regard to the question of the enforceability of charitable promises. In the light of contract law, promises are only valid on the basis of the principle of consideration, which is necessary to create an enforceable contract. The principle of consideration implies that any promise in a contract, has something of value to be exchanged between the parties entering into such a contract. For a contract to become binding, there must be an exchange that benefits one party or is detrimental to the other. The foundational concept itself, therefore, makes one wonder whether an undertaking of a promise for a purpose of charity, without fair consideration, would be enforceable.
The case at hand touches upon whether a promise without any consideration, particularly made with charitable intentions, amounts to a contract or not. It discusses how the absence of consideration affects the legal enforceability of such promises and, thus, points out in detail the importance of consideration in ensuring the validity of contracts. In applying these principles, it was established that consideration does play a vital role in distinguishing between binding agreements and gratuitous promises.
Details of the case
Name of the Case: Masum Ali and Ors. vs. Abdul Aziz and Ors,
Parties to the case:
Petitioner: Masum Ali and others, members of the Islam Local Agency Committee, Agra
Respondent: Abdul Aziz and others, heirs of Munshi Abdul Karim
Court: High Court of Allahabad
Judges: Chief JusticeHenry Richards and Justice Pramada Charan Banerji.
Date of judgement: 11th March, 1914
Equivalent citations: (1914) ILR 36 ALL 268
Facts of the case
The appellant in this case, the Islam Local Agency Committee, Agra, in the year 1907, launched a campaign for raising funds for repairing and rebuilding Masjid Hamman Alawardi Khan. The Committee sanctioned a subscription of Rs. 3,000. Additionally, a contribution of Rs. 100 was paid by Hakim and Rs. 500 was promised by Munshi Abdul. Amongst them, Munshi Abdul was elected as the treasurer, and the Committee handed over their share of contributions to him.
A cheque for Rs. 500 was issued by Munshi Abdul on 12th September, 1907. On presenting the same to the bank on 29th September, 1907 the cheque was returned with a note pointing out some discrepancy. On 12th January, 1909 it was again presented and returned with a note stating that it was out of date. Later, Munshi Abdul died on 20th April, 1909. The present suit was brought against his representatives on 14th April, 1910. Another respondent, Munshi Jan, died in May, 1910.
The suit was brought for the recovery of Rs. 1,000 from the representatives of Munshi Abdul- Rs. 500 from Munshi Abdul, and Rs. 500 from Munshi Jan, which was not encashed. The Lower Appellate Court decided the claim against the representatives for Rs. 1,000. Finally, a second appeal was made before the High Court.
Issues raised
Whether a promise made without consideration is binding?
Whether Munshi Abdul’s heirs should be brought and be held liable?
Laws/concepts involved in the case
Several laws and concepts from the Indian Contract Act, 1872 were involved in Masum Ali and Ors. vs. Abdul Aziz and Ors. (1914).
Indian Contract Act, 1872
Consideration
Section 2(d) states that, when at the desire of the promisor, the promisee or any other person, does or abstains from doing or promises to do or to abstain from doing anything, such act or abstinence or promise is called a consideration for the promise.
Agreement
Section 2(e) states that every promise and set of promises that serve as consideration for each other is said to be an agreement.
Contract
Section 2(h) states that an agreement enforceable by law is called a contract.
Agreement without consideration
Section 25 states that an agreement without consideration is void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law.
Balfour vs. Balfour (1919): The court held that agreements between spouses are not enforceable due to the absence of consideration, reinforcing the idea that agreements without consideration are void.
Tweddle vs. Atkinson (1861): This case best illustrates the fact that attention must be given away from promisee. It was decided in the court that a third party cannot claim a contract unless he provided consideration, which immensely strengthens the fact that contracts for lack of consideration are void.
Agent and principal
Section 182 states that an ‘agent’ is a person who is employed to do any act for or to represent another person in dealings with third persons.
Negligence
Winfield and Jolowicz define negligence as “a breach of a legal duty to take care, which results in undesired damage to the plaintiff.” Negligence is a fundamental concept under the law of torts. It refers to the failure to act as per the level of care that a reasonable person would exercise under similar circumstances, resulting in harm or damage. The legal framework for negligence generally involves four key elements:
Duty of care: The defendant must owe a duty of care to the plaintiff. This duty requires the defendant to act in a manner that avoids foreseeable harm to others.
Breach of duty: There must be a breach of that duty. This occurs when the defendant’s actions or omissions fall short of the standard of care expected from a reasonable person in the same situation.
Causation: There must be a direct link between the breach of duty and the harm suffered. This includes both actual causation (the breach directly led to the injury) and proximate causation (the injury was a foreseeable result of the breach).
Damages: The plaintiff must demonstrate that they suffered actual damages as a result of the breach.
In essence, negligence arises when an individual’s conduct deviates from the standard of care, leading to foreseeable harm. For example, if a store owner fails to clean up a spill and a customer slips and falls, the store owner may be held liable for negligence. Similarly, if a hazardous object is not secured and a customer injures themselves on it, the owner could be held accountable.
Agreements without consideration for charitable causes
Agreements without consideration: The general rule states that agreements without consideration are void. However there are a few exceptions to this general rule. One such exception is related to agreements made for charitable purposes, without consideration. For instance, contracts which are intended to serve charitable purposes and are such that the promisor provides a promise to pay money or hand over some property to any charity may be valid without consideration.
For example, a person promises to donate Rs. 10,000 for building a hospital for the poor. The trust goes ahead and erects the hospital on this promise. Again, despite no consideration moving from the trust to the promisor, the promise is binding on him because the trust incurred a liability upon such a promise.
Similarly, if a charitable organisation invites the public to contribute funds for a project and many people agree to subscribe and promise to pay their share once the charity enters into a contract to carry out the project, then such agreements become enforceable even without consideration. The charity has incurred a liability based on the promises made by the subscribers.
Thus, briefly, most agreements without consideration are void, except for contracts made for charitable purposes. Even though they have not offered any kind of consideration, such promises can legally be enforced by charity or trust since the former has acquired a liability based on the promise made by the promisor to donate.
Yogiraj Charity Trust vs. Commissioner of Income-Tax (1976): This case strongly echoed the fact that Section 4(3) of the Income Tax Act includes relief for the poor, education, and medical relief in charitable purposes. The Supreme Court held the view that the intention behind the income of a trust is the decisive factor to determine its charitable character and, based on this, the court confirmed that promises made for charitable purpose can be enforceable.
Padmavati vs. Narsilal P. Dalal (1954): The court in this case held that relief of the poor cannot be regarded as a charitable object unless it tends to benefit the public in general. The case further proved the need for the charitable purpose to have a more extensive section in the public benefitted, thus supporting the enforceability of promises made for such purposes.
Assistant Commissioner of Income Tax (Exemptions) vs. Ahmedabad Urban Development Authority (2017): This case dealt with the circumstances under which charity organisations would be exempt from paying tax. In such a case, the Supreme Court found that any profit achieved by the charitable organisation must remain incidental to its main charitable purposes and do so in a way that does not give cause to undermine the sanctity of charitable promises.
Arguments of the parties
Petitioners
It was urged by the petitioners that the promise of Rs. 500 by Munshi Abdul Karim was made in the capacity of the treasurer of the Islam Local Agency Committee, and hence this promise must be held binding as made for a communal purpose.
They stated that Abdul Karim had been careless with respect to Munshi Jan Muhammad’s cheque from Sibi, which was returned due to irregularities, and as such, he failed in his duties as a treasurer. Due to such negligence, according to the petitioners, he was liable for the promised amount since it caused loss to the committee.
The petitioners emphasised that the fund-raising was a communal effort and the promises made by the committee members were merely an example of the dedication of that community. For enforcing such promises, this collective responsibility must be taken into account.
It was nevertheless emphasised by the petitioners that the nature of Abdul Karim’s promise was a clear indication of his serious intention to fulfil such a commitment. In other words, it was not a frivolous promise but a real commitment to contribute towards the reconstruction of the mosque.
Respondent
The respondents contended that the promise made by Munshi Abdul Karim was a gratuitous one, completely lacking consideration, without which a binding obligation cannot be created.
Even if it is assumed that Munshi Abdul Karim was an agent of the Committee, he was a gratuitous agent, and he could not be held liable for negligence. The respondents further urged that the acts of Munshi Abdul Karim did not amount to gross negligence since he had presented the cheque for payment and the irregularities were not entirely his fault.
The respondents pointed out that there was no proof to show that Abdul Karim had kept aside the amount of Rs. 500 promised to be paid towards his subscription. Without such proof, according to them, the promise could not be enforced.
It was explained that the proposed work on the mosque might be the reason for the delay in re-presenting the cheque or obtaining a replacement. They submitted that this natural delay should not be interpreted as negligence.
Judgement of the case
As per the court, since no suit could have been successfully pursued against Munshi Abdul Karim during his lifetime, no suit can now be maintained against his heirs either. Accordingly, the claims regarding the two amounts of Rs. 500 each were dismissed. The appellants were awarded costs for this appeal, and the costs in the lower court were to be divided between the parties on the basis of their losses and gains.
Rationale behind the judgement
The court first observed that Munshi Abdul Karim’s promise to donate Rs. 500 was considered a mere gratuitous promise, and if the same was made by an outsider under the same circumstances, it would not be enforceable at all. The court found that the fact that Munshi Abdul Karim was the treasurer would not have any significant impact. Further, there was no evidence to show that he had set aside Rs. 500 for this for the promised subscription.
As regards Munshi Jan Mohammad’s cheque, the court concluded that there was considerable difficulty in establishing that a suit could have been brought against Munshi Abdul Karim during his lifetime. He had voluntarily taken up the role of a treasurer, and could quit at any point. Additionally, nothing in his behaviour gave any indication of gross negligence. The mistake in the endorsement of the cheque and all the subsequent delays seemed quite plausible. Hence, the court passed this decision.
Analysis of the case
The case of Masum Ali and Ors. vs. Abdul Aziz and Ors. (1914) offers deep insights into the very fundamentals of the law of contract, specifically the role that consideration plays in rendering promises as binding. This is an important pointer by the court, that under Section 2(d) of the Indian Contract Act, 1872 a valid consideration is the very foundation of any legally enforceable contract. It is wholly independent of the nature or purpose of the promise, whether for a charitable or any other such benevolent cause. The judgement, therefore, lays down that even promises made with noble intentions, such as donations for religious or community purposes, must be supported by a consideration, to be legally enforceable, unless they come within the specific exceptions enumerated under Section 25 of the Contract Act.
The case, therefore, underscores the importance of adherence to the legal formalities involved in making contracts. It indicates that without consideration clearly established and recognized in law, even the best contracts end up as void in the eyes of the law. This makes for a lesson for people and organisations involved in the area of charities that their agreements have to be well thought out and constructed so that they meet the necessary requirements in order to be held valid.
The judgement also went beyond the doctrine of consideration and briefly touched upon the issues of agency and negligence under the law of contract. In explaining the extent of responsibility and limitations of an agent, as well as of liability in cases of negligence, the court established a nuanced understanding of how all these principles play out together in contractual relationships. The decision of the court to dismiss the claims against Munshi Abdul Karim’s heirs, on the ground that the promise was a gratuitous one and no gross negligence could be imputed to him, does reflect careful consideration by the court of these legal doctrines.
In conclusion, this case brought out the fine distinction between moral obligation and legal enforceability, reaffirming the position that while the law does accommodate charitable intentions, it nonetheless insists on stringent criteria for the creation of legally binding agreements. The judgement therefore does not simply decide the dispute before it but elaborates jurisprudence relating to the law of contract in a way that will forever affect how similar cases may be approached in the future.
Conclusion
The decision passed in the case of Masum Ali and Ors. vs. Abdul Aziz and Ors. (1914) is a notable one, through which the importance of consideration, particularly when promises are made for charity, is highlighted with respect to Indian contract law. Such a judgement not only gives an additional assurance that at the time of making contracts, consideration is necessary, but also insists that in the absence of the said consideration, such contracts would not hold importance and will not be enforced. This has also been a lesson for charitable organisations and people who indulge in philanthropic activities. What strikes most in this case, is the need to find a balance between the law and societal morals. While the former strictly enforces the consideration of a promise to be binding; the latter often views such charitable promises as a moral obligation.
Although legally correct, this decision of the court exposes the disconnect between a rigid application of contract law and the flexibility of social values and virtues. It puts into sharp perspective the reality that the law does not always meet moral expectations. This case serves to reiterate the need to ensure justice while also keeping in mind the evolving requirements and expectations of society.
Frequently Asked Questions (FAQs)
What is the need for consideration in a contract?
Consideration is of importance in the sense that it makes a contract valid by ensuring exchange of value. Without consideration, a bare promise is generally not enforceable, unless certain exceptions apply.
Can a charitable promise be enforced without consideration?
No, a charitable promise generally requires consideration to be enforceable unless it is exempted from the Indian Contract Act, such as a written promise to pay a time-barred debt.
What are the exceptions to the rule that a contract without consideration is void?
Exceptions to the rule that a contract without consideration is void include written promises to pay a barred debt, compensation for past actions, or agreements made out of natural love and affection between close relatives. This can be found under Section 25 of the Indian Contract Act.
What was the relevance of the concept of agency in this case?
This case clearly established the role of an agent and identified that liability of the heirs of the agent is not implied since the original promise was without consideration and there was no gross negligence.
What does this case teach us about creating binding contracts?
This case highlighted that for a promise to be applied or enforced, all the elements, especially consideration, must be present. It also pointed out clearly the importance of understanding the roles and liabilities of agents.
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This article is written by Clara D’costa. This article talks about the case of Nawazish Ali Khan vs. Sardar Ali Raza Khan (1948), wherein the Privy Council determined the legal intricacies concerning the inheritance of the Oudh estates that came under the Oudh Estates Act, 1869. An in-depth research analysis of the Oudh Estates Act, 1869, the issues raised in the case, precedents referred to by the Privy Council and the judgement declared by them.
Table of Contents
Introduction
The case of Nawazish Ali Khan vs. Ali Raza Khan (1948) was decided by the Privy Council- India’s highest court of appeal right after we secured independence. It was an important case as the Privy Council evaluated the facts and focused on the specific rules that govern the system of inheritance in the Muslim community regarding succession of estates. There are numerous property laws; however, in this case, weightage was given to the personal laws and the lordships relied on precedents.
This case that brought about a change in the determination of inheritance rights was examined in the Privy Council and spoke about the rights of the family members and the rights of descendants during the passing down of an estate. Numerous questions were raised and issues were formed regarding the validity of the rights of heirs to the estate, the importance of the rules in the Oudh Estates Act, 1869, personal laws and their relation with other statutes in the country. After a thorough analysis of the facts, laws and previous judgements, the Council arrived at a landmark decision.
These consolidated appeals arise from a judgement and decree of the Chief Court of Oudh, dated January 12, 1943, reported in AIR 1943 Oudh 243-Ed. This ruling changed an order that was granted by the same court on October 30th, 1937. In this appeal, Sardar Nawazish Ali Khan (hereinafter referred to as “the appellant”) and Sardar Ali Raza Khan (hereinafter referred to as “the respondent’’). The appellant and respondent of this case belong to the Ashna Aahari (Ithna Ashari) sect which is a family of the Shia Muhammadans that are governed by the Imamia Law.
The appeals belonging to this case address the ownership of the two estates, namely “The Nawabganj Aliabad” estate belonging to the Bahraich District of Oudh, which is also referred to as “the Oudh estate,” and the estate in the State of Punjab called “Rakh Juliana,” also referred to as the “Juliana estate.” “The Nawabganj Aliabad” estate had been given to Nawab Ali Raza Khan and had been included in the Schedule of the Oudh Estates Act, 1869. Nawab Ali Raza Khan, during his lifetime, transferred the “Rakh Juliana” estate to his brother, Nasir Ali Khan, by using the powers that are granted by Section 11 of the Oudh Estates Act, 1869, despite only being allowed to bequeath one-third of his property as per family law.
In Sir Nawazish Ali Khan’s will dated February 14, 1882, he bequeathed “The Nawabganj Aliabad” estate to Nasir Ali Khan, once again under the authority of Section 11 of the Oudh Estates Act, 1869 despite the restrictions as per family law. On July 15th 1896, Nasir Ali Khan further created two wills for both the Oudh estate and the Juliana estate, respectively, along with another will for a property in Punjab. The heirs of Nasir Ali Khan agreed to these wills. These documents were majorly similar and included the provisions given under Section 11 of the Oudh Estates Act, 1869 and appointed Nawab Fateh Ali Khan as both the executor and successor to “The Nawabganj Aliabad” estate, followed by Mohammad Ali Khan, Hidayat Ali Khan and other suitable descendants. After the death of Nasir Ali Khan on November 19, 1896, Sir Fateh Ali Khan assumed control of both estates.
Sir Nawazish Ali Khan had a son, Hidayat Ali Khan, who would’ve technically succeeded to the Oudh estate under the Oudh Estates Act, 1869 if Sir Nawazish Ali Khan died intestate. Hidayat Ali Khan passed away in 1924. Mohammad Ali Khan (hereinafter referred to as “Mohammad”) initiated a lawsuit in the Privy Council on 9th of December, 1925 and claimed for the ownership of both the “Nawabganj Aliabad” (Oudh) estate as well as the “Rakh Juliana” estate.The Privy Council, thereby, as a result of the litigation declared the ownership of both the estates to Mohammad’s name. Upon Mohammad’s death the Privy Council refused to take into account the effect on the estates.
By a document dated June 30, 1934, Mohammad declared under the decision of the Privy Council and in accordance with the will of Nasir Ali Khan, that he was entitled to nominate a successor. He further nominated Nawabzada Nawazish Ali Khan as his successor. Mohammad later died on February 3, 1935 and upon his death the appellant, Nawabzada Nawazish Ali Khan, took possession of both the Oudh and the Juliana estates. On September 25, 1935, the respondent, Sardar Ali Raza Khan, instituted a suit in the Chief Court of Oudh against Nawazish Ali Khan and sought a decree for the possession of both the Oudh estate and the Juliana estate and other estates not directly connected to this appeal along with other necessary appeals.
Issues raised
The main legal issues in this appeal surrounded the principles of the Islamic inheritance law which dictates the specific shares for the different classes of heirs and also of the restrictions that are imposed on testamentary freedom (the right to dispose of one’s property through a will). The issues that were determined by the Privy Council are as follows:
Whether the power of appointment in the Will of Nasir Ali Khan is valid under Muslim law?
Whether the document in question should be classified as a deed or a will?
Whether the creation of powers of appointment is governed by Section 11 of the Oudh Estates Act, 1869?
Whether the Indian Courts addressed the respondent’s claim for mesne profits?
Legal concepts mentioned in this case
The Oudh Estates Act, 1869
Section 11 of Oudh Estated Act
This Section granted the holder of an estate to dispose of the estate either during the holder’s lifetime or by will. However, it could be done under the condition that the receiver should be someone who would have otherwise succeeded to the estate under provisions given by the Act in case the holder dies intestate. In this case the validity of Nasir Ali Khan’s will was assessed under this Section in order to determine whether the estate was properly bequeathed.
Section 14 of Oudh Estated Act
This Section stated if a Taluqdar (a landowner) or a Grantee (someone who has been granted a land) has already transferred or willed their entire estate or a part of it to another Taluqdar, Grantee or any legal heir, the transferee would have the same rights and powers over that estate as the transferor.
This provision was a key point of contention as the courts examined and determined the validity of Nasir Ali Khan’s will under this Section.
Section 15 of Oudh Estated Act
This Section stated if a Taluqdar or a Grantee has already transferred or willed their entire estate or a part of it to another person not being a Taluqdar, Grantee or any legal heir that could have succeeded the property otherwise, the transfer and inheritance of that proper that was transferred or bequeathed shall be governed by the rules that would apply if the transferee or grantee had purchased the property from someone who was not a Taluqdar or a Grantee.
Section 22 of Oudh Estated Act
This Section stated that if the landowner dies intestate the entire estate will be distributed amongst the eldest sons, other sons and their male lineal descendants. If the eldest son dies, the estate will be distributed among his sons first, in order of their seniority. If the eldest son dies without any male descendants, the estate will then be distributed to the second son and any other surviving sons, also according to their seniority.
If there is no son or their descendants then it shall pass on to the son of a daughter and his male descents. If there are no sons or descendants, then the estate shall be passed down to the brothers of the holder followed by the widow of the holder and the first married widow.
This Section established the rule of primogeniture for the estates that come under the purview of the Oudh Estates Act, 1869.
Indian Succession Act, 1885
Section 78 of Indian Succession Act
This Section speaks about the principle in the interpretation of wills known as the “Doctrine of Falsa Demonstratio.” This principle applies when the testator (the person who made the Will) describes an item or property to be bequeathed, but the description is partly inaccurate or contains errors. However, if the intended item can still be clearly identified despite these errors, the inaccurate parts of the description are disregarded, and the bequest remains valid.
In simpler terms, the Section means that if the testator’s intention is clear and the item can be recognized even though some details are incorrect, those incorrect details should be ignored, and the intended item should still be given to the beneficiary as stated in the will. The focus is on fulfilling the testator’s true intention, even if the wording isn’t perfect.
Section 79 of Indian Succession Act
According to this Section the creation and execution of powers of appointment that can be carried out under wills. In simpler words, when deciding if a case fits this Section, any words in the will that should be ignored according to Section 78 will be treated as if they have been removed from the will.
However, both Section 78 and Section 79 were not incorporated into the Oudh Estates Act, 1869. The Lordships in this case however did not consider this question, as they were satisfied for the reasons whether powers of appointment can be created under the Oudh Estates Act, 1869. They stated that the power that was sought to be conferred by the wills of Nasir Ali Khan does not fall within the Acts.
Amending Act of 1990
This Act brought along noteworthy changes to the Oudh Estates Act, 1869 by replacing Section 14. It also introduced Section 7 with an objective to bring back the original interpretation of laws. It aimed to establish the rule of primogeniture to pass down the estate and not through any personal laws.
Primogeniture rule
The rule of primogeniture is a principle of the common law which states that the eldest male descent shall inherit the estate. For all the estates that were listed under the Oudh Estates Act, 1869 this rule had been codified. It basically states that the next male heir or the eldest male descent is the successor of the estate in case the Taluqdaar (holder) of the property dies. This was a significant principle that aided the claim of the respondent in order to acquire the ownership of the “Nawabganj Aliabad” (Oudh) estate as per the rule of primogeniture and not under the personal laws.
Section 42 of the Specific Relief Act 1877
Section 42 of the Specific Relief Act, 1877, now known as Section 34 of the Specific Relief Act, 1963 allows the court to grant a declaratory decree to the plaintiff wherein the plaintiff has a legal right that the defendant denies. This provision was placed on a higher pedestal when a formal declaration of rights was necessary when immediate relief could not be granted.
Mesne Profits
The Code of Civil Procedure in India under Order XX Rule 12 and Section 2 (12) lays down a mechanism to claim the profits that an owner could not have access to due to being wrongfully disposed of his property. This Section provides for the owner to file a suit to claim his possession and recover the profits gained from the property. However, only a rightful owner can be granted the mesne profits and thereby has to prove the authenticity of his ownership.
Order XX, Rule 12, CPC allows for a decree for mesne profits to be passed along with the decree for possession. It specifies that procedure for determining and awarding such profits.
Here the respondent claimed mesne profits in his suit and based his claim on the assertion that he was entitled to compensation for the period wherein he was wrongfully deprived during the ongoing dispute. The Indian Courts did not address the claim for mesne profits during the initial stage of the proceedings and focused on the substantive issues and thus was left unresolved. In this case however, mesne profits were a secondary issue arising from the primary dispute over the validity of wills and the rightful inheritance of the estates.
Article 7 Schedule 1 Stamp Act, 1899
The Indian Stamp Act, 1889 governs the imposition of duties on instruments that record any transaction to ensure that such documents are properly stamped in order to be declared legally valid and enforceable in the court of law. In this case, Mohammad Ali Khan executed a document that nominated Nawabzada Nawazish Ali Khan Successor to the estate and relied on the power granted by the will of Nawab Nasir Ali Khan. In order to be legally enforceable, this document had to be properly stamped under Schedule I Article 7 of The Indian Stamp Act, 1889. The execution of this document aimed to eliminate any disputes over succession that would arise and that made it critical that the document had the required legal formalities including the appropriate stamp duty.
In this case, Nawab Nasir Ali Khan executed the document on June 30, 1934 which the lower Courts in India had interpreted as a will. However, despite the form that resembled a will this document was stamped under Article 7, indicating that it was treated as an instrument of appointment and not a will. This document exercised power of appointment conferred upon by Nasir Ali Khan will but it did not name an executor, thus it did not dispose of Mohammad’s personal property and lacked any indication of revocability which is the key feature of a will.Therefore the Privy Council concluded that this document could not be considered as a will as under Article 7 of the Stamp Act.
The Privy Council decided that even if it was considered as a will. It was found that it did not transfer the property that Mohammad inherited as his father’s and hence the Juliana estate governed by Mohammad’s personal law rightfully belongs to his heirs thereby dismissing the claim of the appellant.
Arguments of the parties
Petitioners
The petitioner, through his counsel, argued that the power of appointment mentioned in the wills of Nasir Ali Khan which presumed to create the successive life estates with the power of appointment is invalid as per personal law. They further emphasised that as per the Islamic law that governed Nasir Ali Khan, he did not recognise such a power of appointment. The petitioner then established that Nasir Ali Khan in fact attempted to create a power in his will that gave permission to decide any future successors for the estate that primarily did not come under the purview of the Islamic laws.
The counsel for the petitioner also put forth an argument that the Oudh estate cannot be passed down to any inheritors as the power of appointment that Nasir Ali Khan tried to create is not mentioned in the Oudh Estates Act, 1869. The petitioner in his arguments also pointed out before the Privy Council that the Oudh Estates Act, 1869 or even the Amending Act of 1910 does not contain any rule that speaks about creating powers of appointment via a person’s will. Further Section 78 and Section 79 of the Indian Succession Act, 1855, which addressed the powers of appointment, were not incorporated in the Oudh Estates Act and thus the omission of these powers indicated that the Act did not intend to allow for the creation of these powers of appointment.
The petitioner further referred to the judicial interpretation that was provided by the Judicial Commissioners of Oudh in 3 OC 120 and the Privy Council in 31 IA 132. The petitioner argued that in these two precedents the interpretation of which held that only “the person or one of the persons to whom the estate would have descended according to the provisions of the special clause of Section 22 applicable to the particular case” could be considered a valid successor under the Oudh Estates Act, 1869.
The petitioner asserted that this interpretation by the Judicial Commissioners and the Privy Council excludes Nasir Ali Khan as he was not the person to whom the estate would have descended if the testator had died intestate. Further, the petitioner took into account that the Act was amended in order to restore the law to the original state and therefore substituted a new Section in the Oudh Estates Act, 1869 for Section 14. The petitioner further argued that the amendment Act was made with a retrospective effect in order to safeguard the rights of those that were vested before this Act was established. The petitioner therefore claimed that the retrospective application of Section 7 cannot be validly imposed as the power of appointment would dispossess Mohammad of his vested estate.
Further, it was concluded by the petitioner’s counsel by highlighting that the power of appointment that Nasir Ali Khan’s will granted was invalid as per the personal laws. The respondent further stated that the powers of appointment could not be exercised or considered to be legal as the Oudh Estates Act, 1869, could not pass the estate but the personal laws had the authority to pass the estate. The counsel also stated that the retrospective application of the amending act 1890 should not be considered as it will affect the vested rights of the petitioner, and any other attempt that imposes the power of appointment on the estate would be against the legal framework of personal laws governing succession and inheritance.
Respondent
The respondent, through his counsel, argued before the Privy Council that the Oudh Estates Act, 1869 did not explicitly mention that the powers of appointment or disposition conferred upon by Section 11 of the Act applies to all Taluqdars (land owners) including Muslims. The respondent further argued that the Act provided a sufficient legal framework to create power of appointment that allowed Nasir Ali Khan to dispose of the estate according to his will during his lifetime or through testate succession. The respondent further referred to the view that was initially held in the Judicial Commissioners of Oudh in 3 OC 120 which allowed any person that was mentioned in Section 22 as a potential heir to be considered as a valid successor under the Oudh Estates Act, 1869.
The respondent further stated that amending the Act and substituting Section 14 effectively restored the law to its original state before the Privy Council’s decision in 31 IA 132. The respondent argues that this restoration meant that the Oudh Estate will descend according to the primogeniture rule under the Oudh Estates Act, 1869, therefore validating the power of appointment in the will of Nasir Ali Khan.
The respondent further did acknowledge that this power of appointment might have deprived Mohammad of his estate, however, this was a necessary consequence of the retrospective application of the Amending Act of 1910 which restored the estate under the purview of the Oudh Estates Act, 1869. Further, it was maintained by the respondent’s counsel that Mohammad’s estate was subject to the primogeniture rule and no personal laws were applicable, thereby validating his claim as the eldest male child of his father to the “Nawabganj Aliabad” estate. Ali Raza Khan via his counsel brought the Privy Council’s attention to the appellant’s failure to show that the estate had been passed down under any of the personal laws. The respondent also stated that his claims could not be challenged as the appellant did not have solid evidence to back the appointment.
As the Privy Council did allow for the cross appeal, the respondent claimed for the costs incurred by him throughout this litigation process to be paid. As the respondent did not earn the profits that the estate earned, he also claimed for mesne profits and demanded it to be dealt with. As none of the Indian Courts considered or tried disputes for mesne profits in this case the Privy Council sent it back to the Trial Court. The Trial Court was then given the responsibility to deal with the issue according to the law.
While concluding their arguments, the respondent gave importance to the rule of primogeniture and stated that the inheritance of the “Nawabganj Aliabad” estate should have taken place as per the primogeniture rule and not as per any personal laws of the appellant as the estate came under the estates mentioned under the Oudh Estates Act, 1869.
The respondent demanded possession of the “Oudh Estate” due to the primogeniture rule and mentioned that the petitioner failed to back his arguments with legality and that his right to possession should be accepted and given to him.
Relevant judgement referred to in the case
In this case the Privy Council referred to various cases, legal principles and concepts while delivering the judgement. These precedents were crucial in order to understand the application of the Oudh Estates Act, 1869 and the principles of intestate succession and the powers of appointment under will according to the Act.
Judicial Commissioners of Oudh in 3 OC 120
This case was significant in shaping the Privy Council’s understanding and also the application of the provisions of the Oudh Estates Act, 1869 specifically the intestate succession regulated by the rule of primogeniture. The Judicial Commissioners of Oudh in the case ruled that an individual listed under Section 22 of the Oudh Estates Act, 1869 as a potential heir shall be considered as “a person who would have succeeded according to the provisions of the Act”. On the basis of this interpretation it was therefore concluded that Nasir Ali Khan possessed the authority to dispose of the estate under Section 11 of the Oudh Estates Act, 1869
In this case the Privy Council referred to the decision and 3 OC 120 and reinforced the idea that the succession to the estate of Nawab Nasir Ali Khan governed by the principle of primogeniture as laid down in the Oudh Estates Act, 1869. This case was significant to reject the arguments of the appellant that sought to invoke the personal laws of the respondent or any other alternative succession or inheritance mechanisms that could potentially disrupt the primogeniture rule.
The Privy Council applied the principles from 3 OC 120 to affirm that the will of Nawab Nasir Ali Khan conflicting with the Oudh Estates Act particularly the provision related to the nomination of a successor, did not override the statutory rules of primogeniture. This case established that the Oudh Estates Act intended to establish a uniform rule of succession under their jurisdiction in order to preserve the integrity of these estates and prevent their subdivision amongst multiple heirs.
31 IA 132 (Judicial Committee of the Privy Council)
In this case, the court examined how the powers of appointment granted by a will are interpreted under the Oudh Estates Act. The judgement was crucial in deciding whether such powers are legally valid. The Privy Council clarified that any power of appointment not covered by the Oudh Estates Act, 1869, is considered invalid.
During the evaluation to determine the decision of the case, the Privy Council relied on this case and therefore is of great significance. This decision of the Privy Council relied on the idea that the testamentary disposition of a property does not change the laws of succession thereby protecting the statutory rights of the heirs. It was solidified that a testator cannot change the statutory rights of the heirs as granted by the inheritance laws through a will.
In this case the will attempted to nominate the appellant as the successor by negating the primogeniture rule. The Council in this case emphasised that the rule of primogeniture being a legal mandate cannot be disregarded by any testamentary power and thus the nomination made by will was declared void and the estate was to be passed according to the primogeniture rule.
Judgement of the case
The validity of the wills of Nawazish Ali Khan and Nasir Ali Khan were the primary focus of the Privy Council while deciding the appeals that concerned the Oudh Estate and Juliana Estate. The Privy Council further found that the Oudh Estate was granted to Nasir Ali Khan by his brother Sir Nawazish Ali Khan. However, as Sir Nawazish Ali Khan was survived by his son, Nasir Ali Khan was not the rightful heir under the intestate succession laws. Due to this reason the estates did not come under the Oudh Estates Act of 1869. The Privy Council further stated that the power of appointment in wills did not comply with any personal law or any provisions of the Oudh Estates Act of 1869. The lordships carefully examined and analysed Section 7 and the facts of the case and rightfully accepted the respondent’s cross appeal. It was further decided by the Council that even with the inclusion of the new Section 7 the vested rights belonging to Mohammad and the powers granted by Nasir Ali Khan stood unaffected. The estate had been passed on according to the primogeniture rule as decided by the Privy Council.
Further regarding the Juliana estate, the Privy Council, in a similar manner validated the power of appointment as it was granted in Nasir Ali Khan’s will. It was discovered that personal laws were referred to when the estate was passed down to the descendants of Mohammad. The respondent Sardar Ali Raza Khan was given relief by granting possession of the old estate with the order being made without prejudice to any claims that could have been made by other heirs under the personal laws. The Appellant was then directed to pay half the costs of litigation borne by the respondent along with his own costs.
The respondents claim for mesne profits was not addressed by the Indian courts and referred back to the Trial Courts for proper disposal.The Council then established order to declare the power of appointment that was added in the wills of Nasir Ali Khan as invalid under the Special Relief Act, Section 42. The Lordships then dismissed the appellant’s appeal, accepted the cross-appeal of the respondent and also set aside the order of the Chief Court. The ‘Rakh Juliana’ estate was declared to descend according to Mohammad’s personal law while the respondent was granted the possession of the Oudh estate with the understanding that this order did not affect the rights of other heirs under the personal law.
Rationale behind this judgement
The Chief Court in appeal held that under the wills of Nasir Ali Khan, after his death, the estate vested in the three successive tenants for life. It further reasoned that upon the exercise of power of appointment the estate would immediately pass to the appointee without any period during which the estate would be in a state of suspension, thereby not affecting the right of the testator’s heirs.
The Lordships were however of the opinion that Muslim law does not distinguish between real and personal property and no authority would work on Muslim law—whether it be the Hedaya, Baillie or more modern works and no decision by the Privy Council supported the idea that Muslim law recognised the division of ownership of land into estates with differing qualities such as legal and equitable estates or in terms of duration, such as legal and equitable estates or in terms of duration.
The Privy Council concluded that the document was a deed not a will and that the power of appointment could not be created under Section 11 of the Oudh Estates Act, 1869. The court first addressed the issue of the wills of both Sir Nawazish Ali Khan and Nasir Ali Khan. It was admitted that Sir Nawazish Ali Khan’s will had indeed bequeathed the Oudh estate to Nasir Ali Khan his brother despite having a son and thus took the estate out of the purview of the Oudh Estates Act, 1869 which governed the succession of estates in Oudh.
The impact of the Amendment Act, 1910 was taken into consideration as it modified Section 14 in a retrospective effect. The main objective was to bring the original interpretation of the Section. It was concluded that the Act did not validate the powers of appointment that were contained in the will of Nasir Ali Khan.
The Privy Council upheld the view that the power of appointment contained in the will of Nasir Ali Khan was invalid under Muslim law. They emphasised that it would be inappropriate to introduce English legal concepts into Muslim law. The Muslim law recognises the distinction between the corpus of property itself (ayn) and the usufruct of the property (manafi) and unlimited testamentary power is not supported in general. The concept of usufructuary wills is well established in the Muslim law as described in the Hedaya which states that the bequest of the use of a property (whether it is definite or indefinite) is valid during life and death provided that the usufruct does not exceed one-third of the property.
In the Amjad Khan vs. Ashraf Khan AIR (1929) case, Lordship Wazir Hussain highlighted the distinction between the corpus and the usufruct of an estate. This distinction was upheld by the Council in the case. The judgement concluded that the intended gift was only a life interest not of the corpus itself and that Muslim law did not require that a life estate necessarily conferred absolute ownership.
This view reinforces the principle that a limited interest under Muslim law can only take effect out of the usufruct, leaving the ownership of the corpus intact. In applying these principles to the wills of Nasir Ali Khan the courts consistently found that they created successive life interests rather than absolute ownership. The corpus of the property thus descended to the heirs of the testator, subject to the interests of the life tenants in the usufruct.
The Lordships concluded that the proper construction of the wills was that the person taking under the power of appointment was to take an absolute interest. Any suggestion that the power could create succession of tenants for life under Muslim law was deemed invalid and it would conflict with the personal law of succession.
Analysis of the case
The Chief Court in its judgement determined that the will in question did neither intended to affect and did not affect the property of which Mohammad was the absolute owner. This was used by the Indian coach to support the idea that a power of appointment can be conferred under the Muslim law historically and will have been recognised in Muslim law. The Privy Council expressed reluctance to overturn the decisions of the Indian Courts due to the lack of precedence. They propose to examine whether the power of appointment as contained in Nasir Ali Khan’s will conflict with the principles of Muslim law. The counter noted that importing the English legal concept of ownership into Muslim personal laws would be inappropriate as the Muslim law maintained a clear distinction between the corpus and the usufruct.
It was analysed in this case that under the Muslim law, ownership of land is not limited in duration but interests of limited duration in the use of property are recognised. These limited interests have long been acknowledged under Shia law. In this case the respondent designated to take under the power of appointment was intended to take this property absolutely. The Privy Council were of the opinion that if the successor was to take the absolute power, it would operate on the corpus and therefore conflict with the Muslim legal principles therefore the power of appointment in Nasir Ali Khan will was deemed to be invalid and the Muslim law.
Therefore, the Privy Council analysed that the power of appointment that was included in the wills of Nasir Ali Khan was legally invalid under Muslim law. Therefore, this ruling significantly impacted the disposition of the estates that were in the litigation. The invalidity of the power of appointment stated that the intended succession plan that was set out by Nasir Ali Khan in his wills cannot be legally upheld according to the principles of Muslim law especially the Imami law which governed the Shia Muslims. In this case the mesne profits that weren’t adjudicated before in an Indian Court of law were referred back to the Trial Courts for further consideration.
The Lordships noted that the appellant failed in his appeal and the respondent succeeded in his cross appeal for the possession of the estate and therefore the court granted the appellant to pay for his costs and also for half of the costs of the respondent that were incurred during this trial process. In conclusion, the Lordships invalidated the power of the appointment in the wills of Nasir Ali Khan under Muslim law, referred the claim of mesne profits to the Trial Court and allocated the costs of appeal to the appellant, thereby accepting the cross appeal of the respondent.
Significance of the case
The judgement given in the Nawazish Ali Khan vs. Ali Raza Khan (1948) case had a significant impact on the interpretation and application of Islamic inheritance law in India. It talks about the challenges and intricacies involved in the religious principles with demands of a legal system. This case also emphasised on the importance of Colonial Courts that shaped the application of personal laws to settle proceedings that now influence subsequent legal decisions. This case also spoke about the broader social legal dynamics that were at play during the colonial period where religion law and colonial governance created a unique legal landscape.
Conclusion
The Nawazish Ali Khan vs. Ali Raza Khan (1948) case is of profound significance in the realm of Islamic inheritance law in India. This judgement addressed the challenges of reconciling religious doctrine with legal demands and discussed the complexities in applying Islamic inheritance rules in a colonial legal context.
The case highlighted the difficulties of integrating religious rules with the demands of a modern legal system. It showed how complex it can be to balance traditional beliefs with legal requirements. The Colonial Courts were instrumental in shaping the application of the personal laws during this period and indeed set precedents that impact legal matters and applications of Islamic law. Further it served as an important reference for understanding how colonial judicial practices influenced the growth and working of personal laws in India,
Frequently Asked Questions (FAQs)
Why were Mesne profits referred back to the Trial Court in this case?
Profits that arise from the wrongful ownership or occupancy of an estate or property are known as mesne profits. The profits that the legal owner could’ve rightfully earned if he had the ownership against the period of illegal occupancy. In this case, the respondent had claimed mesne profits however as the Indian courts had not addressed this issue due to their focus on other aspects of the case. The Privy Council referred the claim for mesne profits to the Trial Court for further examination and disposal according to the law.
Explain the power of appointment as mentioned in the case.
The legal authority to grant an individual to decide the distribution of a property or an estate is known as the power of appointment. It is generally granted in wills to designate the division of ownership of an estate or property upon the owner’s death. Nasir Ali Khan’s will in this case contained the power of appointment of the estates of Oudh and Juliana. The Privy Council found this power invalid under personal law as it could not be exercised in a way that would deprive the rightful heir, i.e., Mohammad of his inheritance and vest the estate in someone not alive at the time of the testator’s death. This power of appointment was therefore deemed ineffective.
What is the ‘doctrine of lapse’ in the context of wills?
The concept of doctrine of lapse is applied when the beneficiary mentioned in the will predeceases the testator of the will. Here, in such cases unless the will mentioned any other provision the gift to the deceased beneficiary lapses, meaning it fails and thus the property becomes a part of the estate and is distributed according to intestate succession rules.
How are mesne profits calculated?
While in the above case mesne profits weren’t discussed in detail and referred back to the Trial Court, mesne profits are generally calculated depending upon the fair market rental value of the property during the period of unlawful succession. Further any other income that is derived by the unlawful possessor, such as any rent or profits from the property can also be included. The court may also consider the condition of the property and any other expenses incurred by the unlawful possessor to maintain the property.
Is the rule of primogeniture still applicable in India?
The rule of primogeniture is onsite in the modern Indian judicial system. This is especially due to the abolition of princely states and establishment of laws like the Hindu Succession Act, 1956 and Indian Succession Act, 1956. These Acts provide for equal inheritance among all heirs regardless of their gender or order of birth. This rule is no longer considered or recognised for inheritance under the general law.
What happens when an award is not properly stamped under Article 7 of the Indian Stamp Act, 1899?
If an award is not stamped according to the provisions mentioned under Article 7 of the Indian Stamp Act, 1899, it cannot be admitted as evidence in the court of law. The award cannot be acted upon by any legal proceeding, the parties involved may need to pay the deficient stamp duty along with a penalty before the document is considered legally valid.
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This article is written by Janani Parvathy J. It contains a detailed case analysis of Arnesh Kumar vs. the State of Bihar (2014). This article includes the facts, issues raised and the judgement. Additionally, this article highlights the landmark guidelines laid down by the Apex Court regarding the arrest of the accused and the further implications of this case.
Table of Contents
Introduction
Arnesh Kumar vs. State of Bihar(2014) (hereinafter referred to as the ‘Arnesh Kumar case’) is a historic case in criminal law. Indiscriminate arrests and extended detention were prevalent throughout the country. Arrests even in petty offences, and offences punishable within seven years of imprisonment were being carried out. The police arbitrarily exercised its powers of arrest, resulting in a delay of justice, and overcrowding of prisons. Several fundamental rights of the accused were being violated.
There were ubiquitous violations of the Right to life, movement, and freedom of the arrested. They were illegally detained based on mere suspicion. Therefore, understanding the grave situation, the Supreme Court, historically laid down guidelines to regulate arrests in the Arnesh Kumar case. This case laid down comprehensive rules to be followed by the police during arrest and by the magistrate while deciding upon the detention of the accused. It laid down the circumstances during when an accused could be arrested and also provided a thorough interpretation of Section 41 of Code of Criminal Procedure, 1973 (hereinafter referred to as CrPC)- now, Section 35 of Bhartiya Nagarik Suraksha Sanhita, 2023 (hereinafter referred to as BNSS).
Further, this case also deeply analyses the misuse of Section 498A of the Indian Penal Code (IPC), 1860 (Now, Section 85 of Bhartiya Nyaya Sanhita, 2023) (hereinafter referred to as BNS) or cruelty and laid down guidelines to prevent them. Additionally, the Dowry Prohibition Act, 1961 was also briefly analysed in this case. Arnesh Kumar’s case is renowned for ensuring the protection of the incarcerated yet innocent accused. This case condones arbitrary arrests and lays down strict rules to be adhered to by the police. It emphasises on protection of the rights of the accused and the principle of ‘innocent until proven guilty’. It further emphasised that the power of the police is limited and that the fundamental rights of a suspect or an accused need to be upheld unequivocally. This case is rich in its interpretation of Section 41 of CrPC and Section 498A of IPC and hence becomes an important precedent for defence counsels to look up to.
This article shall discuss in detail the facts, issues, and judgment and also provide a critical analysis of the case.
Details of the case
Case name – Arnesh Kumar vs. State of Bihar
Case no. – Criminal Appeal NO. 1277 of 2014
Equivalent Citations – AIR 2014 SUPREME COURT 2756, 2014 AIR SCW 3930, (3) SCC (CRI) 449
Acts involved – Code of Criminal Procedure (CrPC),1973, Indian Penal Code, 1860, and the Dowry Prohibition Act, 1961.
Important provisions – Section 41, 41A and 57 of CrPC, Section 498A of Indian Penal Code (IPC), Article 21 of the Constitution, Article 22(2) of the Constitution, Section 4 of Dowry Prohibition Act of 1961.
Note: The corresponding Sections in BNSS for 41, 41A and 57 of CrPC are Section 35(1)/(2), 35(3) to 35(6) and Section 58 respectively. The corresponding Section in BNS for Section 498A of IPC is Section 85.
Prior to 2014, irrespective of the magnitude of the offence, punishment for the offence, and culpability of the accused, arrest was the consequence. Even individuals with petty offences were put behind bars. The Indian prisons are filled with persons who have not yet gone to trial, over 2/3rd of inmates are undertrials. The plight and magnitude of undertrials were accurately highlighted during the outbreak of Covid-19. The situation of the accused prior to 2014 was bleak. The situation that prevailed was akin to a police state where the police unnecessarily without competent jurisdiction or authority or evidence indiscriminately arrested the accused. This was a gross violation of the right to dignity and basic principles of natural justice. It also violated the fundamental principle of “innocent until proven guilty” of the Indian legal system.
The provisions of CrPC were blatantly violated by the Executive. In the month of 1994, the first respite was given, the Supreme Court observed in Joginder Kumar vs. State of Uttar Pradesh (1994) that indiscriminate arrests violated constitutional provisions. The Court laid down arrest guidelines to be strictly followed by the police. In the Jogider Kumar case, the Court observed that 60% of arrests at that time were unnecessary and unjustified. Further, in Siddharam Sarilingappa Mehtre vs. State of Maharashtra and Ors (2010), the Supreme Court highlighted the menace of indiscriminate arrests. The court re-emphasised adherence to Section 41 of CrPC. Thereafter, in 2014 the same issue was analysed deeply. The prevalence of arbitrary and groundless arrests even after some precedents and guidelines, brought the need to analyse the question again and introduced more comprehensive and stricter guidelines to curb unnecessary arrests. This was extremely important to safeguard fundamental rights and provide proper Justice.
Facts of the case
This case starts with an allegation of dowry harassment. The appellant is the husband of respondent no. 2 (Swetha Kiran), the wife. Their marriage was solemnised on 1st July 2007.
The wife claimed that a Maruti car, A/C, TV set, and 8 lakh rupees were amongst the items demanded by her mother-in-law and father-in-law. When the wife brought this to the notice of her husband, he threatened to marry another woman if the demands were not fulfilled. The wife further alleged that she was driven out of the house because she failed to provide the Dowry that was demanded. The appellant was charged under Section 498A of IPC and Section 4 of the Dowry Prohibition Act,1961.
The appellant after coming to know the charges levied against him sought to obtain an anticipatory bail (Section 438 of CrPC, now, it is Section 482 of BNSS), which was refused by the Sessions Judge of Bihar and by the High Court of Patna.
Challenging the rejection of his anticipatory bail, the appellant approached the Supreme Court through a criminal appeal.
Laws involved
Warrant
A warrant is a legal document issued by the magistrate, judge, or some competent officer to the police, allowing them to arrest, or search an accused. Warrants can also be issued to demand the presence of the accused in the court. It is essential that the warrant be in writing, and possess the seal of the court and the sign of the magistrate. Provisions pertaining to warrants of arrest are mentioned under Sections 70–81 of the CrPC (Now, Sections 72 – 83 of the BNSS). 2(1)(z) of BNSS defines a warrant case as relating to a case punishable with death, imprisonment for life, or imprisonment for a term of more than 2 years.
Section 41 of the Code of Criminal Procedure, 1973
Section 41 of the CrPC enlists the circumstances when the Police can arrest an accused without a warrant. This Section is one of the most comprehensive sections of CrPC. It contains 4 clauses and multiple sub-clauses. Section 41 is one of the most violated provisions, where ensuring adherence is difficult. Section 41 specifies that the police can arrest without a warrant in the following cases:
The offence was grave or serious and specified a punishment of 7 years or more. For example, rape, murder, dacoity, hate crimes etc.
Further, an accused found with possession of stolen goods can be arrested without arrest.
Further, in some instances, an accused of an offence of punishment up to 7 years or less can be arrested without a warrant.
An accused of an offence punishable with less than seven years can be arrested provided that the police officer received credible information or complaint regarding the commission of the offence and reasonably believed that the accused committed the offence or that the arrest of that accused was necessary.
Further, an accused declared as a proclaimed offender by the State can be arrested without a warrant. Proclaimed offenders are defined under Section 82 of the CrPC (Section 84 of BNSS, 2023). The proclaimed offender is an accused who is reasonably believed to be absconding and against whom a proclamation is issued by the magistrate ordering him to be present before the court.
An individual who has deserted the army or is suspected of deserting the army.
When a released convict breaches the rules he is obliged to follow.
An individual who obstructs the police officer from performing their duty or tries to escape from lawful custody.
An individual against whom reasonable apprehension exists that he could have committed an offence outside India, and such an offence would be punishable under Indian laws if committed in India. The law relating to extradition shall be applicable and the individual shall be detained in India
The Section further states that in cases of non-cognizable offences, an arrest cannot be made without a warrant. Non-cognizable offences refer to offences that are less serious in nature. They are those offences where the police ought to obtain permission from the magistrate to investigate the cases.(Section 2(l) of CrPC or Section 2(1)(o) of BNSS,2023)
Further, under Section 41 an accused can be issued a notice to appear before the police officer if the case does not fall under the provisions of Section 41(1). The accused, if given the notice is duty-bound to appear before the police, failing to do the same could lead to the arrest of the accused without a warrant. However, if the accused appeared before the police officer as instructed then the accused cannot be arrested without a warrant except with the reasons mentioned. In the present case, the Supreme Court observed that Section 41 cannot be invoked to arrest the accused. Further, the Apex Court also laid down guidelines for arrest under Section 41 in this case.
Section 41A of the Code of Criminal Procedure, 1973
Section 41A of CrPC specifies furnishing a notice to the accused to appear before the police. It enables the police to order the appearance of the accused if arrest is not necessary. Further, if there is a reasonable belief that the person has committed a cognizable offence, then a notice to appear before the police may be given. Section 41A(2) specifies that once a notice is given the accused is duty-bound to appear. Section 41A(3) enables the police to arrest the accused if he fails to comply with the notice. Additionally, sub-section 4 mentions that subject to orders passed by a competent court, the accused may even be arrested for the offence for which notice was given.
In the present case, the court highlighted the misuse of Section 41A and ordered guidelines to restrict indiscriminate arrests under Section 41.
Article 21 of the Constitution of India
Article 21 talks about the ‘right to liberty and life’. Article 21 specifies that no person can be deprived of his liberty except through the provisions established by law. Liberty refers to freedom of speech, occupation, expression etc. The Apex Court and the High Courts in several judgments have expanded the scope of Article 21. Article 21 was broadened to include the right to dignity, the right to privacy, the right to a safe environment and the right to shelter.
The Supreme Court has explained the facets of liberty through several judgments. In A.K Gopalan vs. State of Madras (1950), the court observed that liberty refers to liberty of the body, that is, freedom from arrest or detention. In the case of Maneka Gandhi vs. Union of India (1978), the court observed that Article 21 includes the right to dignity and life. In the case of Olga Tellis vs. Bombay Municipal Corporation (1985), the right to livelihood is an essential part of the right to liberty under Article 21. In the case of Puttaswamy vs. Union of India (2018), the Supreme Court observed that the right to privacy was a part of Article 21. It was held that individual privacy cannot be compromised except by the procedure established under law.
In the present case, anticipatory bails were under consideration. The Apex Court observed that indiscriminate arrests and the detail of anticipatory bail led to a violation of Article 21 that is, of life and liberty under Article 21.
Before delving into the issues involved and the judgement given by the Apex Court, in the Arnesh Kumar case, it is crucial to discuss the arguments put forth by the parties before the Hon’ble High Court of Patna and the brief of the judgement passed by the Hon’ble High Court.
Proceedings before the High Court of Patna
Arguments of the parties
Petitioner
The petitioner submitted that he is a software engineer and denied all allegations of dowry demands put forth by the respondents. The Petitioner alleged that a prima facie case does not exist and that the allegations of torture or dowry demand have not been substantiated by the respondent at the Court. Further, it was submitted that no injury reports were presented to prove the claims of injury and that therefore, he should be given anticipatory bail.
Respondent
It was alleged that the Husband had tortured the wife, stating that the wife faced dowry harassment and physical torture while staying with her husband in Hyderabad. Further, it was alleged that the husband was having an illicit relationship with another woman. Furthermore, it was stated that the wife was physically and mentally assaulted over the non-fulfilment of the dowry demand.
Judgement by the Hon’ble High Court of Patna
Looking into the serious allegations levelled against the appellant-accused, the Hon’ble High Court dismissed the anticipatory bail application of the accused, dismissing the above-mentioned averments made by the counsel for the appellant-accused. Being aggrieved by the dismissal of anticipatory bail, the appellant-accused preferred an appeal before the Apex Court.
Now, let’s discuss the issues that were before the Apex Court, followed by the judgement of the High Court.
Issues raised before the Supreme Court
Whether anticipatory bail ought to have been given to the appellant or not?
Whether indiscriminate arrests were prevalent or not?
Whether guidelines to curb indiscriminate arrests were necessary or not?
Judgement by the Supreme Court
Rationale behind the judgement
The judgement of this case is very important for guiding police and the judiciary while arresting the accused. This case laid down guidelines which continue to be followed to date. This case has been relied upon by the Supreme and High Courts in several other judgments.
Observations by the Apex Court
The court observed a ‘phenomenal increase’ in the number of matrimonial disputes in the country. It further observed the sacred nature of marriages in the country. Commenting upon the purpose of Section 498A, the court observed it was introduced to tackle the harassment of the wife by her husband or his relatives.
However, although the purpose of Section 498A was good, the Section is becoming prone to misuse. The court observed that because Section 498A is a cognizable and non-bailable offence, the same has led to misuse of the provision as a shield for disgruntled wives. The simplest form to get back at the husband or harass him was to get him and his relatives arrested under this provision.
Highlighting the extent of misuse, the court observed that in several cases even bed-ridden grandmothers, grandfathers of the husband, and sister living abroad are arrested. This case came to appeal before the Supreme Court in 2014, therefore the Court analysed the Crime in India report of 2012, published by the National Crime Records Bureau, Ministry of Home Affairs. The report specified that 1,97,762 persons were arrested under Section 498A, which is 9.4% more than the 2011 statistics. The court observed that this amounted to 6.5% of the total number of arrested individuals.
Further, it was pointed out that the rate of filing charge sheets under Section 498A was as high as 93.6%. However, the conviction rate was merely 15%. Further, the report highlighted that 3,72,706 cases are pending trial of which on the current estimate, nearly 3,17,000 are likely to result in acquittal. This depicts the vulnerability of Section 498 A and its misuse.
Effect of arrests
The court observed that arrests bring with them several ill-effects. The court observed that arrests bring unhealed scars. Although both police and lawmakers are well aware of the ill effects of arrests, indiscriminate arrests often happen. The court reprimanded the police stating that despite 6 years of independence the police failed to shed its colonial nature. The court pointed out that police. The court observed that arrest was used as a tool for harassment. It re-emphasized that although CrPC mandates to cautiously exercise the power of arrests, neither the police nor the magistrate abides by it. Further, the court observed that arrests had become a handy tool for police officers with ulterior motives or extremely insensitive.
The court went on to explain the blatant violations of legal provisions by indiscriminate arrests by the police officers.
The court observed that law commission reports and court judgements have held that balance between the right to arrest, maintenance of law and order and protection of individual rights and liberty.
The court further observed that the police officers believe that they possess the right to arrest however the court observed to the contrary. The court held that merely because the offence is cognizable and non-bailable, arrests cannot be made. Reasonable justification for arrest needs to be specified. The court laid down that arrests cannot be made routinely because of a mere allegation of offence.
The court pointed out that the legislature, even after these grave situations, has not introduced any changes. Further, based on the 177th Law Commission, the parliament intervened and passed section 41 of CrPC. Further, the court observed that Section 41 was necessary to curb indiscriminate arrests.
Observations by the Apex Court in relation to relevant provisions of the Code of Criminal Procedure, 1973
Interpreting Section 41, the Apex Court observed that a person arrested for an offence punishable with a sentence of less than seven years or seven years cannot be arrested by the police officer based on mere allegations. The Apex Court further observed that it has to be necessary that the police officer can arrest in the above situations only once they are satisfied that the arrest is necessary to prevent the commission of further offences, or tampering with evidence, or when the person arrested cannot be produced before the court.
The Apex Court observed that the law mandates the police officers to mention reasons why they have or have not arrested the accused. Therefore, the Apex Court held that police cannot indiscriminately arrest but can exercise only after prudently analysing whether it is necessary, helps fulfil the purpose, and analyse the weight of the evidence. In simple words, the police must be satisfied that the arrest is required under Sections 41 (a) to (e).
Procedure to be followed for the detention of the accused
The Apex Court held that an accused arrested without a warrant must be produced before the magistrate within 24 hours, and noncompliance would lead to violations of Article 22(2) of the Constitution and Section 57 of the CrPC (Section 58 of BNSS,2023)
After the accused is arrested, he must be produced before the magistrate and the police officer must furnish details of the offence, and the reasons behind the arrest However, an arrest cannot be made just because the police thought it was needed, the officer is required to submit relevant details before the magistrate the reasons as to why the arrest was needed and the same shall be perused by the magistrate to decide upon authorising the detention.
Only if the reasons recorded by the police are relevant and conclusive to decide upon the necessity of arrest, only then the magistrate must approve detention.
An accused can be detained for investigation for a period exceeding 24 hours only after permission from the magistrate, as mandated by Section 167 of CrPC (Section 187 of BNSS,2023). Highlighting the negative effects of detention, the Court observed that it needs to be cautiously exercised as it affects the liberty and freedom of individuals.
However, the court pointed out that persons were not detained with caution, instead careless detention was a routine operation carried out by police officers.
Furthermore, it was held that the magistrate can authorise detention only in limited circumstances. The court held that arrests may be authorised only when the arrest is legal, essential, and adequately substantiated with reasons. If it is found that the arrest was unnecessary, then the magistrate can order the release of the accused.
Section 41A of the Code of Criminal Procedure, 1973
This provision was introduced through Section 6 of the CrPC Amendment Act, 2008. This Section empowers the police to call upon the accused after the issuance of legal notices to be present at a particular place and time. If the accused appears as per mandated he/she cannot be arrested.
The Apex Court observed that if the privileges granted of arresting without warrant were carefully exercised then the wrongs committed by the police and their consequent rights violations would be reduced. This would ultimately decrease the caseload of the courts.
Therefore, the Apex Court emphasised that increasing unreasonable arrests and the misuse of Section 41A was unhealthy and must be discontinued.
Guidelines for making an arrest (Arnesh Kumar guidelines)
The Apex Court laid down guidelines for the arrest of the accused by the police in non-cognisable offences.
State governments have to pass instructions to check arrests. State governments have to order police officers to exercise their power of arrests cautiously. Arrests under Section 498A must be made only if it has been satisfied that it is necessary and after following provisions of Section 41 of CrPC.
The state is obligated to provide all police officers with a checklist containing the sub-clauses of Section 41 which need to be adhered to before arrests.
While presenting the accused before the magistrate for detention, the police officer is obliged to furnish the checklist and the reasons that necessitated the arrest.
The magistrate is required to prudently analyse the checklist, reasons and other documents put before him while granting or rejecting detention.
Further, any decision not to arrest the accused must be forwarded to the magistrate within two weeks of initiation of the case.
The notice must be mandatorily given to the accused before initiating the case, in accordance with Section 41 of CrPC.
Failure to issue notice can lead to departmental action against the police, and contempt of court that can be initiated by the High Court possessing territorial jurisdiction.
Failure on the part of the magistrate to properly evaluate the reasons put forth and substantiate the detention can make him/her liable for contempt of court.
Further, authorising detention without recording reasonable reasons shall render the magistrate for departmental action from the High Court.
The court held that these guidelines shall be applicable in all non-cognisable offences punishable with a maximum of seven years imprisonment and not in the offences of domestic violence or dowry deaths as in the present case.
Further, the court directed the order to be forwarded to the Director General of Police of all states and union territories and the registrar of police of all High Courts.
Effects of the Judgment
This judgement had several ramifications for police officers, jurists, and the members of society. This was the first time the court laid down comprehensive guidelines recognising the existence and negative effects of indiscriminate arrests. The court also specified severe consequences of not adhering to the established guidelines. This judgement has been the guiding light for several cases. The court in subsequent cases, analysed compliance with the guidelines laid down in the Arnesh Kumar case and on violation dismissed the arrest. Further, this case also impacted the law enforcement bodies. Law enforcement bodies are being forced to abide by these guidelines to avoid departmental action. Several law enforcement bodies have actively begun adhering to these guidelines fearing the negative consequences. Additionally, this case establishes a three-layered protection against misuse of power to arrest. First, it laid down guidelines for the police to follow, secondly, this case also mandates supervision by the magistrate while allowing or dismissing the police’s application for detention. Thirdly, this case also laid down a checklist of guidelines that the court needs to look for while deciding the application for bail or illegal arrests.
Case Laws after the Arnesh Kumar case
Munawar vs. State of Madhya Pradesh (2021)
The Apex Court in this case was analysing the application for interim bail of the accused. The accused was a standup comedian arrested for hurting religious sentiments. The Apex Court relied on the Arnesh Kumar case and passed an interim order allowing his interim bail. It held that the arrest was illegal because the guidelines mentioned in the Arnesh Kumar case were not followed.
Kahkashan Kausar and Ors. vs. State of Bihar (2022)
The Supreme Court, in this case, was analysing a dispute over domestic violence. The court relied upon the Arnesh Kumar case, amongst several others, to highlight the misuse of Section 4 of the Dowry Prohibition Act, 1961 and Domestic Violence Act, 2005. The court held that jurists also had a duty to ensure that the fabric of the society i.e., the family shall not be broken.
Md Asfak Alam vs. State of Jharkhand & Anr. (2023)
Adherence to the arrest guidelines laid down in the Arnesh Kumar case was in question in the present case. On similar lines to the present case, the Apex Court was dealing with an appeal under Section 498A of IPC. Further, the court laid down some additional guidelines to be followed along with those laid down in the Arnesh Kumar case to ensure stricter implementation of the general rule of bail over arrest.
The court observed that the denial of bail to the husband charged under Section 498A was erroneous provided complete cooperation of the accused with the police. However, the Arnesh Kumar guidelines specified that arrest may be made only if provisions of Section 41 of CrPC were attracted. An accused could be arrested only when found that he would escape, or tamper with evidence or any other valid reason. The court observed that none of these provisions is applicable in the present case and therefore, the arrest of the accused was not necessary.
The court laid down additional guidelines(16.2-16.4). The court directed the High Court to frame further guidelines for compliance by sessions and other criminal courts. Further, the court directed the director general of Police and High Courts to issue strict instructions for abiding by the Arnesh Kumar guidelines. Further, the court also ordered all High Courts to file affidavits regarding compliance with the additional guidelines.
Corresponding Bharatiya Nyaya Sanhita (BNS) and Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) Sections of the laws involved
Details
IPC/CrPC Section
BNS/BNSS,2023 Section
Explanation
Arrest by police without warrant
Section 41 of CrPC
35(1)/(2) of BNSS
It deals with arrest procedures during non-cognizable offences. The BNSS provision includes a new sub-Section 7. Section 35(7) of the BNSS specifies that an arrest cannot be made without the permission of an officer not less than the post of Deputy Superintendent of Police if the offence is punishable with less than 3 years and the accused is infirm or aged over 60 years.
Cruelty on wife
Section 498A of IPC
Section 85 of BNS, 2023
It deals with domestic violence i.e., physical or mental violence on the wife by the husband. No change in the IPC and BNS Sections on cruelty.
Anticipatory Bail
Section 438 of CrPC
Section 482 of BNSS
It deals with anticipatory bail and the conditions that can be imposed on the accused while granting it. Section 482 of BNSS does not incorporate the factors to be considered while granting anticipatory bail i.e., Section 438 (1-4) is omitted in Section 482 of BNSS.
Proclamation Offender
Section 82 of CrPC
Section 84 of BNSS
A proclamation order is issued by the court or State against an accused who is absconding. The BNSS provision added a sentence of 10 years or more.
Warrants case
Section 2(x) of CrPC
Section 2(1)(z) of BNSS
It defines warrant cases as those that are punishable with death, life imprisonment or imprisonment exceeding two years. There is no difference between the CrPC and BNSS provisions.
Notice of appearance to accused
Section 41A of CrPC
Section 35(3) to 35(6) of BNSS
In some cases, when the accused need not be arrested, he may be asked to merely appear before the police. Sections 41 and 41A have been combined under Section 35 of the BNSS with Sections 35(3) to 35(6) of the BNSS explaining Section 41A of CrPC. Additionally, sub-Section 7 has been newly introduced.
Conclusion
The case of Arnesh Kumar vs. State of Bihar (2014) is an important judgement for constitutional and criminal cases. The court recognised the menace of arbitrary arrests even in non-cognisable offences. Further, the court analysed the misuse of Section 498A of IPC and Section 4 of the Dowry Prohibition Act by wives seeking to get back at their husbands or their relatives. The court observed the vulnerability of misuse of these Sections and observed that it was necessary to lay down guidelines. Though this case related to the offence of Domestic violence, the court laid down universal guidelines to be followed while arresting and detaining persons accused of offences punishable with seven years or lesser imprisonment. The court laid down that the police officers must prepare a checklist, specifying reasons for arrest in accordance with Section 41A of CrPC. Further, magistrates are also required to properly peruse the reasons provided by the police with the application for detention and state proper reasons for allowing or dismissing the same. Non-compliance by the police or magistrate with the above guidelines would lead to strict departmental action against them.
Frequently Asked Questions (FAQ)
Where is the arrest procedure mentioned?
The procedure for arrest is mentioned under Sections 41-60, Part V of the Code of Criminal Procedure or Sections 35-58 of BNSS.
Who has the power to arrest?
Chapter 5 of BNSS, 2023 mentions the arrest procedure for arrest and the persons who can be arrested. Section 35 of BNSS specifies that Police officers have the power to arrest with or without a warrant. Further, Section 41 of BNSS,2023 mentions that the magistrate can arrest the accused, provided the same is necessary. Additionally, private individuals in whose presence an offence is committed, or if the person is a proclaimed offender, then even private individuals are entitled to arrest persons.
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The article is written by Clara D’costa. It delves into the landmark case of V. Ravi Chandran vs. Union of India & Ors. (2009), where the Supreme Court of India addressed the complex issue of international child abduction and the wrongful removal of a child from one jurisdiction to another. The article meticulously examines the issues raised, the arguments advanced by the parties, and the Court’s decision, as well as the rationale behind it.
Table of Contents
Introduction
The case of V. Ravi Chandran vs. Union of India & Ors.(2009) is a landmark judgement by the Supreme Court of India addressing the intricate issue of child custody in the context of international parental child abduction. The case delves into the complexities of the Hague Convention on the Civil Aspects of International Child Abduction, 1980 and its application in India (a non-signatory country to the convention). The judgement also highlights principles concerning the welfare of the child, the jurisdiction of Indian courts in international child abduction cases, and the interaction between Indian law and international treaties.
This case is a pivotal reference for understanding how Indian courts approach international child abduction cases, particularly when the abduction involves countries that are signatories to the Hague Convention and those that are not. This judgement has significantly influenced subsequent decisions in similar cases and has provided a framework for handling such disputes with a focus on the child’s best interests and international cooperation.
Details of the case
Case name
V. Ravi Chandran vs. Union of India & Ors.
Petition number
112 of 2007
Type of case
Writ Petition
Name of the Court
Supreme Court of India
Bench
Mr. Justice R.M. Lodha, Mr. Justice Tarun Mukherjee, Mr. Justice B.S. Chauhan
Dr. V. Ravi Chandran (the petitioner), an American citizen, married Vijayasree Voora (the mother) on December 14, 2000, in Tirupati, Andhra Pradesh, following Hindu rites. Their son, Adithya, was born on July 1, 2002, in the United States. The couple’s relationship eventually deteriorated, and in July 2003, Vijayasree filed for divorce in the New York State Supreme Court.
On April 18, 2005, a consent order was passed, granting joint custody of Adithya to both parents, requiring them to notify each other of the child’s whereabouts at all times. In July 2005, a formal separation agreement was established, which covered the distribution of marital property, spousal maintenance, and child support while aligning with the earlier joint custody order. The divorce was finalised on September 8, 2005, with the New York Supreme Court incorporating the existing custody arrangement into the final divorce decree.
In June 2007, following petitions from both parents, the Family Court of the State of New York modified the custody arrangement. This modification order granted joint legal and physical custody to both parents, with a stipulation that Adithya would reside with his father in Allen, Texas. The order further outlined that if the mother relocated to Texas within a 40-mile radius of the father’s residence, physical custody would alternate on a weekly basis. If not, she would have custodial time on alternating weekends, during school vacations, and specified holidays such as Diwali and Adithya’s birthday. Both parents were required to share Adithya’s summer vacation, with each parent having consecutive weeks with him.
The Family Court also mandated that the mother, if not residing within the 40-mile radius, would be responsible for transportation costs related to Adithya’s visitation. The custody order required the parents to exchange Adithya’s passport during custodial transitions and to provide each other with the address and contact number of wherever the child would be staying.
On June 28, 2007, the mother relocated to India with Adithya, informing Dr. Ravi Chandran that she would stay with her parents in Chennai. The petitioner approached the New York Family Court, which on August 8, 2007, granted him temporary sole custody, suspended the mother’s custodial rights, and issued non-bailable warrants for child abduction. Despite these orders, the whereabouts of Adithya and the mother remained unknown for over two years, leading to further legal actions by the petitioner.
The petitioner, Dr. Ravi Chandran, filed a petition in the U.S. for the return of his son under the Hague Convention on the Civil Aspects of International Child Abduction, arguing that Adithya’s habitual residence was the U.S., and his removal to India by the mother was unlawful. Meanwhile, in India, the petitioner filed a writ of habeas corpus before the Supreme Court, seeking the production and return of his son Adithya, challenging the mother’s illegal custody.
In response to the petitioner’s habeas corpus plea, the Supreme Court of India, on August 28, 2009, directed the Central Bureau of Investigation (CBI) to trace and produce Adithya before the court. The CBI, acting on this order, issued lookout notices nationwide. After extensive efforts, on October 24, 2009, the CBI located Adithya and his mother in Chennai. They were brought to Delhi and produced before Justice Tarun Chatterjee on October 25, 2009. The court ordered that Adithya be kept in the custody of the CBI until further hearings, and he was directed to be produced in court again on October 27, 2009, along with the mother.
The petitioner argued that returning Adithya to the U.S., where he had been living, was in the child’s best interest, emphasising that his removal to India was unlawful and traumatic. He contended that the mother violated the joint custody order granted by the New York Family Court. In defence, the mother cited concerns for her and Adithya’s safety, claiming irreconcilable differences with the petitioner made it unsafe to stay in the U.S. She argued that India was a safer environment for Adithya, and the petitioner’s legal actions were driven by revenge, not concern for the child’s welfare
However, the Supreme Court of India remained focused on the legal rights of the petitioner as the lawful custodian of the child, in line with the international obligations under the Hague Convention.The petitioner therefore filed a writ of habeas corpus for the production of his minor son Adithya and for handing over the custody and his passport to him.This indicates that the present case is under writ jurisdiction.
Issues raised
Was the removal of Adhitya from the United States to India wrongful and did it violate Ravi Chandran’s custodial rights?
Whether the principles of the Hague Convention on the Civil Aspects of International Child Abduction should be applied in India, despite India not being a signatory to the convention?
Whether the husband i.e the petitioner should be allowed to keep the custody of the child?
Whether an Indian court can conduct an elaborate inquiry on the question of custody or by dealing with the matter summarily, order the parent to return custody of the child?
Arguments of the parties
Petitioner
The counsel for the petitioner, Adv. Pinky Anand, argued that taking the child away from the petitioner from the United States to India was illegal and violated his custodial rights. The counsel further contended that the principles of the Hague Convention, although not ratified by India, should be considered in the interest of international comity and the welfare of the child.
The petitioner emphasised that Adhitya’s habitual residence was in the United States and that his removal disrupted his stability and well-being. They further laid emphasis on the importance of maintaining the child’s habitual residence and the negative effects of moving a child away without the other parent’s permission.
The counsel for the petitioner further argued that allowing such actions without proper legal recourse could set a dangerous precedent, encouraging parental abduction as a means to resolve custody disputes. The petitioner also pointed to various international cases where the Hague Convention principles were applied to return abducted children to their country of habitual residence.
Respondent
The counsel for the respondent no.6 Adv. T.L.V. Iyer, argued that bringing Adhitya to India was justified due to the strained marital relationship and concerns for the respondent no.6 and the child’s safety. They further argued that the Indian courts had jurisdiction to decide on the matter and that the welfare of the child should be the paramount consideration. The respondent no.6 via her counsel also highlighted that Adhitya had adapted to life in India and it would be in his best interest to remain with his mother in India.
They further emphasised the protective measures taken in the child’s best interest, arguing that the child’s immediate environment and emotional well-being were better secured in India. They pointed out that Adhitya had established social ties, adapted to his new surroundings, and any abrupt change could adversely affect his mental and emotional health.
The respondent no.6 further, through her counsel, raised several objections, including allegations of deprivation of basic rights, failure to provide medication, denial of education, unstable environment, and child abuse against the petitioner. Mother also contended that American courts lacked jurisdiction and their orders could not be enforced in India.
Laws involved in this case
Article 32 of the Constitution
This Article guarantees the right to move the Supreme Court for the enforcement of fundamental rights and empowers the Court to issue various writs to protect these rights. Article 32(1) provides that an individual has the right to approach the Supreme Court directly for the enforcement of their fundamental rights. This provision ensures that every citizen has a direct recourse to the highest judicial authority in the country for the protection of their rights. It embodies the principle that where there is a right, there must be a remedy.
Article 32(2) empowers the Supreme Court to issue directions, orders, or writs, including:
Habeas Corpus
Mandamus
Prohibition
Quo Warranto
Certiorari
These writs serve as powerful legal tools to enforce the fundamental rights guaranteed by the Constitution. Each of these writs has a specific purpose and application and is aimed at providing protection against violations of fundamental rights.
Writ of Habeas Corpus under Article 32
Under Article 32, the writ of Habeas Corpus holds a unique and crucial place in the protection of personal liberty. The term habeas corpus is derived from Latin, meaning “you shall have the body.” It is a judicial mandate requiring that a person detained or imprisoned be brought before the court to determine the legality of their detention. The writ of habeas corpus has its roots in English common law and has evolved over centuries as a fundamental safeguard against unlawful detention. Its incorporation into the Indian legal system reflects the importance of individual liberty and the need for judicial oversight over executive actions.
The primary purpose of the writ of habeas corpus is to secure the release of a person unlawfully detained or imprisoned. It serves as an effective remedy against arbitrary detention by the state or any other authority. The writ can be issued against both public authorities and private individuals who illegally detain another person.
In this case the Supreme Court of India dealt with a habeas corpus petition filed by V. Ravi Chandran. The petition was filed to secure the return of his minor son, Adhitya, who was allegedly wrongfully removed from the United States and brought to India by mother, without the petitioner’s consent.
Hague Convention on the Civil Aspects of International Child Abduction, 1980
This treaty aimed at protecting children from international abduction by providing legal remedies for their prompt return to the country of habitual residence. This convention emphasised the need to respect the custodial rights given by the court and discouraged a parent from relocating their children across borders.
The court did not directly rely on this convention, however, it relied on the precedents that adopted these principles. Further, the court ordered the return of the child, Adithya, to the United States, aligning with the convention’s goal of restoring the status quo prior to the wrongful removal. By requiring the respondent to comply with the consent order from the Family Court of New York, the court emphasised the importance of adhering to pre-existing custody arrangements, consistent with the convention’s intent to prevent unilateral changes to custody orders.
Additionally, the court’s directive for the petitioner to cover travel expenses and arrange accommodations ensures the logistical feasibility of returning the child, akin to the convention’s provision for taking appropriate measures to secure the return of the child. The stipulation that the petitioner should request the dropping of warrants and refrain from pursuing criminal charges against the respondent also aligns with the convention’s spirit of prioritising the child’s return over punitive actions against the parent.
By addressing the practical and legal challenges in returning the child to the United States and respecting the existing custody order, the court’s approach indirectly reflects the Hague Convention’s principles, focusing on the child’s welfare and the prompt restoration of lawful custody arrangements.
Guardians and Wards Act, 1890
This Act governs matters related to the custody and guardianship of children in India. It emphasises the welfare of the child as the paramount consideration in determining custody arrangements. The Act provides a legal framework for Indian courts to adjudicate custody disputes, considering the best interests of the child.
Judgement of the case
The Supreme Court of India, in its judgement, held that the removal of Adhitya from the United States to India by the mother was indeed wrongful and in violation of Ravi Chandran’s custodial rights. The court emphasised the importance of adhering to international principles and conventions, even if not ratified by India, in the interest of justice and the welfare of the child. The court ordered the return of Adhitya to the United States, where the custody matter could be adjudicated by the competent court having jurisdiction over the child’s habitual residence.
The court further issued several orders to address the legal and practical aspects of the custodial arrangements. It was decreed that each party must provide the other with a phone number and address where the child will be located at all times, ensuring regular and reasonable telephone communication with the child. Additionally, each parent is required to provide the child’s passport during custodial exchanges and to sign and deliver any necessary written authorisations for the child’s travel within the Continental United States or abroad.
The court directed mother (Vijayashree Vora) to comply with the consent order dated June 18, 2007, issued by the Family Court of New York, by returning with the child, Adithya, to the United States within 15 days and reporting to the American court. The petitioner was ordered to bear all travel expenses for the mother and Adithya and to arrange accommodation in the USA until further court orders. Furthermore, the petitioner must request that any existing warrants against the mother be dropped and refrain from pursuing criminal charges related to the consent order violation.
The court also stated that respondent no.6 is also required to provide her address and contact number in India to the CBI authorities and inform them of her departure date and flight details to the USA. In the event that mother fails to take Adithya to the USA within the specified time, custody of the child, along with his passport, will be restored to the petitioner to be taken to the USA. The child will then be a ward of the concerned court that issued the consent order, with mother having the option to seek a review of the custody arrangement from that court if she so wishes.
Rationale behind this judgement
In the case of V. Ravi Chandran vs. Union of India & Ors. (2009), the Supreme Court of India addressed whether a detailed inquiry into the custody of the minor, Adithya, was necessary, and if the parties should be directed to seek resolution from an appropriate forum in India. The Court concluded that such an inquiry was unwarranted, reasoning that Adithya, an American citizen born and raised in the United States, should be returned to his natural environment in the U.S., with his welfare and happiness being paramount considerations.
The Court observed that both parents had previously obtained a series of consent orders from competent courts in the United States regarding custody, parenting rights, and maintenance. Initially, the New York State Supreme Court granted joint custody to both parents on April 18, 2005, with a requirement for each parent to keep the other informed about Adithya’s whereabouts. This order was incorporated into subsequent legal documents, including a separation agreement on July 28, 2005, and a divorce decree on September 8, 2005. On June 18, 2007, the Family Court of New York modified the custody arrangement but maintained joint legal and physical custody of Adithya.
The Court dismissed the claims made by respondent no. 6 (the mother) that the petitioner (the father) was unable to provide adequate medication, education, and a stable environment for Adithya, as well as allegations of child abuse, noting these accusations were baseless and unsupported by evidence. Despite residing in India for over two years, the mother had not taken any legal steps to challenge the orders of the Family Court of New York or seek sole custody of Adithya. Although she initially initiated proceedings under the Guardianship and Wards Act in India, she later withdrew them.
Emphasising the importance of comity of courts and the relevant facts, the Supreme Court concluded that custody issues should be adjudicated by the courts in the United States, Adithya’s habitual residence. The Court ruled that Adithya’s best interests required his return to the United States, finding no evidence that returning would harm him. Although Adithya had been in India for nearly two years, he had not established any roots due to frequent relocations between schools and residences. The Court underscored the need for prompt resolution of custody matters to prevent a child from establishing roots in the country of removal. The petitioner had filed the habeas corpus petition without delay; however, due to the mother’s constant relocations, it took over two years to serve notice and produce the child in court.
The petitioner further assured the Supreme Court that he would cover all travel expenses and provide living arrangements for the mother in the United States until the necessary court orders were issued. He also promised to adhere to the existing custody orders, request the dismissal of warrants against the mother, refrain from pursuing criminal charges for violating consent orders, and cooperate with any legal proceedings initiated by the mother in the United States. Additionally, he had secured school admission for Adithya in Texas.
The Supreme Court’s decision was guided by the principles of the Hague Convention on the Civil Aspects of International Child Abduction, which aims to ensure the swift return of children wrongfully removed from their habitual residence. Although India is not a signatory to the Hague Convention, the Court acknowledged that the principles of the convention serve as valuable guidelines in resolving international child abduction cases. Ultimately, the Court held that returning Adithya to his native country was in his best interests, reaffirming the importance of resolving custody disputes in the jurisdiction of the child’s habitual residence.
In this case the Supreme Court emphasised on the jurisdictional aspects in international custody disputes and held that the law of jurisdiction is closely connected to the well-being of the spouses and the welfare of the child should govern matters of matrimony and custody. The father’s act of removing the child to India was seen as an attempt to deprive the English Court of its jurisdiction, which was gravely detrimental to the peace of the matrimonial home.
Application in the present case
In the present case the Supreme Court applied the principles from Smt. Surinder Kaur Sandhu vs. Harbax Singh Sandhu and Anr., (1984) to determine the appropriate jurisdiction for the custody dispute. The court recognised that Adithya, an American citizen born and raised in the United States, had his natural habitat in the United States.
The series of consent orders regarding Adithya’s custody, issued by competent courts in the United States, further reinforced the United States as the appropriate jurisdiction for resolving custody issues.The Supreme Court held that it was in Adithya’s best interest to be returned to the United States, aligning with the principles of comity and the welfare of the child.
The court acknowledged that adjudicating the custody issue in India, when American courts had already passed consent orders, would not serve Adithya’s welfare or the principles of judicial comity.
Mrs. Elizabeth Dinshaw vs. Mr. Arvand M. Dinshaw and Anr. (1987)
In this case the court addressed situation wherein children were wrongfully moved from one country to another and recognised the need to apply international principles to prioritise the best interests of children. The Court held that the removal of a child should not have a detrimental effect on the welfare of the child and stated that these actions should not be rewarded or used to undermine the custodial arrangements made by courts.
Application in the present case
In the case of V. Ravi Chandran vs. Union of India & Ors.(2009), the Supreme Court applied the principles from Mrs. Elizabeth Dinshaw vs. Mr. Arvand M. Dinshaw (1987) to address the wrongful removal of Adithya from the United States to India by his mother.
The court reaffirmed that the wrongful act of removing Adithya from his habitual residence in the United States should not be rewarded or used to undermine the custody arrangements already established by competent American courts.
By emphasising this principle, the Supreme Court ensured that the removal of Adithya did not alter the existing custody arrangements or provide any advantage to the mother for her unlawful act.
The court’s decision to return Adithya to the United States aligned with the principle that the wrongful removal of a child should not impact the enforcement of legitimate custody orders and that the interests of justice and the child’s welfare should prevail.
Re H.K. (an infant) (1966)
The Supreme Court, in its judgement in the present case, referred to the decision in Re H.K.(an Infant) (1966) wherein two American boys were taken away by their mother from New York to England despite the order of The Supreme Court of New York for the children to remain within a 50-mile radius of Peekskill. The Trial Judge ruled that the children should be returned to New York without delay, focusing on returning them to their habitual residence. The Court of Appeal affirmed this decision.
Application in the present case
In the present case, the Supreme Court drew from the principles established in Re H. (Infants). The court reiterated that the wrongful removal of a child from one jurisdiction should not benefit the wrongdoer.
Just as in Re H., where the English court prioritised returning the children to their habitual residence to resolve custody disputes, the Supreme Court emphasised that the removal of Adithya to India by his mother should not undermine the authority of the American court, which had jurisdiction over the custody matter.
The court upheld the principle that wrongful acts should not influence judicial decisions and reinforced that the competent court of the child’s habitual residence should address custody issues. This approach ensured that justice was served and the interests of the child were protected, aligning with the established jurisprudence.
Re L (Minors) (1974)
The Court of Appeal in theRe L (Minors) (1974) addressed a case involving the custody of two children who were removed from Germany to England by their mother. The father sought the return of the children to Germany and the Court of Appeal upheld the trial court’s decision, affirming that it was in the children’s best interests to return to their native jurisdiction to prevent further entrenchment in new surroundings and to ensure custody issues were resolved by the appropriate court.
Application in the present case
In the V. Ravi Chandran vs. Union of India & Ors. (2009) case, the Supreme Court referred to the principles established in In Re L (Minors) (1974). The court acknowledged the distinction between cases involving full factual investigations and those warranting summary return orders.
The court emphasised that while the wrongful removal of a child is a significant factor, the paramount consideration must be the child’s welfare. Just as in In re L., where the Court of Appeal prioritised returning the children to their habitual jurisdiction for proper adjudication, the Supreme Court in Ravi Chandran reinforced that the American court, as the original jurisdiction, should resolve the custody dispute.
This approach was aimed at ensuring that the child’s best interests were upheld and avoiding complications arising from establishing new roots in an unfamiliar environment.
Kernot vs. Kernot
In the case of Kernot vs. Kernot, a child born to an Italian mother and an English father was custody. The Italian court granted custody to the father, who brought the child to England. The mother initiated wardship proceedings in England, seeking the child’s return to Italy and a restraining order. Buckley J. emphasised that the domestic court must prioritise the child’s best interests, even if a foreign court has issued a consent order without examining the case’s merits. Buckley J. highlighted that the duty of the domestic court is even greater when the foreign court has not conducted a comprehensive evaluation of the case.
Mark T. McKee vs. Evelyn McKee (1951)
In Mark T. McKee vs. Evelyn McKee (1951), the Privy Council reaffirmed the importance of the child’s welfare in custody cases, stating that a court in Ontario could independently assess the best interests of the child, rather than adhering to foreign judgements. The court must evaluate all circumstances to ensure the child’s best interests are served, rather than simply adhering to the foreign custody order. The father appealed to the Privy Council’s decision.The Privy Council emphasised that the Ontario court was not obligated to automatically follow the foreign custody order but should give it proper weight in its independent judgement. The court must evaluate all circumstances to ensure the child’s best interests are served.
Re B’s Settlement (1940)
In Re B’s settlement (1940) 1 Ch. 54, the Chancery Division addressed a custody dispute involving an infant who had been made a ward of court. A Belgian father and British mother sought custody of their child from England, where the mother refused to return it. The Belgian court ordered the child’s return, but the mother defied, leading to fines and imprisonment. Morton J., hearing the application in England, emphasised the importance of the child’s welfare and the English court’s obligation to consider the child’s best interests, considering the child’s two-year stay in England.This case highlighted the English court’s authority to review and make independent determinations regarding custody to ensure the child’s best interests are served.
Harbin vs. Harbin (1976)
The Mark T. McKee vs. Evelyn McKee (1951) and the Re B–’s Settlement case were mentioned to consider the Harbin vs. Harbin (1976), wherein the children were moved illegally and forcefully by their father without any justification for his actions. The father failed to provide any reasons and hence the court held that the best interests of the children should be considered while making decisions and hence emphasised on the principle to protect children from wrongful removal during custodial battles and ordered for the children to be taken back to their mother.
Dhanwanti Joshi vs. Madhav Unde, (1988) 1 SCC 112
In this case, the Supreme Court of India stated that the welfare of a child and their best interests should be the primary focus in deciding the custody of the children of a divorced couple. The Court stated that despite the removal of children without a court order, the welfare of the children should be a significant factor and recognised the decisions taken by the English Courts that warranted the return of a child to a foreign jurisdiction without considering the welfare of the child.
Application in the V. Ravi Chandran vs. Union of India & Ors. case
In the present case, similar principles were applied. The court acknowledged the need for the local court to assess the child’s welfare independently while giving due regard to the foreign court’s order.
The concept of balancing the child’s established circumstances in the new country against the legal order from the country of origin was crucial. The decision reinforced that the primary criterion for custody decisions is the child’s best interests, consistent with the approach outlined in the Dhanwanti Joshi vs. Madhav Unde (1988) case.
Sarita Sharma vs. Sushil Sharma (2000) 3 SCC 14
In this case, the Supreme Court of India dealt with a complex child custody dispute arising from an international context. In this case, the mother moved with her children to India due to the excessive alcohol consumption of her husband in order to keep her children safe.
In this case it was ruled by the Supreme Court that the interests of the children should be the priority and not legal rights.It was decided by the Court that the concerns regarding custody shall be dealt with the court in the country that is closely connected to the children.
Analysis of the case
The judgement in V. Ravi Chandran vs. Union of India & Ors. (2009) is a significant development in Indian jurisprudence concerning international parental child abduction. It underscores the importance of considering international conventions and principles, even if not formally adopted, in the interest of justice and the welfare of the child. The case also highlights the challenges faced by Indian courts in dealing with international custody disputes and the need for a comprehensive legal framework to address such issues.
The Supreme Court’s decision to order the return of Adhitya to the United States was based on the principle that the child’s welfare is best served by maintaining continuity and stability in their habitual residence. This aligns with the objectives of the Hague Convention, which seeks to deter international child abduction and ensure the swift return of abducted children to their country of habitual residence.
The case also highlights the necessity for India to consider ratifying the Hague Convention on the Civil Aspects of International Child Abduction, which would establish a clear legal framework for resolving such disputes. Until then, Indian courts will continue to rely on the principles of the convention as persuasive guidelines in determining the best interests of the child in international abduction cases.
Conclusion
The case of V. Ravi Chandran vs. Union of India & Ors. (2009) is a landmark judgement that addresses the complexities of international parental child abduction and the application of international principles in Indian law. The Supreme Court’s decision to order the return of Adhitya to the United States underscores the importance of the child’s welfare, stability, and continuity in their habitual residence. The case also highlights the need for India to consider ratifying the Hague Convention on the Civil Aspects of International Child Abduction to provide a clear legal framework for resolving such disputes in the future.
The ruling in this case emphasises the significance of international comity and the imperative for Indian courts to consider global principles and norms, even if they are not formally integrated into the domestic legal system. This case explores the legal reasoning and deliberations undertaken by the Supreme Court in a cross-border custody dispute, carefully balancing the rights of parents with the paramount concern of child welfare.
Frequently Asked Questions (FAQs)
Is India a signatory to the Hague Convention on the Civil Aspects of International Child Abduction?
No, India is not a signatory to the Hague Convention on the Civil Aspects of International Child Abduction (1980). However, the principles of the convention were considered relevant and persuasive in this case.
The convention emphasises the prompt return of children who have been wrongfully removed from their habitual residence. Additionally, the court took into account the principle that the welfare of the child is the most important factor in custody decisions. This means that the child’s best interests, including their emotional and physical well-being, should be the primary concern in resolving custody disputes.
Why is the welfare of the child considered the paramount consideration in custody disputes?
The welfare of the child is deemed the most important factor in custody disputes because it prioritises the child’s well-being above all other considerations, including the legal rights of the parents. This principle ensures that decisions are made with the child’s best interests in mind, aiming to provide a stable, nurturing, and supportive environment for the child’s emotional, psychological, and physical development. By focusing on the child’s needs and stability, the legal system seeks to create a secure and consistent environment that supports the child’s overall growth and happiness.
How does unilateral relocation affect custody decisions?
Relocating your child’s residence without the consent of the other parent or any such order from the authorised court is called unilateral relocation. courts must consider the disruption caused by such moves, including the emotional and psychological stress on the child and the strain on relationships with the non-custodial parent.
The legal system evaluates whether the relocation was made in the best interest of the child or if it interferes with the child’s established routine and relationships. This evaluation helps determine whether the child should be returned to their previous location or if other custody arrangements need to be made.
What role does international law play in domestic custody cases involving cross-border issues?
International law plays a crucial role in domestic custody cases with cross-border issues by providing guidelines and frameworks for resolving disputes. In cases like V. Ravi Chandran vs. Union of India & Ors. (2009), even when a country is not a signatory to international treaties like the Hague Convention, the principles of these conventions can influence decisions.
These international guidelines help ensure that custody decisions are consistent with global standards for protecting children’s rights and welfare. Domestic courts may use these principles to address the complexities of international child abduction and to promote cooperation between countries in resolving custody disputes.
Can a parent who has wrongfully removed a child from their habitual residence be penalised?
Yes, a parent who has wrongfully removed a child from their habitual residence may face legal consequences. Such actions can be deemed a violation of custodial rights, and the courts may order the return of the child to their previous location. Additionally, the wrongful removal can impact custody arrangements and may be taken into account in determining future custody decisions. Legal penalties may include orders for the child’s return, adjustments to custody arrangements, and in some cases, legal actions against the offending parent for non-compliance with custody agreements or court orders.
What legal remedies are available for wrongful removal or retention of a child?
Legal remedies for wrongful removal or retention of a child typically include:
Return Orders: courts may order the return of the child to their habitual residence if the relocation is deemed wrongful. This remedy aims to restore the status quo and allow the appropriate jurisdiction to make custody decisions.
Custody Modifications: If the return of the child is not possible or practical, courts may modify existing custody arrangements to address the new circumstances and ensure the child’s best interests are protected.
Legal Penalties: The offending parent may face legal consequences for violating custody agreements or court orders, which can include sanctions or legal actions to enforce compliance.
These remedies are designed to address the disruption caused by wrongful removal and to protect the child’s welfare and stability.
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This article is written by Prity. This article provides a detailed analysis of the landmark decision of T.M.A. Pai Foundation & Ors. vs. State of Karnataka & Ors. (2002). The article also goes through the facts of the case, issues in the case, arguments by the petitioners and respondents, the rationale behind the judgement, and a critical analysis of the case. This article ends with a discussion of the present scenario after the T.M.A.Pai Foundation case.
Table of Contents
Introduction
“Education is a fundamental human right and essential for the exercise of all other human rights. It promotes individual freedom and empowerment and yields important development benefits.”
The concept of education is not new in India. It is traced back to the Vedic period, i.e., around 5000 BC, where the Guru Shishya tradition was prevalent. Shishya (the student) went to Gurukul (the school) to learn Vedas, holy scriptures, religion, philosophy, medicine, arithmetic, spirituality, and logic from the gurus. During this period, education was solely confined to the priestly classes, i.e., mostly Brahmins, whereas the lower castes, particularly shudras, were barred from receiving education.
Even during the Buddha and mediaeval periods, education was out of the reach of common people. After the Mughals, Britishers came to India and started their education system, known as the “modern education system,” under which they gave importance to the English language. The British Government’s main goal in providing education was to appoint an Indian as a clerk or lower-grade post in the East India Company. That was a cheaper option than to appoint an Englishman from England. The neglect of education for Indians was visible at that time.
The Wood’s Education Dispatch acknowledged the neglect of the British Government to education. They thought of education as a charity, not as a duty to provide. But, gradually, the education movement was started in India by some “social reformers” or scholars, which the British Government also began to accept. From there, the free and compulsory primary education system commenced in India, yet education was out of the reach of common people.
India was invaded by different rulers, such as Afghani, Mughal, Portuguese, Dutch, and British, in different periods. These invasions gave birth to unlike communities like Muslim, Sikh, Jain, Christian, Parsi, and Anglo-Indians, who are known as minorities in India and Hindu as a majority on the basis of population.
When India was free from the fetters of colonialism in 1947, at the time of drafting the Constitution of India, the minority communities were scared about their security and the abolishment of their unique and peculiar religion, language, and culture. Therefore, they demanded a separate electoral body for themselves, which was rejected by the constituent assembly. However, the makers of the Indian constitution provided certain fundamental rights, such as Articles 14 to 18, Articles 25 to 30, and Directive Principles such as Articles 36 to 51 and Article 350, to protect the interests of and preserve or flourish the religious, cultural, and linguistic values or identities of minorities.
However, in this article, the T.M.A. Pai Foundation & Ors. vs. State of Karnataka & Ors. (2002) (hereinafter referred to as the “T.M.A. Pai Foundation case”) is analysed, and this case is connected with minority educational institutions; therefore, only Articles 15(4), 15(5), 19(1)(g), 26, 28, 29, and 30 will be deliberated upon. The article provides a critical analysis of the T.M.A. Pai Foundation case and explores the broader implications of this landmark judgement on our constitution and society.
Details of the case
Name of the case: T.M.A.Pai Foundation & Ors. vs. State of Karnataka & Ors.
Facts of the T.M.A. Pai Foundation & Ors vs. State of Karnataka & Ors (2002)
The unresolved conflict of issues or new conflict of issues related to Minority Educational Institutions (MEIs) before the equal strength bench or shorter strength bench is often referred to as the larger constitutional bench to resolve all conflicts of the issues. The T.M.A. Pai Foundation case is an example of this. This was the writ petition decided by the eleven-judge Bench of the Supreme Court by a majority of 6:5 on 31st October 2003. This was the second-largest constitutional bench judgement of the Supreme Court after Kesavananda Bharati Sripadagalvaru vs. State of Kerala and Anr (1973).
The facts of the case are as follows:
Dr. T.M.A. Pai was a renowned physician, banker, philanthropist, educationist, and Konkani language speaker. He has established internationally famous Manipal educational institutions. He had a passion for social service, so he founded a society called the “Academy of General Education” (hereinafter mentioned as “Academy”) in 1942 in Manipal, which came under the State of Madras then, and after the reorganisation of state institutions, came under the new State of Karnataka. The Academy was registered as a society under the Societies Registration Act, 1860.
Under this academy, with public support and cooperation, he formed various educational institutions such as high schools, arts, science, and commerce colleges, a medical college, and engineering colleges. He was least interested in the government’s funding for his benevolent work for society.
Manipal Academy of Higher Education (hereinafter referred to as the “MAHE”) was also founded under the Academy. On 30th May 1957, the Manipal Engineering Trust was formed, inter alia, to establish the Manipal Institute of Technology (MIT), the second petitioner in the present case.
T.M.A. Pai died on 29th May 1979. In his memory, a Konkani linguistic minority trust, the Dr. T.M.A. Pai Foundation was established in 1981 and registered under the Trust Act, 1882, to support and promote the advancement of educational activities and the Konkani language and culture of Konkani linguistic minorities. Later on, on 8th July 1983, the trustees of the engineering college, by another deed of declaration of trust, transferred the ownership of the engineering college (MIT) to the Dr. T. M. A. Pai Foundation Trust, the first petitioner in the present case. So, now, the first petitioner is Dr. T. M. A. Pai Foundation, and the second petitioner is the Manipal Institute of Technology, owned by the TMA Pai Foundation. Petitioners No. 3 to 6 are the trustees.
As earlier mentioned, the state of Karnataka is a hub for technical and professional private institutions. Several private educational institutions were mushrooming in Karnataka and charging hefty amounts of money as capitation fees. The petitioner in this case was also one of the private institutions among them. The petitioner had various private professional educational institutions, one of which was the Manipal Institute of Engineering and Technology.
To remove the encumbrance of hefty amounts of money as capitation fees and admission fees from the pocket of the guardians and to regulate the private educational institutions, particularly professional and technical institutions, the governor of Karnataka State promulgated an Ordinance known as the Karnataka Educational Institutions (Prohibition of Capitation Fee) Ordinance, 1984. Later, this ordinance took the form of the Act. The State Government of Karnataka, under this Act, released a notification for fixing the total intakes or seats of students, and among those total intake or seats, the government also fixed the government quota.
This interference of the State machinery was not accepted by minority institutions, and, therefore, this case came before the Supreme Court. A writ petition was filed by the petitioner against the constitutional validity of the statute enacted by the Karnataka government. The notification issued under this statute by the State Government for fixing the total seats for admission and the 40 percent government quota in total seats was also challenged before the Court.
The above case is not a general dispute between two private parties; instead, it raised questions about the nature and scope of the fundamental rights guaranteed by the Constitution under Article 30.
Issues raised before the Supreme Court in the case
When this case came before the Supreme Court, there were a total of 11 questions related to minorities’ rights (some divided into parts) for consideration; in those 11 questions, some were referred from previous cases on minority rights and some were reframed in this case. The Hon’ble Court did not deem it fit to answer all eleven questions, so they decided to take seven questions to discuss and answer, and the rest of the four were left for a regular bench to resolve. Out of those 11 questions, the Chief Justice (CJ) formulated five main issues that cover the entire area. Firstly, this article goes through the 11 questions that were referred to and reframed in this case and then to the 5 issues that were framed by Kripal, the then Chief Justice of India, from those 11 questions.
Following are the 11 questions:
What is the meaning and content of the expression “minorities” in Article 30 of the Constitution of India?
What is meant by the expression “religion” in Article 30(1)? Can the followers of a sect or denomination of a particular religion claim protection under Article 30(1) on the basis that they constitute a minority in the State, even though the followers of that religion are in the majority in that State?
What are the indices for treating an educational institution as a minority educational institution? Would an institution be regarded as a minority educational institution because it was established by a person(s) belonging to a religious or linguistic minority or is being administered by a person(s) belonging to a religious or linguistic minority?
To what extent can professional education be treated as a matter coming under minority rights under Article 30?
Whether the admission of students to minority educational institutions, whether aided or unaided, can be regulated by the State Government or by the university to which the institution is affiliated?
Whether the minorities’ rights to establish and administer educational institutions of their choice include the procedure and method of admission and selection of students?
Whether the minority institutions’ right to admission of students and to lay down procedures and methods of admission, if any, would be affected in any way by the receipt of state aid?
Whether the statutory provisions regulate the facets of administration like control over educational agencies, control over governing bodies, conditions of affiliation, including recognition/withdrawal thereof, and appointment of state employees, teachers, and principals, including their service conditions and regulation of fees, etc., would interfere with the right of administration of minorities?
Where can minority institutions be operationally located? Where a religious or linguistic minority in state ‘A’ establishes an educational institution in the said state, can such an educational institution grant preferential admission, reservations, and other benefits to members of the religious or linguistic group from other states where they are non-minorities?
Whether it would be correct to say that only the members of that minority residing in state ‘A’ will be treated as members of the minority vis-a-vis such institutions?
Whether the members of a linguistic non-minority in one state establish a trust or society in another state and claim minority status in that state?
Whether the decisions of this Court in the Unni Krishnan case, except where it holds that primary education is a fundamental right, and the scheme framed thereunder, require reconsideration or modification?
Do the non-minorities have the right to establish and administer educational institutions under Articles 21 and 29(1), read with Article 14 and Article 15(1), in the same manner and to the same extent as minority institutions?
What is the meaning of the expressions “education” and “educational institutions” in various provisions of the Constitution? Is the right to establish and administer educational institutions guaranteed under the Constitution?
Following are the five issues framed by Justice Kripal:
Is there a fundamental right to set up educational institutions? If so, under which provisions?
Does the Unnikrishnancase require reconsideration?
Can the government regulate private, aided, or unaided institutions? If so, then to what extent?
How religious or linguistic minorities will be determined about Article 30. What is to be a unit, the state, or the nation as a whole?
To what extent should the right to administer private aided minority institutions be regulated?
Laws discussed in the case
Article 15(4) of the Constitution of India
This Article empowers the State to make any special provision for the advancement of any socially and educationally backward class of citizens or for the scheduled castes and tribes in the matter of admission to the educational institutions maintained by the State or receiving aid from the State.
Article 19(1)(g) and Article 19(6) of the Constitution of India
Article 19(1)(g) gives every citizen the right to practise any profession or to carry on any occupation, trade, or business. This right is subject to the reasonable restrictions provided in Article 19(6). The restrictions must be reasonable, which means the restrictions imposed on citizens’ rights under Article 19(1)(g) must be logical and not arbitrary. The restrictions imposed by this Article should be in the interest of the general public. Therefore, this Article confers rights on all citizens to establish and administer educational institutions.
Article 26 of the Constitution of India
Subject to public order, morality, and health, this Article talks about the rights of every religious denomination or any section thereof to establish and maintain an institution for religious and charitable purposes that would include an educational institution. This right is subject to public order, health, and morality. A religious denomination or section thereof that does not fall under Articles 29(1) and 30(1) has the right to establish and maintain educational institutions. Article 26 does not deal with the rights of individuals but with group rights. This Article gives the majority religious denominations as well as the minority religious denominations the right to exercise the rights in Article 26, i.e., to establish and maintain religious denominations.
Article 28 of the Constitution of India
Article 28(1) says that an educational institution wholly maintaining out-of-state funds cannot impart religious instructions. However, a moral education that is not related to any denominational doctrine is not prohibited.
Article 28(2) is an exception to Article 28(1) and says that an institution is established by a trust deed, and the deed mentions the imparting of religious instructions and the institution being administered by the State. The State is obliged to impart religious instructions.
Article 28(3) provides the right to a person studying in a State-recognized institution or in an educational institution receiving aid from State funds not to take part in any religious instruction if imparted by such institution.
Article 29 and Article 30: Cultural and educational rights
Article 29(1) of the Constitution of India
It states that any section of citizens residing in India or any part thereof who has a distinct language script or culture of its own has the right to conserve the same. This Article gives rights to all sections of citizens to conserve their language, script, or culture. Even though this Article mentions in the marginal notes the interests of minorities, it does not refer to any religion. This Article applies to those sections of society who may profess different religions but have similar distinct languages, and they have the right to preserve their distinct language, script, or culture even though they profess different religions.
Article 29(2) of the Constitution of India
It provides that no citizen shall be denied admission into any educational institution receiving aid out of State funds or maintained by the State on grounds only of religion, race, caste, language, or any of them.
Article 30 of the Constitution of India
Article 30(1) gives the right to religious or linguistic minorities to establish and administer the educational institutions of their choice.
Further, Article 30(1A) requires that the Parliament, while making a Central legislation or a State legislature, while making a State legislation for the compulsory acquisition of any property of any established educational institutions administered by a minority, must ensure that the amount fixed by or determined under such law for the acquisition of the property will not be such as to impair the functioning of the educational institutions or infringe the rights given under Article 30(1).
Furthermore, Article 30(2) says that, while granting the aid, the State cannot deny the aid only because the institution is a religious or linguistic minority institution. While granting aid, the State cannot discriminate between minority and majority educational institutions. Issuance of aid or grant of aid to minority institutions by the State by applying a condition that abridges the right under Article 30 is violative. However, such conditions related to the proper utilisation of the grant and fulfilment of the objectives of the grant will be allowed and not violative.
Objective of Article 30
The objective of Article 30 is to prevent the majority from making legislation that will take away the minority’s fundamental rights to establish and administer educational institutions of their choice. This Article ensures equality between the majority and minority communities. Article 30 ensures the protection of religious and linguistic minorities and ensures secularism. Hence, Article 30 maintains the two basic structures of the Indian Constitution, i.e., equality and secularism.
The Constitution makers were very clear that Article 30 should not be subject to any restrictions as other fundamental rights have. That is why we do not find any word of restriction in Article 30, unlike Articles 19, 15, 25, and 26, among other fundamental rights. As we know, whatever rights are given under the Constitution, even if restrictions are not provided in the Article, nobody can claim a right in such a way that they are the above law.
Article 30 was enacted to provide equality, safeguards, and protection to minorities, but these Articles are being used by minorities as they have a monopoly. In this Article, several private professional educational institutions claim their interest as absolute, and they took advantage of the ambiguity found in the Article by defending themselves in their favour.
During the late 80s and early 90s, there was a mushrooming growth of private, sub-standard professional institutions in various areas of the country. In those institutions, admissions were taken on the basis of affluence and influence, and that was not the valid criteria for the admissions. These institutions change education from a pious obligation into a profit-making business. Several private institutions were established that provided technical courses in fields such as medical and engineering.
Under the guise of Article 30, these institutions started to exercise their arbitrariness. They started to take a hefty amount of money as capitation fees and admission fees. The number of seats and the number of students were decided by themselves. There were no regulatory systems to regulate the arbitrariness and stop those private institutions from sucking the blood of innocent guardians in the form of receiving hefty money.Therefore, several states started to bring laws, rules, and regulations to stop the arbitrariness of private professional educational institutions. This interference by the State Government was not acceptable to the private institutions, and they started to raise a dispute before the High Courts and the Supreme Court. Hence, it gave scope to the judiciary to step in, and institutions started approaching the court against the government’s laws and regulations that violated their fundamental rights under Articles 14, 15, 19(1)(g), 29, and 30.
A plethora of court cases are framed and decided by courts due to the ambiguous nature of Article 30.
This gave opportunities to the judicial system to interpret the wording of the above Articles benevolently and for the common good. Here, the Supreme Court stepped in to regulate this Article in the genuine interest of minorities through various landmark judgments and opined that constitutional provisions are to be interpreted by the court in such a way that they further the genuine objectives or interests of their incorporation in the Constitution by constitution makers, clearing almost all the vagueness created through this Article and laws incorporated by various governments.
Arguments of the parties in the case
Contentions raised by the petitioners
The learned counsel appearing for petitioners argued that the Karnataka Educational Institution (Prohibition of Capitation Fee) Act, 1984, is in breach of Article 30 of the Constitution, which allows linguistic or religious minorities to establish and administer educational institutions of their own choice. The counsel added that Konkani is a minority language spoken by a small group of people in the state of Karnataka. T.M.A. Pai was a Konkani speaker by birth, as per the petitioners. Hence, after his death, a Konkani linguistic institution was founded to honour his memory and promote his goals. Because Konkani is a minority language in Karnataka, it is protected under Article 30.
On behalf of all these private institutions, the learned counsels submitted that the Constitution provides fundamental rights to establish and administer educational institutions to non-minorities in Article 19(1)(g) and/or Article 26, and to minorities, these rights are provided under Article 30. So, private institutions should have complete autonomy in establishment and administration. States should not have any power to put any conditions on or interfere with the administration of these institutions.
On behalf of private non-minority unaided educational institutions, it was contended that secularism and equality are the basic structures of the Constitution and, therefore, provisions of the Constitution should be interpreted in such a way that the rights of private non-minority unaided educational institutions are equal to the rights of minority institutions. They should have the same freedom of administration that minority institutions have.
The minority unaided private institutions contended that the Constitution has given them the right to establish and administer the educational institutions of their choice. The use of the word “of their choice” in Article 30(1) gives them independence to establish and administer educational institutions. The State cannot interfere with our independence to establish and administer. We can manage or administer our educational institutions as we wish.
The petitioner’s counsel contended that the scheme formulated in the Unni Krishnan case must be reconsidered. This scheme did not fulfil its objective. It helps the privileged students rather than the meritorious students. It creates economic losses for institutions. The petitioner’s counsel also contended that the scheme had imposed unreasonable restrictions on the administration of private educational institutions, specifically on minority educational institutions. The rights provided under Article 30 to minorities are hampered by the Unni Krishnan Scheme.
On behalf of the minority private institutions, the counsel submitted that the interpretation of Articles 29, 30, and other provisions shows that religious or linguistic minorities have a right to establish and administer the educational institutions of their choice. The use of the phrase “of their choice” in Article 30(1) gives them the right to establish and administer any kind of educational institution, whether it is a school, a degree college, or a professional institution. These institutions have the motto of providing benefits to religious or linguistic minorities, and they admit students of their choice. They further contended that Article 30(2) provides that the State cannot deny aid to these institutions only because they are established and administered by a minority. The states cannot impose any such conditions that take away or curtail the character of minority institutions while granting aid.
The learned counsel also pleaded that Article 29(2) could not be applied in such a way that it curtailed or restricted the rights of minorities provided in Article 30 to grant admission to students of their own religion or language.
The right to constitute a governing body, appoint teachers, and admit students are essential elements of the administration of educational institutions. The State cannot interfere with these rules. The secular laws, such as health and town planning, could be applicable, but while applying the secular laws, no rules could be framed that intervene or curtail the rights of minorities provided in Article 30. The learned counsel also argued that the manners and modes of appointment of teachers and selection of students had to be within the exclusive domain of the institutions, and State interference could not be permitted. The minority institutions further contended that Article 30 is not subject to Article 29(2). Article 30 is an absolute right.
Contentions raised by the respondents
The learned Solicitor General for respondents agreed with the contention of the petitioners that the right to establish and administer educational institutions for non-minority is provided under Article 19(1)(g) and/or Article 26 of the Constitution, and, similarly, Article 30 gives rights to the minority to establish and administer private educational institutions.
He also agreed with the contention of the petitioners that the scheme provided in the Unni Krishnan case should be reconsidered.
He also agreed that private, unaided educational institutions are entitled to greater autonomy.
The main contention of dispute is the provision of Article 29(2). Respondents strictly opposed the contention of the petitioners that Article 29(2) will not apply to minority institutions and, according to the use of the phrase “of their choice”, they can only admit the students of their own religious and linguistic communities. He stated that Article 29(2) will also apply to the institutions established under Article 30, i.e., minority institutions, and these institutions do not deny admission based on religion, caste, language, or any of them.
The learned counsel appearing for respondents contended that, because Article 30 is not an absolute right, the government can put reasonable regulations and limitations on minorities’ private educational establishments in the interest of effective and equal management.
The counsel further contended that the Act was passed to put an end to the practice of charging capitation fees and commercialising education. As a result, the Act does not violate Articles 30, 14, and 19 of the Constitution.
Judgement in T.M.A. Pai Foundation & Ors vs. State of Karnataka & Ors (2002)
The majority judgement, consisting of six judges, held that the status of religious and linguistic minorities can be determined by the State. The right given under Article 30 to religious or linguistic minorities to establish and administer the educational institutions of their choice is not an absolute right or above the law, and any rules or regulations framed in the national interest or public interest will be equally applicable to minority or non-minority institutions. The right to administer does not include the right to maladminister.
The general laws of the land applicable to all persons have also been held to be applicable to minority institutions. For example, laws relating to taxation, sanitation, social welfare, economic regulation, public order, and morality. States also cannot put in place restrictions that contravene the essential elements of administration, for example, the right to constitute a governing body, appoint teachers, and admit students. Admission of students is an essential ingredient of the right to administer under Article 30. The process of admission must be transparent, fair, and based on merit.
Rationale behind the judgement in the case
The ratio decidendi of a judgement is its reasoning, which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case, or the principles and reasons on which it is based, is distinct from the relief finally granted or the manner adopted for its disposal.
In this case, the majority judgement said that the unit of measurement of the minority will not be the arithmetical tabulation of less than 50 percent as prescribed in the case of In Re the Kerala Education Bill, but a geographical entity of the State will be taken into consideration for the status of the minority. The reason for this judgement is that, since the reorganisation of the State in India has been on a linguistic basis, to determine the minority, the unit will be the State and not the whole of India. Similarly, religious minorities will also be construed State-wise. This was affirmed by adding Articles 350A and 350B to the Indian Constitution.
Further, the Court held that admissions in professional institutions will be on a merit basis because there are still a large number of professional institutions engulfed in profiteering and charging capitation fees, and this can be stopped only when admission is made on a merit-based selection basis.
In respect of restrictions imposed by the State, this Court held that, just because imparting education is the State’s duty and it is not in a capacity to do it, private educational institutions impart the State’s duty, and the State cannot nationalise the private educational institutions either in whole or in part by putting unreasonable restrictions. The restrictions imposed by the State must be reasonable, in the interest of the general public, of the utmost importance, and good for education as a whole.
Autonomy of unaided non-minority institutions is an important facet of their right under Article 19(1)(g) and, in the case of minority institutions, under Article 19(1)(g) read with Article 30 of the Constitution. Therefore, unaided institutions should have autonomy in the matter of admission and fee structure.
Issue-wise judgement by the Supreme Court in the case
Is there a fundamental right to set up educational institutions? If so, under which provisions?
The majority of judges said that all citizens have the fundamental right to establish and administer educational institutions under Article 19(1)(g) and Article 26(a). Article 30 specifically talks about minorities’ fundamental right to establish and administer educational institutions of their choice, whereas Article 19(1)(g) provides rights to every citizen to practise any profession or to carry on any occupation, trade, or business.
The fundamental rights under Article 19(1)(g) are subject to the reasonable restrictions imposed by the State in the interest of the general public provided under Clause 6 of Article 19.
In the State of Bombay vs. R.M.D. Chamarbaugwala (1957), it was held that education is a per se work regarded as charitable in nature. It will not come under trade and business, where profit is the motto. The court further said that if there is any doubt about whether education is a profession or not, it does appear that education will fall within the meaning of the expression “occupation”.
This Court further observed that Article 26 says every religious denomination or any section thereof shall have the right to establish and maintain institutions for religious and charitable purposes that include educational institutions. Furthermore, the right under Article 26(a) is subjected to public order, morality, and health. The Court further held that the religious denomination, or any section thereof that does not fall within the special categories in Articles 29(1) and 30(1), has the right to establish and maintain religious and educational institutions. This Article gives fundamental rights to both majority and minority religious communities to establish educational institutions. Furthermore, this Court said that the right under Article 30 in this respect is an additional right given to the minority. The right given under Article 30 is like all other fundamental rights, not an absolute right. This right is subject to Article 29(2).
Does the Unnikrishnan case require reconsideration and modification?
In the present case, the eleven-judge Bench reconsidered the Unnikrishnan judgement.
In the Unnikrishnan case, a five-judge Bench held that the private, unaided, recognized, or affiliated educational institutions running professional courses are entitled to charge higher fees than the government institutions charge for the same course, but it should not be more than that fixed by the State. The Court stated that charging capitation fees is illegal and that the commercialisation of education is prohibited.
In the case of privately aided, recognized, or affiliated educational institutions, the Court held that the government has the power to frame rules and regulations in the matter of admission and fees.
The then Chief Justice Kirpal, with a majority of judges, decided that the Unni Krishnan scheme formulated in the Unni Krishnan case was unconstitutional. The directions issued by this Court to the governments, the University Grants Commission (UGC), or other concerned bodies or private institutions are also declared unconstitutional. The judges in the present case agreed upon the two holdings of the Unni Krishnan judgement. One is primary education as a fundamental right, and the second is that no capitation fee is allowed.
The contention made by the learned counsel is that the fixation of seats as 50 percent free seats and 50 percent payment seats does not fulfil its objectives. Most of the free seats filled through CET are acquired by affluent students, and private professional educational institutions are not able to generate the revenue that they invested in a student. It incurred losses for institutions.
On the ground of revenue shortfalls due to the Unnikrishnan judgement, the Court, in the present case, permitted the private professional institutions the Non-Resident Indians (NRI) quota to be carved out of the 50 percent payment seats for which charging a higher fee was permitted. Directions were issued by the Court to regulate or fix a ceiling on fees to the UGC, AICTE, the Medical Council of India (MCI), and the Central and State governments. The Court further held that the restrictions imposed through the Unnikrishnan Schemes were not reasonable restrictions under Article 19(6).
For imparting quality education, institutions need qualified and experienced teachers and proper facilities and equipment. All these needs require capital investment, and the scheme prohibiting capitation fees makes it difficult for institutions to continue their work; therefore, it is not a reasonable restriction. The Court also held that surrendering the total process of selection to the State is unreasonable.
Finally, in the present case, the majority of judges decided that the decision in the case of Unnikrishnan with respect to the scheme framed related to the grant of admission and the fixing of the fees was not correct. Hence, the said decision to that extent and the consequent direction issued to the UGC, AICTE, Medical Council of India, and Central and State Governments were overruled.
Can the government regulate private, aided, or unaided institutions? If so, then to what extent?
In today’s time and society, private educational institutions are the backbone of the Indian education system. We cannot deny these institutions’ roles in imparting quality education and contributing to national development. While deciding this issue, the judges first took private-aided and unaided non-minority educational institutions into consideration.
Private-aided and unaided non-minority educational institutions
The essential ingredient of the right to establish and administer educational institutions includes the following rights:
Right to admit students
While the State has the right to prescribe necessary qualifications for admission, private, unaided colleges have the right to admit students of their choice, but they must comply with the conditions, if any, and the process of admission must be objective and rational. For example, admission of students belonging to the weaker section of society in small percentages through scholarships or freeships, if not granted by the government, is an objective and rational process.
Right to set up a reasonable fee structure
Regarding this, the majority of judges held that the fee structure should be set up in such a way that it does not amount to profiteering. The fee structure must generate funds to be incorporated for the betterment of educational institutions by providing facilities necessary for students. A rigid fee structure is not allowed.
Rights to constitute a governing body
Private institutions have the right to constitute their own governing body, where the qualifications of the members of the governing body may be prescribed by the state or the concerned university. But if the state nominates some specific person on a political basis in the governing body, it amounts to an inhibition of his right to establish and administer educational institutions.
Rights to appoint staff
In this regard, the majority of judges pronounced that the appointment of teachers, either directly by the department or through a service commission, would be an unreasonable restriction on private, unaided educational institutions.
Rights to take disciplinary action for dereliction of duty by employees
The majority of judges in this aspect held that management of private unaided institutions is neither required to take prior permission or consent or ex post facto approval of government authority to initiate disciplinary actions against the dereliction of duty by employees nor subsequent permission is required to impose the penalty on proven dereliction of duty by teachers or staff. The majority of judges suggested the setup of an educational tribunal to hear the appeals of aggrieved parties.
The regulatory measures imposed on private educational institutions that ensure the maintenance of proper academic standards, atmosphere, and infrastructure, including qualified teachers, and the prevention of maladministration are allowed to be applicable to private educational institutions’ right to establish and administer educational institutions.
The Court further held that the compulsory nomination of teachers and staff for appointments is an unacceptable restriction. Similarly, compulsory nomination of students for admission will also not be allowed. Fixing a rigid fee structure and unnecessarily intruding on the composition of the governing body will not be accepted.
Private institutions that do not seek aid or financial assistance are known as “private unaided institutions”. The essence of private educational institutions is autonomy in management and administration. Greater autonomy is provided to the private, unaided institutions in their day-to-day administration.
In unaided educational institutions, the fixation of the fee must be in the hands of the institutions, but profiteering of money will not be allowed. Rules and regulations for different levels of education, for example, at the school level, at the college level, and at the professional level, are determined differently, so the extent of control or regulation will also be different in the private aided and unaided institutions.
The private, unaided school also requires maximum autonomy with regard to the essential ingredient of the right to establish and administer institutions. The judges, in the present case, also paid heed to the scarcity of private, unaided non-professional colleges or educational institutions and said these non-professional unaided institutions also required maximum autonomy like the schools.
They further said that the authority that grants recognition or affiliation to the private, unaided educational institutions has certain terms and conditions that must be related to academic and educational matters and for the welfare of students and teachers.
Private unaided professional colleges
The Court discussed what types of regulations can be framed in these types of institutions and to what extent. The majority of judges held that the government or university, while granting recognition or affiliation to these types of institutions, ensures that there is a merit-based selection, and at the same time, management must have sufficient discretion in admitting students.
The Court opined that in these types of institutions, management has the power to select teachers and staff based on qualification and eligibility criteria provided by the state or university, but the process of selection must be rational.
The Court observed that there must be a rational fee structure and, hence, capitation fees are not allowed. A reasonable surplus for the furtherance of education is allowed, but not profiteering. The conditions and regulations granting recognition or affiliation must take care of the welfare of students and teachers. The Court further stated that those conditions should also ensure uniformity, efficiency, and excellence in educational courses, and those that are related to the academic and educational character of the institution are valid, but conditions that may lead to governmental control of the administration of these institutions are not valid.
These types of institutions do not enjoy that much autonomy in the management and administration of the institutions, unlike the unaided institutions. But these institutions are also not to be treated as government-controlled institutions or run by government institutions. Therefore, the government cannot interfere with the constitution of the governing body.
Other aided non-minority institutions
There are a large number of educational institutions, for example, schools and non-professional colleges, that cannot run without the aid of the State. In these institutions, the government is entitled to make regulations related to admissions procedures, the appointment or removal of teachers, and non-teaching staff.
Private aided and unaided minority institutions
Private unaided minority institutions
This Court said that, like other private unaided institutions, private unaided institutions run by minorities are also entitled to maximum autonomy in the administration of such institutions, such as the admission process, recruitment of employees, and fixing fee structures.
The Court further held that these institutions also comply with the regulations imposed by the concerned authorities, but such regulations must not be such that they curtail the character of minority institutions. Admission of students to unaided minority educational institutions, viz., schools and undergraduate colleges, where the scope for merit-based selection is practically nil, cannot be regulated by the concerned State or university, except for providing the qualifications and minimum conditions of eligibility in the interest of academic standards.
Furthermore, this Court held that the institution, which does not take grants of aid from the State, has the right and discretion to select or choose students of their choice, but the process of selection or admission must be rational and transparent. The Court also decided that the right to administer is not an absolute right, and States or concerned universities may impose regulatory measures to ensure educational standards and maintain their excellence. These regulatory measures are more relevant in the case of admission to professional institutions.
Private aided minority institutions
The majority of the judges dealt with this head, i.e., the private aided minority institutions, with the issue, “To what extent does the right to administer the private aided minority institutions be regulated?”
The majority pronounced that private minority-aided institutions have the right to admit students of minority communities and, at the same time, it also takes admission of non-minority students to a reasonable extent so that rights under Article 30(1) are not impaired and citizens’ rights under Article 29(2) are not infringed.
How religious or linguistic minorities will be determined in relation to Article 30. What is to be a unit, the state or the nation as a whole?
With respect to this issue, the Court cited a few judgements of this Court, namely, the Kerala Education Bill case, D.A.V. College vs. State of Punjab & Ors., and D.A.V. College Bathinda vs. The State of Punjab & Ors.
In D.A.V. College vs. State of Punjab & Ors. (1971), the Supreme Court held that the Arya Samajis, who were Hindus, were a religious minority in the State of Punjab, even though they may not have been so in relation to the entire country.
In D.A.V. College, Bhatinda vs. State of Punjab & Ors. (1971), the Supreme Court held that “what constitutes a linguistic or religious minority must be judged in relation to the State in as much as the impugned Act was a State Act and not in relation to the whole of India.”
Therefore, in the present case, the majority judges also held that, with regard to a state law, the unit to determine a religious or linguistic minority can only be the State.
To what extent should the right to administer private-aided minority institutions be regulated?
In this respect, the majority of judges agreed upon the contention of the learned Solicitor General that the rights conferred under Part III of the Constitution are not an absolute right but instead subject to reasonable restrictions and other provisions of the same Part.
Therefore, it is not acceptable that the right of religious or linguistic minorities to establish and administer the educational institutions of their choice is above the law, and no law will be applicable to this, not even the Constitution. The Court further held that the right to administration does not mean the right to maladministration.
This Court further held that the right to administer is not absolute but must be subject to reasonable regulations for the benefit of the institutions, and Article 30(1) is subject to general laws such as those related to law and order, taxation, sanitation, social welfare, economic regulation, health, and the laws made in the interests of national security, public order, and morality. Hence, by the same analogy, the Court held that there is no reason why regulations, generally connected with the welfare of students and teachers, should not be applied to the institutions. Such regulations provide a proper academic atmosphere and do not interfere in any way with the right of administration under Article 30(1).
The Court further held that granting aid is not a constitutional imperative. The State is not compelled to grant aid, but if the state grants aid, it cannot deny the grant to the private educational minority institutions only because they are minority institutions. Furthermore, the Court held that it cannot be said that States cannot impose conditions on all types of institutions while granting aid because the imposition of conditions ensures the proper utilisation of the grant and the fulfilment of the objectives of the grant. However, the conditions that curtail or abridge the right to establish and administer the educational institutions of their choice or that dilute the minority status of the institutions are not permissible.
The Court further held that, the moment a grant-in-aid was obtained by any institutions, Article 28 comes into play. Clauses (1) and (3) of Article 28 apply to all educational institutions that take grants of aid, whether run by a majority or a minority. Article 28(3) talks about the right of the students to study in a State-recognized institution or in an institution that receives aid from the State and not to take part in any religious instruction imparting from the institution.
Just like Clauses (1) and (3) of Article 28, Article 29(2) refers to “any educational institution maintained by the State or receiving aid out of the State funds”.
The Court opined that, by virtue of clause (2) of Article 29, no citizen shall be denied admission into any minority educational institution receiving aid out of State funds, only on the basis of religion, race, caste, language, or any of them. Here, this sub-clause has, to some extent, curtailed one of the essential components of the right of administration, for example, the right to grant admission, of minority educational institutions. Other than the right to admission, some more rights of aided minority educational institutions are abridged or curtailed due to clauses (1) and (2) of Article 28.
A minority institution has the right to impart religious instructions, but when the institution is wholly maintained out of State funds, this right will be barred under Article 28(1). Similarly, by virtue of Article 28(3), a minority institution receiving aid out of State funds or recognised by the State cannot compel the student to attend the religious instructions.
Therefore, the Court held that if the curtailment of the rights of administering the minority institutions on receiving aid or wholly maintained out of State funds is valid under Clauses (1) and (3) of Article 28, then there is no reason why Article 29(2) will not be applicable. There is nothing in the language of Article 28(1) and (3), Article 29(2), and Article 30 to suggest that on receiving aid, Article 28(1) and (3) will apply, but Article 29(2) will not.
The Court also pointed out the right of aided minorities to admit students from minority communities when Article 29(2) was imposed on the institution. The Court takes the example of the St. Stephen’s College case. In this case, the Court, while upholding the admission process, held that to maintain the minority character of the private minority aided educational institutions, it is entitled to prefer students from its communities, and the State may regulate the intake in this category with due regard to the area that the institution was intended to serve, but that this intake should not be more than 50 percent in any case. Here, the majority judges agreed with the ratio in the St. Stephen’s College case but had objections to accepting the rigid percentage stipulated therein. The majority judges suggested that, to serve the purpose or interest of the minority communities for which the institution was founded, the percentage of students from minority communities to be admitted must depend upon the level of the institution, whether it be a primary, secondary, or high school or a college, professional or otherwise, and on the population and educational needs of the area in which the institution is to be located.
Analysis of the case
Who is minority
The first and foremost word the Supreme Court pays attention to is the word “minority”. It has been used by the Constitution as a religious and cultural minority, but nowhere in the Constitution it was defined. Similarly, the Motilal Nehru Report (1928) and the Sapru Report (1945) also talked about various rights of minorities and minority commissions, respectively, but nowhere defined who is the minority.
The definition and meaning of the word minority from various other sources are as follows:
The word “minority” is derived from the Latin word “minor,” which is suffixed with “ity” which means “small in number”.
According to the constituent assembly, the concept of the minority is not related to numerical values; it is related to a community that suffered some disadvantage from the rest of the community and was entitled to special treatment from the State.
The U.N. Sub-Commission on Prevention of Discrimination and Protection of Minorities defines Minorities as “a group that is numerically inferior to the rest of the population of a State, in a non-dominant position, whose members—being nationals of the State—possess ethnic, religious, or linguistic characteristics differing from those of the rest of the population and show, if only implicitly, a sense of solidarity directed towards preserving their culture, traditions, religion, or language.”
The National Commission for Minorities Act, 1992, (shortly referred to as the NCM Act, 1992), has notified Muslims, Sikhs, Christians, Buddhists, Jain and Zoroastrians (Parsis) as minority communities under Section 2(c) of the NCM Act, 1992.
The National Commission for Minority Educational Institutions Act, 2004 (shortly referred to as the NCMEI Act, 2004) has been enacted to safeguard the educational rights incorporated under Article 30 of the Constitution. Section 2(f) of the Act defines a “minority” as a community that is notified by the Central Government as a minority. Section 2(g) defines a “Minority Educational Institution” as a college or an educational institution established and administered by a minority or minorities.
Supreme Court on Minority
For the first time, the judiciary tried to define minorities in the case of In Re: The Kerala Education Bill, 1957. In this case, the Supreme Court held that a minority means a community that is numerically less than 50 percent of the total population.
Further, in Guru Nanak Dev University & Anr. vs. Harjinder Singh & Anr. (1994), the Supreme Court rejected the plea of the State Government of Punjab about minority status and held that the status of minorities would be decided by the law that is to be implemented. If it is state legislation, then the minority will decide on the state population.
Recently, an issue related to who is a minority and how to determine the minority was raised before the Supreme Court in Ashwini Kumar Upadhyay vs. Union of India, 2020(the Ashwini Kumar Upadhyay case) in a writ petition 836 of 2020. Section 2(f) of the NCMEI Act, 2004 has been challenged and a prayer has been made to issue guidelines for the identification of minority at State level, as held in the 11 judges bench of the T.M.A.Pai Foundation, 2002 case. Another writ petition 446 of 2022 in Devkinandan Thakur Ji vs. Union of India, 2022 (Devkinandan Thakur Ji case) has also been filed before the Hon’ble Supreme Court, wherein Section 2(c) of the NCM Act, 1992 has been challenged and a prayer has been made to define ‘Minority’ and lay down guidelines for identification of minorities at the district level. The Supreme Court clubbed both writ petitions under the case titled Devkinandan Thakur Ji vs. Union of India, 2022. The Hon’ble Court orally observed that it cannot entrain the prayer to determine the minority communities at district leve;l therefore, it is contrary to the precedent laid down in the T.M.A.Pai Foundation, 2002 case. This case is still pending before the Hon’ble Supreme Court, and in these cases, the Court will decide the constitutionality of Section 2(f) of the NCMEI Act, 2004 and Section 2(c) of the NCM Act, 1992.
Judgements after T.M.A. Pai Foundation & Ors. vs. State of Karnataka & Ors. (2002)
The landmark judgement of the T.M.A. Pai Foundation case was understood by various State Governments from different perspectives and enacted different statutes, rules, and regulations to be applicable to private educational institutions. They also issued several orders under Article 162 of the Constitution for the regulations of these institutions. Therefore, several petitions were filed before the various courts against the statues, rules, regulations, and orders enacted or ordered by the State Governments after the decision in the T.M.A. Pai Foundation case.
A few of the judgements delivered after the T.M.A. Pai Foundation case are as follows:
Islamic Academy of Education & Anr. vs. State of Karnataka & Ors. (2003)
In this case, the Supreme Court held that the State Government cannot fix a rigid fee structure. Each institute must have the freedom to fix its own fee structure, taking into consideration the need to generate funds to run the institution and to provide facilities necessary for the benefit of the students. They must also be able to generate surplus, which must be used for the betterment and growth of that educational institution. Any institutions involved directly or indirectly in profiteering or charging capitation fees can be penalised and can also lose their recognition or affiliation.
In this case, the Court interpreted the T.M.A. Pai Foundation case and tried to remove the doubt created by the T.M.A. Pai Foundation case.
Issues framed by the court are as follows:
Do educational institutions have the right to fix their own fee structure?
In this regard, the Court ordered that, to give effect to the judgement in the T.M.A. Pai Foundation case, the respective State Government and concerned authorities shall set up a committee in each State headed by a retired High Court judge. Each educational institution must place its fee structure and all related documents for academic years in advance before the committee. The committee then decides whether the fee structure proposed before it is justified and whether institutions are not profiteering and charging capitation fees.
The committee is at liberty to approve the fee structure produced by the institution or may reject and propose another fee structure. Once a fee is fixed by the committee, the institution cannot charge any fee directly or indirectly other than the fixed one. If the institution does so, it will amount to capitation fees.
The government or concerned authorities should frame rules and regulations, if not already framed, that help in finding whether any institution is charging capitation fees or profiteering or not, and if any institution does so, then that institution can be penalised appropriately and also face the cancellation of its recognition or affiliation.
Do minority educational institutions or non-minority educational institutions have the same rights?
With respect to this issue, the Court held that, from the reading of paragraphs quoted from the T.M.A. Pai Foundation case at first glance, it appears that both have the same rights; but, in reality, these paragraphs say about the rules, regulations, and laws that cannot be different for the minority and majority.
Non-minority educational institutions do not have protection under Article 30. For example, if the government wants to nationalise education, it may enact a rule that bars the establishment of private non-minority educational institutions, and, hence, the rights of non-minority to establish private educational institutions will be debarred, but minority educational institution rights under Article 30 are still privileged. Similarly, the government may take over the management rights of non-minority educational institutions, but this cannot happen with private minority educational institutions due to the rights given under Article 30. Minority educational institutions have the preferential right of admission to admit students from their own community, but non-minority educational institutions do not have this right. Therefore, minority and non-minority private educational institutions are not on equal footing.
However, when questions of national interest, public order, health, and morality come up, both will be on equal footing.
Whether the private, unaided professional colleges handle the admission process itself and fill in the seats 100 percent; if not, then to what extent do they fill the seats? Can private, unaided professional colleges admit students by making their own method of admission process?
In regard to the above-mentioned two issues, the present Court held that private unaided professional colleges and other educational institutions, i.e., schools and undergraduate colleges, are different, and criteria for admission or selection in private unaided professional colleges are on a merit basis. Private, unaided professional colleges include both minority as well as non-minority professional colleges.
The Court further made distinctions between minority and non-minority professional colleges and said that, in private, unaided minority professional colleges, “a different percentage” can be prescribed for the management quota seats for admission, whereas, in the case of non-minority private, unaided professional colleges, “a certain percentage of seats” can be reserved for admission by the management, and the rest of the seats have to be filled up on the basis of merit as per the common entrance tests conducted by government agencies.
The Supreme Court clarified that, in private, unaided non-minority professional colleges, a certain percentage of seats is determined by the State based on local needs, and provisions have to be made for the poorer and backward sections of society to get admission.
In the case of private, unaided minority professional colleges, in fixing the percentage of the management quota, the State will not only consider the local needs but also the interests and needs of that community in the State. The private, unaided minority professional colleges, on their management quota, take admission of the students of their own communities, not the students of other communities, even if the students of their own community are not meritorious. But the management of the private, unaided minority professionals colleges, while taking consideration of the students from their own community, must take care of the inter-se merit amongst students of their community. This Court further said that if the management quota seats are not filled by students from minority communities, then the other students can be admitted only on the basis of merit as per the common entrance test conducted by government agencies.
Admission on management quota seats
The question that arises before the Court is: how can the management of both minority and non-minority professional colleges admit students in the quota allotted to them?
The Court held that management quota seats in these professional colleges could be filled on either of the following grounds:
The common entrance tests conducted by the State; or
The common entrance test is to be conducted by an association of all colleges of a particular type in that State, e.g., medical, engineering, technical, etc.
This Court directed that if it is found that any student has been admitted without merit, a penalty can be imposed on that institute, and in appropriate cases, recognition/affiliation may also be withdrawn.
Admission by its own method or process
On this issue, the Supreme Court said that this Court leaves it open for the institutions that have been established and who have had their own admission procedure for, at least, the last 25 years to apply to the permanent committee directed to be constituted for the conducting of entrance tests and admission-related issues.
Direction to constitute two committees
In this case, the Court directed to constitute two committees, one for the fixation of fees and another for conducting entrance tests, and deal with admission-related issues with the respective State Governments.
Permanent committee for admission procedure
This Court directed that the respective State Government constitute a permanent committee to conduct entrance tests and deal with admission-related issues.
The committee will oversee and ensure that the tests conducted by the association of colleges are fair and transparent.
For each State, there will be a separate committee.
The committee will be headed by a retired judge of a High Court appointed by the Chief Justice of that State.
This committee has the power to permit the institution to adopt its own admission process if the institution has been established 25 years ago and has been following its own admission process for the last 25 years.
This court also clarified that the institution that has not been established 25 years ago and has not been following its own admission process for the last, at least, 25 years shall not be permitted to apply for or be granted exemption from admitting students in the manner set out by this court in the present case.
The committee has the power to increase the management quota allotted by the State Government to them if the committee feels its need to admit students from their community in excess of the quota to be genuine.
The Court further held that, before exempting any institutions or varying the percentage of quota fixed by the State, the State Government must be heard before the committee.
The different percentages of management quota seats in each minority and non-minority unaided professional college shall be separately fixed on the basis of their needs by the respective State governments.
In case of any dispute as regards the fixation of the percentage of the quota, it will be open to the management to approach the committee.
P. A. Inamdar & Ors. vs. State of Maharashtra & Ors. (2005)
This case tried to clarify the judgement of two previous cases of the Supreme Court, i.e., the T.M.A. Pai Foundation case and Islamic Academy of Education & Anr. vs. State of Karnataka, which interpreted the T.M.A. Pai Foundation case itself. The aggrieved persons before the Supreme Court are classifiable in one class, that is, unaided minority and non-minority institutions imparting professional education.
Issues before the Court in this case were as follows:
Whether the State can regulate the admissions made by unaided (minority or non-minority) educational institutions, and if yes, to what extent? Whether the State enforces its reservation policy on admission to such institutions?
Can unpaid (minority or non-minority) educational institutions be free to determine their own admission procedure or bound by the direction made in the Islamic Academy case in this regard?
Whether the unaided (minority or non-minority) educational institutions are free to fix their own fee structure or bound to fix their fee structure as postulated in the Islamic Academy case?
Supreme Court’s observations
Reservation policy
The Court held that the State cannot impose its reservation policy on minority or non-minority unaided educational institutions. Minority institutions are free to admit students of their own choice, including students of non-minority communities as well as members of their own communities from other States, both to a limited extent and not in such a manner and to such an extent that their minority educational institution status is lost. If they do so, they lose the protection of Article 30(1).
The Court agreed that there may be reservations for NRI quotas not exceeding 15 percent at the discretion of the management of private, unaided educational institutions.
Admission policy
With respect to the admission policy, the Supreme Court stated that, to the level of undergraduate education, the minority unaided educational institutions enjoy total freedom of admission. However, different considerations would apply for graduate and postgraduate levels of education, as well as for technical and professional educational institutions.
The Court further opined that graduate and postgraduate or professional educational institutions cannot impart education unless they are recognised or affiliated by the State, university, or concerned authorities.
The Court further stated that admission will be at the State level, and transparency and merit shall have to be assured. The Court accepted that there is nothing wrong with an entrance test being held for one group of institutions imparting the same or similar education. Such institutions situated in one State or in more than one State may join together and hold a common entrance test, or the State itself or an agency may arrange for the holding of such a test. And, based on the results of the common entrance tests, a merit list will be prepared, and admission can be taken.
Fee structure
With respect to the fee structure, in this case, the Court took the view from both the cases, i.e., the T.M.A. Pai Foundation case and the Islamic Academy case, and held that institutions are free to determine their own fee structure but that fee structure must be free from profiteering and capitation fees. It cannot be taken directly, indirectly, or in any form. The Court further said that a provision for a reasonable surplus can be made to enable future expansion. A reasonable surplus should ordinarily vary from 6 to 15 percent for utilisation in the expansion of the system and development of education.
Regulations and control by the State
In these types of institutions, the T.M.A. Pai Foundation case held that minimal interference by the State is allowed. If these types of institutions are recognised and affiliated by the State and concerned authorities, then the State may impose conditions or regulations that ensure merit and excellence in education and prevent maladministration. The essential components of administration management, including admission of students, recruiting of staff, and the quantum of fees to be charged, cannot be regulated.
Role of committees dealing with admission and fees
This Court agreed with the judgement of the previous case and held that the two committees directed to be appointed in the Islamic Academy case for the admission process and to determine the fee structure are permissive. The Court further held that the committees are an ad hoc arrangement made in the exercise of the power conferred on this Court by Article 142 of the Constitution until suitable legislation or regulation framed by the State steps in. Such committees are not like the Unni Krishnan scheme.
Judgement
The Court held that, in the T.M.A. Pai Foundation case, majority judges held that unaided professional institutions should be given greater autonomy in the determination of admission procedure and fee structure. The State regulation should be minimal and only with a view to maintaining fairness and transparency in admission procedures and checking the exploitation of the students by charging exorbitant money or capitation fees. Therefore, this Court said that the scheme evolved in the case of the Islamic Academy to the extent that it allows States to fix quotas for seat sharing between management and the States on the basis of the local needs of each State in the unaided private educational institutions of both minority and non-minority categories. That part of the judgement in the Islamic Academy case does not lay down the correct law and runs counter to the decision taken in the case of the T.M.A. Pai Foundation.
Society for Unaided Private Schools of Rajasthan vs. Union of India & Anr. (2012)
The most contentious issue before the Court in this Act was its Section 12(1)(c), read with Section 2(n)(iii) and (iv). It mandates that every recognised school imparting elementary education, even if it is unaided or not receiving any kinds of aid or grants to meet its expenses from the appropriate government or local authority, is obliged to admit children from weaker and disadvantaged groups in class 1 to the extent of at least 25% of the strength of that class and provide free and compulsory elementary education till its completion. In the present case, it was contended that Section 12(1)(c) is against the right given under Article 19(1)(g). It was also contended that Article 30 of the Constitution is also violated by imposing restrictions on private, unaided minority schools.
Judgement
The Court upheld the constitutional validity of the Right to Education Act, 2009. In addition, it held that Section 12(1)(c) of the RTE Act does not violate the right under Article 19(1)(g). The reservation policy of the State will not apply to private, unaided schools. The government should reimburse unaided schools while also requiring unaided schools to fulfil the regulations.
Pramati Educational & Cultural Trust & Ors. vs. Union of India & Ors. (2014)
In this case, the validity of Article 15(5) and Article 21A of the Constitution and the RTE Act, 2009, was challenged. It is the most important judgement in the history of the Indian Constitution. It was said that the above-mentioned provisions violate the right to equality under Article 14 and the right under Article 19(1)(g) to unaided minority institutions.
Judgement
The Supreme Court upholds the validity of Article 15(5) on these three grounds.
The first one is that Article 15(5) enables the State to make a special provision related to admission to educational institutions, including private educational institutions, whether aided or unaided by law, for the socially and educationally backward classes of citizens or for the Scheduled Castes and Scheduled Tribes.
Secondly, Article 15(5) gives equal opportunity to students from weaker sections of society to gain admission to private, non-minority educational institutions. From this clause, the right to do business under Article 19(1)(g) of the private non-minority educational institutions is not violated.
Thirdly, if Article 15(5) makes a distinction between minority and non-minority schools, it will not violate the right to equality principle because the constitution itself recognises the minority institutions as separate classes.
By declaring the validity of Article 21A, the Court held that, through Article 21A, it is the responsibility of the State to provide free and compulsory education, and if the State issues directions to minority institutions to admit students from weaker sections of society, then it is also a manner to fulfil its responsibility and duties under Article 21A. This Article also does not violate the right to do business under Article 19(1)(g). The Court further said that Article 21A and Article 19(1)(g) are applicable through harmonious construction.
The Court held that the Right to Education Act, 2009, came into force to fulfil the objective of Article 21A, so when Article 21A is valid, how come the RTE Act will not be valid? However, the Court held that the RTE Act of 2009 will not be applicable to minority schools. The Court held that, if the 2009 Act is made applicable to minority schools, aided or unaided, the rights of the minorities under Article 30(1) of the Constitution will be abrogated.
Christian Medical College Vellore v. Union of India (2020)
In this case, a notification to implement the National Eligibility-cum-Entrance Test (NEET) as the uniform admissions examination for all medical educational institutions by the Medical Council of India (MCI) and the Dental Council of India (DCI) was challenged by several minority educational institutions. The minority educational institutions contended that the notifications posed an unreasonable restriction on their autonomy to implement an independent admissions process.
The Court held that the notifications to implement the NEET as the uniform admission examination for all medical examinations are constitutionally valid and declared that they are reasonable and fair restrictions imposed on medical educational institutions and intend to bring transparency. It does not violate fundamental rights, including the right of autonomy provided under Article 30 of the Indian Constitution to religious or linguistic minority educational institutions.
Present scenario after the T.M.A. Pai Foundation case
After the judgement of the T.M.A. Pai Foundation case, several changes occurred in the legal arena of Article 30 of the Constitution of India and in the regulatory measures of private educational institutions. A few of them are given below:
Article 21A, added through the 86th Constitutional Amendment Act, 2002
Through the Constitution (Eighty-sixth Amendment) Act, 2002, Article 21A was added to the Constitution of India. Article 21A requires that each State provide free and compulsory education to all children between the ages of six and fourteen years. This Amendment Act makes the right to education a fundamental right by inserting Article 21A.
Article 15(5) added through the 93rd Constitutional Amendment Act, 2005
The legislators nullifying the judgement in the case of P.A. Inamdar, where the Court held that reservations cannot be enforced on private, unaided educational institutions, and added Clause 5 in Article 15 through the Constitutional (Ninety-third Amendment) Act, 2005. It provides that the State can, by law, make rules for the reservation of seats for socially and educationally backward classes and schedule castes and scheduled tribes in educational institutions, including private, unaided educational institutions. This Article brought out the distinction between minority and non-minority by not applying to minority-aided or unaided professional educational institutions.
After this enactment or amendment, several other acts, rules, regulations, and notifications were added by concerned authorities.
Central Educational Institutions (CEIs) (Reservation in Admission) Act, 2006
This Act was passed to implement the objective of Article 15(5). This Act came into force on 3rd January 2007. This Act under Section 3 provides reservation to students belonging to the Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs) of citizens to the extent of 15%, 7.5%, and 27%, respectively, in Central Educational Institutions (CEIs) established, maintained, or aided by the Central Government, subject to the exception provided in Section 4 and amendment made in 2012 of this Act. For example, the Indian Institute of Technology (IITs), the Indian Institute of Management (IIMs), and the All India Institute of Medical (AIIMs).
Right of Children to Free and Compulsory Education Act, 2009
This Act was enacted to give effect to the 86th Constitutional Amendment Act, which inserted Article 21A, and to the 93rd Amendment Act, which added Article 15(5). This Act makes it mandatory for all schools, whether government or private, to reserve 25 percent of their seats for children belonging to weaker sections and disadvantaged groups for admission in class. This provision will not be applicable to private, unaided minority schools.
National Commission for Minority Educational Institutions (NCMEI) Act, 2004
This Act has been enacted to safeguard the educational rights of minorities enshrined in Article 30(1) of the Constitution. The Commission is a quasi-judicial body and has been endowed with the powers of a civil court for the purpose of discharging its functions under the Act. The commission has three main roles, namely adjudicatory, advisory, and recommendatory. One of the most important functions of this commission is to resolve disputes regarding affiliation, deprivation, and violation of the rights of minorities to establish and administer the institutions of their choice.
Conclusion
Article 30 was enacted in the Constitution of India to provide the essence of security and confidence among minorities after independence. Therefore, this right was provided as a fundamental right under Part III of the Constitution, and no restrictions were imposed on it like other rights mentioned in Part III of the Constitution.
Imparting education is the duty and responsibility of the State under the Directive Principles of State Policy (DPSPs). When India became independent, certain duties related to education were imposed on the State. Still, due to a shortage of revenue, it was not able to fulfil its duty. Slowly, this duty was taken on by private individuals such as educationists, philanthropists, etc. These persons started to impart education at all levels, be it school, college, professional, or technical.
As long as these people considered providing education a sacred duty, there was no controversy. But then the time came around in the late 80s and early 90s, when the quality of private educational institutions started to deteriorate and quantity increased. As earlier mentioned in this article, how admission has been taken in these institutions and hefty amounts of fees as capitation fees were taken by students and charitable work became a profiteering business.
To stop all this arbitrariness in private educational institutions, the respective State governments came up with various rules, regulations, and notifications to regulate and put restrictions on private educational institutions.
Respective private educational institutions did not agree with the respective states’ rules, regulations, and notifications, and they started to approach the courts contending that all these rules, regulations, and notifications issued by respective State governments were intervening or contravening with their right to do business, trade, profession, or occupation under Article 19(1)(g), the right to establish religious denomination under Article 26, and the right of the religious or linguistic minority to establish and administer educational institutions of their choice under Article 30 of the Constitution of India. Several disputes related to Articles 19(1)(g), 29, and 30 started to arise before the Court. For example, the constitutional validity of Articles 19(1)(g), 29 and 30; an interplay between Articles 29 and 30; fundamental rights to establish private educational institutions; whether education is a business or occupation; whether a right given under Article 30 is an absolute right; whether rules or regulations imposed by States are reasonable or not; who is the minority and how to determine minority; what does administration mean; how many States can interfere with the rights of educational institutions; and much more. On the above-mentioned disputed issues, the Supreme Court has given several statements and decided the cases based on the objective of the constituent assembly to incorporate those particular Articles, and the Supreme Court has applied a harmonious construction rule of interpretation to maintain the harmony.
The right given under Article 30 to minorities is not a kind of privilege given to them. This right is given to them to feel secure and confident. Article 30 is a special right conferred on religious and linguistic minorities because of their numerical handicap. It is to maintain equality between the minority and the majority. This right is not an absolute right, but reasonable restrictions in the public or national interest can be applied. The rights given under this Article are subject to the other Articles of Part lll of the Constitution and to general laws.
The judgement in the T.M.A. Pai Foundation case clearly distinguished and differentiated between the different types of private educational institutions. The Court held that the private, unaided educational institutions that are wholly maintained by the State or get grant-in-aid from State funds somehow curtailed one of the administrative powers, i.e., the right to take admission.
The rules and regulations imposed by the concerned State Government while recognizing or affiliating the institutions for ensuring certain educational standards and maintaining excellence thereof. But these regulations could not be such as to destroy or infringe on the minority character of the institution.
The right to administer minority educational institutions does not mean the right to maladministration. The level of autonomy to administer the private educational institutions varies depending on the aid received by the private institutions. The States, while granting aid to the institutions, put conditions in place that ensure proper utilisation of aid.
As we know, the Supreme Court is called the “guardian and interpreter of the Constitution”. Hence, on the above-mentioned disputed issues, through various landmark judgments, the Supreme Court acted as a good guardian and interpreter by creating a balanced approach towards private educational institutions, State governments and students. For example, by holding that administration does not mean maladministration and that capitation fees and profiteering are strictly prohibited, the Supreme Court imposed restrictions on private educational institutions. Similarly, by holding that the regulations or restrictions imposed by the State must not be such that minority educational institutions lose their main character, the court imposed restrictions on the respective State governments. On the same note, the Court directs the respective State governments or managements of educational institutions to make rules and regulations to ensure that the admission of students, whether minority or non-minority, is on merit. While delivering judgement on the above-mentioned disputes or issues, the Court always stands firm on the basic structure principles.
Frequently Asked Questions (FAQs)
Is the right to education a fundamental right?
Yes, the right to education is a fundamental right under Article 21A of the Indian Constitution, which states that all children up to the age of 14 have a right to get free and compulsory education.
When was Article 21A inserted in the Indian Constitution?
In 2002, the Constitution (Eighty-sixth Amendment) Act inserted Article 21-A in the Constitution of India.
Is the right given under Article 30 absolute?
No, the right given under Article 30 is not an absolute right, but reasonable restrictions in the public or national interest can be applied.
Right given under Article 30 belongs to whom?
The rights given under Article 30 belong to religious and linguistic minorities.
When was Article 15(5) added to the Constitution of India?
Article 15(5) was added to the Indian Constitution through the 93rd Constitutional Amendment Act in 2006.
When was the Right to Education Act enacted and come into force?
The Right of Children to Free and Compulsory Education Act, or Right to Education Act (RTE), is an Act of the Parliament of India enacted on 4 August 2009, and came into force on 1st April 2010.
What are the essential components of the right to administer?
The essential components of the right to administer educational institutions are as follows:
Right to admit students;
Right to fix a reasonable fee structure;
Power to constitute a governing body;
Right to appoint staff, both teaching and non-teaching, and
Right to take disciplinary action for dereliction of duty by employees.
Right to establish and administer educational institutions for the majority comes under which Article of the Constitution, and is that right a fundamental right?
The right to establish and administer educational institutions for non-minority or majority groups comes under Article 19(1)(g) and Article 26. Yes, the right to establish and administer educational institutions comes under fundamental rights.
Is the right to establish and administer educational institutions available to minorities residing outside of India or in India?
The Supreme Court has stated in Rt. Rev. Bishop S. K. Patro & Ors. vs. State of Bihar & Ors. (1969) that rights under Article 29 could only be claimed by Indian citizens, but Article 30 guarantees the rights of minorities. It was held that the said Article does not refer to citizenship as the qualification for members of the minority.
Does Article 30 give a right to ask for a grant or aid from the State?
A grant of aid is not a constitutional imperative. A State cannot be compelled to grant aid, and Article 30 does not give a right to religious or linguistic minorities to ask from the State for the grant, but if a State is granting aid, then it cannot deny the aid only because the institution is a minority institution.
Can minority private educational institutions admit non-minority students to their educational institutions? If yes, to what extent?
The then Chief Justice Kirpal, along with the other five judges in the T. M.A. Pai Foundation case, stated that the minority private educational institutions may admit non-minority students to a “reasonable extent” so that the rights under Article 30(1) are not substantially impaired and further citizens’ rights under Article 29(2) are not infringed.
What will be the reasonable extent determined by the State depends upon factors such as type of institution, course of education, admission of students, population, and educational needs of minorities. The percentage of the quota will be fixed by the court. Admission will be made on the common admission test (CET) organised by the State.
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