Civil Appeal No 3556 of 1987
From the Judgment and order dated 291987 of the Punjab and Haryana High Court in CWP No 5781 of 1987
LM Singhvi HM Singh AM Singhvi RS Yadav and N Waziri for the Appellants
Kuldeep Singh Additional Solicitor General CM Nayar B R Agarwala and Ms Sushma Manchanda for the Respondents
The Judgment of the Court was delivered by RANGANATH MISRA J
This appeal is by special leave and is directed against the decision of the Punjab and Haryana High Court dismissing a writ petition of the appellants in limine
On 8th of May 1987 the Government of Punjab Respondent No 1 notified in the State Gazette the criteria for holding of Competitive Entrance Examination for selection of candidates for admission to MBBSBDS course in the three medical colleges and two dental colleges within the State
The Notification inter alia provided 1 Admission shall be given on the basis of the relative merit of candidates determined on the result of the Competitive Entrance Examination
In the case of reserved seats relative merit of the candidate shall be determined within each category of reservation except that in the category of SportsmenSportswomen admission shall be made out of eligible candidates on the basis of their gradation done by the Department of sports Punjab and in the category of childrenwidow of the defence personnel candidates of sub category vii b given in para IIId infra shall be admitted only if eligible candidates of sub category viia are not available
A candidate however must secure minimum of 50 per cent marks in the competitive Entrance Examination to qualify for the admission
However candidates belonging to the Scheduled CastesScheduled Tribes SportsmenSports 247 women childrengrand children of political sufferers and handicapped categories shall be eligible only if they secure minimum 35 per cent marks in the Entrance Examination
 100 seats out of total available seats in the MBBSBDS Courses were reserved for Scheduled Castes and Scheduled Tribes candidates
There is no dispute that on the basis of the selection test only 32 qualified candidates of the reserved category were available
The prospectus published for the Competitive Examination by the Punjabi University Patiala in a Note below Para IIIa ii under the heading of Distribution of Seats provided Seats left vacant in any reserved category owing to non availability of eligible candidates may be filled from the eligible candidates belonging to General Category On 2871987 the following order was made The President of India is pleased to lower down the percentage of pass marks in PMT for Scheduled Castes and Scheduled Tribes candidates for admission to MBBSBDS Courses in the State MedicalDental Colleges from 35 per cent to 25 per cent during the session 1987 only
Para III ai of the Punjab Government Notification No 2373 5 HB Ill 8710493 dated 85
1987 stands modified to this extent
 Challenge before the High Court as also before this Court is against this Notification and four contentions have been advanced  1 The Government order and the University Prospectus having provided that 35 per cent would be the minimum qualifying marks for the reserved categories named therein it was not open to the respondents to make the impugned Notification
The Note referred to above which provided that upon candidates in the reserved category not being found the remaining seats would revert to the general pool lowering of the qualifying percentage of marks prejudices the candidates in the general category who would have got the benefit of the 548 Note is an arbitrary act and cannot be sustained
2 The prospectus contained an offer and after the candidates have appeared in the examination on the basis of such offer and representation a new basis cannot be brought in
3 The Regulation made by the Indian Medical Council prescribes a minimum of 40 per cent marks and the regulation is binding on the University as also the Government and a qualification lower than what has been prescribed by the Medical Council in exercise of its Regulation Making Power is contrary to law and against the spirit of the scheme
4 Doctors have got to be adequately qualified and professional standards must be high as they deal with human lives
Lowering standard on the plea of reservation of a sizeable portion of the seats for the backward classes is against the interest n of the nation and detrimental to profession standards
We shall first deal with the prescription of the Medical Council by Regulation
The Secretary of the Medical Council of India has filed an affidavit
Regulation II prescribes In respect of candidates belonging to Scheduled CastesScheduled Tribes the minimum marks required shall be 40 per cent in lieu of 50 per cent for general candidates
 In his affidavit the Secretary has further averred that The Medical Council of India has fixed these minimum marks for admission to Medical Courses on the recommendation of the Expert Body who had taken all facts and circumstances into consideration
The main factor before the Council in framing the Regulations was that marks below 40 per cent will adversely affect the studies and such candidates would not have full benefit of medical education along with the candidates with higher capability
In view of the fact that various Governments were resorting to methods to reduce the minimum marks in case of Scheduled Castes and Scheduled Tribes 549 students again discussions took place in the Executive Committee of the Medical Council of India on 531982 and this issue was fully considered and a recommendation was recorded on this aspect
 The Regulation referred to above is said to have been made in exercise of powers under Section 33J of the 
Dr Singhvi for the appellants has very much relied upon the stand taken by the Indian Medical Council in support of the claim of the appellants that the action of the respondents in reducing the qualifying marks to 25 per cent as against the minimum of 40 per cent is wholly wrong and cannot be sustained
We have taken up the last contention first because if the Regulation is found to be binding then certainly both the original as also the subsequent Notification would be bad
As against the basic requirement of 40 per cent for scheduled castes and scheduled tribes candidates the original Notification had put the requirement of 35 per cent five per cent below the minimum and the subsequent Notification reduced it by 10 per cent more
The question as to whether the Regulation of the Council is binding came for determination before a three Judge Bench of this Court
In the case of State of MP  Anr
vs Kumari Nivedita Jain  Ors   the Court found that Regulation II of the Council is merely in the nature of a recommendation
Regulation II begins with the words selection of students in medical college should be based solely on merit 
Language used in Regulation II is deliberate and is intended to indicate the intention of the Council that it is only in the nature of a recommendation 
The Court further went into the matter and observed that The authority of the Council extends to the sphere of maintaining proper medical standards in Medical Colleges or institutions necessary for obtaining recognised medical qualifications
By virtue of this authority it may be open to the Council to lay down the minimum educational qualifications required of a student who may seek 250 admission into a Medical College
In other words the eligibility of a candidate who may sit to get admitted into a medical college for obtaining recognised medical qualifications may be prescribed by the Council
All the candidates who are eligible for admission into medical colleges or institutions for getting themselves qualified as medical practitioners are entitled to seek admission into a medical college of institution
As to how the selection has to be made out of the eligible candidates for admission into the medical college is a matter which has necessarily to depend on circumstances and conditions prevailing in particular State
Though the question of eligibility for admission into the medical curriculum may come within the power and jurisdiction of the Council the question of selection of candidates out of the candidates eligible to the medical course does not appear to come within the purview of the Council
 The view of a coordinate Bench is binding upon us and we find it difficult to differ from what has been held in the aforesaid judgment
It is true that there is an observation of a two Judge Bench in State of Kerala vs Kumari T P Roshana  Anr  that the Regulations of Medical Council are binding but that observation k made by Iyer J was in passing while in Nivedita s case supra the matter directly fell for consideration
Dr Singhvi also relied upon the observations of Fazal Ali J in a three Judge Bench decision in Krishna Priya Ganguly etc
vs University of Lucknow  Ors etc
 1984 I SCR 302 but here again it was an obiter at any rate reference to Nivedita Jain s case was not made
It is interesting to note that in Nivedita Jain s case supra in a situation almost similar as here the State Government fully deleted the prescription of the percentage of marks in the selection examination
That certainly was a worse situation than the one before us
Yet that action was upheld
In that view of the matter we do not think the appellants are entitled to make any grievance on this score
Now that this legal ground has failed the other three questions raised by learned counsel for the appellants may be examined
As 251 pointed out in Nivedita Jain s case the selection is at two stages
The Medical Council prescribed a percentage of marks as the basic minimum to be obtained in the qualifying examination conducted by the University and qualified candidates only applied for admission
Since the seats available are much less than the candidates seeking admission
a further selection becomes necessary to eliminate candidates in excess of the available seats
The candidates belonging to the Scheduled Castes and the Scheduled Tribes who applied for admission and were to be subjected to selection must have secured appropriate marks in the qualifying examination and otherwise they could not have applied
The plea which is raised before us namely that there would be an element of estoppel and the action would be branded as arbitrary would certainly have arisen in he case of Nivedita Jain supra but the Court did not find the total abolition of the percentage qualification as either arbitrary or hit by rules of estoppel
Reservation is not in dispute The State government had really intended that 100 seats should go to the candidates of Scheduled Castes and Scheduled Tribes
When in the selection test that number of candidates was not available the question of reduction of the qualifying marks arose
In the facts of the case we are not prepared to accept the contention of Dr Singhvi that Government s action is arbitrary
In fact the short affidavit filed by the respondents indicates clearly under what circumstances the variation was made
We do not think that there is any force in the plea of estoppel
It is not disputed that after the percentage was reduced in the qualifying standard all the 68 seats have been filled up by Scheduled Castes and Scheduled Tribes candidates and teaching has begun from September
It is a fact that these 68 candidates are not before us as they have not been impleaded
It would not be open to us to cancel their admission behind their back nor would it be possible to require the State Government to create additional seats to accommodate the appellants therein
Before we part with the appeal we think it appropriate to indicate that the standard of medical profession should not be compromised in national interest
There has been perceptible fall in national standards and general efficiency of the professional men
While it is not necessary for us to say anything against reservation we approve of the concern shown by the Indian Medical Council that high standards of efficiency should be maintained and that can only be 252 possible if the State and the Council cooperates to maintain a high standard
This aspect should be kept in view while guidelines are prescribed for selection of students for the medical courses
The impugned Notification of the State Government shows that the reduction is confined for this year
We hope there would not be necessity for a repetition of this action
The appeal fails and is dismissed
We make no order as to costs
SL Appeal dissmissed


Summary:
An agreement for distribution of the film Savere Wali Gadi was entered into on 19th March 1983 between the petitioner as the distributor and the respondent as the producer
The agreement contained an arbitration clause
A sum of Rs340 lakhs paid to the respondent and acknowledged by him earlier to the agreement was deemed to have been adjusted against the first instalment
In or about 1984 about Rs 3 lakhs were further advanced to the respondent
As per the agreement the respondent was to hand over the prints of the film by 10th August 1983 but it was not done
On 11th March 1985 a further agreement was entered into between the parties whereby the respondent agreed to pay a total sum of Rs650 lakhs to the petitioner for giving up his distribution rights in the first agreement
The first agreement was accordingly irrevocably cancelled and superseded by the subsequent agreement
The respondent took up the matter with Motion Pictures Association to de register the film in the name of the petitioner
The Motion Picture Association stated that de registration would be allowed only when the respondent pays Rs650 lakhs to the petitioner or deposits the amount with the Association
The petitioner s claim before the Association was that the respondent committed breach of the subsequent agreement
A civil suit was filed in the High Court for recovery of Rs650 lakhs with interest by the petitioner against the respondent
Later an application under section 20 of the was made
The Single Judge held that the first agreement had revived and directed the 528 filing of the agreement
On appeal the Division Bench confirmed the order
This special leave petition is against the order of the Division Bench of the High Court
Dismissing the special leave petition this Court  HELD 11 Whether in any particular case there was a complete novation of a contract in the sense that the new contract replaced or substituted the old contract could depend upon the facts and circumstances of the case
531B C 12 When the agreement of 1985 was entered into it was the intention of the parties that the earlier agreement would be superseded and a new arrangement was sought to be brought about whereby the rights of the petitioner under the earlier agreement were to be yielded for a sum of Rs650 lakhs
This amount of Rs650 lakhs was never paid by the respondent and it was the case of the petitioner that the earlier agreement stood cancelled
The petitioner who claimed rights under the earlier agreement sought the continuation of his registration of distributorship
This registration could continue only by virtue of the earlier agreement which had revived
530G HG 531B Babulal Marwari and others vs Tulsi Singh and others AIR 1940 Patna 121 refered to
21 Sub section 1 of Section 20 of the gives an option to the parties by the use of the expression may  but the other sub sections if the conditions are fulfilled make it obligatory for the Court to direct filing of an arbitration agreement
532G 22 Indubitably there was an arbitration clause in the agreement
The parties have applied for reference
The Division Bench has reiterated that the original agreement dated 19th March 1983 which ceased to have effect and came to an end by the agreement dated 11th March 1985 stood revived by virtue of the two letters dated 15th July 1985 and 11th September 1985 by the appellant
It is clear that the petitioner in the above letters fell back on the original contract of 19th March 1983
This was accepted by the respondent
Hence there was at all relevant times a valid and binding contract between the parties
That contract contained an arbitration clause
There was nothing to disentitle the parties to have their rights adjudicated in terms of an arbitration clause
The civil suit filed does not by itself preclude filing of proper arbitration agreement between the parties
There being no impediment 529 in filing the arbitration agreement which was subsisting at the relevant time when the High Court directed that the arbitration agreement be filed that discretion should not be interfered with
532G H 531F G