2017 (9) TMI 1826 - SC - Indian Laws

Debarment of the petitioner college from admitting students in the MBBS course for the academic years 2017-18 and 2018-19 - opportunity of being heard not provided to the college - HELD THAT - The approach of the Respondents is markedly incompatible with the essence and import of the proviso to Section 10A(4) mandating against disapproval by the Central Government of any scheme for establishment of a college except after giving the person or the college concerned a reasonable opportunity of being heard. Reasonable opportunity of hearing which is synonymous to 'fair hearing', it is not longer res integra, is an important ingredient of audi alteram partem Rule and embraces almost every facet of fair procedure. The Rule of 'fair hearing' requires that the affected party should be given an opportunity to meet the case against him effectively and the right to fair hearing takes within its fold a just decision supplemented by reasons and rationale. Reasonable opportunity of hearing or right to 'fair hearing' casts a steadfast and sacrosanct obligation on the adjudicator to ensure fairness in procedure and action, so much so that any remiss or dereliction in connection therewith would be at the pain of invalidation of the decision eventually taken. Every executive authority empowered to take an administrative action having the potential of visiting any person with civil consequences must take care to ensure that justice is not only done but also manifestly appears to have been done. The manner in which the Respondents, in the individual facts of the instant case, have approached the issue, leads to the inevitable conclusion that the materials on record do not support determinatively the allegation of deficiency in course of the process undertaken, as alleged. We are thus of the considered opinion that in view of the persistent defaults and shortcomings in the decision making process of the Respondents, the Petitioner college/institution ought not to be penalised. Having regard to the progression of events, the assertions made by the Petitioners in the representations countering the deficiencies alleged, the observations/views expressed by the Oversight Committee in its communication dated 14.05.2017 and the DGHS in the hearing held on 17.01.2017 negate the findings with regard to the deficiencies as recorded by the assessors of the MCI in the inspections held - the conditional LOP granted to the Petitioner college/institution on 12.09.2016 for the academic year 2016-17 deserves to be confirmed. The impugned order dated 10.8.2017 stands modified to this extent only - The direction for a writ, order or direction to the Respondents to permit the Petitioner college/institution to admit students for the academic year 2017-18, in the facts of the case, is declined.

Summary

Issues Involved:

1. Debarment of the Petitioner college from admitting students for the academic years 2017-18 and 2018-19.
2. Authorization to the Medical Council of India (MCI) to encash the bank guarantee of ?2 crores.
3. Compliance with the procedural requirements under Section 10A(4) of the Indian Medical Council Act, 1956.
4. Evaluation of deficiencies in faculty and infrastructure as per MCI inspections.
5. Legality of successive inspections by MCI.
6. Consideration of recommendations by the Oversight Committee and DGHS.
7. Fair hearing and opportunity to the Petitioner college.

Detailed Analysis:

1. Debarment of the Petitioner College:

The primary issue was the debarment of the Petitioner college from admitting students for the academic years 2017-18 and 2018-19. The Central Government had based its decision on the findings of the MCI inspections, which reported significant deficiencies in faculty and residents. The Supreme Court found that the Central Government's decision lacked a thorough and fair re-evaluation of all materials on record, including the recommendations of the Oversight Committee and the DGHS. The Court emphasized that the Central Government must provide a reasonable opportunity of hearing, which was not adequately done in this case.

2. Authorization to MCI to Encash Bank Guarantee:

The Central Government had also authorized the MCI to encash the bank guarantee of ?2 crores submitted by the Petitioner college. The Supreme Court noted that this decision was taken without a comprehensive re-evaluation of the materials and recommendations. The Court held that the decision to encash the bank guarantee was premature and directed that it should not be encashed until a fresh inspection and evaluation were conducted.

3. Compliance with Procedural Requirements under Section 10A(4):

The Court highlighted the importance of compliance with Section 10A(4) of the Indian Medical Council Act, 1956, which mandates a reasonable opportunity of hearing before disapproving any scheme for the establishment of a medical college. The Court found that the Central Government's decision did not meet this requirement, as it failed to consider all relevant materials and recommendations comprehensively and fairly.

4. Evaluation of Deficiencies in Faculty and Infrastructure:

The MCI inspections had reported deficiencies in faculty and residents, each in excess of 30%. The Petitioner college had contested these findings with detailed representations. The Supreme Court noted that the Central Government did not adequately consider these representations and the supporting materials provided by the Petitioner college. The Court emphasized the need for a thorough and fair evaluation of the alleged deficiencies.

5. Legality of Successive Inspections by MCI:

The Petitioner college had objected to the second inspection conducted by MCI on 09.12.2016, arguing that it was too close to the previous inspection on 18-19.11.2016 and lacked bona fide. The Supreme Court noted that the Oversight Committee had observed that successive inspections in quick succession were not authorized. The Court found that the second inspection was an act of selective victimization and lacked justification.

6. Consideration of Recommendations by the Oversight Committee and DGHS:

The Court emphasized the importance of considering the recommendations of the Oversight Committee and the DGHS. The Oversight Committee had recommended confirmation of the conditional letter of permission (LOP) granted to the Petitioner college, while the DGHS had also made observations negating the deficiencies recorded by the MCI assessors. The Central Government's decision did not adequately consider these recommendations, which was a significant procedural lapse.

7. Fair Hearing and Opportunity to the Petitioner College:

The Supreme Court reiterated the importance of a fair hearing and opportunity to the Petitioner college. The Court found that the Central Government's decision lacked fairness and did not provide the Petitioner college with a reasonable opportunity to present its case comprehensively. The Court emphasized that fairness in procedure and action is a fundamental requirement of the audi alteram partem rule.

Conclusion:

The Supreme Court set aside the Central Government's order dated 10.08.2017 and directed a fresh inspection of the Petitioner college for the academic year 2018-19. The Court ordered that the Central Government/MCI should not encash the bank guarantee and that the Petitioner college should be given a fair opportunity to address the alleged deficiencies. The Court declined the request to permit the Petitioner college to admit students for the academic year 2017-18 but directed that the matter be revisited after the fresh inspection.