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1979 DIGILAW 964 (ALL)

Nathimal Ramsai Mai Edward Coronation College Association v. State of U. P

1979-09-06

K.C.AGRAWAL, K.M.DAYAL

body1979
JUDGMENT K.C. Agrawal, J. - On 28th May,. 1909 the Society known as Nathimal Ramsai Mai Edward Coronation College-Association, Khurja, district Bulandshahr, was registered under the Societies Registration Act 1860. The main object of the said Society was of establishing educational institutions. To effectuate its object, the Society started a College in the name of Nathimal Ramsai Mai Edward Coronation College, Khurja. The aforesaid College was subsequently raised to the status of a Degree College. In this College, education is imparted up to Post-Graduate classes. It was previously affiliated with the Agra University. On the enforcement of Kanpur and the Agra Universities Act, the College was affiliated with the Meerut University. In accordance with the provisions of Meerut and Kanpur Universities Act, statutes and the ordinance framed thereunder, a committee of management was formed to run the administration of the Degree College. The committee of management consists of the following office bearers : - 1. President. 2. Vice President. 3. Secretary. The election for the aforesaid offices of the committee of management, which, took place last, was on 9th January, 1978. 2. On 16th May, 1979 the State Government issued a charge-sheet under Section 57 of the U. P. State Universities Act, 1973 (Act No. 10 of 1973) (hereinafter referred to as the Act) calling upon the petitioners to show cause why an order under Section 58 of the Act should not be made. Section 58 of the Act authorises the State Government after considering the explanations, if any, submitted by the management under Section 57 to take over, for such period not exceeding two years, the management of the College and its property to the exclusion of management. Under this section, whenever the authorised controller so takes over the management, he shall, subject only to-such restrictions as State Government may impose, have in relation to the management of the College and its property all such powers and authority as the Management would have if the College and its property were not taken over under this sub-section. 3. The aforesaid charge-sheet dated 16th May, 1979 contained as many as six charges. As we are concerned only with the following two charges that need alone be mentioned. (I) During the years 1960 to 1978 a sum of Rs. 1,75,500/- was taken as loan from different funds, which were transferred to the maintenance fund and a sum of Rs. 3. The aforesaid charge-sheet dated 16th May, 1979 contained as many as six charges. As we are concerned only with the following two charges that need alone be mentioned. (I) During the years 1960 to 1978 a sum of Rs. 1,75,500/- was taken as loan from different funds, which were transferred to the maintenance fund and a sum of Rs. 5000/- was transferred to the hostel fund, which is a serious irregularity. (II) The fees realised from the students for the months of April, May and June, 1975 have been returned by the committee from its own sources. On June 23, 1975 a sum of Rs. 98645.96 P. was transferred to the maintenance funds, but on 4th June, 1976 a sum of Rs. 7066.02 only was returned. The remaining amount of Rs. 91579.94 has still to be deposited. This is a grave irregularity, which has been detrimental to the College. 4. Upon the receipt of the aforesaid charge-sheet, an explanation was submitted by the management. The explanation submitted mainly was that the charge levelled against the committee only relates to the financial condition of the College prevailing during the time of the old managing committee. The present committee having been elected on January 8, 1978 and having not taken any loan from any of the funds could not be held to be guilty of the same. To the second charge the reply was that it was absolutely wrong to state that the managing committee transferred on June 23, 1975 Rs. 98645.96 from the maintenance fund and has to repay Rs. 91579.95 in the maintenance fund. As far as the committee of management is concerned, it had not taken any loan from the maintenance fund. Apart from these two explanations, the committee also pleaded that in respect of these charges a show cause notice dated 7th June, 1978 had been issued but subsequently on finding that the charges could not be substantiated, the same had been withdrawn by the State Government. 5. Having found that the explanation given by the petitioners was not satisfactory, the State Government on June 14, 1979 made an order superseding the committee of management for a period of two years. By this very order, the State Government appointed District Magistrate Bulandshahr to be the Authorised Controller of the aforesaid College. 5. Having found that the explanation given by the petitioners was not satisfactory, the State Government on June 14, 1979 made an order superseding the committee of management for a period of two years. By this very order, the State Government appointed District Magistrate Bulandshahr to be the Authorised Controller of the aforesaid College. The findings given by the State Government with respect to the aforesaid two charges were as follows : - (1) The management of this College has committed a serious irregularity in taking a sum of Rs. 1,75,500/- as loan from various funds during the years 1960 to 1978 and in transferring the same to the maintenance fund and Rs. 5000/- to the Hostel Fund. In his explanation the Secretary of the College has, in regard to this serious irregularity, tried to evade by saying that this relates to the financial position of the College during the time of the old Managing Committee and that the present committee took over charge on January 8, 1978 and it has not taken any loan so far. As a matter of fact this contention of the management is far from truth. Actually speaking, these amounts of Rs. 1,75,500/- and Rs. 5000/- have been taken as loan after diverting them from different funds to the maintenance fund and Hostel Fund, whereas the aforesaid amounts should have been spent on some particular object falling under the funds from which it was taken as loan. A detailed statement of the amount taken as aforesaid loan has been given in enclosure Ka\ As a matter of fact this amount should have been spent over the students but the management has done harm to the College by diverting the aforesaid amount to the maintenance and Hostel fund and thus depriving the students forming part and parcel of the College of the benefits which might have accrued to them from that amount. As far as the allegation of the management committee is concerned, it is worth mentioning that it cannot be absolved of the responsibility of irregularity, by saying this, because it has taken no steps so far for removal of the aforesaid irregularity. As far as the allegation of the management committee is concerned, it is worth mentioning that it cannot be absolved of the responsibility of irregularity, by saying this, because it has taken no steps so far for removal of the aforesaid irregularity. As a matter of fact the present management is a successor of the old management, and if any serious financial irregularity has been committed by the old management committee the present management committee too cannot be absolved of its responsibility because no steps have been taken for removal of the aforesaid irregularity. At the same time this fact has also been put forward, that only four of the fourteen members of the present management committee are new and that the remaining are those who were formerly members (of the old committee) and in' this way the constitution of the present management committee is more or less similar to that of the old management committee. 2. The fees realised for the months of April, May and June, 1975 has not been returned by the management from its own sources, on the other hand the aforesaid fees has been returned by transferring as loan a sum of Rs. 98645.96 P. from the miscellaneous fund to the maintenance fund on June 23, 1975. But on June 4, 1976 a sum of Rs. 7066.2 P. only has been transferred to the Vidhi fund, and the remaining amount of Rupees 91579.94 P. has still to be returned. In his explanation the Prabandhak (Manager) of the College has stated that on June 23, 1975 no amount of Rs. 98,645.96 P. has been withdrawn from the maintenance fund. As a matter of fact this amount was transferred on 23rd June, 1975 from Vidhi fund to maintenance fund and subsequently it was deposited as fees of the aforesaid teachers. As a matter of fact the management should have deposited this amount of fee from its own sources, for example, income from securities. Miscellaneous funds are meant for spending on special head for the welfare of the students. As a matter of fact the management should have deposited this amount of fee from its own sources, for example, income from securities. Miscellaneous funds are meant for spending on special head for the welfare of the students. The act of diverting the aforesaid amount by means of transfer to the maintenance fund for depositing the same as fees is not only unauthorised but also detrimental to the College, because this amount was required to be spent over the welfare of the students, who are part and parcel of the College and the management has, by diverting the aforesaid amount deprived students, forming part of the College, of its benefits and done harm to the College. In his explanation the Secretary of the College has stated that the present management has not taken any loan, but it is not possible to absolve the present management of the responsibility of the aforesaid irregularities, because this irregularity has not been removed by it also, besides this fund is for the fulfilment of a particular object. The diversion of the aforesaid amount is therefore not only an unauthorised act on the part of the management, but the management of the College has also done harm to the College by depriving it of the expenditure to be incurred on a particular object." 6. Challenging the aforesaid order of the State Government, the present writ petition has been filed. Counsel appearing for the petitioners raised four points in support of the writ. (I) That the State Government had no power to supersede the committee of management and to appoint the Authorised Controller under the Section 57 (v) of the Act without finding that the management has substantially diverted the property of the College to its detriment. (II) That no action could be taken against the present committee of management on the charges levelled. Inasmuch as the charges even if taken to be correct could not amount to misappropriation, diversion or in application of the property of the College. (III) That the State Government did not have power to make an order of appointment of Authorised Controller without first providing an opportunity to the petitioners to rectify the defect on the ground of which the Authorised Controller had been appointed. (III) That the State Government did not have power to make an order of appointment of Authorised Controller without first providing an opportunity to the petitioners to rectify the defect on the ground of which the Authorised Controller had been appointed. (IV) That the alleged act of diversion of College funds having been committed by the old committee of management, the order superseding the committee of management is against the provisions of the Act. 7-8. Before considering the arguments of the learned counsel for the petitioners, a brief reference to the legislation dealing with the subject appears to be necessary. Prior to the enactment of the U. P. State Universities Act, 1973, the various Universities in Uttar Pradesh were being regulated by separate Acts. Several commissions and committees appointed by the Government of India and the State Government pointed out the necessity of improving the functions of tire Universities, and, therefore, the U. P. State Universities Act, 1973 was enacted to amend and consolidate the law with a view, in particular, to toning up the academic and financial administration. Amongst others, the Act contains provisions containing the regulation of the administration of the Degree College. For the first time, the Act made the provision for the appointment of the Authorised Controller on grounds stated in clauses (I), (II), (III) and (IV). The clause with tire relevant portion of Section 57 with which we are concerned, runs as under : - Section 57. If the State Government receives information in respect of any affiliated or associated college (other than a college maintained exclusively by the State Government or a local authority) - (i) to. (iv) ...................., (v) that its Management has substantially diverted, misapplied or misappropriated the property of the College to the detriment of the college, it may call upon the Management to show cause why an order under Section 58 should not be made ; Section 58. As already stated, the State Government has powers to appoint an Authorised Controller for taking up the management. In pursuance of the powers conferred by statute, the State Government made statutes which are known as. I. Statutes of the University of Meerut. 9. The relevant statutes are 13.39, 13.40 and 13.41. As already stated, the State Government has powers to appoint an Authorised Controller for taking up the management. In pursuance of the powers conferred by statute, the State Government made statutes which are known as. I. Statutes of the University of Meerut. 9. The relevant statutes are 13.39, 13.40 and 13.41. These statutes, which came into force on April 20, 1977, provide that all Students Funds shall be administered by the Principal and that the Students Funds and the fee income shall not be transferred to other funds and no loan shall be taken from these funds for any purpose whatsoever. 10. To contest the writ petition three counter-affidavits have been filed on behalf of the respondents. Out of the three counter-affidavits, two are of Sri G. P. Mittal, Secretary and Commissioner, Ministry of Education and Sri Maya Ram Joint Secretary. The third counter-affidavit is that of Sri P. G. Gupta who was arrayed as respondent No. 4. Sri P. C. Gupta is the Principal, N. R. E. C. College, Khurja, Sri G. P. Mittal filed his affidavit controverting the allegations of mala fides which had been made by the petitioners against him. Sri Maya Ram defended the order on the ground that it was valid. Sri P. C. Gupta, however, has filed a detailed counter-affidavit challenging the various allegations made in the writ petition and has justified the taking over of the management of the College by the Authorised Controller. As already noted above, the State Government found that out of six charges, two of them had been established against the committee of management. Defending the order, Sri P. C. Gupta stated that the State Government rightly held that the managing committee had taken Rupees 1,75,500/- as loan from various funds and transferred it to the maintenance fund and Rs. 5000/- hostel fund which is serious irregularity committed by the committee of management. With respect of other charge No. 6, Sri P. G. Gupta alleged that . Rs. 98,645.96 P. were transferred from the Roys fund to the maintenance account by the resolution of the committee of management. Therefore, the charges were proved. 11. Before dealing with the merits of various contentions raised before us, we wish to note that the validity of the impugned order of the State Government had also been challenged on the ground of mala fides. Therefore, the charges were proved. 11. Before dealing with the merits of various contentions raised before us, we wish to note that the validity of the impugned order of the State Government had also been challenged on the ground of mala fides. The petitioners had alleged that since Sri P. C. Gupta, the Principal of N. R. E. C. College was related to Sri G. P. Mittal, the impugned order had been made at the dictates of Sri G. P. Mittal. However, Sri S. C. Bndhwar, counsel appearing for the petitioner made a statement before us that he had been instructed to press the writ petition on other grounds than the ground of mala fides. We are, therefore, not required to enter into the controversy of mala fides. 12. As it would be convenient to deal with the point of an opportunity being given to the petitioner to remove the defects before passing the impugned order we wish to take the same as a first ground. The contention of the petitioners counsel was that since the petitioners were not guilty of diverting the funds, the State Government should have afforded an opportunity to the petitioner for removing the detects and as such an opportunity was not being given the order was illegal. We do not think that this would be the correct approach in construing Sections 57 and 58 of the Act which are meant for superseding the committee as a whole when its work discloses existence of grounds for such an action this would justify its supersession. There is nothing in these sections which could justify the interpretation placed by the petitioners learned counsel. We are, therefore, not inclined to accept this. It does not appear sound to us to hold that without giving an opportunity to the committee of management, to rectify the defects found after an enquiry held under Section 57 would constitute to exercise power without jurisdiction. 13. At this place we may also dispose of the other argument of the learned counsel for the petitioner that since the mal-administration, if any, was result of the earlier committees of management, the present committee of management could not be superseded. The object of supersession obviously is to appoint an Authorised Controller to correct the maladministration. In other words, the object is to set the working of the committee right. The object of supersession obviously is to appoint an Authorised Controller to correct the maladministration. In other words, the object is to set the working of the committee right. It is not difficult to envisage a situation where mal-administration were so seriously affected a committee of management that it is necessary in the interest of the committee itself to hand Over the affairs of the management to an Authorised Controller. The funds had been diverted by the previous committee of management. That may not be a ground to hold that Sections 57 and 58 did not apply. We, however, wish to make it clear that since we will allow the writ petition on another ground, we may not be taken to have expressed a concluded opinion on this controversy. For our view we, however, find support from a case reported in Joint Registrar of Cooperative Societies v. P. S. Rajagopal Naidu, AIR 1970 SC 992 . 14. Now we will take up the main ground on which we think the writ petition is liable to succeed. The same is that the requirement of Section 57 of the Act having not been made out, the order was invalid. For applying Section 57 (v) the State Government is required to find. (I) That its management has substantially diverted, (II) misapplied, (III) misappropriated the property of the College, (IV) to the detriment of the College. The present is admittedly not a case of misapplication or misappropriation. It was a case where the management is alleged to have substantially diverted the property of the College to its detriment. We are now, therefore, required to understand the meaning of the words "diverted" and "detriment". These words have not been defined in the Act. We can, therefore, refer to the dictionary meaning for understanding the true import and scope of clause (v) of Section 57. In Oxford Dictionary the word "diversion" has been given the meaning as "the turning aside from its due, or ordinary course or direction, a turning aside of ones course, deviation, deflection. To the same effect is the definition of this word given in Websters III New International Dictionary, the relevant meanings are, "go different, waste, the act of diverting from some act of the committee". The meaning given to the word "detriment" in Websters Dictionary is "injury or damage or something that causes it". To the same effect is the definition of this word given in Websters III New International Dictionary, the relevant meanings are, "go different, waste, the act of diverting from some act of the committee". The meaning given to the word "detriment" in Websters Dictionary is "injury or damage or something that causes it". In Oxford Dictionary the meaning of word "detrimental" is "causing loss or damage; harmful; injurious, hurtful, dangerous, full of loss". 15. Apart from the dictionary meanings, it is also settled law that in order to apply a meaning the context is also relevant. In Maharaj Singh v. State of U. P., AIR 1976 SC 2602 , the Supreme Court observed. "A word can have many meanings. To find out the exact connotation of a word in a statute, we must look to the context in which it is used. The context would quite often provide the key to the meaning of the word and the sense it should carry. Its setting would give colour to it and provide a clue to the intention of the legislature to use it........................" 16. Interpreting Section 57 (v) from the angle pointed out above, we find that for applying section for taking the source the State Government is required to see that the funds of the College have been diverted by the managing committee to the detriment or loss of the College. An appointment of an Authorised Controller can be made on the ground of diversion if it is established that the diversion has resulted in causing loss or damage to the College. For passing an order, the State Government is required to record both the findings, namely, that there had been a diversion and to the detriment of the College. If either of the two things is missing, the order would be liable to fall. 17. In the instant case, the diversion claimed is that of two amounts. One is from the miscellaneous account whereas the other is from the Students funds account. The State Government after having found that there has been a diversion from various funds during the years 1960 to 1978 held that the diversion resulted in causing loss to the students depriving them of various benefits which might have accrued to them. According to the State Government itself, a sum of Rupees 1,75,500/- had been taken as loan from various funds. According to the State Government itself, a sum of Rupees 1,75,500/- had been taken as loan from various funds. If the loan has been taken from various funds, the State Government was not justified in holding that the diversion of the aforesaid funds deprived the students of the various benefits which have accrued to them. There is nothing in the finding of the State Government to show that the entire amount, which had been withdrawn from the accounts was meant for the investment in the welfare activities of the students. The finding of the loss, having been caused to the students, was given to justify the order. In the absence of the details as to the amount which would have been actually spent in the welfare of the students or for their benefits, the State Government could not hold that the taking of loan by the College resulted in the deprivation of the benefits to the students. 18. Moreover, the second item was that of Rs. 98,645.96 P. This sum is said to have been withdrawn from the miscellaneous fund. There is nothing to indicate that the amount lying in this fund was meant for the welfare of the students. Moreover, in the absence of any finding to the effect that the students were actually deprived of the benefits which would have accrued to them but for the diversion, the State Government could not record a finding against the managing committee holding that an action under Section 57 (v) could justifiably be taken. 19. The question of detriment was one of fact and was required to be established on circumstantial and other evidence. The State Government did not have any evidence to come to that finding. It presumed that the diversion resulted in causing detriment to the students without there being any evidence to that effect. It may be that in a case of misappropriation, the fact of embezzlement may amount to establishing detriment incapable of effective contradiction but that would not be true of diversion. In the case of diversion, the detriment could not be presumed. As one of the preconditions for exercising the powers' did not exist, the State Government exceeded its jurisdiction in making the order under Section 58 (2). 20. In R. v. Electricity Commrs., ex parte London Electricity Joint Committee (1920) Ltd., 1923 All Ex Rep 150 at 161 it was held that. ".. As one of the preconditions for exercising the powers' did not exist, the State Government exceeded its jurisdiction in making the order under Section 58 (2). 20. In R. v. Electricity Commrs., ex parte London Electricity Joint Committee (1920) Ltd., 1923 All Ex Rep 150 at 161 it was held that. ".. .the operation of the writs (of prohibition and certiorari) has extended to control the proceedings of bodies which do not claim to be, and would not be recognised as, Courts of Justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the Kings Bench Division exercised in those writs." 21. We find that since the finding of the State Government is based on assumptions and conjectures, the order made by it cannot be permitted to stand. In Rukmanand v. State of Bihar, AIR 1971 SC 746 , the Supreme Court observed. "Therefore, one of the principal matters which weighed with the authorities and the High Court was based on pure assumptions and conjectures and on no evidence whatsoever. On this ground alone the impugned orders should have been quashed." 22. Counsel for the petitioners also contended that since Section 57 (v) is prospective, the State Government did not have jurisdiction to appoint an authorised Controller over the management on the basis of certain acts and admissions done before the enforcement of the Act. We have since accepted the petitioners main argument, we are not called upon to decide this controversy in the present writ. Similarly, other grounds raised are also not required to be gone into. 23. For the reasons given above, the writ petition succeeds and is allowed. The order of the State Government dated June 14, 1979 (Annexure 20) is quashed and the Authorised Controller is directed to hand over the management to the managing committee of the Nathimal Ramsai Mai Edward Coronation College Association, Khurja forthwith. The petitioners will be entitled to get the costs of this writ petition from respondent No. 1.