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TMI Blog2016 (3) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the legislature while enacting the Reorganisation Act, 2014. The main thrust of the argument of both the learned senior counsel appearing on behalf of State of Telangana, as well as the impugned judgment and order passed by the High Court is that the successor State of Andhra Pradesh has absolutely no right over the institutions in the city of Hyderabad, by virtue of the fact that Hyderabad falls in the successor State of Telangana. Heavy reliance has also been placed on Section 75 of the Reorganisation Act, 2014, on the ground that the assets belonging to the specified institutions of the Tenth Schedule exclusively belong to the State institutions, since the Act does not provide any apportionment to them. We are wholly unable to agree with this contention advanced on behalf of the State of Telangana. If this contention is accepted, it would render Section 47 of the Act, which provides for the apportionment of assets and liabilities among the successor States, useless and nugatory. Thus, the common impugned judgment and order passed by the High Court of judicature at Hyderabad for the States of Telangana and Andhra Pradesh in Writ Petition, upholding the freezing of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her Education. 3. The relevant facts which are required for us to appreciate the rival legal contentions are stated in brief hereunder: The Andhra Pradesh State Council of Higher Education (hereinafter referred to as the "APSC") was constituted under Section 3 of the Andhra Pradesh State Council of Higher Education Act, 1988, to advise the State government in matters relating to Higher Education in the State and to oversee its development with Perspective Planning. The APSC continued carrying out the various functions assigned to it under the Act of 1988, including conducting common entrance examinations for various courses in the State of Andhra Pradesh. 4. On 02.06.2014, the Andhra Pradesh Reorganisation Act, 2014 (hereinafter referred to as the "Reorganisation Act, 2014") came into force, which bifurcated the existing State of Andhra Pradesh into two separate States, namely, the State of Andhra Pradesh and the State of Telangana. The statement of objects and reasons of the Act provides, inter alia, as under: "a) it provides for the territories of the two successor states of Andhra Pradesh and Telangana, and necessary provisions relating to representation in Parliament and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of any law (as defined in section 2(f) of the Act)made before 02.06.2014, whether by way of repeal or amendment as may be necessary or expedient, for the purpose of facilitating the application of such law in the State of Telangana before expiration of two years from 02.06.2014; and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other Competent Authority; And whereas, it has become necessary to adapt the Andhra Pradesh State Council of Higher Education Act, 1988 and the Rules and Regulations made thereunder for the purpose of facilitating their application in relation to the State of Telangana……" Thus, the Telangana State Council of Higher Education (hereinafter referred to as the "TSC") came into existence to discharge the same functions for the State of Telangana as the APSC for the State of Andhra Pradesh. 6. Pursuant to the creation of the TSC, the Secretary to the Government, Higher Education (UE) Department, Telangana, wrote Letter No.263/UE/2014-2 dated 05.09.2014, to the Principal Secretary to Government, Higher Education (UE) Department, An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working and condemned) S.No. Category Total Vehicles 58% to APSCHE 42% to TSCHE 1 Serviceable 4 2 2 2 Condemned 5 3 2 Total 9 5 4 Number of Equipments S.No. Category Total Equipments 58% to APSCHE 42% to TSCHE 1 Computers 37 21 16 2 Printers 18 10 8 3 Others 27 16 11 Total 82 47 35 Number of Movable Assets S.No. Total Assets 58% to APSCHE 42% to TSCHE 1 676 392 284 7. On 30.10.2014, the Government of Telangana issued a Circular Memo to the senior management of the banks in which the bank accounts of the government were operating to ensure that the provisions of the Reorganization Act, 2014, especially with respect to the institutions listed in Schedules VII, IX and X were not violated. On 05.01.2015, TSC sent a communication to the Manager, Andhra Bank, Saifabad, Hyderabad Branch, stating that TSC is the successor organization to APSC as per the Reorganisation Act, 2014 and requested the Bank to freeze the operation of Account No. 0533100110978 and all other accounts operating in the name of APSC. The Bank sent a letter dated 07.01.2015 to APSC, informing them about the letter from TSC. In its reply dated 08.01.2015, APSC denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution specified at Item No. 27 of tenth schedule is without jurisdiction and would be ultra vires. 9. The APSC, at the instance of the State of Andhra Pradesh, is now asserting its power and authority and physically occupying the premises without any authority of law. The APSC is not entitled to operate the bank accounts or withdraw any amount. Notwithstanding the aforesaid legal status, even after 2nd June 2014, the APSC has withdrawn considerable amounts from the State Bank of Hyderabad, Shantinagar Branch, in respect of the above two saving bank accounts. As such, the petitioner No.2 wrote a letter to the State Bank of Hyderabad and Andhra Bank for freezing of the said accounts. Accordingly, a decision was taken by the Bank and rightly so." (emphasis laid by this Court) On the question of ownership and control of the erstwhile APSC, the High Court held as under: "38. On a fair reading of Section 5 of the Act, 2014, as correctly contended by the learned A.G. for the state of Telangana, the State of Andhra Pradesh is a mere user of the city of Hyderabad for a maximum period of ten years. It has no proprietary right, title and interest in this city and none of the assets w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash balances in all treasuries of the existing State of Andhra Pradesh and the credit balances of the existing State of Andhra Pradesh with the Reserve Bank of India, the State Bank of India or any other bank immediately before the appointed day shall be divided between the States of Andhra Pradesh and Telangana on the basis of population ratio……" Population ratio has been defined in Section 2(h) as under: "2. (h) "population ratio", in relation to the States of Andhra Pradesh and Telangana, means the ratio of 58.32 : 41.68 as per 2011 Census" The learned senior counsel contends that the assets of APSC need to be divided in the population ratio between the successor States of Andhra Pradesh and Telangana in a fair and equitable manner. 11. Mr. Basava Prabhu S. Patil, the learned senior counsel appearing on behalf of the State of Andhra Pradesh contends that the impugned judgment and order passed by the High Court is erroneous in law. The learned senior counsel contends that the funds collected by APSC post the creation of Telangana, i.e., post 02.06.2014 cannot be appropriated by the State of Telangana simply by way of the order of the High Court, on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union v. Union of India [(2000) 7 SCC 339], wherein this Court, while interpreting the provisions of the Punjab Reorganisation Act held as under: "11. Part VI of the Act as stated above deals with apportionment of assets and liabilities of the erstwhile State of Punjab. This Part is not applicable for apportionment of assets and liabilities of the existing Punjab State Electricity Board, as there is specific provision for this purpose viz., Section 67 and moreover the Board has a separate legal entity." 15. Further, the learned Advocate General contends that the apportionment of assets and liabilities as per the Reorganisation Act, 2014 has been made on the basis of territory and location. The Tenth Schedule state institutions have to be maintained as per the location of the respective States. Thus, purely on the basis of the principle of territoriality also, the funds and assets of the erstwhile APSC now belong to the TSC. 16. Mr. Ranjit Kumar, the learned Solicitor General appearing on behalf of Union of India, submits that APSC is a statutory body constituted under the Andhra Pradesh State Council for Higher Education Act, 1988. Since the Council has to discharge statutory r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort point which arises for our consideration is whether the High Court was right in upholding the action of the Banks in freezing the accounts of APSC. 19. We are unable to agree with the contentions advanced by the learned senior counsel appearing for the State of Telangana. 20. The Constitution of India envisages a federal feature, which has been held to be a part of the basic structure of the Constitution of India, as has been held by the seven Judge Bench of this Court in the case of S.R. Bommai & Ors. v. Union of India [1994) 3 SCC 1], wherein Justice K. Ramaswamy in his concurring opinion elaborated as under: "247. Federalism envisaged in the Constitution of India is a basic feature in which the Union of India is permanent within the territorial limits set in Article 1 of the Constitution and is indestructible. The State is the creature of the Constitution and the law made by Articles 2 to 4 with no territorial integrity, but a permanent entity with its boundaries alterable by a law made by Parliament. Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se are decisive to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia [(1971) 1 SCC 85] has held as under: "The Court will interpret a statute as far as possible, agreeably to justice and reason and that in case of two or more interpretations, one which is more reasonable and just will be adopted, for there is always a presumption against the law maker intending injustice and unreason. The Court will avoid imputing to the Legislature an intention to enact a provision which flouts notions of justice and norms of fairplay, unless a contrary intention is manifest from words plain and unambiguous. A provision in a statute will not be construed to defeat its manifest purpose and general values which animate its structure. In an avowedly democratic polity, statutory provisions ensuring the security of fundamental human rights including the right to property will, unless the contrary mandate be precise and unqualified, be construed liberally so as to uphold the right. These rules apply to the interpretation of Constitutional and statutory provisions alike." (emphasis laid by this Court) 23. In the case of Prakash Kumar@ Prakash Bhutto v. State of Gujarat [(2005) 2 SCC 409], a constitution bench of this Court held as under: "By now it is well sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na, as well as the impugned judgment and order passed by the High Court is that the successor State of Andhra Pradesh has absolutely no right over the institutions in the city of Hyderabad, by virtue of the fact that Hyderabad falls in the successor State of Telangana. Heavy reliance has also been placed on Section 75 of the Reorganisation Act, 2014, on the ground that the assets belonging to the specified institutions of the Tenth Schedule exclusively belong to the State institutions, since the Act does not provide any apportionment to them. We are wholly unable to agree with this contention advanced on behalf of the State of Telangana. If this contention is accepted, it would render Section 47 of the Act, which provides for the apportionment of assets and liabilities among the successor States, useless and nugatory. 26. The action of the Banks of freezing the bank accounts of APSC is wholly untenable in law, which must be set aside. By no stretch of imagination can it be assumed that the complete takeover of assets of the erstwhile APSC by TSC, on the ground that the State institution happens to be in Hyderabad, which is now a part of Telangana, was what the legislature had in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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