SCA/5410/2008 1/31 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5410 of 2008 With SPECIAL CIVIL APPLICATION No. 5520 of 2008 To SPECIAL CIVIL APPLICATION No. 5647 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= MODI NILAY BHADRESHBHAI & 128 - Petitioner(s) Versus SMT N H L MUNICIPAL MEDICAL COLLEGE & 4 - Respondent(s) ========================================================= Appearance : MR HARSHADRAY A DAVE for Petitioner(s) : 1 - 129.MR HARDIK A DAVE for Petitioner(s) : 1 - 34,36 - 129. DS AFF.NOT FILED (N) for Respondent(s) : 1, 4, M/S TRIVEDI & GUPTA for Respondent(s) : 2, MR SUNIT S SHAH for Respondent(s) : 3, GOVERNMENT PLEADER for Respondent(s) : 4, MRS VD NANAVATI for Respondent(s) : 5, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 15/05/2008 SCA/5410/2008 2/31 JUDGMENT ORAL JUDGMENT 1. The short facts of the case appears to be that the petitioners are the students of medical faculty studying in Smt. N.H.L.Municipal Medical College. The fee structure was approved by the Committee for the period from 2003-2004, 2004- 2005, 2005-2006. Thereafter, for the period of 2006-2007 to 2008-2009, the proposal was submitted by the college for approval of the fee structure of Rs.2,50,000/- as against the fee structure of the earlier period upto 2005-2006 of Rs.1,40,000/-. 2. The Committee considered the material placed on record and attributed the expenses of the hospital in the fee structure and approved the fee structure of Rs.2,15,000/- for the year 2006-2007 and for the other respective period. However, on the NRI seat, it was observed that the college shall be free to fix the fees for NRI students upto 15% of the intake capacity subject to the approval of the Fee Committee and the additional fees from NRI students will be utilised for the purpose of scholarship only. Thereafter, the respondent No.1 insisted for recovery of the difference of the amount from the students based on the fee structure approved and it is under these circumstances, the petitioners have approached to this Court by preferring the present petition. SCA/5410/2008 3/31 JUDGMENT 3. Heard Mr. Dave for the petitioners, Mr.Mehta for respondents Nos. 1 & 2, Mr.Sunit Shah, learned Govt. Pleader with Ms.Patel and Mr.Shukla, learned Asst. Govt. Pleaders for State and Mrs. Nanavati, for respondent No.5 for final disposal. 4. It may be recorded that more or less, similar challenge came to be considered by this Court in Special Civil Application No. 25954 of 2007, which was preferred by the Parents Association for the Medical/Dental students studying in Pramukhswami Medical College affiliated with Sardar Patel University. The aforesaid Special Civil Application and allied matter is already decided by this Court vide Judgement dated 19- 24.03.2008. When this Court considered the present petition, on 01.04.2008, the following order was passed: “1. In the decision of this Court in Special Civil Application No.25954/07 and allied matters, decided on 19-24.03.2008 in the case of Parents Association for the Medical/dental students & Ors. Vs. Justice R J Shah Fee Committee (Medical) & Ors. in case of Pramukhswami Medical College, the view taken by this Court is that the Fees Committee ought not to have attributed 50% cost of the hospital in the fees to be borne by the student concerned on the ground of the time consumed by the students in the hospital and as ordered by this Court in the said decision, the decision of the Committee is set aside and the matter is remanded. SCA/5410/2008 4/31 JUDGMENT 2. In the said decision, by interim arrangement, the students are ordered to pay Rs.1.80 Lakhs, as against the fees fixed by the Fees Committee of Rs. 2.20 Lakhs of that college. 3. In the present case, fee structure sanctioned is Rs.2.15 Lakhs. Therefore, Rs.5,000/- less than the fees sanctioned in the case of Pramukhswami Medical College. 4. Hence, Notice returnable on 16th April, 2008. By ad interim order, it is directed that the respondent shall not take coercive steps and shall release the mark-sheets of the students concerned on the condition that the petitioner/student concerned pays the amount of fees at the rate of Rs.1.75 Lakhs per year by way of an interim arrangement as against the fee sanctioned by the fees committee of Rs.2.15 Lakhs, but subject to further orders in the present petition. 5. It is observed and directed that as the concerned students shall be required to pay the fees at the fee structure of Rs.1.75 Lakhs in place of Rs.2.15 Lakhs as fixed by the fees committee subject to further orders which may be passed by this Court in the preset petition, the mode and manner of payment of such difference as permitted by the college to such students shall proportionately get reduced.” 5. In response to the notice issued by this Court to respondent No.1 college, which is under the control of respondent No.2 Corporation, Mr.Mehta for Mr.Trivedi & Gupta has appeared and it was submitted that the affidavit-in-reply could not be filed on behalf of the college and it was also submitted that the Judgement of this Court dated 19-24.03.2008 in Special Civil Application SCA/5410/2008 5/31 JUDGMENT No. 25954/07 is carried before the Letters Patent Bench and the matter has been kept in vacation. Therefore, it was submitted that this Court may differ final hearing of the matter until the view is before the Court of the Letters Patent Bench. 6. It deserves to be recorded that it is an admitted position that the Letters Patent Appeal Bench has not stayed against the operation of the Judgement and the appeal is pending as it is. Further, the present proceedings are before the Single Judge of this Court and the issue as such is covered by the decision of this Court. If the matter is concluded before the Single Judge of this Court, no useful purpose would be served in delaying the final disposal of the matter, more particularly when the Committee who is to reconsider the matter is yet to finalise the fee structure as may be ordered by this Court hereinafter. Further, as per the various aspects clarified in the above referred decision of this Court, the Committee will have to give a fresh look and will have to examine the material which is produced on behalf of the respondent No.1 College before it. All such materials which came to be considered by this Court in the above referred decision forming part of the record of the Committee are already before the Committee and therefore, I find that when the issues are covered by the decision of this Court SCA/5410/2008 6/31 JUDGMENT on the basis of the material already available before the Committee, the matters can be finally ended on the same line as was so ordered by this Court in the above referred decision. 7. The contentions as are raised in the present petition and which arise for the consideration of this Court are already covered by the above referred decision of this Court in the case of Parents Association for the Medical/Dental Students (supra). It may be recorded that this Court in the above referred decision, inter alia observed at paras 8 to 10 on the aspects of the role of the committee in exercise of the power for approval of the fee structure. It was further observed by this Court in the above referred decision, at paras 12 to 15 as under: “12. It may be recorded that the scope of judicial scrutiny for examining the legality and validity of the decision of the quasi judicial authority or a quasi judicial body is by now well settled. 13. The error of law on the face of the record is one of the aspects on which the judicial scrutiny may be undertaken. Further if the lower authority or the Tribunal has acted on evidence, which is legally inadmissible or has refused to consider the admissible evidence or if the finding is not supported by any evidence at all, the same can be considered in exercise of writ power by this Court. Not only that, but if a ground or a material germane to the exercise of the power is not considered, it may result into a jurisdictional error. In the same manner, if a ground or a material SCA/5410/2008 7/31 JUDGMENT which was not germane to the exercise of power, if considered and the decision or the finding is based on the same, it would also result into jurisdictional error, which can be considered by writ Court under Article 226 of the Constitution of India while undertaking the judicial scrutiny. If the finding is recorded by the lower authority without their being any evidence on record, then such finding can be said as perverse and the same would also be subject to the scope of judicial review by a writ Court against the decision of a quasi judicial authority. 14. It would be worthwhile to extract certain observations made by the Apex Court in the case of Rameshwar Prasad & Ors. V. Union of India and Anr. reported at JT 2006(1) SC 457, wherein the Apex Court had an occasion to examine the action or dissolution of the Legislative Assembly of State of Bihar. In the said decision, the Apex Court (speaking through Mr. Justice Arijit Pasayat) observed at para 239 to 242 as under: “239. A person entrusted with discretion must, so to speak, direct himself properly in law. He must call his attention to matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules he may truly be said to be acting unreasonably. Similarly, there may be something so absurd that no sensible person person could ever dream that it may law within the powers of the authority. 240. It is an unwritten rule of the law, constitutional and administrative, that whenever a decision making function is entrusted to the subjective SCA/5410/2008 8/31 JUDGMENT satisfaction of a statutory functionary, there is an implicit obligation to the apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote. (See, Smt, Shalini Soni and Ors. Vs. Union of India & Ors.)“ 241. The Wednesbury principle is often misunderstood to mean that any administrative decision which is regarded by the court to be unreasonable must be struck down. The correct understanding of the Wednesbury principle is that a decision will be said to be unreasonable in the Wednesbury sense if(i) it is based on wholly irrelevant material or wholly irrelevant consideration, (ii) it has ignored a very relevant material which it should have taken into consideration, or(iii) it is so absurd that no sensible person could ever have reached to it. 242. As observed by Lord Diplock in CCSU's case (supra) a decision will be said to suffer from Wednesbury unreasonableness if it is “so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it” 15. On the factual aspects, following appears to be an undisputed position. 1) The requisite informations at the time when the proposal was submitted in Column No.2 for the building of college/hospital, the total cost as on 31.03.2005 of the building was shown in Annexure-II as under: SCA/5410/2008 9/31 JUDGMENT --------------------------------------------------------------- Sr. Particulars Area Gross Depreciation Net Value No. in Sq.Mtr. Value (Rs.In Lakhs) (Rs.In Lakhs) --------------------------------------------------------------- 1. Medical 13065.98 139.99 86.96 53.03 College 2. Academic Block 4538.20 100.88 14.60 86.28 --------------------------------------------------------------- TOTAL 240.87 101.56 139.31 --------------------------------------------------------------- In Column No.II, the age of the building is shown as 18 years. Therefore, the net value of the building as shown by the institution is of 139.31 Lakhs and the age of the building is 18 years. 2) The building is not owned by Pramukhswami Medical College, respondent No.2 herein, but is owned by Charutar Arogya Mandal, which is the parent body of the college/institution. 3) In the fee structure, at Part-IV, the existing fee structure is shown as Rs. 1.45 Lakhs. Similarly, in NRI quota, blank is shown. No fee structure whatsoever is mentioned. In Part-VIII of the details of new investment for building, unaudited for the accounting year of 2005-2006 is shown as addition of only Rs.3.13 Lakhs. 4) In the compilation of S.B. Billimoria & Cos., for institutional details, it has been mentioned that all buildings are owned by Charutar Arogya Mandal and rent has not been charged for the buildings to the respective institution. 5) In the audited books of accounts, copy of which was produced by Mr.Shah, learned counsel for the fees Committee with the declaration that these details were produced before the Committee, the depreciation claimed as on 31.03.2005 in SCA/5410/2008 10/31 JUDGMENT the books of accounts of Pramukhswami Medical College, is Rs.15,07,701.54 ps. (roughly rounded figure of Rs.15 Lakhs). Similarly, in the audited books of accounts, for the year ending on 31.03.2004, of Pramukhswami Medical College, the depreciation claimed is Rs.10,43,631/- (roughly rounded figure of Rs.10 Lakhs). 6) In the report of S.B.Billimoria & Co., which is considered by the Committee as it is, under the head of Cost of Medical College shown as fee based on the audited books of account for the year 2003-2004, depreciation included is Rs.31,98,000/- (rounded figure is Rs.32 Lakhs) and for the accounting year of 2004-2005, it is shown as Rs.32,53,000/- (rounded figure is Rs.32 Lakhs). 7) In the aforesaid S.B. Billimoria's report for the year of 2005-2006, towards cost of the medical education (Pramukhswami Medical College), depreciation shown is Rs.33,11,000/- (roughly Rs.33 Lakhs) as against in the audited books of accounts, which were produced before the Committee of Prakukhswami Medical College, depreciation claimed is Rs.22,83,327/- (roughly Rs. 22 Lakhs). 8) As per the instructions issued by the Committee, the depreciation is to be claimed on straightline method @ 5% p.a. and it is not clear as to whether such depreciation is to be claimed with gross value as existed at the time when the construction was made or the cost incurred or the net value. 9) The Committee has included 50% of the cost of Shri Krishna Hospital which is attached to the Pramukhswami Medical College on the basis that the students are occupying 50% of their study time in attending hospital SCA/5410/2008 11/31 JUDGMENT and therefore, 50% of the cost of the hospital is required to be borne by the students being part of the cost of medical education. The aforesaid is with the clarification that certain cost of the hospital which is not concerned to the medical education viz., the Blood Bank, Laboratory, etc., are not included in the cost of hospital for attribution to the fees. 10)Even while considering the cost of the hospital under the head of depreciation, the figures do not tally with the audited books of accounts, which were submitted before the Committee. For example, for the accounting year of 2005-2006, the depreciation claimed by Krishna Hospital in the audited books of accounts is 90,36,972/- (rouhgly Rs.90 Lakhs). As against the same, in the report of S.B. Billimoria, though in the estimated figure, depreciation shown is of Rs.1,56,49,000/- (roughly Rs. 1.50 Crore) as against the figure of Rs.90 Lakhs shown in the books of accounts. Same is the position for the accounting year of 2004-2005 inasmuch as in the books of accounts of Krishna Hospital, depreciation claimed is Rs.1,05,80,199/- (roughly Rs.1 Crore), whereas in the figure considered in the S.B.Billimoria's report, is Rs.2,83,28,000/- (roughly Rs.2.80 Crores). In the same manner, for the accounting year of 2003-2004, in the audited books of accounts, the amount of depreciation claimed by Krishna Hospital is Rs.1,15,80,192/- (roughly Rs.1.15 Crores), whereas the amount shown in the report of S.B.Billimoria is Rs.1,32,43,000/- (roughly Rs. 1.32 Crores). 11)No comparative study is undertaken by the Committee after undertaking any exercise through the Member of the Medical Council on the aspects about the additional costs which may be required to be undertaken by a SCA/5410/2008 12/31 JUDGMENT hospital on account of the students getting education for practical and clinical in hospital, except that as per the opinion of the Member of Medical Council of India (MCI), students are spending 50% of time in hospital while studying and therefore, required to bear 50% of the cost of the hospital. 12)Earlier, the very Committee had taken the view for the academic year of 2003-2004, 2004-2005, 2005-2006 that the college/institution is not entitled to any additional amount towards the cost of maintenance of the hospital as fees but the said decision of the Committee was not accepted in the past by the respondent College. 13)The Committee either itself or through the member of the MCI, did not call for the information of MCI regarding any material for incurring of the additional cost by a hospital, if attached to the medical college.” 8. On the aspect of scope of judicial scrutiny, this Court on the basis of the material produced during the course of the hearing in the said matter, further observed at paras 16 to 24 as under: “16. In view of the aforesaid factual scenario, keeping in view the scope of judicial review against the decision of a Committee to be treated as the quasi judicial authority or a quasi judicial body, can be considered as discussed hereinafter. However, before it is considered, the language used by the Apex Court deserves to be reiterated again for the role of the Committee to be more sensitive and to act rationally and reasonably with due regard SCA/5410/2008 13/31 JUDGMENT for realities. As observed by the Apex Court, the Committee should refrain from generalizing the fee structure and are required to go into the accounts, schemes, plans and objects of an individual institution for the purpose of finding out as to what would be an ideal and reasonable fee structure for that institution. 17. It appears to the Court that the following aspects germane to the exercise of powers by the Committee while deciding the fee structure are not considered: 1) In the information which was submitted by the institution to the Committee for deciding the fee structure vide Item No.2 it is mentioned as per Annexure-II which if considered shows the net value of the medical college is of Rs.53.03 Lakhs and of the academic block is of Rs.86.28 Lakhs, total 139.31 Lakhs. If straightline method of depreciation @5% already decided by the Committee in its policy is considered, the depreciation would come to Rs.6.96 Lakhs for one year towards the building. Whereas in the cost statement as per Annexure-IX being Part-vi, the depreciation claimed for the accounting year of 2004-2005, i.e. as on 31.03.2005, is of Rs.17.38 Lakhs. The pertinent aspect is that, even in the statement at Annexure-A, which is an estimated figure, the depreciation claimed to be included in the cost is Rs.13.19 Lakhs. Therefore, the cost of depreciation which is sought to be included in the cost structure as against the net value of the asset and net value of the medical college and the academic block, is roughly more by Rs.10.41 Lakhs (Rs. 17.38 Lakhs figure shown minus Rs.6.96 Lakhs permissible depreciation). If the cost as shown vide Annexure-IX for the accounting year of 2004-2005 is considered for the accounting year of SCA/5410/2008 14/31 JUDGMENT 2005-2006, is more by Rs.6.23 Lakhs (Rs.13.19 Lakhs figure shown as per Annexure-A minus Rs.6.96 Lakhs permissible depreciation) as against the actual net value of the building. Therefore, the institution has shown cost of depreciation more than the actual, had the details considered and cross-checked through its account member of the Committee. The Committee has without cross-checking the details of Annexure-IX with the details of Annexure-II in the information supplied, has been unduly impressed and wrongly guided by the figures supplied at Annexure-IX. 2) The aforesaid is coupled with the circumstance that in the audited books of accounts of the Pramukhswami Medical College, in none of the year, any depreciation is claimed towards the building; the reason being not that the property is owned by Charutar Arogya Mandal, but is due to the fact that Charutar Arogya Mandal has given property for use to the college as free from rent and no cost is being incurred. The said aspect is apparent from the compilation of the S.B. Billimoria's report under the head of Institutional details. 3) As such, if the institution/college has not incurred any expenses for construction of the college/academic block, and has received free the use of the building, no expenses towards rent or even depreciation could be claimed being part of the cost to the college, more particularly when even in the books of accounts of such college, duly audited for income tax purpose, such amount is neither claimed nor deducted. The learned counsel for the respondent College did attempt to submit that in the books of accounts of Charutar Arogya SCA/5410/2008 15/31 JUDGMENT Manda, such depreciation has been claimed and therefore, the same could be included in the cost structure for the fees. No data is produced before the Committee for which the contention is sought to be relied upon by the learned counsel. Further, even if considered for the sake of examination, the same cannot be permitted to travel beyond the information which has been supplied at the initial stage for providing cost of the building. Even if the contention of the learned counsel is accepted, then also, as observed earlier, there is exaggeration shown under the head of the depreciation for the cost structure by about 10 Lakhs for the accounting year of 2004-2005 and more than Rs.6 lakhs for the accounting year of 2005-2006. Therefore, the aforesaid shows that the Committee has apparently committed jurisdictional error in not cross- checking the information and ignoring the basic information supplied by the institution at the time when the proposal was submitted for sanction of the fee structure. 4) In the information supplied to the Committee, at the time when the fee structure was proposed to be sanctioned, Part-iv for fee structure provided for: A-State Quota B-Management Quota C-NRI Quota Under the said head, the present fees shown is of Rs.1.45 Lakhs for State quota, and Management quota with the note that the same is under challenge before the Hon'ble Supreme Court and the final fee would, if would be, subject to the SCA/5410/2008 16/31 JUDGMENT directions of the Hon'ble Supreme Court. The pertinent aspect is that under the head of proposed fee, the amount is shown as blank and no fee structure whatsoever is proposed either for State quota or for Management quota. The same is the situation for NRI quota. The fees is kept blank. 5) The aforesaid shows that the institution at the time when submitted proposal for approval of the fee structure, did not propose any fee structure at all for State quota or management quota nor had disclosed the fee structure for NRI quota. If the aforesaid is considered with Part-IX of the scholarship/aid to students for academic year of 2004-2005 (Actual shown is as NIL) and 2005- 2006(actual it is shown NIL). Hence, it is apparent that no scholarship/aid to the student whatsoever has been extended or disbursed to any of the students. 6) The aforesaid if bifurcated for the purpose of fixing the cost structure and for the NRI separately, it was required for the Committee to bear in mind and consider that the institution has to propose its own fee structure by quantifying the figure. In