REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

WRIT PETITION (CIVIL) No. 89 of 2018

CHINTPURNI MEDICAL COLLEGE

AND HOSPITAL & ANR. ... PETITIONER (S)

Versus

STATE OF PUNJAB & ORS. ... RESPONDENT(S)

J U D G M E N T

S.A. BOBDE, J.

1. Chintpurni Medical College started in the year 2011 in the

State of Punjab. This college is affiliated to Baba Farid University. It

made an application to the Medical Council of India (hereinafter

referred to as ‘MCI’) under Section 10(A) of the Indian Medical Council

Act, 1956 (hereinafter referred to as ‘the IMC Act’) for establishing a

new Medical College. The permission for the first batch was granted in

the year 2011-12 on 30.06.2011. For the subsequent academic years

i.e. 2012-13 and 2013-14, no renewal of permission was granted to the

petitioner college, since the petitioner college was found to be

deficient in the inspections carried out by the MCI. For the academic

year 2014-15, petitioner was granted Letter of Permission (LOP) under

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the orders of this court passed in W.P (Civil) No.469 of 2014.

Thereafter, no renewal of permission was granted to the petitioner for

the academic year 2015-16. Petitioner college applied for the grant of

recognition under section 11 of the IMC Act in the year 2015. MCI in

order to determine whether the petitioner college fulfills the minimum

eligibility requirements for grant of recognition under section 11 of the

IMC Act, conducted three inspections. The First inspection was carried

out on 16.12.2015 followed by second inspection on 25/26.02.2016

and the third one on 16.03.2016.

2. In all the three inspections carried out by the MCI,

petitioner college was found to be deficient. The MCI concluded the

college was deficient to the extent of 100%. The MCI, therefore,

recommended to the Central Government, not to issue recognition to

the petitioner college under Section 11 of the IMC Act. The MCI also

made similar recommendations in respect of other colleges. Those

Medical Colleges approached this Court by way of filing a batch of Writ

Petitions. This Court directed the matters to be examined by the

Oversight Committee constituted under the judgment of this Court

delivered by the Constitution Bench in the case of Modern Dental

College and Research Centre v. State of Madhya Pradesh

1

. Finally, the

Oversight Committee directed the MCI to conduct inspections and

further directed that if the Medical Colleges were found deficient, they

1

(2016) 7 SCC 353

2

would be banned for a period of two years. Such a direction was also

given in respect of the petitioner college. MCI conducted fresh

inspection of the petitioner college on 07.03.2017 & again found the

petitioner college deficient & accordingly recommended to the Central

Government to debar the petitioner college from admitting students

against the allowed intake for two academic years i.e. 2017-18 and

2018-19. The Central Government by its order dated 31.05.2017

debarred the petitioner college for a period of two academic years i.e.

2017-18 and 2018-19. This order was questioned by the petitioner in

Writ Petition (Civil) No. 423 of 2017. By order dated 10.5.2018, this

Court dismissed the Writ Petition (Civil) No.423 of 2017.

3. The present writ petition questions the withdrawal of the

Essentiality Certificate dated 07.12.2010 and 15.02.2011 issued to the

petitioner college by Respondent No. 1 under Section 10A of the IMC

Act read with the Establishment of Medical College Regulations, 1999

(Hereinafter referred to as “Regulations”) framed under the Act.

Regulations lay down the qualifying criteria for making an application

to open a Medical College. One of the essential qualifications is that a

person should obtain an Essentiality Certificate from the State

Government where the college is proposed to be located in Form 2.

4. On 13.07.2017, MCI making an unusual request wrote a

letter to the Secretary, Government of Punjab stating that it will take

3

action only if the concerned college is closed down and the Essentiality

Certificate is withdrawn by the State Government. The Government of

Punjab by letter dated 24.7.2017 submitted that they are not in a

position to withdraw the Essentiality Certificate for several reasons.

The State Government stated that the doctor – patient ratio in the

State of Punjab is 1:1440 approximately whereas the required ratio as

per MCI norms is 1:1000. They said that they are committed to

opening five new medical colleges in the State, it was not possible in

these circumstances to conclude that there is lack of essentiality. They

further said that it would not be possible to absorb the students from

the petitioner college and this will adversely affect the interest of

students. They requested for permission to facilitate shifting of the

students to medical colleges in the other states without insisting on the

withdrawal of Essentiality Certificate. The State thus declined to

withdraw the Essentiality Certificate.

5. However, for reasons which are not clear, the State relied

on proceedings of an earlier show cause notice dated 03.05.2017

calling upon the petitioner to show cause as to why the Essentiality

Certificate should not be withdrawn, to do just the opposite. They

passed an order dated 01.11.2017 and held that the college had made

hollow claims for removing deficiencies and had failed to show cause

why the Essentiality Certificate should not be withdrawn. Though

several opportunities of personal hearing were afforded, the college

4

had failed to rebut the findings of the inspection reports. Having found

persistent deficiencies, the State Government directed the withdrawal

of the Essentiality Certificate.

6. At this juncture, we might make it clear that no fault can be

found with the orders of the State Government in observing the

deficiencies in the functioning of the petitioner college. These

deficiencies have resulted in the Central Government order dated

31.05.2017 debarring the petitioner college from taking any fresh

intake for two years. As stated above, this Court has declined to

interfere with such an order and accordingly, Writ Petition (Civil)

No.423 of 2017 has been dismissed.

7. Shri Mukul Rohtagi, learned senior counsel for the

petitioner, however contended that the State does not have the power

to withdraw the Essentiality Certificate once granted. According to the

learned senior counsel, the Essentiality Certificate is issued for the

specific purpose of certifying the need for opening a new medical

college in a State. Once such a need is certified and the college is

established, there is no power conferred by the IMC Act or the

Regulations to withdraw such a certificate except on the ground of

fraud.

8. Before going into the merits of the submission, it is

important to note that the State Government appears to have

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withdrawn the Essentiality Certificate acting under dictation of the MCI.

This is obvious from the letter dated 13.07.2017 referred to above.

This by itself would vitiate the withdrawal of the Essentiality Certificate

by the State, vide Anirudhsinhji Karansinhji Jadeja v. State of Gujarat

2

and Dipak Babaria v. State of Gujarat.

3

The following passage from

Wade and Forsyth in Administrative Law, 10

th

Edition at p. 269

succinctly states the vice in such an action:

“Closely akin to delegation, and scarcely

distinguishable from it in some cases, is any

arrangement by which a power conferred upon

one authority is in substance exercised by

another. The proper authority may share its

power with someone else, or may allow

someone else to dictate to it by declining to

act without their consent or by submitting to

their wishes or instructions. The effect then is

that the discretion conferred by Parliament is

exercised, at least in part, by the wrong

authority, and the resulting decision is ultra

vires and void. So strict are the courts in

applying this principle that they condemn

some administrative arrangements which must

seem quite natural and proper to those who

make them.”

9. The issue which arises in the present W.P is:

whether the State Government has the power to withdraw

an Essentiality Certificate once granted, and whether the power to do

so is ultra-vires the Act and the Regulations framed thereunder.

This issue needs to be decided since power assumed by

the State to withdraw an Essentiality Certificate has drastic

2

(1995) 5 SCC 302

3

(2014) 3 SCC 502

6

consequences on Medical Education in a State, which can only be

controlled by and under the IMC Act.

Essentiality Certificate

10. It would, therefore, be necessary to see the origin of the

requirement that a College must have an Essentiality Certificate before

it receives permission for its establishment. The Legislative scheme

that imposes the requirement of an Essentiality Certificate is as

follows:-

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Section 10A

4

of the IMC Act requires the previous

permission of the Central Government for establishing a Medical

College or opening a new course of study or training. Every person or

Medical College must submit to the Central Government a scheme as

prescribed. The Central Government then refers the scheme to the

MCI for its recommendations. The Medical Council is required to

4

10.A PERMISSION FOR ESTABLISHMENT OF NEW MEDICAL COLLEGE, NEW COURSE OF

STUDY -

(1) Notwithstanding anything contained in this Act or any other law for the time being in

force:-

(a) no person shall establish a medical college or

(b) no medical college shall:-

(i) open a new or higher course of study or training (including a postgraduate 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 (including a

postgraduate course of study or training),

except with the previous permission of the Central Government obtained in accordance with

the provisions of this section.

Explanation 1-. For the purposes of this section, "person" includes any University or a trust

but does not include the Central Government.

Explanation 2.- For the purposes of this section "admission capacity" in relation to any course

of study or training (including postgraduate course of study or training) in a medical college, means

the maximum number of students that may be fixed by the Council from time to time for being

admitted to such course or training.

(2) (a) Every person or medical college shall, for the purpose of obtaining permission under

sub-section (1), submit to the Central Government a scheme in accordance with the provisions of

clause (b) and the central Government shall refer the scheme to the Council for its

recommendations.

(b) The Scheme referred to in clause (a) shall be in such form and contain such particulars

and be preferred in such manner and be accompanied with such fee as may be prescribed.

(3) On receipt of a scheme by the Council under sub-section (2) the Council may obtain such

other particulars as may be considered necessary by it from the person or the medical college

concerned, and thereafter, it may –

(a) if the scheme is defective and does not contain any necessary particulars, give a

reasonable opportunity to the person or college concerned for making a written representation

and it shall be open to such person or 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.

(4) The Central Govt. may after considering the scheme and the recommendations of the

Council under sub-section (3) and after obtaining, where necessary, such other particulars as may be

considered necessary by it from the person or college concerned, and having regard to the factors

referred to in sub-section (7), either approve 4 (with such conditions, if any, as it may consider

necessary ) or disapprove the scheme, and any such approval shall be a permission under sub-section

(1):

Provided that no scheme shall be disapproved by the Central Government except after giving

the person or college concerned a reasonable opportunity of being heard;

Provided further that nothing in this sub section shall prevent any person or medical college

whose scheme has not been approved by the Central Government to submit a fresh scheme and the

provisions of this section shall apply to such scheme, as if such scheme has been submitted for the

first time under subsection (1).

8

consider the scheme and satisfy itself by obtaining any particulars as

are necessary and after having the defects if any removed, make its

recommendations to the Central Government. The Central

Government, may on receipt of the scheme, approve it conditionally or

disapprove the scheme. Approval constitutes permission vide sub-

section (4) of Section 10A of the IMC Act.

11. The power to permit the establishment of a Medical College

is thus conferred on the Central Government by the IMC Act. The

regulations referred to above, framed in the exercise of powers

conferred under Section 10A read with Section 33 of the IMC Act

(5) Where, within a period of one year from the date of submission of the scheme to the

Central Government under sub-section (1), no order passed by the Central Government has been

communicated to the person or college submitting the scheme, such scheme shall be deemed to

have been approved by the Central Government in the form in which it had been submitted, and

accordingly, the permission of the Central Government required under sub-section (1) shall also be

deemed to have been granted.

(6) In computing the time-limit specified in sub-section (5), the time taken by the person or

college concerned submitting the scheme, in furnishing any particulars called for by the Council, or by

the Central Government, shall be excluded.

(7) The Council, 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), shall have due regard to the following factors, namely:-

(a) whether the proposed medical college or the existing medical college seeking to open a

new or higher course of study or training, would be in a position to offer the minimum standards of

medical education as prescribed by the Council under section 19A or, as the case may be

under section 20 in the case of postgraduate medical education.

(b) whether the person seeking to establish a medical college or the existing medical college

seeking to open a new or higher course of study or training or to increase it admission

capacity has adequate financial resources;

(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 or

study or training or accommodating the increased admission capacity, have been provided or

would be provided within the time-limit specified in the scheme.

(d) whether adequate hospital facilities, having regard to the number or 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;

(e) whether any arrangement has been made or programme drawn to impart proper training

to students likely to attend such medical college or course of study or training by persons having

the recognised medical qualifications;

(f) the requirement of manpower in the field of practice of medicine; and

(g) any other factors as may be prescribed.

(8) Where the Central Government passes an order either approving or disapproving a

scheme under this section, a copy of the order shall be communicated to the person or college

concerned.

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prescribe the qualifying criteria. These criteria lay down the eligibility

to apply for permission to establish a Medical College. One of the

criteria is that the person who is desirous of establishing a medical

college should obtain an Essentiality Certificate as prescribed in Form 2

of the Regulations, certifying that the State Government/Union Territory

Administration have no objection for the establishment of the proposed

Medical College at the proposed site and availability of adequate

clinical material

5

.

12. Form 2 in which the Essentiality Certificate must be

obtained indicates the facts which are considered relevant for

determining whether the establishment of a proposed college is

justified. These factors are:-

(1)Number of institutions already existing in the State.

(2)Number of seats available or No. of doctors being

produced annually.

(3)Number of doctors registered with the State Medical

Council.

(4)Number of doctors in Government Service.

(5)Number of Government posts vacant and those in

rural/difficult areas.

(6)Number of doctors registered with Employment

Exchange.

(7)Doctor population ratio in the State.

(8)How the establishment of the college would resolve

the problem of deficiencies of qualified medical

5

(3) that Essentiality Certificate in Form 2 regarding No objection of the State Government/Union

Territory Administration for the establishment of the proposed medical college at the proposed site

and availability of adequate clinical material as per the council regulations, have been obtained by

the person from the concerned State Government/Union Territory Administration.

10

personnel in the State and improve the availability of

such medical manpower in the State.

(9)The restrictions imposed by the State Government,

if any, on students who are not domiciled in the State

from obtaining admissions in the State, be

specified.

(10)Full justification for opening of the proposed college.

(11)Doctor-patient ratio proposed to be achieved.

13. The concerned State Government is required to certify that

it has decided to issue an Essentiality Certificate for the establishment

of a Medical College with a specified number of seats in public interest,

and further that such establishment is feasible. Importantly, the State

Government is required to certify that if the applicant fails to create an

infrastructure for the Medical College as per the MCI norms and fresh

admissions are stopped by the Central Government, the State

Government shall take over the responsibility of those seats that

already admitted in the College with the permission of the Central

Government. An amendment to the notification also requires a

declaration that the applicant owns and possesses adequate land on

which non-agricultural use of the land is permitted and on which a

Medical College can be established. It further requires a declaration to

the effect that the Hospital and Medical College have been granted

completion certificate / building use certificate.

14. The Essentiality Certificate thus certifies that it is essential

having regard to specified factors that the opening of the proposed

college is essential in the State, in public interest. Further, that the

11

applicant has the necessary land and building for running it. What is

significant to note is that the law requires that an applicant must

possess an Essentiality Certificate from the State Government

mentioning therein that it is essential to have a Medical College as

proposed by him. The purpose is interalia to prevent the

establishment of a college where none is required or to prevent

unhealthy competition between too many Medical Colleges.

15. Thus, the Legislative scheme for permission to establish a

Medical College prescribes, as a qualifying criterion, that the applicant

must have an Essentiality Certificate issued by the State Government.

The State Government certifies the justification for establishing a

proposed Medical College as a part of the Legislative scheme under the

Act. It does not do so under any other law including a State

enactment. The only purpose of the Essentiality Certificate is to

enable the Central Government acting under Section 10A to take an

informed decision for permitting the opening or establishment of a new

Medical College. Once the college is established, its functioning and

performance and even the de-recognition of its courses is controlled

only by the provisions of the IMC Act and not any other law. The IMC

Act, which is a Legislation under Entry 66 of List-I of Seventh Schedule

of the Constitution of India is a complete code which governs the

establishment, functioning, including maintenance of standards of

education and even

de-recognition of Medical Colleges vide Section 19 of the Act. The

12

States are denuded of the Legislative Power to legislate on medical

education under Entry 25 of the Concurrent List since Parliament has

exercised its power under Entry 66 and enacted the IMC Act vide Dr.

Preeti Srivastava v. State of Madhya Pradesh

6

.

16. It would be impermissible to allow any authority including a

State Government which merely issues an Essentiality Certificate, to

exercise any power which could have the effect of terminating the

existence of a Medical College permitted to be established by the

Central Government. This the State Government may not do either

directly or indirectly. Moreover, the purpose of the Essentiality

Certificate is limited to certifying to the Central Government that it is

essential to establish a Medical College. It does not go beyond this. In

other words, once the State Government has certified that the

establishment of a Medical College is justified, it cannot at a later stage

say that there was no justification for the establishment of the College.

Surely, a person who establishes a Medical College upon an assurance

of a State Government that such establishment is justified cannot be

told at a later stage that there was no justification for allowing him to

do so. Moreover, it appears that the power to issue an Essentiality

Certificate is a power that must be treated as exhausted once it is

exercised, except of course in cases of fraud. The rules of equity and

fairness and promissory estoppel do not permit this Court to take a

contrary view.

6

(1999) 7 SCC 120

13

17. In this case, the reasons given by the State for rescinding

the Essentiality Certificate are not relevant or germane to the

establishment of a Medical College. They refer to the deficiencies in

the functioning of a Medical College for a particular period.

Deficiencies by their nature are curable and can be removed. To allow

the State Government to withdraw an Essentiality Certificate and say

that it is no more essential that there should be a college at all, would

lead to gross arbitrariness since logically the existence of the Medical

College would again be justified if the deficiencies are removed. The

question of justified existence of a college and the irregular/illegal

functioning of an existing college belong to a different order of things

and cannot be mixed up. A certificate constitutes a solemn statement

by an authority certifying certain conditions of things. Persons acting

on such certificates are entitled to assume that the certificate will

ensure and not be pulled out from under their feet for extraneous

reasons. We find that none of the reasons for withdrawing the

Essentiality Certificate pertain to factors which are certified as true in

the prescribed Form 2, reproduced above.

Challenge to Conditions Introduced in Form 2 by the State

18. It is argued mainly on behalf of the State Government that

the specified conditions which are imposed in the Essentiality

Certificate empower the State Government to withdraw an Essentiality

Certificate and the certificate has been withdrawn in exercise of the

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powers reserved under following conditions incorporated in Essentiality

Certificate dated 07.12.2010:-

“vii. The inspection of the institute shall be

carried out on yearly basis upto the completion

of the study of first batch of the students.

Thereafter, the inspection shall be periodical

after three years.

……

xi. The Punjab Government will have the right

to withdraw the Essentiality Certificate/No

objection Certificate if the

trust/society/applicant failed to meet any of

the conditions contained therein…..

7

”

19. Shri Rohtagi, learned senior counsel submitted that

Condition Nos. (VII) and (XI) reproduced (supra) have been introduced

by the State Government on their own; they are not in Form 2

prescribed under the Regulations. In other words, the MCI Act and the

Regulations do not confer any power on the State Government to carry

out the inspection of the medical college or to withdraw the

Essentiality Certificate, and the State has attempted to arrogate these

powers to itself. According to the learned senior counsel, these

conditions are ultra-vires the provisions of the Act and the Regulations.

20. Relying on the Condition No.(VII), the learned counsel for

the State of Punjab, Ms. Uttara Babbar submitted that the State

Government has the power to carry out inspections, since it is

responsible for the students of the college which is shut down by the

MCI or otherwise. If such inspections reveal any deficiencies, the State

7

Essentiality Certificate dated 07.12.2010.

15

is entitled to withdraw the Essentiality Certificate. This submission

cannot be accepted, the IMC Act and the Regulations under which the

State Government has purported to issue Essentiality Certificate

confers the power of inspection on any medical institution, college or

hospital where any medical education is given, on Visitors/Inspectors

appointed by MCI under Sections 17

8

and 18

9

of IMC Act.

21. The learned counsel for the State has not pointed out any

power of inspection which is conferred on a State Government/Union

Territory Administration either by the Act or by the Regulations. The

State Government is designated by the Regulations only for the

purpose of issuing an Essentiality Certificate to justify the

establishment of a medical college within its territories and that too

when approached by a person seeking to establish a medical college.

There is no direct conferral of any power of general inspection on the

State and neither can such a power be read into the Regulations nor be

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17. INSPECTION OF EXAMINATIONS (1) The Committee shall appoint such number of medical

inspectors as it may deem requisite to inspect any medical institution, college, hospital or other

institution where medical education is given, or to attend any examination held by any University or

medical institution for the propose of recommending to the Central Government recognition of

medical qualifications granted by the University or medical institution.

(2) The medical inspectors shall not interfere with the conduct of any training or examination,

but shall report to the committee on the adequacy of the standards of medical education including

staff, equipment, accommodation, training facilities prescribed for giving medical education or on the

sufficiency of every examination which they attend.

(3) ……

9

18. VISITORS AT EXAMINATIONS (1) The Council may appoint such number of visitors as it may deem

requisite to inspect any medical institution, college, hospital or other institution where medical

education is given, or to attend any examination held by any University or medical institution for the

purpose of granting recognised medical qualifications.

(2) Any person, whether he is a member of the Council or not may be appointed as a visitor

under this section but a person who is appointed as an inspector under section 17 for any inspection

or examination shall not be appointed as a visitor for the same inspection or examination.

(3) …..

(4) ..…

16

implied as necessary to carry out an expressly conferred power which

doesn’t exist. In fact, it might be difficult to even construe that the IMC

Act has delegated any powers to the State Government including that

of issuing of an Essentiality Certificate. The IMC Act merely requires an

applicant to obtain an Essentiality Certificate from the State

Government to justify the establishment of a medical college.

However, the Act prescribes the form in which such a certificate must

be obtained from the State. Significantly, the form does not confer

any power of inspection. The mere requirement of an Essentiality

Certificate by the State as a qualifying criterion cannot imply the

delegation of a power which must be express and clear. It is, therefore,

clear that such power has been arrogated by the State without any

justification and is likely to lead to a conflict with the power meant to

be exercised by the Central Government and potentially, result in

conflicting inspection reports. The condition imposed by the State

Government is therefore ultra-vires the IMC Act and the Regulations.

22. It was submitted by the learned counsel appearing for the

State of Punjab that since the Essentiality Certificate requires the State

Government to assume responsibility of the students in case the

college closes down, the State must be held to have an inherent right

to withdraw the Essentiality Certificate. This argument must be

rejected as fallacious since the consequence of withdrawing the

Essentiality Certificate can only be that the college closes down, and

17

the State must bear the burden of accommodating the students in

another institution.

23. The learned counsel for the State of Punjab submitted that

since the Essentiality Certificate certifies the availability of adequate

clinical material for the proposed Medical College, as per the

Regulations, the State has the necessary power of inspection of the

college even after its establishment to ensure that there is adequate

clinical material. This submission must also be rejected since the State

is enjoined to certify adequate clinical material only at the time of

proposal of the Medical College and not after it is established. But we

find from the submissions that the State has misinterpreted the term

‘adequate clinical material’ completely. According to the State,

“adequate clinical material” means “people” i.e. doctors, patients, staff

etc. Whereas, the term is understood in the field of Medical Education

to mean data about number of admissions, number of discharges,

number of deaths, number of surgeries, number of procedures, X-rays

and laboratories investigations. Thus, what the State is required to

certify is the data available in the region to justify the establishment of

the proposed Medical College. Obviously, for the purpose of justifying

the existence of a Medical College, the State’s claim that it must have

the right to inspect a college after it is established to see whether

there are adequate numbers of doctors, patients etc. to justify it’s

continued existence is completely hollow and unfounded.

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Condition No. XI

24. It was further contended by the learned counsel for the

State that the power to issue a certificate carries a power to withdraw

the same in a like manner as contemplated by Section 21 of The

General Clauses Act, 1987. Section 21 of the said Act reads as

follows:-

“21. Power to issue, to include power to add to,

amend, vary or rescind notifications, orders,

rules or bye-laws. – Where, by any [Central

Act] or Regulations a power to [issue

notifications] orders, rules or bye-laws is

conferred, then that power includes a power,

exercisable in the like manner and subject to

the like sanction and conditions (if any), to add

to, amend, vary or rescind any [notifications]

orders, rules or bye-laws so [issued].”

25. Section 21 has no application to a certificate since a

certificate is neither a notification, nor an order, or rule or bye- law as

contemplated by that Section. This Court has on several occasions

held that where a statutory authority is enjoined to perform a quasi

judicial function such as that of grant of registration to a political party

or issue a certificate under the Income Tax Act, Section 21 has no

application and confers no power to review such an Act because the

party has violated a provision of the constitution of law, vide Indian

National Congress (I) vs. Institute of Social Welfare

10

and Industrial

10

(2002) 5 SCC 685

19

Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs.

Commissioner of Income Tax, Gwalior

11

.

26. In the Indian National Congress (I) case (supra), this Court

held that where the law requires that an authority before arriving at a

decision must make an enquiry, such a requirement of law makes the

authority a quasi judicial authority. Also when the authority is required

to act according to rules and not dictated by policy or expediency, the

authority performs the quasi judicial function and not an administrative

function.

27. On the above test, the function of the State Government in

granting an Essentiality Certificate must be construed as a quasi

judicial function. The Government is required to, while issuing the

certificate in Form 2, to determine the justification and feasibility of

opening the proposed college in the State. Towards this purpose, it is

bound to enquire and determine the existence of several factors such

as the number of existing institutions, the number of doctors becoming

qualified annually, the number of doctors registered with the State

Medical Council and employed in Government Service, registered with

employment exchange etc. It must also determine the doctor

population in the State, the doctor - patient ratio to be achieved and

the impact of the proposed college on the availability of medical

manpower in the State. The issuance of certificate must therefore be

11

(2018) SCC Online SC 126

20

construed to be a quasi judicial act. The upshot is that such an act is

not liable to be construed as an “order” contemplated by Section 21 of

the General Clauses Act. Not being an order, and certainly not being a

notification, rule or bye-law, Section 21 has no application whatsoever.

28. Moreover, no provision of the IMC Act confers any power on

the State Government or Union Territory Administration to issue an

Essentiality Certificate. What the Regulations do, as discussed above,

is lay down that an Essentiality Certificate is the qualifying criterion for

making an application for opening a medical college. In that sense, the

provision recognizes an Essentiality Certificate issued by the State

Government. It is nobody’s case that the State Government is

conferred with the power or duty to issue such a certificate under any

State law. In any case, in view of the fact that the field is occupied by

a parliamentary law i.e. IMC Act, 1956, a State law even if already

existing would have no efficacy in the field. As a consequence, the

executive power of the State under Article 162 cannot be invoked.

29. The Essentiality Certificate, therefore, must be taken to

have been issued under the IMC Act read with Regulations and not in

exercise of any independent power of the State. Significantly, where

no power to issue certificate is shown to have been conferred by the

IMC Act or the Regulations, it would be futile to enquire if a

corresponding power to withdraw the same has been conferred on the

21

State. Even assuming that a power to issue such a certificate has been

impliedly conferred by the Regulations under the Act, certainly, no

power to withdraw the same has been so conferred. Such a power

cannot be arrogated relying on Section 21 of the General Clauses Act.

30. A similar question arose in Industrial Infrastructure

Development case (supra) where the Commissioner of Income Tax

cancelled a registration certificate because it contained an error

apparent from the record. This Court held that the certificate was

issued as a result of the quasi judicial order and could have been

withdrawn only when an express power is vested in the authority to do

so. In that case, this Court noted two earlier decisions in Ghaurul

Hasan vs. State of Rajasthan

12

and Hari Shanker Jain vs. Sonia

Gandhi

13

, where it was held that a certificate of registration of

citizenship issued under Section 5(1)(c) of the Citizenship Act, 1955

cannot be cancelled by the authority granting registration by taking

recourse to Section 21 of the General Clauses Act.

31. In Government of Andhra Pradesh vs. Y.S. Vivekanand

Reddy

14

, the High Court was called upon to consider whether the

consent given by the State Government to the lessee to enter into sub-

leases could be withdrawn by invoking Section 21 of General Clauses

Act. A full bench of the Andhra Pradesh High Court, per S.S.M. Quadri, J

12

AIR 1967 SC 107

13

(2001) 8 SCC 233

14

AIR 1995 AP 1

22

(as His Lordship then was) held that the power to withdraw the consent

could have been exercised only as long as it was capable of being

rescinded since this exercise had to be subject to like conditions, as

contemplated by Section 21. Therefore, the Court held since the

lessee, acting on consent had executed a sub-lease and the sub-lessee

had already commenced mining operations, the consent had worked

itself out and cannot be withdrawn at that stage as the conditions

existing at the time of giving consent have changed.

32. We are of the view that the case before us presents a

similar situation where the petitioner college has acted on the

Essentiality Certificate and has established a college which has

functioned; may be deficiently. The conditions having changed since

the grant of the Essentiality Certificate, Section 21 is not available in

the absence of any power to withdraw conferred by the IMC Act.

33. In view of the above, we find that Condition No.(XI) is ultra-

vires the provisions of the IMC Act and Regulations. In the result, the

order dated 01.11.2017, issued by Respondent No. 1- State of Punjab,

withdrawing the Essentiality Certificate is quashed and set aside and

Condition Nos.(VII) and (XI) are declared illegal.

34. Accordingly, the Writ Petition is allowed.

35. We may not be understood to be laying down that under

no circumstances can an Essentiality Certificate be withdrawn. The

23

State Government would be entitled to withdraw such certificate where

it is obtained by playing fraud on it or any circumstances where the

very substratum on which the Essentiality Certificate was granted

disappears or any other reason of like nature.

….………………………………..J.

[S.A. BOBDE]

….………………………………..J.

[L. NAGESWARA RAO]

NEW DELHI

JULY 03, 2018

24