{"id":59379,"date":"1994-03-29T00:00:00","date_gmt":"1994-03-28T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-gujrat-vs-m-p-shah-charitable-trust-on-29-march-1994"},"modified":"2015-01-18T04:26:25","modified_gmt":"2015-01-17T22:56:25","slug":"state-of-gujrat-vs-m-p-shah-charitable-trust-on-29-march-1994","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-gujrat-vs-m-p-shah-charitable-trust-on-29-march-1994","title":{"rendered":"State Of Gujrat vs M.P. Shah Charitable Trust on 29 March, 1994"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of Gujrat vs M.P. Shah Charitable Trust on 29 March, 1994<\/div>\n
Equivalent citations: 1994 SCC (3) 552, \t JT 1994 (3)\t 96<\/div>\n
Author: B Jeevan Reddy<\/div>\n
Bench: Jeevan Reddy, B.P. (J)<\/div>\n
           PETITIONER:\nSTATE OF GUJRAT\n\n\tVs.\n\nRESPONDENT:\nM.P. SHAH CHARITABLE TRUST\n\nDATE OF JUDGMENT29\/03\/1994\n\nBENCH:\nJEEVAN REDDY, B.P. (J)\nBENCH:\nJEEVAN REDDY, B.P. (J)\nSAHAI, R.M. (J)\n\nCITATION:\n 1994 SCC  (3) 552\t  JT 1994 (3)\t 96\n 1994 SCALE  (2)374\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
The Judgment of the Court was delivered by
\nB.P. JEEVAN REDDY, J.- Leave granted.\n<\/p>\n
2.Meghji Pethraj Shah Medical College was established  by
\nthe  then Government of Saurashtra at Jamnagar in  the\tyear
\n1955.\t For  establishing  the\t college,  Shri\t M.P.\tShah
\n“donated”  a sum of Rupees fifteen lakhs subject to  certain
\nconditions.   The  government hospital then known  as  Irwin
\nHospital  was  attached\t to the said  college  to  meet\t the
\nrequirement  of a hospital with necessary bed-strength.\t  In
\nthe  year 1993, the Government of Gujarat repudiated one  of
\nthe conditions attached to the donation, which led the\tM.P.
\nShah Charitable Trust to approach the Gujarat High Court for
\nissuance  of  a\t writ commanding the  State  of\t Gujarat  to
\ncontinue to abide by the said condition.  The writ  petition
\nwas  allowed by a learned Single Judge and a Letters  Patent
\nAppeal preferred by the State of Gujarat has been  dismissed
\nby  a  Division\t Bench\tthe  correctness  whereof  is  under
\nchallenge herein.\n<\/p>\n
3.Having  regard to the questions arising herein,  it  is
\nnecessary  to notice the facts concerning the  establishment
\nof the college.\t On October 8, 1954, Shri M.P. Shah wrote  a
\nletter\tto the then Chief Minister of Saurashtra  confirming
\nthe  arrangement arrived at by him with Shri Manubhai  Shah,
\nwho  was evidently acting on behalf of the  Chief  Minister.
\nIt is necessary to quote the letter in full :\n<\/p>\n
\t      “Respected Shri Dhebarbhai,
\n\t      Today morning, I returned from Jamnagar and in
\n\t      good health.  Hope, you will also be  enjoying
\n\t      good health.  On Monday the 4th October, I had
\n\t      satisfactory  discussions with  Shri  Manubhai
\n\t      Shah at the residence of Shri Premchandbhai in
\n\t      Jamnagar for Medical College and hospital.  He
\n\t      has shown good interest in the matter and\t let
\n\t      us pray that, by the grace of God this mission
\n\t      may be successful.\n<\/p><\/blockquote>\n
\t      Following\t decisions  have been taken  in\t the
\n\t      discussion with him.\n<\/p><\/blockquote>\n
\t      (1)  Existing Irwin Hospital will be  properly
\n\t      extended\t and  the number of beds  and  other
\n\t      amenities\t  will\tbe  provided  as   per\t the
\n\t      requirement of the medical college.   Hospital
\n\t      shall  be\t named after Mahatma Gandhi  or\t any
\n\t      other  great Indian leader instead of  present
\n\t      name.\n<\/p><\/blockquote>\n
\t      (2)The  medical college attached with  this
\n\t      hospital shall be known as Shri Meghji Pethraj
\n\t      Shah  Medical College.  The building  for\t the
\n\t      hostel  for the students of this college\talso
\n\t      shall be constructed.\n<\/p><\/blockquote>\n
\t      (3)The  constitution of the colleges  shall
\n\t      also  provide  that I or my  successor  or  my
\n\t      nominees\t shall\tbe  entitled  to   recommend
\n\t      admission\t to the extent of 10% of  the  total
\n\t      number  of  students to be admitted  and\tthis
\n\t      arrangement shall be continued so long as\t the
\n\t      college continues,.  I have explained to\tShri
\n\t      Manubhai about the necessity of provision\t and
\n\t      has accepted the same.\n<\/p><\/blockquote>\n
\t      (emphasis added)
\n558<\/span>
\n\t      (4)The  steps shall be taken to  start  the
\n\t      college  from  next  June\t and  till  the\t new
\n\t      building for the college is ready, the college
\n\t      shall   be  conducted  in\t the  new   building
\n\t      constructed for Jamnagar Court.
\n\t      After having confirmation to the above  effect
\n\t      from  the\t Government, we shall  complete\t the
\n\t      necessary procedure for donation and send\t our
\n\t      confirmation  for\t the  same  for\t  Government
\n\t      record.\n<\/p><\/blockquote>\n
\t      Yours
\n\t      sd\/-\n<\/p><\/blockquote>\n
\t      for Meghji Pethraj Shah.”\n<\/p><\/blockquote>\n
\t      On  November 22\/23, 1954, the  Chief  Minister
\n\t      wrote   to  Shri\tM.P.  Shah  confirming\t the
\n\t      arrangement.  The letter reads:
\n\t      “Dear Shri Meghjibhai,
\n\t      I\t was glad to receive your letter dated\t28th
\n\t      October.\t All  the steps are being  taken  to
\n\t      start   medical\tcollege\t from\tJune   1955.
\n\t      Arrangements will be made to start the college
\n\t      in the new building of the Court till the\t new
\n\t      building\tfor  the  college  is\tconstructed.
\n\t      Medical  college\twill be known  as  the\tname
\n\t      suggested\t by  you and the  arrangements\thave
\n\t      been  made for the same.\tConstitution of\t the
\n\t      college shall provide for the admission to 10%
\n\t      of   the\tstudents  admitted  every  year\t  as
\n\t      recommended  by  you  or\tyour  successor\t  or
\n\t      nominee\tand   this  arrangement\t  shall\t  be
\n\t      permanent.\n<\/p><\/blockquote>\n
\t      (emphasis added)
\n\t      As regards hospital, it is being considered to
\n\t      name  as Smt Kasturba Gandhi Hospital.   Final
\n\t      decision shall be taken in few days.
\n\t      I\t think\tthat  on this basis,  till  all\t the
\n\t      points  are  confirmed and  the  procedure  is
\n\t      completed,  stone foundation ceremony  of\t the
\n\t      new  building  shall be done  by\tthe  Hon’ble
\n\t      President\t  or  other  great  leader.   I\t  am
\n\t      arranging\t for the same and shall\t inform\t the
\n\t      date, when finalised.\n<\/p><\/blockquote>\n
\t      Hope this will find you in good health.
\n\t      Your well-wisher,
\n\t      sd\/-\n<\/p><\/blockquote>\n
\t      U.N. Dhebar.”\n<\/p><\/blockquote>\n
4.The  medical\tcollege was accordingly\t established  and
\nstarted\t functioning  from June 1955 with a strength  of  60
\nstudents.  As per the arrangement contained in the aforesaid
\nletters,  Shri M.P. Shah was permitted to nominate  students
\nfor  admission\tto the extent of 10% of the  total  strength
\nobtaining at a given time.  This arrangement continued\teven
\nafter  the formation of the State of Gujarat.  In course  of
\ntime,  the  college and the hospital grew  in  strength\t and
\nsize.  As against 60 seats in 1955, the annual intake of the
\ncollege\t rose to 175  three times the original\tnumber.\t  In
\nthe  year  1964, the Government of Gujarat took\t a  decision
\nthat  it would not be possible for it to reserve  more\tthan
\ntwelve\tseats for the nominees of the donor.  Though a\tcopy
\nof the said proceedings is not placed before us, it is
\n 559<\/span>
\nfound referred to in the letter dated April 19, 1965 written
\nby  the Under Secretary to the Government of Gujarat to\t the
\ntrustee\t of Meghji Pethraj Charitable Trust. (It  is  stated
\nthat meanwhile the original donor, M.P. Shah had  designated
\nthe respondent-trust as his nominee.) The letter reads:\n<\/p>\n
\t      “I  am directed to refer to your letter  dated
\n\t      March  4, 1965 on the subject noted above\t and
\n\t      to  state\t that  for  the\t reasons  given\t  in
\n\t      Government  letter No.  MOG-1062\/4257\/Q  dated
\n\t      August  11, 1964, it will be not possible\t for
\n\t      Government  to reserve more than 12 seats\t for
\n\t      the nominees of the donor at M.P. Shah Medical
\n\t      College, Jamnagar.”\n<\/p><\/blockquote>\n
5.The  respondent-trust acquiesced in this decision.   It
\nis  not\t brought  to our notice that the  trust\t lodged\t any
\nprotest\t to  the  said reduction much less  take  any  legal
\nproceedings  to\t compel\t the  Government  to  abide  by\t the
\narrangement.   From  the year 1964-65,\ttherefore,  only  12
\nstudents were being nominated by the trust.\n<\/p>\n
6.In February 1993 this Court delivered the judgment in J.P.
\nUnnikrishnan  v.  State\t of A.P. The  decision\tpertains  to
\nprivate professional colleges.\tWith a view to eliminate the
\nevil  of capitation fee and the other undesirable  practices
\nprevalent  in private medical colleges, this Court framed  a
\nscheme\twhich the affiliating university and the  Government
\nconcerned  were under an obligation to impose as  terms\t and
\nconditions  of\taffiliation\/recognition.  The  scheme  inter
\nalia  directed\tthat  no seats shall  be  reserved  for\t any
\ncommunity,  group or family which may have  established\t the
\ncollege.   The idea evidently was that while  donations\t are
\nwelcome,  investments  are not\tfor  the  reason,  expressly
\naffirmed in the judgment, that imparting of education is not
\nand cannot be allowed to become a business.  This feature of
\nthe  scheme  naturally\tset the\t Government  of\t Gujarat  a-
\nthinking   whether in the light of the above  pronouncement,
\nit  is permissible to reserve seats for the “donor”  in\t the
\nsaid   government  college  when  such\ta  course   is\t not
\npermissible even in a private medical college.\tAccordingly,
\nit resolved vide the Government of Gujarat resolution  dated
\nJuly 12, 1993 “to discontinue the twelve donor seats in M.P.
\nShah Medical College, Jamnagar”.  The resolution, a copy  of
\nwhich  was  communicated  to the  respondent-trust  and\t the
\ncollege reads as follows:\n<\/p>\n
\t\t\t       “ANNEXURE’E’
\n\t      Rules\t for\t Admission     to      first
\n\t      MBBSIBDS\/Physiotherapy in Medical Colleges  in
\n\t      Gujarat State 1993-94.\n<\/p><\/blockquote>\n
\t      Government of Gujarat,
\n\t      Health and Family Welfare Department,,
\n\t      Resolution No. MCG-1093-2323-J,
\n\t      Sachivalaya, Gandhinagar,
\n\t      Dated July 12, 1993.<\/p><\/blockquote>\n
\t      1\t (1993) 1 SCC 645
\n\t      560<\/span>
\n\t      Read  (1) Govt. Resolution Welfare Health\t and
\n\t      Family No.
\n Department dt. 20-5-1993.     MCG-1093-1373-J
\n\t       (2)  Govt.  Resolution  Welfare\t Health\t and
\n\t      Family\t No.
\n\t       Department dt. 26-6-1993.     MCG-1093-1373-J
\n (3)  Govt.  Resolution\t Welfare   Health  and
\n\t      Family\t No.
\n Department dt. 3-7-1993       MCG-1093-1373-J
\n\t      Resolution :\n<\/p>\n
\t      Government has in keeping with the judgment of
\n\t      the Supreme Court in Writ Petition No. 607  of
\n\t      1992  between  Unnikrishnan J.P. v.  State  of
\n\t      A.P.1  decided  to discontinue  the  12  donor
\n\t      seats  in M.P. Shah Medical College,  Jamnagar
\n\t      and  10 donor seats in Pramuch  Swami  Medical
\n\t      College,\t Karamsad.   The  decision  of\t the
\n\t      Government   has\tbeen  communicated  to\t the
\n\t      trustees concerned vide this department letter
\n\t      of  even\tNo. dated June 22,  1993  requesting
\n\t      them  not\t to admit any  student\tagainst\t the
\n\t      donor seats.\n<\/p>\n
\t      Therefore\t  in  modification  of\t rules\t for
\n\t      admission\t  to  first   MBBS\/BDS\/Physiotherapy
\n\t      course at Government Medical College and\tP.S.
\n\t      Medical  College,\t Karamsad\/Government  Dental
\n\t      College\/School  of  Physiotherapy\t in  Gujarat
\n\t      State  for  the  year  199394  approved\tvide
\n\t      Government   Resolution  No.   MCG-1093-1373-J
\n\t      dated 20-5-1993, Government is pleased (i)  to
\n\t      delete the words ‘and 3’ appearing in 7th line
\n\t      of  Rule\t1  and\t(ii)  to  delete  the  words
\n\t      ‘Provided\t that  …  total  available  seats’
\n\t      appearing\t in 6th and 7th lines of the Rule  2
\n\t      and (iii) to delete Rules 3.1, 3.2, 3.3,\t3.4,
\n\t      and note thereunder.\n<\/p>\n
\t      By order and in the name of the Government  of
\n\t      Gujarat.\n<\/p>\n
\t      (M.L. Jadav)
\n\t      Section Officer, Health and Family
\n\t      Welfare Department.”\n<\/p>\n
7.   Accordingly  the rules for admission to MBBS course  in
\ngovernment medical college, for the year 1993-94,  published
\nby  the\t Government of Gujarat contained  no  provision\t for
\nnomination of students by the respondent trust for the\tsaid
\nacademic  year.\t  It  is  then\tthat  the   respondent-trust
\napproached the Gujarat High Court challenging the  aforesaid
\nGovernment resolution.\n<\/p>\n
8.   Before  we refer to the contentions of the parties,  it
\nis  necessary to notice an earlier judgment of\tthe  Gujarat
\nHigh  Court  dated  September  20,  1974  in  Special  Civil
\nApplication No. 1232 of 1974 (Miss Asha J. Nanavati v. State
\nof  Gujarat).\tThe  writ petition was filed  by  a  student
\nseeking\t admission to the said college.\t Her case  was\tthat
\nbut  for the said provision for nomination, she\t would\thave
\nobtained a seat in the college.\t She questioned the validity
\nof  the\t rules\tfor admission issued by\t the  Government  of
\nGujarat
\n2  Civil Application No. 1232 of 1974, decided on  20-9-1974
\n(Guj)
\n 561<\/span>
\ninsofar\t as they provided for nomination of 12\tstudents  by
\nthe  respondent trust.\tShe submitted that when the  college
\nwas  started  in  the year 1955, its  strength\twas  60\t and
\naccording  to  the original arrangement only  6\t seats\twere
\navailable for nomination by the trust; that the strength  of
\nthe  college  has been increased from time to  time  by\t the
\nGovernment  by investing its own funds with the result\tthat
\nby  the year 1974, the strength of the college had risen  to
\n175; in such a situation, the provision permitting the donor
\nto   nominate  as  many\t as  12\t students   was\t  arbitrary,
\nunreasonable and violative of Article 14 of the Constitution
\nof  India.  She submitted that there was no formal  contract
\nor  agreement between the Government of Saurashtra  and\t the
\ndonor  and  that the arrangement, if any, between  the\tthen
\nGovernment of Saurashtra and Shri M.P. Shah was not  binding
\nupon the Government of Gujarat.\t She characterised the\tsaid
\narrangement as contrary to public policy and prejudicial  to
\npublic\tinterest.   Both  the trust and\t the  Government  of
\nGujarat, who were impleaded as respondents, opposed the writ
\npetition  and  justified the arrangement.   The\t High  Court
\ndismissed   the\t  writ\tpetition  holding  that\t  the\tsaid
\narrangement   was  not\tviolative  of  Article\t14  of\t the
\nConstitution.  The court observed that in 1954-55, there was
\nno medical college in Saurashtra and that a college could be
\nestablished  only  with the help of the said  donation\tfrom
\nShri  M.P. Shah.  The provision for nomination by  the\tsaid
\ndonor in consideration of the said donation, the court held,
\nis  reasonable.\t No appeal was preferred by  anyone  against
\nthe said decision.\n<\/p>\n
9.   Shri   Altaf   Ahmed,  Additional\t Solicitor   General
\nappearing for the appellant (State of Gujarat) assailed\t the
\njudgment of the Gujarat High Court on the following grounds:
\n(1)  The  Government  was  justified  in  discontinuing\t the
\nprovision  reserving  12 seats for being  nominated  by\t the
\nrespondent-trust inasmuch as the reservation of the kind  is
\nopposed\t  to  Articles\t14  and\t 15  of\t the   Constitution.
\nAccording  to the judgment in Unnikrishnan’ no seats can  be
\nreserved  for the family, group or community which may\thave
\nestablished   a\t  private  professional\t  college;   it\t  is
\ninconceivable  that such a reservation can be provided in  a
\ngovernment college.\n<\/p>\n
(2)  Even  if  it is assumed for the sake of  argument\tthat
\nsuch  a provision was valid when it was made in 1954, it  is
\nnot valid or reasonable after lapse of about forty years.
\n(3)  There  was\t no  contract  between\tM.P.  Shah  and\t the
\nGovernment  of Saurashtra as provided by Article 299 of\t the
\nConstitution.\tThe  arrangement between the  Government  of
\nSaurashtra and Shri M.P. Shah is not legally enforceable  in
\na court of law.\n<\/p>\n
(4)  The  High Court has not correctly understood the  ratio
\nof  the\t judgment in Unnikrishnan1.  The  judgment  made  it
\nclear that any such reservation even in a private college is
\nimpermissible.\t The Government of Gujarat was bound by\t the
\nsaid  judgment.\t It, therefore, acted to put an end  to\t the
\nsaid provision for reservation in a government college.\n<\/p>\n
562<\/span><\/p>\n
(5)  The  High\tCourt  was  in error  in  holding  that\t the
\njudgment  of the Gujarat High Court in Nanavati v. State  of
\nGujarat2 operated as res judicata between the Government and
\nthe  respondent-trust.\tSince the Government and  the  Trust
\nwere  co-respondents and there was no conflict\tof  interest
\nbetween\t them in that writ petition, the  decision  rendered
\ncannot operate as res judicata between them.
\n(6)  Having  regard  to the nature of function, it  was\t not
\nnecessary  for the Government to observe the  principles  of
\nnatural justice while terminating the arrangement.\n<\/p>\n
10.  Shri  G. Ramaswamy, learned counsel appearing  for\t the
\nrespondent  trust urged the following reasons in support  of
\nthe judgment of the High Court:\n<\/p>\n
(1)  There is a binding contract between the Government\t and
\nthe  trust entered into in 1954.  In any event, the  finding
\nof the Gujarat High Court in Nanavati case2 that there was a
\nbinding contract between the parties operates res judicata.
\n(2)  The  contract entered into between the parties  is\t not
\nviolative  of Article 14.  It is also not open to the  State
\nto raise the question of violation of Article 14 since\tthis
\nquestion was concluded by the judgment of the High Court  in
\nNanavati2 as far back as in 1974.\n<\/p>\n
(3)  The  judgment  in Unnikrishnan’ is applicable  only  to
\nprivate\t colleges.  It did not pertain to or deal  with\t the
\ngovernment colleges.  The said judgment was, therefore,\t not
\nrelevant  and  did not warrant the impugned  termination  of
\narrangement  by\t the  Government  of  Gujarat.\t Once\tthat
\njudgment is held to be irrelevant in the case of  government
\ncolleges, the only ground of termination gets knocked off.
\n(4)  In\t the  facts and the circumstances of the  case,\t the
\ncontract between the parties could not have been  terminated
\nunilaterally  without  observing the principles\t of  natural
\njustice.\n<\/p>\n
(5)  If\t the Government is of the opinion that the  contract
\nentered\t into  in 1954 was void and  unconstitutional,\teven
\nthen  it cannot unilaterally terminate the contract  without
\nrefunding the amount donated by Shri M.P. Shah.\t The  amount
\nof  Rupees  fifteen lakhs in 1954 is  equivalent  to  Rupees
\nseven and a half crores today.\n<\/p>\n
(6)  The  Government’s order pertains to M.P.  Shah  Medical
\nCollege as well as pharmacy college.  By a common  judgment,
\nthe  learned Single Judge of the Gujarat High  Court  struck
\ndown   the  government\tresolution  with  respect  to\tboth
\ncolleges.   The\t Government, however, chose to\tfile  appeal
\nonly  in the case of M.P. Shah Medical College but not\twith
\nrespect\t  to  the  pharmacy  college.\tThis  is  not\tonly
\ndiscriminatory and arbitrary but must also induce this Court
\nnot to interfere in this appeal since upsetting the judgment
\nof  the Gujarat High Court would result in two\tinconsistent
\norders.\n<\/p>\n
11.  Before  we\t deal  with the\t contentions  urged  by\t the
\nlearned counsel before us, it would be appropriate to notice
\na few facts.\n<\/p>\n
 563<\/span><\/p>\n
12.  M.P.  Shah\t Medical  College  was\testablished  by\t the
\nGovernment  of\tSaurashtra.   At  all  times,  it  has\tbeen
\nmaintained  and run by the Government of  Saurashtra\/Gujarat
\nfrom  out  of their own funds.\tEvery medical  college\tmust
\nnecessarily  have a hospital attached to it  with  requisite
\nbed-strength  and  facilities;\tthere cannot  be  a  medical
\ncollege without such an attached hospital.  For this reason,
\nas  existing  government hospital was renamed  as  “Kasturba
\nGandhi\tHospital” and attached to the college.\t Apart\tfrom
\nthe sum of Rupees fifteen lakhs “donated” in the year  1954,
\nno  further sum has been donated nor any  other\t expenditure
\nincurred by Shri M.P. Shah or the respondent-trust over\t the
\nlast  forty years.  There is also no evidence to  show\tthat
\nthe  college  was established exclusively  with\t the  amount
\n“donated” by Shri M.P. Shah and that no funds or property of
\nthe  Government was utilised for the purpose.  The  material
\nplaced\tbefore us does not also show that the Government  of
\nSaurashtra  was\t in  no position to spare a  sum  of  Rupees
\nfifteen\t lakhs in 1954 for establishing the college or\tthat
\nfor that reason it approached or requested Shri M.P. Shah to
\ndonate\tthe said amount.  It is not clear from whom did\t the
\nproposal  emanate.   The judgment of Gujarat High  Court  in
\nNanavati2  refers to and accepts the statement of a  trustee
\nof the respondent-trust that “the State of Saurashtra was  a
\nnewly  formed State at that time and was a very small  State
\nand the State had many other public duties like\t development
\nof  other  educational institutions of higher  education  in
\nwhat  was  known  as educationally backward  region  of\t the
\ncountry”,  and\tthe  further  averment\tthat  “this   object
\n(setting  up a medical college) could be achieved only if  a
\nsizeable donation like Rupees fifteen lakhs (considering the
\nvalue of rupee in those days) was received by the Government
\nof Saurashtra, when the Government itself was unable without
\nsome  initial donation to embark upon setting up  a  medical
\ncollege from its own funds”.  The aforesaid observations  in
\nthe judgment themselves show that while the laid  “donation”
\nwas essential for starting the college, it did not meet\t the
\nentire expense.\t Nor do we know what was the entire expense.
\nThe  significant  words are “the Government  by\t itself\t was
\nunable without some initial donation to embark upon  setting
\nup  a medical college from its own funds”.  Not that we\t are
\nsuggesting that had the college been set up exclusively\t out
\nof he said “donation”, it would make any difference.  We are
\nonly setting out the precise factual position.\n<\/p>\n
13.  The  arrangement between the Government  of  Saurashtra
\nand  Shri M.P. Shah does not prescribe the manner or  method
\naccording  to which the original donor or the  trust  should
\nselect\tthe  students  to be  nominated\t against  the  quota
\nreserved for them.  It was and is open to the donor\/trust to
\nnominate such candidates as they chose.\t The Government\t had
\nno right to question the combinations made.  While the trust
\nsays that they have been nominating students on a fair basis
\nwith  a\t view  to  help\t genuine  students  and\t  physically
\nhandicapped   students,\t  the  Government  says\t  that\t the
\nnomination did not follow any particular method or  criteria
\nand  that  the\tnominated students same from  all  over\t the
\ncountry.  The fact remains that the power of
\n564<\/span>
\nnomination  was unregulated and absolute and lay within\t the
\nsole discretion of the “donor” and his nominee.\n<\/p>\n
14.  Secondly,\tand more significantly, it is misleading  to
\ncall  the amount of Rupees fifteen lakhs paid by  Shri\tM.P.
\nShah  to  the Government in the year 1954 as  a\t “donation”.
\nThe said amount was not given by Shri M.P. Shah without\t any
\nstrings attached, but subject to certain conditions, one  of
\nwhich  was  of\tan enduring benefit to him.   Not  only\t the
\ncollege (to be established and maintained by the Government)
\nwas  to be named after Shri M.P. Shah, he bargained for\t and
\nobtained  a  quota of 10 per cent seats to  which  he  could
\nnominate  anyone.  At the time the college  was\t established
\nthe  strength  of  the\tcollege was  60.   It  has  expanded
\nenormously  and\t its present strength is  practically  three
\ntimes  its original strength.  As against 60 seats in  1955,
\nthe  number  of seats today is 175.  Shri M.P. Shah  or\t the
\nrespondent trust have not been spending a single pie on\t the
\neducation of students nominated by them over the last  about
\nforty  years.  For the first twenty years. they enjoyed\t the
\nright  of nominating one-tenth of the students and  for\t the
\nlast  about twenty years, 12 students.\tThe cost of  medical
\neducation has been steadily rising over the years.  In 1974,
\nas  it appears from the judgment in Nanavati2  the  cost  of
\neducating  one\tstudent was Rupees one lakh.   Today  it  is
\nanywhere in the region of five to seven lakhs.\tWe can\ttake
\njudicial  notice  of  the fact that over  the  last  several
\ndecades,   a  seat  in\tMBBS  course  is  a  highly   prized
\nachievement.\tThe  private  medical  colleges\t have\tbeen
\ncharging  several lakhs of rupees for granting admission  in
\ntheir colleges.\t We are not suggesting that the\t respondent-
\ntrust was collecting money for nominating students.  It\t may
\nnot  have  been\t necessary  for it but\tthe  very  power  of
\nnomination  in\trespect of 12 medical seats every  year\t did
\nmean  an exceptional power and clout  and  patronage   which
\neven  the  Government, which has established  and  has\tbeen
\nmaintaining  and running the college at a huge expense,\t did
\nnot  and  does\tnot  possess.\tIndisputably  admission\t  to
\ngovernment medical colleges is being done exclusively on the
\nbasis of the merit and even the Government does not  possess
\nthe  power  to\tnominate  a student  for  admission  in\t its
\ndiscretion.   Only  the respondent-trust  possessed  such  a
\npower\tand  all  because forty years back a  sum  of  Rupee
\nfifteen lakhs was “donated” by its  predecessor-in-interest.
\nIt is true that the sum of Rupees fifteen lakhs in 1954\t was
\na  substantial amount, as has been repeatedly emphasised  by
\nShri  Ramaswamy.   But it is equally evident that  the\tsaid
\npayment has yielded substantial benefit over the last  forty
\nyears.\n<\/p>\n
15.  Having noticed the relevant factual aspects, we may now
\nturn  to  the position in law.\tShri G.\t Ramaswamy,  learned
\ncounsel for the respondent trust is not right in saying that
\nthe  decision  in  Unnikrishnan1 was  not  relevant  to\t the
\ndecision  of  the  Government of Gujarat  to  terminate\t the
\naforesaid  arrangement.\t  In our opinion, it  was  perfectly
\nrelevant  and  the  Government\tof  Gujarat  was  right\t  in
\nterminating the arrangement following the said decision.  It
\nhas been held in Unnikrishnan1 that while a person may\thave
\na  right  to establish an educational  institution,  it\t can
\ncertainly not be treated or operated as a trade or business.
\nThe following extract from the
\n 565<\/span>
\njudgment  brings  out  the essence of the  holding  on\tthis
\naspect: (SCC pp. 75 1 52, paras 197-198)
\n\t      “While  we do not wish to express any  opinion
\n\t      on the question whether the right to establish
\n\t      an  educational institution can be said to  be
\n\t      carrying\t on  any  ‘occupation’\twithin\t the
\n\t      meaning  of Article 19(1)(g), perhaps,  it  is
\n\t      we  are  certainly of the\t opinion  that\tsuch
\n\t      activity\tcan neither be a trade\tor  business
\n\t      nor can it be a profession within the  meaning
\n\t      of   Article  19(1)(g).\tTrade  or   business
\n\t      normally connotes an activity carried on\twith
\n\t      a\t profit\t motive.  Education has\t never\tbeen
\n\t      commerce\tin this country.  Making it  one  is
\n\t      opposed\tto   the   ethos,   tradition\t and
\n\t      sensibilities of this nation.  The argument to
\n\t      the  contrary  has  an  unholy  ring  to\t it.\n<\/p>\n
\t      Imparting of education has never been  treated
\n\t      as  a trade or business in this country  since
\n\t      time  immemorial.\t  It has been treated  as  a
\n\t      religious\t duty.\t It has been  treated  as  a
\n\t      charitable  activity.  But never as  trade  or
\n\t      business.\t  We agree with\t Gajendragadkar,  J.
\n\t      that  ,education in its true aspect is more  a
\n\t      mission\tand   a\t vocation  rather   than   a
\n\t      profession or trade or business, however\twide
\n\t      may  be  the  denotation\tof  the\t two  latter
\n\t      words…\t.’ (See University of  Delhi3.)\t The
\n\t      Parliament  too has manifested  its  intention
\n\t      repeatedly (by enacting the U.G.C. Act, I.M.C.
\n\t      Act and A.I.C.T.E. Act) that commercialisation
\n\t      of  education is not permissible and  that  no
\n\t      person shall be allowed to steal a march\tover
\n\t      a\t more meritorious candidate because  of\t his
\n\t      economic\tpower.\tThe very same  intention  is
\n\t      expressed\t  by  the  Legislatures\t of   Andhra
\n\t      Pradesh, Karnataka, Maharashtra and Tamil Nadu
\n\t      in the Preamble to their respective enactments
\n\t      prohibiting charging of capitation fee.
\n\t      We  are, therefore, of the  opinion,  adopting
\n\t      the  line of reasoning in State of  Bombay  v.
\n\t      R.M.D.\tChamarbaugwala4<\/a>\t   that\t   imparting
\n\t      education\t cannot\t be treated as\ta  trade  or
\n\t      business.\t  Education cannot be allowed to  be
\n\t      converted\t  into\t commerce   nor\t  can\t the
\n\t      petitioners seek to obtain the said result  by
\n\t      relying\t upon\tthe   wider    meaning\t  of
\n\t      ‘occupation’.   The content of the  expression
\n\t      ‘occupation’ has to be ascertained keeping  in
\n\t      mind the fact that clause (g) employs all\t the
\n\t      four expressions, viz. profession, occupation,
\n\t      trade and business.  Their fields may overlap,
\n\t      but each of them does certainly have a content
\n\t      of its own, distinct from the others.  Be that
\n\t      as  it may, one thing is clear   imparting  of
\n\t      education\t is  not and cannot  be\t allowed  to
\n\t      become  commerce.\t A law, existing or  future,
\n\t      ensuring\tagainst it would be a valid  measure
\n\t      within  the meaning of clause (6)\t of  Article\n<\/p>\n
\t      19.   We\tcannot, therefore,  agree  with\t the
\n\t      contrary\t   proposition\t   enunciated\t  in
\n\t      Sakharkherda Education Society v. State of
\n\t      3\t  University of Delhi v. Ram Nath,<\/a> (1964)  2
\n\t      SCR 703: AIR  1963 SC 1873: (1963) 2 LLJ 335
\n\t      4 1957 SCR 874: AIR 1957 SC 874
\n\t      566<\/span>
\n\t      Maharashtra5, Andhra Kesari Education  Society
\n\t      v. Govt. of A.p.6 and Bapuji Educational Assn.
\n\t      v. State7.\n<\/p>\n
16.  In\t the  scheme  evolved in the said  judgment,  it  is
\nexpressly  directed that all students admitted to a  private
\nprofessional  college shall be selected exclusively  on\t the
\nbasis  of merit, both in the category of merit (free)  seats
\nas  well  as  payment seats.  In the case  of  such  private
\nprofessional  colleges, an exception was made to the  extent
\nof  5%\tof  the seats  for  accommodating  the\tNRIs\/foreign
\nstudents in view of the orders and policy of the  Government
\nof  India  to  encourage such students.\t It  has  also\tbeen
\ndirected  expressly that “there shall be no  quota  reserved
\nfor  the management or for any family, caste  or  community,
\nwhich  may have established such college”.  If this  is\t the
\nposition  in the case of professional  colleges\t established
\nand administered by private bodies, it is inconceivable that
\nin  the\t case  of  a college  established  and\trun  by\t the
\nGovernment,  any  admissions can be made otherwise  than  on
\nmerit or any quota can be reserved for any person, family or
\ntrust,\twhich may have assisted monetarily  in\testablishing
\nthe college.  The Government is not precluded from accepting
\ndonations    from    charitable-minded\t  individuals\t  of
\norganisations\tbut  it\t cannot\t certainly  enter  into\t  an
\narrangement  or a venture of the kind concerned herein.\t  In
\nthis  case,  the payment was more in the nature\t of  a\tdeal
\nwhereunder  Shri  M.P. Shah obtained in return\tan  enduring
\nbenefit\t till  the college lasts.  It was not even  a  case,
\nwhere  the Government unilaterally offered something out  of
\ngratitude  for such “donation” not that we are\tsaying\tthat
\nsuch  a thing would be legal.  Now, where and individual  or
\nan Organisation which establishes and runs a medical college
\n(recognised  by State or affiliated to a university) is\t not
\nentitled,  according to Unnikrishnan1 to admit\tstudents  on
\nits  own, or in its discretion, it is inconceivable  that  a
\nperson\tor  a  body which has assisted in setting  up  of  a
\ngovernment  medical  college would be permitted\t to  have  a
\nquota  of its own to which it can nominate students  of\t its
\nown  choice.   There is no room for such an  arrangement  in
\nlaw.   We  are, therefore, of the opinion  that\t the  reason
\ngiven  by  the Government of Gujarat  in  its  communication
\ndated June 22 1993 for terminating the said arrangement is a
\nperfectly  relevant,  legitimate and valid reason.   It\t was
\nbound to do so in law and it has done so.  No exception\t can
\nbe taken to the said action.\n<\/p>\n
17.  In this view of the matter, it is not necessary to deal
\nwith  the other contentions urged by the learned  Additional
\nSolicitor  General.   We  must\thowever,  deal\twith   other
\ncontentions urged by Shri Ramaswamy.  He contended that\t the
\ndecision of the Gujarat High Court in Nanavati2 operate:  as
\nres judicata between the respondent-trust and the Government
\nof Gujarat and, therefore, it is not open to the  Government
\nto say that the said arrangement is not valid and\/or binding
\nupon  it.   It\tis not possible to  agree  The\tjudgment  in
\nNanavati2 is not a judgment in rem.  It is a judgment it
\n5 AIR 1968 Bom 91: 69 Bom LR 690
\n6 AIR 1984 AP 251: (1984) 1 AP LJ 45
\n7 AIR 1986 Kant 119: ILR 1985 Kant 80
\n 567<\/span>
\npersonam.  It was in a writ petition filed by a student,  in
\nher individual capacity, seeking a direction to the  college
\nto admit her in MBBS 1st year course.  She arrayed both\t the
\nrespondent-trust   and\t the  Government   of\tGujarat\t  as
\nrespondents  to the writ petition.  Both the trust  and\t the
\nGovernment  supported the arrangement and contended that  it
\nwas  valid and binding.\t There was no conflict\tof  interest
\nbetween the trust and the Government.  There was no issue in
\ncontroversy  between  the trust and the Government  nor\t was
\nthere  any adjudication by the court on such an issue.\t For
\nattracting  the rule of res judicata  between  co-defendants
\naccording to the terms in Section 11 of the Civil  Procedure
\nCode which provision of course is not, in terms,  applicable
\nto  proceedings\t in a writ petition  it\t is  necessary\tthat
\nthere should have been some issue directly and substantially
\nin controversy between them which has been heard and finally
\ndecided\t by the court.\tSame would be the position, where  a
\nplea  of  res judicata is sought to be\traised\tbetween\t co-
\nrespondents in a writ petition, on the general principles of
\nres  judicata.\t Since\tthe said basic\trequirement  is\t not
\nsatisfied,  the\t said  judgment cannot\tbe  treated  as\t res
\njudicata between the trust and the Government.\tAt the most,
\nit  can\t be  used as an instance where\tthe  Government\t had
\naffirmed  the binding nature of the said arrangement but  no
\nmore.\tThat does not even give rise to an estoppel  in\t the
\nfacts  of  this\t case.\tMerely because\tthe  Government\t had
\ncontended  in 1974 that the said arrangement is a valid\t one
\nand binding upon it, it cannot be said that it is  precluded
\nfrom  resiling\tfrom  the said position\t even  when  it\t has
\nrealised that such an arrangement is contrary to Article 14.
\nThere can be no acquiescence or waiver in such matters.\t  If
\nan individual cannot waive the fundamental rights  conferred
\nupon him by Part III, the State cannot equally be  prevented
\nfrom discharging its obligations placed upon it by Part\t III
\nby rules of evidence like estoppel, acquiescence or waiver.\n<\/p>\n
18.  Shri Ramaswamy relied upon certain decisions in support
\nof the, said contention which we may deal with briefly.\t The
\nfirst  decision\t relied upon is in  Federation\tof  Directly
\nAppointed Officers of Indian Railway v. Union of India8.  In<\/a>
\nthat case, there was an earlier decision by this Court on an
\nissue  identical  to the one raised in\tthe  writ  petition.
\nThough\tthe  earlier  decision was not rendered\t in  a\twrit
\npetition  filed in a representative capacity, the issue\t had
\narisen\tbetween the very same categories of persons and\t the
\ncontentions  were also the same.  The petitioners sought  to
\nargue that the earlier decision is not binding upon them  in
\nview  of  the “developing concept of Article  14”.   On\t the
\nother hand, it was argued by the other side that the earlier
\ndecision operated as res judicata.  On an examination of the
\ncontentions which arose in the previous case and which arose
\nin  the case before them, the learned Judges comprising\t the
\nDivision  Bench\t held  that  they are  unable  to  see\t“any
\ncompelling reasons to deviate from the principles enunciated
\nin (earlier) judgment”.\t It was also held that “[a]  dispute
\nnow sought to be raised under Article 32 of the Constitution
\nbetween the Officers in a representative
\n8 (1993) 3 SCC 364: 1993 SCC (L&S) 776: (1993) 25 ATC 200
\n568<\/span>
\ncapacity  and  Engineers  across also  in  a  representative
\ncapacity  must\tbe held to be barred by\t principles  of\t res
\njudicata as also by the rule of constructive res  judicata”.
\nWe are unable to see how the principle of the said  decision
\nhelps  the respondent-trust herein.  There it was  a  direct
\nconflict  between  two categories of employees on  both\t the
\noccasions and on identical grounds.  It was for that  reason
\nthat the earlier decision was treated as res judicata.\n<\/p>\n
19.  The  next\tdecision  relied upon is  in  Ambika  Prasad
\nMishra\tv.  State of U.P.9 The principle emphasised  by\t the
\nConstitution  Bench in this case is that judicial  decisions
\nshould not be reviewed from time to time since such a course
\nhas  the effect of making the law uncertain besides  keeping
\nthe legislative and administrative decisions on vital issues
\nin  perennial  suspense.  There can be no quarrel  with\t the
\nsaid principle but its relevance herein is very little.\n<\/p>\n
20.  Shri  Ramaswamy  then  cited State\t of  U.P.  v.  Nawab
\nHussain10.   In<\/a> that case, the respondent who was  dismissed
\nfrom service filed a writ petition in the High Court raising
\na  particular contention.  The writ petition was  dismissed.
\nThereafter,  he\t filed\ta suit\traising\t another  ground  of
\nchallenge which was met by the State by raising the plea  of
\nres  judicata.\t This  Court held that\tthe  respondent\t was
\nprecluded  by  the rule of constructive\t res  judicata\tfrom
\nraising\t the  said new ground in the suit which he  did\t not
\nraise  in  the\twrit  petition, though\tit  was\t within\t his
\nknowledge and could have been taken in the writ petition.\n<\/p>\n
21.  The last decision cited by Shri Ramaswamy on this score
\nis in Somawanti v. State of Punjab’ 1. In this case, it\t was
\nobserved  at pages 793-94 (SCR) that the mere fact that\t one
\nof  the contentions now raised was not raised or  considered
\nin  an earlier decision which affirmed the validity  of\t the
\nenactment, does not furnish sufficient ground for  reopening
\nthe  issue.  None of these cases are cases relating  to\t res
\njudicata between co-defendants\/corespondents.\n<\/p>\n
22.  We are unable to see any substance in the argument that
\nthe   termination  of  arrangement  without  observing\t the
\nprinciple of natural justice (audi alteram partem) is  void.
\nThe  termination is not a quasi-judicial act by any  stretch
\nof  imagination; hence it was not necessary to\tobserve\t the
\nprinciples of natural justice.\tIt is not also an  executive
\nor administrative act to attract the duty to act fairly.  It
\nwas   as  has  been repeatedly urged by\t Shri  Ramaswamy   a
\nmatter governed by a contract\/agreement between the parties.
\nIf  the matter is governed by a contract, the writ  petition
\nis  not maintainable since it is a public law remedy and  is
\nnot  available in private law field, e.g., where the  matter
\nis governed by a non-statutory contract* . Be
\n9    (1980) 3 SCC 719:(1980) 3 SCR 1159
\n10   (1977) 2 SCC 806: 1977 SCC (L&S) 362: (1977) 3 SCR 428
\n11   (1963)  2 SCR 774: AIR 1963 SC 151: (1963) 33  Com\t Cas
\n745<\/span>
\nIn  this  connection, see Assistant Excise  Commissioner  v.
\nIsaac Peter,<\/a> ( 1994) 4 SCC 104: 1994 (2)     J.T. 140 on the
\nrelevance  of  doctrine of fairness in matters\tgoverned  by
\ncontract,  arrived  at calling for tenders,  auction  or  by
\nnegotiations.\n<\/p>\n
569<\/span><\/p>\n
that as it may, in view of our opinion on the main question,
\nit is not necessary to pursue this reasoning further.\n<\/p>\n
23.  Regarding the contention that the Government of Gujarat
\ndid  not choose to file an appeal (against the\tjudgment  of
\nthe  learned  Single  Judge) in the  case  of  the  pharmacy
\ncollege\t but  filed an appeal only in the case of  the\tM.P.
\nShah Medical College and that it is guilty of discrimination
\non that account, we must say, we see no substance in it.  It
\nis  explained  by the learned Additional  Solicitor  General
\nthat  in  the case of pharmacy college, only  one  seat\t was
\ninvolved  whereas  it was 12 seats here and that  too  in  a
\nmedical college.  In any event, since both the colleges\t are
\ndifferent  and they had filed two different writ  petitions,
\nnon-filing  of\tappeal\tin one case  does  not\tdisable\t the
\nGovernment from filing the appeal in the other case,  merely
\nbecause the judgment is a common one.  It must be deemed  in
\nsuch a case that it is a judgment in each case separately.\n<\/p>\n
24.  For  the above reasons, the civil appeals\tare  allowed
\nand  the  judgments of the Gujarat High Court, both  of\t the
\nlearned\t Single Judge and the Division Bench  under  appeal,
\nare set aside.\tNo order as to costs.\n<\/p>\n
25.  No orders on interlocutory applications.\n<\/p>\n
614<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of Gujrat vs M.P. Shah Charitable Trust on 29 March, 1994 Equivalent citations: 1994 SCC (3) 552, JT 1994 (3) 96 Author: B Jeevan Reddy Bench: Jeevan Reddy, B.P. (J) PETITIONER: STATE OF GUJRAT Vs. RESPONDENT: M.P. SHAH CHARITABLE TRUST DATE OF JUDGMENT29\/03\/1994 BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-59379","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of Gujrat vs M.P. 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