# STATE OF KERALA AND ORS v. K.G. MADHAVAN PILLAI AND ORS

- **Citation:** [1988] Supp. 3 S.C.R. 94
- **Court:** Supreme Court of India
- **Decided:** 1988-09-19
- **Case number:** Civil Appeal No. 140715 of 1988
- **Bench:** A.P. Sen, S. Natarajan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-kerala-and-ors-v-k-g-madhavan-pillai-and-ors-10197
- **Pages:** 29

## Headnote

Kera/a Education Act, 1957/Kerala Education Rules-Sections 2(7), 2(8), 37/Chapter V-Rules 2, 2A, 9, 11 and 12-0pening
new unaided recognised· Schools or upgrading existing schoolsGovernment according sanction to educational agencies-Later order
c:;
cancelled-Held Order vitiated by reason of non-observance of
principles of naturaljustice.
Respondents are running Private Schools. In pursuance of the
State of Kerala publishing in the Gazette a final list of areas where new
unaided recognised high schools/upper primary schools/lower primary
D schools were to be opened or existing unaided lower primary schools/
upper primary schools were to be upgraded in the year 1986-87 the
Respondents-educational agencies submitted applications for grant of
sanction to open the unaided recognised schools or for upgrading the
schools already run by them. These applications were duly inquired and
considered by the District Educational Officer as also by the Director of
i;.
Education as per the Rules & procedure laid down therefor, particularly Rules 24(3) and (4) and thereafter the Government considered the
applications in accordance with Rule 2A(S) and took a final decision for
grant of necessary sanction for opening/upgrading of 36 lower primary
schools, 36 upper primary schools and 19 high schools, totalling in all
91 schools in the list of areas selected. On 4.2.87, the State Government
p issued an Order under Ex. P-4, granting sanction to the Respondents to
open new unaided schools or to upgrade their existing schools subject to
the conditions set out therein. However, by an Order Ex. P-5, dated
20.2.87, the Government directed that the earlier order under Ex P-4
be kept in abeyance. The Respondents challenged the Order of the
Government by means of a Writ Petition.
G
During the pendency of the Writ Petition general elections were
held to the ·Kerala Legislative Assembly as a result whereof a new
Ministry assumed office. The Government under the new Ministry passed an order dated 19.5.87 under Ex P-7 cancelling in toto the order
under Ex-P-4 granting sanction to the Respondents to open the school
H or to_ upgrade the existing schools.
94.
STATE OF KERALA v. K.G.M. PILLAI
95
The Respondents thereupon amended their Petition suitably and A
challenged the validity of the order of cancellation passed under Ex.P· 7.
The Single Judge of the High Court before whom the Writ Petition first
I
came up for hearing took the view that while it was obligatory for the
Government to follow the procedure prescribed in Rules 2 & 2A, Chap·
ter V, if it was to permit the opening of new unaided recognised schools
or upgradation of existing schools, the converse result would not follow
B
i.e. wherever the Government had gone through the procedure under
the Rules the Government could not retrace its steps and was bound to
proceed further in the matter and that the Governlnent had no option to
reverse its decision. On. the question of revocation of the order of sanetion, however, the learned Judge held that the power to sanction new
schools carried with it the inherent power of cancellation 11f an order c
passed under Rule 2A(S). Accordingly the learned Single Judge dlsmls·
sed the petitions. The respondents thereafter preferred appeals before
the Division Bench. The Division Bench allowed the appeals, reversed
the order passed by the Single Judge but granted only limited reliefs to
the Respondents in that it quashed the order under Ex. p. 7 dated
19.S.87 and issued a mandamus to the State Government to consider the
D
applications of the Respondents on their merits on the basis of the
earlier order passed in their favour under Ex. p.4 dated 4.2.87. The
Division Bench further held that the Respondents have /ocus-standi to
challenge the order of cancellation and that the Government did not
have the power or jurisdiction to revoke the cancellation order. It also
held that the cancellation order violated the principle ofnaturaljust/ce.
E
Being aggrieved by the decision o

## Text

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B
STATE OF KERALA AND ORS.
v.
K.G. MADHAVAN PILLAI AND ORS.
SEPTEMBER 19, 1988
[A.P. SEN AND S. NATARAJAN, JJ.]
Kera/a Education Act, 1957/Kerala Education Rules-Sections 2(7), 2(8), 37/Chapter V-Rules 2, 2A, 9, 11 and 12-0pening
new unaided recognised· Schools or upgrading existing schoolsGovernment according sanction to educational agencies-Later order
c:;
cancelled-Held Order vitiated by reason of non-observance of
principles of naturaljustice.
Respondents are running Private Schools. In pursuance of the
State of Kerala publishing in the Gazette a final list of areas where new
unaided recognised high schools/upper primary schools/lower primary
D schools were to be opened or existing unaided lower primary schools/
upper primary schools were to be upgraded in the year 1986-87 the
Respondents-educational agencies submitted applications for grant of
sanction to open the unaided recognised schools or for upgrading the
schools already run by them. These applications were duly inquired and
considered by the District Educational Officer as also by the Director of
i;.
Education as per the Rules & procedure laid down therefor, particularly Rules 24(3) and (4) and thereafter the Government considered the
applications in accordance with Rule 2A(S) and took a final decision for
grant of necessary sanction for opening/upgrading of 36 lower primary
schools, 36 upper primary schools and 19 high schools, totalling in all
91 schools in the list of areas selected. On 4.2.87, the State Government
p issued an Order under Ex. P-4, granting sanction to the Respondents to
open new unaided schools or to upgrade their existing schools subject to
the conditions set out therein. However, by an Order Ex. P-5, dated
20.2.87, the Government directed that the earlier order under Ex P-4
be kept in abeyance. The Respondents challenged the Order of the
Government by means of a Writ Petition.
G
During the pendency of the Writ Petition general elections were
held to the ·Kerala Legislative Assembly as a result whereof a new
Ministry assumed office. The Government under the new Ministry passed an order dated 19.5.87 under Ex P-7 cancelling in toto the order
under Ex-P-4 granting sanction to the Respondents to open the school
H or to_ upgrade the existing schools.
94.
STATE OF KERALA v. K.G.M. PILLAI
95
The Respondents thereupon amended their Petition suitably and A
challenged the validity of the order of cancellation passed under Ex.P· 7.
The Single Judge of the High Court before whom the Writ Petition first
I
came up for hearing took the view that while it was obligatory for the
Government to follow the procedure prescribed in Rules 2 & 2A, Chap·
ter V, if it was to permit the opening of new unaided recognised schools
or upgradation of existing schools, the converse result would not follow
B
i.e. wherever the Government had gone through the procedure under
the Rules the Government could not retrace its steps and was bound to
proceed further in the matter and that the Governlnent had no option to
reverse its decision. On. the question of revocation of the order of sanetion, however, the learned Judge held that the power to sanction new
schools carried with it the inherent power of cancellation 11f an order c
passed under Rule 2A(S). Accordingly the learned Single Judge dlsmls·
sed the petitions. The respondents thereafter preferred appeals before
the Division Bench. The Division Bench allowed the appeals, reversed
the order passed by the Single Judge but granted only limited reliefs to
the Respondents in that it quashed the order under Ex. p. 7 dated
19.S.87 and issued a mandamus to the State Government to consider the
D
applications of the Respondents on their merits on the basis of the
earlier order passed in their favour under Ex. p.4 dated 4.2.87. The
Division Bench further held that the Respondents have /ocus-standi to
challenge the order of cancellation and that the Government did not
have the power or jurisdiction to revoke the cancellation order. It also
held that the cancellation order violated the principle ofnaturaljust/ce.
E
Being aggrieved by the decision of the Division Bench of the High
Court, the State filed these appeals after obtaining special leave.
Dismissing the appeals this Court,
F
HELD: The importance of securing recognition lies in the fact
that without recognition the students studying in the unaided schools
will neither be permitted to appear as candidates In the examinations
conducted by, the State nor be eligible to avail of the opportunities for
higher education or to enter public service examination. The obtain·
,-
ment-of recognition from the Government is therefore a vital factor for
G
'
the educational agencies starting new schools or newly upgrading their
)
existing schools. [I07B-C]
Rule 2A(l) makes it imperative for the Director to call for
applications from interested parties for opening new schools or up·
grading existing schools in the selected areas. The mandate contained
H
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SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
A
therein goes to show that the identification and selection of inadequately served areas under Rule 2(4) is not an idle or meaningless
exercise. [IIIA-C]
B
c
D
E
F
G
ff'
When even an unsuccessful applicant is conferred a right to represent to Government against the non-approval of the application,
can it be said that an approved applicant has no right whatever to
complain when the sanction granted to him is revoked all of a sudden
without he being given any opportunity to show cause against such
cancellation. [ lllD-E]
The further scrutiny of the application of the approved applicant
under Rule 9 and the confirmation of approval under Rule 11 would
not, however, mean that the earlier sanctii>u granted under Rule 2A(S)
does not create "legitimate expectation right" in the approved
applicant. [lllG-H; 112A]
The Rules do not provide for the Government reviewing suo moto
any order of sanction passed under Rule 2A(S) in favour of any applicant for opening of a new school or upgrading an existing school and its
power of revision under Rule 12 is conimed to the reconsideration of the
case of any applicant whose name did not find a place in the final list of
approved applications published hy the Government. [116D-EJ
Though the sanction granted to the respondents under Ex. P-4
would not by itself entitle them to open new schools or upgrade the
existing schools, it did confer on them a right to seek the continuance of
the statutory procedural stream in order to have their applications
considered under Rule 9 and dealt with them under Rule II. [122C]
It was not open to the Government, either under the Act or Rules
or under Section 20 of the Kerala General Clauses Act to cancel the
approval granted to the respondents under Rule 2A(S), for opening new
schools or upgrading existing schools in the selected areas on the basis
of a revised policy. [ 122D]
The impugned order under Ex. P-7, irrespective of the question
whether the government had the requisite power of cancellation or not,
is vitiated by reason of non-observance of the principles of natural
justice and the vice of extraneous factors. [ 122E]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 140715 of 1988.
""
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STATE OF KERALA v, K.G.M. PILLAI (NATARAJAN, J,]
97
From the Judgment and Order dated 29.9.1987 of the Kerala A
High Court in W .A. Nos. 60·1, 602, 604, 605, 610, 655, 664, 680 and
735of1987.
P.S. Poti, K. Sudhakaran and K.R. Nambiar for the Appellants.
T.S. Krishnamurthy Iyer, K.K. Venugopal, Dr. Y.S. Chitale, B
E.M.S. Anam and Mrs. Baby Krishnan for the Respondents.
The Judgment of the Court was delivered by
NATARAJAN, J. These appeals by special leave arise out of a
common judgment rendered by the High Court of Keral.a in a batch of ·
writ appeals filed by the respondents herein against the dismissal of C
their petitions under Article 226 of the Constitution of India for the
issue of writs of certiorari, mandamus, prohibition etc. by a leamed
single Judge. Though the appeals were allowed and the order of
learned single Judge wa• reversed, the Division Bench has granted
only limited reliefs to the respondents in that it has quashed the D
impugned order of the Government under Ex. P-7 dated 19-5-87 and
issued a mandamus to the State Government to consider the applications of the respondents on their merits on the basis of the earlier
order passed in their favour under Ex. P-4 dated 4-2-87. The State of
Kerala, feeling aggrieved with the judgment of the Division Bench,
has preferred these appeals.
E
Pursuant to the State Government ·publishing in the Gazette a
final list of areas where new unaided recognised high schools/upper
primary schools/lower primary schools are to be opened or existing
unaided lower primary schools/upper primary schools are to be
upgraded in the year 1986--87, the respondent educational agencies .F
submitted applications for grant of sanction to open new unaided
recognised schools or for upgrading the schools already run by •them.
By 4-2-87, the State Government issued an.order under Ex. P-4 granting sanction to the respondents to open new unaided schools or to
upgrade their existing schOols subject to the conditions set out therein.
However, by an order under Ex. P-5 dated 20-2-87, ihe Government ·G
directed the earlier order under Ex. P-4 to be kept in abeyance. The
respondents challenged the order of the Government by means of
petitions under Article 226 of the Constitution. During the pendency
of the writ petitions, the general elections were held in Kerala State
and a new ministry came to assume office. The government under the
new ministry passed an order dated 19-5-87 under Ex. P-7 cancelling in :fi
98
SUPREME COURT REPORTS
(1988] Supp. 3 S.C.R.
to to the order under Ex. P-4 granting sanction to the respondents to
A open new schools or to upgrade the existing schools. This led to the
respondents amending the writ petitions suitably so as to direct their
challenge to the validity of the cancellation order passed under Ex.
P-7. The respondents failed before the single Judge but on appeal the
Division Bench has granted them limited reliefs as set out above.
B
Before adverting to factual matters, it is necessary to refer to
some of tite relevant provisions of the Kerala Education Act (for short
'The Act') and the Kerala Education Rules (for short 'The Rules).
After the Kerala Education Bill, 1957, had been passed by the Kerala
Legislative Assembly and was reserved by the Governor for the
consideration of the President, the President made a reference to the
C Supreme Court under Article 143(1) of the Constitution for obtaining
the opinion of the Court upon certain questions relating to the
constitutional validity of some of the provisions of the Bill and the
Supreme Court gave its opinion as reported In re. Kerala Education
Bill, 1957 (1959 SCR 995). The preamble to the Act states that the Act
.O is being enacted "to provide for the better organisation and development of educational institutions in the State providing a varied and
comprehensive educational service throughout the State". Section 2 is
the definition section and for our purpose it is enough if we look at the
definitions of 'educational agency', 'private school', and 'recognised
school' because we are concerned in these appeals only with private
E recognised schools and not with government or departmental schools
or aided schools. Section 2(2), 2(7) and 2(8) read as under:
\
'
"2(2). "Educational agency" means any person or body of
persons permitted to establish and maintain any private
school under this Act;
2(7). "Private school" means an aided or recognised school;
2(8). "Recognised school," means a priVate school recognised by the Government under this Act".
O Section 3(1) empowers the Government to regulate primary and other
stages of education and courses of instruction in government and
private schools. It is apposite to mention here that recognised schools
do not receive any financial aid from the Goverlll]lent though they are
bound to impart instruction only according to the prescribed curriculum
of studies and they can have recognised standards or divisions of clasH
ses only in accordance with the Act and the Rules. Section 3(3) sets out
f.···
•
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STATE OF KERALA v. K.G.M. PILLAI [NATARAJAN, J.J
99
that the Government may provide. educational facilities by (a)
establishing and maintaining schools or (b) permitting any person or A
body of persons to establish and maintain aided schools or ( c) recognising arty school established and maintained by any person or
body of persons. Section 3(4) confers deemed recognition to all the
schools which were in existence when the Act came into force. Section
3( 5) stipulates that after the commencement of the Act, the establishment of a new school or the opening of a higher class in any private
school shall be subject to the provisions of the Act and the Rules made
thereunder and that if any school or higher class is established or
opened otherwise than in accordance with the provisions of the Act
and the Rules, they will not be entitled to be recognised by the
Government. Section 9 provides that the Government shall pay the
salary of all teachers in aided schools direct or through the Headmaster of the school. Section 13 lays down that if there is any retrenchment of teachers in any aided school on account of orders of Government, then the retrenched teachers can be absorbed in any Government school or aided school. Section 36 confers power on Government
to make Rules, either prospectively or retrospectively for the purpose
of carrying into effect the provisions of the Act. Section 37 provides
that all Rules made under the Act shall be laid before the Legislative
Assembly for its approval.
B
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D
In exercise of its powers under Section 36, the Government have
framed Rules and they have been approved by the Legislature.
E
Though the Rules contain several chapters, we need look only into
chapter V and the relevant rules therein. Rule 2 provides for the
Director of Public Instructions (hereinafter the Director) preparing
once in two years "a report indicating the locality where new schools
'
or class or grades are to be opened and existing lower primary schools
or upper primary schools or both are to be upgraded." In preparing
F
such a report,. the Director is enjoined to take into consideration
several factors. The list so prepared by the Director should be
published in the Gazette before the end of January of the year of
publication, inviting objections or representations against such list.
Every objection filed by an objector has to be accompanied by a
challan for Rs. 10. On receipt of the objection, the educational
G
authorities have to conduct enquiries, hear the parties, visit the areas
and submit their reports, together with their views on the objections
raised, to the Director within a period of two months. The Director, if
he finds it necessary, may also hear the parties and thereafter he has to
finalise the list and send his recommendations with the final list to
Government within a period of two months. The Government has
H
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SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
A thereafter to scrutinise the records and approve the list with or without
modifications and cause the approved list to be published by the
Director. As against the final list published by the Director, there is no
right of appeal or revision for anyone but the Government is
empowered to review the list. As Rules 2(4) and 2(5) are relevant for
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consideration, they are extracted hereunder:
!'I
"2(4). Government after scrutinising all the records
may approve the list, with or without modification and forward it to the Director within a month from the last date of
the receipt of the recommendation of the Director. The list
shall be finalised before the end of July by the Government
and shall be published by the Director."
"2(5). No appeal or revision shall lie against the final list
published by the Director
Provided that the Government may, either suo mo to or on
application by any person objecting to the list published by
the Director under sub-rule ( 4) made before the expiry of
thirty days from the 'date of such publication, review their
order finalising such list and make such modifications in
that list aa they deem fit by way of additions or omissions, if
they are satisfied that any relevant ground has not been
taken into consideration or any lrr<ilevant ground has been
taken into account while finalising the said list;
Provided further that no modification shall be made under
the preceding proviso without giving any person likely to
be affected thereby an opportunity to make representations against such modification."
Then comes Rule 2A which is. an important provision and requires
close scrutiny. Rule 2A(l) provides that after the publication of the
final list under Rule 2(4) the Director shall, by notification in the
Gazette in the month of October, call for applications for opening of
{) new schools and for upgradation of existing schools in the areas
specified in the final list. Rule 2A(2) lays down that only applications
made in response to the notification published by the Director will
merit consideration and not applications made otherwise. Rule 2A(3)
lays down that on receipt of such applications for permission to open
new schools or for upgrading of existing schools, the District EducaH tional Officer should make appropriate enquiries -regarding the. cor-
STATE OF KERALA v. K.G.M. PILLAI (NATARAJAN, J.]
101
rectness of the particulars contained in the application and other relevant matters and then forward the applications with his report thereon
to the Director. Rule 2A(4) obligates the Director to peruse the applications and the reports of the. District Educational Officers and forward all the papers to the Government with his own report. Rule
2A(5) enjoins the Government to consider the applications and the
reports accompanying them and take a final decisfon and publish the
same in the Gazette. As this sub-rule is of importance it requires
extraction: ·
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"2A(5). The Government shall consider the applications
in the light of the report of the District Educational 'Officer
.and the Director and other relevant matters which the
· Government think necessary to be considered in this C
connection and shall take a final decision and publish their
decision in the Gazette with the list containing necessary
particulars."
·
Rule 2A(7) sets out the time schedule in which the applications are to D
be made and the orders of Government are to be issued. It is worthy of
note that as against the list of applications approved by the Government and published in the Gazette under Rule 2A(5), there is no
provision for the Government reviewing the list to the detriment of the
applicants whose applications have been approved and the provision
made under Rule 12 is only for unsuccessful applicants to present E
revision petitions to complain of their non-selection. The next rule
which requires notice is Rule 9 which sets out the conditions for grant
of permission to open new schools. Rule 10 which was originally in the
Rules and which prescribed the preparation of a Development Plan by
the Director came to be deleted when the Rules were amended. Rule
11 pertains to grant of permission to open new schools. The rule pro· p
vides that if the Government are satisfied that permission to open the
schools included in the development plan may be granted, the Govern-
. ment may issue orders to that effect through the Director specifying (i)
the educational agency to whom permissiOn is granted, (ii) the grade
of the school, (iii) the standard or standards to be opened, (iv) the
location of the school, (v) the date from which the school should start G
functioning and (vi) the conditions to be fulfilled by the educational
agency in respect of the site, area, buildings, equipments, staff, financial guarantee etc. Rule 14 provides that when a new school is opened
with permission granted under Rule 11, the District Educational
Officer and the Director should be informed of the date of opening of
the school, the location, the standards opened, the name and qualifica· H
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SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
tions of the staff etc. etc. The District Educational Officer should then
visit the school and report to the Director ab6ut the conditions
stipulated for opening the school being complied with. Rule 15 provides for withdrawal of permission if the conditions stipulated have not
been fulfilled. Rule 16(a) deals with applications for recognition of
schools or of additional standards. The rule states that within three
months from the date of opening of schools or of additional standards,
applications should be made to the educational authorities for grant of
recognition or continuance of temporary recognition. Rule 17 sets out
that if all the conditions prescribed have been satisfied, then the school
shall be granted recognition.
Now turning to factual matters, the Director published on March
6, 1986 a list indicating the areas where new un-recognised schools are
to be opened and existing lower/upper primary schools are to be
upgraded and inviting objections or representations against the list
from interested parties. Thereafter, the educational authorities conducted the necessary enquiries, considered the objections/representaD tions received and submitted their reports to the Director. Thereupon
the Director bestowed his consideration to the matter and finalised the
list and sent his recommendations to the Government. The Government approved the list with some modifications and then caused the
approved list to be published by the Director on June 24, 1986 in the
Gazette. The list published by the Government set out 122 areas where
E
new schools are to be opened or existing schools are to be upgraded in
order to fulfil the educational needs of the notified areas. The Gazette
publication was under the caption "The final list of areas where new
unaided recognised High schools/Upper primary schools/Lower primary schools are to be opened or existing unaided L.P. Schools/Upper
primary schools are to be upgraded in the year 1986-87."
F
The task of identifying and approving the areas where new
unaided schools are to be opened or existing schools are to be
upgraded having been accomplished, the Director took the next step
of issuing a notification under Rule 2A(l) calling for applications from
intending applicants for opening new schools or for upgrading of exist0
ing schools in the selected areas. The respondents submitted their
applications in response to the notification made by the Director.
These applications were duly enquired into and considered by the
District Educational Officer and thereafter by the Director as laid
down in Rule 2A(3) and (4) and thereafter the qovernment considered the applications in accordance with Rule 2A(5) and took a
H. final decision and caused their decision to be published in the Gazette
STATE OF KERALA v. K.G.M. PILLAI !NATARAJAN, J.]
103
on February 4, 1987. As per the Gazette notification, the Government
granted sanction for the opening/upgrading of 36 lower primary
schools, 36 upper primary schools and 19 high schools, totalling in all
91 schools in the list of areas selected. This Gazette notification has
been marked as Ex. P-4. The names of all the respondents found a
place in the notification and they were granted permfssion to open/
upgrade unaided schools. The order reads as under:
"Government are pleased to accord sanction to open/
upgrade unaided recognised schools as detailed in
Annexure to the Government Order subject to the following conditions.
I. The schools will be permitted to be opened during the
academic year 1986-87 ...... .
2. For L.P. Schools and U.P. Schools without L.P. SecA
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tion, the educational agencies must provide one acre of
land; for U.P. School with L.P. Section 1.5 acres of land; oand for High Schools with or without primary section 3
acres of land. Recognition will be given only to the educational agency who produce evidence before the concerned
controlling authority of having provided the required site.
3. The applicants for opening of the schools or upgradaE
tion of the schools shall give an undertaking as provided
under Note (V) to Rule 11 Chapter V of K.E.Rs."
It so happened that on February 4, 1987, itself an announcement was
made regarding the holding of general elections in Kerala State but no
dates were announced for the election. Presumably, to avoid criticism
F
about the timing of the publication of the sanction order, the Chief
Minister passed orders for keeping in abeyance the sanction accorded
to the successful applicants under Ex. P-4 and a Gazette notification to
that affect was published on February 23, 1987. Thereupon, the
respondents moved the High Court through petitions under Article
226 of the Constitution cha~'3nging the actio;i of the Government.
G
_ ,During the pendency of the writ petitions, the general elections came
to be held and a new ministry assumed power in Kerala State.-The new
ministry decided to revoke the order of sanction passed under Ex. P-4
and caused a Gazette notification Ex. P'7 to be made in that behalf.
The notification was as under:
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SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
"In the G.0. read as first paper above sanction was
accorded to open/upgrade 91 unaided recognised schools
of various categories during the academic year 1986-87. As
per G. 0. read as second paper above the orders issued in
the said G.O. were kept in abeyance until further orders.
2. Government have reconsidered the matter. At present
there are more than 16000 schools in the State. Thousands
of protected teachers will have to be absorbed from these
schools. Every time a recognised school is started in an
area, there is an immediate impact on the neighbouring
aided and Government schools leading to fall in strength
and divisions, creating mqre protected teachers and
thereby leading to wasteful expenditure. The 91 schools
sanctioned were at the fag end of the academic year 198681 and it was not possible to start the schools during the
same year. Many schools do not fulfil the conditions for
starting the schools. In several cases exemption will have to
be given to fulfil the conditions year after year. As such
.Government strongly feel that instead of starting new
schools the existing schools should be strengthened in all
respects, i.e. site, building, equipment etc.
3. In the circumstances the orders issued in the G.0. read
as first paper will stand cancelled. No recognised schools
will be upgraded or sanctioned during 1987-88 also."
The learned single judge who heard the writ petitions filed by the
respondents took the view that while it was obligatory for the Government to follow the procedure prescribed in Rules 2 and 2A of Chapter
p
V of the Rules, if it was to permit the opening of new unaided recognised schools or the sanctioning of upgradation of existing schools,
the converse result would not follow i.e. wherever the Government
had gone through the exercise of the procedure laid down in Rules 2
and 2A, the Government could not retrace its steps and was bound to
proceed further in the matter of the opening of new schools or upgrad0
Ing o( existing schools and that the Government had no option to
reverse its decision. In so far as the Government's power to revoke an
order of sanction made under Rule 2A(5) is concerned, the learned
judge held that the Government's power ~o sanction new schools also
carried with it an inherent right of cancellation of an order passed
under Rule 2A(5). The learned judge saw justification for the cancelH Iation order being passed by the Government on another ground also
STATE OF KERALA v. K.G.M. PILLAI [NATARAJAN. J.I
105
viz. that the sanction for opening of new schools or upgrading of
schools was given only at the fag end of the academic year 1986-87 and,
as such, the order of sanction was not capable of in1plementation.
Besides these grounds, the single judge found merit in the reasons
given by the Government in the impugned order Ex. P-7 for revoking
the sanction viz. that the opening of new unaided schools or upgrading
of existing unaided schools invariably resulted in fall of pupil strength
and/or division strength in the government-run as well .as aided schools
and this led to the ousting of teachers from aided schools whom the State
had to treat as "protected teachers" and take care of them and provide appointments for them in government as well as aided schools.
The last reason which weighed with the single judge was that the
Government's experience in the past showed that many of the schools
proposed to be started or seeking upgradation were not ablt\ to fulfil
the minimum requirements and resorted to seeking Government's indulgence for granting them exemption from complying with the prescribed conditions and requirements. In accordance with these views,
the foamed single judge dismissed the writ petitions.
The Division Bench which heard the writ appeals viewed the
matter in a wholly different manner and allowed the appeals. The
Division Bench held that firstly the writ petitioners had adequate locus
standi to challenge the cancellation order of the Government and that
the Government did not have power or jurisdiction·· to revoke the
sanction order; secondly the order of cancellation violated the principles of natural justice; thirdly there was no application of mind and
fourthly the order of cancellation was passed on the basis of irrelevant
grounds.
In presenting the case of the State before us in tl!ese appeals Mr.
Subramania Poti, learned senior advocate appearing for the State assailed everyone of the findings and reasons given by the Division
Bench and argued that the notifications made under E'.xs: P-4 arid P-7
were oniy a!lnouncements of the policy decisions taken by the Government and, the Government could revise its decision at any time and
even if they are to be viewed as administrath·l orders passed by the
Government, it was always open to the Government, in exercise of its
powers under Section 20 of the Kerala General Clauses Act (corresponding to Section 21 of the General Clauses Act X of 1897) to add,
amend, vary, or rescind the notifications. The learned counsel further
stated that the respondents would get the status of 'aggrieved persons'
and acquire locus_Jiandi to question any order of revocation passed by
the Government only if they had been __ granted permission under Rule
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A 11 to open new schools and not before as they would acquire "legitimate expectation rights" only after satisfying the requirements of Rule
11. Proceeding on the same lines, the learned counsel stated that the
Government had not indulged in any adjudicative process nor had the
Government violated any provisions of the Act or Rules or even the
principles of natural justice and, as such, the writ petitions did not
B present any justiciable iSsue for consideration -by the Court. The last
submission made was that the cancellation order did not suffer either
from the vice of non-application of mind or the permeation of irrelevant grounds.
Controverting the arguments of the appellant's counsel, Dr.
Chitale, Mr: Krishnamurthy Iyer.and Mr. K.K. Venugopal, learned
C Sr. Advocates appearing for the respondents contended that the decision rendered by the Division Bench is fully in accordance with law
and needs no interference by this Court. They pointed out that the
Division Bench has done nothing more than to place the parties in
,their status quo ante position by quashing Ex. P-7 and directing the
D Government to proceep further with the applications in order to see
whether permission could be granted under Rule 11 of Chapter V.
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In the light of these conflicting arguments what falls for consideration in these appeals may broadly be enunciated under the following heads:
(l) Whether any rights accrued to the respondents pursuant to
the sanction granted to them under Ex. P-4 for opening new
. schools or upgrading existing schools; so as to challenge t~
cancellation order under Ex. P-7 or whether the right of
challenge would accrue to them only after further approval was
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granted under Rule 11.
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2. Whether it was open to the Government under the Act and
Rules or under Section 20 of the Kerala General Clauses Act to
cancel in toto the sanction given to 91 approved applicants for
opening new schools or upgrading existing schools;
3. Even if the Government had powers of cancellation, whether
the order under Ex. P-7 is vitiated by reason of (a) non-
,observance of the principles of natural justice (b) non-application of mind and ( c) influence of irrelevant grounds.
Bef.ore taking up for consideration these questions, we may set
STAIB OF KERALA v. K.G.M. PILLAI [NATARAJAN, J.]
107
out the various stages contemplated by the. Rules which have to be
passed through by an educational agency in order to open a new school
or upgrade an existing school and obtain recognition from the Government. It is relevant at this juncture to mention that the Act and the
Rules do not prohibit the starting and running of private unaided
schools by any agency and the only restriction is that it will not be
entitled to secure recognition for the said school from the Government
unless the conditions imposed by the Rules are satisfied and complied
with. The importance of securing recognition lies in the fact that without recognition the students studying in the unaided schools will
neither be permitted to appear as candidates in the examinations conducted by the State nor be eligible to avail of the opportunities for
higher education or to enter public service examination. The obtain-
. ment of recognition from the Government is therefore a vital factor for
the educational agencies starting new schools or newly upgrading their
eidsting schools.
Coming now \o th~ ~!ages which should be gone through, there
·.are five stages as set out by the Division Bench and which enunciation
is accepted by the learned counsel for the appellants as the correct
position. The first stage consists of the Government going through the
exercise under Rule 2 culminating in the Government publishing
under Rule 2(4) the localities where new schools are to be opened or
existing schools are to be upgraded. The second stage consists of the
Government calling for applications under Rules 2A(l) from intending applicants for opening new schools or for upgrading the existing
·schools in the areas specified and taking a final decision and publishing
the list of approved applicants in the Gazette under Rule 2A(5). Then
comes tlie third stage when the applications are subjected to more
detailed scrutiny under Rule 11 regarding the fulfilment of conditions
se,t out in Rule 9 and the drawing up of the order setting out the name
of the educational agency, the grade of the school, the standards to be
opened, the location and the date of opening of the school etc. The
fourth .stage is envisaged under Rule 14 and ii,,consists of the educatim1.al agency permitted under Rule 11 to rep9rt to the educational
authorities the factum of the opening of the school and the fulfilment
of the conditions set out in the order and the names and qualifications
of the staff etc. so that the educational officer can visit the school and
submit a report to the Director regarding the fulfilment of all the
conditions by the school authority. The fifth and the last stage is set
out in Rules 16 and 17 and it pertains to the school authority applying
for recognition under Rule 16A and the Director granting sanction
under Rule .17 after being satisfi.~d tha! the school authority has
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satisfied all the requisite conditions for grant of recognition.
A four-fold argument was advanced by Mr. Po ti to assail the
judgment of the Division Bench. The contentions were formulated as
under:
1. The respondents are not-entitled to the issue of a writ of
mandamus because firstly they had unauthorisedly opened new
schools in contravention of Section 3(5) without obtaining the
Government's permission under Rule 11 Chapter V and secondly
the proceedings under Chapter V had reached only the second
stage of passing of an order under Rule 2A(5) and had not
reached the third stage of permission being granted under Rule
11 whereafter only the respondents would acquire "legitimateexpectation rights" cognisable in law.
2. There was no violation of any Rule or the principles of natural
justice when the Government dropped the proposal of permitting new schools to be opened or existing schools to be upgraded
in the 91 localities mentioned in Ex. P-4 notification because it
was an administrative decision based on Government's policy
and no adjudicative process was involved in the passing of the
cancellation order.
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3. In any event the Government had inherent powers of revocation under Section 20 of the Kerala General Clauses Act corresponding to Section 21 of the Central Act and the exercise of
such powers is not open to challenge.
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4.-In any view of the matter, this was not a case where the High
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Court should have exercised its powers under Section 226 to
restore the sanction order under Ex. P-4 because the Court cannot impose an economic burden on the State's resources by
issuance of a writ.
Taking up for consideration the first limb of the first contention
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of the learned counsel, it is true the respondents have opened new
schools or upgraded their existing schools at the approved localities on
2.6.1986 itself i.e. even before the final list of approved areas under
Rule 2(4) was published on 24.6.1986 and the sanction order under
Ex.P-4 was published on 4.2.1987. The question however will be
whether by reason of the opening of the schools prematurely, the
H respondents stand forfeited of their right to question the cancellation
STATE OF KERALA v. K.G.M. PILLAI INATARAJAN, J.]
109
order under Ex.P-7. We think not. This is because Section 3(5) of the
Act does not totally ban the establishment of a new school or the
opening of a higher class but only states that if any school or higher
class is opened without following the procedure, then such new school
or higher class will not be entitled to recognition by the Government.
It will not therefore, be per sea contravention of the Act and the Rules
if an educational agency started a new school or opened a higher class
without following the provisions of the Act and the Rules and the only
disqualification it would suffer is its disentitlement to Government's
recognition. That apart the order of cancellation is not challenged by
the respondents on the ground they have already established new
schools or opened higher classes in existing schools but on the ground
the earlier order of sanction under Ex. P-4 had been cancelled without
justifiable reason and without the respondents being heard. Therefore,
the respondents cannot be non-suited merely on the ground they had
opened new schools or higher standards even before the Government
published its final list of approved areas under Rule 2(4). Hence, the
first limb of the first argument of Mr. Po ti cannot be countenanced.
In so far as the second limb of the first contention is concerned, it
was urged by Mr. Poti that the publication of the final list under Rule
2(4) was only a preliminary exercise and not a final one because the
initial selection of localities under Rule 2(4) for opening new schools
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or upgrading existing schools requires further scrutiny and approval
under Rule 9 and consequently any order of sanction granted under
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Rule 2A(5} would leave the grantee only in the position of an applicant
and not confer on him legitimate expectation rights.