Bhagwanbaba Sevabhavi Sanstha and Others Vs. the State of Maharashtra, Through Its Secretary, Department of School Education and Sports and Others - Court Judgment

R.M. Borde, J.

1 Heard. Rule. Rule made returnable forthwith and heard finally by consent of learned Counsel for respective parties.

2 Petitioners are Educational Institutions registered under the Bombay Public Trusts Act and/or Societies Registration Act. Petitioner-Education Societies, in this group of petitions, are challenging the provisions contained in Clauses 1 and 3 of Schedule “D” appended to Government Resolution dated 05.12.2012 prescribing specified marks on evaluation of different criterion laid down under the relevant clauses. The challenge is raised on the ground of unreasonableness and arbitrariness in prescription of marks.

3 The State of Maharashtra has issued a Resolution on 05.12.2012 prescribing procedure for according permission to operate Secondary Schools on ‘No Grant basis. It is recorded in the introductory part of the Government Resolution, that the State has finalised perspective plan for according approval to primary and secondary schools in Marathi medium in Rural areas of the State. Accordingly, the State has prescribed 651 locations for primary schools, 1579 locations for Higher Primary Schools and 142 locations for Secondary Schools. It is specified that Primary and Higher Primary Schools would be operated by Zilla Parishads and local bodies, whereas, 142 Secondary Schools shall be permitted to be operated by private Managements. The State has also prescribed locations for permitting opening of Secondary Schools as per Government Resolutions dated 25.07.2012, 22.08.2012 and 22.11.2012.

4 The State Government has laid down guidelines for according approval to operate Secondary Schools by issuing Resolution on 05.12.2012.

(i) It is recorded in paragraph 1 of the Resolution, that the Societies, desirous of operating Secondary Schools, shall be economically sound and such Societies shall make deposit of Rs.5 lacs for non-tribal area locations and Rs.2 lacs for tribal area locations. It is further prescribed that the Society must possess two acres of land for establishing school in nontribal area and 1 acre land for establishing school in tribal area. If the society does not possess required land, an undertaking to that effect shall have to be presented to acquire the land within a period of three months from the date of issuance of letter of intent. It is also prescribed that the Institutions, desirous of operating schools, shall not be administered by the appointed Administrator.

(ii) Paragraph 2 of the Government Resolution dated 05.12.2012 provides for procedure in respect of issuance of letter of intent. The Society, desirous of operating secondary school, has to tender Online application along with non refundable deposit of Rs. 10,000/-. The proposals, so received by the Education Officer, shall have to be placed before the District Level Committee and the District Level Committee is required to submit such proposals along with its recommendations to Director of Education, Maharashtra State, Pune, within a period of fifteen days from the date of receipt of the proposals. The Director of Education, Pune, shall have to forward said proposals along with his recommendations to the State Level Committee. If the Director of Education receives more than one application from the Societies desirous of operating schools at one location, the Director of Education, on consideration of norms prescribed in Schedule “D” as well as marks earned by the Society, shall have to forward first three proposals, in the order of merit, to the State Government. It is also prescribed that the Society, which has been allotted highest marks on consideration of parameters laid down under Schedule “D”, shall have to be allotted letter of intent. It is also provided that the Society, receiving a letter of intent, will not be entitled to operate the school until receipt of letter of approval from the State Government.

(iii) Paragraph no. 3 of the aforesaid Government Resolution provides that the Society, on receipt of letter of intent, shall have to fulfil norms prescribed under the Secondary School Code and thereafter shall have to apply for issuance of letter of approval to the State Government.

(iv) Paragraph no.4 of the Government Resolution provides for procedure in respect of issuance of letter of approval. It is provided that on receipt of letter of approval, the Society shall have to commence functioning of the school during relevant academic year and in the event of issuance of letter of approval, after commencement of academic year, the Society shall have to commence functioning of the school, during next academic year.

5 Petitioners, in the instant petitions, have essentially raised objection to clauses 1 and 3 contained in Schedule “D” appended to the Government Resolution dated 05.12.2012. Schedule “D” provides for allotment of marks on consideration of different parameters laid down in the Schedule.

(i) Clause 1 of Schedule “D” provides for award of marks in respect of acquisition of land for operating the school. If the Society owns requisite land at the place where the school is to be operated, the Society is entitled to earn 10 marks. Whereas, if the acquisition of requisite land is on rental basis for a period of 30 years, the Society can earn 8 marks. In the event, the Society proposes a land of another Society, such society can be awarded 5 marks. In the event, the Society proposes to acquire land belonging to other Society, which is secured by such Society on lease basis for the period of 30 years, minimum 3 marks are required to be awarded. If the Society does not have its own or rented premises, the Society can earn 1 mark.

(ii) In a similar fashion, clause 3 of Schedule “D” prescribes that if the Society operates more than 5 recognised Primary/Secondary Schools, such Society is eligible to earn 10 marks. Whereas, 8 marks are prescribed in the event the Society operates 5 recognised primary or secondary schools. 5 marks are prescribed if the Society operates 3 to 4 recognised primary or secondary schools. A Society operating 2 primary or secondary schools is eligible to secure 3 marks. Whereas, a Society, operating 1 primary or secondary school, is eligible to secure 2 marks. In case of a society, which does not operate any primary or secondary school, such society is eligible to earn only 1 mark.

6 According to petitioners, prescription of marks under various heads, as provided under clauses 1 and 3 of Schedule “D”, is discriminatory and criteria applied is irrational and arbitrary. It is contended that the provision of marks under clauses 1 and 3 of Schedule “D” is unreasonable for the reason that it has no nexus with the object sought to be achieved. It is contended that the net result of prescribing marks in the fashion that has been prescribed, is to make it impossible for the newly established societies to enter the field of imparting school education. The award of marks, as prescribed under the Schedule, offers unfair advantage in favour of the societies which are operating 5 or more primary or secondary schools. The provision made in Schedule “D” in respect of award of marks is aimed at creating monopoly of the Institutions which are operating number of schools.

7 It is further contended that in the State of Maharashtra, almost in every district, large number of educational Institutions are controlled by persons having strong political connections or by the Politicians themselves and such individuals operate large number of Societies. The prescription of marks, as provided under Schedule “D” creates monopoly of such political strongholds in the educational field thereby debarring entry of other eligible societies to operate schools. It is contended that since the system of award of marks prescribed under clauses 1 and 3 of Schedule “D” is discriminatory and since it does not have any nexus with the object sought to be achieved and since it is aimed at creating monopoly of a particular class operating number of schools in the State, aforesaid clauses are required to be struck off being violative of provisions of Article 14 of the Constitution of India.

8 An affidavit-in-reply has been presented on behalf of Respondent No.1-State by the Under Secretary, School Education and Sports Department, Mantralaya, Mumbai. Respondent No.1 has denied the contention raised by petitioners that clauses 1 and 3 of Schedule “D” are discriminatory in nature and those are aimed at extending unfair advantage to a particular class, as alleged. It is contended that the State Government is bound to consider, whether a society, applying for proposed school, has enough experience in the field so as to ensure that the School is run properly. It is also contended that the State Government has framed a policy and issued the Government Resolution in pursuance to the directives issued by this Court in Writ Petition No.1773 of 2000 (Gramvikas Shikshan Prasarak Mandal, Sangola Vs. State of Maharashtra and others). It is contended that in order to assess competing claims of the applicants, it was felt necessary to prescribe norms for evaluation of such applications, so that the decision making process evolved by the State is fair, transparent and consistent. It is contended that in terms of the parameters prescribed in Schedule “D”, each application could be objectively assessed taking into consideration availability of necessary infrastructure and experience.

9 It is contended that system of award of marks is prescribed in order to aid the decision makers to arrive at a just and fair decision. It is contended that the contention raised by petitioners that clauses 1 and 3 of Schedule “D” are likely to eliminate competition, is unfounded. It is further stated that while evaluating each proposal, the Government is bound to consider that the Society owns land and infrastructure sufficient for future expansion. It is, thus, contended that there is no merit in the petitions and same deserve to be dismissed.

10 We have heard arguments advanced by learned Counsel for respective parties and perused the relevant Government Resolution. So far as clause 1 of Schedule “D” is concerned, it provides for different marks in respect of acquisition of land and infrastructure. If the Society owns land at the place where the school is proposed to be set up, the society is entitled to earn 10 marks, whereas, if the society proposes to acquire rented premises, 8 marks are prescribed and so on. The marks prescribed under clause 1 of Schedule “D” in respect of acquisition of infrastructure i.e. land is concerned, we do not find anything discriminatory or irrational in prescribing uneven marks considering availability of infrastructure. The prescription of different marks, under clause 1 of Schedule “D” appended to Government Resolution dated 05.12.2012, does truly have nexus with the object sought to be achieved i.e. the society, desirous of operating proposed school, shall possess necessary infrastructure. The challenge raised by the petitioners, in the instant group of petitions, to clause 1 of Schedule “D”, on the ground of unreasonableness, does not deserve consideration.

11 However, the contention of the petitioners that prescription of different marks under clause 3 of Schedule “D” is irrational and does not have any nexus with the object sought to be achieved and that such prescription of marks is aimed at extending unfair advantage in favour of the Societies operating number of schools, deserve consideration.

12 It is contended that the object of prescribing marks under different heads which has a nexus with the object sought to be achieved i.e. acquisition of infrastructure for operating a school or competence of a society to operate a school is understandable. However, prescription of higher marks i.e. 10 marks in favour of a society, operating more than 5 primary/secondary schools, gives unfair advantage in favour of established societies. A new society, although having capability to operate a school and even if possess necessary infrastructure to operate a school, will be thrown out of the competition, since the society operating more than 5 schools would be securing additional 10 marks. It is contended that it is unreasonable to prescribe higher marks only for the reason that a society is operating number of schools in the State. It is contended that the fact that a society operates more schools has nothing to do with the availability of infrastructure. It would be understandable if higher marks are prescribed in the event the Society has necessary infrastructure to operate school, however, it would be unreasonable to prescribe higher marks only because a society operates number of schools. It is contended that it is a matter of common knowledge that the persons, who are nearer to power centre or politically strong, wield control over large number of educational Institutions in the State.

13 Petitioner in Writ Petition No.3237 of 2013 has placed on record data in respect of schools operated by the Ministers – present and former, as well as Politicians holding different positions in Beed district. The situation is no more different in other districts. The list is quite long and details thereof are not necessary to be recorded.

14 It is, thus, contended that prescription of higher marks, as per clause 3 of Schedule “D” extends unfair advantage in favour of the societies operating more than 5 schools and as such, said clause is aimed at creating monopoly in favour of existing Institutions and is disadvantageous to the newly established education societies desirous of tendering applications for operating schools. The prescription of marks under clause 3 of Schedule “D”, being discriminatory, offends right of equality guaranteed under Article 14 of the Constitution and as such, deserves to be quashed and set aside.

15 Petitioners have placed reliance on the judgment in the matter of Union of India Vs. Dinesh Engineering Corporation and another, reported in AIR 2001 SC 3883. The matter before the Supreme Court relates to award of tenders by Railways for supply of spare parts used in GE-Governors. Petitioners tender was rejected by the Railways by taking policy decision in context of sophistication, precision, etc, without taking into consideration the fact that petitioner was supplying such spare parts for over 17 years. The monopoly created in other Company from which spare parts were purchased without any tender on proprietary basis was held to be in flagrant violation of Article 14. The Supreme Court, in paragraph 12 of the judgment, observed thus:

12 “.. “There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to a policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and Courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the Courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness bearing in mind the material on record.”

16 In RashbihariPanda Vs. State of Orissa, reported in AIR 1969 SC 1081, the petition was presented challenging Scheme and Act passed by the Government of Orissa monopolizing sale of kendu leaves in the State. The Supreme Court held that complete monopoly is bad. While considering the question on the touchstone of Article 14, in paragraph 17, the Supreme Court has observed thus:

“It was ex facie discriminatory, and imposed unreasonable restrictions upon the right of persons other than existing contractors to carry on business. In our view, both the schemes evolved by the Government were violative of the fundamental right of the petitioners under Article 19(1)(g) and Article 14 because the schemes gave rise to a monopoly in the trade in Kendu leaves to certain traders, and singled out other traders for discriminatory treatment.”

17 In the case of D.S.Nakaraand others Vs. Union of India, reported in AIR 1983 SC 130, it is observed thus:

“The fundamental principle is that Art.14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the twin tests of classification being founded on an intelligible differential which distinguishes persons or things that are grouped together from those that are left out of the group and that deferentia must have a rational nexus to the object sought to be achieved by the statute in question. The doctrine of classification was evolved to sustain a legislation or State action designed to help weaker sections of the society or some such segments of the society in need of succour. Legislative and executive action may accordingly be sustained if it satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. The State, therefore, would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlates it to the objects sought to be achieved.”

18 In the case of RamanaDayaram Shetty Vs. The International Airport Authority of India and others, reported in AIR 1979 SC 1628, in paragraph 10 of the judgment, referring to the article on “The Welfare State, Rule of Law and Natural Justice”, by Mathew, J., it is observed that, “Substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found.” In paragraph 11 of of the judgment, it is observed thus:

“11 Today the Government, in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including jobs contracts, licences, quotas, mineral rights etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political sufferers and the whole scheme of State and local welfare. Then again, thousands of people are employed in the State and the Central Government and local authorities. Licences are required before one can engage in many kinds of businesses or work. The power of giving licences means power to withhold them and this gives control to the Government or to the agents of Government on the lives of many people. Many individuals and many more businesses enjoy largess in the form of Government contracts. These contracts often resemble subsidies. It is virtually impossible to lose money on them and many enterprises are set up primarily to do business with Government. Government owns and controls hundreds of acres of public land valuable for mining and other purposes. These resources are available for utilisation by private corporations and individuals by way of lease or licence. All these mean growth in the Government largess and with the increasing magnitude and range of governmental functions as we move closer to a welfare State, more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do not enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure? Is the position of the Government in this respect the same as that of a private giver? We do not think so. The law has not been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights while others have been given legal protection not only by forging procedural safeguards but also by confining/structuring and checking Government discretion in the matter of grant of such largess. The discretion of the Government has been held to be not unlimited in that the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will. It is insisted, as pointed out by Professor Reich in an especially stimulating article on “The New Property” in 73 Yale Law Journal 733, “that Government action be based on standards that are not arbitrary or unauthorised.” The Government cannot be permitted to say that it will give jobs or enter into contracts or issue quotas or licences only in favour of those having gray hair or belonging to a particular political party or professing a particular religious faith. The Government is still the Government when it acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual.”

19 Applying the test of reasonableness, we are of the considered opinion that prescription of marks, as provided under clause 3 of Schedule “D” in Government Resolution dated 05.12.2012, is bad and deserves to be quashed. The prescription of marks does not have any nexus with the object sought to be achieved and creates unfair advantage in favour of the Institutions operating more than 5 schools. The prescription of marks does not have any nexus with the merit or capability of a Institution to operate the school. The classification made on account of prescription of different marks does not satisfy twin tests of classification being founded on an intelligible deferentia which distinguishes persons or Institutions that are grouped together from those that are left out. Moreover, deferentia must have a rational nexus to the object sought to be achieved. As laid down in the case of Ramana(supra), duty is cast upon the Government to act fairly and it cannot act arbitrarily even in the matters of granting largess.

20 Thus, applying touchstone of reasonableness, the criteria prescribed under clause 3 of Schedule “D” appended to Government Resolution dated 05.12.2012 prescribing different marks is unreasonable, irrational and as such, is violative of Fundamental principles laid down under Article 14 of the Constitution.

21 For the reasons recorded above, Petitions succeed and are partly allowed. Clause 3 of Schedule “D”, appended to Government Resolution dated 05.12.2012, stands quashed and struck down.

22 Rule made partly absolute in above terms. In the facts and circumstances, there shall be no order as to costs.

23 Pending Civil Applications, if any, do not survive and stand disposed of.