IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 20124 of 2005(U)
1. POCKER SAHIB MEMORIAL ORPHANAGE
... Petitioner
Vs
1. THE GOVERNMENT OF KERALA, REP. BY
... Respondent
2. THE DIRECTOR OF COLLEGIATE EDUCATION,
3. THE DEPUTY DIRECTOR OF COLLEGIATE
For Petitioner :SRI.V.M.KURIAN
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice A.K.BASHEER
Dated :19/03/2007
O R D E R
A.K. BASHEER, J.
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W.P.(C). NOS. 20124, 28031, 31070 OF 2005 &
9876 OF 2006
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Dated this the 19th day of March, 2007
J U D G M E N T
The core issue, which has come up for consideration in
these writ petitions is whether the Government is justified in
directing the Private Aided Colleges to transfer the
accumulated funds in P.D. Accounts in the name of Principal
of such colleges to the Government account. By Circular dt.
April 20, 2005, a copy of which is available on record as
Ext.P6 in W.P.(C) No.20124/05, and by letter dt. September
20, 2005, a copy of which is available on record as Ext.P13
in W.P.(C) No.9876/06, it was ordered by the Director of
Collegiate Education that all amounts lying in such accounts
in the name of Principal of the institutions till the last date of
the previous academic year shall be transferred to the
Government Account. The said orders are under challenge in
these writ petitions, which are at the instance of
management and heads of such aided institutions.
WPC NO.21124/05 & Conn. Cases 2
2. A brief reference to the essential facts may be
necessary to consider the question whether the above
circular and letter issued by the Director of Collegiate
Education are legally valid and unsustainable.
3. It is not in dispute that the Government of Kerala
had entered into separate individual agreements, known as
Direct Payment Agreement, with the managements of
various aided colleges in the State. As regards the collection
of fee, the following clauses were incorporated in the
agreements. Ext.P1 is stated to be one such agreement
entered into between the Government and the management
of aided college in Malappuram district. Since the clauses in
all the agreements are identical, the following clauses in
Ext.P1 are being extracted hereunder for convenience.
“2 . The Educational Agency shall cause to collect
through the Principal of the institution on or
before the date prescribed according to the rules
in each month the tuition fees prescribed and
fines imposed on the students and remit all such
amounts to the credit of the Government in the
Treasury at Tirur in such manner as may be
prescribed by the Government from time to time.
The amounts collected on a day shall be remitted
WPC NO.21124/05 & Conn. Cases 3
in the said Treasury within the next 4 working
days.
3. The Educational Agency shall cause to collect
from the students such special fees at such rates
as may be prescribed by the University from time
to time.
4. (i) The Educational Agency shall cause to
remit all fee collections other than those
mentioned in clauses 1 and 2 in the Treasury at
Tirur in a separate account opened in the name
of the Principal of the Institution. Such
remittance shall be made within the next four
working days after collection. The Principal shall
be competent to draw money from this account
and incur necessary expenditure on the items for
which such fees were collected.
(ii) The special fee collected for a purpose
shall be utlised only for the purpose for which it is
intended and for no other purpose.
(iii) The special fee collected from the
students of a college under the Educational
Agency shall be utilised only for the purpose of
that college and not for the purpose of any other
college.
5. No fees other than those authorised under this
agreement shall be collected from the students of
the Institution.”
4. It is pertinent to note that the Educational Agency
has been given liberty to collect special fee from the
WPC NO.21124/05 & Conn. Cases 4
students at such rates that may be prescribed by the
University from time to time. The special fee collected by
the institution has to be remitted in a separate account to be
opened in the name of the Principal of the institution.
Clause 4(1) stipulates that the Principal shall be competent
“to draw money from this account and incur necessary
expenditure on the items for which such fees were
collected” (Emphasis supplied). It is further provided in the
agreement that “the special fee collected for a purpose shall
be utilised only for the purpose for which it is intended and
for no other purpose” and that the special fee collected from
the students of a college under the Educational Agency shall
be “utilised only for the purpose of that college and not for
the purpose of any other college.”
5. It appears that certain modifications were made in
the matter of collection of registration fees, between the
Government and the managements with which we are not
concerned at this stage.
6. As mentioned earlier, the Director of Collegiate
WPC NO.21124/05 & Conn. Cases 5
Education issued Ext.P6 circular and Ext.P13 letter directing
all Deputy Directors and Principals of Colleges to transfer the
accumulated funds lying to the credit of the Principals of the
institutions in their respective personal deposit accounts to
the Government fund.
7. In the counter affidavit reference has been made to
Article 282.5(D) of Kerala Financial Code Vol.I. It is
contended that in terms of the above article, the
accumulated unspent balance has to be refunded to
Government Account. It is further contended that the
Government is spending crores of rupees for running the
aided private colleges in the State. Moreover, the
management’s major portion of the fee collected from the
students can also be spend for the college. However,
University Grants Commission’s fund also were provided for
financial help to the colleges for infra structural facilities. It
is the case of the respondents that the Circular does not
impose any restrictions on the Educational Agencies in using
the current collections. What has been taken away is the
WPC NO.21124/05 & Conn. Cases 6
right to utilise the accumulated funds till March 2005. I am
afraid the above unilateral view taken by the Government
cannot be justified.
8. As mentioned earlier, the Government had entered
into individual agreements with the management of aided
colleges. The Clauses contained in the agreement will
have to be respected by both sides. The Government could
not have unilaterally issued a direction to the Director of
collegiate education to issue a circular appropriating the
accumulated funds to its fund without affording opportunity
to the management concerned to be heard. Therefore,
Ext.P6 circular shall not be enforced or implemented till a
final decision is taken by the Government of course, after
holding discussions with all the respective managements.
Till such time a decision is taken and appropriate new
clauses are incorporated in the agreement in modification of
the existing ones, the directions contained in Ext.P6 shall be
kept in abeyance.
9. Learned counsel for the petitioner in W.P.C. No.
WPC NO.21124/05 & Conn. Cases 7
20124/05 has invited my attention to the judgment rendered
by a Division Bench of this Court in W.A. No.380/06. It is
true that the Division Bench had confirmed the judgment of
the learned Single Judge against which the above appeal
was preferred. The issue in that case related to registration
fee collected by aided colleges. It appears that the said fee
is to be remitted to the treasury in a specified account. The
Deputy Director of Education on receipt of instructions from
the Directorate had ordered that the accumulated amounts
of registration fee lying to the credit of the personal deposit
account of the Principal of the colleges be transferred to the
Government fund. The learned Single Judge took the view
that such a decision could not have been taken by the
Government in view of the agreement executed between the
Government and the management. The learned Single
Judge was particularly referring to the retrospectivity of the
above order issued by the Directorate. The learned Single
Judge held that the Government was not justified in giving
retrospectivity to the above order. The said view taken by
WPC NO.21124/05 & Conn. Cases 8
the learned Single Judge was affirmed by the Division Bench
in writ appeal mentioned above.
10. It is true that the Division Bench had referred to
special fees in the judgment. Obviously, this appears to be a
mistake because, registration fee was only one of the
components of special fee and what the leaned Single Judge
dealt with was only the transfer of accumulated registration
fees. Anyhow, for the reasons stated in the judgment, I am
satisfied that the decision rendered by the Division Bench in
the Writ Appeal mentioned above may not have any
application in the facts of this case. Similarly, the petitioner
in W.P.C. No. 9876/06 has produced Ext.P13 in addition to
Ext.P6 which is a subsequent order issued by the Secretary
in the Department of Higher Secondary education.
In the above facts and circumstances, these writ
petitions are disposed of with a direction that before
enforcing Ext.P6 circular the Government shall hold
discussions with the respective managements and take a
decision in the matter with regard to the transfer of the
WPC NO.21124/05 & Conn. Cases 9
accumulated funds lying to the credit of the Principals of
various aided colleges with whom the Government has
entered into separate agreements. If the Government and
the respective managements agree upon the appropriation
of the accumulated funds, it will be open to the parties to
incorporate such a clause in the addenda of the agreement,
which may be executed between the parties. Till such time
a decision is taken in the matter, Ext.P6 shall not be
enforced. The Government shall take a decision in the
matter as expeditiously as possible, at any rate, within a
period of three months from the date of receipt of a copy of
this judgment.
A.K. BASHEER, JUDGE
vps
WPC NO.21124/05 & Conn. Cases 10
KURIAN JOSEPH, JUDGE
OP NO.
JUDGMENT
21st DECEMBER, 2006