IMPORTANT POINT
For establishment of new medical college, policy power now rests with Central Govt. subject to grant of essentiality certificate by State Govt. Since State Govt. wrongly refused it, the Central Govt. can consider grant of permission to the Trust-Appellant for establishing a new Medical College in Salem without insisting upon said essentiality certificate by State Govt.

JUDGMENT

S.C. Agrawal, J.-Special leave granted.

2. These appeals by Thirumuruga Kirupananda Variyar Thavathiru Sundara Swamigal Medical Educational and Charitable Trust (hereinafter referred to as the Trust ) relate to the establishment of a Medical College at Salem in the State of Tamil Nadu. The Trust has been formed for establishing various educational institutions and for other charitable purposes. It has established a Pharmacy College, a Dental College, a Homoeopathy College, an Engineering College, a Polytechnic, an Industrial Training Institute, etc. in the town of Salem. It is desirous of establishing a medical college at Salem.

2. In 1987, the Tamil Nadu State Assembly enacted the Tamil Nadu Medical University Act, 1987 (Act No.37 of 1987) which is now re-named as Dr. M.G.R. Medical University Act (hereinafter referred to as the Medical University Act ) whereby Tamil Nadu Medical University, re-named as Dr. M.G.R. Medical University, (hereinafter referred to as the University ) was established. Sub-section (5) of Section 5 of the Medical University Act empowers the University to affiliate colleges to the University as affiliated colleges, within the University area under conditions prescribed and withdraw such affiliation. On December 2, 1987, the Trust submitted an application to the University seeking affiliation to the University a medical college which the Trust wanted to start. The University, however, refused to entertain the said application of the Trust on the ground that a no objection certificate should be obtained from the Government of Tamil Nadu (hereinafter referred to as the State Government ) for starting a medical college and without such a no objection certificate the application could not be considered. The Trust filed a Writ Petition (W.P. No. 2776 of 1989) in the Madras High Court against the said order of the University refusing to entertain the application of the Trust for affiliation of the proposed medical college to the University. On the said Writ Petition, a learned single Judge (K. Venkataswamy J., as the learned Judge then was) passed an order, on April 13, 1989, with the consent of the parties, wherein it was recorded that the University would not insist on the prior permission of the Government and that the Trust would apply for affiliation in the prescribed form and the University would consider the same on merits without insisting upon prior permission of the State Government and pass orders in accordance with law. Thereafter, the Trust submitted an application for affiliation of the medical college on October 30, 1989. The said application was rejected by the University by order dated December 18, 1989 on the ground that the application ought to have been received on or before October 31, 1989 and it was received on November 7, 1989. The Trust filed another Writ Petition (W.P. No. 10453 of 1990) in the Madras High Court against the said order of the University dated December 18, 1989. The said Writ Petition of the Trust was allowed by a learned single Judge of the High Court (Somasundram, J.) by order dated February 1, 1991 and the order dated December 18, 1989 was set aside on the ground that application for affiliation has been sent by post on October 30, 1989 and the requirement of statute 37 with regard to the period of limitation for submitting the application was complied with. The University was directed to re-consider the said application of the Trust on merits. In the meanwhile, the Tamil Nadu State Legislature had enacted Dr. M.G.R. Medical University Tamil Nadu (Amendment and validation) Act, 1989 [XXXII of 1990] (hereinafter referred to as the State Act ) on July 6,1990. By the said Act, which was brought into force with effect from September 24, 1987, a proviso was inserted in sub-section (5) of Section 5 of the Medical University Act whereby it was prescribed that "no college shall be affiliated to the University unless the permission of the Government to es