IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 11TH AUGUST 2008 / 20TH SRAVANA 1930 WA.No. 1217 of 2002(B) --------------------------------- AGAINST THE JUDGEMENT IN OP.5454 OF 2002 DATED 19.2.02 .................... APPELLANT/PETITIONER IN O.P. : ------------------------------------------------ REV. DR.MATHEW MALEPARAMBIL, PRINCIPAL, ST.THOMAS COLLEGE, PALA. BY ADV. SRI.BABY ISAAC ILLICKAL RESPONDENTS/RESPONDENTS I TO 3 IN O.P. : ------------------------------------------------------------------ 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. PRINCIPAL SECRETARY, HIGHER EDUCATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 3. DIRECTOR OF COLLEGIATE EDUCATION, THIRUVANANTHAPURAM. R1 TO R3 BY SR.GOVERNMENT PLEADER SRI.M.P.SRIKRISHNAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11/08/2008, ALONG WITH OP Nos. 1609 &1774 OF 2003,WP(C) Nos. 6511 & 8298 OF 2004, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A.No. 1217 OF 2002, O.P. Nos. 1609/03, 1774/03, W.P.(C) Nos. 8298/04 AND 6511/04 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 11th day of August 2008 JUDGMENT A.K. BASHEER, J. The question that arises for consideration in this bunch of cases is whether the Government is justified in directing the private aided colleges to transfer the “unclaimed caution deposits” collected from the students to the Government treasury. 2. The writ appeal is filed by the principal of an aided private college at Pala, challenging the judgment of the learned single Judge upholding the above order issued by the Government. The learned Judge took the view that the appellant/management was not justified in retaining the unclaimed caution deposit and therefore the management was bound to transfer the same to the treasury account, especially since the Government is paying salary to the teaching and non-teaching staff in the college. Since the same issue arises in the remaining original petitions also, they have been referred to the Division Bench to be heard along with the writ appeal. Therefore, these cases are being disposed of by this common judgment. WA No.1217/02 & Conns. -:2:- 3. In the Government Order, [GO(MS) No.150/2001/H.Edn. Dated 9.11.2001], it was ordered that unclaimed caution deposits lying in the PD accounts of the principals of the aided colleges shall be transferred to the treasury account The Director of Collegiate Education and Director of Technical Education were directed by the Government to issue necessary instructions to the principals of all private colleges in this regard. A copy of the said order is available on record in OP No.1774/03. 4. Pursuant to the above order, the Deputy Director of Collegiate Education had issued a Circular, on December 20, 2001 informing the principals of all private colleges to comply with the direction contained in the Government Order. Thereafter, on November 18, 2002, the Director of Collegiate Education had also issued a Circular to all heads of institutions and managements to comply with the above direction. The said order issued by the Government and the two circulars issued by the Deputy Director and Director of Collegiate Education are primarily under challenge in this bunch of cases. 5. It is contended by the learned counsel for the petitioners that the Government is not entitled to issue a direction to the managements to transfer the unclaimed portion of caution deposit to the treasury account, ignoring or overlooking the clauses contained in the individual agreements executed between the Government and the managements. It is beyond controversy that the WA No.1217/02 & Conns. -:3:- Government of Kerala had entered into separate individual agreements, i.e., Direct Payment Agreement with the managements of aided colleges in the State. A copy of one such agreement is marked as Ext.P1 in WP(C) No.6511/04. Clauses 1 to 5 in the said agreement deal with collection of fees in aided colleges. These Clauses are extracted hereunder: “1. The Educational Agency shall cause to collect tuition fees including fines, if any, from the students admitted or to be admitted to the institution only at the rates prescribed by the University from time to time. 2. The Educational Agency shall cause to collect through the Principal of the institution on or before the date prescribed according to the rules in each month the tuition fees prescribed and fines imposed on the students and remit all such amounts to the credit of the Government in the Treasury at Tirur in such manner as may be prescribed by the Government from time to time. The amounts collected on a day shall be remitted in the said Treasury within the next 4 working days. 3. The Educational Agency shall cause to collect from the students such special fees at such rates as may be prescribed by the University from time to time. 4. (i) The Educational Agency shall cause to remit all fee collections other than those mentioned in clauses 1 and 2 in WA No.1217/02 & Conns. -:4:- the Treasury at Tirur in a separate account opened in the name of the Principal of the Institution. Such remittance shall be made within the next four working days after collection. The Principal shall be competent to draw money from this account and incur necessary expenditure on the items for which such fees were collected. (ii) The special fee collected for a purpose shall be utilised only for the purpose for which it is intended and for no other purpose. (iii) The special fee collected from the students of a college under the Educational Agency shall be utilised only for the purpose of that college and not for the purpose of any other college. 5. No fees other than those authorised under this agreement shall be collected from the students of the Institution.” 6. It is pertinent to note that under Clause 3 the educational agency has been given liberty to collect special fee from the students at such rates that may be prescribed by the University from time to time. It is further provided that the special fee collected for a purpose shall be utilized only for the purpose for which it is intended and for not any other. Similarly, the special fee collected from the students of a college under the educational agency shall be utilized only for the purpose of that college and not for the purpose of any other college. More importantly, Sub Clause (1) of Clause 4 extracted above stipulates that the WA No.1217/02 & Conns. -:5:- Principal shall remit the special fee in the treasury in a separate account opened in his name. The principal is authorised to draw money from the said account opened in his name and to incur necessary expenditure on the items for which such special fees are collected. 7. It is on record that, in GO(MS) No.313/83/H.Edn. dated December 13, 1983, the Government had revised the PD rules to be maintained by the principals of the aided colleges by enumerating the items of fees to be deposited in such accounts. They included Athletic fee, stationary fee, magazine fee, caution money deposit etc. Thus it is evident that, the Government, which was a party to the agreement with the management, had reserved the right of the latter to collect special fees from the students and utilize the same for the purpose for which it was intended. But the Government took the unilateral view that the unclaimed caution deposit lying in the PD account of the principal was bound to be transferred by the management to the treasury account. 8. In the counter affidavit filed on behalf of the Government it is inter-alia contended that, no specific orders had been issued permitting the management to keep the unclaimed caution deposit in their custody, and use it for developing infrastructural facilities in the institution. Since these aided institutions are run with the assistance of the Government and also since maintenance and contingency grants are provided by the Government for development of infrastructural facilities WA No.1217/02 & Conns. -:6:- in these institutions the managements are not entitled to appropriate the unclaimed caution deposit to their coffers. It is further contended that a major portion of the budgetary provisions of the Government is ear-marked for running aided private institutions; but the fee collected from the students is quite negligible. 9. But, it has to be noticed that, the Government had entered into separate agreements with these aided institutions. The clauses contained in the agreement will have to be respected by both sides. The learned Government Pleader could not bring to our notice any clause in the agreement which enabled the Government to lay a claim over the unclaimed caution deposit lying in the PD account of the principal. The Government Pleader was also not in a position to inform us as to what was the unutilised amount available with these institutions under the head of unclaimed caution deposit. 10. We have carefully perused the various clauses in the agreement. In our view, The Government could not have unilaterally issued a direction to the managements to transfer the unclaimed caution deposit to the treasury account. It is trite that the parties to a contract shall be bound by the terms of the contract. One of the parties to the contract cannot unilaterally try to enforce its own decision on the other party, especially, when none of the clauses in the agreement gives such an authority to either of them. In our view, the petitioners are amply justified in contending that the impugned order issued by the Government and the two WA No.1217/02 & Conns. -:7:- consequential circulars issued by the Director and Deputy Director of Collegiate Education are arbitrary, illegal and unenforceable. Therefore the above order issued by the Government in GO(MS) No.150/2001/H.Edn. Dated 9.11.2001 and the two circulars issued by the Directorate (Ext.P2 and P3 in OP No. 1774/2003) are quashed. 11. In WP(C) No.6511/04, the petitioner has prayed for a direction to the respondents to disburse a sum of Rs.2,75,000/- towards maintenance and contingency grant to the college for the period up to and inclusive of 2003-04. Learned counsel submits that the said relief is not pursued at this stage. He prays that petitioner may be granted liberty to pursue the matter before the authorities concerned. Therefore, the petitioner in WP(C) No.6511/04 is given liberty to pursue the above remedy before the appropriate authority. All the original petitions and writ appeal are allowed as prayed for. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE ttb WA No.1217/02 & Conns. -:8:-