# Khalsa University and Another v. The State of Punjab and Another

- **Citation:** 2024 INSC 751
- **Court:** Supreme Court of India
- **Decided:** 2024-10-03
- **Case number:** Civil Appeal No. 10999 of 2024
- **Bench:** B.R. Gavai, K.V. Viswanathan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/khalsa-university-and-another-v-the-state-of-punjab-and-another-37284
- **Pages:** 48

## Headnote

The High Court dismissed the writ petition filed by the appellants
inter-alia seeking a writ in the nature of certiorari praying for
quashing "The Khalsa University (Repeal) Act, 2017" dated 17th
July 2017. The issues which arises for consideration are: Whether
an enactment for giving out a differential treatment to a single
entity is valid in law or not; whether the Impugned Act is liable to
be struck down on the ground of manifest arbitrariness.
Headnotes†
Khalsa University (Repeal) Act, 2017 - Whether an enactment
for giving out a differential treatment to a single entity is
valid in law or not:
Held: It is a settled position of law that though a legislation
affecting a single entity or a single undertaking or a single person
would be permissible in law, it must be on the basis of reasonable
classification having nexus with the object to be achieved -
There should be a reasonable differentia on the basis of which
a person, entity or undertaking is sought to be singled out from
the rest of the group - Further, if a legislation affecting a single
person, entity or undertaking is being enacted, there should be
special circumstances requiring such an enactment - Such special
circumstances should be gathered from the material taken into
consideration by the competent legislature and shall include the
Parliamentary/Legislative Debates - Also, wherever this Court
has upheld the legislation affecting the single entity, institution or
undertaking, it found that it was done in emergent and extreme
circumstances preceded by enquiries, parliamentary debates,
etc. - It was done when the legislature took into consideration the
relevant material and found it expedient to do so - In the instant
* Author
446
[2024] 10 S.C.R.
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case, the impugned Act is a single entity legislation repealing the
2016 Act by which the Khalsa University was established - The
Khalsa University has specifically averred that it has been singled
out by the State Government amongst 16 Universities - It has also
been averred that there is absolutely no reason or justification
whereby the Khalsa University could be ordered to be shut down in
such a discriminatory manner - The reply filed by the respondent
no.1 does not deal with the submissions made by the appellants
on the ground of discrimination - No material is placed on record
as to what was the compelling and emergent situation so as to
enact a law which could affect the Khalsa University (appellant
No.1) - No material is placed on record to show that there were
any discussions prior to the Impugned Act being passed or as
to what material was placed and taken into consideration by
the competent legislature - Since the Khalsa University had
specifically pleaded a ground regarding discrimination, it was
incumbent upon the respondents to have dealt with the said
challenge - Therefore, the Impugned Act singled out the Khalsa
University (appellant No.1) amongst 16 private Universities in the
State and no reasonable classification has been pointed out to
discriminate the Khalsa University (appellant No.1) against the
other private Universities - The Impugned Act therefore would
be discriminatory and violative of Article 14 of the Constitution.
[Paras 48, 53, 58, 59]
Khalsa University (Repeal) Act, 2017 - Constitution of
India - Art.14 - Whether the Impugned Act (Khalsa University
(Repeal) Act, 2017) is liable to be struck down on the ground
of manifest arbitrariness:
Held: The only reasoning given in the Statement of Objects and
Reasons of the Impugned Act is that the Khalsa College has, over
a period of time, become a significant icon of Khalsa heritage and
the University established in 2016 is likely to shadow and damage
its character and pristine glory - It is to be noted that the Khalsa
College which was established in 1892 is not a part of the Khalsa
University - During the course of hearing, a specific statement
has been made by the appellants that the Khalsa College would
not be af

## Text

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[2024] 10 S.C.R. 445 : 2024 INSC 751
Khalsa University and Another
v.
The State of Punjab and Another
(Civil Appeal No. 10999 of 2024)
03 October 2024
[B.R. Gavai* and K.V. Viswanathan, JJ.]
Issue for Consideration
The High Court dismissed the writ petition filed by the appellants
inter-alia seeking a writ in the nature of certiorari praying for
quashing "The Khalsa University (Repeal) Act, 2017" dated 17th
July 2017. The issues which arises for consideration are: Whether
an enactment for giving out a differential treatment to a single
entity is valid in law or not; whether the Impugned Act is liable to
be struck down on the ground of manifest arbitrariness.
Headnotes†
Khalsa University (Repeal) Act, 2017 - Whether an enactment
for giving out a differential treatment to a single entity is
valid in law or not:
Held: It is a settled position of law that though a legislation
affecting a single entity or a single undertaking or a single person
would be permissible in law, it must be on the basis of reasonable
classification having nexus with the object to be achieved -
There should be a reasonable differentia on the basis of which
a person, entity or undertaking is sought to be singled out from
the rest of the group - Further, if a legislation affecting a single
person, entity or undertaking is being enacted, there should be
special circumstances requiring such an enactment - Such special
circumstances should be gathered from the material taken into
consideration by the competent legislature and shall include the
Parliamentary/Legislative Debates - Also, wherever this Court
has upheld the legislation affecting the single entity, institution or
undertaking, it found that it was done in emergent and extreme
circumstances preceded by enquiries, parliamentary debates,
etc. - It was done when the legislature took into consideration the
relevant material and found it expedient to do so - In the instant
* Author
446
[2024] 10 S.C.R.
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case, the impugned Act is a single entity legislation repealing the
2016 Act by which the Khalsa University was established - The
Khalsa University has specifically averred that it has been singled
out by the State Government amongst 16 Universities - It has also
been averred that there is absolutely no reason or justification
whereby the Khalsa University could be ordered to be shut down in
such a discriminatory manner - The reply filed by the respondent
no.1 does not deal with the submissions made by the appellants
on the ground of discrimination - No material is placed on record
as to what was the compelling and emergent situation so as to
enact a law which could affect the Khalsa University (appellant
No.1) - No material is placed on record to show that there were
any discussions prior to the Impugned Act being passed or as
to what material was placed and taken into consideration by
the competent legislature - Since the Khalsa University had
specifically pleaded a ground regarding discrimination, it was
incumbent upon the respondents to have dealt with the said
challenge - Therefore, the Impugned Act singled out the Khalsa
University (appellant No.1) amongst 16 private Universities in the
State and no reasonable classification has been pointed out to
discriminate the Khalsa University (appellant No.1) against the
other private Universities - The Impugned Act therefore would
be discriminatory and violative of Article 14 of the Constitution.
[Paras 48, 53, 58, 59]
Khalsa University (Repeal) Act, 2017 - Constitution of
India - Art.14 - Whether the Impugned Act (Khalsa University
(Repeal) Act, 2017) is liable to be struck down on the ground
of manifest arbitrariness:
Held: The only reasoning given in the Statement of Objects and
Reasons of the Impugned Act is that the Khalsa College has, over
a period of time, become a significant icon of Khalsa heritage and
the University established in 2016 is likely to shadow and damage
its character and pristine glory - It is to be noted that the Khalsa
College which was established in 1892 is not a part of the Khalsa
University - During the course of hearing, a specific statement
has been made by the appellants that the Khalsa College would
not be affiliated with the Khalsa University - The maps have been
placed on record which show the placement of Khalsa College in
the campus along with the other institutions - The perusal of the
[2024] 10 S.C.R.
447
Khalsa University and Another v. The State of Punjab and Another
said map would clearly reveal that it is only the Khalsa College
established in 1892 which is a heritage one - All other buildings
have been subsequently constructed having no resemblance with
the Khalsa College building - It can thus be seen that the very
foundation that Khalsa University would shadow and damage the
character and pristine glory of Khalsa College which has, over a
period of time, become a significant icon of Khalsa heritage is on
a non-existent basis - It could thus be seen that the Impugned
Act, which was enacted with a purpose which was non-existent,
would fall under the ambit of manifest arbitrariness and would
therefore be violative of Article 14 of the Constitution - Therefore,
this Court is of the considered view that the Impugned Act is also
liable to be set aside on the same ground. [Paras 64, 65]
Khalsa University (Repeal) Act, 2017 - Khalsa University Act,
2016 - Punjab Private Universities Policy, 2010 - Whether
Khalsa University (Repeal) Act, 2017 is unconstitutional:
Held: Khalsa University (Repeal) Act, 2017 is struck down as being
unconstitutional - The consequent direction is also issued to the
effect that the Khalsa University Act, 2016 would be deemed to
be in force and status quo as it obtained on 29.05.2017 would
stand restored. [Para 66(iii)]
Constitution of India - Art.14 - Differential treatment to a
single entity - Charanjit Lal Chowdhury v. Union of India
[1950] 1 SCR 869 - discussed. [Paras 26-39]
Case Law Cited
Chiranjit Lal Chowdhuri v. Union of India [1950] 1 SCR 869 : 1950
SCC 833 : AIR 1951 SC 41; D.S. Reddy v. Chancellor, Osmania
University and Others [1967] 2 SCR 214 : 1966 INSC 259; S.P.
Mittal v. Union of India and Others [1983] 1 SCR 729 : (1983)
1 SCC 51 : 1982 INSC 81; Shayara Bano v. Union of India and
Others (Ministry of Women and Child Development Secretary
and Others [2017] 9 SCR 797 : (2017) 9 SCC 1 : 2017 INSC
785 - followed.
Chandan Banerjee and Others v. Krishna Prosad Ghosh and
Others [2021] 11 SCR 720 : (2022) 15 SCC 453 : 2021 INSC
516; State of Tamil Nadu and Another v. National South Indian
River Interlinking Agriculturist Association [2021] 7 SCR 479 :
448
[2024] 10 S.C.R.
Digital Supreme Court Reports
(2021) 15 SCC 534 : 2021 INSC 777; Dharam Dutt and Others
v. Union of India and Others [2003] Supp. 6 SCR 151 : (2004) 1
SCC 712 : 2003 INSC 667; P. Venugopal v. Union of India [2008]
8 SCR 1 (2008) 5 SCC 1 : 2008 INSC 607; Natural Resources
Allocation, In re, Special Reference No. 1 of 2012 [2012] 9 SCR
311 : (2012) 10 SCC 1; Ajay Hasia and Others v. Khalid Mujib
Sehravardi and Others [1981] 2 SCR 79 : (1981) 1 SCC 722 :
1980 INSC 218; Ram Krishna Dalmia v. Justice S.R. Tendolkar
[1959] 1 SCR 279 : [AIR 1958 SC 538 : 1959 SCR 279]; Raja
Bira Kishore Deb v. State of Orissa [1964] 7 SCR 32 - referred to.
List of Acts
Khalsa University (Repeal) Act, 2017; Khalsa University Act, 2016;
Sholapur Spinning and Weaving Company (Emergency Provisions)
Act, 1950; The Sholapur Mill Act; Companies Act; Essential Supplies
Act; Osmania University (Second Amendment) Act, 1966; Auroville
(Emergency Provisions) Act, 1980; Indian Council of World Affairs
Act, 2001; Societies Registration Act, 1860; All-India Institute of
Medical Sciences Act, 1956; Delhi Special Police Establishment
Act, 1946; Constitution of India.
List of Keywords
Khalsa University (Repeal) Act, 2017; Differential treatment;
Reasonable classification; reasonable differentia; Parliamentary/
Legislative Debates; Arbitrariness; Article 14 of the Constitution;
Special treatment; Discriminatory character; Equal protection;
Mismanagement; Maladministration.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10999 of 2024
From the Judgment and Order dated 01.11.2017 of the High Court
of Punjab & Haryana at Chandigarh in CWP No. 17150 of 2017
Appearances for Parties
P.S. Patwalia, Sr.Adv., Ashok K. Mahajan, Advs. for the Appellants.
Shadan Farasat, A.A.G., Siddhant Sharma, Abhishek Babbar, Ms.
Sheetal Dubey, Ravinder Agarwal, Lekh Raj Singh, Advs. for the
Respondents.
[2024] 10 S.C.R.
449
Khalsa University and Another v. The State of Punjab and Another
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, J.
1.
Leave granted.
2.
The present appeal challenges the final judgment and order dated
1st November 2017 passed by the Division Bench of the High Court
of Punjab and Haryana at Chandigarh in C.W.P. No. 17150 of 2017
(O&M), whereby the High Court dismissed the writ petition filed by
the appellants inter-alia seeking a writ in the nature of certiorari
praying for quashing "The Khalsa University (Repeal) Act 2017"
dated 17th July 2017.
FACTS:
3.
The facts giving rise to this appeal lie in a narrow compass.
3.1 In the year 2010, the State of Punjab framed the Punjab Private
Universities Policy, 2010.1
3.2 The Khalsa College Charitable Society, Amritsar,2 (appellant
No.2 herein), which was in existence since 1892, submitted a
proposal to the State Government for setting up a self-financing
University in the State of Punjab on the basis of the 2010 Policy.
3.3 On 5th March 2011, the Higher Education Department,
Government of Punjab, after examining the proposal, issued a
Letter of Intent to Khalsa Society for establishing and running
the Khalsa University, Amritsar.3
3.4 On 7th November 2016, the Punjab Vidhan Sabha passed The
Khalsa University Act, 20164 (Punjab Act No. 44 of 2016). The
2016 Act received the assent of the Hon'ble Governor of Punjab
on 7th November 2016 and the same was published in the Punjab
Government Gazette Extraordinary on 17th November 2016.
1
Hereinafter referred to as the "2010 Policy"
2
Hereinafter referred to as the "Khalsa Society"
3
Hereinafter referred to as "Khalsa University"
4
Hereinafter referred to as "2016 Act"
450
[2024] 10 S.C.R.
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3.5 The Khalsa University (appellant No.1 herein), after its
establishment, was imparting courses in 26 programmes and
215 students were admitted for the Academic Session 2016-17.
3.6 On 18th January 2017, the Registrar of Khalsa University
communicated to the Principal Secretary, Department of Higher
Education, Government of Punjab, that they have enacted
the Statutes of the Khalsa University in consonance with the
2010 Policy, the 2016 Act and University Grants Commission5
guidelines.
3.7 On 6th April 2017, the Superintendent of Higher Education
Department, Government of Punjab, communicated to Khalsa
University that no admission process will be started till the Statues
of the University are approved by the State Government. The same
was reiterated by another communication dated 17th May 2017.
3.8 On 30th May 2017, the State Government promulgated an
Ordinance thereby repealing the 2016 Act. Shortly thereafter, the
Punjab Vidhan Sabha passed The Khalsa University (Repeal)
Act 2017.6 The Impugned Act received assent of the Hon'ble
Governor on 4th July 2017 and the same was published in the
Punjab Government Gazette Extraordinary on 17th July 2017.
3.9 Aggrieved by the communications dated 6th April 2017 and 17th
May 2017, the promulgation of the Ordinance and passing of
the Impugned Act, the Khalsa University and Khalsa Society
(hereinafter referred to as "appellants") filed a Writ Petition
being C.W.P. No. 17150 of 2017 (O&M) before the Punjab and
Haryana High Court.
3.10 Vide final judgment and order dated 1st November 2017, the
High Court dismissed the Writ Petition filed by the appellants.
Being aggrieved thereby, the present appeal arises.
SUBMISSIONS:
4.
We have heard Shri P.S. Patwalia, learned Senior Counsel appearing
on behalf of the appellants and Shri Shadan Farasat, learned
5
Hereinafter referred to as "UGC"
6
Hereinafter referred to as the "Impugned Act"
[2024] 10 S.C.R.
451
Khalsa University and Another v. The State of Punjab and Another
Additional Advocate General (AAG) appearing on behalf of the
respondents.
5.
Shri Patwalia, learned Senior Counsel appearing on behalf of the
appellants submits that the Impugned Act is patently arbitrary, mala
fide, discriminatory and violative of Article 14 of the Constitution of
India.
6.
Shri Patwalia submits that the mala fides in passing of the Impugned
Act are apparent inasmuch as the statements made by Captain
Amarinder Singh, who at the relevant time was in the opposition,
would clearly show that he was opposed to the establishment of
the Khalsa University. It is submitted that Captain Amarinder Singh
had made public statements that he was "touchy" about the Khalsa
College, that he would not permit the ruling party to tinker with the
status of the same and that, after he comes to power, he will reverse
the decision. It is submitted that immediately after Captain Amarinder
Singh became the Chief Minister of Punjab in 2017, an Ordinance
was promulgated repealing the 2016 Act, and shortly thereafter, the
said Ordinance got the imprimatur of the legislature by the passing
of the Impugned Act dated 17th July 2017.
7.
Shri Patwalia further submitted that the State of Punjab had come
up with the 2010 Policy and under the said Policy, 16 Universities
were established, however, it was only the Khalsa University which
was picked up and abolished. He submitted that picking up a single
University out of 16 Universities which were established as per the
2010 Policy is patently arbitrary, discriminatory and violative of Article
14 of the Constitution.
8.
Shri Patwalia further submitted that the Impugned Act is passed
on a non-existent factual matrix. He submitted that the Statement
of Objects and Reasons7 of the Impugned Act shows that the only
reason for passing it is to "protect the heritage character of Khalsa
College". He submitted that the SOR shows that the Impugned Act
was passed on the basis that the Khalsa College has, over a period
of time, become a significant icon of Khalsa Heritage and the Khalsa
University established in 2016 was likely to shadow and damage its
character and pristine glory. He submitted that the Khalsa College
7
Hereinafter referred to as "SOR"
452
[2024] 10 S.C.R.
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was established in 1892 and the appellants had clearly given an
undertaking that the establishment of the Khalsa University would
not touch the Khalsa College. He submitted that the Khalsa Society
comprises of various other establishments apart from Khalsa College
and that the Khalsa University was established to provide affiliation
for only three colleges namely Khalsa College of Pharmacy, Khalsa
College of Education and Khalsa College for Women. He submits
that all the three institutions were started after more than half a
century of establishment of Khalsa College. It is submitted that
Khalsa University (appellant No.1) had also planned/established
various other colleges or institutions which would be affiliated to it,
however, the same was to be done without in any way affecting the
Khalsa College. As such, it is submitted that the reasoning given in
the SOR that the Impugned Act was being passed only to protect
the heritage character of Khalsa College is formed on a factually
erroneous matrix.
9.
Shri Patwalia further submitted that the Impugned Act was patently
arbitrary, discriminatory and violative of Article 14 of the Constitution.
It is submitted that the Constitution Bench of this Court in the case
of Shayara Bano v. Union of India and Others (Ministry of
Women and Child Development Secretary and Others) 8 has
held that the ground of manifest arbitrariness is also available for
examining the validity of a legislation. It is submitted that if it is
found that the legislative enactment is not based on an intelligible
differentia, then such a classification would not be permissible and
the enactment would be liable to be struck down on the ground of
manifest arbitrariness.
10. Per contra, Shri Farasat, learned AAG appearing on behalf of the
respondents submits that a reasonable classification having a nexus
with the object to be achieved is permissible under Article 14 of the
Constitution. He submits that merely because Khalsa University
(appellant No.1) has been singled out as against the other Universities
established under the 2010 Policy cannot be a ground for holding
the Impugned Act to be invalid.
11. The learned AAG submits that there is a presumption with regard to
the validity of a legislative action. He submits that the burden with
8
[2017] 9 SCR 797 : (2017) 9 SCC 1 : 2017 INSC 785
[2024] 10 S.C.R.
453
Khalsa University and Another v. The State of Punjab and Another
regard to invalidity is on the person who challenges it. It is submitted
that the classification is based on the fact that the Khalsa College
had, over a period of century, received a heritage status. The name
"Khalsa" was identified with the Khalsa College. He submitted that
the establishment of Khalsa University tinkered with the heritage
status of Khalsa College.
12. The learned AAG further submitted that the Khalsa University and
the Khalsa College have been established in the same premises
and therefore there is a possibility of confusion being caused in the
minds of a general observer. He further submitted that it was, over
a period of time, the Khalsa College had earned a huge reputation
and was playing a leading role in Punjabi socio-religious society.
It is submitted that the establishment of a private University could
diminish its nature. It is submitted that there was further a possibility
that Khalsa Society (appellant No.2) would allocate greater attention
and resources to the private university and neglect Khalsa College
which has a historic value. To buttress his submissions, he relies on
the judgments of this Court in the cases of Chandan Banerjee and
Others v. Krishna Prosad Ghosh and Others9 and State of Tamil
Nadu and Another v. National South Indian River Interlinking
Agriculturist Association.10
13. Shri Farasat further submitted that the appellants had no vested
right in their status as a University. It is submitted that shortly after
the 2016 Act was enacted, the Impugned Act came to be enacted.
During that short period, a few students were admitted, however,
the Impugned Act also took care of the said students inasmuch as
the colleges where they were studying were affiliated with the other
Universities. He therefore submits that there is no merit in the appeal
and the appeal deserves to be dismissed.
CONSIDERATION:
14. The facts in the present case are not in dispute. The Government
of Punjab, Department of Higher Education had come up with the
2010 Policy. The 2010 Policy was framed in order to attract high
quality private sector investment and expertise in the realm of higher
9
[2021] 11 SCR 720 : (2022) 15 SCC 453 : 2021 INSC 516
10
[2021] 7 SCR 479 : (2021) 15 SCC 534 : 2021 INSC 777
454
[2024] 10 S.C.R.
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education and provides for establishment and incorporation of private
self-financed Universities in the State of Punjab. By the 2010 Policy,
it was decided to permit establishment of self-financed universities
which shall not receive any grant or aid from the State Government.
However, it provided for laying down a rationale proposal and welldefined conditions for the establishment of such universities in order
to safeguard the interest of the stakeholders, ex-students, staff
members and genuine promoters.
15. In furtherance of the 2010 Policy, Khalsa Society (appellant No.2)
applied to the State Government for establishing Khalsa University.
The State Government vide communication dated 5th March 2011
issued Letter of Intent to the Khalsa Society on various conditions
mentioned therein.
16. Subsequently, the 2016 Act came to be enacted on 7th November
2016. It will be relevant to refer to the SOR of the 2016 Act, which
read thus:
"STATEMENT OF OBJECTS AND REASONS
As the Punjab Private Universities Policy - 2010 has been
formulated to provide greater access and to ensure quality
in higher education, the Government of Punjab wishes to
allow the establishment of self financed private universities
to supplement the efforts of the State Universities. The
object of the Khalsa University is to impart comprehensive
education at all levels to achieve excellence and to promote
research and teaching in areas of Education, Engineering
and Technology, Languages, Laws, Life Sciences and
other courses under the general heads of the Arts and
Humanities, Social Sciences etc.
2. As the establishment of such private self financed
universities requires a broadly uniform set of guidelines
for ensuring academic standards, prevention of
commercialization and mismanagement etc., it deemed,
therefore, expedient to provide for promulgation of 'The
Khalsa University Bill- 2016."
17. Subsequent to the enactment of the 2016 Act, Khalsa University
(appellant No.1) received a communication dated 15th February 2017
from the UGC informing it that, in view of its establishment, its name
[2024] 10 S.C.R.
455
Khalsa University and Another v. The State of Punjab and Another
has been included in the list maintained by the UGC. It was also
informed to it that it was required to follow the UGC (Establishment
of and Maintenance of Standards in Private Universities) Regulations,
2003.
18. It appears that thereafter there was a change of regime in the
Government of Punjab. It further appears that from April, 2017
onwards, Khalsa University started receiving communications that it
should not admit any more students till the Statutes of the University
were approved by the State Government.
19. Thereafter on 30th May 2017, the State Government promulgated an
Ordinance thereby repealing the 2016 Act. The Impugned Act came
to be passed by Punjab Vidhan Sabha, which received the assent of
the Hon'ble Governor on 4th July 2017 and published in the Punjab
Government Gazette (Extraordinary) on 17th July 2017.
20. The SOR of the Impugned Act read thus:
"STATEMENT OF OBJECTS AND REASONS
The Khalsa University (Repeal) Ordinance, 2017 aims
to repeal the Khalsa University Act, 2016 with a view to
protect heritage character of Khalsa College, Amritsar.
The Khalsa College, Amritsar has, over a period of time,
become a significant icon of Khalsa Heritage and the
University established in 2016 is likely to shadow and
damage its character and pristine glory. Therefore, the
Act ibid is proposed to be repealed."
21. The Impugned Act, which consists of three sections, reads thus:
"Be it enacted by the Legislature of the State of Punjab in
the Sixty-eight year of the Republic of India as follows: -
1. (1) This Act may be called the Khalsa University (Repeal)
Act, 2017.
(2) It shall be deemed to have come into force with effect
from the 30th day of May, 2017.
2. The Khalsa University Act, 2016 (Punjab Act No.44 of
2016), is hereby repealed: -
Provided that admission to the affected students shall be
given in other appropriate educational institutions of the
456
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State of Punjab as per their eligibility, so that the interests
of the students are not prejudicially affected.
3. The Khalsa University (Repeal) Ordinance, 2017 (Punjab
Ordinance No. l of 2017), is also hereby repealed."
22. It is thus clear that by the 2016 Act under the 2010 Policy of the
State Government, Khalsa University was established as one of the
private universities. The Impugned Act has been enacted with the sole
purpose of repealing the 2016 Act by which the Khalsa University
was established. It is also clear that the Impugned Act deals with
only a single entity/institution i.e. the Khalsa University.
23. At the outset, we clarify that we do not propose to go into the question
with regard to the allegation of mala fides attributed to any individual
involved in the passing of the Impugned Act. In fact, the former
Chief Minister of Punjab Captain Amarinder Singh was arrayed as
respondent No.2 in the present appeal, however, by an order dated
8th August 2018, the name of Captain Amarinder Singh was deleted.
Be that as it may, for the purpose of the present appeal, we propose
to examine only two questions.
24. The first question is, whether an enactment for giving out a differential
treatment to a single entity is valid in law or not and secondly,
whether the Impugned Act is liable to be struck down on the ground
of manifest arbitrariness.
A.
Whether an enactment for giving out a differential treatment
to a single entity is valid in law or not?
25. For considering the first issue, we propose to examine certain
landmark judgments of this Court on the issue.
26. In the case of Chiranjit Lal Chowdhuri v. The Union of India and
Others,11 the Constitution Bench of this Court was faced with a
situation where the Governor General of India had promulgated an
Ordinance on the basis of a finding that, on account of mismanagement
and neglect, a situation had arisen concerning the affairs of the
Sholapur Spinning and Weaving Company Ltd.12 which had not only
prejudicially affected the production of an essential commodity but
11
[1950] 1 SCR 869 : 1950 INSC 36
12
Hereinafter referred to as "Sholapur Mill"
[2024] 10 S.C.R.
457
Khalsa University and Another v. The State of Punjab and Another
also had caused serious unemployment amongst a certain section
of the community. On account of such an emergency, a situation
had arisen which rendered it necessary to make a special provision
for the proper management and administration of the Sholapur Mill.
The aforesaid Ordinance was subsequently re-enacted in the form of
an Act of the Legislature called the Sholapur Spinning and Weaving
Company (Emergency Provisions) Act, 1950.13 The net result of the
Sholapur Mill Act was that the Managing Agents of the Sholapur Mill
were dismissed and the Directors holding the office automatically
vacated their office.
27. The Sholapur Mill Act was challenged on various grounds. One of
the grounds was that since the application of the said Act was found
to affect only one person, it was, therefore, plainly discriminatory
in character and within the constitutional inhibition of Article 14 of
the Constitution. The said ground was rejected by the Constitution
Bench by a majority of 3:2.
28. One of the arguments that was made before this Court was that
there would be other companies wherein similar allegations of mismanagement and neglect would be available. It was sought to be
argued that the provisions of the Companies Act were sufficient to
deal with the said situation. However, the passing of an enactment
whereby the Sholapur Mill was singled out for giving a "special
treatment" was not permissible under Article 14 of the Constitution.
While rejecting the said contention, Saiyid Fazl Ali, J. (one of the
Judges forming part of the majority) observed thus:
".......The Government of India, as a matter of precaution
and lest it should be said that they were going to interfere
unnecessarily in the affairs of the Company and were not
allowing the existing provisions of the law to take their own
course, consulted other interests and placed the matter
before the Standing Committee of the Industrial Advisory
Council where a large number of leading industrialists of
the country were present, and ultimately it was realised
that this was a case where the Government could rightly
and properly intervene and there would be no occasion
for any criticism coming from any quarter. It appears
13
Hereinafter referred to as "Sholapur Mill Act".
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from the discussion on the floor of the House that the
total number of weaving and spinning mills which were
closed down for one reason or the other was about 35 in
number. Some of them are said to have closed for want of
cotton, some due to overstocks, some for want of capital
and some on account of mismanagement. The Minister
for Industry, who sponsored the Bill, in explaining
what distinguished the case of Sholapur Mill from
the other mills against whom there might be charges
of mismanagement, made it clear in the course of
the debate that "certain conditions had to be fulfilled
before the Government can and should intervene",
and he set out these conditions as follows:
(1) The undertaking must relate to an industry
which is of national importance. Not each and
every undertaking which may have to close
down can be taken charge of temporarily by
the Government.
(2) The undertaking must be an economic unit.
If it appears that it is completely uneconomic
and cannot be managed at all, there is no
sense in the Government taking charge of
it. If anything, it will mean the Government
will have to waste money which belongs to
the taxpayer on an uneconomic unit.
(3) There must be a technical report as regards
the condition of the plants, machinery, etc.,
which either as they stand, or after necessary
repairs and reconditioning can be properly
utilised.
(4) Lastly, and this is of considerable importance,
there must be a proper enquiry held before
the Government takes any action. The
enquiry should show that managing agents
have so misbehaved that they are no
longer fit and proper persons to remain in
charge of such an important undertaking.
[Parliamentary Debates, Vol. III, No. 14, 313-1950 at pp. 2394-95]
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459
Khalsa University and Another v. The State of Punjab and Another
It appears from the same proceedings that Sholapur
Mill is one of the largest mills in Asia and employs
13,000 workers. Per shift, it is capable of producing
25 to 30 thousand pounds of yarn, and also one lakh
yards of cloth. It was working two shifts when it was
closed down on 29-8-1949. The closure of the Mill
meant a loss of 25 lakhs yards of cloth and one-anda-half lakhs pounds of yarn per month. Prior to 1947,
the highest dividend paid by the Company was Rs 525
per share and the lowest Rs 100, and, in 1948, when
the management was taken over by the managing
agents who have been removed by the impugned
Act, the accounts showed a loss of Rs 30 lakhs, while
other textile companies had been able to show very
substantial profits during the same period.
Another fact which is brought out in the proceedings
is that the managing agents had acquired control over
the majority of the shares of the Company and a large
number of shareholders who were dissatisfied with
the management had been rendered powerless and
they could not make their voice heard. By reason of
the preponderance of their strength, the managing
agents made it impossible for a Controller under the
Essential Supplies Act to function and they also made
it difficult for the Company to run smoothly under the
normal law.
It was against this background that the Act was passed,
and it is evident that the facts which were placed
before the legislature with regard to Sholapur Mill
were of an extraordinary character, and fully justified
the Company being treated as a class by itself. There
were undoubtedly other mills which were open to the
charge of mismanagement, but the criteria adopted by
the Government which, in my opinion, cannot be said
to be arbitrary or unreasonable, is not applicable to
any of them. As we have seen, one of the criteria was
that a mere allegation of mismanagement should not
be enough and no drastic step such as is envisaged in
the Act should be taken without there being a complete
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enquiry. In the case of Sholapur Mill, a complete
enquiry had been made and the revelations which
were made as a result of such enquiry were startling."
[emphasis supplied]
29. It can thus be seen that Fazl Ali, J. found that before the Act was
passed, the matter was placed before the Standing Committee of
the Industrial Advisory Council where a large number of leading
industrialists of the country were present. It was ultimately realized
that, that was a case where the Government could rightly and
properly intervene. It was further found that when the matter was
discussed on the floor of the House, it emerged that there were about
35 weaving and spinning mills which were closed for one reason
or the other. Some of them were closed for want of cotton, some
due to overstock, some for want of capital and some on account
of mismanagement. However, while singling out the Sholapur Mill,
the Parliament had taken into consideration various factors. One of
them was that the undertaking was related to an industry which was
of national importance. It was found that the Sholapur Mill was one
of the largest mills in Asia and employed 13,000 workers. Another
factor was that it was an economic unit and was working in two shifts
before it was closed down. It was further found that prior to 1947,
the highest dividend paid by the Company was Rs. 525/- per share
and the lowest was Rs. 100/-. It was further noticed that only when
the management was taken over by the Managing Agents, Sholapur
Mill started showing losses. It was further found that the Managing
Agents had acquired the control over the majority of the shares of
the Sholapur Mill and a large number of shareholders who were
dissatisfied with the management had been rendered powerless.
It was further found that, by reason of the preponderance of their
strength, the managing Agents made it impossible for a Controller
under the Essential Supplies Act to function. In the totality of the
circumstances, the Court found that a situation of an extraordinary
character had arisen which fully justified the Sholapur Mill being
treated as a class by itself. It was further found that though the other
companies were also open to the charge of mismanagement, however,
the criterion made applicable by the Government to Sholapur Mill for
singling out could not be said to be arbitrary or unreasonable. It could
further be noticed that 4 reasons were given by the Government for
singling out the Sholapur Mill.
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461
Khalsa University and Another v. The State of Punjab and Another
30. It will also be pertinent to note the observations made by Mukherjea,
J. (who again formed a part of the majority) in the said judgment,
which read thus:
"It must be admitted that the guarantee against the
denial of equal protection of the laws does not mean
that identically the same rules of law should be made
applicable to all persons within the territory of India in
spite of differences of circumstances and conditions.
As has been said by the Supreme Court of America, "equal
protection of laws is a pledge of the protection of equal
laws [Yick Wo v. Hopkins, 30 L Ed 220 : 118 US 356 at
p. 369 (1886) : 1886 SCC OnLine US SC 188] " (L Ed p.
226), and this means "subjection to equal laws applying
alike to all in the same situation [Southern Railway Co.
v. Greene, 54 L Ed 536 : 216 US 400 at p. 412 (1910) :
1910 SCC OnLine US SC 59] " (L Ed p. 539). In other
words, there should be no discrimination between one
person and another if as regards the subject-matter of
the legislation their position is the same. I am unable
to accept the argument of Mr Chari that a legislation
relating to one individual or one family or one body
corporate would per se violate the guarantee of the
equal protection rule. There can certainly be a law
applying to one person or to one group of persons
and it cannot be held to be unconstitutional if it is not
discriminatory in its character [ Willis : Constitutional
Law at p. 580.] . It would be bad law: "if it arbitrarily
selects one individual or a class of individuals, one
corporation or a class of corporations, and visits a
penalty upon them which is not imposed upon others
guilty of like delinquency [Gulf, Colorado and Santa Fe
Railway Co. v. Ellis, 41 L Ed 666 : 165 US 150 at 159
(1897) : 1897 SCC OnLine US SC 20] ...." (L Ed p. 669
: US p. 159) The legislature undoubtedly has a wide field
of choice in determining and classifying the subject of its
laws, and if the law deals alike with all of a certain class,
it is normally not obnoxious to the charge of denial of
equal protection; but the classification should never be
arbitrary. It must always rest upon some real and substantial
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distinction bearing a reasonable and just relation to the
things in respect to which the classification is made; and
classification made without any substantial basis should
be regarded as invalid [Southern Railway Co. v. Greene,
54 L Ed 536 : 216 US 400 at p. 412 (1910) : 1910 SCC
OnLine US SC 59].
The question is whether judged by this test the impugned
Act can be said to have contravened the provision
embodied in Article 14 of the Constitution. Obviously, the
Act purports to make provisions which are of a drastic
character and against the general law of the land as laid
down in the Indian Companies Act, in regard to the
administration and management of the affairs of one
Company in Indian territory. The Act itself gives no reason
for the legislation but the Ordinance, which was a precursor
of the Act, expressly stated why the legislation was
necessary. It said that owing to mismanagement and
neglect, a situation had arisen in the affairs of the Company
which prejudicially affected the production of an essential
commodity and caused serious unemployment amongst
a certain section of the community. Mr Chari's contention
in substance is that there are various textile companies
in India situated in a similar manner as Sholapur Company,
against which the same charges could be brought and
for the control and regulation of which all the reasons that
are mentioned in the Preamble to the Ordinance could
be applied. Yet, it is said, the legislation has been passed
with regard to this one Company alone. The argument
seems plausible at first sight, but on a closer examination
I do not think that I can accept it as sound. It must be
conceded that the legislature has a wide discretion in
determining the subject-matter of its laws. It is an accepted
doctrine of the American courts and which seems to me
to be well founded on principle, that the presumption is
in favour of the constitutionality of an enactment and the
burden is upon him who attacks it to show that there has
been a transgression of constitutional principles. As was
said by the Supreme Court of America in Middleton v.
Texas Power and Light Co. [Middleton v. Texas Power
[2024] 10 S.C.R.
463
Khalsa University and Another v. The State of Punjab and Another
and Light Co., 63 L Ed 527 : 249 US 152, 157 (1919) :
1919 SCC OnLine US SC 50] : (L Ed p. 531) "... [It must
be presumed] that a legislature understands and correctly
appreciates the needs of its own people, that its laws are
directed to problems made manifest by experience and
that its discriminations are based upon adequate grounds."
(US p. 157) This being the position, it is for the
petitioner to establish facts which would prove that
the selection of this particular subject by the
legislature is unreasonable and based upon arbitrary
grounds. No allegations were made in the petition
and no materials were placed before us to show as
to whether there are other companies in India which
come precisely under the same category as Sholapur
Spinning and Weaving Company and the reasons for
imposing control upon the latter as mentioned in the
Preamble to the Ordinance are applicable to them as
well. Mr Chari argues that these are matters of common
knowledge of which we should take judicial notice. I do
not think that this is the correct line of approach.