Management Education & Research ... vs Director Higher Education & Ors.
2012 Latest Caselaw 562 Del

*         IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       W.P.(C) No.505/2010

                                                     Decided on: 27.01.2012

IN THE MATTER OF
MANAGEMENT EDUCATION & RESEARCH INSTITUTE        ..... Petitioner
                  Through: Mr. Raghav Awasthi, Adv.

                  versus

DIRECTOR HIGHER EDUCATION & ORS.                    ..... Respondents
                   Through: Ms. Purnima Maheshwari with
                   Ms. Poonam Kumari and Mr. D.K. Singh, Advs.
                   for R-1 & 2.
                   Mr. Mukul Talwar, Adv. for R-3.


CORAM
HON'BLE MS.JUSTICE HIMA KOHLI


HIMA KOHLI, J. (Oral)

1. The present petition is filed by the petitioner praying inter alia

for quashing of the order dated 29.12.2009 passed by a Committee

authorized by the Lt.Governor, NCT of Delhi, in exercise of the powers under

Section 19(1) of Delhi Professional Colleges or Institution (Prohibition of

Capital Fee, Regulation of Admission Fixation of non-Exploitative Fee & Other

Measures to Ensure Equity and Excellence) Act, 2007 (in short 'the Act'),

whereunder a penalty of `10.00 lacs was imposed on the petitioner/Institute

for compounding an offence punishable under Section 18 of the Act on

account of non-compliance of Rule 8(2)(a)(ii) of the Rules made by the

Government in pursuance of the powers conferred upon it under Section 23

of the Act.

2. The offence alleged against the petitioner/Institute was set out

in a notice to show cause dated 12.6.2009 issued by respondent

No.1/Director Higher Education calling upon it to explain as to why penalty

should not be imposed on it for contravening the provisions of the aforesaid

Act, upon compounding an offence under Section 18 of the Act.

3. While issuing notice on the present writ petition, vide order

dated 25.1.2010, it was directed that subject to the petitioner/Institution

depositing a sum of `2.50 lacs within four weeks, without prejudice to its

rights and contentions, operation of the impugned order dated 29.12.2009,

would remain stayed.

4. Learned counsel for the petitioner/Institute states that the

aforesaid amount was duly deposited by the petitioner/Institute and, vide

order dated 19.8.2010, the interim order dated 25.1.2010 was made

absolute till the decision of the petition with the condition that in the event

of the petition being dismissed, the petitioner/Institute would be liable to

pay interest @ 9% per annum on the stayed amount from 25.1.2010 till the

date of payment. It was further directed that the amount of `2.50 lacs

deposited by the petitioner, be released to respondent No.3/University

subject to final adjudication in the petition. It was however clarified that if

respondent No.3/University did not take any steps for release of the amount

within one month from the date of passing of the order, the amount would

be kept in an interest bearing fixed deposit.

5. Counsel for respondent No.3/University states that his client had

not approached the Registry for release of the aforesaid amount and

therefore the Registry was required to place the amount in an interest

bearing fixed deposit.

6. Before adverting to the factual matrix of the case, it would be

necessary to take into consideration the relevant provisions of the Act.

7. Section 13, which deals with the manner in which admissions are

to be made in an institution, that is subject to the provisions of this Act, is as

under:-

"13. An institution shall, subject to the provisions of this Act, make admission through a common entrance test to be conducted by the designated agency, in such manner, as may be prescribed :

Provided that the management seats may be advertised and filled up, from the candidates who have qualified the common entrance test, by the institution in a transparent manner based on the merit at the qualifying examination."

8. Section 18 deals with the powers to convict the defaulting

institution and lays down the offences and penalties, reads as under:-

"18. Without prejudice to the penalty specified in any other law for the time being in force, whoever contravenes the provisions of this Act or the rules made thereunder shall, on conviction be punishable with imprisonment for a term which may extend to three years, or, with fine which may extend to one crore rupees, or with both."

9. Section 19 envisages compounding of offences punishable under

Section 18 in a manner as stated below :

"19.(1) Any offence punishable under Section 18 may be compounded by such officer or body as may be specially authorized by the Government in this behalf, either before or after the institution of the prosecution, on payment for credit to the Government of such sum as such officer or body may impose :

Provided that such sum shall not, in any case, be less than five lakh rupees and, exceed the maximum amount of the five which may be imposed under this Act for the offence so compounded :

Provided further that in the event of charging of excessive fee by the institution than the notified fee, the amount of compounding fee shall not be less than double the amount of fee excessively charged or five lakh rupees, whichever is higher."

10. Section 23 empowers the Government to make rules in relation

to various matters including the manner of filling the management seats by

the management of an institution covered under Section 13, as laid down in

clause (i), sub-section (2) of Section 23.

11. The Rules framed by the Govt. of NCT of Delhi under the Act

include Rule 8, which relates to allotment of seats. Relevant for

consideration in the present case is Rule 8(2)(a)(ii) of the Rules, which reads

as below:-

"8. Allotment of seats:

(1) xxx xxx xxx (2) Every institution other than a minority institution, shall provide for seats in respect of management quota, wards of defence personnel, persons with disability and others the manner as described below:-

(a) Management Quota. -(i) The Chairman or Secretary of the highest management body of the institution shall furnish an affidavit to the designated agency, mentioned therein that they have followed the procedure laid down in the Act and these rules in transparent manner and that they have done so without any prejudice or undue favour. Such an affidavit shall accompany the list of successful candidates under management quota, to be lodged with the University in the manner laid down in sub-clause (viii).

(ii). The institution shall advertise the admission notice for management quota seats in at least two leading daily newspapers, one in Hindi and other in English in addition to displaying the same on the institution's website and the institution's notice Board, kept at a conspicuous place. The admission notice shall be displayed at least a fortnight before the last date for closing the admission for the concerned course in the University and shall include therein information necessary for the students seeking admission in management quota seats. The admission notice shall include herein the place for which admission forms will be available, the date, time and manner for submission of completed applications and the schedule for various admission processes of counseling. Prospective

applicants shall be given a period of at least eighteen days to apply for seats under the management quota, in the aforementioned manner."

12. The factual matrix of the case lies in a narrow compass. The

petitioner/Institute is a society engaged in providing education to students.

This institute is affiliated to respondent No.3/University. The academic

course in question, which is the subject matter of the present petition, is a

three years MCA course. For the academic year 2008-09, the

petitioner/Institute had advertised the management quota seats through its

website and its notice board, instead of advertising the said seats in two

leading newspapers (one in Hindi and one in English) as required under Rule

8(2)(a)(ii) of the Rules. When the aforesaid deficiency in filling up the

management quota seats was noticed by respondent No.3/University, it

brought the same to the notice of respondent No.1/Director of Higher

Education vide letter dated 27.10.2008. The petitioner/Institute was also

called upon to furnish an explanation.

13. Vide letter dated 02.12.2008 addressed to respondent

No.1/Director of Higher Education, the petitioner/Institute admitted to

having breached the aforesaid Rule and sought condonation of the lapse

and expressed its sincere regret. Vide letter dated 03.12.2008 addressed by

the Registrar of the petitioner/Institute to respondent No.1/Director of

Higher Education, regret was expressed and the respondent No.1/Director of

Higher Education was requested to take a lenient view in the matter and

impose minimum penalty as the Institute had already apologized for the

error. On 12.06.2009, respondent No.1/Director of Higher Education issued

a notice to show cause to the petitioner/Institute stating inter alia that a

meeting of the committee constituted under Section 19 of the Act was held

on 12.05.2009 to compound an offence under Section 18 of the Act as it had

been noticed that the petitioner/Institute had not advertised the admission

notice of the management quota seats for the MCA course in two leading

newspapers as required under the said rules. The show cause notice called

upon the petitioner/Institute to explain its conduct in contravention of the

provisions of the Act.

14. The petitioner/Institute submitted its reply on 14.6.2009, to the

notice to show cause stating inter alia that the admission notice was

displayed in the website of the Institute and on the notice board but on

account of an inadvertent omission, the petitioner/Institute did not advertise

the admission notice in two daily newspapers. It was further explained that

despite the fact that the advertisement could not be published in

newspapers, there was a very good response from applicants as indicated by

the fact that the Institute received 96 applications against 6 seats under the

management quota. Under such circumstances, condonation of the omission

was sought by the petitioner/Institute. On 7.7.2009, the Committee granted

a personal hearing to the petitioner/Institute for compounding of the offence

under Section 19 of the Act. After taking into consideration the submissions

made by the petitioner/Institute, the Committee took into account the fact

that it was the first time that the Institute had committed such an offence

after the Act had come into force, therefore, by the impugned order dated

29.12.2009, it was decided to compound the offence by imposing a penalty

of `10 lacs on the petitioner/Institute for contravening Rule 8(2)(a)(ii) of the

Rules. The said penalty was directed to be deposited with respondent

No.1/Director of Higher Education, within two weeks from the date of

passing of the order.

15. The petitioner/Institute has assailed the impugned order dated

29.12.2009 on the ground that the breach in the present case was purely

technical in nature and no penalty ought to have been imposed on it.

Learned counsel for the petitioner/Institute states that the right to be heard

is a fundamental right under Article 14 of the Constitution of India and in the

present case, the said right was denied to the petitioner/Institute for the

reason that the Registrar of respondent No.3/University was a member of

the Committee constituted under the Act and given the fact that respondent

No.3/University itself was the complainant, he could not have been made a

part of such a Committee. It is therefore submitted that on account of a

conflict of interest, the petitioner/Institute has been denied the fundamental

right enshrined in Article 14 of the Constitution of India. In support of his

submission, learned counsel relies on the decisions in the cases of Basheshar

Nath vs. Commissioner of Income-Tax, Delhi & Rajasthan & Anr. reported as

AIR 1959 SC 149, and Olga Tellis & Ors. Vs. Bombay Municipal Corporation

and Ors. reported as (1985) Supp. 2 S.C.R. 51.

16.         It   is    next   submitted    by   learned    counsel    for    the

petitioner/Institute   that   assuming,     without    admitting,    that    the

petitioner/Institute is guilty of the offence alleged against it, the punishment

of penalty of `10.00 lacs imposed on it is grossly disproportionate to the

offence and therefore ought to be waived and if not waived, reduced to a

large extent. He seeks to explain the aforesaid stand by pointing out that

the annual fee payable by each student is `50,000/- and considering the fact

that the petitioner/Institute could have allotted six seats in the management

quota, at best, the Committee ought to have imposed a fine of `3.00 lacs on

the petitioner/Institute by multiplying the annual fee of `50,000/- into six.

Learned counsel for the petitioner/Institute relies on the judgment in the

cases of Bhagat Ram vs. State of Himachal Pradesh, reported as AIR 1953

SC 454, M/s. Hindustan Steel Ltd. vs. The State of Orissa reported as AIR

1970 SC 253 and Ranjit Thakur vs. Union of India reported as (1987) 4

SCC 611 to urge that the Court is empowered to go into the quantum of

punishment and ought to do so in the present case as the same is entirely

disproportionate to the offence alleged against the petitioner/Institute.

Lastly, reliance is placed on the Heydon's Rule of Interpretation to urge that

the mischief, sought to be prevented by the Act ought to be kept in mind

and having regard to the facts of the case, where the applications received

in respect of six seats were far more than the number of seats available in

the management quota, the intent and the object of the Act was satisfied

even without any advertisement having been inserted by the

petitioner/Institute in two national newspapers.

17. Per contra, learned counsel for respondent/University

vehemently opposes the present petition and submits that a bare perusal of

Section 18 of the Act reveals that it deals with "offences" and not

"penalties", as sought to be urged by the learned counsel for the

petitioner/Institute. He states that equating the present case with the case

of M/s Hindustan Steel Ltd. (supra) would be of no avail to the

petitioner/Institute as the present case is not one of imposition of penalty

but one where the offence has been compounded under Section 19 of the

Act and a penalty has been imposed on the petitioner/Institute. He further

questions the assumption on the part of the petitioner/Institute that the

Registrar of respondent No.3/University is an interested party in the present

case and therefore ought not to have been made a part of the Committee

constituted by the Government. It is stated that the role of respondent

No.3/University is only that of an informant and the Registrar cannot be

treated as a complainant, as urged by the other side. He asserts that the

offence envisaged under the Act is an offence against the public at large

inasmuch as the Act provides for equity and excellence in professional

education in the National Capital Territory of Delhi and such an object which

is a laudable one, is meant for the higher good of the public at large and not

to subserve the interest of respondent No.3/University. Thus, no bias could

be claimed by the petitioner/Institute against the respondent

No.3/University or its Registrar. Learned counsel further states that the vires

of Rule 8(2)(a)(ii), sought to be challenged by the petitioner/Institute, has

not been taken as a ground for challenge in the writ petition and therefore

ought not be examined by the Court. Lastly, it is urged that in any case, the

penalty imposed on the petitioner/Institute has been on the lower side for

the reason that Section 19 of the Act envisages that penalty shall not, in any

case, be less than `5.00 lacs and shall not exceed the maximum amount of

fine, which is `1.00 crore, whereas, in the present case, the

petitioner/Institute has been let off quite lightly with a fine of `10.00 lacs

imposed on it.

18. This Court has heard the learned counsels for the parties and

carefully perused the documents placed on record, as also examined the

extant provisions of law as noticed herein above. It is an undisputed

position that under Section 13 of the Act, the petitioner/Institution is

required to make admissions through a common entrance test in the manner

as prescribed by the respondent No.3/University and further that the

management quota seats are required to be advertised and filled-up from

amongst the candidates who have qualified the common entrance test, but

in a transparent manner, based on merit at the qualifying examination. Rule

8 lays out the manner in which the allotment of seats are to be made by a

college or an institute for each course. Sub-rule 2(a)(ii) of Rule 8 stipulates

that an institution shall advertise the admission notice for filling up the

management quota seats in at least two leading daily newspapers, one in

Hindi and the other in English in addition to displaying the same on the

website of the institution as also on the notice board of the institution at a

conspicuous place. The timeline for display of the advertisement as also for

submission of applications of prospective applicants has also been stipulated

in the aforesaid Rule.

19. In the case in hand, it is admitted that the petitioner/Institute

had not complied with the requirement of advertising the management

quota seats in two leading newspapers. Instead, the petitioner/Institute

chose to display the advertisement only on its website and on the notice

board. The explanation sought to be offered by the petitioner/Institute for

the aforesaid breach of the terms of allotment of management quota seats,

is that the same was on account of inadvertence on the part of its officers

and further, that though the admission notices were not advertised in two

newspapers, they were prominently displayed on its website and on the

notice board. It is pertinent to note that the aforesaid admission of the

mistake committed by the petitioner/Institute was reiterated by it in its

letter dated 3.12.2008 addressed to respondent No.1/Director of Higher

Education, wherein sincere regret was expressed with an assurance that due

care would be taken in future and further, the petitioner/Institute requested

that a lenient view may be taken in the matter by imposing a minimum

penalty on it.

20. Merely because the petitioner/Institute had tendered an

unqualified apology for the mistake committed by it and requested the

respondent No.1/Director Higher Education to impose a minimal penalty on

it for the said breach, cannot be treated as a ground to overlook the illegality

committed by it in the process of filling-up the seats in the management

quota. It is pertinent to note that for the contravention of such a provision,

Section 18 of the Act envisages punishment of imprisonment for a term

which may extend to three years, or with fine which may extend to one

crore rupees, or with both. In the present case, the Committee had agreed

to compound the offence so as to impose a lighter punishment on the

petitioner/Institute. The punishment to be imposed on the defaulting

institute has been laid down in Section 19 of the Act. The phrase

"punishment" is not interchangeable with the phrase "penalty" as sought to

be urged by the learned counsel for the petitioner/Institute. The term "fine"

has been used in both, Sections 18 & 19 of the Act, while further specifying

that in any case the said fine would not be less than `5.00 lacs. However,

the manner of calculation of the fine has been left entirely to the discretion

of the Committee, authorized by the Government in this behalf.

21. This Court is not inclined to accept the submission made by

learned counsel for the petitioner/Institute that the fine imposed on it ought

to be calculated by taking into consideration the number of seats under the

management quota and then multiplying them with the fee that would have

been payable by the students in respect of the first year of the course to be

undertaken by them. However, even if such a yardstick was to be adopted

by the Committee to assess the penalty to be imposed on the

petitioner/institute, considering the fact that the course in question is a

course spread over a period of three-years and there were six seats

available for allotment in the management quota and the annual fee fixed by

the petitioner/Institute is `50,000/- per student, then, by the end of the

course, each student would be expected to have deposited a sum of `1.50

lacs with the petitioner/Institute. The said amount of `1.50 lacs, if

multiplied by six seats, would total to a sum of `9.00 lacs. It may further be

noted that as per the respondent No.3/University, the annual fee for the

year 2008-09 for six management quota seats was `65,000/- X 6 =

`3,90,000/- and the students taking admission under the said quota would

have deposited a sum of `11,70,000/- with the petitioner/institute at the

end of three years. This calculation would clearly demonstrate that the

quantum of fine imposed by the Committee on the petitioner/Institute has

been quite reasonable inasmuch as the same has been assessed as `10.00

lacs, which is on the lower side.

22. As regards the argument urged by the counsel for the

petitioner/Institute that principles of natural justice have been violated in the

present case for the reason that the petitioner/Institute was not afforded an

appropriate opportunity of hearing and its right had been violated on

account of the fact that the Registrar of respondent No.3/University was a

part of the Committee, this Court finds no force in the aforesaid submission.

Learned counsel for respondent No.3/University has rightly made short shrift

of the said argument by pointing out that the role of the Registrar of

respondent No.3/University is only regulatory in nature and in the present

case, the latter had simply forwarded the information gathered by it from

the petitioner/Institute and left the matter in the hands of respondents No.1

& 2. In fact, respondents No.1 & 2 are the ones, who decided to take notice

of the offence committed by the petitioner/Institute and initiate action under

the Act. The offence committed by the petitioner/institute can only be

described as an offence against the public at large and not against any

particular individual. Thus, by no stretch of imagination, can the respondent

No.3/University be treated as a complainant in the present case. At best,

the role which can be assigned to it is that of an informant of an offence

committed by an institution governed under the Act.

23. As for the contention of the learned counsel for the

petitioner/Institute that the Institute ought to be entirely absolved from the

penalty imposed on it as the breach committed by it is purely technical in

nature and on application of the Heydon's Rule of Interpretation, it would be

seen that the requirement of advertising the management quota seats was

satisfied to a large extent in view of the number of applications received by

the petitioner/Institute, this Court is not inclined to accept the aforesaid

argument. The breach committed by the petitioner/Institute cannot be

treated to be only technical in nature as sought to be asserted by learned

counsel for the petitioner/Institute. The mode and manner of filling-up the

management quota seats has been clearly laid out under Rule 8(2)(a)(ii) of

the Rules. Once the petitioner/Institute decided to advertise the

management quota seats and fill up the same, then Rule 8 of the Rules

would automatically come into play and in such circumstances, the term

"may" used in the proviso to Section 13 as a prefix to the phrase, "be

advertised and filled-up" has to be read only in the context of Rule

8(2)(a)(ii) of the Rules, which mandates that an institution ought to issue an

advertisement in the prescribed manner. The petitioner/Institute cannot be

permitted to interpret the said Rule to state that displaying an advertisement

on its website and on its notice board should be treated as sufficient for the

purpose of advertisement and thus, claim an option to dispense with the

requirement of advertising the admission notice for filling-up the

management quota seats into two leading newspapers. The purpose and

intent of the aforesaid Rule is to ensure that the notice of filling-up the

management quota seats gets as wide a publicity as possible. It is for this

reason that the advertisements are required to be carried in two languages,

Hindi and English and not only in local newspapers, but in two leading daily

newspapers, besides displaying the same on the institution's website and its

notice board, as prescribed in the Act and Rules.

24. The last submission made by the counsel for the

petitioner/Institute is a prayer for compassion on the ground that the

petitioner/Institute is a philanthropic institution and has been set up to

provide quality education to students from underprivileged background and

thus, the fine of `10.00 lacs imposed on it would be too heavy a burden for

it to bear. The aforesaid explanation offered by learned counsel for the

petitioner/Institute for seeking reduction of the fine imposed on the

petitioner/Institute in terms of the impugned order is not tenable inasmuch

as all the institutions recognized for imparting higher education are required

to be charitable organizations under the Act. The petitioner/Institute herein

is no different from other similarly placed institutions and thus, cannot claim

any special treatment on the basis of being a charitable organization.

25. It may also be noted that even otherwise, in the course of

exercising its power under judicial review, the Court is required to examine

the decision making process of an authority and not the decision itself. As

held in the Supreme Court in the case of A.P.S.R.T.C. Vs G. Srinivas Reddy,

reported as AIR (2006) SC 1465, the power of judicial review under Article

226 lays emphasis on the decision making process, rather than the decision

itself and only such an action is open to judicial review, where an order or

action of the State or an authority is illegal, unreasonable, arbitrary or

prompted by malafides or extraneous consideration. In the present case,

even if it is assumed that the decision arrived at by the Court could have

been different from the one arrived at by the Committee, as for example,

the quantum of fine imposed in the impugned order, could have been less

than or more than that imposed by the Committee, would in itself not be a

ground for interference as the Court ought not to step into the shoes of the

Committee and then arrive at a different conclusion.

26. For all the aforesaid reasons, the present petition is dismissed

being devoid of merits. As the petitioner/Institute has already deposited a

sum of `2.50 lacs in terms of the order dated 25.1.2010, the said amount is

directed to be released to respondent No.1 in terms of the operative para of

the impugned order, along with the interest accrued thereon. It is further

directed that the petitioner/Institute shall deposit the balance sum of `7.50

lacs with respondent No.1 along with interest payable @ 9% per annum

from 25.1.2010 till the date of payment in terms of the order dated

19.08.2010. Needful shall be done within a period of four weeks. In view of

the fact that interest is being paid by the petitioner/Institute on the amount

of fine imposed on it, the Court does not deem it appropriate to direct the

petitioner/Institute to pay any costs to the other side.

                                                            (HIMA KOHLI)
JANUARY 27, 2012                                               JUDGE
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