Case: Sukh Sagar Medical College and Hospital Vs. State of Madhya Pradesh and Ors

medical college is established in terms of the Essentiality Certificate within a reasonable time. 21. While dealing with the case of maintaining standards in a professional college, a strict approach must be adopted because these colleges engage in imparting training and education to prospective medical professionals and impact their academic prospects. Thus, the future of the student community pursuing medical course in such deficient colleges would get compromised besides producing inefficient and incompetent doctors from such colleges. That would be posing a bigger risk to the society at large and defeat the sanguine hope entrenched in the Essentiality Certificate issued by the State. 22. Indeed, the fact that the Essentiality Certificate given to the Appellant-College stands withdrawn, it does not follow that the need to have a new medical college in the concerned locality or the State ceases to exist. For, the raison detre behind Essentiality Certificate, amongst others, is likely improvement of doctor-patient ratio and access to healthcare for the population in the attached hospital. As a matter of fact, the need would get bigger due to the failure of the new medical college to fulfil the scheme in a time bound manner in right earnest. That entails in enhancing the mismatch of demand and supply ratio of doctors required to achieve the medical manpower of the State. It would not be in public interest nor appropriate for the State Government to remain a mute spectator and not move into action when the college miserably fails to translate the spirit behind the Essentiality Certificate within a reasonable time. By no stretch of imagination, five years period, to fulfil the minimum requirement and standards specified by the MCI, can be countenanced. 23. Article 47 of the Constitution of India encompassed in Directive Principles of State Policy, enjoins the State with a duty to provide for and ensure good public health and a constant endeavour to improve the same to effectuate the fundamental right to life guaranteed by the Constitution to all. Thus understood, the States duty Under Article 47 is to act as an enabler for the wholesome exercise of right to life. A right to have access to proper public health care would be of little value if the State does not create the requisite conditions for proper exercise of such right. Access to medical college and hospital is, no doubt, a part of the said conditions. In Paschim Banga Khet Mazdoor Samity and Ors. v. State of West Bengal and Anr. (1996) 4 SCC 37 , this Court observed that it is the Constitutional obligation of the State to provide adequate medical services to the people. Whatever is necessary for this purpose has to be done. 24. What is necessary in the present factual matrix, as discussed above, is for the State to assess the dire need of medical infrastructure within the State or the locality, as the case may be. The very fact that an Essentiality Certificate is issued in the first place, in itself, is a testimony of the essentiality of such infrastructure. The authority of the State to grant Essentiality Certificate is both power coupled with a duty to ensure that the substratum of the spirit behind the Certificate does not disappear or is defeated. The exercise of power and performance of duty with responsibility and in right earnest must co-exist. Notably, the duty Under Article 47 is, in the constitutional sense, fundamental in the governance of the State. This duty does not end with mere grant of a certificate, rather, it continues upto the point when essentiality of basic medical infrastructure is properly taken care of within a reasonable time frame. Any future application for such certificate, be it by the present Appellant (in terms of directions in this judgment) or by a different applicant, must be dealt with accordingly, and supervision of the State must continue to ensure that the purpose and substratum for grant of such certificate does not and has not disappeared. 25. We are conscious of the view taken and conclusion recorded in Chintpurni Medical College (supra). Even though the fact situation in that case may appear to be similar, however, in our opinion, in a case such as the present one, where the spirit behind the Essentiality Certificate issued as back as on 27.8.2014 has remained unfulfilled by the Appellant-College for all this period (almost six years), despite repeated opportunities given by the MCI, as noticed from the summary/observation in the assessment report, it can be safely assumed that the substratum for issuing the Essentiality Certificate had completely disappeared. The State Government cannot be expected to wait indefinitely, much less beyond period of five years, thereby impacting the interests of the student community in the region and the increased doctor-patient ratio and denial of healthcare facility in the attached hospital due to gross deficiencies. Such a situation, in our view, must come within the excepted category, where the State Government ought to act upon and must take corrective measures to undo the hiatus situation and provide a window to some other institute capable of fulfilling the minimum standards/norms specified by the MCI for establishment of a new medical college in the concerned locality or within the State. Without any further ado, we are of the view that the Appellant-College is a failed institute thus far and is unable to deliver the aspirations of the student community and the public at large to produce more medical personnel on year to year basis as per the spirit behind issuance of the subject Essentiality Certificate dated 27.08.2014. To this extent, we respectfully depart from the view taken in Chintpurni Medical College (supra). 26. To complete the record, we may mention the argument of the Appellant that the attached hospital of the Appellant has now been taken over by the State Government recently for providing treatment to Covid patients. That, however, will be of no avail to answer the matter in issue. We do not intend to dilate on this argument any further.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. At the outset, we deem it apposite to closely analyse the two-Judge Bench decision of this Court in Chintpurni Medical College (supra). For, much emphasis has been placed on the said decision as involving similar fact situation. Even in that case, the medical college had started in the year 2011 in the State of Punjab. The permission for the first batch was granted in the year 2011-12. For subsequent academic years i.e. 2012-13 and 2013-14, no renewal of permission was granted to the college, as it was found to be deficient during the inspection carried out by the MCI. For the academic year 2014-15, however, a Letter of Permission (LoP) was granted in terms of order of this Court in Hind Charitable Trust Shekhar Hospital Private Limited v. Union of India and Ors. (2015) 2 SCC 336.   Thereafter, no renewal of permission was granted to the Petitioner for the academic year 2015-16. The college had applied for grant of recognition Under Section 11 of the Indian Medical Council Act, 19566 in the year 2015. During the inspection carried out by the MCI, deficiencies to the extent of 100% came to be noted. Despite that, in terms of the decision of this Court in Modern Dental College & Research Centre v. State of Madhya Pradesh (2016) 7 SCC 353  , the scheme submitted by the college was processed further. The SCMOC directed the MCI to conduct inspection and in case the college was found deficient, it was to be banned for a period of two years. The MCI conducted inspection of the concerned college on 7.3.2017 and found it deficient, thus recommended to the Central Government to debar the college from admitting students against the allowed intake for two academic years i.e. 2017-18 and 2018-19. The above decision was unsuccessfully challenged by the concerned college by way of a writ petition. In the meantime, the State Government decided to withdraw the Essentiality Certificate issued to the concerned college. That decision was challenged by way of a separate writ petition before this Court. While considering that challenge, the Court examined the scheme of the provisions of the IMC Act and the purpose for which Essentiality Certificate was required to be issued by the State Government. It noted that the same has been made condition precedent at the time of submitting the scheme for grant of Letter of Intent (LoI)/Letter of Permission (LoP) to start a new medical college. It noted that the State Government is required to certify by way of Essentiality Certificate, its approval for establishment of a medical college with a specified number of seats in public interest, and further that such establishment is feasible. Thus, an Essentiality Certificate from the State Government mentioning therein that it is essential to have a medical college, as proposed by the applicant, is to prevent the establishment of a college where none is required or to prevent unhealthy competition between too many medical colleges. Further, the only purpose of the Essentiality Certificate is to enable the Central Government acting Under Section 10-A of the IMC Act to facilitate the competent authority to take an informed decision for permitting the opening or establishment of a new medical college and once the college is established, its functioning and performance and even the derecognition of its courses is governed by the provisions of the IMC Act and not any other law. Having said that, in paragraph 17, the Court observed as follows:17. It would be impermissible to allow any authority including a State Government which merely issues an essentiality certificate, to exercise any power which could have the effect of terminating the existence of a medical college permitted to be established by the Central Government. This the State Government may not do either directly or indirectly. Moreover, the purpose of the essentiality certificate is limited to certifying to the Central Government that it is essential to establish a medical college. It does not go beyond this. In other words, once the State Government has certified that the establishment of a medical college is justified, it cannot at a later stage say that there was no justification for the establishment of the college. Surely, a person who establishes a medical college upon an assurance of a State Government that such establishment is justified cannot be told at a later stage that there was no justification for allowing him to do so. Moreover, it appears that the power to issue an essentiality certificate is a power that must be treated as exhausted once it is exercised, except of course in cases of fraud. The Rules of equity and fairness and promissory estoppel do not permit this Court to take a contrary view.(emphasis supplied)The Court then went on to hold that the State Government is designated by the 1999 Regulations only for the purpose of Essentiality Certificate to justify the establishment of a medical college within its territories and that too when approached by a person seeking to establish a medical college. There is no direct conferral of any power of general inspection on the State and neither can such a power be read into the Regulations nor be implied as necessary to carry out an expressly conferred power which does not exist. While rejecting the argument of the State about the inherent right of the State to withdraw the Essentiality Certificate, in paragraph 24, the Court observed thus:24. The learned Counsel for the State of Punjab submitted that since the essentiality certificate certifies the availability of adequate clinical material for the proposed medical college, as per the Regulations, the State has the necessary power of inspection of the college even after its establishment to ensure that there is adequate clinical material. This submission must also be rejected since the State is enjoined to certify adequate clinical material only at the time of proposal of the medical college and not after it is established. But we find from the submissions that the State has misinterpreted the term adequate clinical material completely. According to the State, adequate clinical material means people i.e. doctors, patients, staff, etc. Whereas, the term is understood in the field of medical education to mean data about number of admissions, number of discharges, number of deaths, number of surgeries, number of procedures, X-rays and laboratories investigations. Thus, what the State is required to certify is the data available in the region to justify the establishment of the proposed medical college. Obviously, for the purpose of justifying the existence of a medical college, the States claim that it must have the right to inspect a college after it is established to see whether there are adequate numbers of doctors, patients, etc. to justify its continued existence is completely hollow and unfounded.(emphasis supplied)The Court then noted the argument of the State about the existence of its power ascribable to Section 21 of the General Clauses Act, 18977. In that regard, the Court noted that the certificate is neither a notification nor an order or Rule or bye-law as contemplated by Section 21 of the 1897 Act. Further, the act of issuance of Essentiality Certificate by the State is a quasi-judicial function. It is neither a legislative nor an executive function as such, so as to attract Section 21 of the 1897 Act. Further, advisedly, there is no provision in the IMC Act or the 1999 Regulations empowering the State to revoke or cancel the Essentiality Certificate once granted by it in respect of an established medical college. In absence of an express provision in that regard and issuance of an Essentiality Certificate being a quasi-judicial function, Section 21 of the 1897 Act will be of no avail. In other words, the State had no power to withdraw the Essentiality Certificate once granted in respect of an established college. At the same time, the Court following earlier decisions of this Court observed that even in such a situation, the State would be competent to withdraw the certificate, where it is obtained by fraud or in circumstances where the very substratum on which the Essentiality Certificate was granted disappears or any other reason of the like nature. For that, the Court has referred to the decisions of this Court in Indian National Congress (I) v. Institute of Social Welfare and Ors. (2002) 5 SCC 685  , Industrial Infrastructure Development Corporation (Gwalior) Madhya Pradesh Limited v. Commissioner of Income Tax, Gwalior, Madhya Pradesh (2018) 4 SCC 494  , Ghaurul Hasan and Ors. v. State of Rajasthan and Anr. AIR 1967 SC 107   and Hari Shankar Jain v. Sonia Gandhi (2001) 8 SCC 233     and of the High Court of Andhra Pradesh in Government of Andhra Pradesh and Anr. v. Y.S. Vivekananda Reddy and Ors. AIR 1995 AP 1  .13. At the outset, we may straightaway agree with the dictum in Chintpurni Medical College (supra) that the act of the State in issuing Essentiality Certificate is a quasi-judicial function, which view is supported by the analogy deduced from the reported decisions referred to above. Having said that, it must follow that Section 21 of the 1897 Act cannot be invoked and in absence of an express provision in the IMC Act or the 1999 Regulations empowering the State Government to revoke or cancel the Essentiality Certificate, such a power cannot be arrogated by the State relying on Section 21. That, however, does not deprive the State Government to revoke or withdraw the Essentiality Certificate in case where (a) it is secured by playing fraud on the State Government, (b) the substratum for issuing the certificate has been lost or disappears and (c) such like ground, where no enquiry is called for on the part of the State Government.In other words, we hold that Chintpurni Medical College (supra) does not lay down in absolute terms that the State cannot revoke the Essentiality Certificate once granted for opening of a new medical college within the State. The observations in paragraph 36 of the reported decision also reiterate this position and make it amply clear that in exceptional circumstances referred to therein, the State is free to do so.The first excepted category is where the Appellant had obtained the Essentiality Certificate by playing fraud on the State Government. It is well-settled that fraud vitiates any act or order passed by any quasi-judicial authority, even if no power of review is conferred upon it, as held in paragraph 34 of the decision in Indian National Congress (I) (supra) in the following words:34. Coming to the first exception, it is almost settled law that fraud vitiates any act or order passed by any quasi-judicial authority even if no power of review is conferred upon it. In fact, fraud vitiates all actions. In Smith v. East Elloe Rural Distt. Council [(1956) 1 All ER 855], it was stated that the effect of fraud would normally be to vitiate all acts and orders. In Indian Bank v. Satyam Fibres (India) (P) Ltd. [(1996) 5 SCC 550]   it was held that a power to cancel/recall an order which has been obtained by forgery or fraud applies not only to courts of law, but also to statutory tribunals which do not have power of review. Thus, fraud or forgery practised by a political party while obtaining a registration, if comes to the notice of the Election Commission, it is open to the Commission to deregister such a political party.As to when it would be a case of fraud played on the State Government, would depend on whether it was an attempt by the Appellant to present facts, so as to misrepresent the State. The fraud can either be actual or constructive fraud. The actual fraud is a concealment or false representation through an intentional or reckless statement or conduct that injures another who relies on it in acting, whereas the constructive fraud is unintentional deception or misrepresentation that causes injury to another.15. Indeed, in the present case, the State Government in its order dated 5.9.2019, has adverted to several aspects including the assessment report of the MCI and inspection report of the Committee. The substance of the reason weighed with the State Government, as can be culled out from the stated order, is that the Appellant had failed to fulfil the commitment given to the State at the relevant time-of providing minimum infrastructure and fulfilment of the norms of MCI and appointing the staff as per norms of MCI-for all this period and was incapable in doing so despite repeated opportunities given since 2016 by the MCI. Further, even though the Appellant was granted conditional Letter of Permission (LoP) for academic year 2016-17, it had failed to remove the deficiencies, as a result of which not even the first batch could pursue or complete the medical course in the Appellant-College. The concerned students kept on making earnest representation to the State authorities to rescue them from the hiatus situation in which they were trapped. Indisputably, the concerned students (admitted in the first batch of 2016-17) were eventually reallocated to another recognised college after November, 2019, as no renewal of permission to the Appellant-College was forthcoming for three successive academic sessions i.e. 2017-18, 2018-19 and 2019-20.16. Such circumstances reckoned by the State, by no stretch of imagination, can be disregarded as irrelevant, intangible or imaginary. Rather, the totality of the situation reinforces the fact that the Appellant-College had failed and neglected to discharge its commitment given to the State at the relevant time; and is incapable of fulfilling the minimum norms specified by the MCI for starting and running a medical college. It had thus misrepresented the State Government at the relevant time by giving a sanguine hope of ensuring installation of minimum infrastructure and setting up of a robust organisational structure for running of a medical college in a time bound programme. Therefore, it can be safely deduced that it is a case of constructive fraud played upon the State Government. For, even after lapse of over five years from the date of issuance of Essentiality Certificate (27.8.2014), the Appellant-College is not in a position to secure the requisite permission(s) from the MCI and the Central Government to run a medical college as per the scheme.17. The State Government whilst discharging its role of parens patriae of the student community cannot remain a mute spectator and expose them to a college, which is deficient in many respects. The fact that no renewal permission has been granted by the MCI for three successive academic sessions due to gross deficiencies in the Appellant-College, is itself indicative of the state of affairs in the Appellant-College, warranting a legal inference that the substratum on the basis of which Essentiality Certificate was issued to the Appellant-College had completely disappeared. For, even the first batch of students admitted in the Appellant-College could not pursue their medical course and were eventually reallocated by the State Government to other recognised private medical colleges within the State as per the obligation specified in the Essentiality Certificate, after obtaining permission of the Central Government in that behalf in November, 2019.18. The Essentiality Certificate was issued on the representation of the Appellant-College that it would give 150 fully trained and qualified doctors each year to the State, thereby improving the doctor-patient ratio and provide healthcare to the nearby population in the attached hospital. All this has become a mirage due to the failure of the Appellant-College to get permission of Central Government for four successive academic sessions starting from 2016-17 till 2019-20. Not even one doctor has been produced by the Appellant-College after issuance of the Essentiality Certificate nor the hospital attached to the college is provided with minimum standards specified by the MCI and is found to be grossly deficient. On a comprehensive view of the state of affairs, the fulfilment of MCI norms and other allied conditions must be understood as an implied imperative for the consideration/continuation of Essentiality Certificate. For, there can be no deviation from the standards. This being a clear case of a non-functioning college, warranted immediate intervention of the State Government in larger public interest and also because the substratum had disappeared. It would certainly come within the excepted category, where the power of withdrawal of Essentiality Certificate ought to be exercised by the State and more particularly not being a case of an established college per se.In the present case, however, the Appellant-College was at the threshold stage of only opening and starting first year course for academic year 2016-17. It failed and neglected to fulfil even the minimum benchmark of standards specified by the MCI allowing it to run the medical college. Admittedly, no renewal permissions from the Central Government were issued for the successive academic years. In that sense, it is not a case of withdrawal of the Essentiality Certificate of an established medical college as such. Had it been a case of well-established and a running medical college having basic minimum infrastructure as per the specifications of the MCI and State Government was to withdraw its Essentiality Certificate, that matter would stand on a different footing than the case at hand, where the college has miserably failed to ensure completion of medical course even of the first batch for three successive academic sessions from 2016-17 due to non-renewal of permission by the MCI.20. Be that as it may, there would be legitimate expectation amongst the stakeholders, after issuance of Essentiality Certificate by the State Government, that the applicant-college shall fulfil the basic norms specified by the MCI in a time bound manner, so as to open the medical college and operate it as per the norms. That, however, has not happened in the present case since August, 2014 until the issuance of subject show-cause notice in August, 2019 and passing of the impugned order of withdrawal of Essentiality Certificate. The fact that the applicant has made certain investments for starting the medical college, by itself, cannot be the basis to undermine power of the State Government coupled with duty to ensure that the medical college is established in terms of the Essentiality Certificate within a reasonable time.21. While dealing with the case of maintaining standards in a professional college, a strict approach must be adopted because these colleges engage in imparting training and education to prospective medical professionals and impact their academic prospects. Thus, the future of the student community pursuing medical course in such deficient colleges would get compromised besides producing inefficient and incompetent doctors from such colleges. That would be posing a bigger risk to the society at large and defeat the sanguine hope entrenched in the Essentiality Certificate issued by the State.22. Indeed, the fact that the Essentiality Certificate given to the Appellant-College stands withdrawn, it does not follow that the need to have a new medical college in the concerned locality or the State ceases to exist. For, the raison detre behind Essentiality Certificate, amongst others, is likely improvement of doctor-patient ratio and access to healthcare for the population in the attached hospital. As a matter of fact, the need would get bigger due to the failure of the new medical college to fulfil the scheme in a time bound manner in right earnest. That entails in enhancing the mismatch of demand and supply ratio of doctors required to achieve the medical manpower of the State. It would not be in public interest nor appropriate for the State Government to remain a mute spectator and not move into action when the college miserably fails to translate the spirit behind the Essentiality Certificate within a reasonable time. By no stretch of imagination, five years period, to fulfil the minimum requirement and standards specified by the MCI, can be countenanced.24. What is necessary in the present factual matrix, as discussed above, is for the State to assess the dire need of medical infrastructure within the State or the locality, as the case may be. The very fact that an Essentiality Certificate is issued in the first place, in itself, is a testimony of the essentiality of such infrastructure. The authority of the State to grant Essentiality Certificate is both power coupled with a duty to ensure that the substratum of the spirit behind the Certificate does not disappear or is defeated. The exercise of power and performance of duty with responsibility and in right earnest must co-exist. Notably, the duty Under Article 47 is, in the constitutional sense, fundamental in the governance of the State. This duty does not end with mere grant of a certificate, rather, it continues upto the point when essentiality of basic medical infrastructure is properly taken care of within a reasonable time frame. Any future application for such certificate, be it by the present Appellant (in terms of directions in this judgment) or by a different applicant, must be dealt with accordingly, and supervision of the State must continue to ensure that the purpose and substratum for grant of such certificate does not and has not disappeared.25. We are conscious of the view taken and conclusion recorded in Chintpurni Medical College (supra). Even though the fact situation in that case may appear to be similar, however, in our opinion, in a case such as the present one, where the spirit behind the Essentiality Certificate issued as back as on 27.8.2014 has remained unfulfilled by the Appellant-College for all this period (almost six years), despite repeated opportunities given by the MCI, as noticed from the summary/observation in the assessment report, it can be safely assumed that the substratum for issuing the Essentiality Certificate had completely disappeared. The State Government cannot be expected to wait indefinitely, much less beyond period of five years, thereby impacting the interests of the student community in the region and the increased doctor-patient ratio and denial of healthcare facility in the attached hospital due to gross deficiencies. Such a situation, in our view, must come within the excepted category, where the State Government ought to act upon and must take corrective measures to undo the hiatus situation and provide a window to some other institute capable of fulfilling the minimum standards/norms specified by the MCI for establishment of a new medical college in the concerned locality or within the State. Without any further ado, we are of the view that the Appellant-College is a failed institute thus far and is unable to deliver the aspirations of the student community and the public at large to produce more medical personnel on year to year basis as per the spirit behind issuance of the subject Essentiality Certificate dated 27.08.2014. To this extent, we respectfully depart from the view taken in Chintpurni Medical College (supra).26. To complete the record, we may mention the argument of the Appellant that the attached hospital of the Appellant has now been taken over by the State Government recently for providing treatment to Covid patients. That, however, will be of no avail to answer the matter in issue. We do not intend to dilate on this argument any further.