JUDGMENT

SAWANT, J.- The short question involved in these matters is whether after the coming into force of the All India Council for Technical Education Act, 1987 (hereinafter referred to as the "Central Act") the State Government has power to grant and withdraw permission to start a technical institution as defined in the Central Act. In the present case, the technical institutions with which we are concerned are the respondent Engineering Colleges which are being run in the State of Tamil Nadu.

2. To understand the issue, we will refer to the facts in CAs. Nos. 1634-35 of 1990. The State Government under GOM No. 429 dated 17-4-1984 issued by the Education, Science and Technology Department had permitted private managements to start new engineering colleges under the self-financing scheme without any financial commitment to the Government, but subject to the fulfilment of certain conditions. The first respondent, viz., Adhiayaman Educational Research Institute (for short, "the Trust") applied to the Government of Tamil Nadu for permission to start a new self-financing private Engineering College in terms of the said policy. The Government granted the permission to the Trust to start a private engineering college under the name and style of Adhiyaman College of Engineering at Hosur in Dharmapuri District beginning with the academic year 1987-88 by its order of 9-6-1987. The permission was to offer three degree courses with the intake of 180 students per year, i.e., sixty students in each course in the subjects of (a) Mechanical Engineering, (b) Electronics and Communication Engineering and (c) Computer Science and Engineering. One of the conditions imposed by the Government was that the Trust could admit candidates of its choice up to 50 per cent of the approved intake under the management quota, and the remaining 50 per cent of the seats would be allotted by the Director of Technical Education from among the candidates of the approved list prepared for admission to Government and Government-aided Engineering Colleges. The Government had also stipulated that if any of the conditions imposed by them was not fulfilled, the permission granted to start the College would be withdrawn and the Government will have the right to take over the College with all its moveable and immovable properties including endowment and cash balance without paying compensation. Pursuant to this permission, the Trust applied to the University on 18-6-1987 for affiliation of the College. After inspection of the College, the Inspecting Commission of the University submitted its report on 5-11-1987 and the University on 21-11-1987 granted temporary affiliation to the College for the academic year 1987-88 subject to the fulfilment of certain conditions. The University also made it clear to the Trust that the Trust should make an application for affiliation for the second year B.E. degree course for the academic year 1988-89 and that no admission should be made to the degree course until the permission was granted by the University.

3. The College started functioning from July 1987. On 17-9-1988, the University extended the affiliation for first year of B.E. degree course for the academic year 1988-89 subject to the implementation of the recommendations of the Inspecting Commission made in its report of 5-11-1987 and subject to the conditions of affiliation already intimated while granting the initial temporary affiliation. On 24-11-1988 the Trust applied for affiliation for third year B.E. degree course for the academic year 1989-90 and continuation of affiliation for first year and second year B.E. degree courses. In March 1989, the Committee appointed by the Director of Technical Education, inspected the College and submitted its report which was forwarded to the Trust with a direction to take necessary steps to create requisite infrastructural facilities. The Trust sent a reply to the Director informing him of the progress made by it with regard to the pr