IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.J.CHELAMESWAR & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 15TH DECEMBER 2010 / 24TH AGRAHAYANA 1932 WA.No. 2076 of 2010 ----------------------- AGAINST THE ORDER IN IA NO.13427/2010 IN WPC.18476/2010 DATED 04/10/2010 .................... APPELLANT/1ST RESPONDENT: ---------------------------------- UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF SOCIAL JUSTICE & EMPOWERMENT, SHASTRI BHAVAN, NEW DELHI BY SRI.T.P.M.IBRAHIM KHAN, ASST.SOLICITOR GNERAL OF INDIA RESPONDENTS/PETITIONER & RESPONDENTS 2 AND 3: ------------------------------------------------------------- 1. ALL KERALA ASSOCIATION FOR THE MENTALLY RETARDED, REG. OFFICE AT CENTRAL INSTITUTE ON MENTAL RETARDATION, MURINJIPALAM, MEDICAL COLLEGE.P.O, THIRUVANANTHAPURAM - 695 001, REPRESENTED BY ITS SECRETARY. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, GENERAL EDUCATION (R) DEPARTMENT, THIRUVANANTHAPURAM. 3. THE SECRETARY TO GOVERNMENT, HEALTH & FAMILY WELFARE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. R1 BY SMT.V.P.SEEMANDINI, SENIOR ADVOCATE ADV. SMT.S.KARTHIKA R2 & R3 BY SR.GOVERNMENT PLEADER SMT.K.MEERA THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 15/12/2010, ALONG WITH WPC NO. 18476 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.Chelameswar, C.J. & P.R.Ramachandra Menon, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A. No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 15th day of December, 2010 JUDGMENT J.Chelameswar, C.J. W.A. No. 2076 of 2010 arises out of an interim order dated 04.10.2010 passed in IA No.13427 of 2010 in W.P. (C) No. 18476 of 2010. The said writ petition is filed with the prayers as follows: “i) to issue a writ of certiorari or other appropriate writ, order or direction to quash Ext.P12 order; ii) to issue a writ of mandamus or other appropriate writ, order or direction directing the 1st respondent to sanction and disburse “Grant-in-aid” due to the petitioner as recommended by respondents 2 and 3 by Exts.P6 to P10 for the period 2004-2005 to 2007-2008; iii) to issue a writ of mandamus or other appropriate writ, order or direction directing the 1st respondent to sanction and disburse “Grant-in-aid” due to the petitioner for the period from 2008-2009 onwards, as and when such recommendation are made by respondents 2 and 3; and iv) to pass such other and further orders as are deemed just and necessary in the facts and circumstances of the case.” WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:2:- 2. During the pendency of the said writ petition, the abovementioned interim order came to be passed by a learned Judge of this Court directing the 1st respondent/Union of India to disburse an amount of `21,72,683/- to the writ petitioner as grant-in-aid. Aggrieved by the said order, the Union of India preferred the abovementioned appeal. When the appeal came up for admission on 14.12.2010, having regard to the nature of the controversy, we thought it fit to hear the appeal as well as the writ petition together and dispose of both the matters. Accordingly, both the matters are listed today. 3. Heard the learned Senior counsel, Smt.V.P. Seemandini, appearing for the writ petitioner and the learned Assistant Solicitor General, Sri.T.P.M. Ibrahim Khan, appearing for the 1st respondent. 4. The facts leading to the present litigation are as follows: The writ petitioner is a registered society under the Travancore Cochin Literary Scientific and Charitable Societies Act, 1955. The petitioner is running an institute known as the WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:3:- 'Central Institute on Mental Retardation'. The institute undertakes various programmes aimed at helping the mentally challenged children to attain self reliance by appropriate techniques of training and education. 5. The Government of India admittedly has been granting certain amounts of aid to the writ petitioner in recognition of the good work that is being done by the petitioner in the field of service to mentally challenged children from 1993 onwards. However, in view of certain complaints received against the petitioner the payment of the abovementioned grant- in-aid was stopped with effect from 2004-05 financial year. It may be stated here that apart from the complaints received by the Government of India certain criminal complaints also came to be filed against the President of the petitioner's Association alleging commission of offences under Sections 405, 409, 420 and 463 IPC etc. 6. In view of the stoppage of the grant-in-aid, the writ petitioner on an earlier occasion approached this Court by way of WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:4:- W.P.(C) No. 2626 of 2009. By an interim order dated 14.07.2009, a learned Judge of this Court directed the Union of India and others to take a decision on Ext.P9 representation made by the petitioner to the Government of India seeking the release of the grant-in-aid. The said writ petition came to be dismissed as withdrawn by an order dated 07.10.2009. The petitioner chose to withdraw the writ petition because during the pendency of the writ petition, the Government of India rejected the representation referred to above by an order dated 23.09.09. The writ petitioner therefore prayed this Court to permit the writ petitioner to withdraw the writ petition with liberty to file a fresh writ petition challenging the abovementioned order dated 23.09.09 and hence the present writ petition, W.P.(C) No. 18476 of 2010. 7. In the said impugned order, passed by the Deputy Secretary(Cdn), Government of India in the Ministry of Social Justice and Empowerment, it is recorded that certain complaints were received from a member of the Legislative Assembly of the WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:5:- Kerala and also from a member of Parliament (Lok Sabha) against the petitioner. Such complaints included allegations of (1) mis-utilisation of Government grants (2) Collection of huge donation from the parents and (3) collection of monthly fees from the beneficiaries. It is also noted that a criminal case on the file of the Additional Chief Judicial Magistrate, Thiruvananthapuram in connection with Crime No.414 of 2004 is also pending against the President of the writ petitioner Association. The said order also refers to a letter received by the Government of India from the Additional Secretary, Social Welfare Centre, Government of Kerala. The order also refers to Rule 149(1) of the General Financial Rules 2000 which obligate the sanctioning authority of the grant-in-aid to ensure that no grants are sanctioned where there is “reasonable suspicion or suggestion of corrupt practices” unless the bodies concerned are cleared of the allegations. The Director therefore comes to a conclusion by the abovementioned order dated 23.09.09 that, the grant-in-aid cannot be sanctioned in favour of the writ petitioner. It is also recorded in the said WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:6:- order that there is a break of more than two years in giving grant-in-aid to the petitioner Association and therefore the proposal cannot be considered in the financial year 2009-10, as in the opinion of the Director, the claims have become time barred and under various administrative instructions issued by the Ministry. The relevant portion of the order reads as follows: “2. As per Rule 149(1) of the General Financial Rules, 2000, sanctioning authorities should ensure that no grant-in-aid is sanctioned where there is a reasonable suspicion or suggestion of corrupt practices unless the body concerned is clear of the allegations. Hence, the Ministry can not sanction grant-in-aid in favour of the Petitioner Association unless and until it is cleared of the allegations. 3. Further, there is a break of more than two years in the grant-in-aid to the organization for all its various projects and the pending proposals cannot be considered for grant-in-aid in the financial year 2009-10. Hence, all these cases have no become time-barred in view of the extant instructions of this Ministry as indicated below: (i) As per paragraph 4 of O.M. No.I-22/2009-Cdn. dated 8.12.2006(Annexure-A),since the project has not been sanctioned grant-in-aid for more than 2 years, it is time-barred. (ii) As per para 5(b) of O.O.No.I-31/2006-Cdn. dated the 5th Sept., 2008(Annexure-B), in cases where WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:7:- NGOs have not received grants for more than two years, and the proposal is received now for the release of grant, it should be done from the current year. However, if the pending grant is ony for two years, then it should be processed as per the existing provisions of GFR rule 209(6). 4. In view of the extant rules and instructions applicable in this matter, it has been decided by the competent authority that the pending proposals that were received upto 2008-09 from the Petitioner Organization for its 5 projects listed at para 1(a) above, cannot be considered for grant-in-aid.” 8. On behalf of the Union of India a counter affidavit is filed in the abovementioned writ petition reiterating the various facts which are already noticed above in this judgment. At paragraph 12 of the counter affidavit it is stated that a Joint Action report conducted by the Director, NIMH(National Institute for the Mentally Handicapped), Secunderabad, Deputy Secretary in the Ministry of Social Justice and Empowerment, Government of India, Additional Director, Department of Social Welfare, Government of Kerala and the Senior Accounts Officer of the Archaeological Survey of India, Hyderabad in which it is pointed out that, there was some irregularity in the matter of accounting WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:8:- the payment of transport allowances to the students in the years 2001-02 and 2002-03. A copy of the said report itself is annexed to the writ petition as Ext.P5. The relevant portion relied upon by the respondent in their counter affidavit reads as follows: “Payment of the transport allowance to the students for the years 2001-02 and 2002-03 and the acquaintance in proof of payment obtained through thumb impression of the Registers maintained for the purpose (copy of register for 2000-01 enclosed). Further, it is also observed that amount received had been transferred as donations from the students to the institutions as reflected from the ledger of donation(copy enclosed). As per the guidelines for the payment of the transport allowance, the payment has to be made to the parent/guardian of the child and this stipulation has not been followed by the management resulting in the complaint.” The abovementioned committee also recorded its observations regarding the writ petitioner's institution as follows: “The observation team members have gone through various documents such as byelaws, minutes of the meeting, amendments in the byelaws, accounts related documents - cashbooks, bank transactions and the audit reports. The team members visited three locations where the activities of AKAMR at their centres at Jagathi, Kuttichal an ago WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:9:- based rehabilitation centre and Murinjapalam (Special School) where vocational training, special therapeutic activities and DSE (MR) training programmes are conducted. Team members also had interactions with some of the parents whose children are the beneficiaries of AKAMR. The overall impression of the team is that: 1. AKAMR is extending services to the persons with mental retardation. 2. The parents of the beneficiaries whom the team met expressed their satisfaction on all the services being extended by AKAMR. 3. A test check of the accounts of the center for the years 2000-01, 2001-02 and 2002-03 were carried out to verify the accuracy of the accounts furnished and the state of accounts found satisfactory (copes of accounts enclosed). 4. All the registers were maintained for recording receipt of grants, donations, and other income and also the cashbooks ledgers, vouchers are maintained as per the requirement. The periodical bank reconciliation statements were prepared and the annual accounts duly audited by a chartered accountant submitted regularly to the grants sanctioning authorities. 5. Specific comments with reference to Memorandum submitted by the service Association for the mentally handicapped, Thiruvananthapuram.” 9. After observing the abovementioned aspects of the petitioner's institution, the Committee also recorded lacuna in the WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:10:- accounting process of the transport allowances which is already extracted. It must also be mentioned here that on 22.03.2007 the Co-ordinator of Inclusive Education for Differently -abled (IED), in the Directorate of Public Instructions, Government of Kerala, submitted a report on a petition filed by some parents of the petitioner's institution. The relevant portion of the report reads as follows: “After enquiry with the Teachers and other employees of the Institution, I have come to know that even though no grant was received for the last so many years, the DCMR School is running properly and they have maintained the mentally retarded persons and also extending the valuable services rendered for helping them. On an analysis of the above facts and circumstances, I understood that the aims and intention of the Director Fr.Feliks is solely for the purpose of development of the mentally retarded children. Under the above circumstances, I recommend that the Government may solve the present deadlock of the Institution by giving a short warning to the authorities of the Institution considering the devotion and valuable service rendered by the Director Fr.Felix and Rev.Sisters who were under the active initiation for the establishment of the Institution and proper running of the same for maintaining the mentally retarded children during period of 1970 where there WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:11:- were no such institutions for the mentally retarded children.” The content of the abovementioned two paragraphs speak for themselves and do not require any further explanation. 10. In the background of the abovementioned two reports it is unfortunate that, the Union of India chose to place reliance on only one part of the report of the Joint Committee of inspection to deny the grant of aid to the petitioner. No doubt, under Rule 149(1) of the General Finance Rules, 2000, the Government of India is required to ensure that the grant-in-aid sanctioned is not misused or the institutions availing the benefits of the grant-in-aid should not resort to corrupt practices and wherever such allegations are brought to the notice of the Government of India, the grant-in-aid is not to be disbursed until the allegations are cleared. But, in view of the two reports mentioned above, we are of the opinion that the Government of India is not justified to fall back upon Rule 149(1) of the General Finance Rules, 2000. The short coming, if any, on the part of the petitioner appears to be technical and minor. WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:12:- 11. Coming to the second reason given by the Government of India for declining the grant-in-aid that it is barred by time, we are equally unable to understand the legality of such a stand. It is not as if claim of the petitioners is time barred under the prescription of any statute. It is true that nobody can have a claim for a grant-in-aid as a matter of right. The payment of grants-in-aid by the State is a matter of policy of the State and the State has a great range of pliability in framing the policy. But once the policy is framed, in the matter of implementation of the policy the State is bound by the constitutional mandate of Article 14 to act fairly and rationally and not to discriminate between persons who are otherwise entitled to receive the grant-in-aid. The petitioner was found eligible for the benefits of grant-in-aid scheme of the Government of India is undoubted as the petitioner was admitted to the benefits of the Scheme at one point of time. The claim of the petitioner for the period in dispute was pending with the Government of India for a long time. But the same was not WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:13:- considered on the ground that there are allegations which if proved would disentitle the petitioner from receiving the grant-in- aid under Rule 149(1). However, such allegations are not proved or at any rate substantially untrue. In the circumstances the lapse of time cannot be cited as a ground for rejecting the claim of the petitioner as the petitioner is no way responsible for such lapse of time which was consumed by the 1st respondent in making appropriate enquiry into the allegations against the petitioner. 12. In the circumstances, we are of the opinion that the writ petition is required to be allowed and is therefore allowed and Ext.P12 is quashed. The respondents are directed to sanction and disburse the grant-in-aid to the petitioner for the period commencing from 2004-05 financial year to 2007-08 financial year and further consider the case of the petitioner for the grant-in-aid for the subsequent financial years in accordance with law. We further direct the respondent to complete the said exercise within a period of six weeks from today. WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:14:- In view of the order passed in the writ petition, the Writ Appeal is partially allowed declaring that the interim order which is the subject matter of the writ appeal stands merged in the final order in the writ petition. We also make it clear that it is always open to the Government to reconsider the issue of grant-in-aid, if at any point of time, adverse consequences are recorded in the criminal proceedings referred to earlier registered against the President of the petitioner Association. J.Chelameswar, Chief Justice. P.R.Ramachandra Menon, Judge. ttb WA No. 2076 of 2010 and W.P.(C) No. 18476 of 2010 -:15:-