1988 (9) TMI 349 - SC - Indian Laws

Summary

Issues Involved:
1. Accrual of rights to respondents pursuant to the sanction granted under Ex. P-4.
2. Authority of the Government to cancel the sanction under Ex. P-4.
3. Validity of the cancellation order under Ex. P-7 in terms of natural justice, application of mind, and influence of irrelevant grounds.

Summary:

1. Accrual of Rights to Respondents:
The Supreme Court examined whether the respondents acquired any rights pursuant to the sanction granted under Ex. P-4 for opening new schools or upgrading existing schools. The Court held that the sanction under Rule 2A(5) did confer on the respondents a right to seek the continuance of the statutory procedural stream in order to have their applications considered under Rule 9 and dealt with under Rule 11. The Court noted that the respondents could not be non-suited merely because they had opened new schools prematurely, as Section 3(5) of the Act does not totally ban the establishment of new schools without following the procedure but only disentitles them to Government recognition.

2. Authority of the Government to Cancel the Sanction:
The Court addressed whether it was open to the Government under the Act and Rules or under Section 20 of the Kerala General Clauses Act to cancel the sanction given to 91 approved applicants for opening new schools or upgrading existing schools. The Court concluded that the Government did not have the authority to cancel the approval granted under Rule 2A(5) based on a revised policy. The Rules do not provide for the Government to review or revoke a sanction order once it has been granted under Rule 2A(5), and the Government's power of revision under Rule 12 is confined to reconsidering the case of any applicant whose name did not find a place in the final list of approved applications.

3. Validity of the Cancellation Order:
The Court examined whether the cancellation order under Ex. P-7 was vitiated by non-observance of the principles of natural justice, non-application of mind, and influence of irrelevant grounds. The Court found that the impugned order under Ex. P-7 was indeed vitiated by these factors. The order was passed without giving the respondents any opportunity to be heard, and the reasons provided for the cancellation were based on extraneous factors that were not new developments but existed even when the Government took steps under Rule 2 to identify inadequately served areas.

Conclusion:
The Supreme Court dismissed the appeals, holding that the respondents are entitled, on the basis of the earlier order passed in their favor under Ex. P-4, to seek continuance of the statutory procedure to have their applications considered under Rule 9 and for appropriate orders being passed under Rule 11 in accordance with law. The Court made it clear that it was not making any pronouncement about the suitability or otherwise of the respondents to be granted permission under Rule 11.