2000 Supreme(SC) 1277

2000(5) Supreme 467
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
M. Jagannadha Rao and K.G. Balakrishnan, JJ.
Government of Andhra Pradesh & Ors. -Appellants
versus
G.V.K. Girls High School -Respondent
Civil Appeal No. 2422 of 1997
Decided on 7-8-2000
Counsel for the Parties :
For the Appellants : Mrs. K. Amreshwari, Sr. Advocate, G. Venkatesh, Anil Kumar Tandale, Advocate.
For the Respondent : B. Kanta Rao and Ms. Sudha Gupta, Advocates.

IMPORTANT POINT
Andhra Pradesh Educational Institutions Grants-in-Aid (Regulations) Supplementary Provisions Act, 1995 does not retrospectively remove the rights created by Act 1/82 read with Act 22/88.

Headnote:Andhra Pradesh Education Act, 1982-Sections 42, 43 and 46-Andhra Pradesh Private Educational Institutions Grant-in-Aid (Regulation) Act, 1988-Section 3-Andhra Pradesh Educational Institutions Grant-in-Aid (Regulation) Supplementary Provisions Act, 1995-Section 2-Grant-in-aid-Arrears of grant-in-aid-Denial of-Validity-Complaint against schools-Statutory Committee to go into allegations-Grant-in-aid kept in abeyance-Statutory Committee clearing respondent school-Government not releasing arrears of aid-Writ petition-High Court directing release of fund-State legislature passing Act pending writ petition to enable Government to refuse arrears of grant-in-aid-High Court holding by new Act Govt. cannot set aside judgment-Held, right to grant in accrued under 1982 and 1988 Act-1995 Act, did not take away right so accrued-What is removed by 1995 Act is right created by Government orders-Respondent school entitled to arrears of grant-in-aid.

       Held : Section 42 to 45 of Act 1/82 contain the main provisions as to admission to grant-in-aid. In other words, in respect of the schools which satisfy the prescribed eligibility conditions as prescribed in the GOs, a statutory right to receive grant-in-aid is clearly created by Sections 42 to 45 of the said Act. No doubt, Section 46 of Act 1/1982 permits withholding or reduction or withdrawal of the grant-in-aid. The power mentioned in the first part of clause (1)(a) could be exercised after inquiry by the State having regard to the funds at the disposal of the Government. Under the second part of clause (1)(a), this power could be exercised based upon conduct and efficiency or financial position of the institution also after giving opportunity. Under clause (2) of Section 46, the power could be exercised if the manager had committed certain irregularities as found in an inquiry where the manager is heard. It is clear that when Government appointed a Committee to go into complaints, it was exercising the option under Section 46(2). So far as Section 46(1) is concerned, there are no proceedings issued under Section 46(1) and no inquiry conducted under that provision. (Paras 20 and 21)

       It is not in dispute that after Act 1/82, the respondent-school was admitted to grant-in-aid under the said Act in GO 347 (Ed.) dated 1.8.86 because the school satisfied the conditions in GO 238 (Ed.) dated 27.5.86. Now, after complaints were received, the grant was kept in abeyance and the cases of the respondent and others were inquired into under Section 46(2). Initially, the Government constituted a Committee in GO 220 dated 24.2.88. Later by Act 22/88, the Committee was given statutory status to go into complaints. It will be noticed that the right to receive grant-in-aid for the back years i.e. from 22.7.85 was declared under Act 22/88, contingent upon the recommendation of the Committee. This is clear from section 3(2). It states that if the Committee recommends favourably, then the grant is to be released in favour of an institution, "from the date upon which it satisfies all the conditions for admission to grant in aid specified in the Andhra Pradesh Education Act, 1982 and the Rules made thereunder, or the grant in aid code or orders or other instructions issued by the Government from time to time". This clause, in our view, therefore directs release of grant-in-aid from the date upon which the school satisfies the eligibility conditions. As already stated sub-clause (3) of section 1 made Act 22/88 retrospective from 22.7.85. Hence it is as if the Committee constituted under Act 22/88 was there from 1985. In our view, once the Committee gave its clearance, the decision would therefore be effective from 22.7.1985 in respect of all the back years from dates anterior to the passing of Act 22/88, and the school would be entitled to release of grant-in-aid from the date on which it satisfies the conditions for receiving grant-in-aid. (Paras 22 & 23)

       It is true Section 3 does not expressly say that the recommendation will be retro-active but from the language of Section 3(2) referred to above and also because sub-section 3 of section 1 says that the Act "be deemed to have come into force on the 22nd July, 1985", in our view, the right is retrospectively affirmed for the back years. In other words, the Committee s recommendations as to compliance with conditions during various years from 1985 though made after 1988 were to be treated as in existence from various dates after 22.7.1985 and if the institution satisfied the conditions of the Act 1/1982 and also conditions laid down in other GOs in the previous years, the Committee s recommendation in favour of any school would be retroactive and will apply to those back years. That the right to arrears is affirmed by Section 3 is also clear from section 5 which relates to an adverse recommendation of the Committee. In cases where the Committee accepted complaints, Section 5 requires refund of amounts already paid. Thus, Act 22/88 provided for payment of arrears or for refund of amounts paid. That was the purpose in making the provisions of that Act retrospective w.e.f. 22.7.1985. In our view, these provisions of the Act, therefore, clearly conferred a statutory right on the writ petitioners to receive the grant-in-aid right from 22.7.85 onwards in the various years in which they satisfied the conditions. The right to arrears thus flows from the statutes and the Committee s recommendations and not from any Government orders. In other words, the basic right to receive arrears does not stem from any Government order in respect of the schools enumerated in GO 326 (Ed.) dated 17.10.89 read with GO 178 (Ed.) dated 23.7.90. The right stems from Act 1/82 and Act 22/88 and the findings of the Committee. This aspect becomes important when we come to deal with Act 34/95 and as to whether it has removed the basis of the judgment of the learned Single Judge. (Para 24)

       What is removed by the Act 22/95 is the right created by the Government orders and not the rights created by Act 1/82 and Act 22/88. If any Government order had conferred any right to the institutions enumerated in the Annexure to GO 326 dated 17.10.89 read with GO 178 dated 23.7.90, it was only those rights that were intended to be removed retrospectively by Section 2 from 17.10.89. In other words, the legislature while enacting Section 2 of Act 34/95 failed to remove the rights conferred by the Principal Act 1/82 and Act 22/88 read with the Committee s declaratory findings. Further, the Act 34/95 being retrospective only from 17.10.89, it does not go beyond that date into the back years. (Para 28)

       So far as the first part of section 2 read with Section 46 of Act 1/82, the State has also not placed any material before Court to sustain the order of denial of arrears for want of funds. What budgetary allocations were made in the concerned years were never placed before Court. There is also no proof of any inquiry as required by the first part of Section 46(1) of Act 1/82. Thus, under the first and second parts of Section 2 of Act 34/95, there is no removal of the statutory right created by Act 1/82 and Act 22/88, read with the recommendations of the Committee. (Paras 29)

       Section 2 of the Act 34/95 also purports to nullify the effect of the judgment of the learned Single Judge. It is well settled that the legislature cannot overrule a judgment by passing a law to that effect unless it removes the basis of the legal rights upon which the judgment is based, with retrospective effect and provided there is no violation of any constitutional provision in such withdrawal of rights retrospectively. In the present case, we are not going into the question whether any provision of the Constitution is violated while passing Act 34/95 denying arrears of grant-in-aid retrospectively. However, in our view, inasmuch as the rights created by Act 1/82 and Act 22/88 read with the Committee s recommendations have not been nullified by Act 22/95, the judgment of the learned Single Judge remains effective. The basis of the judgment has not been removed. We have already shown that the rights flowing from the Acts were not touched. Only rights flowing from Government orders were taken away retrospectively. It is therefore necessary to give effect to the judgment of the learned Single Judge. (Paras 30 & 31)