Section 133 (1) or 133 (4) of the Income Tax Act - Confession - Retraction - Voluntary admission - three different aspects - with out pleadings can not be considered in arguments -Voluntary admission at the time of survey , the director of company voluntarily admitted excess amount of Rs.20 lakhs and paid tax also - but filed appeal - in appeal grounds no plea was taken that the admission was obtained by force as such he is retracting the same - with out basis - CIT set aside the orders of A.O. - ITAT tribunal set aside the orders of CIT and restored the orders of A.O. as correct - High Court held that with out pleadings , no case be forward - a lawyer can not develop a case - dismissed the appeal upholding the order of ITAT and A.O as correct = Kernex Micro Systems (India) Ltd.,Hyderabad. Appellant Deputy Commissioner of Income Tax,Circle-2(1), Hyderabad. Respondent = 2014 ( January Vol-1 )judis.nic.in/judis_andhra/filename=10749

  Section 133 (1) or 133 (4) of the Income Tax Act - Confession - Retraction - Voluntary admission - three different aspects - with out pleadings can not be considered in arguments -Voluntary admission at the time of survey , the director of company voluntarily admitted excess amount of Rs.20 lakhs and paid tax also - but filed appeal - in appeal grounds no plea was taken that the admission was obtained by force as such he is retracting the same - with out basis - CIT set aside the orders of A.O. - ITAT tribunal set aside the orders of CIT and restored the orders of A.O. as correct - High Court held that with out pleadings , no case be forward - a lawyer can not develop a case - dismissed the appeal upholding the order of ITAT and A.O as correct =

The Assessing Officer has made an assessment order on the basis of the 
voluntary statement made by the Managing Director of the appellant disclosing of
income of Rs.20 lakhs.  
The said statement, which was reproduced by the learned
Tribunal in its judgment, is reproduced hereunder.
        "I admit that the above defects persist in maintenance of expense
vouchers.  The payments are not properly recorded.  Taking into account the
above deficiencies, which are not deliberate and to cover up any other omissions
and commissions, I voluntarily offer Rs.20.00 lakhs as additional income in
respect of training and development divisions of the company and EOU division of
the company.  The lapses being common to both the divisions, i.e., training and
development and EOU, I offer Rs.10.00 lakhs for each of the division.  This
offer has been made voluntarily to close the matter.  This does not cover any
disallowance on any legal issue.  I would request the department not to initiate
any penalty proceedings.  I undertake that the company pay the taxes after it
receives the assessment order." =

"5.1.   Whether on the facts and circumstances of the case, the Hon'ble ITAT was
        justified in reversing the order of the learned CIT (Appeals) and
restoring the   addition of Rs.20 lakhs

5.2.    Whether on the facts and circumstances of the case, the Hon'ble ITAT was
        justified in holding that the appellant company could   not retract
from its        admission before the learned CIT (Appeals), who is also a
departmental    authority and whose powers are co-      eval with those of the
assessing officer

5.3.    Whether the Hon'ble ITAT the ultimate fact finding body, was justified in
refusing to look into the facts relating to the expenditures involved in the so
called defective vouchers listed by the assessing officer

5.4.    Whether there is any basis for the conjecture and suspicion of the Hon'ble
ITAT    that the appellant company could manipulate its evidence in the face of
the fact        that most of the expenditures were      covered by either cheque
payments or TDS         provisions of the Income Tax Act

5.5.    Whether the Hon'ble ITAT was justified in restoring the addition of Rs.20
lakhs solely basing itself on the statement recorded by the assessing officer
under Section 133A of the Income Tax Act from the Managing Director of the
appellant company, which statement cannot be put on par with a sworn statement 
under Section 133 (1) or 133 (4) of the Income Tax Act

5.6.    Whether the canons of natural justice are not violated as no show cause
notice was issued by the assessing officer and the list of the defective
vouchers was not furnished and not even a copy of the statement recorded from
the Managing Director was furnished to the appellant company before the
assessment has been completed   

5.7.    Whether the Hon'ble ITAT was justified in sustaining the addition when the
Central Board of Direct Taxes itself in its instructions F.No.286/2/2003-
IT(Inv), dated 23.03.2003 had instructed the officers not to force confessions
of undisclosed income during search and survey operations and stated that such confessions, as in the present case, which are not based on credible evidence,
did not serve any purpose

5.8.    Whether the Hon'ble Tribunal was justified in calling upon the
        appellant company to prove the negative by way of showing proof that the
        statement of the Managing Director had not been furnished to it"
those questions are not the questions of law
rather argument in the form of question.  Therefore, we do not want to look into
those questions. =
The fact shows that at the time of assessment the assessee did not retract
the aforesaid admission making voluntary disclosure.  Even the assessee on the
basis of the assessment has paid the tax and after that an appeal was preferred
before the Commissioner of Income Tax (Appeals).  In the said appeal we do not
find that the appellant has made out any case that the aforesaid admission was
not made voluntarily and it was made by mistake or anything else.
        It appears from the record that only the learned lawyer appearing before
the Commissioner of Income Tax (Appeals) took up the factual point, which was
not stated in the grounds of appeal, that the aforesaid admission was recorded
under mistaken belief of fact and law.  
"Before going into the legal intricacy whether income offered during the
course of survey can be agitated before the appeal proceedings or not, I want to
state that an addition made by the AO should stand on its own legs irrespective
of the fact whether it is accepted or not accepted by the assessee.  I agree
that in this case, the MD of the appellant-company had offered a sum of Rs.20
lakhs at the time of survey.  It is also a fact that he has not disputed the
same during the course of assessment proceedings.  It is also a crucial fact
that the appellant had even paid taxes on the income offered.  But can he
sustain an addition only on the basis of admissions and acquiscences,
particularly, when the appellant has gone back on the admission  The answer is
an emphatic "No" as, if an addition can be made on the basis of admission, the
same has to be deleted on the basis of retraction."

        We fail to understand from where the case of retraction has been
discovered by the Commissioner of Income Tax (Appeals) when the appellant has 
not stated in the grounds of appeal before it that it has retracted.
A lawyer cannot improve the case of the litigant on fact
unlike in case of law.  Such an act is without jurisdiction.
        The appeal is accordingly dismissed.

2014 ( January Vol-1 )judis.nic.in/judis_andhra/filename=10749



THE HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON'BLE SRI JUSTICE SANJAY KUMAR              

ITTA No.77 OF 2007

02-01-2014

Kernex Micro Systems (India) Ltd.,Hyderabad. Appellant

Deputy Commissioner of Income Tax,Circle-2(1), Hyderabad. Respondent  

Counsel for Petitioner  : Sri P. Murali Krishna

Counsel for the respondent: Sri S.R. Ashok                                    
       

<GIST:

>HEAD NOTE:  

?Cases referred

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD                

        THE HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA                
AND
THE HON'BLE SRI JUSTICE SANJAY KUMAR        

I.T.T.A. No. 77 OF 2007

       
DATE: 02.01.2014


This Court made the following:

JUDGMENT: (Per the Hon'ble The Chief Justice Sri Kalyan Jyoti Sengupta)

        This appeal is directed against the judgment and order dated 22.02.2006 of
the learned Tribunal in relation to assessment year 1998-99 and is sought to be
admitted on as many as eight suggested questions of law, which are as follows:
"5.1.   Whether on the facts and circumstances of the case, the Hon'ble ITAT was
        justified in reversing the order of the learned CIT (Appeals) and
restoring the   addition of Rs.20 lakhs

5.2.    Whether on the facts and circumstances of the case, the Hon'ble ITAT was
        justified in holding that the appellant company could   not retract
from its        admission before the learned CIT (Appeals), who is also a
departmental    authority and whose powers are co-      eval with those of the
assessing officer

5.3.    Whether the Hon'ble ITAT the ultimate fact finding body, was justified in
refusing to look into the facts relating to the expenditures involved in the so
called defective vouchers listed by the assessing officer

5.4.    Whether there is any basis for the conjecture and suspicion of the Hon'ble
ITAT    that the appellant company could manipulate its evidence in the face of
the fact        that most of the expenditures were      covered by either cheque
payments or TDS         provisions of the Income Tax Act

5.5.    Whether the Hon'ble ITAT was justified in restoring the addition of Rs.20
lakhs solely basing itself on the statement recorded by the assessing officer
under Section 133A of the Income Tax Act from the Managing Director of the
appellant company, which statement cannot be put on par with a sworn statement 
under Section 133 (1) or 133 (4) of the Income Tax Act

5.6.    Whether the canons of natural justice are not violated as no show cause
notice was issued by the assessing officer and the list of the defective
vouchers was not furnished and not even a copy of the statement recorded from
the Managing Director was furnished to the appellant company before the
assessment has been completed  

5.7.    Whether the Hon'ble ITAT was justified in sustaining the addition when the
Central Board of Direct Taxes itself in its instructions F.No.286/2/2003-
IT(Inv), dated 23.03.2003 had instructed the officers not to force confessions
of undisclosed income during search and survey operations and stated that such confessions, as in the present case, which are not based on credible evidence,
did not serve any purpose

5.8.    Whether the Hon'ble Tribunal was justified in calling upon the
        appellant company to prove the negative by way of showing proof that the
        statement of the Managing Director had not been furnished to it"

        At the first instance, from a reading of the aforesaid suggested questions
of law, we are of the view that those questions are not the questions of law
rather argument in the form of question.  Therefore, we do not want to look into
those questions.  However, when the matter has come up for hearing, it is the
duty of the Court to formulate the substantial question of law, if the Court
decided to admit the appeal for hearing.  The relevant facts are as follows:
        The Assessing Officer has made an assessment order on the basis of the 
voluntary statement made by the Managing Director of the appellant disclosing of
income of Rs.20 lakhs.
The said statement, which was reproduced by the learned
Tribunal in its judgment, is reproduced hereunder.
        "I admit that the above defects persist in maintenance of expense
vouchers.  The payments are not properly recorded.  Taking into account the
above deficiencies, which are not deliberate and to cover up any other omissions
and commissions, I voluntarily offer Rs.20.00 lakhs as additional income in
respect of training and development divisions of the company and EOU division of
the company.  The lapses being common to both the divisions, i.e., training and
development and EOU, I offer Rs.10.00 lakhs for each of the division.  This
offer has been made voluntarily to close the matter.  This does not cover any
disallowance on any legal issue.  I would request the department not to initiate
any penalty proceedings.  I undertake that the company pay the taxes after it
receives the assessment order."

        The fact shows that at the time of assessment the assessee did not retract
the aforesaid admission making voluntary disclosure.  Even the assessee on the
basis of the assessment has paid the tax and after that an appeal was preferred
before the Commissioner of Income Tax (Appeals).  In the said appeal we do not
find that the appellant has made out any case that the aforesaid admission was
not made voluntarily and it was made by mistake or anything else.
        It appears from the record that only the learned lawyer appearing before
the Commissioner of Income Tax (Appeals) took up the factual point, which was
not stated in the grounds of appeal, that the aforesaid admission was recorded
under mistaken belief of fact and law.  
Taking note of this argument, perhaps
and without verifying whether such ground has been made out or not, the
Commissioner of Income Tax (Appeals) observed as follows: 
        "Before going into the legal intricacy whether income offered during the
course of survey can be agitated before the appeal proceedings or not, I want to
state that an addition made by the AO should stand on its own legs irrespective
of the fact whether it is accepted or not accepted by the assessee.  I agree
that in this case, the MD of the appellant-company had offered a sum of Rs.20
lakhs at the time of survey.  It is also a fact that he has not disputed the
same during the course of assessment proceedings.  It is also a crucial fact
that the appellant had even paid taxes on the income offered.  But can he
sustain an addition only on the basis of admissions and acquiscences,
particularly, when the appellant has gone back on the admission  The answer is
an emphatic "No" as, if an addition can be made on the basis of admission, the
same has to be deleted on the basis of retraction."

        We fail to understand from where the case of retraction has been
discovered by the Commissioner of Income Tax (Appeals) when the appellant has 
not stated in the grounds of appeal before it that it has retracted.
Notwithstanding above, the learned counsel before us very strenuously argues
that there has been retraction of admission before the Commissioner of Income
Tax (Appeals) and the Commissioner has taken into consideration of the same.
Therefore, the learned Tribunal should not have set aside the order of the
Commissioner, but at the most it should have remanded the matter.  According to
him, the Commissioner of Income Tax (Appeals) has extensive power and he has  
rightly exercised the same.
        We are of the view that the argument of the learned counsel is absolutely
misplaced on fact as before the Commissioner of Income Tax (Appeals) there was 
no case of retraction.
Factually, he perhaps noted oral arguments of the
lawyer.  According to us, it is not permissible under law as retraction of
admission is purely a matter of fact, which must be made available before the
Court of law or Tribunal, which then can consider the same.  It is settled
position of law that admission is a very important piece of evidence, unless it
is explained or retracted.  Here the assessee has not made any attempt to
explain before the Commissioner of Income Tax (Appeals) suggesting not to accept
the same.  Here instead of retracting the assessee called upon to act upon the
same to pass assessment order and accordingly it was done and the tax was duly 
paid.  We fail to understand why challenge should be made at a later stage.
        The learned counsel thereafter argues that the admission cannot be looked
into under the law, as it is a material collected during the period of survey
and this is not a valid piece of evidence.
We think there must be distinction
between the admission and the evidence collected during the course of survey.
This is a voluntary act of the assessee and if the assessee accepts the
liability, there is no point or scope to collect further evidence or making any
enquiry.  Here exercising of power by the Commissioner was not called for.
Exercise of power evaluating legal implication of admission was not called for
because no case was made out factually.  Therefore, the decisions cited by the
learned counsel for the appellant before us are absolutely inappropriate.
Hence, we ignore all these decisions.
        The learned Tribunal has taken a correct decision and we are constrained
to comment on the decision taken by the Commissioner of Income Tax (Appeals),
even basing on his own recording that the same is without any factual basis and
further unsupported by law.  When a case is not made out before the
Commissioner, he should not have made out so to say his own case basing on a
lawyer's argument.  A lawyer cannot improve the case of the litigant on fact
unlike in case of law.  Such an act is without jurisdiction.
        The appeal is accordingly dismissed.
        We are of the view that for filing such a frivolous appeal an exemplary
cost has to be imposed.  Accordingly, we impose costs estimated at Rs.10,000/-
(Rupees Ten thousand only), to be paid by the appellant to the A.P. Legal
Services Authority within a period of two weeks from date.
__________________  
K.J. SENGUPTA, CJ  
___________________  
SANJAY KUMAR, J

Indian Medical council Act - Regulations 8 (3) - renewal of permission for the fourth batch of 100 MBBS students - permission rejected despite of compliance of objections - writ filed for mandamus for direction to issue renewal of permission - High court rejected to give any directions as it is not with in it's jurisdiction and as the refusal is not an order - as per regulation of 8(3) after granting permission also , the MCI can on surprise visit again refuse the same if petitioner not complied with objection raised - directed to considered the application of the writ petitioner = Aditya Educational Society, rep., by its Chairma, Dr. M.M.Vilekar and others.....Petitioners The Union of India rep., by its Secretary, Ministry of Medical & Health, New Delhi and others...Respondents = 2014 ( JANUARY - VOL -1) JUDIS.NIC.IN / JUDIS _ ANDHRA / FILE NAME = 10709

Indian Medical council Act - Regulations 8 (3) - renewal of permission for the fourth batch of 100 MBBS students - permission rejected despite of compliance of objections  - writ filed for mandamus for direction to issue renewal of permission - High court rejected to give any directions as it is not with in it's jurisdiction  and as the refusal is not an order  - as per regulation of 8(3) after granting permission also , the MCI can on surprise visit again refuse the same if petitioner not complied with objection raised  - directed to considered the application of the writ petitioner =

The order of the 2nd respondent dated 10.09.2013, rejecting renewal of permission for the fourth batch of 100 MBBS students to the 2nd petitioner-College for the academic year 2013-2014, is questioned in this Writ Petition as being arbitrary, illegal and contrary to the provisions of the Indian Medical Council Act, 1956 and the Regulations made thereunder. =
after examining the assessors
report the 2nd respondent informed them, vide letter dated 22.04.2013, of eleven
deficiencies and called upon them to show-cause why renewal of permission, for
the fourth batch of 100 MBBS students, should not be refused; 
after compliance of the same
 rejected renewal of permission, for admission of the fourth batch of
100 MBBS students for the academic year 2013-2014, citing three deficiencies of
which two were originally referred to and the third was raised afresh.
Sl.No. Deficiencies as per Council's letter dated 20.04.2013
UG Committee remarks   
1. Central Library Shortage of books by 124 (2676 required as against the
requirement of 2800)
Xerox copy of cash memo of purchase of books enclosed - Partially complied.
2. Bed distribution - Most of the patients in surgical speciality are non-surgical
patients as per Assessor report.
The detail list of cases submitted by the college shows that most of the cases
doesn't need admission.  As for example in growing toe nail, laceration chin,
phimosis etc.
3. Inadequate bed occupancy (50% available as against the requirement of 75%) 
As per the report submitted by the College from 10.3.2013 to 20.3.2013
calculation of bed occupancy is 67.1%.

Not complied.

The Board of Governors, thereafter, noted the requirements under the "Minimum
Requirements for 100 MBBS Admissions Annually Regulations, 1999" and Regulation   
8(3)(1) of the Establishment of Medical College Regulations, 1999 (for short,
the 'Regulations").  
The amended Regulation
8(3)(1) and its provisos are relevant, and read as under:
"8(3)(1). The permission to establish a medial college and admit students may be
granted initially for a period of one year and may be renewed on yearly basis
subject to verification of the achievements of annual targets. 
It shall be the
responsibility of the person to apply to the Medical Council of India for
purpose of renewal six months prior to the expiry of the initial permission.

This process of renewal of permission will continue till such time the
establishment of the medical college and expansion of the hospital facilities
are completed and a formal recognition of the medical college is granted.
Further admissions shall not be made at any stage unless the requirements of the
Council are fulfilled. The Central Government may at any stage convey the
deficiencies to the applicant and provide him an opportunity and time to rectify
the deficiencies.
PROVIDED that in respect of 
(a) Colleges in the stage upto II renewal (i.e. Admission of third batch):
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 30% and/or bed
occupancy is < 60%, such an institute will not be considered for renewal of
permission in that Academic Year.
(b) Colleges in the stage from III renewal (i.e., Admission of fourth batch)
till recognition of the institute for award of M.B.B.S. degree:
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 20% and/or bed
occupancy is <70% such an institute will not be considered for renewal of
permission in that Academic Year.
(c) Colleges which are already recognized for award of M.B.B.S. degree and/or
running Postgraduate Courses: 
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 10% and/or bed
occupancy is < 80%, such an institute will not be considered for processing
applications for postgraduate courses in that Academic Year and will be issued
show cause notices as to why the recommendation for withdrawal of recognition of
the courses run by that institute should not be made for Undergraduate and
Postgraduate courses which are recognized u/s.11(2) of the IMC Act, 1956 along
with direction of stoppage of admissions in permitted Postgraduate courses."
renewal of permission should not be granted to a medical
college, if the schedule for opening a medical college was not adhered to;
Regulation 8(3)(i) contemplates renewal of permission on a
yearly basis, subject to verification of achievement of the annual targets; it
also stipulates that the Central Government may, at any stage, convey the
deficiencies to the applicant and provide them an opportunity and time to
rectify the deficiencies referred to in Regulation 8(3)(i); 
the deficiencies
which the applicant is entitled to rectify, are those which are capable of being
rectified such as shortage of material and equipment, providing infrastructure
etc; the deficiency in clinical material and bed occupancy are not capable of
being rectified within a short duration; it requires the institution to build
its name and reputation over a period of time, for attracting and sustaining the
same; 
on an harmonious reading of Regulation 8 (3)(i), and proviso (b) thereto,
any college which, during any inspection, is found deficient in the specified
faculty or bed strength cannot be considered for renewal; the provisos relate
only to these two deficiencies; and there is a conscious departure therein from
other possible deficiencies.
admissions shall not be made without prior approval of the Board of Governors;
in view of these restrictions, while it may not be open to the Court to issue
any direction for the current academic session, it could direct that a fresh
decision be taken by the MCI, after inspection by its team of assessors, for the
next academic session in the event of success of the inspection, with further
right to further assessment in case it is otherwise.  
A similar direction can be issued in the present case also.
The 2nd respondent shall consider the petitioners' application for renewal of
permission afresh, in the light of the observations made hereinabove and in
terms of the Act and the Regulations, for the next academic year 2014-15 and
pass orders thereupon at the earliest, in any event not later than one month
from the date of receipt of a copy of this order.  
It is made clear that this
order shall not preclude the petitioners from instituting appropriate legal
proceedings seeking damages for the loss sustained by them because of the high 
handed and illegal acts of the MCI in its selective application of the "bed
occupancy" requirement under the Regulations, and for refusing them renewal of
permission for the academic year 2013-14.

 The writ petition is allowed with exemplary costs of Rs.10,000/- which the 2nd
respondent shall pay to the petitioners within one month from the date of
receipt of a copy of this order.  Miscellaneous petitions, if any pending, are
also disposed of.

2014 ( JANUARY - VOL -1) JUDIS.NIC.IN / JUDIS _ ANDHRA / FILE NAME = 10709

THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN          

WRIT PETITION NO.27112 of 2013  

03-01-2014

Aditya Educational Society, rep., by its Chairma, Dr. M.M.Vilekar and
others.....Petitioners

The Union of India rep., by its Secretary, Ministry of Medical & Health, New
Delhi and others...Respondents

Counsel for the petitioner:  Sri C.V. Mohan Reddy, Learned Senior Counsel for
Sri P.S. Rajasekhar,

Counsel for respondent No.1: Mrs. S. Nanda, Standing Counsel;
 Counsel for respondent No.2: Sri C. Gunaranjan;
 Counsel for respondent No.3: Sri A. Prabhakar Rao, Standing Counsel.

<GIST:

>HEAD NOTE:  

? Citations:

1) (1998) 6 SCC 131
2) (2001) 10 SCC 264
3) (2004) 6 SCC 76
4) 2013 (11) SCALE 294 = (2013) 10 SCC 60
5) AIR 1979 SC 765
6) (1999) 7 SCC 120
7) (2011) 4 SCC 623
8) (2007) 15 SCC 435
9) (1996) 6 SCC 665
10) AIR 1959 SC 713
11) (1985) 1 SCC 591
12) AIR 1957 SC 281
13) (1955) 2 SCR 483
14) (1989) 1 SCC 321
15) (1944) 71 IA 113, 122 : AIR 1944 PC 71
16) (2008) 13 SCC 185
17) 1992 SUPPL.(2) SCC 651
18) (2004) 1 SCC 574
19) (1962) 2 SCR 159
20) AIR 1965 SC 1728
21) AIR 1991 SC 1538
22) (1994)5 SCC 672
23) (2008) 12 SCC 364
24) (2000) 1 SCC 426
25) (1976) 1 SCC 128
26) AIR 1959 SC 1012
27) 1940 AC 206: (1939) 4 All ER 464 (HL)
28) AIR 1965 SC 980
29)  AIR 1969 SC 1048
30)  (1989) 1 SCC 724
31)  AIR 1979 SC 1049
32)  (1981) 4 SCC 173
33)  (1988) 2 SCC 293
34)  AIR 1962 SC 159
35)  1987 Supp SCC 350
36)  (1991) 1 SCC 86
37) 2002(2) ALT 426 (D.B)
38) (2008) 2 SCC 390
39) 98 L Ed 873 : 347 US 483 1954
40) (2012) 6 SCC 1
41) (2002) 8 SCC 481
42) (2013) 5 SCC 427
43) (2013) 2 SCC 772
44) (2011) 7 SCC 639
45) (1966) 5 SCC 125
46) (2013) 8 SCC 519
47) (1974) 1 SCC 19
48) AIR 1955 SC 191
49) AIR 1958 SC 538
50) (2003) 9 SCC 358
51) (1990) 4 SCC 366
52) (2003) 7 SCC 83
53) (2013) 8 SCC 154
54) (2013) 10 SCC 280
55) (2005) 7 SCC 627
56) (2008)1 SCC 728
57) AIR 1967 S.C. 295
58) (1981) 1 SCC 664
59) (1990)4 SCC 356
60) (2007)2 SCC 181
61) AIR 1969 SC 707
62) Order dated 21.10.2013 passed in SLP No.32731 of 2013
63) Judgment in WA No.1638 of 2013, dt.07.08.2013
64) Judgment in W.A.No.1600 of 2013 and M.P.Nos.1 and 2 of 2013 dated 14.08.2013
65) (1990) 4 SCC 624
66) (2005) 2 SCC 65
67) (2005) 2 SCC 65
68) (2012) 7 SCC 433
69) (2012) 7 SCC 389
70) AIR 1952 SC 16
71) AIR 1969 SC 1306
72) (2010) 15 SCC 546
73) AIR 2011 SC 2731
74) (2012) 7 SCC 261
75) (1991) 3 SCC 239
76)Judgment in LPA No.1228 of 2012 (O&M) dated 10.09.2012


THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN          

WRIT PETITION NO.27112 of 2013  

ORDER:
The order of the 2nd respondent dated 10.09.2013, rejecting renewal of permission for the fourth batch of 100 MBBS students to the 2nd petitioner-College for the academic year 2013-2014, is questioned in this Writ Petition as
being arbitrary, illegal and contrary to the provisions of the Indian Medical Council Act, 1956 and the Regulations made thereunder. 
Facts, to the extent relevant, are that
the 3rd petitioner is the chairman of
the 1st petitioner Society and the Director of the 2nd petitioner-college.  
The
1st petitioner is a society registered under the Societies Registration Act,
1860.  
It claims to be a charitable organisation whose aims and objects include
spreading education among the backward classes in Srikakulam district - a
predominantly agency area in the State of Andhra Pradesh.  
It is the
petitioners' case that the 2nd petitioner-college was established in furtherance
of its objects of imparting quality medical education to the youth from the
backward classes; more than 66% of all students in the 2nd petitioner-college
are from the backward classes, and 76% are from the same region; 
the 2nd
petitioner-college was established in the year 2010, and the first batch of MBBS
students were admitted during the academic year 2010-2011; permission was
granted by the Medical Council of India ("MCI" for short) after inspection and
verification of compliance of various requirements; they spent a huge amount to
establish the medical college, and are successfully running it; they applied for
renewal of permission for the academic year 2011-2012; on renewal being refused,
they filed W.P. No.20834 of 2011; this Court passed an interim order dated
18.08.2011 suspending the order of the M.C.I dated 30.06.2011, and directed the
3rd respondent to include the 2nd petitioner-college in the ongoing counselling
being conducted by them; by its proceedings dated 23.06.2012 the 2nd respondent 
granted renewal of permission, for admission of the third batch of MBBS
students, for the academic year 2012-2013; on their submitting an application,
seeking renewal of permission for the fourth batch of 100 MBBS students for the
academic year 2013-2014, the assessors of the 2nd respondent inspected the 2nd 
petitioner-college on 08th and 09th March, 2013;
after examining the assessors
report the 2nd respondent informed them, vide letter dated 22.04.2013, of eleven
deficiencies and called upon them to show-cause why renewal of permission, for
the fourth batch of 100 MBBS students, should not be refused; 
by their reply
letter dated 11.05.2013, they informed the 2nd respondent that the alleged
deficiencies, which were trivial in nature, had been complied with; as the
deficiencies, after rectification, were less than 8%, they requested that
further action be dropped;
the 2nd respondent, thereafter, issued letter dated
21.06.2013 calling upon them to appear before it on 26.06.2013, and submit
documentary proof; as no orders were passed on their representation, they filed
W.P.No.21506 of 2013 and this Court, by order dated 05.08.2013, directed the
Board of Governors to consider the matter afresh and, if considered necessary,
accord an opportunity of personal hearing to the petitioners, and then take an
appropriate reasoned decision in the matter; and on the matter being remitted
back for its re-consideration the 2nd respondent, by its proceedings dated
10.09.2013, rejected renewal of permission, for admission of the fourth batch of
100 MBBS students for the academic year 2013-2014, citing three deficiencies of
which two were originally referred to and the third was raised afresh.
The impugned order dated 10.09.2013 records that the Board of Governors had
considered the petitioners' representation and had referred the matter to the
under-graduate committee to scrutinize the additional documents, submitted by
the representatives of the 2nd petitioner-college during the personal hearing
held on 27.08.2013, and place the matter before the Board of Governors for
passing an order in the matter; and the under-graduate committee, in its meeting
held on 29.08.2013, noted three deficiencies.
The impugned order contains a table wherein these three deficiencies, and the remarks of the under-graduate committee thereupon, are detailed.
Sl.No.
Deficiencies as per Council's letter dated 20.04.2013
UG Committee remarks   
1. Central Library Shortage of books by 124 (2676 required as against the
requirement of 2800)
Xerox copy of cash memo of purchase of books enclosed - Partially complied.
2. Bed distribution - Most of the patients in surgical speciality are non-surgical
patients as per Assessor report.
The detail list of cases submitted by the college shows that most of the cases
doesn't need admission.  As for example in growing toe nail, laceration chin,
phimosis etc.
3. Inadequate bed occupancy (50% available as against the requirement of 75%) 
As per the report submitted by the College from 10.3.2013 to 20.3.2013
calculation of bed occupancy is 67.1%.

Not complied.

The Board of Governors, thereafter, noted the requirements under the "Minimum
Requirements for 100 MBBS Admissions Annually Regulations, 1999" and Regulation   
8(3)(1) of the Establishment of Medical College Regulations, 1999 (for short,
the 'Regulations").  It observed that, during the course of inspection, the team
of assessors had found that the bed occupancy was far below the minimum  
percentage prescribed in the Regulations; even in the compliance report,
submitted by the College, the bed occupancy was less than the requirement of the
Regulation; and, in terms of Regulation 8(3)(1)(b), the college could not be
considered for renewal of permission for the current academic year.
It is the petitioners case that the deficiencies pointed out by the M.C.I, with
respect to shortage of books, was false and erroneous as the bills enclosed by
them showed that 199 books, exclusive of the existing 2676 books, were there in
the library of the 2nd petitioner-College. Reference is made by them to various
invoices, relating to purchase of books, which are said to have been made
available to the 2nd respondent in the compilation of submissions furnished to
them on 26.06.2013.  With regards the second deficiency, it is stated that the
2nd petitioner-college is a rural hospital wherein patients come from remote
areas and, in view of logistical difficulties regarding stay and transportation,
they choose to stay overnight and request for observation; moreover, the
hospital has evolved a policy of safety norms wherein minor surgical cases are
admitted for a day; and the second deficiency is, therefore, not tenable.  With
respect to the third deficiency regarding bed occupancy, it is contended that
the 2nd respondent had calculated the bed occupancy of 67.1%, basing on the 
occupancy for a limited period of 10 days i.e., from 10.03.2013 to 20.03.2013;
the bed occupancy for the period from 10.03.2013 to 31.03.2013 was 68%; the
monthly bed occupancy for April and May, and 20 days of June (1st to 20th June),
was  77%, 70% and 80% respectively; if the entire period is taken, the bed
occupancy is more than the prescribed norms, and the respondents have erred in
holding that the petitioner-college was deficient in the aspect of bed
occupancy. 
In the counter-affidavit dated 28.09.2013, filed on behalf of the 2nd
respondent, it is stated that an assessment was carried out by the assessors of
the M.C.I. on 8th and 9th March, 2013; the assessment report detailed several
deficiencies, including bed distribution to the effect that most of the patients
in the surgical speciality were non-surgical patients; the bed occupancy was
inadequate (50% available as against the requirement of 75%); in their meeting
held on 15.04.2013, the Board of Governors had considered the assessment report,
and had decided that the 2nd petitioner-College be asked to submit their
compliance report within 15 days, after rectifying the deficiencies as pointed
out in the assessment report; the decision of the Board of Governors was
communicated to the 2nd petitioner-college by letter dated 20.04.2013; the
college submitted its compliance report vide letter dated 08.05.2013; both the
compliance report dated 08.05.2013, and the assessment report dated 08th and 9th
March, 2013, were considered by the Board of Governors in their meeting held on
11th and 12th June, 2013; the Board of Governors noted that no documentary proof
was annexed with the compliance report and certain declaration forms needed
physical verification; they decided to grant a personal hearing to the 2nd
petitioner-college to produce evidence/documents in proof of rectification of
the deficiencies; a personal hearing was granted to the college on 26.06.2013,
and it was decided thereat that renewal of permission, for admission of the
fourth batch of 100 MBBS students, should not be granted; the decision of the
Board of Governors was communicated to the 2nd petitioner-college vide letter
dated 02.07.2013; the representation of the 2nd petitioner-college dated
27.06.2013, requesting them to have a re-look, was examined; the earlier
decision was reiterated and communicated to the petitioners vide letter dated
10.07.2013; the Principal of the 2nd petitioner-college submitted a compliance
report, along with the declaration of the faculty, by their letter dated
08.07.2013; this Court, by its order dated 05.08.2013, directed M.C.I. to
consider the matter afresh, and accord an opportunity of personal hearing if
considered necessary; accordingly, an opportunity of personal hearing was
granted to the 2nd petitioner-college on 27.08.2013; during the personal
hearing, the 2nd petitioner-college submitted additional documents in support of
their having complied with the deficiencies; the matter was, thereafter,
referred to the under-graduate committee which considered the matter in its
meeting held on 29.08.2013, and noted three deficiencies; and the impugned order
dated 10.09.2013 was passed thereafter.
I. SECTION 10-A OF THE ACT AND REGULATION 8(3)(i) OF     THE REGULATIONS : 
ITS   SCOPE:  

Sri C.V. Mohan Reddy, Learned Senior Counsel appearing on behalf of the
petitioners, would submit that the 2nd respondent had issued show cause notice
dated 22.04.2013 pointing out that the bed occupancy,  as on the date of
inspection, was 50% as against the requirement of 70%;  proviso (b) to
Regulation 8 (3) (1) should be read in such a manner as to give meaning to the
opportunity contemplated under Regulation 8 (3) (1); and, in other words, the
proviso cannot take away what is given  by the main provision.
  On the other hand Sri C. Gunaranjan, Learned Standing Counsel for the MCI,
would submit that
Regulation 8(3)(i) contemplates renewal of permission on a
yearly basis, subject to verification of achievement of the annual targets; it
also stipulates that the Central Government may, at any stage, convey the
deficiencies to the applicant and provide them an opportunity and time to
rectify the deficiencies referred to in Regulation 8(3)(i); 
the deficiencies
which the applicant is entitled to rectify, are those which are capable of being
rectified such as shortage of material and equipment, providing infrastructure
etc; the deficiency in clinical material and bed occupancy are not capable of
being rectified within a short duration; it requires the institution to build
its name and reputation over a period of time, for attracting and sustaining the
same; 
on an harmonious reading of Regulation 8 (3)(i), and proviso (b) thereto,
any college which, during any inspection, is found deficient in the specified
faculty or bed strength cannot be considered for renewal; the provisos relate
only to these two deficiencies; and there is a conscious departure therein from
other possible deficiencies.
The Indian Medical Council Act (hereinafter called the 'Act') is referable to
Entry 66 of List I (Union List) of the Seventh Schedule to the Constitution.
(MCI v. State of Karnataka1).  Section 10-A of the Act relates to permission for
establishment of new medical colleges and new courses of study.  Under sub-
section (1) thereof, notwithstanding anything contained in the Act or any other
law for the time being in force, (a) no person shall establish a medical
college; (b) no medical college shall
(i) open a new or higher course of study or training which would enable a
student of such course or training to qualify himself for the award of any
recognised medical qualification; or (ii) increase its admission capacity in any
course of study or training, except with the previous permission of the Central
Government obtained in accordance with the provisions of Section 10-A of the
Act.  Explanation 1 thereto provides that, for the purpose of Sec.10-A, a
"person" shall include any university or a trust but would not include the
Central Government.  It is thus clear that no medical college can be established
by a university, a trust, a society or an individual, or even the State
Government, without permission from the Central Government under Section 10-A(1)
of the Act.
Section 10-A(1) of the Act is a substantive provision in itself and begins with
a non obstante clause. It prohibits increase in the admission capacity in a
medical college, unless previous permission of the Central Government is
obtained in accordance with the recommendation of the MCI. The object, of
achieving high standards of medical education, can be ensured only if a medical
college has the requisite infrastructure to impart medical education. Unless an
institution can provide complete facilities for imparting training to students,
admitted in various disciplines, their medical education would remain
incomplete; and the medical college would be turning out half-baked doctors
which, in turn, would adversely affect the health of the public in general.
(K.S. Bhoir v. State of Maharashtra2).   What is postulated, under Section 10-A
of the Act, is evaluation of the application made by the institution concerned
by the Central Government in the first instance and then forwarding the same to
the MCI for its further examination. There are various steps envisaged under the
Scheme such as (a) issuance of letter of intent by the Central Government on the
recommendation of the Council; (b) issuance of letter of permission by the
Central Government on the recommendation of the Council for starting admissions;
(c) issuance of annual renewal to be granted by the Central Government on the
recommendation of the Council; (d) at the stage when the first batch of
students, admitted in MBBS course, go for the final year examination, grant of
formal recognition by the Central Government on the recommendation of the
Council; (e) if at any stage, after the grant of initial permission entitling
permission of 1st batch of students, any college fails to fulfil the minimum
norms in any successive year, as per the statutory regulations, further
admissions are liable to be stopped at any stage. (MCI v. Rajiv Gandhi
University of Health Sciences3).
        MCI, an expert body constituted under the provisions of the Act, has been
assigned the task of maintaining high standards of medical education in the
country; to supervise eligibility standards for admission in medical
institutions; and to regulate their observance.  This high-powered council has
been conferred the power to prescribe minimum standards of medical education.
(Manohar Lal Sharma v. M.C.I.4; State of Kerala v. Kumari T. P. Roshana5).
Section 10-A(3) of the Act requires the M.C.I, on receipt of a scheme under sub-
section (2), to obtain such particulars, as may be considered necessary by it,
from the medical college concerned and, thereafter, it may (a) if the scheme is
defective and does not contain the necessary particulars, give a reasonable
opportunity to the college concerned for making a written representation and it
shall be open to such medical college to rectify the defects, if any, specified
by the Council; (b) consider the scheme, having regard to the factors referred
to in sub-section (7), and submit the scheme together with its recommendations
thereon to the Central Government.  Sub-section (7) of Section 10-A requires the
M.C.I while making its recommendations under clause (b) of sub-section (3), and
the Central Government while passing an order, either approving or disapproving
the scheme, under sub-section (4), to have due regard to certain factors viz.,
(a) whether the proposed medical college or the existing medical college would
be in a position to offer the minimum standards of medical education as
prescribed by the MCI under Section 19A; (c) whether necessary facilities in
respect of staff, equipment, accommodation, training and other facilities, to
ensure proper functioning of the medical college or conducting the new course of
study or training or accommodating the increased admission capacity, have been
provided or would be provided within the time limit specified in the scheme; and
(d) whether adequate hospital facilities, having regard to the number of
students likely to attend such medical college or course of study or training or
as a result of the increased admission capacity, have been provided or would be
provided within the time limit specified in the scheme.  Section 19-A (1)
empowers the MCI to prescribe the minimum standards of medical education
required for granting recognised medical qualifications by universities or
medical institutions in India.  Section 33 of the Act enables the M.C.I, with
the previous sanction of the Central Government, to make regulations generally
to carry out the purposes of the Act and to provide for the form of the scheme,
the particulars to be given in such a scheme, the manner in which the scheme is
to be preferred, the fee payable with the scheme under clause (b) of sub-section
(2) of Section 10-A, and the standards of staff, equipment, accommodation,
training and other facilities for medical education.
In the exercise of its powers under Section 10-A read with Section 33 of the
Act, and with the previous sanction of the Central Government, the MCI made the
Establishment of Medical College Regulations, 1999 (hereinafter called the
"Regulations").  Regulation 3 relates to the establishment of a medical college
and, thereunder, no person shall establish a medical college except after
obtaining prior permission from the Central Government by submitting a Scheme as
annexed to the Regulations.  Regulation 3 gives details of the scheme for
obtaining permission of the Central Government to establish a medical college.
All applications under the scheme are required to be made in Form-I which
contains three parts.  Part-III requires the applicant to furnish the name and
address of the existing hospital and its details including: (a) the bed
strength; (b) bed distribution; (c) built-up area; (d) clinical and para-
clinical disciplines, etc.  Regulation 6 requires the MCI to evaluate the
applications.  Regulation 7 stipulates that, after examining the application and
after conducting necessary physical inspection, the MCI should send to the
Central Government a factual report and its recommendation whether a Letter of
Intent should be issued and, if so, the number of seats per academic year.  The
MCI is required to recommend a time bound programme for the establishment of the
medical college, and expansion of hospital facilities.  Regulation 8 relates to
grant of permission. Under Regulation 8(1) the Central Government, on the
recommendation of the Council, may issue a letter of intent to set up a new
medical college with such conditions or modifications, in the original proposal,
as may be considered necessary.  On acceptance of the conditions, and on the
College furnishing the required performance bank guarantee, the Central
Government is empowered, after consulting the MCI, to grant formal permission.
Regulation 8(2) stipulates that the formal permission may include a time bound
programme for the establishment of the medical college and expansion of the
hospital facilities.
These Regulations were amended by the "Establishment of
Medical College Regulations, (Amendment), 2010 (Part II)", which came into force
on 16.04.2010.
Regulation 8(3), under the heading "Grant of Permission", was
amended by insertion of Regulations 8(3)(1) to 8(3)(4). 
The amended Regulation
8(3)(1) and its provisos are relevant, and read as under:
"8(3)(1). The permission to establish a medial college and admit students may be
granted initially for a period of one year and may be renewed on yearly basis
subject to verification of the achievements of annual targets. 
It shall be the
responsibility of the person to apply to the Medical Council of India for
purpose of renewal six months prior to the expiry of the initial permission.

This process of renewal of permission will continue till such time the
establishment of the medical college and expansion of the hospital facilities
are completed and a formal recognition of the medical college is granted.
Further admissions shall not be made at any stage unless the requirements of the
Council are fulfilled. The Central Government may at any stage convey the
deficiencies to the applicant and provide him an opportunity and time to rectify
the deficiencies.
PROVIDED that in respect of 
(a) Colleges in the stage upto II renewal (i.e. Admission of third batch):
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 30% and/or bed
occupancy is < 60%, such an institute will not be considered for renewal of
permission in that Academic Year.
(b) Colleges in the stage from III renewal (i.e., Admission of fourth batch)
till recognition of the institute for award of M.B.B.S. degree:
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 20% and/or bed
occupancy is <70% such an institute will not be considered for renewal of
permission in that Academic Year.
(c) Colleges which are already recognized for award of M.B.B.S. degree and/or
running Postgraduate Courses: 
If it is observed during any regular inspection of the institute that the
deficiency of teaching faculty and/or Residents is more than 10% and/or bed
occupancy is < 80%, such an institute will not be considered for processing
applications for postgraduate courses in that Academic Year and will be issued
show cause notices as to why the recommendation for withdrawal of recognition of
the courses run by that institute should not be made for Undergraduate and
Postgraduate courses which are recognized u/s.11(2) of the IMC Act, 1956 along
with direction of stoppage of admissions in permitted Postgraduate courses."

It needs no emphasis that a medical student requires gruelling study for which
proper facilities must be available in a medical college, the hospital attached
to it should be well equipped, and the teaching faculty and doctors must be
competent enough to ensure that, when a medical student comes out, he is not
found wanting in any way. The country does not want half-baked medical
professionals coming out of medical colleges with inadequate facilities of
teaching, and lack of exposure to the patients and their ailments during the
course of their study. (Manohar Lal Sharma4; MCI v. State of Karnataka1).  The
Regulations, framed by the MCI under Section 33 of the Act, stipulate the
infrastructural and institutional facilities to be provided by a medical college
with an attached hospital, and are mandatory in character.  (K.S. Bhoir2; MCI v.
State of Karnataka1 and Preeti Srivastava (Dr) v. State of M.P.6).  In the
absence of compliance with the mandatory requirements of the Act and the
Regulations, no permission can be granted. (K.S. Bhoir2). After evaluation of
the application/scheme, submitted by the applicants, verification takes place
and a physical inspection is conducted by a team of inspectors of the MCI. The
letter of permission, if any granted by the Board of Governors enabling the
applicant to make admissions in the first year MBBS course, is renewed each year
subject to the college achieving the yearly target specified in the Regulations.
The Board of Governors have no power to dilute the statutory requirements
mentioned in these Regulations. (Manohar Lal Sharma4).
The need for renewal of permission emanates from the fact that a newly
established college is not required to have in place the full complement of
teaching faculty and complete infrastructure in the first year itself. This is
because, 
during the first year, the college would be catering only to a limited
number of first year students. 
During the second, third, fourth and fifth years,
the students strength increases. 
Thereafter, the strength may remain constant.
As the strength increases gradually every year, the infrastructure and faculty
will have to be increased correspondingly. (Priyadarshini Dental College and
Hospital v. Union of India7). While deciding to grant or refuse permission, the
MCI is not functioning as a quasi-judicial authority, but only as an
administrative authority. Regulation 8(3)(1) provides only for an "opportunity
and time to rectify the deficiencies". A compliance report is called for only to
ascertain whether the deficiencies pointed out were rectified or not. If the MCI
is not satisfied with the manner of compliance, it can conduct a surprise
inspection. After that, no further time or opportunity to rectify the
deficiencies is contemplated, nor further opportunity of being heard is
provided. A surprise inspection contemplates no notice for, if notice is given
in advance, it would not be a surprise inspection and will give room for the
college to hoodwink the assessors by making perfect what was imperfect. Surprise
inspection is conducted to ascertain whether the compliance report can be
accepted, and to ascertain whether the deficiencies pointed out in the regular
inspection were rectified or not. By pointing out the deficiencies, the MCI is
giving an opportunity to the college to rectify the deficiencies, if any,
noticed by the inspection team. It is the duty of the college to submit the
compliance report after rectifying the deficiencies. The MCI can conduct a
surprise inspection to ascertain whether the deficiencies are rectified, and
whether the compliance report should be accepted or not. (Manohar Lal Sharma4).
II. PROVISOS (a) TO (c) OF REGULATION 8(3)(i) - ITS EFFECT:  

While Regulation 8(3)(1) provides for an opportunity to be provided to the
medical college to rectify the deficiencies, the question which arise for
consideration is whether such an opportunity is required to be provided for the
deficiencies referred to in the "provisos" also.  It is in this context that the
scope of a "proviso" needs to be examined.  A statutory proviso "is something
engrafted on a preceding enactment". The proviso hath diverse operations.
Sometime it worketh a qualification or limitation; sometime a condition; and
sometime a covenant. (Binani Industries Ltd. v. CCT8). A proviso, to a statutory
provision, has several functions and, while interpreting a statutory provision,
the court is required to carefully scrutinise and find out the real object of
the proviso appended to that provision. It is not a proper rule of
interpretation of a proviso that the enacting part or the main part of the
provision be construed first without reference to the proviso and, if the same
is found to be ambiguous, only then recourse may be had to examine the proviso.
On the other hand the accepted rule of interpretation is that a provision and
the proviso thereto must be construed as a whole. A proviso is normally used to
remove special cases from the general enactment and provide for them specially.
A proviso qualifies the generality of the main enactment by providing an
exception and taking out from the main provision a portion which, but for the
proviso, would be a part of the main provision. A proviso must, therefore, be
considered in relation to the principal matter to which it stands as a proviso.
A proviso should not be read as if providing something by way of addition to the
main provision which is foreign to the main provision itself.  (J.K. Industries
Ltd. v. Chief Inspector of Factories & Boilers9; CIT v. Indo Mercantile Bank
Ltd.10).  A proviso cannot be torn apart from the main Section nor can it be
used to nullify or set at naught the real object of the main Section. (S.
Sundaram Pillai v. V.R. Pattabiraman11; Craies: Statute Law 7th Edn.).   A
proviso must be construed harmoniously with the main enactment. (Abdul Jabar
Butt v. State of Jammu & Kashmir12; Indo-Mercantile Bank Ltd.,10; Ram Narain
Sons Ltd. v. Assistant Commissioner of Sales Tax13; and State of Punjab v.
Kailash Nath14).
It is settled rule of statutory construction that "the proper function of a
proviso is to except and deal with a case which would otherwise fall within the
general language of the main enactment, and its effect is confined to that
case". (Madras & Southern Mahratta Railway Company Ltd. v. Bezwada
Municipality15; Holani Auto Links (P) Ltd. v. State of M.P.16; Indo-Mercantile
Bank Ltd.10; A.N. Sehgal  v. Raje Ram Sheoran17).  A proviso is a qualification
of the preceding provision, and is not to be interpreted as stating a general
rule. (Haryana State Coop. Land Development Bank Ltd. v. Banks Employees
Union18; Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subhash Chandra
Yograj Sinha19; Calcutta Tramways Co. Ltd. v. Corpn. of Calcutt20; A.N.
Sehgal17; Tribhovandas Haribhai Tamboli v. Gujarat Revenue Tribunal21 and Kerala
State Housing Board v. Ramapriya Hotels (P) Ltd22).  A proviso, to a particular
provision of a statute, only embraces the field which is covered by the said
provision. It carves out an exception to the provision to which it has been
enacted as a proviso, and to no other. (Indo-Mercantile Bank Ltd.,10; A.N.
Sehgal17; Tribhovandas Haribhai Tamboli21; Ramapriya Hotels (P) Ltd.22; Binani
Industries Ltd.8; Bezwada Municipality15; Nagar Palika Nigam v. Krishi Upaj
Mandi Samiti23; Ram Narain Sons Ltd.13).   When one finds a proviso to a section
the natural presumption is that, but for the proviso, the enacting part of the
section would have included the subject-matter of the proviso.  (Binani
Industries Ltd.8; Shah Bhojraj Kuverji Oil Mills and Ginning Factory19; Calcutta
Tramways Co. Ltd.20; Nagar Palika Nigam23).  The effect of the benefit, extended
by the main part of the rule, can be nullified or taken away by a proviso.
(Hyderabad Asbestos Cement Products v. Union of India24).
A proviso must be limited to the subject-matter of the enacting clause. It must,
prima facie, be read and considered in relation to the principal matter to which
it is a proviso. It is not a separate or independent enactment. A proviso
ordinarily is but a proviso, although the golden rule is to read the whole
section, inclusive of the proviso, in such a manner that they mutually throw
light on each other and result in a harmonious construction.  (Dwarka Prasad v.
Dwarka Das Saraf25). The sound interpretation and meaning of the statute, on a
view of the enacting clause, saving clause, and proviso, taken and construed
together is to prevail. (Tahsildar Singh v. State of U.P.26; Maxwell's
Interpretation of Statutes, 10th Edn., at p. 162).  The ordinary and proper
function of a proviso, coming after a general enactment, is to limit that
general enactment in certain instances.  (Jennings v. Kelly27; Binani Industries
Ltd.8).
The minimum bed occupancy requirement, under provisos (a) to (c) to Regulation
8(3)(i), varies from batch to batch.  While the minimum bed occupancy is 60% for
admission of the third batch it increases to 70% for admission of the fourth
batch and for colleges, which are already recognized for award of the MBBS
course, the minimum bed occupancy requirement is 80%. In the case on hand, the
2nd petitioner-College has been found deficient, in its bed occupancy
requirement, on the day of its inspection. The proper function of provisos (a)
to (c) is to except, limit and deal with cases which would otherwise fall within
the general language of Regulation 8(3)(i).  While the deficiencies in
achievement of the annual targets specified in the Regulations are required
under Regulation 8(3)(i) to be conveyed, and time and opportunity given to the
college to rectify them, the deficiencies mentioned in the provisos thereto,
relating to teaching faculty, residents and bed occupancy, stand on a different
footing and the college is not entitled to an opportunity to rectify them.  A
proviso is also required to be read with the main Regulation and construed
harmoniously. On a conjoint reading and a harmonious construction of Regulation
8(3)(1) and provisos (a) to (c) thereunder the deficiencies, for which an
opportunity is required to be provided to the institution and time granted to
rectify them, are other than those referred to in the provisos.  It is evident,
therefore, that the deficiencies in teaching faculty and/or residents and/or bed
occupancy are fatal, and no opportunity can or need be given to the subject
medical college for rectification of such deficiencies.
As a general rule, in construing an enactment containing a proviso, it is proper
to construe the provisions together without making either of them redundant or
otiose. Even where the enacting part is clear, it is desirable to make an effort
to give meaning to the proviso with a view to justify its necessity.  (J.K.
Industries Ltd.9). It would not be a reasonable construction of any statute to
say that a proviso, which in terms purports to create an exception, should be
held to be otiose and to have achieved nothing. (Durga Dutt Sharma v. N.P.
Laboratories28).  A sincere attempt should be made to reconcile the enacting
clause and the proviso and to avoid repugnancy between the two. (Tahsildar
Singh26).
Accepting the submission of Sri C.V. Mohan Reddy, learned Senior Counsel, that,
even for the deficiencies mentioned in the provisos, the college would be
entitled for an opportunity to rectify them would render the provisos otiose and
unnecessary.  If an opportunity of rectification is required to be provided even
for the deficiencies mentioned in provisos (a) to (c), it was wholly unnecessary
for the rule making authority to prescribe the provisos, as Regulation 8(3)(i)
would have sufficed to deal with the situation and provisos (a) to (c) would be
inapposite surplussage.  Both on a literal, and on a harmonious, construction of
Regulation 8(3)(i) and its provisos, the interpretation suggested by the Learned
Senior Counsel does not merit acceptance.  As the "bed occupancy" requirement,
under the provisos to Regulation 8(3)(i), are deficiencies which cannot be
rectified, the data furnished by the college to the M.C.I, regarding "bed
occupancy" after the dates of inspection on 8th and 9th March, are irrelevant.
It is wholly unnecessary for this Court, therefore, to deal with the submission
of Sri C.V. Mohan Reddy, learned Senior Counsel, that though the 2nd petitioner
had submitted data regarding bed occupancy for the period 10.03.2013 to
20.06.2013, in support of their submission that the bed occupancy satisfied the
norm of 70%, the
2nd respondent had taken into consideration the data only for the period
10.03.2013 to 20.03.2013 without any rationale, and had concluded that the bed
occupancy was only 67.1%.
III. CONTEMPORANEO EXPOSITIO:    
        Sri C.V. Mohan Reddy, Learned Senior Counsel appearing on behalf of the
petitioners, would submit that matters which are understood and implemented as a
legal practice for long, and is supported by the basic rule of law, should then
be accepted as part of the interpretative process with the aid of the doctrine
of contemporanea exposition; there is abundant evidence on record to show that
the MCI has understood the rule to mean that the bed occupancy and the faculty
deficiencies are rectifiable, after an opportunity is given to the college to do
so; such an opportunity was, in fact, granted to Karuna Medical College,
Palakkad to rectify its "bed occupancy" deficiency which was a mere 13% and,
after an opportunity was afforded, the deficiency was rectified and, on the next
inspection, was found to have increased to 60%; and though this deficiency
remained less than the prescribed bed strength of 70%, the MCI had granted
renewal of permission to the said college.
Where the meaning of an enactment is obscure, the Court may resort to
contemporary construction, that is the construction which the authorities have
put upon it by their usage and conduct for a long period of time. (National &
Grindlays Bank Ltd. v. Municipal Corpn. of Greater Bombay29).   The terms of the
statute can well be construed by reference to such exposition, in the absence of
anything in the statute to indicate to the contrary.  (State of T.N. v. Mahi
Traders30; Desh Bandhu Gupta v. Delhi Stock Exchange Association Ltd31 and K.P.
Varghese v. ITO32).  Contemporanea expositio is a well settled principle or
doctrine which applies only to the construction of ambiguous language in old
statutes (Baktawar Singh Bal Kishan v. Union of India33), but not to
interpreting Acts which are comparatively modern. (Senior Electric Inspector v.
Laxmi Narayan Chopra34; and J.K. Cotton Spg. & Wvg. Mills Ltd. v. Union of
India35). Even if the MCI, which dealt with the statutory regulations,
understood its requirements in another sense, such mistaken construction of the
Regulation and its provisos does not bind the court so as to prevent it from
giving it its true construction. (National & Grindlays Bank Ltd.29; Punjab
Traders v. State of Punjab36).  The rule of construction, by reference to
contemporanea expositio, must give way where the language of the statute is
plain and unambiguous. (K.P. Varghese32).  As the language of Regulation 8(3)(i)
and its provisos are clear and unambiguous, and the only possible construction
is that no opportunity can or need be given to the college to rectify the
deficiencies referred to in the provisos, the rule of construction, by reference
to contemporaneo exposition, must give way.
IV. OBSERVATIONS DURING THE REGULAR INSPECTION ARE      NOT CONFINED ONLY TO THE                
DATE OF INSPECTION BUT      INCLUDE THOSE WHICH ARE NOTICED ON      VERIFICATION            
OF THE RECORDS:  

While examining the scope and application of Regulation 8(3)(i) and its
provisos, it must be borne in mind that the MCI, on the basis of the reports -
regular and compliance, is legally obliged to form an opinion on the capacity of
the college to provide necessary facilities in respect of staff, equipments,
accommodation, training etc. to ensure proper functioning of the medical college
or for increase of its admission capacity.  (Manohar Lal Sharma4). The
assessment form, statutorily prescribed by the M.C.I, is required to be filled
by the assessors when they cause inspection of the medical college and the
various infrastructural and instructional facilities offered by it. Clause 2.6
of the assessment form relates to clinical material, and requires the assessors
to randomly verify the monthly data and compute the daily average of bed
occupancy for three randomly selected months.  Annexure-VI is the tabular form
whereunder separate columns are provided for the daily average (for the last
three randomly selected months), and for "the day of the assessment".   The
application submitted by the 2nd petitioner-College was for admission to the
fourth batch of MBBS students, and it is proviso (b) of Regulation 8(3)(1),
whereunder the minimum bed occupancy is prescribed as 70%, which is attracted.
It is in this context that the requirements of proviso (b) to Regulation 8(3)(1)
needs to be examined. From the words used therein, i.e "if it is observed during
any regular inspection of the institution", it is clear that the observations of
the assessors, during a regular inspection, is not confined merely to the bed
occupancy on the day of inspection.  When proviso (b) is read along with the
statutory assessment form, it is clear that the expression "if it is observed
during any regular inspection" would require the assessors to observe the bed
occupancy for both "the daily average for the last three randomly selected
months" and "on the day of inspection". The percentage of bed occupancy of the
2nd petitioner-College, calculated on a daily average for the last three
randomly selected months, as noted by the assessors during the course of their
inspection on 09.03.2013, was 75% (more than the stipulated minimum of 70%).
However the bed occupancy, on the day of inspection, was only 50% far less than
the minimum stipulated 70%.
While a strict adherence to the statutory regulations is imperative to ensure
maintenance of high standards of medical education, the respondents cannot also
be permitted, under the guise of ensuring such high standards, to act
arbitrarily as the petitioners have the fundamental right, to establish and run
institutions of higher learning, under Article 19(1)(g) of the Constitution of
India. It is the duty of the State, under the directive principles of state
policy enshrined in Article 41 of the Constitution, not only to establish
educational institutions but also to effectively secure the right to education.
The State is, admittedly, in no position to perform its sovereign function of
imparting education. Such functions are, necessarily, required to be performed
by private actors. As it is not in a position to establish colleges with its
financial resources, the State Governments have evolved a policy to encourage
setting up of private colleges. (Sri Teja Educational Society  v. A.P. State
Council of Higher Education, Hyderabd37; Election Commission of India v. St.
Mary School38; Brown v. Board of Education39). Private education is one of the
most dynamic and fastest-growing segments of post-secondary education at the
turn of the twenty-first century. A combination of unprecedented demand for
access to higher education, and the inability or unwillingness of the Government
to provide the necessary support, has brought private higher education to the
forefront. The fundamental right to establish and administer educational
institutions, under Article 19(1)(g) of the Constitution of India, broadly
comprises the following rights: (a) to admit students; (b) to set up a
reasonable fee structure; (c) to constitute a governing body; (d) to appoint
staff (teaching and non-teaching); and (e) to take action if there is
dereliction of duty on the part of its employees. (Society for Unaided Private
Schools of Rajasthan v. Union of India40; T.M.A. Pai Foundation v. State of
Karnataka41).
It is a matter of common knowledge that establishing a medical college, with an
attached hospital, requires huge investment running into several crores of
rupees.  The infrastructural and instructional facilities, statutorily required
to be provided by the medical college, would not only involve a huge initial
financial investment, but would also require the management of the institution
to periodically and regularly incur expenditure in crores.  If a college were to
be refused renewal of permission, merely on the ground that the bed occupancy on
a single day is less than the statutorily prescribed minimum, it would result in
disastrous consequences.  The bed occupancy of a teaching hospital, on a
particular day, may fall below the statutorily prescribed minimum for reasons
beyond the control of the management of the institution - bandhs, floods, earth-
quakes or other natural calamities may well result in such an eventuality.
Penalizing the medical college, with refusal to renew permission for an entire
academic year, merely on the ground that the bed occupancy on a single day was
below the minimum stipulated percentage, is not only irrational, arbitrary and
in violation of Article 14 of the Constitution of India but would also result in
rendering the other statutory requirement, of ascertaining "the daily average
for the randomly selected three months", redundant.  The prescription of the
daily average, for the past three randomly selected months, is to enable the
M.C.I. to satisfy itself that, on an average, the daily bed occupancy is more
than the statutorily prescribed minimum of 70%.  It also safe-guards an
institution from being needlessly penalized for a fall in the bed occupancy,
below the statutorily prescribed minimum, on a single day.
The requirement of the bed occupancy on the day of inspection, satisfying the
minimum stipulated percentage under the provisos to Regulation 8(3)(1), cannot
also be ignored or treated as inapposite surplussage.  A conjoint reading of
both the requirements - (1) the daily average for three randomly selected months
and (2) on the day of inspection - makes it clear that if the assessors observe,
during the course of inspection of the institution, that the records, produced
by the medical college for inspection, are cooked-up and the data reflected
therein are suspect, the bed occupancy on the day of inspection would assume
significance. Lack of the minimum statutorily stipulated bed occupancy on the
day of inspection, when examined in the light of the incredulous data placed
before the assessors by the college, may necessitate a stringent view being
taken against them by the M.C.I.
It is not even the case of the respondents that the daily average bed occupancy
of 75% for three randomly selected months, (as noted by the assessors in their
inspection report), is a figure conjured by the petitioners or is not supported
by the data reflected in the records produced by them.  Refusal of renewal of
permission should neither be abrupt nor for insignificant or technical
violations.  The application of the medical college should also not be dealt in
a casual manner.  The object of providing for annual renewal of permissions for
four years is to ensure that the infrastructural and faculty requirements are
fulfilled in a gradual manner, and not to cause disruption.  (Priyadarshini
Dental College and Hospital7).  In the absence of any finding being recorded,
either by the assessors or by the M.C.I, that the daily average of three
randomly selected months is below the statutorily stipulated minimum or that the
records relating to the bed occupancy are not genuine, refusal to renew
permission to the petitioner-college, solely on account of the bed occupancy
falling below the statutorily prescribed minimum on a single day, is arbitrary,
irrational and in violation of the petitioner's fundamental rights under Article
14 of the Constitution of India.
V. SELECTIVE APPLICATION, OF REGULATION 8(3)(I) AND ITS      PROVISOS, IS ALSO          
DISCRIMINATORY:    

A party seeking relief, on the ground of discrimination, must take appropriate
pleadings, lay down the factual foundation and must provide details of
comparable cases so that the court may, after assessing the facts of both sets
of cases together, reach a conclusion whether the authorities have actually
discriminated against that party; and whether there is in fact any justification
for the discrimination. (Rajasthan State Industrial Development & Investment
Corporation v. Subhash Sindhi Coop.Hs.Society42).
In the affidavit filed in support of the writ petition, the petitioners claim
that the action of the 2nd respondent is discriminatory and several other
colleges, with deficiencies relating to "bed occupancy", were accorded renewal
of permission.  In the affidavit, filed in support of W.P.M.P. No.37337 of 2013,
the petitioners stated that the 2nd respondent had conducted regular inspection
of Thiruvarur Government College, Thiruvarur; Government Medical College,
Kannauj and Vardhaman Institute of Medical Sciences, Nalanda, wherein the "bed
occupancy" was less than the minimum stipulated 70% despite which these three
colleges were granted renewal of permission for the academic year 2013-2014.
Copies of the relevant assessors report, and the orders renewing permission to
them for the year 2013-2013, were annexed thereto.  In their counter-affidavit,
filed to W.P.M.P. No.37337 of 2013, it is stated, on behalf of the M.C.I, that
Vardhaman Institute of Medical Sciences, Nalanda, for which permission was
sought for the year 2013-2014 with an admission capacity of 100 MBBS students,
was established by the Government of Bihar; the application of the college was
considered and, as per the requirement of Regulation 8(3)(1)(a), the minimum
requirement of bed occupancy was 60% and not 65%; Baba Saheb Dr. Bhim Rao  
Ambedkar Medical College, established by the Government of U.P, was considered
for admission of the second batch of 100 MBBS students for the academic year
2013-2014; their daily average, of three months of IPD patients, was 60%; the
data submitted by Government Medical Colleges are reliable and are, therefore,
given due consideration; the Board of Governors had obtained a letter from the
Principal Secretary, Medical Education Department, Government of U.P. dated
28.06.2013, that all necessary efforts would be made to rectify the shortages;
further documentary proof of budget allotment for the proposed project, aimed to
rectify the deficiency, was referred to in the said letter; the M.C.I. had
granted permission for renewal subject to the said undertaking; the OPD
attendance of Thiruvarur Government Medical College was 1100 and, on the date of
inspection, it was 1050; and, though the bed occupancy was on the lower side,
the Board of Governors deemed it appropriate, having regard to the overall
factor of high availability of clinical material, to grant permission of renewal
to them.
In their affidavit, filed in reply thereto, the petitioners have referred to
Karuna Medical College, (a private medical college) which was granted the third
stage renewal on 25.06.2011 though, on the date of inspection, the said College
had a bed occupancy of merely 13%; the said college was issued notice by the
M.C.I. to rectify the deficiencies; and, after such an opportunity was granted,
the bed occupancy was revised to 70% and 50% respectively.
In the additional affidavit filed on behalf of M.C.I dated 03.12.2013, it is
stated that information has been compiled by them in a tabular form for the
academic years 2011-2012, 2012-2013 and 2013-2014 which was being filed along
with the affidavit; the information showed that the requirement of bed occupancy
have been met, by and large, in all cases; in one or two cases, relating to the
government medical colleges, the M.C.I. had acted on the undertaking given by
Chief Secretary of the concerned State; for the North-Eastern States the bed
occupancy requirement, at the stage of grant of letter of permission, is only
50%; Karuna Medical College, Palakkad had a bed occupancy of 60% on the date of
assessment as per the compliance verification report dated 04.06.2011; the
assessors had observed that the bed occupancy was 60%, and had noted in the
remarks column that other clinical material was adequate, and the deficiency had
been complied with; and the Board of Governors, based on the said observation,
may have permitted renewal of permission for the sixth batch of students to
Karuna Medical College.
Sri C.V. Mohan Reddy, Learned Senior Counsel appearing on behalf of the
petitioners, would submit that the data now furnished by the MCI discloses that
several medical colleges were granted permission/renewal of permission though
their "bed occupancy" compliance was far below the statutorily stipulated
minimum; and the statutory regulations make no distinction between government
and private medical colleges in so far as the "bed occupancy" requirement is
concerned.  On the other hand, Sri C. Gunaranjan, Learned Standing Counsel for
MCI, would submit that all the three colleges, referred to in the WPMP, were
Government Medical Colleges; it has been the experience of M.C.I that the data,
regarding clinical material availability, was accurate  in government colleges
and clinical material (patients) were in abundance; comparison of the data of
government medical colleges with the petitioners' private medical college is
misconceived; even in the Regulations, government medical colleges are treated
differently in as much as the fee for inspection of a government medical
colleges is half the fee for private medical colleges; government medical
colleges are also not required to submit bank guarantees in terms of the
Regulations, which private medical colleges are required to furnish; the M.C.I,
without compromising the standard of medical education, had endeavoured to
consider the cases of government medical colleges in larger public interest;
further there is no issue of capitation fee in government medical colleges; the
satisfaction of the Board of  Governors, under Section 10-A(7) of the Act, is
subjective and is based on the  material placed before it; the satisfaction of
the Board of Governors that the colleges, whose "bed occupancy" is below the
stipulated minimum, would be in a position to meet the minimum requirements of
the Regulations cannot be said to be erroneous or without any material; and
comparison between government medical colleges and private entities is without
any basis.
A. IS THE CLASSIFICATION OF MEDICAL COLLEGES, FOR      THE PURPOSES OF            
SATISFYING THE "BED OCCUPANCY"      REQUIREMENT OF THE REGULATIONS, INTO              
GOVERNMENT AND PRIVATE COLLEGES, VALID?          

A valid classification based on a just objective is truly a valid
discrimination. The result to be achieved by the just objective presupposes the
choice of some for differential consideration/treatment over others.
Legalistically, the test for a valid classification may be summarized as a
distinction based on a classification founded on an intelligible differentia,
which has a rational relationship with the object sought to be achieved.
(Kallakkurichi Taluk Retired Officials Assn. v. State of T.N.43).  Every
instance of discrimination does not necessarily fall within the ambit of Article
14 of the Constitution.  Discrimination means an unjust, an unfair action in
favour of one and against another. It involves an element of intentional and
purposeful differentiation and further an element of unfavourable bias; an
unfair classification. (Rajasthan State Industrial Development & Investment
Corporation42; The State of M.P. v. Narmada Bachao Andolan44;  Madhu Kishwar v.
State of Bihar45). Classification must be truly founded on substantial
differences which distinguish persons grouped together from those left out of
the group and such differential attributes must bear a just and rational
relation to the object sought to be achieved. (State of Maharashtra v. Indian
Hotel & Restaurants Assn.46; State of Jammu and Kashmir v. Shri Triloki Nath
Khosa47).  To pass the test of permissible classification two conditions must be
fulfilled, namely, (i) that the classification must be founded on an
intelligible differentia which distinguishes persons or things that are grouped
together from others left out of the group, and (ii) that differentia must have
a rational relation to the object sought to be achieved by the statute in
question. The classification may be founded on different bases. What is
necessary is that there must be a nexus between the basis of classification and
the object of the provision under consideration. (Indian Hotel & Restaurants
Assn.46; Budhan Choudhry v. State of Bihar48).   Classification, to be valid
under Article 14, need not necessarily fall within an exact or a scientific
formula for exclusion or inclusion of persons or things.  There is no
requirement of mathematical exactness or for doctrinaire tests to be applied for
determining the validity, as long as it is not palpably arbitrary. (Indian Hotel
& Restaurants Assn.46; Ram Krishna Dalmia v. S.R. Tendolkar49; Welfare
Association, A.R.P. v. Ranjit Pl.Gohili50; Shashikant Laxman Kale v. Union of
India51). So long as there is a nexus between the basis of classification and
the object sought to be achieved, the classification is valid. (The State of
Madhya Pradesh v. Gopal D. Tirthani52).
While the Regulations prescribe half the fee, stipulated for a private medical
college, for inspection of a government medical college and do not require them,
unlike private institutions, to submit a bank guarantee, they make no
distinction between Government Medical Colleges and Private Medical Colleges in
so far as the requirement of "bed occupancy" is concerned.  The object of the
provisos to Regulation 8(3)(i) of prescribing a minimum bed occupancy
requirement is to ensure high standards of medical education.  While government
medical colleges and private medical colleges may constitute two different
classes, such a classification has no nexus with the aforesaid object and does
not satisfy the test of a valid classification.  As the classification between
government medical colleges and private medical institutions, in so far as the
"bed occupancy" requirement of the Regulations is concerned, is not a valid
classification, the MCI has discriminated against the petitioners in not
extending to them a concession which it had given to government medical
colleges.
In enforcing its statutory obligations, of ensuring maintenance of high
standards of medical education, the M.C.I. cannot apply different yardsticks to
Government Medical Colleges on the one hand, and Private Medical Colleges on the
other, as the deficiency of "bed occupancy" in both Government and Private
Medial Colleges would result in a fall in the standards of medical education.
The test ought not to be what would be a 'better' basis for the categorization
for that would introduce subjectivity in the process.  The test is whether
categorization, on the basis adopted, results in hostile discrimination and
adoption of the criteria has no reasonable nexus with the object sought to be
achieved. (Samaj Parivartana Samudaya v. State of Karnataka53).  If there is
nothing on the face of the law or the surrounding circumstances brought to the
notice of the court on which the classification may be reasonably be regarded as
based, the presumption of constitutionality cannot be carried to the extent of
always holding that there must be some undisclosed and unknown reasons for
subjecting certain individuals or corporations to hostile or discriminating
legislation. (Ram Krishna Dalmia49; Indian Hotel & Restaurants Assn.46;
Shashikant Laxman Kale51).  As the Regulations do not exempt government medical
colleges from the "bed occupancy" requirement, the MCI could not have extended
them any relaxation of this requirement, which it has chosen not to extend to
the petitioner college.  If the MCI intended to make a departure from the
standards laid down in the Regulations, or for carving out an exception in
favour of any identifiable class of persons, it should then have amended the
Regulations after previous sanction of the Central Government. (Gopal D.
Tirthani52).
In Dr. B.R. Ambedkar Medical College v. Union of India54 the notification, under
challenge before the Supreme Court, related to enhancement of the annual intake
capacity of undergraduate medical courses in medical colleges for the academic
year 2013-2014, only to government medical colleges.  The Establishment of
Medical College Regulations (Amendment) 2012, provides for a time schedule for
the M.C.I to grant letters of permission for establishment of a medical college
as well as an increase in admission capacity in the MBBS course.  The note, to
the schedule to the aforesaid Regulations, stipulates that the time schedule,
prescribed in the schedule, may be modified by the Central Government, for
reasons to be recorded in writing, in respect of any class or category of
applications.  The last date prescribed in the schedule for receipt of
applications by the Board of Governors of the M.C.I, was 15th July, 2013.  This
was modified by the Central Government to 24th July, 2013.  The Supreme Court
observed that Section 3-C of the Indian Medical Council Act required the Board
of Governors of the M.C.I to be bound by such directions, on questions of
policy, as the Central Government may give in writing to it from time to time;
and as power is vested with the Central Government, to modify the time schedule
in respect of a class or category of applications, their decision to extend the
last date from 15th July, 2013 to 24th July, 2013 was in order.  Reliance placed
by Sri C. Gunaranjan, Learned Standing Counsel for M.C.I on the judgment of the
Supreme Court in Dr. B.R. Ambedkar Medical College54 is misplaced as the 'bed
occupancy' requirement, stipulated under the Regulations, was neither in issue
therein nor is it the case of the MCI that they have obtained permission of the
Central Government before exempting Government medical colleges from the minimum
"bed occupancy" requirement.
            The data furnished to this Court by the MCI, along with their
affidavit dated 30.11.2013, makes startling reading.  As it reflects the
whimsical ways of the MCI, in according/refusing renewal of permission even for
a fall in the "bed occupancy requirement" below the statutorily stipulated
minimum, it is necessary to make a detailed reference thereto.  The data
furnished by the M.C.I is referred to hereunder in three tables.

TABLE-I

Colleges which were granted permission by MCI despite having low occupancy on
the day of assessment

Academic year
College
Govt/
Private
Batch
Required
Occu-pancy%
Daily
Average
Occu-pancy%
Occupancy on day of assess-ment %
Comments
2011-12
Karuna Medical College, Palakkad
Private
6th
70
70
60
MCI reply dated 30.11.2013 states that 60% occupancy in the compliance
verification report is adequate.  However, since this is the 6th batch, the
college requires 70% occupancy, and not 60%, so MCI's reply is erroneous.
2012-13
Saraswati Institute of Medical Sciences, Hapur
Private
5th
70
60
60

2013-14
Fathima Institute
Private
4th
70
62
60

2013-14
Thiruvarur Govt. Medical Colelge, Thiruvarur
Govt.
4th
70
78
50

2013-14
Government Medical College, Kannauj
Govt.
2nd
60
60
50

2013-14
Pt.JNM Medical College, Raipur
Govt.
5th
70
70.63
69
For increase of seats from 100-150
2013-14
Meenakshi Medical College and Hospital, Chennai
Private
5th
70
75
30-35% vacant
For increase of seats from 100-150
2013-14
Kilpauk Medical College, Chennai
Govt.
2nd
60
Full
50-60
For increase of seats from 100-150

TABLE-II

Colleges which do not meet the daily average bed occupancy for three randomly
selected months, but meet the occupancy requirements on the day of inspection


Academic year
College
Govt/
Private
Batch
Required
Occu-pancy%
Daily
Average
Occu-pancy%
Occupancy on day of assessment %  
Comments
2011-12
Ahmedabad Municipal Corporation Medical Education Trust Medical College,
Maninagar, Ahmedabad
Govt.
3rd
60
55
60

2011-12
Melmaruvarthur Adiparasakthi Instt. Medical Sciences and Research
Private
4th
70
62
73

2011-12
Tagore Medical College and Hospital, Chennai
Private
2nd
60
66
60

2011-12
Shri Guru Ram Rai Institute of Medical & Health Sciences, Dehradun
Govt.
Recog-nition u/s 11(2)
70
60
86
Not mentioned in MCI reply dated 30.11.2013
2012-13
Pt.JNM Medical College, Raipur
Govt.
4th
70

68.5
72
For increase of seats from 100-150
2012-13
Hamdard Institute of Medical Sciences & Research, New Delhi
Private
Letter of per-mission u/s 10A
60
51
87
Not mentioned in MCI reply dated 30.11.2013
 TABLE-III

Other colleges which were granted permission by MCI despite their bed occupancy
falling below the statutorily prescribed minimum


Academic year
College
Govt/
Private
Batch
Required
Occu-pancy%
Daily
Average
Occu-pancy%
Occupancy on day of assess-ment %
Comments
2011-12
Chintpurni Medicla College, Gurdaspur
Private
Letter of permission u/s 10A
60
Less than 60%
Less than 60%

2012-13
Bidar Institute of Medical Sciences, Bidar
Govt.
Recognition u/s 11(2)
70
56
69

2013-14
Govt. Medical College, Bettiah, Bihar
Govt.
Letter of permission u/s 10A
70
As per MCI norms, not fulfilled
As per MCI norms, not fulfilled

2013-14
Rajiv Gandhi Institute of Medical Sciences, Ongole, AP
Govt.
3rd
60
85
50
Not mentioned in MCI reply dated 30.11.2013.  Permission granted based on UG
Committee report on 04.07.2013
2013-14
Veer Chandra Singh Garhwali Govt. Medical Sc.& Research Instt, Srinagar, pauri
Garhwal
Govt.
Recognition
70

79
51
Not mentioned in MCI reply dated 30.11.2013.  Even if we consider J&K a Hill
State with relaxed requirements, there requires to be a60% occupancy, which is
not fulfilled.
Assessment date was 22.01.2013, and no further assessment were done.  The case
was taken up on the BOG meeting on 02.07.2013 and the permission was granted
based on "Considered by the BOG and approved to admit students"


From the aforesaid tables, it is evident that M.C.I. has arbitrarily and
whimsically exercised its power to grant or refuse renewal of permission to
medical colleges.  No explanation, much less one which can be said to
reasonable, is forthcoming for their selective application of the "bed occupancy
requirement" of the Regulations.  While the scope of judicial review in academic
matters is extremely limited, and the recommendations/decisions of expert bodies
should not be lightly interfered with, the court is bound to intervene where
statutory authorities act contrary to the provisions of a statute - plenary or
subordinate - or their action is arbitrary, discriminatory and in violation of
Article 14 of the Constitution of India.
B. CAN SELECTIVE APPLICTION OF THE REGULATIONS BE      JUSTIFIED ON THE PLEA OF               SUBJECTIVE SATISFACTION?      

Exempting Karuna Medical College, Palakkad (a private medical college), and
other medical colleges, from complying with the 'bed occupancy' requirement of
the Regulations cannot be justified by the M.C.I on the ground that the exercise
of power is based on its subjective satisfaction.  Formation of opinion must be
preceded by application of mind as regards consideration of relevant factors and
rejection of irrelevant ones. (Hindustan Petroleum Corpn. Ltd. v. Darius Shapur
Chenai55; Devinder Singh v. State of Punjab56).  The competent authority is
required to form an opinion from circumstances suggesting what is set out in the
Act and the Regulations.  Even if the formation of opinion is subjective the
existence of circumstances, relevant to the inference as the sine qua non for
action, must be demonstrable. (Barium Chemicals Ltd. v. Company Law Board57;
Swadeshi Cotton Mills v. Union of India58).   If the satisfaction, in regard to
the existence of any of the conditions stipulated in the Act and the
Regulations, is based on no evidence or on irrelevant evidence or on extraneous
considerations, the Court will be justified in quashing such an illegal order.
(Swadeshi Cotton Mills58).
In the formation of opinion regard must be had to all the factors relevant for
the exercise of that power.  Formation of opinion must be based on objective
considerations.  (India Cement Ltd. v. Union of India59, Rajesh Kumar v. Dy.
CIT60).  There must exist circumstances which, in the opinion of the competent
authority, suggest what has been set out in Act and the Regulations.  Existence
of such circumstances is a condition precedent for formation of the required
opinion and, if the existence of those conditions is challenged, Courts are
entitled to examine whether those circumstances existed when the order was made.
(Rohtas Industries Ltd v. S.D. Agarwal61).  If it is shown that the
circumstances do not exist, or that they are such that it is impossible for any
one to form an opinion therefrom, the opinion can be challenged on the ground of
non-application of mind or perversity or on the ground that it was formed on
collateral grounds and was beyond the scope of the Statute. (Barium Chemicals
Ltd.57).  Formation of opinion by the M.C.I, to grant exemption to a few select
medical colleges from the 'bed occupancy' requirement, falls foul of the
statutory Regulations and is, therefore, illegal.  Subjective satisfaction does
not justify whimsical application of the law.
C. EXERCISE OF DISCRETION TO GRANT OR REFUSE       RENEWAL OF PERMISSION MUST                
NOT ONLY BE IN       ACCORDANCE WITH THE REGULATIONS BUT SHOULD       ALSO BE            
REASONABLE:  

While a feeble attempt was made by Sri C. Gunaranjan, Learned Standing Counsel
for the M.C.I, to gloss over the flagrant acts of discrimination by the M.C.I,
contending that no mandamus can be issued to perpetuate an illegality, it would
be wholly inappropriate for this Court to exercise judicial restraint on this
specious plea, and permit M.C.I. to arbitrarily pick and choose medical colleges
for grant of, or to refuse, renewal of permission, from among all of those who
have failed to comply with the "bed occupancy" requirement.  Exercise of
discretion to grant or refuse permission should not only be in accordance with
the statutory regulations, but must also be uniform and reasonable.  Discretion
must be bound with the rule of reason and law.  A person in whom is vested a
discretion must exercise his discretion upon reasonable grounds.  A discretion
does not empower a man to do what he likes merely because he is minded to do so
- he must in the exercise of his discretion do not what he likes but what he
ought.  In other words he must, by the use of his reason, ascertain and follow
the course which reason directs.  He must act reasonably.  The word
'unreasonable' is frequently used as a general description of the things that
must not be done.  A person entrusted with a discretion must direct himself
properly in law. He must call his own attention to the matters which he is bound
to consider.  He must exclude from his consideration matters which are
irrelevant to what he has to consider.  If he does not obey those rules, he may
truly be said, and often is said, to be acting unreasonably'.  Similarly, there
may be something so absurd that no sensible person could ever dream that it lay
within the powers of the authority.  The rule of reason has thus become a
generalized rubric covering not only sheer absurdity or caprice, but merging
into illegitimate motives and purposes, a wide category of errors commonly
described as 'irrelevant considerations', and mistakes and misunderstandings
which can be classed as self-misdirection.  (Administrative Law: HWR Wade & C.F.
Forsyth - Tenth Edition).  Greater the power, greater the caution in its
exercise. Selective and irrational application of the statutory regulations
would necessitate action being taken by the Government of India to clean up the
augean stables of the MCI.  Unless this unseemly mess is sorted out at the
earliest, and the MCI house put back in order, it would spell the doom of
maintenance of high standards of medical education in this country, and leave
medical colleges to the mercy of the officials of the M.C.I. Capricious exercise
of statutory power, and indifference to the plight of the medial colleges and
its students, would not only financially cripple such institutions forever, but
also destroy the career of students undergoing medical education thereat.
Vagarious and irrational enforcement by the MCI, of the statutory regulations,
necessitates immediate course correction. The Government of India would do well
to cause an enquiry into, and ascertain the reasons for, the arbitrary
application of the Regulations by the MCI and why it has adopted a "pick and
choose method" in according permission to medical colleges which have not
satisfied the "bed occupancy" requirement of the Regulations.  While the
impugned order of the MCI dated 10.09.2013 must be set aside, the next question
which needs to be examined is the nature of relief which the petitioner is
entitled to be granted?
V. TIME SCHEDULE FIXED UNDER THE REGULATIONS: CAN     IT BE RELAXED BY THE               COURT:  
        Sri C.V. Mohan Reddy, Learned Senior Counsel appearing on behalf of the
petitioners, would submit that the time schedule for admissions, as fixed under
the Establishment of Medical College Regulations, can be relaxed; and the 2nd
respondent cannot take advantage of its illegal action in taking its own time in
rejecting the petitioner's request, and then turn around and contend that the
time schedule fixed cannot be relaxed.
On the other hand Sri C. Gunaranjan, Learned Standing Counsel for the M.C.I,
would submit that the Regulations provide a schedule for making applications,
and passing orders on the applications for increase/starting of a medical
college; and the date for issuance of the letter of permission is 15th June
which was extended upto 15th July, 2013; the M.C.I. is required to strictly
adhere to the time schedule mentioned in the Regulations; the last date for
grant of renewal of permission, for MBBS course for the academic year 2013-14,
is only upto 15th July 2013; and the Board of Governors (BOG) cannot now grant
permission for the academic year 2013-14.
Reliance placed on behalf of the MCI, on the judgment of Supreme Court in Board
of Governors v. Kushal Educational Trust62, to contend that, as the Supreme
Court had directed the M.C.I. to apprise the High Court that it was also not
entertaining any matter relating to MBBS or Post Graduate Medical Courses for
the year 2013-2014, this Court should refrain from interference is misplaced.
The issue which fell for consideration in the aforesaid judgment of the Supreme
Court has no relevance to the facts of the present case or the issues which
arise for consideration herein.
In The Board of Governors in Super-cession of the MCI rep. by its Secretary v.
Tagore Medical College & Hospital rep. by its Dean Dr. S. Shantha
Rathinamangalam63, a Division Bench of the Madras High Court held:-
"............ The learned counsel appearing for the appellant by referring to
the decision in Priya Gupta, (supra) submitted that no renewal of permission
could be granted beyond 15th July of each calender year. However, in the case on
hand we have found that the appellant did not apply their mind to the compliance
verification assessment report and the UG committee while analysing the report
appears to have applied the norms fixed for the fourth renewal when in fact the
respondent institution had submitted their application for the third renewal.
Furthermore, no reasons were assigned either in the resolution of the appellant
or in the impugned order dated 14.07.2013, and a vague statement has been made
stating that there are large number of deficiencies still persisting.
.............Thus, when there is arbitrariness in the action of the appellant
and when decision has been taken without assigning any reason, it clearly
offends Article 14 of the Constitution and in such circumstances, this Court is
not denuded of its jurisdiction in issuing appropriate directions to meet the
ends of justice. That apart, the last date for completion of all admissions to
the medical course is yet to be over and it comes to an end only on 30.09.2013.
Though the respondent was unsuccessful before the High Court of Delhi in respect
of the grant of renewal of permission for the academic year 2012-13, that would
not disable or disentitle the respondent from seeking for renewal of approval
for the year 2013-14, which has been independently assessed by the appellant.
Therefore, the respondent cannot be non-suited on this ground....."
In Madha Medical College & Hospital v. Union of India64, another Division Bench
of the Madras High Court directed the Inspection Committee of the M.C.I to
inspect the medical college and find out whether the deficiencies pointed out in
the earlier report were complied with or not. The M.C.I was directed to complete
the exercise and pass final orders, in accordance with law, within a period of
two weeks from the date of receipt of a copy of the order.  The Division Bench
held that, since it had set aside the earlier order of the M.C.I, the time limit
prescribed by the Supreme Court for admission to the current academic year need
not be put against the college.  Reliance placed on behalf of the petitioners,
on the aforesaid judgments of the Madras High Court, is also misplaced as the
law laid down by the Supreme Court, in the judgments referred to hereinafter,
prohibit Courts from extending the time, prescribed in the Regulations, for
grant of renewal of permission.
In State of Bihar v. Dr. Sanjay Kumar Sinha65, the Supreme Court held that
everyone, including the States, the Union Territories and other authorities
running Medical Colleges, must strictly follow the time schedule; and everyone
concerned should strictly comply with the time-frame.  In M.C.I. v. Madhu
Singh66, the Supreme Court held that there was a necessity for specifically
providing the time schedule for the course, and fixing the period during which
admissions can take place; no admission can be granted after the scheduled date
which, essentially, should be the date for commencement of the course; no
variation of the schedule, so far as admissions are concerned, shall be allowed;
and, in case of any deviation by the concerned institution, action as prescribed
should be taken by the MCI. In Mridul Dhar v. Union of India67 the Supreme Court
issued several directions including that the time schedule, provided for in the
Regulations, should be strictly adhered to by all concerned failing which the
defaulting party would be liable to be personally proceeded against.  In
Priyadarshini Dental College & Hospital7 the Supreme Court observed that Mridul
Dhar67 primarily dealt with the time schedule for completion of the admission
process for medical colleges; and the stipulation of 15th July as the last date,
for letters of permission to be issued by the Central Government, is an extract
from the Medical Council of India Establishment of Medical College Regulations,
1999.  In Priya Gupta v. State of Chhattisgarh68, the Supreme Court held that
the statutory regulations should be enforced so that all concerned are
mandatorily required to implement the time schedule in its true spirit and
substance; these schedules were prescribed upon serious consideration; and they
cannot be moulded to suit the convenience of some economic or other interests of
any institution, especially in a manner that is bound to result in compromise of
principles.  The Supreme Court directed that commencement of new courses, or
increase in the seats of existing MBBS courses, should be approved/recognised by
the Government of India by 15th July of each calendar year, for the relevant
academic sessions of that year; the Medical Council of India should, immediately
thereafter, issue appropriate directions and ensure the implementation and
commencement of the admission process within one week thereafter; after 15th
July of each year, neither the Union of India nor the Medical Council of India
shall issue any recognition or approval for the current academic year; if any
such approval is granted after 15th July of any year, it shall only be operative
for the next academic year, and not in the current academic year; these
directions should be complied with by all concerned, including the Union of
India, Medical Council of India, State Governments, Universities and medical
colleges and the management of the respective universities or medical colleges;
and any default in compliance with these conditions, or attempt to overreach
these directions, would be liable for action under the provisions of the
Contempt of Courts Act.
It is no doubt true that, in Asha v. Pt.B.D.Sharma University of Health
Sciences69, the Supreme Court held that, having returned a finding on merits in
favour of the appellant, it had to grant relief even, if necessary, by moulding
the relief appropriately and in accordance with law; and it must do complete
justice between the parties, particularly where the legitimate right of the
appellant stands frustrated because of the inaction or inappropriate action on
the part of the respondents concerned.  In the guise of granting relief, it is
not permissible for this Court to direct MCI to consider the petitioners'
application for renewal of permission for the academic year 2013-14, as the last
date for grant of permission expired by 15th July, 2013, and the last date for
admission of students expired by 30th September, 2013.  Compassion and sympathy
have no role to play where the rule of law is required to be enforced. Any
direction by the High Court to the MCI to now grant permission would not be a
proper exercise of jurisdiction under Article 226 of the Constitution. (K.S.
Bhoir2).
Even otherwise the Supreme Court, in Asha69, was examining the entitlement of a
student for admission into the MBBS course for which the last date was 30th
September.  Even in such a case of admission of a student it was held that, only
in very rare and exceptional cases of unequivocal discrimination or
arbitrariness or pressing emergency, admission is permissible after 30th
September; it is only in the rarest of rare cases or exceptional circumstances
where the ends of justice would be subverted, or the process of law frustrated,
can the court mould the relief and make exception to the cut-off date of 30th
September, and exercise its extraordinary jurisdiction of admitting candidates
to the courses after the deadline of 30th September of the current academic
year; this can only be done if the conditions stated in Priya Gupta68 are found
to be unexceptionally satisfied, and the reasons therefor are recorded by the
court of competent jurisdiction; even in such cases, the Court must first return
a finding that no fault is attributable to the candidate; the fault lay on the
part of the authorities; and there is apparent breach of the rules, regulations
and principles in the process of selection and grant of admission; where denial
of admission violates the right to equality, and equal treatment of the
candidate, it would be completely unjust and unfair to deny such exceptional
relief to the candidate; and, even if these conditions are satisfied, the court
would still have to decide whether the relief should or should not be granted
and, if granted, should it be with or without compensation. Unlike in Asha69,
wherein the admission of a student to a medical college was in issue, the
present case relates to grant of renewal of permission for a medical college,
for the academic year 2013-14, the last date for which expired on 15th July,
2013.
VI. WRIT OF MANDAMUS: ITS SCOPE:    
According to Sri C.V. Mohan Reddy, Learned Senior Counsel, a mandamus can be  
issued in cases where the authority, vested with the jurisdiction to take action
and pass an order, has passed an order in an irrational or illegal manner or in
cases where the authority, vested with the jurisdiction to take action, has not
taken any action at all; in the latter cases the High Court may direct the
authority to take action and no more; however, in the former cases where the
action is found to be illegal, the High Court has the power to direct the
authority to act in a particular manner; and, in this case, this Court has the
power, under Article 226 of the Constitution of India, to direct MCI to grant
renewal of permission, for the academic year 2013-14, as the authority has
already taken a decision.  On the other hand Sri C. Gunaranjan, Learned Standing
Counsel for the M.C.I, would submit that there is no illegality or irregularity
in the impugned order rejecting renewal of permission to the 2nd petitioner
institution for the academic year 2013-14; and the Writ Petition should,
therefore, be dismissed in the interest of the justice.
While the impugned order of the 2nd respondent dated 10.09.2013, rejecting the
petitioners' application for renewal of permission, is illegal, arbitrary and
discriminatory and necessitates being set aside, this Court may not be justified
in directing them to grant renewal of permission to the petitioners college as
these are matters of discretion which the MCI is required to exercise in
accordance with law.  It is no doubt true that a writ of mandamus is equitable
in nature, its issuance is governed by equitable principles and the prime
consideration, for issuance of the writ, is whether or not substantial justice
will be promoted.  (Rajasthan State Industrial Development & Investment
Corporation42; Commissioner of Police, Bombay v. Govardhandas Bhanji70; Praga
Tools Corporation v. Shri C.V Imanual71; Punjab Financial Corporation v. Garg
Steel72; Union of India v. Arulmozhi Iniarasu73; and Khela Banerjee v. City
Montessori School74).  It is, however, not for the Court to dictate what
decision should be taken by the statutory authority, in the exercise of its
discretion, in a given case. The Court cannot direct the statutory authority to
exercise its discretion in a particular manner or in favour of a particular
person. That would be beyond the jurisdiction of the Court. (U.P.S.R.T.C. v.
Mohd. Ismail75).  Adjusting equities, in the exercise of the extraordinary
jurisdiction under Article 226, is one thing and the High Court assuming the
role of the MCI under Section 10-A of the Act is a different thing altogether.
The Court cannot direct waiver of the mandatory requirement of law in the
exercise of its extraordinary jurisdiction under Article 226 of the Constitution
of India.  It is not permissible for the High Court to direct an authority under
the Act to act contrary to the statutory provisions. (K.S. Bhoir2).  As the
power to grant renewal of permission is conferred on the MCI, both under the Act
and the Regulations, any direction issued by the High Court, to the MCI to
accord permission, would be in the teeth of the statutory provisions and would
amount to amending the provisions of Section 10-A of the Act and the
Regulations. It is not permissible for the High Court to direct an authority
under the Act to act contrary to statutory provisions. The power conferred on
the High Court, under Article 226, is to enforce the rule of law and ensure that
the State and other statutory authorities act in accordance with law, (K.S.
Bhoir2), and not to don the robes of the MCI to grant the petitioners renewal of
permission for the academic year 2013-14.
VII. OTHER CONTENTIONS:  
Sri C. Gunarajan, learned Standing Counsel for the MCI, would submit that the
gross deficiencies, found in the teaching faculty of the petitioner institution
during the surprise physical inspection, raises a serious doubt on the
genuineness of the faculty and the residents allegedly employed by them; it also
raises a serious doubt that teachers and residents were being employed
temporarily for inspection purposes only; the hospital of the 2nd petitioner-
college cannot be shut down during vacation; and to manage such huge patient
load there is a requirement of sufficient number of doctors, residents, nurses
and other paramedical staff.  It is wholly unnecessary for this Court to deal
with these submissions, as none of these factors formed the basis of the
impugned order dated 10.09.2013 whereby the petitioners' request for renewal of
permission was rejected.
The jurisdiction, to refuse renewal of permission, can be exercised by the 2nd
respondent only if the applicant medical college has failed to comply with the
infrastructural and instructional requirements of the Regulations.  The
Regulations contemplate an opportunity being afforded to the college to rectify
the deficiencies.  It is only if they are informed thereof, can the colleges
take steps to rectify such deficiencies.  The 2nd respondent cannot, therefore,
exercise its powers to refuse renewal of permission for deficiencies (other than
those mentioned in the provisos) which the college has neither been intimated
earlier nor have they been provided an opportunity to rectify them.  It is
unnecessary for this Court to dwell any further on this aspect as the impugned
order dated 10.09.2013 is being set aside on the issue of "bed occupancy", and
the other two deficiencies referred to therein are rectifiable in terms of
Regulation 8(3)(1) (which the petitioners claim to have either rectified or
offer a justification therefor). The 2nd respondent shall examine whether the
petitioners have been put on notice earlier of the other two deficiencies and,
if so, whether they have rectified them.
VIII. NATURE OF RELIEF TO BE GRANTED:       
On the nature of relief, which the petitioners can be granted, it is useful to
refer to MCI v. Chintapurni Medical College & Hospital76, wherein a Division
Bench of the Punjab and Haryana High Court held that the schedule for receipt of
applications, for establishing a new medical college and processing of
applications as set out in paragraph 22 of the judgment in Priya Gupta68, left
no manner of doubt that 
renewal of permission should not be granted to a medical
college, if the schedule for opening a medical college was not adhered to;

admissions shall not be made without prior approval of the Board of Governors;
in view of these restrictions, while it may not be open to the Court to issue
any direction for the current academic session, it could direct that a fresh
decision be taken by the MCI, after inspection by its team of assessors, for the
next academic session in the event of success of the inspection, with further
right to further assessment in case it is otherwise.  
A similar direction can be issued in the present case also.
The 2nd respondent shall consider the petitioners' application for renewal of
permission afresh, in the light of the observations made hereinabove and in
terms of the Act and the Regulations, for the next academic year 2014-15 and
pass orders thereupon at the earliest, in any event not later than one month
from the date of receipt of a copy of this order.  
It is made clear that this
order shall not preclude the petitioners from instituting appropriate legal
proceedings seeking damages for the loss sustained by them because of the high 
handed and illegal acts of the MCI in its selective application of the "bed
occupancy" requirement under the Regulations, and for refusing them renewal of
permission for the academic year 2013-14.

 The writ petition is allowed with exemplary costs of Rs.10,000/- which the 2nd
respondent shall pay to the petitioners within one month from the date of
receipt of a copy of this order.  Miscellaneous petitions, if any pending, are
also disposed of.

_____________________________  
RAMESH RANGANATHAN, J      
Date:   03-01-2014