J U D G M E N T.
1. Heard. Rule. Rule returnable forthwith. Both these writ petitions are taken up for final disposal. Heard finally by consent of the learned counsel for the parties.
FACTS :
2. In Writ petition No.1916/2010 the petitioner claims to be a trustee of respondent no.4 education society while in Writ Petition No.1261/2010 the employees of the school run by respondent no.4 education society have a grievance in the matter of transfer of management of the school to respondent no.5 society by the respondent no.4 society. SUBMISSIONS :
3. The learned counsel appearing for the petitioner in both writ petitions made the following submissions :-
(a) In Writ Petition No.1916/2010 Nitin Raghobaji Raut is a trustee of the respondent no.4 Matoshri Bahuuddeshiya Shikshan Sanstha and the dispute amongst the trustees are pending before the Joint Charity Commissioner in the form of Application No.20/2009. Being a trustee, he obtained an order from the Joint Charity Commissioner, Nagpur on 15th October 2009 below Exh.4 in Application No.20/2009 under section 47 of the Bombay Public Trust Act by which ad-interim stay was granted by the said authority staying the process of transfer of management and that order was extended on 24/12/2009. According to him, therefore, there could be no transfer of management by impugned order dated 16/10/2009.
(b) The transfer of management could have been made only in accordance with the provisions of Maharashtra Educational Institutions Transfer of Management Act, 1971 and Rules framed thereunder. Admittedly, that having not been done, the impugned order is illegal.
(c) There being a dispute amongst the trustees and the management of respondent no.4 and in the absence of any no objection certificate, as contemplated by circular dated 8/12/2005 issued by Director of Education, no steps to transfer the school could have been taken. The decision to transfer the school is passed at whims and caprice and not for any plausible reason but upon production of fake documents.
(d) The employees in Writ Petition No. 1261/2010 were not made aware about the mode of transfer of school from one management to another. Impugned order certainly acted adverse to the interest of the employees who are also the beneficiaries of the School. The impugned order could not have been passed without hearing all the interested persons and beneficiaries. Thus, there was no transparency observed before making the impugned order and thus impugned order is bad in law being arbitrary.
4. Per contra, the learned counsel for the respondent opposed the writ petitions. It is submitted that the ad-interim order issued by the Joint Charity Commissioner on 15/10/2009 was never served at any time before passing of the impugned order dated 16/10/2009 on the authority. Therefore, it cannot be assumed that the authority had knowledge of the said order and hence the said order would not affect the impugned order. On the contrary, the said order appears to have been served after passing of the order dated 16/10/2009 and handing over and taking over the charge after transfer of management of school. The ad-interim order was never continued till the last continuation order was made on 24/12/2009. As there was no order continuing the ad-interim stay, the same had become infructuous. At any rate, in Writ Petition No.1261/2009 the said ad- interim stay order was set aside by consent and the matter was remanded back to the Deputy Director of Education for reconsideration and the parties were directed to maintain status-quo and thus the stay order stood modified and that is why no benefit can be derived from the said ex-parte order.
5. It was then argued that the order dated 9 th of March 2010 passed by the said authority is nothing but an order of revival of the earlier order dated 16/10/2009. The learned counsel for the respondent no.4 invited our attention to the additional submissions dated 2/12/2010 and the documents filed therewith and argued that as a matter of fact the site on which the school building was standing was acquired completely by the Maharashtra Airport Development Company Limited for MIHAN Project at Nagpur since the piece of school land is located at Khapri and a over-bridge has already been constructed by the said company. The school has been demolished and that is why there is no school on the spot as the said company had directed vacating the school building and the entire premises. According to him, therefore, the school in the said emergent situation was required to be re-located in the interest of employees as well as students and was accordingly re-located by the impugned order and therefore, the petitions should not be entertained. Since the school upon transfer is already being run by respondent no.5 - society, the writ petitions be dismissed.
6. The learned Addl. G.P. supported the impugned order.
CONSIDERATIONS :
7. Having heard learned counsel for the rival parties, the case in hand is one of simpliciter change of transfer of management governed by the provisions of Clauses 12.1 to 12.5 of the Secondary School Code ( the Code for short). The said clauses read as follows :-
Change of Managements.
12.1 When the management of a school is proposed to be changed, previous permission of the Deputy Director shall be obtained for effecting the change.
12.2 The transfer of a recognized school from one management to another shall be governed by the following sub-rules:
(i) The transfer shall not be effected without the previous approval of the Deputy Director;
(ii) A previous notice of three months, for the intended transfer shall be given to the Deputy Director.
12.3 The Deputy Director may, at his discretion, dispense with the condition in sub-rule (ii) above.
12.4 If the condition laid down in Rule 1.2.(i) above is not complied with, the recognition of the school should be deemed to have been withdrawn automatically from the date of change of management. In very special cases, however, the Director may, at his discretion, waive the condition in Rule
1.2.(i) above.
12.5 The school may be held eligible for grant-in-aid under the new management when the transfer has been effected with the permission of the Deputy Director; or when the condition in Rule 12.2(i) above is waived by the Director, unless he directs otherwise.
8. Perusal of the above provisions of Clauses 12.1 to 12.5 of the Code show that the change of management of school; whether grant-in-aid or otherwise can be made after obtaining the previous permission from the Deputy Director of Education upon giving prior notice of three months. Clause 12.3 provides for power to dispense with the said three months notice. Thus, perusal of Clause 12.1 to 12.5 of the Code clearly show that the Deputy Director of Education has been given full discretion and authority to permit the change of management of a school whether on grant-in-aid or otherwise, however, no basis or guidelines are to be found for grant of prior permission or exercise of discretionary power bestowed on the Deputy Director of Education. These provisions do not spell out circumstances under which the change of management should be allowed. No norms to regulate exercise of discretion is to be found in the said provisions with regard to the resultant effect or otherwise on the beneficiaries of the school, namely, students, parents, teaching and non- teaching staff including the citizens of the area for whose need the school was allowed to be opened and run by the trustees of the Society. The schools are basically allowed to run on grant-in-aid provided by the State exchequer or without grant-in-aid but under the control and supervision of the Education Department to serve the public interest.
9. The public interest does not mean interest of the persons running school. It takes within its fold several factors such as need to run school in a particular locality or area having regard to the need of the area or locality, convenience of the traveling students, non-availability of other school in the adjoining area, educational atmosphere with other facilities like play-ground coupled with financial capacity of the institution to provide educational standard and quality and such other several factors depending upon the facts and circumstances of each case.
10. The reading of the clauses 12.1 to 12.5 extracted hereinabove, prima facie; give unguided and unbridled power to permit transfer of the management of the school or, at any rate, the said power is capable of exercising in a manifestly arbitrary manner. While making this observation, we are not unmindful of the said legal position that the statute will not necessarily be condemned as arbitrary as it does not provide for guidelines or norms to exercise discretion, provided the clear legislative policy and definite legislative object is read therein and an effective mechanism of carrying out that policy is laid down, may be by exercising judicial power. If it is shown in any case that the discretion is exercised in disregard of the standards or contrary to the declared policy of State or object of the legislation, such exercise can be challenged and annulled under Article 14 which includes in its purview both executive and legislative acts.
11. Absence of exercise of arbitrary power is first essential of rule of law upon which constitutional system is based. In a system governed by rule of law, discretion conferred upon an executive authority must be exercised within the clearly defined limits. Rule of law from this point of view means that decision should be made on known principles and rules and in general, such decision should be predictable and a citizen should know where he stands. If a decision is taken without any guiding principle or without any rule, it is impermissible and such decision is the anti-thesis of a decision taken in accordance with the rule of law as held by the Apex Court in Jai Singhani v. Union of India, AIR 1967 SC 1427.
12. At this juncture, it will be useful to refer to the observations of the Apex Court made inD.K.Yadav v. J.M.A.Industries, (1993) 3 SCC 259; wherein the Apex Court observed that substantive and procedural laws and action taken under them must pass the test of Article 14. The test of reason and justice cannot be obstructed. The test have to be pragmatic otherwise they would cease to be reasonable. The procedure prescribed must be just, fair and reasonable even though there is no specific provision in the statute or the rule made thereunder.
13. The Government has laid down guidelines prescribing eligibility criteria for grant of permission to open schools either on grant-in-aid or without grant-in-aid. Persons dehors of guidelines have no independent right to have schools open. The distribution of largesse of the State is for the common good and to subserve the common good of as many persons as possible.
14. Keeping in mind what is stated hereinabove, the Courts cannot adopt rigid attitude of negativity and sit back after striking down the scheme of the Government leaving it to the helpless Government caught in the crisis to make do as best as it may or throwing the situation open to agitational chaos to find a solution by demonstration in the streets and worse. There is a residuary jurisdiction, left in the Court to give direction to the authority when it is satisfied that requirement of law is not being complied with either by the executive authority or by the legislature. Thus, it is a duty of the Court to take notice of the law as exists and as is existed in the past.
15. Keeping in mind the aforesaid observations, this Court cannot overlook the happenings in the recent point of time in the matter of change of managements, namely; that the change of managements of the schools particularly run on grant-in-aid basis i.e. on the grant provided by the State Government (salary as well as non-salary grants) are being made obviously with an eye on the hefty unaccounted income while appointing new teachers or non-teaching staff in the school. This business of change of management for consideration is not only affecting the society and students community at large but also affecting the teaching community which have direct impact on the standards of education. Under these circumstances, the Courts cannot afford to turn blind eye to this business of change of management for consideration and permit exercise of unguided and unbridled powers conferred on the Deputy Direction of Education. The time has come to arrest this tendency till such time either legislature or the State Government do not come out with a well guided and transparent policy in the matter of change of management.
16. In the instant case, we find that the respondent no.5 wanted to take over the school run by respondent no.4 as the school was obviously on grant-in-aid basis. Both the managements entered into an agreement for change of management. There is no Proforma agreement provided anywhere in the School Code but it appears that there is a Circular issued by the Director of Education on 8/12/2005, with which we will deal latter. Perusal of the agreement which has been accepted in toto by the Deputy Director of Education shows the following only reason mentioned for change of management by the respondent no.4 society (translated Annexure M- page 58)
para 1 sub para -
In the present circumstances for some unavoidable reasons it would not be possible to manage the school properly and therefore, this school should be transferred to Jeevandeep Shikshan Sanstha, Mahal, Nagpur.
17. We have perused the entire agreement and the pleadings of the parties and except the above reason, we do not find any other reason for effecting the change of management. Perusal of the impugned order shows that this reason has been readily accepted by the Deputy Director of Education by stating the reason that there being only one school of the society and due to other liabilities, the Society being not in a position to look after the management/administration of the school carefully; it was therefore the Matoshri Bahuuddeshiya Shikshan Sanstha has decided to transfer the same. Admittedly, the Deputy Director of Education did not at all make any enquiry about the so-called other liabilities or the alleged unavoidable reason and chose to abruptly accept the said reason as a good reason for change of management. Thus, this is a clearcut misuse of the unguided and unbridled power given under the said provisions i.e. Clause 12.1 to 12.5 of the Secondary School Code. It is, thus, clear that merely for asking the Deputy Director has passed the impugned order and changed the management. It is an admitted position that when the said impugned order was passed, none except the said two societies who were interested in handing over and taking over the School were heard. In other words, neither the students, teachers, non-teaching staff or the beneficiaries of the School which was grant-in-aid school or even the concerned Education Officer were at all heard. No attempt was made to find out the correctness of the reason furnished in the agreement for change of the management. We further find that merely because transferee school took the responsibilities of the employees of the school or its financial liabilities, the Deputy Director was impressed and satisfied to effect the change by making the impugned order which, in our opinion, is wholly arbitrary. Since none of the beneficiaries or the interested persons were at all heard by the Deputy Director of Education, we hold that the said order dated 16.10.2010 is in the violation of the principles of natural justice. It is unfortunate to note that Clause 12.1 to 12.5 do not provide for the aforesaid compliance or transparency in the matter. The circular dated 8.12.2005 issued by the Deputy Director of Education at Annexure M (at page 58) in para 2 thereof states as under :
In the matter of transfer/change of management of School, assets and liabilities, employees of the school, it is purely a matter of privity of contract between transferor and transferee society .
18. In our opinion, the aforesaid statement in the said circular is wholly wrong as it is the State which gives grant to the schools from the public money and thus transfer of management of a school cannot be a private affair. The Circular thus is in support of the unguided and unbridled power given to the Deputy Director of Education under the aforesaid provisions which we have already found to be arbitrary. Consequently, we hold that the said circular does not protect public interest. The schools run on grant-in-aid basis cannot be the private property of the two societies namely, transferor and transferee society. There is further statement in the said circular that no objection certificate from the Assistant Charity Commissioner should be obtained. The Assistant Charity Commissioner has pointed out that there is no such provision for issuance of no objection certificate by the Assistant Charity Commissioner, and in our opinion rightly. The Court of Assistant Charity Commissioner, from the reading of the aforesaid Circular dated 8/12/2005, seems to have been treated as if it is an office of the Government giving no objection certificates. It is unfortunate that Director of Education even does not understand that the Assistant Charity Commissioner or the Charity Commissioner is not an office of Government issuing no objection certificates.
19. We reject the submissions made on the basis of an ad-interim order dated 15/10/2009 made by counsel for petitioner since no evidence has been placed before us in that behalf to show that before passing of the order dated 16/10/2009, the said ad- interim order was served on the authority. Hence impugned order dated 16/10/2009 cannot be faulted on that ground.
20. At this juncture, we notice the provisions of the Maharashtra Education Institutions (Transfer of Management), Act, 1971, providing for modalities and transparency in the matter of transfer of school having regard to the principles of natural justice. It is clear that in the matter of transfer of management, the field is occupied by the State legislation. The executive power of the State cannot be exercised in the field which is already occupied by the laws made by the legislature. Any order, instruction, direction or modification issued in exercise of the executive power of the State which is contrary to any statutory provision is without jurisdiction and is a nullity. The School Code is nothing but the administrative/ executive instruction prescribing the conditions for giving grant-in-aid to the educational institutions which have no statutory force unless the provision thereof, either in full or in part, is referred to or incorporated in any statute. It has, therefore, no statutory force. The executive instructions are capable of being reconciled or read together with the legislation holding the field. The Courts are expected to make all endeavour that the provisions of both the Code as well as Statute holding the field are allowed to be read together. Keeping in mind the said approach, one has to turn to the provisions of the Maharashtra Education Institutions (Transfer of Management) Act, 1971 and sections 3 and 4 thereof which read thus:
3. Where the State Government is of opinion that any educational institution is being managed in a manner detrimental to the public interest, the State Government may make or cause to be made an investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose. The person or body of persons shall, after making the investigation, submit his or its report in that behalf to the State Government. In making such investigation the person in charge of the institution shall be given an opportunity of being heard in relation to any matter pertaining to such investigation.
4.(1) If, after making or causing to be made any such investigation as is referred to in section 3 and on considering the report submitted to it under that section, the State Government is satisfied that action under this section is expedient in the public interest, it may issue directions to the educational institution as may be appropriate in the circumstances for the purpose of improving the standard of education imparted in the institution or for ensuring the competence of teachers, or for maintaining the discipline of the institution or for the purpose of improving the administration or management of the undertaking or the institution in the manner specified or indicated in such directions, or in relation to any matter which promotes or is likely to promote in the public interest the administration or management of the institution.
(2) Without prejudice to the generality of the provisions of sub-section (1), such directions may be issued for all or any of the following matters, namely;-
(a) requiring the institution to pay the salaries of all the employees of the institution not later than the fifth day of each calendar month ; or requiring it to pay to each employee the amount of the salary in full (without any deductions other than deductions which are authorized by or under any law for the time being in force) as specified in the pay-bill in such manner as may be prescribed in this behalf ;
(b) requiring the institution to appoint the teaching staff possessing such prescribed qualifications as are necessary for the purpose of ensuring the maintenance of academic standards as laid down by the State Government from time to time in relation to the institution and for maintaining efficient administration and management thereof; and accordingly, requiring the institution to terminate the services of any person or persons who do not possess such qualifications within such time as may be specified in the directions;
(c) requiring the institution in the interest of ensuring the smooth and orderly administration thereof to avoid any disputes or dissensions amongst the persons managing the affairs of the institution and for that purpose indicating in such directions the action which may be taken by the institution;
(d) requiring the institution to provide it with adequate and proper accommodation, furniture, stationery, equipment and other facilities and matters which are necessary for the efficient administration or management of the undertaking of the institution, and specified in such directions;
(e) requiring the institution not to demand, either directly or indirectly any contribution, donation or payment of any kind, either in cash or in kind, from or on behalf of any pupil as a condition for granting him admission to the institution or promotion or any other special benefit;
(f) requiring the institution to carry out the instructions from time to time issued by the Education Department of the State Government or of any officer not lower in rank than a Deputy Director of Eduction duly authorised by it in this behalf, and specified in such directions;
(g) requiring the institution to take all such steps or action as is specified in the directions in relation to any matter involving misappropriation or misapplication of the funds of the institution which affects the working of the institution.
(3) Every direction issued under this section shall specify the period within which the direction may be complied with. The State Government may extend such period from time to time, if the circumstances of the case warrant such extension.
Upon reading the aforesaid provisions, we find that State Government has been empowered to issue directions in public interest for proper and effective administration and management of school to those in charge of the school after affording them an opportunity of being heard. Section 5 and section 6 read thus :
5.(1) The person or body of persons appointed to make any investigation under section 3 may, with the approval of the State Government, choose one or more persons possessing special knowledge of any matter relating to the investigation to assist him or it in holding the investigation.
(2) The person or body of persons so appointed shall have all the powers of a civil court under the Code of Civil Procedure, 1908, for the purpose of taking evidence on oath (which he or it is hereby empowered to administer) and of enforcing the attendance of witnesses and compelling production of documents and material objects, and the person or body of persons shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898.
6. (1) If the State Government is of opinion that -
a) an institution to which directions have been issued in pursuance of section 4 has failed to comply with such directions within the period specified in the directions, or
(b) an educational institution in respect of which an investigation has been made under section 3 (and any directions have been issued in pursuance of section 4) is managing the affairs of its undertaking in a manner detrimental to such institution or to public interest,
The State Government may, by notification in the Official Gazette, direct that the entire management and control of the undertaking of the institution specified in the notification (hereinafter referred to as the 'said Institution') vested in such institution immediately before the date of such notification (hereinafter refereed to as the appointed date ) shall be transferred to and vested in a Society formed for the purpose under the Societies Registration Act, 1860 (hereinafter referred to as the Society ) with a view to maintaining continuity of eduction imparted in the said Institution.
(2) The Society shall among other members consist of such officers of the Eduction Department as may be nominated by the State Government and if the said Institution is an institution to which the provisions of clause (1) of article 30 of of the Constitution of India apply, the Society shall consist of persons the majority of whom (including officers of Government) belong to the minority by which the said Institution has been administered immediately before the appointed date.
(3) The State Government shall cause the substance of such notification to be published at such places and in such manner as may be prescribed.
These provisions provide for investigation into the affairs of such school and in case of failure to comply with directions issued under Section 4 of the Act, after complying with principles of natural justice power to transfer school to other management has been given.
21. Maharashtra Educational Institutions (Management) Act, 1976, which was brought into force for taking over of management and appointing 'Administrator' on the school also provides for modalities, transparency and compliance with principles of natural justice.
22. We are, however, faced with a situation particularly with reference to Clauses 12.1 to 12.5 of the Secondary School Code wherein no modalities, transparency and compliance of rules of natural justice is provided. There is no reason why the spirit of said provisions should not be taken into consideration while considering the request for transfer of the school.
23. In the aforesaid premises, we direct that the following modalities shall be followed in the matter of change of management henceforth until framing of the Rules and Regulations or Guidelines by the State Government in the matter of change of Managements.
(1) A public notice shall be published and displayed at appropriate and prominent newspapers in the concerned area at the cost of transferor or transferee society about the proposed change in the management of a grant-in-aid school and objections should be invited from all the interested persons including students, their parents, teaching and non-teaching staff, the citizens of the area and the other school, if it is going to adversely affect, may be because of transfer of one area to another.
(2) Enquiry shall be held about the reasons etc. for proposed change of management. The enquiry shall include independent report from Education Officer and Vigilance Section, to find out bona fides behind the proposal.
(3) All objections shall be heard by the Deputy Director of Education who shall then pass a reasoned order which fact shall be made known by publication/display as stated in (1) above.
(4) Actual transfer/change of management shall not be allowed to take place for a period of thirty days from the date of publication about fact of passing of order and it should be preferably from the commencement of the new academic session subject to prior permission of the Charity Commissioner under section 36 of the BPT Act.
24. As a sequel, to the above discussion the impugned order as well as the consequential order dated 9th March 2010 are liable to be quashed and set aside. However, in the instant case, we refrain from doing so, in view of the typical developments and particular facts and circumstances which took place. They are that the school building and its premises were standing on Partwari Halka No.42, Khasra No. 190/1, Plot No.1, admeasuring 4500 sq. ft at Mauza Khapari, Tq. and District Nagpur. Part of the building was required to be demolished because of the construction of the flyover by the M.A.D.C. for its MIHAN Project at Nagpur and rest of the school building has also been demolished. The entire piece of land on which the school building was standing has been acquired by M.A.D.C. Not only that, on 5/2/2007 the said company had already issued a warning to vacate the school and demolish the building. Admittedly, now there is no school and the over bridge leading to the MIHAN Project has already been constructed. In other words, at present there is no school existing on the spot. For the aforesaid reasons and since the school has already been actually transferred under the impugned order dated 16/10/2009 to the respondent No.5 Society, the students have been accommodated and the entire staff is working with respondent No.5 Society in the said school, under these circumstances, in our opinion, it would not be in the interest of justice at this stage and in the above said peculiar circumstances to exercise our discretionary writ jurisdiction under Article 226 of the Constitution of India and interfere with the order dated 16/10/2009 resulting in change of management.
25. In the result, the Deputy Director, henceforth, while considering the application for transfer of management shall be guided by the guidelines contained in the instant judgment. In the facts and circumstances of the case, for the reasons recorded, both petitions are dismissed. Rule is discharged with no order as to costs.