CHINTPURNI MEDICAL COLLEGE AND HOSPITAL & ANR.V. STATE OF PUNJAB & ORS. versus STATE OF PUNJAB & ORS. on 3 July 2018

CHINTPURNI MEDICAL COLLEGE AND HOSPITAL & ANR.

v.

STATE OF PUNJAB & ORS.

(Writ Petition (Civil) No. 89 OF 2018)

JULY 03, 2018

[S. A. BOBDE AND L. NAGESWARA RAO, JJ.]

Medical Council Act, 1956 – ss. 10A, 19 – EssentialityCertificate – Grant of, by State Government to the medical college– Power of State Government to withdraw the Certificate oncegranted – Permissibility of – Held: It is not permissible to allow anyauthority including a State Government which merely issues anEssentiality Certificate, to exercise any power of withdrawing theCertificate which could have the effect of terminating the existenceof a Medical College permitted to be established by the CentralGovernment – State Government may not do either directly orindirectly – Further, it cannot be said that under no circumstancescan the Essentiality Certificate be withdrawn – State Governmentwould be entitled to withdraw such certificate where it is obtainedby playing fraud on it or any circumstances where the verysubstratum on which the Essentiality Certificate was granteddisappears or any other reason of like nature – On facts, thecondition of doctor-panel ratio proposed to be achieved, is ultra-vires the provisions of the Act and Regulations – Thus, the orderissued by the State, withdrawing the Essentiality Certificate isquashed and set aside.

Allowing the writ petition, the Court

HELD: 1.1 The Essentiality Certificate certifies that it isessential having regard to specified factors that the opening ofthe proposed college is essential in the State, in public interest.What is significant to note is that the law requires that an applicantmust possess an Essentiality Certificate from the StateGovernment mentioning therein that it is essential to have aMedical College as proposed by him. The purpose is interalia toprevent the establishment of a college where none is required orto prevent unhealthy competition between too many Medical

147

A

B

C

DEF

GH

AColleges. Thus, the Legislative scheme for permission toestablish a Medical College prescribes, as a qualifying criterion,that the applicant must have an Essentiality Certificate issued bythe State Government. The State Government certifies thejustification for establishing a proposed Medical College as a partof the Legislative scheme under the Act. It does not do so underBany other law including a State enactment. The only purpose ofthe Essentiality Certificate is to enable the Central Governmentacting under Section 10A of the Medical Council Act, 1956 totake an informed decision for permitting the opening orestablishment of a new Medical College. Once the college isCestablished, its functioning and performance and even the de-recognition of its courses is controlled only by the provisions ofthe IMC Act. [Para 14, 15][160-H; 161-A-D]

1.2 It would be impermissible to allow any authorityincluding a State Government which merely issues an EssentialityDCertificate, to exercise any power which could have the effect ofterminating the existence of a Medical College permitted to beestablished by the Central Government. The State Governmentmay not do either directly or indirectly. Moreover, the purposeof the Essentiality Certificate is limited to certifying to the CentralGovernment that it is essential to establish a Medical College. ItEdoes not go beyond this. In other words, once the StateGovernment has certified that the establishment of a MedicalCollege is justified, it cannot at a later stage say that there wasno justification for the establishment of the College. Surely, aperson who establishes a Medical College upon an assurance ofFa State Government that such establishment is justified cannotbe told at a later stage that there was no justification for allowinghim to do so. Moreover, it appears that the power to issue anEssentiality Certificate is a power that must be treated asexhausted once it is exercised, except of course in cases of fraud.The rules of equity and fairness and promissory estoppel do notGpermit this Court to take a contrary view. [Para 16][161-F-H;162-A-B]

1.3 The reasons given by the State for rescinding theEssentiality Certificate are not relevant or germane to theestablishment of a Medical College. They refer to the deficienciesH

in the functioning of a Medical College for a particular period.Deficiencies by their nature are curable and can be removed. Toallow the State Government to withdraw an Essentiality Certificateand say that it is no more essential that there should be a collegeat all, would lead to gross arbitrariness since logically theexistence of the Medical College would again be justified if thedeficiencies are removed. The question of justified existence ofa college and the irregular/illegal functioning of an existing collegebelong to a different order of things and cannot be mixed up. Acertificate constitutes a solemn statement by an authoritycertifying certain conditions of things. Persons acting on suchcertificates are entitled to assume that the certificate will ensureand not be pulled out from under their feet for extraneous reasons.None of the reasons for withdrawing the Essentiality Certificatepertain to factors which are certified as true in the prescribedForm 2. [Para 17][162-C-E]

1.4 Relying on the Condition No.(VII)-doctor populationratio in the State, it was submitted that the State Government hasthe power to carry out inspections, since it is responsible for thestudents of the college which is shut down by the MCI orotherwise. If such inspections reveal any deficiencies, the Stateis entitled to withdraw the Essentiality Certificate. Thissubmission cannot be accepted, the IMC Act and the Regulationsunder which the State Government has purported to issueEssentiality Certificate confers the power of inspection on anymedical institution, college or hospital where any medicaleducation is given, on Visitors/Inspectors appointed by MCIunder Sections 17 and 18 of IMC Act. [Para 20][163-D-E]

1.5 The State Government is designated by the Regulationsonly for the purpose of issuing an Essentiality Certificate to justifythe establishment of a medical college within its territories andthat too when approached by a person seeking to establish amedical college. There is no direct conferral of any power ofgeneral inspection on the State and neither can such a power beread into the Regulations nor be implied as necessary to carryout an expressly conferred power which doesn’t exist. In fact, itmight be difficult to even construe that the IMC Act has delegatedany powers to the State Government including that of issuing of ABC

DE

F

G

H

ABC

DE

F

G

H

Aan Essentiality Certificate. The IMC Act merely requires anapplicant to obtain an Essentiality Certificate from the StateGovernment to justify the establishment of a medical college.However, the Act prescribes the form in which such a certificatemust be obtained from the State. Significantly, the form does notconfer any power of inspection. The mere requirement of anBEssentiality Certificate by the State as a qualifying criterion cannotimply the delegation of a power which must be express and clear.It is, therefore, clear that such power has been arrogated by theState without any justification and is likely to lead to a conflictwith the power meant to be exercised by the Central GovernmentCand potentially, result in conflicting inspection reports. Thecondition imposed by the State Government is therefore,ultra-vires the IMC Act and the Regulations. [Para 21][164-A-E]

1.6 The submission that since the Essentiality Certificaterequires the State Government to assume responsibility of theDstudents in case the college closes down, the State must be heldto have an inherent right to withdraw the Essentiality Certificate,is ejected as fallacious since the consequence of withdrawing theEssentiality Certificate can only be that the college closes down,and the State must bear the burden of accommodating the studentsin another institution. [Para 22][164-F-G]

E

1.7 The submission that since the Essentiality Certificatecertifies the availability of adequate clinical material for theproposed Medical College, as per the Regulations, the State hasthe necessary power of inspection of the college even after itsestablishment to ensure that there is adequate clinical material,Fcannot be accepted since the State is enjoined to certify adequateclinical material only at the time of proposal of the Medical Collegeand not after it is established. But it is found that the State hasmisinterpreted the term ‘adequate clinical material’ completely.According to the State, “adequate clinical material” meansG“people” i.e. doctors, patients, staff etc. Whereas, the term isunderstood in the field of Medical Education to mean data aboutnumber of admissions, number of discharges, number of deaths,number of surgeries, number of procedures, X-rays andlaboratories investigations. Thus, what the State is required tocertify is the data available in the region to justify theH

establishment of the proposed Medical College. Obviously, forthe purpose of justifying the existence of a Medical College, theState’s claim that it must have the right to inspect a college afterit is established to see whether there are adequate numbers ofdoctors, patients etc. to justify it’s continued existence iscompletely unfounded. [Para 23][165-B-D]

1.8 The function of the State Government in granting anEssentiality Certificate must be construed as a quasi judicialfunction. The Government is required to, while issuing thecertificate in Form 2, to determine the justification and feasibilityof opening the proposed college in the State. Towards this purpose,it is bound to enquire and determine the existence of severalfactors such as the number of existing institutions, the numberof doctors becoming qualified annually, the number of doctorsregistered with the State Medical Council and employed inGovernment Service, registered with employment exchange etc.It must also determine the doctor population in the State, thedoctor - patient ratio to be achieved and the impact of theproposed college on the availability of medical manpower in theState. The issuance of certificate must therefore be construed tobe a quasi judicial act. The upshot is that such an act is not liableto be construed as an “order” contemplated by Section 21 of theGeneral Clauses Act. Not being an order, and certainly not beinga notification, rule or bye-law, s. 21 has no application whatsoever.[Para 27][166-D-F]

1.9 No provision of the IMC Act confers any power on theState Government or Union Territory Administration to issue anEssentiality Certificate. What the Regulations do is lay down thatan Essentiality Certificate is the qualifying criterion for makingan application for opening a medical college. In that sense, theprovision recognizes an Essentiality Certificate issued by the StateGovernment. It is nobody’s case that the State Government isconferred with the power or duty to issue such a certificate underany State law. In any case, in view of the fact that the field isoccupied by a parliamentary law i.e. MC Act, 1956, a State laweven if already existing would have no efficacy in the field. As aconsequence, the executive power of the State under Article 162cannot be invoked. [Para 28][166-G-H; 167-A-B]

A

B

C

DE

F

G

H

A

A1.10 The Essentiality Certificate must be taken to havebeen issued under the IMC Act read with Regulations and not inexercise of any independent power of the State. Significantly,where no power to issue certificate is shown to have beenconferred by the IMC Act or the Regulations, it would be futileto enquire if a corresponding power to withdraw the same hasBbeen conferred on the State. Even assuming that a power to issuesuch a certificate has been impliedly conferred by the Regulationsunder the Act, certainly, no power to withdraw the same has beenso conferred. Such a power cannot be arrogated relying on Section21 of the General Clauses Act. [Para 29][167-B-D]

C

1.11 In the instant case, the petitioner college has acted onthe Essentiality Certificate and has established a college whichhas functioned; may be deficiently. The conditions having changedsince the grant of the Essentiality Certificate, Section 21 is notavailable in the absence of any power to withdraw conferred byDthe IMC Act. Condition No. (XI) is ultra-vires the provisions ofthe IMC Act and Regulations. The order issued by respondentNo. 1-State of Punjab, withdrawing the Essentiality Certificate isquashed and set aside and Condition Nos.(VII) and (XI) aredeclared illegal. [Paras 32, 33][168-B-D]

E1.13 This Court may not be understood to be laying downthat under no circumstances can an Essentiality Certificate bewithdrawn. The State Government would be entitled to withdrawsuch certificate where it is obtained by playing fraud on it or anycircumstances where the very substratum on which theEssentiality Certificate was granted disappears or any otherFreason of like nature. [Para 35][168-E-F]

E

Modern Dental College and Research Centre v. Stateof Madhya Pradesh (2016) 7 SCC 353; AnirudhsinhjiKaransinhji Jadeja v. State of Gujarat (1995) 5 SCC302 : [1995] 2 Suppl. SCR 637; Dipak Babaria v. Stateof Gujarat (2014) 3 SCC 502 : [2014] 2 SCR 71; Dr.Preeti Srivastava v. State of Madhya Pradesh (1999) 7SCC 120 : [1999] 1 Suppl. SCR 249; Indian NationalCongress (I) v. Institute of Social Welfare (2002) 5 SCC685 : [2002] 3 SCR 1040; Industrial InfrastructureDevelopment Corporation (Gwalior) M.P. Ltd. v.

G

H

CHINTPURNI MEDICAL COLLEGE AND HOSPITAL v.STATE OF PUNJAB

Commissioner of Income Tax, Gwalior (2018) SCCOnline SC 126; Ghaurul Hasan vs. State of RajasthanAIR 1967 SC 107 : 1962 SCR 772; Hari Shanker Jainvs. Sonia Gandhi (2001) 8 SCC 233 : [2001] 3 Suppl.SCR 38; Government of Andhra Pradesh vs. Y.S.Vivekanand Reddy AIR 1995 AP 1 – referred to.

A

B

Wade and Forsyth in Administrative Law, 10[th] Edn p.269 – referred to.

E

CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.89 of 2018.

Under Article 32 of the Constitution of India.

Ms. Bina Madhavan, S. Udaya Kumar Sagar, Mrityunjai Singh,M/s. Lawyer S Knit & Co., Advs. for the Petitioners.

F

Mr. Aman Lekhi, ASG, Prateek Bhatia, Dhawal Mohan, MishraSaurabh, Ms. Uttara Babbar, Ms. Akanksha Choudhary, Ms. BhavanaDuhoon, Mr. Govind Goel, Ankit Goel, Alok Kr. Dwivedi, Advs. for theRespondents G

The Judgment of the Court was delivered by

S. A. BOBDE, J. 1. Chintpurni Medical College started in theyear 2011 in the State of Punjab. This college is affiliated to Baba FaridUniversity. It made an application to the Medical Council of India H

A(hereinafter referred to as ‘MCI’) under Section 10(A) of the IndianMedical Council Act, 1956 (hereinafter referred to as ‘the IMC Act’)for establishing a new Medical College. The permission for the firstbatch was granted in the year 2011-12 on 30.06.2011. For the subsequentacademic years i.e. 2012-13 and 2013-14, no renewal of permissionwas granted to the petitioner college, since the petitioner college wasBfound to be deficient in the inspections carried out by the MCI. For theacademic year 2014-15, petitioner was granted Letter of Permission(LOP) under the orders of this court passed in W.P (Civil) No. 469 of2014. Thereafter, no renewal of permission was granted to the petitionerfor the academic year 2015-16. Petitioner college applied for the grantCof recognition under section 11 of the IMC Act in the year 2015. MCI inorder to determine whether the petitioner college fulfills the minimumeligibility requirements for grant of recognition under section 11 of theIMC Act, conducted three inspections. The First inspection was carriedout on 16.12.2015 followed by second inspection on 25/26.02.2016 andthe third one on 16.03.2016.D

2. In all the three inspections carried out by the MCI, petitionercollege was found to be deficient. The MCI concluded the college wasdeficient to the extent of 100%. The MCI, therefore, recommended tothe Central Government, not to issue recognition to the petitioner collegeunder Section 11 of the IMC Act. The MCI also made similarErecommendations in respect of other colleges. Those Medical Collegesapproached this Court by way of filing a batch of Writ Petitions. ThisCourt directed the matters to be examined by the Oversight Committeeconstituted under the judgment of this Court delivered by the ConstitutionBench in the case of Modern Dental College and Research Centre v.FState of Madhya Pradesh[1]. Finally, the Oversight Committee directedthe MCI to conduct inspections and further directed that if the MedicalColleges were found deficient, they would be banned for a period of twoyears. Such a direction was also given in respect of the petitioner college.MCI conducted fresh inspection of the petitioner college on 07.03.2017

& again found the petitioner college deficient & accordinglyGrecommended to the Central Government to debar the petitioner collegefrom admitting students against the allowed intake for two academicyears i.e. 2017-18 and 2018-19. The Central Government by its orderdated 31.05.2017 debarred the petitioner college for a period of two academic years i.e. 2017-18 and 2018-19. This order was questionedby the petitioner in Writ Petition (Civil) No. 423 of 2017. By order dated10.5.2018, this Court dismissed the Writ Petition (Civil) No.423 of 2017.

3. The present writ petition questions the withdrawal of theEssentiality Certificate dated 07.12.2010 and 15.02.2011 issued to thepetitioner college by Respondent No. 1 under Section 10A of the IMCAct read with the Establishment of Medical College Regulations, 1999(Hereinafter referred to as “Regulations”) framed under the Act.Regulations lay down the qualifying criteria for making an application toopen a Medical College. One of the essential qualifications is that aperson should obtain an Essentiality Certificate from the State Governmentwhere the college is proposed to be located in Form 2.

4. On 13.07.2017, MCI making an unusual request wrote a letterto the Secretary, Government of Punjab stating that it will take actiononly if the concerned college is closed down and the EssentialityCertificate is withdrawn by the State Government. The Government ofPunjab by letter dated 24.7.2017 submitted that they are not in a positionto withdraw the Essentiality Certificate for several reasons. The StateGovernment stated that the doctor – patient ratio in the State of Punjabis 1:1440 approximately whereas the required ratio as per MCI norms is1:1000. They said that they are committed to opening five new medicalcolleges in the State, it was not possible in these circumstances to concludethat there is lack of essentiality. They further said that it would not bepossible to absorb the students from the petitioner college and this willadversely affect the interest of students. They requested for permissionto facilitate shifting of the students to medical colleges in the other stateswithout insisting on the withdrawal of Essentiality Certificate. The Statethus declined to withdraw the Essentiality Certificate.

5. However, for reasons which are not clear, the State relied onproceedings of an earlier show cause notice dated 03.05.2017 callingupon the petitioner to show cause as to why the Essentiality Certificateshould not be withdrawn, to do just the opposite. They passed an orderdated 01.11.2017 and held that the college had made hollow claims forremoving deficiencies and had failed to show cause why the EssentialityCertificate should not be withdrawn. Though several opportunities ofpersonal hearing were afforded, the college had failed to rebut the findingsof the inspection reports. Having found persistent deficiencies, the StateGovernment directed the withdrawal of the Essentiality Certificate.

AB

C

D

E

F

G

H

A6. At this juncture, we might make it clear that no fault can befound with the orders of the State Government in observing thedeficiencies in the functioning of the petitioner college. These deficiencieshave resulted in the Central Government order dated 31.05.2017 debarringthe petitioner college from taking any fresh intake for two years. Asstated above, this Court has declined to interfere with such an order andBaccordingly, Writ Petition (Civil) No.423 of 2017 has been dismissed.

7. Shri Mukul Rohtagi, learned senior counsel for the petitioner,however contended that the State does not have the power to withdrawthe Essentiality Certificate once granted. According to the learned seniorcounsel, the Essentiality Certificate is issued for the specific purpose ofCcertifying the need for opening a new medical college in a State. Oncesuch a need is certified and the college is established, there is no powerconferred by the IMC Act or the Regulations to withdraw such acertificate except on the ground of fraud.

8. Before going into the merits of the submission, it is important toDnote that the State Government appears to have withdrawn the EssentialityCertificate acting under dictation of the MCI. This is obvious from theletter dated 13.07.2017 referred to above. This by itself would vitiatethe withdrawal of the Essentiality Certificate by the State, videAnirudhsinhji Karansinhji Jadeja v. State of Gujarat[2] and DipakEBabaria v. State of Gujarat.[3] The following passage from Wade andForsyth in Administrative Law, 10[th] Edition at p. 269 succinctly statesthe vice in such an action:

“Closely akin to delegation, and scarcely distinguishable fromit in some cases, is any arrangement by which a powerFconferred upon one authority is in substance exercised byanother. The proper authority may share its power withsomeone else, or may allow someone else to dictate to it bydeclining to act without their consent or by submitting to theirwishes or instructions. The effect then is that the discretionconferred by Parliament is exercised, at least in part, by theGwrong authority, and the resulting decision is ultra vires andvoid. So strict are the courts in applying this principle thatthey condemn some administrative arrangements which mustseem quite natural and proper to those who make them.”

2 (1995) 5 SCC 302H 3 (2014) 3 SCC 502

CHINTPURNI MEDICAL COLLEGE AND HOSPITAL v.STATE OF PUNJAB [S. A. BOBDE, J.]

9. The issue which arises in the present W.P is:

whether the State Government has the power to withdraw anEssentiality Certificate once granted, and whether the power to do so isultra-vires the Act and the Regulations framed thereunder.

This issue needs to be decided since power assumed by the Stateto withdraw an Essentiality Certificate has drastic consequences onMedical Education in a State, which can only be controlled by and underthe IMC Act.

Essentiality Certificate

10. It would, therefore, be necessary to see the origin of therequirement that a College must have an Essentiality Certificate beforeit receives permission for its establishment. The Legislative schemethat imposes the requirement of an Essentiality Certificate is as follows:- Section 10A[4 ]of the IMC Act requires the previous permission ofthe Central Government for establishing a Medical College or opening a 4 10.A PERMISSION FOR ESTABLISHMENT OF NEW MEDICAL COLLEGE,NEW COURSE OF STUDY -

(1) Notwithstanding anything contained in this Act or any other law for the time beingin force:- (a) no person shall establish a medical college or (b) no medical college shall:-

(i) open a new or higher course of study or training (including apostgraduate course of study or training) which would enable astudent of such course or training to qualify himself for the award of any recognised medical qualification; or

(ii) increase its admission capacity in any course of study or training(including a postgraduate course of study or training), except with the previous permission of the Central Government obtained inaccordance with theprovisions of this section.

Explanation 1-. For the purposes of this section, “person” includes anyUniversity or a trust but does not include the Central Government.

Explanation 2.- For the purposes of this section “admission capacity” inrelation to any course of study or training (including postgraduate course of study ortraining) in a medical college, means the maximum number of students that may be fixedby the Council from time to time for being admitted to such course or training.

(2) (a) Every person or medical college shall, for the purpose of obtainingpermission under sub-section (1), submit to the Central Government a scheme inaccordance with the provisions of clause (b) and the central Government shall refer thescheme to the Council for its recommendations.

(b) The Scheme referred to in clause (a) shall be in such form and contain suchparticulars and bepreferred in such manner and be accompanied with suchfee as may be prescribed.

A

B

C

D

E

F

G

H

Anew course of study or training. Every person or Medical College mustsubmit to the Central Government a scheme as prescribed. The CentralGovernment then refers the scheme to the MCI for its recommendations.The Medical Council is required to consider the scheme and satisfy

(3) On receipt of a scheme by the Council under sub-section (2) the Councilmay obtain such other particulars as may be considered necessary by it from theBperson or the medical college concerned, and thereafter, it may –

(a) if the scheme is defective and does not contain any necessary particulars,give a reasonable opportunity to the person or college concerned for making awritten representation and it shall beopen to such person or medical collegeto rectify the defects, if any, specified by the Council.

(b) consider the scheme, having regard to the factors referred to in sub-Csection (7) and submit the scheme together with its recommendations thereonto the Central Government.

(4) The Central Govt. may after considering the scheme and therecommendations of the Council under sub-section (3) and after obtaining, wherenecessary, such other particulars as may be considered necessary by it from the personor college concerned, and having regard to the factors referred to in sub-section (7),either approve 4 (with such conditions, if any, as it may consider necessary ) orDdisapprove the scheme, and any such approval shall be a permission under sub-section

(1) :

Provided that no scheme shall be disapproved by the Central Governmentexcept after giving the person or college concerned a reasonable opportunity of beingheard; Provided further that nothing in this sub section shall prevent any person ormedical college whose scheme has not been approved by the Central Government toEsubmit a fresh scheme and the provisions of this section shall apply to such scheme, asif such scheme has been submitted for the first time under subsection (1).

(5) Where, within a period of one year from the date of submission of thescheme to the Central Government under sub-section (1), no order passed by theCentral Government has been communicated to the person or college submitting thescheme, such scheme shall be deemed to have been approved by the Central GovernmentFin the form in which it had been submitted, and accordingly, the permission of theCentral Government required under sub-section (1) shall also be deemed to have beengranted.

(6) In computing the time-limit specified in sub-section (5), the time taken bythe person or college concerned submitting the scheme, in furnishing any particularscalled for by the Council, or by the Central Government, shall be excluded.

(7) The Council, while making its recommendations under clause (b) of sub-Gsection (3) and the Central Government, while passing an order, either approving ordisapproving the scheme under sub-section (4), shall have due regard to the followingfactors, namely:- (a) whether the proposed medical college or the existing medical collegeseeking to open a new or higher course of study or training, would be in aposition to offer the minimum standards of medical education as prescribedby the Council under section 19A or, as the case may be under section 20 inHthe case of postgraduate medical education.

itself by obtaining any particulars as are necessary and after having thedefects if any removed, make its recommendations to the CentralGovernment. The Central Government, may on receipt of the scheme,approve it conditionally or disapprove the scheme. Approval constitutespermission vide sub-section (4) of Section 10A of the IMC Act.

11. The power to permit the establishment of a Medical College isthus conferred on the Central Government by the IMC Act. Theregulations referred to above, framed in the exercise of powers conferredunder Section 10A read with Section 33 of the IMC Act prescribe thequalifying criteria. These criteria lay down the eligibility to apply forpermission to establish a Medical College. One of the criteria is that theperson who is desirous of establishing a medical college should obtain anEssentiality Certificate as prescribed in Form 2 of the Regulations,certifying that the State Government/Union Territory Administration haveno objection for the establishment of the proposed Medical College atthe proposed site and availability of adequate clinical material[5].

12. Form 2 in which the Essentiality Certificate must be obtainedindicates the facts which are considered relevant for determining whether (b) whether the person seeking to establish a medical college or the existingmedical college seeking to open a new or higher course of study or training orto increase it admission capacity has adequate financial resources;

(c) whether necessary facilities in respect of staff, equipment, accommodation,training and other facilities to ensure proper functioning of the medical collegeor conducting the new course or study or training or accommodating theincreased admission capacity, have been provided or would be provided withinthe time-limit specified in the scheme.

(d) whether adequate hospital facilities, having regard to the number or studentslikely to attend such medical college or course of study or training or as aresult of the increased admission capacity, have been provided or would beprovided within the time-limit specified in the scheme; (e) whether any arrangement has been made or programme drawn to impartproper training to students likely to attend such medical college or course ofstudy or training by persons having the recognised medical qualifications; (f) the requirement of manpower in the field of practice of medicine; and (g) any other factors as may be prescribed.

(8) Where the Central Government passes an order either approving ordisapproving a scheme under this section, a copy of the order shall be communicated tothe person or college concerned.

5 (3) that Essentiality Certificate in Form 2 regarding No objection of the StateGovernment/Union Territory Administration for the establishment of the proposedmedical college at the proposed site and availability of adequate clinical material as perthe council regulations, have been obtained by the person from the concerned StateGovernment/Union Territory Administration.

A

B

C

D

E

F

G

H

Athe establishment of a proposed college is justified. These factors are:-

(1) Number of institutions already existing in the State.

(2) Number of seats available or No. of doctors being producedannually.

B(3) Number of doctors registered with the State Medical Council.

(4) Number of doctors in Government Service.

(5) Number of Government posts vacant and those in rural/difficultareas.

(6) Number of doctors registered with Employment Exchange.C

(7) Doctor population ratio in the State.

(8) How the establishment of the college would resolve the problemof deficiencies of qualified medical personnel inthe State andimprove the availability of such medical manpower in the State.D

(9) The restrictions imposed by the State Government, if any, onstudents who are not domiciled in the State fromobtaining admissions in the State, be specified.

(10) Full justification for opening of the proposed college.

E(11) Doctor-patient ratio proposed to be achieved.

13. The concerned State Government is required to certify that ithas decided to issue an Essentiality Certificate for the establishment ofa Medical College with a specified number of seats in public interest,and further that such establishment is feasible. Importantly, the StateFGovernment is required to certify that if the applicant fails to create aninfrastructure for the Medical College as per the MCI norms and freshadmissions are stopped by the Central Government, the State Governmentshall take over the responsibility of those seats that already admitted inthe College with the permission of the Central Government. Anamendment to the notification also requires a declaration that the applicantGowns and possesses adequate land on which non-agricultural use of theland is permitted and on which a Medical College can be established. Itfurther requires a declaration to the effect that the Hospital and MedicalCollege have been granted completion certificate / building use certificate.

14. The Essentiality Certificate thus certifies that it is essentialHhaving regard to specified factors that the opening of the proposed college is essential in the State, in public interest. Further, that the applicant hasthe necessary land and building for running it. What is significant to noteis that the law requires that an applicant must possess an EssentialityCertificate from the State Government mentioning therein that it isessential to have a Medical College as proposed by him. The purpose isinteralia to prevent the establishment of a college where none is requiredor to prevent unhealthy competition between too many Medical Colleges.

15. Thus, the Legislative scheme for permission to establish aMedical College prescribes, as a qualifying criterion, that the applicantmust have an Essentiality Certificate issued by the State Government.The State Government certifies the justification for establishing a proposedMedical College as a part of the Legislative scheme under the Act. Itdoes not do so under any other law including a State enactment. Theonly purpose of the Essentiality Certificate is to enable the CentralGovernment acting under Section 10A to take an informed decision forpermitting the opening or establishment of a new Medical College. Oncethe college is established, its functioning and performance and even thede-recognition of its courses is controlled only by the provisions of theIMC Act and not any other law. The IMC Act, which is a Legislationunder Entry 66 of List-I of Seventh Schedule of the Constitution of Indiais a complete code which governs the establishment, functioning, includingmaintenance of standards of education and even de-recognition ofMedical Colleges vide Section 19 of the Act. The States are denuded ofthe Legislative Power to legislate on medical education under Entry 25of the Concurrent List since Parliament has exercised its power underEntry 66 and enacted the IMC Act vide Dr. Preeti Srivastava v. Stateof Madhya Pradesh[6].

16. It would be impermissible to allow any authority including aState Government which merely issues an Essentiality Certificate, toexercise any power which could have the effect of terminating theexistence of a Medical College permitted to be established by the CentralGovernment. This the State Government may not do either directly orindirectly. Moreover, the purpose of the Essentiality Certificate is limitedto certifying to the Central Government that it is essential to establish aMedical College. It does not go beyond this. In other words, once theState Government has certified that the establishment of a Medical Collegeis justified, it cannot at a later stage say that there was no justification 6 (1999) 7 SCC 120

AB

C

D

E

F

G

H

Afor the establishment of the College. Surely, a person who establishes aMedical College upon an assurance of a State Government that suchestablishment is justified cannot be told at a later stage that there was nojustification for allowing him to do so. Moreover, it appears that thepower to issue an Essentiality Certificate is a power that must be treatedas exhausted once it is exercised, except of course in cases of fraud.BThe rules of equity and fairness and promissory estoppel do not permitthis Court to take a contrary view.

17. In this case, the reasons given by the State for rescinding theEssentiality Certificate are not relevant or germane to the establishmentof a Medical College. They refer to the deficiencies in the functioningCof a Medical College for a particular period. Deficiencies by their natureare curable and can be removed. To allow the State Government towithdraw an Essentiality Certificate and say that it is no more essentialthat there should be a college at all, would lead to gross arbitrarinesssince logically the existence of the Medical College would again beDjustified if the deficiencies are removed. The question of justifiedexistence of a college and the irregular/illegal functioning of an existingcollege belong to a different order of things and cannot be mixed up. Acertificate constitutes a solemn statement by an authority certifying certainconditions of things. Persons acting on such certificates are entitled toassume that the certificate will ensure and not be pulled out from underEtheir feet for extraneous reasons. We find that none of the reasons forwithdrawing the Essentiality Certificate pertain to factors which arecertified as true in the prescribed Form 2, reproduced above.

Challenge to Conditions Introduced in Form 2 by the State F18. It is argued mainly on behalf of the State Government that thespecified conditions which are imposed in the Essentiality Certificateempower the State Government to withdraw an Essentiality Certificateand the certificate has been withdrawn in exercise of the powers reservedunder following conditions incorporated in Essentiality Certificate dated07.12.2010:-G

“vii. The inspection of the institute shall be carried out onyearly basis upto the completion of the study of first batch ofthe students. Thereafter, the inspection shall be periodicalafter three years.

H……

xi. The Punjab Government will have the right to withdrawthe Essentiality Certificate/No objection Certificate if the trust/society/applicant failed to meet any of the conditionscontained therein…..[7]"

19. Shri Rohtagi, learned senior counsel submitted that ConditionNos. (VII) and (XI) reproduced (supra) have been introduced by theState Government on their own; they are not in Form 2 prescribed underthe Regulations. In other words, the MCI Act and the Regulations donot confer any power on the State Government to carry out the inspectionof the medical college or to withdraw the Essentiality Certificate, andthe State has attempted to arrogate these powers to itself. According tothe learned senior counsel, these conditions are ultra-vires the provisionsof the Act and the Regulations.

20. Relying on the Condition No.(VII), the learned counsel forthe State of Punjab, Ms. Uttara Babbar submitted that the StateGovernment has the power to carry out inspections, since it is responsiblefor the students of the college which is shut down by the MCI orotherwise. If such inspections reveal any deficiencies, the State is entitledto withdraw the Essentiality Certificate. This submission cannot beaccepted, the IMC Act and the Regulations under which the StateGovernment has purported to issue Essentiality Certificate confers thepower of inspection on any medical institution, college or hospital whereany medical education is given, on Visitors/Inspectors appointed by MCIunder Sections 17[8] and 18[9] of IMC Act.

7 Essentiality Certificate dated 07.12.2010.

8 17. INSPECTION OF EXAMINATIONS (1) The Committee shall appoint suchnumber of medical inspectors as it may deem requisite to inspect any medical institution,college, hospital or other institution where medical education is given, or to attend anyexamination held by any University or medical institution for the propose ofrecommending to the Central Government recognition of medical qualifications grantedby the University or medical institution.

(2) The medical inspectors shall not interfere with the conduct of any training orexamination, but shall report to the committee on the adequacy of the standards ofmedical education including staff, equipment, accommodation, training facilitiesprescribed for giving medical education or on the sufficiency of every examinationwhich they attend.(3) ……

9 18. VISITORS AT EXAMINATIONS (1) The Council may appoint such number ofvisitors as it may deem requisite to inspect any medical institution, college, hospital orother institution where medical education is given, or to attend any examination held byany University or medical institution for the purpose of granting recognised medicalqualifications.

A

B

C

D

E

F

G

H

A21. The learned counsel for the State has not pointed out anypower of inspection which is conferred on a State Government/UnionTerritory Administration either by the Act or by the Regulations. TheState Government is designated by the Regulations only for the purposeof issuing an Essentiality Certificate to justify the establishment of amedical college within its territories and that too when approached by aBperson seeking to establish a medical college. There is no direct conferralof any power of general inspection on the State and neither can such apower be read into the Regulations nor be implied as necessary to carryout an expressly conferred power which doesn’t exist. In fact, it mightbe difficult to even construe that the IMC Act has delegated any powersCto the State Government including that of issuing of an EssentialityCertificate. The IMC Act merely requires an applicant to obtain anEssentiality Certificate from the State Government to justify theestablishment of a medical college. However, the Act prescribes theform in which such a certificate must be obtained from the State.Significantly, the form does not confer any power of inspection. TheDmere requirement of an Essentiality Certificate by the State as a qualifyingcriterion cannot imply the delegation of a power which must be expressand clear. It is, therefore, clear that such power has been arrogated bythe State without any justification and is likely to lead to a conflict with the power meant to be exercised by the Central Government andEpotentially, result in conflicting inspection reports. The condition imposedby the State Government is therefore ultra-vires the IMC Act and theRegulations.

22. It was submitted by the learned counsel appearing for theState of Punjab that since the Essentiality Certificate requires the StateFGovernment to assume responsibility of the students in case the collegecloses down, the State must be held to have an inherent right to withdrawthe Essentiality Certificate. This argument must be rejected as fallacioussince the consequence of withdrawing the Essentiality Certificate canonly be that the college closes down, and the State must bear the burden of accommodating the students in another institution.G(2) Any person, whether he is a member of the Council or not may be appointed as avisitor under this section but a person who is appointed as an inspector under section17 for any inspection or examination shall not be appointed as a visitor for the sameinspection or examination.(3) …..(4) ..…H

23. The learned counsel for the State of Punjab submitted thatsince the Essentiality Certificate certifies the availability of adequateclinical material for the proposed Medical College, as per the Regulations,the State has the necessary power of inspection of the college evenafter its establishment to ensure that there is adequate clinical material.This submission must also be rejected since the State is enjoined to certifyadequate clinical material only at the time of proposal of the MedicalCollege and not after it is established. But we find from the submissionsthat the State has misinterpreted the term ‘adequate clinical material’completely. According to the State, “adequate clinical material” means“people” i.e. doctors, patients, staff etc. Whereas, the term is understoodin the field of Medical Education to mean data about number ofadmissions, number of discharges, number of deaths, number of surgeries,number of procedures, X-rays and laboratories investigations. Thus,what the State is required to certify is the data available in the region tojustify the establishment of the proposed Medical College. Obviously,for the purpose of justifying the existence of a Medical College, theState’s claim that it must have the right to inspect a college after it isestablished to see whether there are adequate numbers of doctors, patientsetc. to justify it’s continued existence is completely hollow and unfounded.

Condition No. XI

24. It was further contended by the learned counsel for the Statethat the power to issue a certificate carries a power to withdraw thesame in a like manner as contemplated by Section 21 of The GeneralClauses Act, 1987. Section 21 of the said Act reads as follows:- “21. Power to issue, to include power to add to, amend, varyor rescind notifications, orders, rules or bye-laws. – Where,by any [Central Act] or Regulations a power to [issuenotifications] orders, rules or bye-laws is conferred, then thatpower includes a power, exercisable in the like manner andsubject to the like sanction and conditions (if any), to add to,amend, vary or rescind any [notifications] orders, rules orbye-laws so [issued].”

25. Section 21 has no application to a certificate since a certificateis neither a notification, nor an order, or rule or bye- law as contemplatedby that Section. This Court has on several occasions held that where astatutory authority is enjoined to perform a quasi judicial function such A

B

CD

E

F

G

H

Aas that of grant of registration to a political party or issue a certificateunder the Income Tax Act, Section 21 has no application and confers nopower to review such an Act because the party has violated a provisionof the constitution of law, vide Indian National Congress (I) vs. Instituteof Social Welfare[10] and Industrial Infrastructure DevelopmentCorporation (Gwalior) M.P. Ltd. vs. Commissioner of Income Tax,BGwalior[11].

26. In the Indian National Congress (I) case (supra), this Courtheld that where the law requires that an authority before arriving at adecision must make an enquiry, such a requirement of law makes theauthority a quasi judicial authority. Also when the authority is requiredCto act according to rules and not dictated by policy or expediency, theauthority performs the quasi judicial function and not an administrativefunction.

27. On the above test, the function of the State Government ingranting an Essentiality Certificate must be construed as a quasi judicialDfunction. The Government is required to, while issuing the certificate inForm 2, to determine the justification and feasibility of opening theproposed college in the State. Towards this purpose, it is bound to enquireand determine the existence of several factors such as the number ofexisting institutions, the number of doctors becoming qualified annually,Ethe number of doctors registered with the State Medical Council andemployed in Government Service, registered with employment exchangeetc. It must also determine the doctor population in the State, the doctor- patient ratio to be achieved and the impact of the proposed college onthe availability of medical manpower in the State. The issuance ofcertificate must therefore be construed to be a quasi judicial act. TheFupshot is that such an act is not liable to be construed as an “order”contemplated by Section 21 of the General Clauses Act. Not being anorder, and certainly not being a notification, rule or bye-law, Section 21has no application whatsoever.

28. Moreover, no provision of the IMC Act confers any power onGthe State Government or Union Territory Administration to issue anEssentiality Certificate. What the Regulations do, as discussed above,is lay down that an Essentiality Certificate is the qualifying criterion formaking an application for opening a medical college. In that sense, the 10 (2002) 5 SCC 685 11 (2018) SCC Online SC 126H

provision recognizes an Essentiality Certificate issued by the StateGovernment. It is nobody’s case that the State Government is conferredwith the power or duty to issue such a certificate under any State law.In any case, in view of the fact that the field is occupied by aparliamentary law i.e. IMC Act, 1956, a State law even if already existingwould have no efficacy in the field. As a consequence, the executivepower of the State under Article 162 cannot be invoked.

29. The Essentiality Certificate, therefore, must be taken to havebeen issued under the IMC Act read with Regulations and not in exerciseof any independent power of the State. Significantly, where no power toissue certificate is shown to have been conferred by the IMC Act or theRegulations, it would be futile to enquire if a corresponding power towithdraw the same has been conferred on the State. Even assumingthat a power to issue such a certificate has been impliedly conferred bythe Regulations under the Act, certainly, no power to withdraw the samehas been so conferred. Such a power cannot be arrogated relying onSection 21 of the General Clauses Act.

30. A similar question arose in Industrial InfrastructureDevelopment case (supra) where the Commissioner of Income Taxcancelled a registration certificate because it contained an error apparentfrom the record. This Court held that the certificate was issued as aresult of the quasi judicial order and could have been withdrawn onlywhen an express power is vested in the authority to do so. In that case,this Court noted two earlier decisions in Ghaurul Hasan vs. State ofRajasthan[12]and Hari Shanker Jain vs. Sonia Gandhi[13], where itwas held that a certificate of registration of citizenship issued underSection 5(1)(c) of the Citizenship Act, 1955 cannot be cancelled by theauthority granting registration by taking recourse to Section 21 of theGeneral Clauses Act.

31. In Government of Andhra Pradesh vs. Y.S. VivekanandReddy[14], the High Court was called upon to consider whether the consentgiven by the State Government to the lessee to enter into sub-leasescould be withdrawn by invoking Section 21 of General Clauses Act. Afull bench of the Andhra Pradesh High Court, per S.S.M. Quadri, J (asHis Lordship then was) held that the power to withdraw the consent 12 AIR 1967 SC 107

13 (2001) 8 SCC 233

14 AIR 1995 AP 1

AB

C

D

EF

G

H

Acould have been exercised only as long as it was capable of beingrescinded since this exercise had to be subject to like conditions, ascontemplated by Section 21. Therefore, the Court held since the lessee,acting on consent had executed a sub-lease and the sub-lessee hadalready commenced mining operations, the consent had worked itselfout and cannot be withdrawn at that stage as the conditions existing atBthe time of giving consent have changed.

32. We are of the view that the case before us presents a similarsituation where the petitioner college has acted on the EssentialityCertificate and has established a college which has functioned; may bedeficiently. The conditions having changed since the grant of theCEssentiality Certificate, Section 21 is not available in the absence of anypower to withdraw conferred by the IMC Act.

33. In view of the above, we find that Condition No.(XI) is ultra-vires the provisions of the IMC Act and Regulations. In the result, theorder dated 01.11.2017, issued by Respondent No. 1- State of Punjab,Dwithdrawing the Essentiality Certificate is quashed and set aside andCondition Nos.(VII) and (XI) are declared illegal.

34. Accordingly, the Writ Petition is allowed.

35. We may not be understood to be laying down that under noEcircumstances can an Essentiality Certificate be withdrawn. The StateGovernment would be entitled to withdraw such certificate where it isobtained by playing fraud on it or any circumstances where the verysubstratum on which the Essentiality Certificate was granted disappearsor any other reason of like nature.

F

Nidhi Jain

Writ Petition allowed.

G

H