Judgment:

Dr. Mukundakam Sharma, J.

1. Leave granted.

2. These appeals filed by the State of Kerala are directed against the judgment and order dated 17.6.2005 passed by the Division Bench of the High Court of Kerala at Ernakulam whereby not only order dated 3.3.2004 of the learned Single Judge of the same High Court was upheld and the writ petition was held to have been rightly allowed by the learned Single Judge.

3. Relevant facts for disposal of the appeals are as under:

Dr. Padiar Memorial Homoeopathic Medical College, Chottanikkara (hereinafter referred to as Padiar Medical College) is a private college established in the year 1920 and governed by its Board of Trustees. On 30.12.1998, a decision, in consultation with the Government of Kerala, was taken by the management of the college to introduce the `direct payment system. At that time there were only 31 teaching staff and 20 non-teaching staff. Consequent thereupon the management appointed 45 non-teaching staff and 21 teaching staff by letter dated 2.1.1999. On 24.1.2000, an agreement was executed between the Government of Kerala and the Governing Body of the College for bringing the said college under the `direct payment system w.e.f. 1.1.2000.

4. G.O. (Ms) 511/95/H&FWD dated 10.11.1995 issued by the Department of Health and Family Welfare, Government of Kerala, provided that the system of direct payment will be introduced in the following three private Homoeopathic Colleges in the State, subject to the conditions stipulated hereunder:

"1. Athurasramam Nair Service Society Homeopathic Medical College, Kurichy, Kottayam

2. Dr. Padiyar Memorial Homoeopathic Medical College, Chottanikara.

3. Sir Vidadhiraja Homeopathic Medical College, Nemom, Thiruvananthapuram Conditions:

(a) Direct payment of salary will take effect from 01.11.1995

(b) All these private Homeopathic Colleges will enter into agreements with the Government to the effect that in respect of appointments of Staff and enrollment of students, they will abide by terms and conditions similar to those adopted in respect of private Engineering Colleges in the State.

(c) Dr. Padiyar Memorial Homeopathic College will not claim any Special rights of a Minority Institutions or of a self-financing institution.

(d) Shree Vidyadhiraja Homeopathic College shall obtain recognition from University of Kerala as a Precondition for implementation of the direct payment system"

5. The Government Order G.O. (MS) No. 100/2000/H&FWD dated 25.4.2000 was issued regarding the introduction of `direct payment system with effect from 1.1.2000 which, inter alia, provided that direct payment system can be introduced in the Padiar Memorial Homeo College, allowing the management to fill up 15% seat for BHMS as is being enjoyed by the NSS Homeo College, Kurichy if they executed an agreement to this effect as provided in the conditions stipulated in the aforesaid Government order dated 10.11.1995. This Government order authorised the Senior Principal & Controlling Officer for Homoeopathic Education to take necessary action for making the staff fixation. Consequently, on 16.11.2001 he sent a list of 40 teaching and 50 non-teaching staff having qualification according to the government rules as on 1.1.2000 and considering the department seniority for staff fixation. The Government accepted and approved the said list as per Government Order G.O. (MS) No. 99/02/ H&FWD dated 25.4.2002 relevant portion of which is reproduced hereinbelow :

"In the G.O. read above, Direct Payment System was introduced in the Dr. Padiar Memorial Homoeopathic Medical College, Chottanikkara, with effect from 01.01.2000, subject to the conditions set out in the agreement entered into between Government and the Management of the College. It was stipulated therein that until fixation of staff strength and approval of salary are done, members of the staff in the college will be paid pay and allowances at the approval rate at which they were drawing their pay for the month of