Corporate law – Education Act- taking over primary schools by state govt. which are intend to be closed by the management = whether the Notification issued by State of Kerala taking over the aided schools, which were managed by the appellants, is valid = The State decision to run the Primary schools which were decided to be closed by their respective management was in public interest and in the interest of the education. The High Court has rightly refused to interfere with the decision of the State Government taking over the schools to run the same directly by the Government. ; Payment of compensation for taking over schools intended to close – whether sec.15 of Education Act overridden the compensation Act 2013 – No = we conclude that Act, 1958 and Act, 2013 operate in different fields and Section 15 of the Act, 1958 in no manner is overridden or repugnant to Act, 2013. There was no invalidity in the exercise of the power of the State Government under Section 15 to take over the schools. The owners being entitled to compensation at the market rate on the date of notification, the procedure for taking over the property is in full compliance of requirement of Article 300A of the Constitution of India. We, thus, do not find any merit in this submission of learned counsel for the appellant.

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2206 OF 2018

(arising out of SLP (C) No. 24386 of 2017)

A.A. PADMANBHAN …APPELLANT

VERSUS

THE STATE OF KERALA & ORS. …RESPONDENTS

WITH

CIVIL APPEAL NO.2207 OF 2018

(arising out of SLP (C) No. 24565 of 2017)

AND

CIVIL APPEAL NO.2208 OF 2018

(arising out of SLP (C) No. 24722 of 2017)

J U D G M E N T

ASHOK BHUSHAN, J.

Leave granted.

2. These three appeals have been filed by Ex-Managers of

three private aided institutions questioning the common

2

judgment of Kerala High Court dated 01.08.2017 by which

judgment, the Division Bench of Kerala High Court while

dismissing the writ appeals filed by the appellants have

confirmed the judgment of learned Single Judge wherein the

appellants have questioned the Notification issued by State of

Kerala taking over the aided schools, which were managed by

the appellants.

3. The facts and issues raised in these appeals being

similar, reference of facts and pleadings in Civil Appeal

arising out of Special Leave Petition (C) No. 24386 of 2017

shall suffice for deciding all these appeals.

4. The appellant had been running P.M.L.P. School, Kiralur,

District of Thrissur in the State of Kerala, which was also an

aided institution. The appellant with intention to close down

the school gave a notice as required by Section 7(6) of the

Kerala Education Act, 1958 (hereinafter referred to as “the

Act”). The Education Authorities did not permit the appellant

to close the institution, which led to filing of writ petition

by the appellant being W.P. (C) No. 12873 of 2015. W. P. (C)

No. 12205 of 2015 was filed by the Headmistress incharge of

the Aided P.M.L.P. School and the President of the Parent

Teachers Association as also the President of the School

3

Samrakshanasamiti of the said school impugning the steps taken

by the manager of the aided school to close the aided school.

A direction was also prayed to the State Government to take

over the school. The Writ Petition was allowed by learned

Single Judge holding that appellant was entitled to close down

the school in accordance with the provisions of the Act and

Kerala Education Rules, 1959 (hereinafter referred to as “the

Rules”). Writ Appeals against the said judgment were

dismissed by the Division Bench on 22.07.2015, however, in

Writ Appeal filed by the Headmistress & others, a direction

was issued by the Division Bench directing the respondents to

consider their representations by which it was prayed that

school be taken over and run by the State Government. The

above order was questioned by the State of Kerala by filing

Special Leave Petition Nos. 27822-27827 of 2015. The Special

Leave Petitions were dismissed on 05.10.2015 by following

order:-

“The special leave petition is dismissed.

However, in the interest of the children in the

respondent-school, Mr. V. Giri, learned senior

counsel appearing for the respondent has fairly

stated that the respondent-school will continue

with them till the end of this academic year.

We make it clear that it would be the

responsibility of the State to shift these

children to another school from the next

academic year.”

4

5. The State Authorities did not take necessary steps to

close the institutions, hence the appellant filed a contempt

application being Contempt Case (C) No. 1045 of 2015, in which

contempt application, learned Government Pleader made

submission that the procedural formalities in connection with

the closing of the school have been complied with. Taking

note of which statement, the contempt case was closed down on

16.06.2016.

6. Before the aforesaid date, the Chief Minister of the

State took a decision on 07.06.2016 to take over the

institution of the appellant alongwith other three

institutions in exercise of power under Section 15 of the Act.

The decision of the Chief Minister taken on 07.06.2016 was

endorsed by the Council of the Ministers on 29.06.2016.

Kerala Legislative Assembly, unanimously passed the resolution

dated 18.07.2016 to take over the four schools under

sub-section (1) of Section 15 of the Act. A Notification

dated 27.07.2016 was issued as contemplated under Section

15(1). A further Notification dated 03.08.2016 was issued

modifying the earlier Notification dated 27.07.2016 to the

extent that the schools shall vest in Government absolutely

from the date of fixation of compensation. The appellant

aggrieved by Notification dated 27.07.2016 filed a writ

5

petition being Writ Petition (C) No. 25790 of 2016 questioning

the Notification dated 27.07.2016 as well as the Notification

dated 03.08.2016. Prayer for striking down Section 15 of the

Act as well as declaring Rules 6, 7 and 8 of the Rules, 1959

as repugnant was also made. However, the prayer for

challenging the provision of the Act and the Rules does not

appear to have been pressed. In the writ petition, counter

affidavit was filed where it was stated that a decision was

taken on 07.06.2016 to take over the institution by the State

Government, which was before the actual closure of the

institution. A resolution has been passed by Kerala

Legislative Assembly approving the proposal; Notification has

rightly been issued. Other three writ petitions were heard

alongwith connected writ petitions, which were filed by other

appellants in this group of appeals. All the writ petitions

were dismissed by learned Single Judge vide its judgment and

order dated 23.11.2016. Aggrieved against the judgment dated

23.11.2016, appellant filed Writ Appeal No. 2360 of 2016,

wherein it was contended that although the submission of the

appellant was made that on the date when the State Government

took over the schools under Section 15 of the Act, the closure

of the schools had already been effected but the said

submission has not been correctly understood by the learned

Single Judge. The Division Bench dismissed all the appeals on

6

09.12.2016 giving liberty to the appellants to apply for

review of the judgment of learned Single Judge. Against the

judgment dated 09.12.2016, Special Leave Petition was also

filed by the appellant in this Court, which Special Leave

Petition was withdrawn by the appellant. Appellant filed a

Review Petition before learned Single Judge for review of

judgment dated 23.11.2016, which Review Petition has been

dismissed by judgment and order dated 20.12.2016 of learned

Single Judge. Challenging the order dated 23.11.2016 as well

as the order dated 20.12.2016 passed on the review petition,

writ appeals have been filed before the Division Bench. The

writ appeals have been dismissed by the Division Bench vide

its judgment dated 01.08.2017, which judgment has been

questioned before us in these appeals.

7. Learned Counsel appearing for the appellant in support of

the appeal has raised the following submissions:

(a) The State Government could not have exercised power

under Section 15 of the Kerala Education Act, 1958 to

take over the school which has already been closed down.

The Notification under Section 15 has been admittedly

issued on 27.07.2016 whereas according to the own case

of the respondent the school was closed on 08.06.2016.

The power under Section 15 can be exercised with regard

7

to a school which is in existence. The closed down

school cannot be taken over by the State Government.

(b) The school and its properties could have been acquired

by the State only after resorting to Right to Fair

Compensation and Transparency in Land Acquisition,

Rehabilitation and Resettlement Act, 2013 (hereinafter

shall be referred to as “2013, Act”), after making

payment of compensation, determined in accordance with

the above-mentioned 2013, Act.

(c) Section 15 of the Kerala Education Act, 1958 made by the

Legislature of the State falling under Entry 20 List III

of the Concurrent List is in conflict and repugnant to

the provisions of the 2013, Act, made by the Parliament

under Entry 42 List III of the Concurrent List, is void

in view of the Article 254 of the Constitution of India.

The State Government has dispossessed the petitioner

under the guise of applying provision of law that is not

applicable to the subject matter and the procedure of

dispossessing the petitioner is in violation of Article

300A of the Constitution of India.

(d) The closure of the school had attained finality by

decision of dismissal of SLP (c) No. 27827 of 2015, when

this Court passed order on 05.10.2015.

8. Refuting the above submission learned Senior Counsel

appearing for the State of Kerala submits that the State

8

Government has validly exercised its power under Section 15 of

the Kerala Education Act, 1958. The decision was taken by the

Chief Minister to take over the school on 07.06.2016 on which

date the school was not actually closed down. Hence, there is

no substance in the contention of the appellant that school

had already been closed down and could not have been taken

over by the State Government. It is submitted that decision

of the Chief Minister dated 07.06.2016 was ratified by the

Council of Ministers vide decision dated 29.06.2016. The

issuance of notification is a step in consequence of decision

to take over the school and there is no illegality in the

issuance of Notification dated 27.07.2016. It is submitted

that the provision of Section 15 of the Kerala Education Act,

1958 operates in a different field to that of the provisions

of the 2013, Act. Neither there is a conflict nor Section 15

is in any manner repugnant to 2013, Act. Both the Acts

operate in their own fields. The action of taking over of the

schools by State is for running the school in compliance of

its obligation to provide education to the primary school

students. Section 15 itself, contemplates the payment of

compensation at market rate and the Collector has already

determined the market value of the schools, details of which

has already been brought on record by means of the counter

affidavit. One of the schools which were taken over accepted

9

the compensation. One of the institutions which had filed the

Writ Petition (C) No. 25622 of 2016 has not challenged the

judgment of the learned Single Judge and had accepted the

same.

9. We have considered the submissions of the learned counsel

for the parties and perused the record.

RELEVANT STATUTORY PROVISIONS

10. The Kerala Education Act, 1958 was enacted for the better

organisation and development of the educational institutions

in the State after obtaining the assent of the President.

Section 2 sub-section (1) defines the “Aided Schools” and the

“School” is defined in Section 2 sub-section (9) in the

following manner:

“2.(1). “aided school” means a private school

which is recognised by and is receiving aid

from the Government, but shall not include

educational institutions entitled to receive

grants under Article 337 of the Constitution of

India, except in so far as they are receiving

aid in excess of the grants to which they are

so entitled;

2.(9). “School” includes the land, buildings,

play-grounds and hostels of the school and the

movable properties such as furniture, books,

apparatus, maps and equipments pertaining to

the school:”

11. Section 7 of the Kerala Education Act, 1958, which deals

with the “Managers of Schools“, contains the provision under

10

Section 7 sub-section (6) prohibiting the Manager from closing

down school unless one year’s notice is given. Section 7

sub-section (6) is quoted as below:

“7.(6) No manager shall close down any school

unless one year’s notice, expiring with the 31st

May of any year, of his intention so to do, has

been given to the officer authorised by the

Government in this behalf.”

Further Rule 24 of the Kerala Education Rules, 1959

provides for closure of private schools which is to the

following effect:

“24. Closure of private schools: – (1) No

private school shall be closed down without

giving the Director one year’s notice expiring

with the 31st May of any year of the intention

to do so.

[(2) The Director may, after considering all

aspects of the question, grant permission for

the closure of the school and recognition of

such school shall lapse. No application for

withdrawal of the notice after the issue of

permission shall be entertained unless adequate

reasons are adduced to the satisfaction of the

Director. The order of the Director in the

matter shall be final.]”

12. Section 15 of the Act contains a heading “Power to

acquire any category of schools”. Section 15 which is relevant

for the present case is as follows:

“15. Power to acquire any category of schools –

(1) If the Government are satisfied that for

standardising general education in the State or

11

for improving the level of literacy in any area

or for more effectively managing the aided

educational institutions in any area or for

bringing education of any category under their

direct control in the public interest it is

necessary to do so, they may, by notification

in the Gazette, take over with effect from any

day specified therein any category of aided

schools in any specified area or areas; and

such schools shall vest in the Government

absolutely with effect from the day specified

in such notification;

Provided that no notification under this

sub-section shall be issued unless the proposal

for the taking over is supported by the

resolution of the Legislative Assembly.

(2) Where any school has vested in the

Government under sub-section (1), compensation

shall be paid to the persons entitled thereto

on the basis of the market value thereof as on

the date of the notification:

Provided that where any property, movable

or immovable has been acquired, constructed or

improved for the purpose of the school with the

aid or grant given by the Government for such

acquisition, construction or improvement,

compensation payable shall be fixed after

deducting from the market value the amounts of

such aids or grants:

Provided further that in the case of

movable properties the compensation payable

shall be the market value thereof on the date

of the notification or the actual cost thereof

less the depreciation, whichever is lower.

(3) In determining the amount of compensation

and its apportionment among the persons

entitled thereto the Collector shall follow

such procedure as may be prescribed.

(4) Any person aggrieved by an order of the

Collector may, in the prescribed manner, appeal

to the District Court within whose jurisdiction

the school is situated within sixty days of the

12

date of such award and the decision of the

Judge shall be final.

(5) Nothing in this section shall apply to

minority schools.”

13. One of the principle submissions, which has been raised

by counsel for the appellant, is that on the date when

notification under Section 15 was issued, i.e. on 27.07.2016,

the school having been already closed, the power under Section

15 of the Act could not have been exercised. Learned counsel

submits that after the writ petition filed by the management

was allowed by High Court permitting closure of the school,

which was affirmed by the Division Bench as well as by this

Court on 05.10.2015, school stood closed, which disabled the

State Government to exercise the power under Section 15. We

have already noticed the factum of filing of writ petition by

the management for closure of the school, which stood allowed

on 08.06.2015. Writ appeals were filed against the judgment

of learned Single Judge, which were decided by the Division

Bench on 22.07.2015. It is to be noticed that aggrieved by

the judgment of learned Single Judge, writ appeals were also

filed by the Headmistress of the institution as well as

Parent-Teachers Association praying for the relief directing

the State Government to take over the institutions. In this

context, it will be useful to refer to Para 27 of the judgment

of the Division Bench by which while affirming the judgment of

13

the learned Single Judge, the Division Bench also directed the

State Government to decide the representations, which were

submitted seeking directions to take over the schools by the

Government. Para 27 is as follows:-

“….. However, it essentially is a matter to be

decided by the Government and therefore, though

we cannot issue any binding direction to the

Government, but can only clarify that the

authorities before whom Exts.P17 and P18

representations in W.P.(C) 12205/15 are pending

will bestow their attention to this claim and

will take appropriate decision on the

representations.”

14. As noticed above, against the writ appeals, Special Leave

Petition was filed by the State of Kerala, which was dismissed

on 05.10.2015. However while dismissing the petition, a

direction was given that children of the schools shall be

allowed to continue till the end of the academic year and

thereafter they may be shifted to another school. The

management filed Contempt Petition alleging that orders of the

Court regarding closure of schools are not being given effect

to by the State, which contempt was closed on 16.06.2016

noticing the statement of Government pleader that all

formalities regarding closure of the school have been complied

with. In the writ petition filed by the manager, learned

Single Judge in its judgment dated 23.11.2016 has returned the

findings regarding the actual date of closure of the school.

14

In Para 9 of the judgment, following was held:-

“…..The closure of the schools was effected on

10.06.2016 in the case of W.P.(C) No.

25292/2016, on 09.06.2016 in the case of W.P.(C)

No.25619/2016, on 08.06.2016 in the case of W.P.

(C) No. 25622/2016, on 07.06.2016 in the case of

W.P.(C) No. 25695/2016 and on 10.06.2016 in the

case of W.P.(C) No. 25790/2016. The affidavits

filed on behalf of the State Government in the

Contempt cases indicate that the handing over of

all records and other procedural formalities for

effecting a closure of the schools was completed

shortly thereafter. The contempt of court

cases, that were filed by the petitioners

herein, were all disposed after recording the

fact of closure of the schools, based on the

affidavit filed on behalf of the State

Government. It deserves mention here that, in

the affidavit filed on behalf of the State, it

was clearly stated that the State Government had

already taken a decision to acquire the schools

in public interest by invoking the powers under

Section 15 of the KE Act.”

15. Learned Single Judge as well as the Division Bench has

also noticed that the Chief Minister has already taken a

decision on 07.06.2016 after consultation with the Finance

Minister regarding exercise of power under Section 15 to close

the schools. Section 15(1) of the Act used the words “If the

Government are satisfied …………… they may, by notification in

the Gazette, take over with effect from any day specified

therein ……………… provided that no notification under this

sub-section shall be issued unless the proposal for the taking

over is supported by the resolution of the Legislative

Assembly.” The above statutory scheme indicates that there are

15

three steps in exercise of power under Section 15, they are:

(a) satisfaction of the Government that in the public interest

it is necessary to take control of any category of

institution; (b) resolution of the Legislative Assembly

approving the proposal for taking over the schools; and (c)

issuance of notification in the Gazette to take over with

effect from any day specified therein any category of aided

schools.

16. The satisfaction of the Government in sub-section (1) of

Section 15 is the first phase of initiating the proceeding for

taking over of the institutions. The satisfaction is required

of “the Government”. The Government refers to in the

provision is the “State Government”. The State Government as

defined in Section 3(60) of the General Clauses Act,

1897 means the Governor in a State. The Governor, being head

of a State in whom all the executive power is vested under

Article 154, exercises the power either directly or through

officers subordinate to him in accordance with the

Constitution of India. Under Article 166(1), any action taken

in the exercise of executive power is taken by the State

Government in the name of the Governor. Under Article 166

sub-clause (3), the Governor is to make rules for the more

convenient transaction of the business of the Government of

16

the State, and for the allocation amongst the Ministers of the

said business in so far as it is not business with respect to

which the Governor is by or under the Constitution required to

act in his discretion. Except the discretionary functions of

the Governor, he does not exercise any executive functions

individually or personally. When a Minister takes an action

according to the Rules of Business, it is both in substance

and in form the action of the Governor. The Constitution

Bench of this Court in Samsher Singh Vs. State of Punjab &

Anr., (1974) 2 SCC 831 while considering the constitutional

provisions regarding function of the President of India and

Governor of the State laid down following in Paragraphs 30 and

31:-

“30. In all cases in which the President or the

Governor exercises his functions conferred on

him by or under the Constitution with the aid

and advice of his Council of Ministers he does

so by making rules for convenient transaction of

the business of the Government of India or the

Government of the State respectively or by

allocation among his Ministers of the said

business, in accordance with Articles 77(3) and

166(3) respectively. Wherever the Constitution

requires the satisfaction of the President or

the Governor for the exercise of any power or

function by the President or the Governor, as

the case may be, as for example in Articles 123,

213, 311(2) proviso (c), 317, 352(1), 356 and

360 the satisfaction required by the

Constitution is not the personal satisfaction of

the President or of the Governor but is the

satisfaction of the President or of the Governor

in the constitutional sense under the Cabinet

system of Government. The reasons are these. It

is the satisfaction of the Council of Ministers

17

on whose aid and advice the President or the

Governor generally exercises all his powers and

functions. Neither Article 77(3) nor Article

166(3) provides for any delegation of power.

Both Articles 77(3) and 166(3) provide that the

President under Article 77(3) and the Governor

under Article 166(3) shall make rules for the

more convenient transaction of the business of

the Government and the allocation of business

among the Ministers of the said business. The

Rules of Business and the allocation among the

Ministers of the said business all indicate that

the decision of any Minister or officer under

the Rules of Business made under these two

articles viz. Article 77(3) in the case of the

President and Article 166(3) in the case of the

Governor of the State is the decision of the

President or the Governor respectively.

31. Further the Rules of Business and allocation

of business among the Ministers are relatable to

the provisions contained in Article 53 in the

case of the President and Article 154 in the

case of the Governor, that the executive power

shall be exercised by the President or the

Governor directly or through the officers

subordinate. The provisions contained in Article

74 in the case of the President and Article 163

in the case of the Governor that there shall be

a Council of Ministers to aid and advise the

President or the Governor, as the case may be,

are sources of the Rules of Business. These

provisions are for the discharge of the

executive powers and functions of the Government

in the name of the President or the Governor.

Where functions entrusted to a Minister are

performed by an official employed in the

Minister’s department there is in law no

delegation because constitutionally the act or

decision of the official is that of the

Minister. The official is merely the machinery

for the discharge of the functions entrusted to

a Minister (see Halsbury’s Laws of England 4th

Ed., Vol. I, paragraph 748 at p. 170 and

Carltona Ltd. v. Works Commissioners).”

18

17. An earlier Constitution Bench judgment, i.e., A.Sanjeevi

Naidu, Etc. Vs. State of Madras & Anr., (1970) 1 SCC 443,

considered Section 68(C) of the Motor Vehicles Act, 1939,

which Section provided as follows:-

“…………Where any State transport undertaking is of

opinion that for the purpose, of providing an

efficient, adequate, economical and properly

co-ordinated road transport service, it is

necessary in the public interest that road

transport services in general or any particular

class of such service in relation to any area or

route or portion thereof should be run and

operated by the State transport undertaking,

whether to the exclusion, complete or partial of

other persons or otherwise, the State transport

undertaking may prepare a scheme giving

particulars of the nature of the services

proposed to be rendered, the area or route

proposed to be covered and such other

particulars respecting thereto as may be

prescribed, and shall cause every such scheme to

be published in the Official Gazette and also in

such other manner as the State Government may

direct.”

18. A perusal of Section 68 sub-clause(C) indicates that the

words used in the provision “where any State transport

undertaking is of opinion …………., the State transport

undertaking may prepare a scheme …………, and shall cause every

such scheme to be published in the Official Gazette”. In the

Rules of Business pertaining to Rule 23(A) of the Madras

Government Business Rules, powers and functions which State

Transport Undertaking may exercise under Section 68(C) were to

be discharged on behalf of the State Government by the

19

Secretary to the Government of Madras in the Industries,

Labour and Housing Department. The Constitution Bench held

that decision of the Secretary to the Government was the

decision of the Governor as per Business Rules. In Para Nos.

10, 11 and 12, following was stated:-

“10. The cabinet is responsible to the

Legislature for every action taken in any of the

Ministries. That is the essence of joint

responsibility. That does not mean that each and

every decision must be taken by the cabinet. The

political responsibility of the Council of

Ministers does not and cannot predicate the

personal responsibility of the Council of

Ministers to discharge all or any of the

Governmental functions. Similarly an individual

Minister is responsible to the Legislature for

every action taken or omitted to be taken in his

ministry. This again is a political

responsibility and not personal responsibility.

Even the most hard working Minister cannot

attend to every business in his department. If

he attempts to do it, he is bound to make a mess

of his department. In every well planned

administration, most of the decisions are taken

by the civil servants who are likely to be

experts and not subject to political pressure.

The Minister is not expected to burden himself

with the day-to-day administration. His primary

function is to lay down the policies and

programmes of his ministry while the Council of

Ministers settles the major policies and

programmes of the Government. When a civil

servant takes a decision, he does not do it as a

delegate of his Minister. He does it on behalf

of the Government. It is always open to a

Minister to call for any file in his ministry

and pass orders. He may also issue directions to

the officers in his ministry regarding the

disposal of Government business either generally

or as regards any specific case. Subject to that

over all power, the officers designated by the

“Rules” or the standing orders, can take

20

decisions on behalf of the Government. These

officers are the limbs of the Government and not

its delegates.

11. In Emperor v. Sibnath Banerji1 construing

Section 59(3) of the Government of India Act,

1935, a provision similar to Article 166(3), the

Judicial Committee held that it was within the

competence of the Governor to empower a civil

servant to transact any particular business of

the Government by making appropriate rules. In

that case their Lordships further observed that

the Ministers like civil servants are

subordinates to the Governor. In Kalyan Singh v.

State of U.P.2 this Court repelling the

contention that the opinion formed by an

official of the Government does not fulfil the

requirements of Section 68(C) observed:

“The opinion must necessarily be formed

by somebody to whom, under the rules of

business, the conduct of the business is

entrusted and that opinion, in law, will

be the opinion of the State Government.

It is stated in the counter-affidavit

that all the concerned officials in the

Department of Transport considered the

draft scheme and the said scheme was

finally approved by the Secretary of the

Transport Department before the

notification was issued. It is not

denied that the Secretary of the said

Department has power under the rules of

business to act for the State Government

in that behalf. We, therefore, hold that

in the present case the opinion was

formed by the State transport

undertaking within the meaning of

Section 68(C) of the Act, and that,

there was nothing illegal in the manner

of initiation of the said Scheme.”

12. In Ishwarlal Girdharlal Joshi, etc. v. State

of Gujarat3 this Court rejected the contention

that the opinion formed by the Deputy Secretary

under Section 17(1) of the Land Acquisition Act

cannot be considered as the opinion of the State

Government. After referring to the rules of

21

business regulating the Government business,

this Court observed at p. 282:

“In our case the Secretaries concerned

were given the jurisdiction to take

action on behalf of Government and

satisfy themselves about the need for

acquisition under Section 6, the urgency

of the matter and the existence of waste

and arable lands for the application of

sub-sections (1) and (4) of Section 17.

In view of the Rules of business and the

instructions their determination became

the determination of Government and no

exception could be taken.”

19. The decision to take over four Schools was taken by the

Chief Minister with the consultation of the Finance Minister

on 07.06.2016. It was not challenged before the High Court or

before this Court that Chief Minister was not competent to

take the decision under the Rules of Business of the State

regarding take over of the schools. What is being contended

is that the school was to continue to exist till the date the

notification under Section 15 is issued for taking over of the

school and in event the school is closed, any date prior to

the date of notification, the power under Section 15 cannot be

exercised. The management of the institution has also filed a

Review Petition after judgment of learned Single Judge

emphasising above issue. The learned Single Judge has

elaborately dealt the issue and held that satisfaction as

contemplated by Section 15 was arrived on at 07.06.2016 when

Chief Minister took the decision. Learned Single Judge

22

(Justice A.K.Jayasankaran Nambiar) extensively considered the

issue and expressed following opinion:-

“……… The exercise of the power is made

conditional only on the State Government being

satisfied that one or all of the factors

indicated therein exist, rendering it necessary

for the State Government to act in public

interest. In my view, it is at this stage alone

that an aided school must exist, as the subject

matter, in relation to which the power of the

State Government is exercised. The procedure to

be complied with in connection with the take

over, such as the framing of a proposal and

placing it before the Legislative Assembly of

the State for its approval, before issuing a

formal notification, only ensures a valid

implementation, or execution, of the decision

that is taken in exercise of the power conferred

under the Section. It follows, therefore, that

once an aided school is identified as the

subject matter of a proposed take over, its

closure during the stage of implementation of

the decision of the State Government is of no

consequence, and will not affect a valid

exercise of power by the State Government. As

regards the exercise of power by the State

Government it needs to be noted that the Cabinet

decision on 29.06.2016 had the effect of

ratifying the decision of the Chief Minister

taken on 07.06.2016 and therefore the decision

of the State Government effectively relates back

to 07.06.2016…………..”

20. Looking to the statutory scheme under Section 15(1), we

are of the opinion that satisfaction of the Government as

contemplated by Section 15 is the satisfaction of the

competent authority, who can under the Rules of Business take

a decision. We have noticed above the findings of learned

Single Judge regarding the date of actual closure of the

23

school, which finding has been specially affirmed by the

Division Bench in writ appeal that closure of school took

place on 07.06.2015 or thereafter and on the date when the

Chief Minister took the decision, actual closure of the school

was not taken place. The fact that contempt petition was

filed by the management, which was closed on 16.06.2015

noticing that all formalities regarding closure had been taken

and in the contempt, the statement on behalf of the State was

also noted that the State has decided to take over the

institutions. Thus, on the date when the Chief Minister took

the decision, the existence of school cannot be denied.

21. The other two steps as noticed above, i.e. approval of

Legislative Assembly and issuance of notification in the

Gazette are further steps regarding completion of the process

and on the date when Government was satisfied that it is in

the public interest to take over the school, the school was in

existence, the said decision cannot be said to lose its

efficacy, even if the school was actually closed before

issuance of notification under Section 15. When the decision

taken on 07.06.2016 was valid to close the school, it was

valid exercise of power and no infirmity can crept in the said

decision even if as per the appellant, the school was closed

before Legislative Assembly passed the resolution or

24

notification was issued on 27.07.2016. It could have been

open to the Legislative Assembly not to approve the proposal

on account of any reason including any subsequent valid

reason, but Legislative Assembly having approved, no capital

can be gained by the appellant on the strength of the above

submission.

22. We fully endorse the view taken by the learned Single

Judge that on the date when the Government took the decision,

i.e., the Chief Minister took a decision on 07.06.2016 to take

over the schools; the schools were not actually closed.

23. There is one more reason due to which the decision taken

by the State Government as approved by the Legislative

Assembly and notified in the Gazette needs no interference.

The reason is that all the institutions, which have been taken

over were the institutions providing primary education. Under

Article 21(A) of the Constitution of India as well as under

the Right of Children to Free and Compulsory Education Act,

2009, the State has to take all steps for fulfilling the

objective to provide education to children upto 14 years of

age seeking Primary (Upper Primary and Lower Primary)

education. The State decision to run the Primary schools

which were decided to be closed by their respective management

25

was in public interest and in the interest of the education.

The High Court has rightly refused to interfere with the

decision of the State Government taking over the schools to

run the same directly by the Government.

 

24. Another limb of argument of the appellant forcefully

put is that acquisition of properties of the schools, if

at all, was to be undertaken by the State, the State

ought to have taken recourse of the provisions of the

Act, 2013. It is contended that owners of the schools are

being deprived of their right of property. They are

clearly entitled for compensation in accordance with the

provisions of Act, 2013. Learned counsel submits that

Act, 2013 being a Parliamentary Act shall override the

provision pertaining to acquisition of properties of

schools as contained in Section 15 of Act, 1958.

25. The Kerala Education Act, 1958 is a State enactment

referable to education. The Entry of Education prior to

its substitution in List III was contained in List II

Entry 11, by the Constitution (Forty-Second Amendment)

Act, 1976. Entry 11 List II was omitted and the subject

was transferred to be comprised in Entry 25 of List III,

26

which is as follows:

“25. Education, including technical

education, medical education and

universities, subject to the provisions of

entries 63, 64, 65 and 66 of List I;

vocational and technical training of

labour.”

26. Acquisition of property is covered by Entry 42 List

III. Entry 42 List III is as follows:

“42. Acquisition and requisitioning of

property.”

27. As noted above, the present is a case where school

is being taken over by the State in accordance with

Section 15 which is a part of the Scheme under the Kerala

Education Act, 1958. The State is entitled to take over a

school for the purpose and object as contained in Section

15. The Government is entitled to take over the school

for any of the following purposes that:

i) for standardising general education in the

State, or

ii) for improving the level of literacy in any

area, or

iii) for more effectively managing the aided

educational institutions in any area, or

iv) for bringing education of any category under

their direct control in the public interest.

27

28. In the present case the State Government has taken

over the school in the public interest in the interest of

education. The power under Section 15 given to the State

is distinct and separate from the power which is

possessed by the State under the provisions of the Act,

2013.

29. It is contended that Section 15 being repugnant to

Act, 2013 which being a Parliamentary enactment, it shall

override the Act, 1958 in view of Article 254 sub-clause

(1) of the Constitution of India.

30. The principles for ascertaining the inconsistency/

repugnancy between two statutes were laid down by this

Court in Deep Chand Vs. State of U.P and others, AIR 1959

SC 648. K. Subba Rao, J. speaking for the Court stated

following in paragraph 29:

“29……Repugnancy between two statutes may

thus be ascertained on the basis of the

following three principles:

(1) Whether there is direct

conflict between the two

provisions;

(2) Whether Parliament intended to

lay down an exhaustive code in

28

respect of the subject-matter

replacing the Act of the State

Legislature and

(3) Whether the law made by

Parliament and the law made by the

State Legislature occupy the same

field.”

31. This Court in State of Kerala and others Vs. Mar

Appraem Kuri Company Limited and another, (2012) 7 SCC

106, in paragraph 47 held that:

“47. The question of repugnancy between

parliamentary legislation and State

legislation arises in two ways. First, where

the legislations, though enacted with

respect to matters in their allotted

spheres, overlap and conflict. Second, where

the two legislations are with respect to

matters in the Concurrent List and there is

a conflict. In both the situations, the

Parliamentary legislation will predominate,

in the first, by virtue of non obstante

clause in Article 246(1); in the second, by

reason of Article 254(1)”.

There cannot be any dispute to the proposition laid

down by this Court to the State of Kerala case (supra).

32. This Court has time and again emphasised that in the

event any overlapping is found in two Entries of Seventh

Schedule or two legislations, it is the duty of the Court

to find out its true intent and purpose and to examine

29

the particular legislation in its pith and substance. In

Kartar Singh Vs. State of Punjab, (1994) 3 SCC 569, in

paragraphs 59 and 60 following has been held:

“59….But before we do so we may briefly

indicate the principles that are applied for

construing the entries in the legislative

lists. It has been laid down that the

entries must not be construed in a narrow

and pedantic sense and that widest amplitude

must be given to the language of these

entries. Sometimes the entries in different

lists or the same list may be found to

overlap or to be in direct conflict with

each other. In that event it is the duty of

the court to find out its true intent and

purpose and to examine the particular

legislation in its ‘pith and substance’ to

determine whether it fits in one or other of

the lists. [See : Synthetics and Chemicals

Ltd. v. State of U.P.; India Cement Ltd. v.

State of T.N.]

60. This doctrine of ‘pith and substance’ is

applied when the legislative competence of a

legislature with regard to a particular

enactment is challenged with reference to

the entries in the various lists i.e. a law

dealing with the subject in one list is also

touching on a subject in another list. In

such a case, what has to be ascertained is

the pith and substance of the enactment. On

a scrutiny of the Act in question, if found,

that the legislation is in substance one on

a matter assigned to the legislature

enacting that statute, then that Act as a

whole must be held to be valid

notwithstanding any incidental trenching

upon matters beyond its competence i.e. on a

matter included in the list belonging to the

other legislature. To say differently,

incidental encroachment is not altogether

forbidden.”

30

33. In A.S. Krishna and others Vs. State of Madras, AIR

1957 SC 297 this Court laid down following in paragraph

10:

“10. This point arose directly for decision

before the Privy Council in Prafulla Kumar

Mukherjee v. The Bank of Commerce, Ltd.

[1946 74 I.A. 23 There, the question was

whether the Bengal Money-Lenders Act, 1940,

which limited the amount recoverable by a

money-lender for principal and interest on

his loans, was valid in so far as it related

to promissory notes. Money-lending is within

the exclusive competence of the Provincial

Legislature under Item 27 of List II, but

promissory note is a topic reserved for the

center, vide List I, Item 28. It was held by

the Privy Council that the pith and

substance of the impugned legislation begin

money-lending, it was valid notwithstanding

that it incidentally encroached on a field

of legislation reserve for the center under

Enter 28. After quoting its approval the

observations of Sir Maurice Gwyer C.J. in

Subrahmanyan Chettiar v. Muttuswami Goundan,

(supra) above quoted, Lord Porter observed :

“Their Lordships agree that this

passage correctly describes the

grounds on which the rule is founded,

and that it applies to Indian as well

as to Dominion legislation.

No doubt experience of past difficulties has

made the provisions of the Indian Act more

exact in some particulars, and the existence

of the Concurrent List has made it easier to

distinguish between those matters which are

essential in determining to which list

particular provision should be attributed

and those which are merely incidental. But

31

the overlapping of subject-matter is not

avoided by substituting three lists for two,

or even by arranging for a hierarchy of

jurisdictions. Subjects must still overlap,

and where they do, the question must be

asked what in pith and substance is the

effect of the enactment of which complaint

is made, and in what list is its true nature

and character to be found. If these

questions could not be asked, must

beneficent legislation would be satisfied at

birth, and many of the subjects entrusted to

Provincial legislation could never

effectively be dealt with.”…”

34. Further in Union of India and others Vs. Shah

Goverdhan L. Kabra Teachers’ College, (2002) 8 SCC 228 in

paragraph 7 following was laid down:

“7. It is further a well-settled principle

that entries in the different lists should

be read together without giving a narrow

meaning to any of them. Power of Parliament

as well as the State Legislature are

expressed in precise and definite terms.

While an entry is to be given its widest

meaning but it cannot be so interpreted as

to override another entry or make another

entry meaningless and in case of an

apparent conflict between different

entries, it is the duty of the court to

reconcile them. When it appears to the

court that there is apparent overlapping

between the two entries the doctrine of

“pith and substance” has to be applied to

find out the true nature of a legislation

and the entry within which it would fall.

In case of conflict between entries in List

I and List II, the same has to be decided

by application of the principle of “pith

and substance”. The doctrine of “pith and

substance” means that if an enactment

32

substantially falls within the powers

expressly conferred by the Constitution

upon the legislature which enacted it, it

cannot be held to be invalid, merely

because it incidentally encroaches on

matters assigned to another legislature.

When a law is impugned as being ultra vires

of the legislative competence, what is

required to be ascertained is the true

character of the legislation. If on such an

examination it is found that the

legislation is in substance one on a matter

assigned to the legislature then it must be

held to be valid in its entirety even

though it might incidentally trench on

matters which are beyond its competence. In

order to examine the true character of the

enactment, the entire Act, its object,

scope and effect, is required to be gone

into. The question of invasion into the

territory of another legislation is to be

determined not by degree but by substance.

The doctrine of “pith and substance” has to

be applied not only in cases of conflict

between the powers of two legislatures but

in any case where the question arises

whether a legislation is covered by

particular legislative power in exercise of

which it is purported to be made.”

35. Even if it is assumed that, in working of two

legislations which pertain to different subject matters,

there is an incidental encroachment in respect of small

area of operation of two legislations, it cannot be held

that one legislation overrides the other. When we look

into the pith and substance of both the legislations,

i.e., Act, 1958 and Act, 2013, it is clear that they

33

operate in different fields and it cannot be said that

Act, 1958 is repugnant to Act, 2013. It is also relevant

to note that under Section 15(2) it is provided that

where any school has vested in the Government under

sub-section (1), compensation shall be paid to the

persons entitled thereto on the basis of the market value

thereof as on the date of the notification.

36. In the counter-affidavit in the present case, the

State has clearly mentioned that compensation has been

determined by the Collector. In paragraph 12 of the

counter-affidavit following has been stated:

“12.Out of the 4 schools that have been

taken over by Government, compensations

have been sanctioned to the erstwhile

Managers of the following 3 schools as per

market value.

(i) A.U.P. School, Malaparamba

Rs.5,85,86,710/- as per G.O.(Rt)

No.181/2017(GEdn dated 25.01.2017.

(ii)A.U.P. School, Palat, Kozhikode –

Rs.56,09,947/- as per G.O.(Rt)No.

2289/2017/Gedn dated 11.07.2017

& G.O.(Rt)No.6047/2017/Fin dated

31.07.2017.

(iii)P.M.L.P. School, Kiraloor,

Thrissur Rs.79,54,550/- as per

G.O.(Rt)No. 2289/2017/Gedn dated

34

11.07.2017 & G.O. (Rt) No.

6047/2017/Fin dated 31.07.2017.

37. It is also relevant to note that under Section 15

sub-section (4), any person aggrieved by an order of the

Collector has a right to appeal to the District Court.

38. Applying the ratio as laid down by this Court in the

above noted cases, we conclude that Act, 1958 and Act,

2013 operate in different fields and Section 15 of the

Act, 1958 in no manner is overridden or repugnant to Act,

2013. There was no invalidity in the exercise of the

power of the State Government under Section 15 to take

over the schools. The owners being entitled to

compensation at the market rate on the date of

notification, the procedure for taking over the property

is in full compliance of requirement of Article 300A of

the Constitution of India. We, thus, do not find any

merit in this submission of learned counsel for the

appellant.

39. Learned counsel for the appellant has placed reliance

on the judgment of this Court in Bhusawal Municipal

Council Vs. Nivrutti Ramchandra Phalak and others, (2015)

35

14 SCC 327. Bhusawal Municipal Council had filed the

appeal against the interlocutory order passed by the

Bombay High Court by which interim relief was granted to

the appellant to the extent of payment of 50% of the

enhanced amount of compensation as awarded by the

Reference Court in the land acquisition proceedings. The

Council challenged the said order and contended that the

land was acquired for the public purpose, the

Council-appellant does not have sufficient funds to pay

the enhanced compensation, this Court may grant stay of

payment of the enhanced amount of compensation awarded by

the Reference Court. In the above context following

observation was made by this Court in paragraph 8:

“8. We see no justification to accept the

submissions so advanced on behalf of the

appellant Council. Undoubtedly, the

appellant might be willing to meet its

constitutional or legal obligation to open

a primary school for imparting education to

children below 14 years of age but the

question does arise as to whether the

appellant Council has a right to meet a

public purpose or a constitutional

obligation at the cost of individual

citizens by depriving them of their

constitutional rights under Article 300-A

of the Constitution?”

40. This Court dismissed the appeal filed by the Council

and had made the observation that right to property is

36

not only a constitutional or a statutory right but also a

human right. Therefore, in case the person aggrieved is

deprived of the land without making the payment of

compensation, it would be tantamount to forcing the said

uprooted persons to become vagabond. There cannot be

any dispute to the proposition laid down by this Court as

above. For the land acquired under the Land Acquisition

Act compensation determined under the provisions of the

Land Acquisition Act, 1894 is required to be paid to the

land owner. The order granting interim relief to the

appellant was held to be just order in which this Court

refused to interfere.

41. In the above case no such proposition has been laid

down by this Court which may help the appellant. The

present is not a case of acquisition under the Land

Acquisition Act. As noted above, under Section 15

sub-section (4) of Act, 1958, the payment of compensation

has to be made in accordance with the market value on the

date of notification under Section 15.

42. In view of the foregoing discussion, we do not find

any ground to interfere with the judgments of the learned

37

Single Judge as well as Division Bench of the Kerala High

Court dismissing the writ petition and writ appeal of the

appellant.

43. In the result, all the appeals are dismissed.

……………………..J.

( A.K. SIKRI )

……………………..J.

( ASHOK BHUSHAN )

NEW DELHI,

FEBRUARY 16, 2018.