The Governing Body O... v. The Government Of An..., Andhra Pradesh High Court, Judgment, Law, casemine.com

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Case Number

W.P No. 1209/77

Attorney(S)

For the Appellant: G.V.R. Mohan Rao, Advocate.

Judges

Alladi Kuppuswami
Ramachandra Rao
Madhava Rao
Madhusudan Rao
Jeevan Reddy, JJ.

Acts

S. 3 (2) of the Aided Schools Act and the amendments of S. 52 (1) of the Municipal Act
Section 44 of the Bombay Tenancy and Agricultural Lands Act (67 of 1948)
PUNJAB LOCAL AUTHORITIES AIDED SCHOOLS ACT
Regulation of Administration ) Act, 1960,
S. 4 (2) and Ss. 10 and 11. Section 4 (7)
S. 59, of the Punjab Municipal Act,
Kerala University Act (9 of 1969).
SOCIETIES REGISTRATION ACT
Management) Act (17/77)
Management) Act (1972)
Section 4(2)

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Smart Summary

Factual and Procedural Background

Two societies registered under the Societies Registration Act (the petitioners) were involved. The second petitioner, the Medical Education Society, established Sri Rangaraya Memorial Medical College, Kakinada in 1958. The college raised funds through donations and capitation (donation) fees from students; the fee increased over time and was stated to be Rs. 16,000 per student at the time of these proceedings. In 1964 a separate governing body (a new society) was formed for the college and management was handed over to it by resolution dated 11-4-1964. Although the Government did not grant funds, it allowed the college to use the Government General Hospital, Kakinada for teaching; the Government incurred expenditure for clinical staff salaries.

Following persistent public protests and legislative complaints about the high capitation fees and with an intention to take such colleges over, the State promulgated the Rangaraya Medical College (Taking Over of Management) Ordinance, 6 of 1977, vesting management of the college in the Government. The petitioners filed a writ petition seeking a mandamus restraining enforcement of the Ordinance. Before hearing, the Ordinance was replaced by the Rangaraya Medical College (Taking over of the Management) Act (17/77), which received the President's assent on 23 July 1977. The petitioners amended their writ petition to challenge the validity of the Act. The petitioners advanced several grounds including that the Act was in substance compulsory acquisition without adequate compensation contrary to Article 31(2) and outside the protection of Article 31-A(1)(b), and that the measure was promulgated with mala fide motives.

Legal Issues Presented

Whether the Rangaraya Medical College (Taking over of the Management) Act (17/77) is a substantive compulsory acquisition of property (thereby invoking Article 31(2)) or is lawfully a taking over of management protected by Article 31-A(1)(b) of the Constitution.
Whether Article 31-A(1)(b) applies to the Act — specifically, whether (a) management of property is taken over by the State, (b) the taking over is for a limited period, and (c) it is in public interest or to secure proper management of the property.
Whether provisions of the Act (including deemed vesting of assets, delivery of possession, termination of contracts, and treatment of liabilities) amount to acquisition of property beyond mere management.
Whether the legislation is vitiated by mala fide motives in its enactment.

Arguments of the Parties

Petitioners' Arguments

The ordinance and Act are in substance compulsory acquisition of the petitioners' properties without provision for adequate compensation, violating Article 31(2) of the Constitution.
Although the statute purports only to vest management, its provisions (e.g., S.4(2) deeming all assets and rights part of the "medical college"; S.4(6) requiring delivery of possession; termination of contracts by S.4(3)) demonstrate that the Government is taking possession and proprietary control of the college — i.e., acquisition disguised as management.
Article 31-A(1)(b) covers only cases of taking over management simpliciter and for a limited period; it does not cover a taking over that effectively results in acquisition or indefinite control.
The Act affects cash balances; petitioners relied on authorities that cash cannot properly be acquired.
The takeover was alleged to be motivated by mala fide political considerations (influence of Mullapudi Harischandra Prasad and political rivalry), and thus the legislation was enacted for an improper purpose.
‘Private management’ is defined to include both societies; the petitioners contended that properties belonging to the Medical Education Society (a distinct legal entity with other activities such as a nursing college) should not be subject to takeover simply because they are included in the definition of private management.

State's Arguments (Respondent)

Denial of mala fide: the State attributed the legislation to widespread public protests and representations (including Central Government views) about abolition of capitation fees and to interests in reserving seats for Scheduled Castes and Scheduled Tribes.
The Ordinance and Act are legislation for taking over management for a limited period in public interest and are therefore covered by Article 31-A(1)(b) and not hit by Article 31.
The Act only vests management in the Government; while possession of assets and cash balances may be taken for the purpose of management, the State does not claim proprietary interest in those assets — it may use them only for management of the institution.
S.4(7) is intended to protect the State from fictitious or frivolous liabilities; the State affirmed it would take over legitimate debts and contracts and that liabilities would be enforceable against private management as appropriate.
The State conceded it would not take possession of property of the Medical Education Society that is unconnected with the medical college, and representations could be made to the Government in that regard.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Raman Lal v. State of Gujarat	Principle that Article 31-A(1)(b) protection is available only where the law fixes a definite limit for the period of management; if management can continue indefinitely it is not "limited".	The Court applied this principle to hold that Section 4(1) of the challenged Act (management for not exceeding five years or until acquisition, whichever is earlier) satisfies the requirement of a limited period under Article 31-A(1)(b).
Indore Malwa United Mills v. Union of India	Held that where an Act contemplates taking over management "pending nationalisation" without specifying a definite period, Article 31-A(1)(b) is not applicable because the period is indefinite.	The Court distinguished that case: where no period was specified Article 31-A did not apply; by contrast, the present Act specifies a limit (five years or until acquisition whichever earlier), so Indore Malwa does not prevent application of Article 31-A(1)(b) here.
Amritsar Municipality v. State of Punjab	Whereby provisions transferred proprietary and ownership rights (not merely management), those provisions contravened Article 31(2) and were unconstitutional; however, provisions limited to taking over management were not in conflict with Article 31 due to Article 31-A(1)(b).	The Court relied on the distinction drawn in Amritsar Municipality to conclude that because the present Act vests only management (and not proprietary ownership) in the State, the Act is not constitutionally comparable to the provisions invalidated in Amritsar Municipality.
Ram Autar v. Sub-Divnl. Education Officer, Hazipur	Held that appointment of a Managing Committee of a school does not amount to acquisition of the school and does not infringe Article 31(2).	The Court cited this authority to support the proposition that vesting management in a State-appointed authority (special officer) need not amount to acquisition of the institution.
State Of Kerala v. Very Rev. Mother Provincial, Etc.	Where transfer of right to possession of properties and compulsory requisition were involved, Article 31-A(1)(b) did not apply (also noted that presidential assent was required for applicability).	The Court distinguished that case as involving transfer of right to possession and compulsory requisition; the Court found the present Act only vests management and possession for management purposes, not transfer of proprietary possession as in the Kerala case.
Dwarkadas v. Sholapur Sp. & Wg. Co. Ltd.	Decision prior to introduction of Article 31-A(1)(b) and influential in motivating the Fourth Amendment adding Article 31-A.	The Court treated this decision as of limited relevance to interpretation of Article 31-A(1)(b) because it predates that Article and the Fourth Amendment which responded to issues raised by such earlier decisions.
State of Bihar v. Kameshwar Singh; Bombay Dyeing & Manufacturing Co., Ltd. v. State of Bombay; State of M.P. v. Ranoji Rao Shinde	Authorities cited for the proposition that cash balances cannot be acquired as property in acquisition.	The Court explained these authorities did not apply: reading S.4(1) and S.4(2) together shows the State only takes possession of cash balances for the purpose of managing the institution, and does not claim proprietary interest in cash balances; thus the cited decisions were not applicable to facts of this case.

Court's Reasoning and Analysis

The Court proceeded by first addressing the mala fide allegation and then by analysing whether Article 31-A(1)(b) applied to the Act.

Mala fides: The Court found no sufficient material to substantiate the allegation of mala fide in enacting the legislation. It noted that courts do not normally inquire into the motives of the legislature and that validity of legislation cannot be defeated merely by alleging mala fides. Accordingly, the petitioners did not press the mala fide contention seriously.
Structure of Article 31-A(1)(b): The Court set out the three conditions for Article 31-A(1)(b) to apply: (a) the legislation must be one whereby the management of any property is taken over by the State; (b) it should be for a limited period; and (c) it should be in the public interest or to secure proper management of the property.
Limited period (Condition b): The Court examined S.4(1) of the Act which vests management in the Government "for a period not exceeding five years, or until the medical college is acquired, whichever is earlier." Applying Raman Lal, the Court held that a definite limit was present (five years or earlier if acquisition occurs) so that the "limited period" requirement of Article 31-A(1)(b) is satisfied. The Court distinguished decisions where no definite period was specified (e.g., Indore Malwa United Mills).
Public interest and proper management (Condition c): The Court accepted the State's factual matrix — public complaints about high capitation fees, use of Government General Hospital and Government expenditure on clinical staff, and central Government encouragement to abolish capitation fees — as establishing public interest in taking over management. The petitioner did not seriously press that the taking over was not in public interest.
Whether taking over management is a cover for acquisition: The petitioners relied on several statutory provisions (S.4(2), S.4(3), S.4(6), which respectively define the "medical college" to include assets, terminate contracts relating to management, and require delivery of possession) to argue that the Act effects acquisition. The Court analysed these provisions in context:
- The preamble expressly stated the Act was to provide for taking over management pending acquisition, indicating acquisition (if any) would be a future step, not effected by this Act.
- S.4(1) vests only the management in the Government; possession of assets (movable, immovable, cash balances) is taken only for the purpose of enabling management.
- S.6 (payment of rent-like sums for use of property and arbitration in case of dispute, with appeal to the High Court under S.7) shows that the State does not claim proprietary rights and provides mechanisms to protect owners' interests while management is in the hands of the State.
- Accordingly, mere provisions for possession and operational control to enable management do not convert the statute into an acquisition under Article 31(2).
Cash balances and liabilities: The Court rejected the petitioners' contention that the State impermissibly acquired cash balances. It held that S.4(1) and S.4(2) together show the State only has the right to take possession of cash balances for management purposes, not proprietary title. On liabilities, S.4(7) declares that liabilities incurred by private management before the appointed day are enforceable against private management and not the Government; the State clarified in counter-affidavit that legitimate debts and contracts would be taken over and that S.4(7) is intended to guard against fictitious liabilities. Because the petition did not allege specific liabilities the Court found it unnecessary to decide a constitutional challenge to S.4(7).
Distinguishing precedents: The Court systematically compared the Act to prior authorities (Amritsar Municipality, Ram Autar, Kerala case, Dwarkadas) and explained distinctions based on whether proprietary ownership/possession was transferred or only management — concluding the present Act falls within the protective ambit of Article 31-A(1)(b).
Overall conclusion of analysis: For the reasons above (satisfaction of Article 31-A(1)(b) conditions, absence of demonstrable mala fides, statutory safeguards for owners' interests), the Court concluded that the legislation is covered by Article 31-A(1)(b) and is not liable to be struck down as violating Article 31.

Holding and Implications

Holding: Writ petition dismissed.

Implications:

Direct effect on the parties: The petitioners' challenge to the Rangaraya Medical College (Taking over of the Management) Act (17/77) failed; the Act stands and management of the college is upheld as lawfully vested in the State under Article 31-A(1)(b). The writ petition was dismissed with costs and an advocate's fee of Rs. 250 was fixed.
Scope and precedent: The Court treated the Act as falling within Article 31-A(1)(b) because it (i) takes over management, (ii) fixes a limited period (five years or until acquisition, whichever earlier), and (iii) is in the public interest. The Court distinguished decisions where proprietary rights or indefinite periods were involved. The opinion does not announce a broad new doctrine beyond its application of existing authorities to the statutory facts; the decision upholds the Act on the particular statutory structure and factual matrix presented.

Costs: The writ petition was dismissed with costs; Advocate's fee Rs. 250. (As recorded in the judgment.)

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The Governing Body Of The Rangaraya Medical College, Kakinada, Rep. By Its President Dr. P.V.N Raju And Others Petition v. The Government Of Andhra Pradesh, Rep. By The Secretary, Health, Housing And Municipal, Admn., Hyd. And Others .

1. The two petitioners before us are societies registered under the Societies Registration Act. The second petitioner, the Medical Education Society, Kakinada Collected donations from public and started the Sri Rangaraya Memorial Medical College at Kakinada in 1958. As the amount collected was not sufficient for the building and the equipment for the college and also for its running expenses, the society began to collect not only the tuition fees from the students, but also donations from persons who sponsor the applications for admission by the students. The college received donation of Rs. 6,000/- from each student in 1958. It was increased from time to time and at present it is receiving a sum of Rs. 16,000/- from each student. The increase was necessitated by reason of the increased expenditure consequent on the rise in prices of laboratory equipment etc. and increase in pay allowances of the teachers and other staff. In 1964 the State Government and the Andhra University to which the college was affiliated insisted on the college having a separate governing body instead of the governing body of the Medical Education Society. Therefore, a separate society with its own constitution was registered under the name, Kakinada with a separate governing body and the second petitioner handed over the management of the college to the new governing body by a resolution dated 11-4-1964. The governing body consists among other of the following ex-officio members. The Secretary, Ministry of Health, State of Andhra Pradesh, the Director of Medical and Health Service, the District Collector, East Godavari and the Superintendent of the Government General Hospital, Kakinada.

2. Though no grant is given to the college by the Government, the Government has given the college the facility of using the Government General Hospital, Kakinada for the purpose of teaching as without this facility the college could not function. The expenditure relating to the salaries etc., of the clinical staff working in the college and Hospital is being incurred by the Government. There were persistent protests by the public against the exaction of Rs. 16,000/- per seat for every candidate admitted into the college and there were demands, in the Legislature of the State, from the Central Government., and from the public that the petitioner and other medical colleges which were collecting capitation fee, should be taken over by the Government. The Government therefore decided that such colleges including the petitioner college should be taken over by the Government in due course.

3. As a preliminary step to such acquisition the Government passed an ordinance called the Rangaraya Medical College (Taking Over of Management) Ordinance 6 of 1977 whereby the management of the first petitioner college was vested in the Government. The petitioners thereupon filed this writ petition praying for the issue of a writ in the nature of a writ of mandamus restraining the Government from enforcing the provisions of the Andhra Pradesh Ordinance 6 of 1977.

4. Several grounds were urged in the writ petition against the validity of the Ordinance. The principal contention was that the ordinance is in substance one relating to compulsory acquisition of the petitioner's properties without making provision for payment of adequate compensation and violates Article. 31(2) of the Constitution. Although the ordinance purported to vest only the management of the college in the Government, the various provisions of the Ordinance made it clear that, under the guise of management, all the assets and rights of the college were also taken over. It was submitted that the Ordinance was therefore outside the purview of Article. 31-A(1)(b) of the Constitution which covers only cases of taking over the management of property for a limited period in public interest. Lastly, it was urged that the Ordinance was brought about by the Government at the instance of Mullapudi Harischandra Prasad one of the members of the General Body of the second petitioner society who could not succeed in getting himself elected as President of the society. Apart from this, the present President is also the President of the State Jana Sangh. The State Government which is headed by the Congress caused the Ordinance to be promulgated under the influence of Harischandraprasad with the mala fide intention of causing loss to the society and harassing the President.

5. Before the writ petition was heard the Ordinance was replaced by the Rangaraya Medical College (Taking over of the Management) Act (17/77) which received the assent of the President on the 23rd of July, 1977. The petitioners were therefore allowed to amend their Writ Petition by challenging the validity of the Act which had replaced the ordinance. The petitioners filed W. P. M. P. No. 3722/77 praying for such an amendment. In this petition in addition to the various grounds urged in the writ petition it was also contended that under Article. 31-A(1)(b) of the Constitution the taking over of the management should be only for a limited period and does not cover taking over of the management for the purpose of acquisition. It was also contended that the expression taking over management in Article. 31-A(1)(b) of the Constitution would only apply to cases where management simpliciter was taken over without taking possession of the properties and assets of the petitioners.

6. In the counter affidavit filed on behalf of the State, the allegations of mala fide are denied. Neither Harischandraprasad nor any other person had any concern with the promulgation or passing of the Ordinance. It was due to the persistent protests from the public against the exaction of huge capitation fee of nearly Rs. 16,000 per seat and the repeated complaints of responsible person like members of the Legislative Assembly and the Legislative Council, the Government decided to bring forth this legislation. The Government of India had also expressed the view that the State Government of Andhra Pradesh, Bihar, Maharashtra and Karnataka concerned should abolish the system of charging capitation fee for admission to the Medical Colleges concerned. It was also felt that if the system is abolished substantial number of seats could be reserved for Scheduled Castes and Scheduled Tribes in these colleges. It is also pointed out that most of the members who agitated for the taking over of the college include prominent members of the Jana Sangh and opposition parties and it is therefore absurd to suggest that the legislation was effected as the President of the second petitioner was the President of the State Jana Sangh. On the merits it is stated that the Ordinance and the Act being legislation for taking over management of the property of the petitioners for a limited period in public interest they are outside the pale of Article. 31 of the Constitution and are covered by Article. 31-A(1)(b) of the Constitution and are not void because of the absence of provision for adequate compensation. It is denied that under the guise of taking over management the college itself is being acquired. It is submitted that the legislation is not one whereby the property of the petitioners is taken possession of, but is one whereby only the management of the property of the petitioners is taken over by the State.

7. Though allegations of mala fide are made in the petition, no sufficient material is placed before us to substantiate that plea. It is also to be noted that we are not concerned here with an executive act of the Government but with legislation duly passed by the legislature. It is well settled that the validity of a legislation cannot be attacked on the grounds of mala fides and it is not the province of the Court to go into the motive of the legislature in enacting legislation, nor is it for the Court to scan the wisdom or the reasonableness of the policy behind a statute. Sri G. V. R. Mohan Rao, learned counsel for the petitioner, in the above circumstances very rightly in our opinion did not seriously press the contention that the legislation is vitiated by mala fides.

8. Article. 31-A(1)(b) of the Constitution was introduced by the Constitution Fourth Amendment in 1955 and reads:

"Notwithstanding anything contained in Article. 13 no law providing for

(a) ......................................................................................................................................................

(b) taking over of the management of any property by the State for a limited period either in public interest or in order to secure proper management of the property .....................................................................

(c) .......................................................................................................................................................

(d) ......................................................................................................................................................

(e) .......................................................................................................................................................

shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article. 14, Article. 19 or Article. 31 of the Constitution."

In order that Article. 31-A (1)(b) may apply (a) the legislation must be one whereby the management of any property is taken over by the state; (b) it should be for a limited period; (c) it should be in the public interest or in order to secure proper management of the property.

9. Section 4(1) of the Act provides at the management of the college shall in the Government and shall continue to so vest for a period not exceeding five years, or until the medical college is acquired, whichever is earlier. It is clear from this provision that the management is taken over for a limited period, namely, not exceeding five years or until the medical college is acquired whichever is earlier. Hence condition (B) is satisfied. Reference was made to the decision of the Supreme Court in Raman Lal v. State of Gujarat, . Under Section 44 of the Bombay Tenancy and Agricultural Lands Act (67 of 1948) the State Government was entitled to assume management in certain circumstances of any land-holder's estate. Section 61 provided that the State Government may direct that the said management shall be terminated when it is of opinion that it is not necessary to continue the management of the estate. Rule. 35 of the Rules made under the Act stated that the Manager of an estate of which management has been assumed shall, before, the 31st day of March following the year in which the management has been assumed, send a report and state whether it is necessary to continue the management. After considering the report the State Government shall decide whether the management should be terminated or continued and if so for what period, such period not being in excess of five years at a time. If the management was to be continued beyond the expiry of ten years, the Collector has to hold a formal inquiry and send a report to the State Government which had to be taken into consideration by the State Government before it decided to continue the management any further. The Supreme Court held that protection of Article. 31-A (1)(b) is available only where there is a definite limit in the law for the period of management. Neither Section 61 alone nor read with the rule indicate any such limit. They did not accept the argument that so long as there was possibility of return of land to the original owner it must be construed that the management is of a limited period. If the management was likely to continue for an indefinite period it was not in any sense limited. In the present case however, a limited period is fixed, namely, either five years or until acquisition of the college whichever is earlier. If it was stated in the Act that the management was until acquisition it could have been argued on the strength of the decision of the Supreme Court that the period is indefinite and it cannot be stated definitely when the college would be acquired. But in this case the legislature has taken care to provide that the period is either five years of until the acquisition of the college whichever is earlier. Thus, even if there is no acquisition the management cannot extend over a period of five years. We are therefore of the view that condition in Article. 31-A (1)(b) that the management should be for a limited period is fulfilled in this case.

10. Reference was also made to Indore Malwa United Mills v. Union of India, ILR (1974) 1 Delhi 311. In that case Section 4(2) of the Sick Textile Under taking (Taking Over of Management) Act (1972) provided that, in certain circumstances, the Central Government may make a declaration that the management of a textile undertaking ought to be taken over by it. The long title of the Act however recited that it was an Act to provide for taking over in the public interest of the management of the stick textile undertaking pending nationalisation of such undertakings. The Delhi High Court held that Article. 31-A (1)(b) was not applicable. It observed that the specification for a limited period mentioned in the Article. necessarily assumes that after the expiry of the limited period the management will be returned to the old management but the impugned Act does not at all contemplate the return to private management and specifically provided for taking over of the management of sick textile undertakings pending nationalisation of such undertakings. Thus the take-over of management cannot be said to be for a limited period within Article. 31-A (1)(b). It is to be noticed that in that case Section 4(2) did not specify any period during which the Government would be in management. It was only in the long title that it was mentioned that the taking over of management was pending nationalisation. Hence in that case there was no limited period. As observed by the Supreme Court in Raman Lal v. State of Gujarat (supra) the period is indefinite as it could not be said with any degree of certainty when the undertaking would be nationalised. For the above reason we agree with the conclusion of the Delhi High Court. We however do not agree with the observation that merely because he Act does not contemplate the return to private management and specifically provides for taking over of the management pending nationalisation it cannot be said to be for a limited period. Article 31-A (1)(b) does not require that the management should be handed over to the old management after the expiry of the period. If the period is limited, Art. 31-A (1)(b) would in our view be applicable even though at the end of the period the undertaking would be acquired and is not returned to the old management.

11. It was also contended that the management was not taken in public interest or to secure proper management of the property. In the counter affidavit it is stated that there was a clamour from all sources against the exaction of a huge amount of capitation fee of Rs.16,000/- per seat. Questions were raised in the legislature. Even the Central Government pointed out that private medical colleges which were collecting such captitation fee should be taken over by the Government. The petitioner was given the facility of using the Government General Hospital , Kakinada and the expenditure relating to salaries of the clinical staff working in the college and hospital was incurred by the Government. If the Government felt that as the admission to the college was limited only to a privileged few who could afford to pay the enormous amount of Rs.16,000/- as capitation fee and when the Government Hospital was being utilised for the benefit of the college and considerable expenditure was incurred by the Government for maintaining the clinical staff of the college and the hospital , it cannot be said that the Government was not acting in public interest in deciding to acquire the college and to take over the management of the college in the meanwhile. It has also to be noted that this would enable the Government to reserve some seats for the Scheduled Castes and Scheduled Tribes. In the above circumstances though a contention was raised in the writ petition that the management was not in the public interest, Sri Mohan Rao could not and did not seriously argue that taking over of the college was not in public interest. He however contended that in this case condition (a) referred to above is not satisfied as this is not a case of mere taking over management. He submitted firstly that in truth and in fact, this is a case of acquisition of the college or at any rate taking possession of the college. He further submitted that in assuming that the management of the property was taken over, it is only taken over of the management simpliciter that is covered by Art. 31-A (1)(b) and in such taking over of the management is coupled with taking of possession it is outside the purview of the said Article. Mr. Mohan Rao drew our attention to the various provisions of the Act. Under S. 4(2) of the Act the Medical College shall be deemed to include all assets, rights and lease holds, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, stores, instruments and vehicles, cash balances, reserve fund, investments and book debts and all other rights and interests arising out of such property as were immediately before the appointed day in the ownership, possession, power or control of the private management and all books of account, registers and all other documents of whatever nature relating thereto. Under S. 4 (3) any contract, whether express or implied or other arrangements in so far as it relates to the management of the medical college and in force immediately before the appointed day shall be deemed to have terminated on the appointed day. Under S. 4 (6) every person in whose possession or custody or under whose control the medical college or any part thereof or any property attached thereto may be immediately before the appointed day, shall deliver possession of the medical college or such part thereof or any properties attached thereto as the case may be to the special officer. Section 4(7) provides that liability incurred by the private management in relation to the medical college before the appointed day shall be enforceable against the private management and not against the Government or the Special Officer. Private management is defined in S. 2 (f) as meaning both the societies namely petitioners 1 and 2. The learned counsel for the petitioners submit that these and other provisions make it clear that under the guise of taking over management, the Government is practically acquiring the college or at any rate taking possession of the college. We are not inclined to agree with this submission. The preamble to that Act says that this is an Act to provide for the taking over of the management pending acquisition of the college. Under S. 4(1) it is only the management of the college it vests in the Government. It is clear that these provisions that the legislation is one whereby the management of the college is taken over. It is no doubt true the college and its properties including cash balance etc., are also taken possession of by the Special Officer. But it is clear that such possession is taken only for the purpose of management. Without taking possession of the property, movable and immovable or the cash balance etc., it will be impossible to manage the college. Hence the mere fact that the act also provides for taking possession of the property of the college does not render the legislation any the less a legislation whereby the management of the college is taken over. The fact that possession is only taken for the purpose of management is made clear by S. 6 which provides that during the period when the management of the medical college remains vested in the Government it shall pay to the person interested in respect of any property such sum as is equal to the rent which would have been payable for its use and occupation if it is an immovable property, or for its use if it is a movable property had it been taken on lease for that period. Under the proviso it is stated that if the sum is not settled by any agreement, the matter shall be referred to the arbitrator for making an award. An appeal lies to the High Court against such award under S. 7. Again the preamble makes it clear that the taking over of management is pending the legislation. In other words acquisition is to follow at a future date and is not made under the Act.

12. The learned counsel for the petitioner strongly relied on the decision of the Supreme Court in Amritsar Municipality v. State of Punjab, where taking over by the Government of the Schools which were run by the Municipal Committee together with all the buildings in which the schools were functioning and other movable and immovable properties connected with the institutions which belonged to the committee, under the Punjab Local Authorities (Aided Schools) Act (22 of 1959) was challenged. It was contended that taking over of movable and immovable property of the Committee could not possibly fall within Art. 31-A (1)(b) of the Constitution. The Supreme Court while observing that though under Art. 31-A (1)(b) the management of the Schools could be taken over by the state for a limited period in public interest, S. 3 (2) of the Act provided that all rights and interests of the Committee including the rights of maintenance, management and control shall be transferred and vest in the State Government. This essentially had reference to proprietary and ownership rights apart from the rights pertaining to management and control. Further S. 6 of the Act provided that S. 52 (1) and S. 59 of the Punjab Municipal Act must be deemed to have been amended. By virtue of the amendment of S. 59, of the Punjab Municipal Act, all rights and interests in the lands, buildings etc. of the school as also the movable property shall be deemed to have been transferred to the State Government. In those circumstances it was held that S. 3 (2) of the Aided Schools Act and the amendments of S. 52 (1) of the Municipal Act were held to be unconstitutional as they contravened Art. 31 (2) of the Constitution. It has to be noticed that Ss. 3 (1), 4 and 5 which related only to the taking over management were held not to be in conflict with the Constitution in view of Art. 31-A (1)(b). The position in the present case is entirely different. Whereas in the case before the Supreme Court the proprietary and ownership rights apart form the rights pertaining to management and control were taken over by the Sections which were declared unconstitutional, in the present case it is only the management that is vested in the Government under S. 4(1) of the Act. No doubt, S. 4(2) defined 'medical college' as including all rights and all property, movable and immovable including cash balances etc. but read with S. 4(1) it is clear that it is not the property but the management of such property that vests in the Government. In Ram Autar v. Sub-Divnl. Education Officer, Hazipur, it was held that the appointment of a Managing Committee of a school does not amount to acquisition of the school and therefore the action of the Government under the Bihar High School (Control and Regulation of Administration ) Act, 1960, does not involve infringement of Art. 31 (2) of the Constitution. In this case also the effect of the Act is that the Special Officer steps into the shoes of the Managing Committee until the college is acquired. In State Of Kerala, Etc. v. Very Rev. Mother Provincial, Etc., the Supreme Court had to consider the validity of the Kerala University Act (9 of 1969). One of the grounds on which it was attacked was that it violated Art. 31-a (1) (b) of the Constitution. Dealing with that contention the Supreme Court observed that the saving in Art. 31-A (1)(b) is not available as the assent of the President was required in order that the article is applicable and in that case the assent was not obtained. Further it was observed that S. 63 (1) of the Act involved the transfer of right to possession of the properties and that section provided for compulsory requisition of the properties within Art. 31 (2) and (2-A). It is thus seen that the Supreme Court was not dealing with a case where the Government was only taking over management but a case which involved the transfer of possession by way of compulsory acquisition. The transfer of right to possession in that case was not merely an incident of right to management as in the present case.

13. The learned counsel for the petitioners also referred to the decision of the Supreme Court in Dwarkadas v. Sholapur Sp. & Wg. Co. Ltd., . But this decision was rendered prior to the introduction of Art. 31-A (1)(b). As a matter of fact it was this decision that necessitated the Fourth Amendment of the Constitution under which Art. 31-A (1)(b) along with other articles was introduced. The observation of the Supreme Court in that decision are not in any way helpful in interpreting Art. 31-A (1)(b) which was introduced later.

14. The learned counsel for the petitioner submitted that under S. 4 (2) the cash balance also vests in the Government and it is settled law that in exercise of the right to acquire property, cash cannot be acquired and he referred to the decisions in State of Bihar v. Kameshwar Singh, ; Bombay Dyeing & Manufacturing Co.,Ltd. v. State of Bombay, and State of M.P. v. Ranoji Rao Shinde, . This argument proceeds upon a misconception, namely that cash balances are acquired by the Government. Reading S. 4(1) and (2) of the Act together it is clear that the Government has only the right to take possession of the cash balances for the purpose of management of the institution which vests in it under S. 4(1). It cannot claim any proprietary interest over the cash balance or in respect of any other property, movable or immovable. The Government is entitled only to use the cash balance or the property for the purpose of managing the institution. The decisions relied on are of no application to this case.

15. The learned counsel for the petitioner also submitted that the expression 'private management' is defined as meaning both the Medical Education Society as well as the Rangaraya Medical College. The two societies are distinct and separate entities. It is only the management of the Rangaraya Medical College that is being taken over, but under S. 4(2) of the Act all the rights, properties, movable and immovable, cash balances etc. of the private management are also taken possession of by the Government. He submitted that in exercise of its power to take over the management of the College, it is not open to the Government to take possession of the properties of the Medical Education Society which is a distinct entity. In this connection he pointed out that under the Memorandum of Association of the Medical Education Society, the activities of the Medical Education Society are not restricted merely to the running of the college. As a matter of fact it is running a College of nursing which is quite distinct from the Rangaraya Medical College. The learned Government Pleader conceded that the Government did not intend to take possession of any property of the society unconnected with the Medical College. Even in the writ petition it is not stated that any property of the Education Society which is unconnected with the college is being taken possession of. It is always open to the Medical Education Society to represent to the Government that any item of property belongs only to the Medical Education Society and has nothing to do with the Medical College in which case the learned Government Pleader conceded that the Government would not take such property. The learned Government Pleader also submitted that on the strength of the counter affidavit of the Government this was made clear by this Court in W.P. 1211/77.

16. The learned counsel for the petitioner also drew our attention to S. 4(7) of the Act which is in the following terms:

"For the removal of doubts, it is hereby declared that any liability incurred by the private management in relation to the medical college before the appointed day shall be enforceable against the private management and not against the Government or the Special Officer"

17. He pointed out that while under S. 4(1) all the rights, properties, movable and immovable including cash balances are taken over by the Government any liability incurred by the Management in relation to the Medical is not borne by the Government. The Government in the counter affidavit however has made it clear that this provision is only to protect the State from frivolous liabilities incurred previously and all legitimate debts and contracts which are not voidable under Act 17/77 will be taken over by the State and that S. 4(7) has to be read in conjunction with S. 4 (2) and Ss. 10 and 11. Section 4 (7) has been inserted in order to avoid the State from being foisted with all kinds of fictitious liabilities. In the writ petition there is no averment that there are any liabilities of the petitioners which the Government is likely to refuse to take over. In view of the fair concession by the Government in the counter affidavit that all legitimate debts and contracts would be taken over by the State it is unnecessary to consider the contention that S. 4(7) of the Act, if it is construed as wiping out all liabilities so far as the Government is concerned, would be void as offending Art. 31 (2) of the Constitution.

18. For all the above reasons we are of the view that the impugned legislation is one covered by Art. 31-A (1)(b) of the Constitution and is therefore not liable to be struck down as violating Art. 31.

19. The Writ petition is dismissed with costs.

20. Advocate's fee Rs.250/-.

21. Petition dismissed.

The Governing Body O... v. The Government Of An...