Gujarat High Court
Modi School Secondary (English Medium) ... vs State Government on 19 February, 2024
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 111 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 2455 of 2023
With
R/LETTERS PATENT APPEAL NO. 113 of 2024
In
R/SPECIAL CIVIL APPLICATION NO. 2451 of 2023
==========================================================
MODI SCHOOL SECONDARY (ENGLISH MEDIUM) RUN BY VITRAG
CHARITABLE TRUST
Versus
STATE GOVERNMENT & ORS.
==========================================================
Appearance:
MR PARESH V SHETH(3998) for the Appellant(s) No. 1
for the Respondent(s) No. 2,3,4,5
MR. KRUTIK PARIKH, ASSISTANT GOVERNMENT PLEADER/PP for the
Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
Date : 19/02/2024
COMMON ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
These intra-court Appeals arise out of the common judgment and
order dated 18.08.2023 passed by the learned single judge in a group of
writ petitions, being Special Civil Application No. 2446 of 2023 and
other allied petitions, filed by common trustees of the trust namely
common trustees of the Trust, viz., Auham Educational and Charitable Trust
and Vitrag Charitable Trust, which are running total 17 schools in the
same premises.
2. Out of 17 writ petitions decided together by common judgment and
order dated 18.08.2023 filed by individual institutions, a group of Letters
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
Patent Appeal arising out of the said common judgment in 14 petitions,
bearing Letters Patent Appeal No. 58 of 2024 alongwith other allied
matters, have been decided by common judgment and order dated
06.02.2024, in the following manner,
"1. Heard Mr. Devan Parikh, learned senior advocate assisted by Mr.
Paresh Sheth, learned advocate appearing for the appellants and Mr.
Krutik Parikh, learned Assistant Government Pleader for State
respondents no.1 and 4.
2. The challenge in this set of appeals is to the common judgment
and order dated 18.08.2023 passed by the learned Single Judge in
dismissing the writ petitions assailing the decision of the Fee Revision
Committee dated 12.12.2022, whereby the decisions of the Free
Regulatory Committee dated 29.08.2022 and 13.10.2022 have been
upheld.
3. The group of writ petitions have been preferred by common
trustees of the Trust, viz., Auham Educational and Charitable Trust and
Vitrag Charitable Trust, which are running total of 17 schools in the
same premises. The date of the order passed by the Fee Regulatory
Committee in respect of each of the school, though is slightly different,
but the issues raised in the group of the petitions were same.
4. The main ground of challenge before the learned Single Judge
was that the Fee Regulatory Committee had passed the impugned order
without affording an opportunity of hearing to the writ petitioners. The
draft order dated 13.09.2022 of the Fee Regulatory Committee was
served upon the petitioners. The petitioners submitted a representation
dated 19.09.2022 but later withdrew it on the premise that the order
dated 13.09.2022 was not a final order but a draft order. It was
contended that the Fee Revision Committee had not appreciated the
grievances raised by the petitioners in its proper perspective. The
contention was that the rent which was being paid by the school had not
been deducted in arriving at the final figure by the Fee Revision
Committee. It has erred in holding that the rent for running a school
was being paid to the trustees of the Trust and that the same amounted to
profiteering. The Committee has erred in reducing the applicable rent
which was actually approximately Rs.62 lakhs to Rs. 24 lakhs per
annum upon the opinion of the Civil Engineer, who was a part of the
Fee Regulatory Committee, without giving copy thereof to the
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
petitioners.
5. Taking note of the above submissions of the petitioners on the
first issue that the petitioners were not given proper opportunity of
hearing, the reply submitted by the Chief Coordinator and District
Education Officer, Fee Regulatory Committee, Rajkot, were taken note
of wherein it was demonstrated from the order sheet that one of the
representative of the Trust had remained present and order dated
06.10.2022 bears the signature of the said person. The representative of
the Trust Mr. Paras Modi, who was present in the hearing, is the
President of the Trust, which runs 17 schools and it was also noted by
the Court that all the writ petitions have been preferred through the same
person, namely, Mr. Paras Modi.
6. The learned Single Judge has thus taken exception to the
statement of the petitioners that they were not given hearing. For the
incorrect statement made on the part of the petitioners, it was noted that
a qualified apology was earlier tendered before the coordinate bench and
by order dated 23.03.2023, cost of Rs.25,000/- was imposed upon the
petitioners. Again in this group of writ petitions, the petitioners have
raised similar contentions with a slightly modified submission that
hearing on merits was not given.
7. Dealing with the said contention, it was noted by the learned
Single Judge that upon the order dated 29.08.2022, passed by the Fee
Regulatory Committee, the petitioners had submitted an application for
reconsideration, however, the said application was withdrawn by the
petitioners vide communication dated 06.10.2022. Such a contention
had not been raised before the Fee Revision Committee in the Revision
Application. It was thus held by the learned Single Judge that the
submission that hearing on merits had not been afforded appears to be a
clear afterthought and an unacceptable proposition post this Court
having not accepted the contention that the petitioner was not afforded
an opportunity. The plea of the orders impugned being in violation of
the principles of natural justice has, thus, been turned down.
8. Insofar as the rent is concerned, it is noted by the learned Single
Judge that the Fee Regulatory Committee has disallowed the same on
the ground that the Trust had not produced a registered sale deed as per
the provisions of the Registration Act, 1908. In absence of the Rent
Agreement, the statement that the schools were paying in total an
amount of approximately Rs.62 lakhs per annum to the owner of the
building where the schools are running, was not accepted. The Fee
Regulatory Committee has further gone on to record that the Trustee
cannot profiteer from the premises as rental income and the reasonable
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
rent at the rate of Rs. 24 lakhs per annum has been allowed by the Fee
Regulatory Committee on the opinion of the Civil Engineer.
9. It was noted by the learned Single Judge that no error in the
decision making process of the Free Regulatory Committee in
rationalisation of the rent to be paid to the Trustee at the rate of Rs. 24
Lakhs per annum could be demonstrated before it. The jurisdiction of
the Court is confined to the decision making process and it cannot sit as
a court of appeal over the decision of the Fee Regulatory Committee.
The petitioners have thus failed to establish that the order passed by the
Fee Regulatory Committee and the Fee Revision Committee is in
violation of the statutory principles.
10. The order of the learned Single Judge is being challenged on the
ground that the Fee Regulatory Committee has erred in holding that the
payment of Rs. 62 lakhs as annual rent to the Trustees amounts to
profiteering without any cogent material on record. The rent of Rs.62
lakhs per annum being paid by the school to the Trustees has been
disbelieved only on the ground that no registered Lease Agreement was
placed before the Committee and that the property was owned by the
Trustee. The contention is that the burden of proof to show profiteering
was on the Fee Regulatory Committee.
11. Reliance is placed on the decision of this Court in Ambe Public
School vs. State of Gujarat, which is Special Civil Application No.
2356 of 2021 and allied matters, decided on 22.07.2022 to submit that
to arrive at the finding of profiteering, the Fee Regulatory Committee
should have ascertained the market value and determined lease rent,
which should ideally be payable by the school, if it comes to the
conclusion that the school management has entered into lease
transaction in a clandestine manner and that the transaction of lease rent
was not at arm's length. It is contended that without conducting this
exercise of ascertaining the market value and determination of lease
rent, it was not permissible for the Fee Regulatory Committee to reduce
the rent to Rs.24 lakhs by casually returning the finding that the amount
of Rs. 62 lakhs of fee being paid to the trustees was in fact profiteering.
It was further argued that even if profiteering was found and the value
was outraged, there has to be evidence why another value was to be
accepted. There is no evidence except the bare statement in the order
that the Civil Engineer had given an opinion of lease rent being Rs.24
lakhs per annum. No evidence for determination of correct market value
of the property was placed by the Fee Regulatory Committee. No such
evidence has been supplied to the petitioners. The contention thus was
that without determination of actual rent, it was not possible for the Fee
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
Regulatory Committee to hold that the payment of Rs. 62 lakhs per
annum to the Trustees would amount to profiteering.
12. Dealing with the said contention of learned counsel for the
appellants, suffice it to record that the Fee Regulatory Committee has
taken note of the provisions of the Registration Act, 1908 and Transfer
of Property Act, 1882 to record that as per the definition of the 'Lease' as
contained in Section 105 of the Transfer of Property Act, it is a transfer
of immovable property for a particular time period for a consideration of
which the transferee has accepted the terms surrounding the agreement.
A transfer of a right to enjoy a property in consideration of a price paid
or promised to be rendered periodically or on specified occasions is the
basic fabric for a valid lease. The provision says that such a transfer can
be made expressly or by implication. Once there is such a transfer of
right to enjoy the property, a lease stands created.
13. According to section 107 of the Transfer of Property Act, a lease
for the period of more than one year or of year to year or reserving of
yearly rent must be registered. Section 107 says that an unregistered
lease may cause a severe effect on the enforcement of the right and such
deed shall not be admitted in evidence. An unregistered lease deed
renders the lease into a month to month.
14. It was further noted that section 17 of the Registration Act, 1908,
mandates registration of a document to create a lease of immovable
property from year to year or for any term exceeding one year or
reserving a yearly rent.
15. Insofar as the petitioners are concerned, their case is that one of
the trustees of the Trust who is owner of the buildings wherein the
schools are being running, had fixed the annual rent of Rs. 62 lakhs,
which was to be deducted towards expenditure to be incurred by the
schools in question. However, the fact remains that there is no lease
agreement in writing and further there was no documentary evidence
that such an amount of lease rent was paid by the schools concerned.
The distribution of the total amount of rent to be paid by the English
medium and Gujarati medium schools run by the Trust was without any
justification. It was noted that even there is no material on record to
substantiate that such an amount of rent was paid in the last academic
year, i.e., 2020-2021 and 2021-2022.
16. Having considered the same, the Fee Regulatory Committee has
come to the conclusion that the rent of Rs. 10 lakhs p.a. for English
medium schools was justifiable. Having noted the findings returned by
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
the Fee Regulatory Committee, when we have gone through the stand of
the petitioners in the writ petitions, it is stated therein that the petitioners
in their representation dated 19.09.2022, filed before the Fee Regulatory
Committee, had pointed out that nearby property rented to Allahabad
Bank was fetching rent of Rs. 62 per sq. ft., which is much more than
the rent expenses incurred by the petitioner Trusts. It was also
submitted that the rent determined by the Fee Regulatory Committee on
the opinion of the member who happened to be a Chartered Engineer is
not proper inasmuch as the same is without any documentary evidence
or criteria prescribed under law.
17. However, the fact remains that the petitioners did not press their
representation dated 19.09.2022, which was filed after the Fee
Regulatory Committee shared the draft order with the petitioners and
offered their comment. No material has been produced by the
petitioners to contradict the computation of the rent made by the Fee
Regulatory Committee on the opinion of the expert. Inspite of due
opportunity of hearing granted to the petitioners, they could not bring
any cogent evidence to justify the amount of Rs. 62 lakhs per annum,
which was proposed by the petitioners towards rent. In absence of any
contrary material brought before the Fee Regulatory Committee, it is not
permissible for the petitioners to agitate their point of determination of
rent to the tune of Rs. 62 lakhs per annum. Moreover, as noted by the
Fee Regulatory Committee and could not be disputed before us, there
was no material evidence of payment of such an amount of rent in the
last academic years, i.e., 2020-2021 and 2021-2022.
18. In absence of any cogent evidence to prove the payment of rent
of Rs. 62 lakhs p.a., the proposed rent by the petitioners before the Fee
Regulatory Committee, was rightly disallowed. No benefit can be
derived from the decision of this Court in Ambe Public School (supra),
which was delivered in the facts and circumstances of the said case,
inasmuch as in the facts of the instant case, the same is distinguishable.
19. It may not be out of place to mention here that the buildings
wherein the schools are being run by the Trust are owned by one of the
Trustees. As noted by the Fee Regulatory Committee, the object of the
trust is not to profiteer. The trustee can only seek for Return of
Investment made by him/her and cannot earn to profiteer. A reasonable
return on the investment made by the trustee being owner of the
properties wherein the schools are being run, has been allowed by the
Fee Regulatory Committee after rationalisation of the rent to be paid to
the trustees at the rate of Rs. 24 lakhs p.a.
NEUTRAL CITATION
C/LPA/111/2024 ORDER DATED: 19/02/2024
undefined
20. For the above, we do not find any good ground to interfere with
the decision of the learned Single Judge who has found the decision of
the Fee Regulatory Committee being rational and judicious decision.
No error in the decision making process could be pointed out as rightly
noted by the learned Single Judge that this Court would not usurp the
jurisdiction of the decision maker and make a decision itself.
21. For the above, the Letters Patent Appeals are found to be devoid
of any merits and hence dismissed."
3. The present Letters Patent Appeals are also being dismissed in the
same terms of the judgment and order dated 6.2.2024 passed in Letters
Patent Appeal No. 58 of 2024 with other allied matters, being devoid of
merit.
(SUNITA AGARWAL, CJ )
(ANIRUDDHA P. MAYEE, J.)
C.M. JOSHI/PPS
