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  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 166 of the Constitution of India, 1985
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 166 of the Constitution of India, 1985
Smart Summary

Factual and Procedural Background

The first respondent, a diploma-holder in engineering employed elsewhere, enrolled in 1996 for a part-time (evening) Bachelor of Engineering course offered by Madhav Institute of Technology and Science, Gwalior (“the appellant”). He paid the tuition fee for the academic year 1996-97. The State of Madhya Pradesh had earlier issued two administrative orders designed to encourage family-planning:

  • Order dated 1-10-1985: children of “green-card” holders (persons who had undergone sterilisation) were exempted from tuition fees in specified professional institutions.
  • Order dated 6-11-1987: the benefit of fee exemption was purportedly extended to the sterilised persons themselves.

Relying on the 1987 order, the first respondent filed W.P. No. 906 of 1997 in the Madhya Pradesh High Court seeking refund of the tuition already paid and exemption for the remaining years of study. A learned Single Judge dismissed the petition, holding that the 1987 order was unenforceable because it was not issued in the Governor’s name under Article 166 of the Constitution. On appeal, a Division Bench reversed that decision and granted the requested relief. The Institute appealed to the Supreme Court of India. No interim stay was granted during the pendency of the appeal, and the respondent continues his studies in the part-time course.

Legal Issues Presented

  1. Whether the State Government’s circular dated 6-11-1987, not issued in the Governor’s name under Article 166, confers an enforceable right to tuition-fee exemption.
  2. Whether that circular applies to part-time, self-financed courses in private unaided institutions not in receipt of grant-in-aid.
  3. Whether principles of promissory estoppel compel either the Institute or the State to grant or finance the requested fee exemption.
  4. Whether the Court can direct the State to bear the tuition cost for individual candidates where the institution and course are unaided.

Arguments of the Parties

Appellant Institute

  • The 1987 circular was never intended to extend to private unaided colleges or to self-financing part-time courses; imposing such an obligation would leave the Institute without any source to meet teaching expenses.
  • Because the part-time course is not admitted to grant-in-aid, the State cannot compel the Institute to waive fees.

State of Madhya Pradesh

  • Filed a counter-affidavit supporting the Institute, clarifying that both the 1985 and 1987 circulars were meant only for regular, aided courses; they do not apply to self-financing part-time programmes.

First Respondent

  • Claimed the 1987 circular conferred a statutory right to fee exemption and refund.
  • Argued that he underwent sterilisation relying on the State’s representation and that the doctrine of promissory estoppel prevents withdrawal of the benefit.
  • Contended that initial capital contributions from Government and public to the Institute justified imposing the fee waiver even for unaided courses.
  • In the alternative, sought a direction that the State itself pay his tuition fees if the Institute was not obliged to waive them.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court began by noting the State’s express clarification that the 1985 and 1987 circulars were intended only for regular, aided courses. Because the respondent’s course was part-time, self-financed and unaided, applying the circular would force the Institute to absorb teaching costs without reimbursement—an unreasonable burden unsanctioned by any policy agreement.

On enforceability, the Court accepted that the 1987 circular, not issued in the Governor’s name under Article 166, lacked the force of an enforceable executive order. Even assuming otherwise, the circular’s text and subsequent State clarification demonstrated that it was never meant to cover unaided courses.

The plea of promissory estoppel was rejected. The circular was a general administrative communication to medical officers, not a personal representation to the respondent. Furthermore, the respondent had voluntarily paid tuition for 1996-97, indicating he was unaware of the circular when enrolling; hence no detrimental reliance was shown.

The Court also declined to direct the State to pay the respondent’s fees, holding that grant-in-aid decisions are matters of governmental policy and cannot be judicially re-written to benefit individual claimants.

Holding and Implications

Appeal Allowed; writ petition dismissed; judgment of the Division Bench set aside.

Immediate Effect: The first respondent must pay all outstanding tuition for previous and future years of the part-time course. The Institute may permit instalment payments or secure a bond for arrears. No costs were awarded.

Broader Implications: The decision confirms that administrative fee-waiver schemes cannot be judicially extended to private unaided courses absent clear governmental intent or statutory mandate, and that promissory estoppel will not arise from broad policy circulars lacking specific reliance.

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    Principal, Madhav Institute Of Technology & Science v. Rajendra Singh Yadav And Others

    M. Jagannadha Rao, J.— Madhav Institute of Technology and Science, Gwalior, represented by its Principal is the appellant before us. The 1st respondent, who is an employee and a diploma-holder in Engineering wanted to improve his educational qualification and joined the part-time engineering course (evening session) of the appellant Institute in 1996 and also paid the tuition fee for the degree course. This part-time course was started in this Institute in 1991. It appears that the State of Madhya Pradesh, with a view to control population growth wanted to give certain incentives to those who had undergone “sterilisation”. Such persons were given “green cards” by a government circular dated 1-10-1985, which said that “children” of the green-card holders would not have to pay fees in medical colleges, engineering colleges/polytechnic colleges and industrial training institutes. Subsequently, the Government issued another order on 6-11-1987, extending this benefit to the “persons” who had undergone the sterilisation operation and it was said that there would be “waiver” of tuition fee in medical and engineering colleges in their cases too.

    2. The 1st respondent who joined the Institute in 1996 and who paid tuition fee for 1996-97 then filed WP No. 906 of 1997 claiming that under the above order dated 6-11-1987 of the Government of Madhya Pradesh, he was entitled to exemption from paying the fee in the College and that he was entitled to refund of the tuition fee already paid for 1996-97 and exemption for the future.

    3. The State contended that the above orders were not applicable to “part-time” courses. [There is no dispute that so far as this College is concerned, the regular courses (i.e other than part-time) were admitted to grant-in-aid and that these part-time courses were not so admitted.] In other words, it was contended that the 1st respondent was not entitled to exemption from payment of tuition fee. A further contention was advanced by the State that the first order dated 1-10-1985 was issued in the name of the Governor of the State under Article 166 of the Constitution of India (the one which conferred benefit on the “children” of those who had undergone sterilisation) whereas the second order dated 6-11-1987 (which conferred the benefit on the persons who had undergone sterilisation) was not issued in the name of the Governor and did not confer any enforceable right on the persons who were claiming exemption under the second order.

    4. A learned Single Judge of the High Court of Madhya Pradesh, in his judgment dated 26-8-1997 dismissed the writ petition on the ground that the second order dated 6-11-1987 having not been issued in the name of the Governor under Article 166 of the Constitution of India, it was not enforceable. But, on appeal in LPA No. 218 of 1997, the Division Bench allowed the writ petition and granted relief stating that the appellant Institute had no case that government orders were not binding on it and hence it was bound to implement the second order of the Government dated 6-11-1987. The exemption was general in nature and had been made applicable to “all” colleges and polytechnics/institutes. The appellant was accordingly directed to grant exemption in regard to the tuition fee. It is against this judgment that the Institute has preferred this appeal.

    5. During the pendency of this appeal, there was no stay of the judgment of the Division Bench. We are informed that the 1st respondent is yet to complete the degree course and is still studying in this Institute in the part-time course.

    6. In this appeal, the learned Senior Counsel, Shri A.K Chitale appearing for the appellant Institute has contended that the order of the Government of Madhya Pradesh dated 6-11-1987 would never have been intended to apply to private colleges/institutes where the courses were not admitted to grant-in-aid by the Government. The Government could not have imposed any obligation on the unaided colleges/institutes inasmuch as there was no other way whereby these colleges/institutes could meet the expenditure for these part-time courses. Admittedly, the part-time course in this College was not admitted to grant-in-aid by the Government.

    7. The State of Madhya Pradesh has filed a counter in this Court supporting the appellant Institute and has clarified as follows:

    “That it is submitted that the circulars dated 1-10-1985 and 6-11-1987 have been issued by the Government for providing facilities of exemption from payment of tuition fees to the green-card holders and these words apply only in respect of regular courses. Respondent 1 was granted admission in part-time course which is under self-financing scheme and the Government does not provide any fund for the same. Hence the above-mentioned circulars are not applicable in the case of Respondent 1.”

    The above clarification issued by the Government would mean that the part-time courses in this College which were not regular courses and which were not admitted to aid, were never intended by the Government to be covered by the orders dated 1-10-1985 and 6-11-1987. The State stated that there was thus no obligation on the private unaided colleges/institutes to grant such exemption from payment of tuition fee in respect of part-time courses.

    8. In our view, there can be no difficulty in granting exemption to the aided courses in private colleges/institutes. But there will be difficulty in extending exemption to unaided courses in private colleges/institutes. The reason is obvious. If the Government is not to meet the teaching expenses in part-time courses and if the college is not to collect the tuition fee, the college will have to bear the financial burden without the corresponding right to collect fees from the students to meet its legitimate expenses for these part-time courses. There is also no material to show that before such an administrative order was issued the private colleges or institutes agreed to bear the expenditure themselves even if grant-in-aid was not extended to these part-time courses. The Government, in our view, was therefore justified in making the clarification as aforesaid in its counter-affidavit and it appears to be quite a reasonable stand taken by them.

    9. Learned Senior Counsel for the 1st respondent, Shri M.N Krishnamani contended that but for the representation made by the State in its circular dated 6-11-1987, the 1st respondent would not have undergone sterilisation. The Government and the institutes were, therefore, now estopped from denying benefit of the order to the 1st respondent. We are unable to accept this contention. The circular dated 6-11-1987 is one addressed to all Chief Medical and Health Officers in Madhya Pradesh. While we may assume that the circular has been issued to benefit those who have undergone sterilisation, it cannot be said that any personal representation was made to the 1st respondent. Therefore, no question of promissory estoppel arises. There is also no material to hold that the 1st respondent has undergone the sterilisation operation in contemplation of taking up this part-time course. It might have been for other good reasons relevant to the family's financial status to meet extra expenditure for more children. In fact, if he were acting upon any such representation in 1996, when he joined the part-time course, he would not have paid the tuition fee for 1996-97. The reasonable inference is that he was not even aware of this circular when he joined the course and it was only much later, when he learnt about the circular that he sought refund for 1996-97 and exemption for the future. So far as the Institute is concerned, it never made any representation to the 1st respondent.

    10. It was then argued for the 1st respondent that at the time when this Institute was founded, lot of monies came from the Government and the public and, therefore, the fact that for this course there was no grant-in-aid, made no difference. We cannot agree. The capital expenditure incurred at the time of founding the Institute is different from the running expenses of the teaching staff every month.

    11. Learned Senior Counsel for the 1st respondent then contended that if there was no grant-in-aid, then the State must be directed to pay the tuition fee in respect of such individual candidates who had undergone sterilisation, though the part-time course was not aided. In our view, it is not possible to issue any such direction in this writ petition. Grant-in-aid, either for the institution or for the school or for individuals is a matter of policy. In view of the clarification given in the counter-affidavit set out above, if any such direction is given by this Court to benefit individuals, it would amount to amendment of the existing government policy by way of a judicial order and amounts to extension of benefit to persons to whom the policy was not intended to apply.

    12. We are, therefore, unable to agree with the view taken by the Division Bench of the High Court in allowing the writ petition. The appeal is allowed and the judgment of the Division Bench in the LPA is set aside and the writ petition is dismissed. It will be necessary for the 1st respondent to pay the arrears in the tuition fee for the past years and for the rest of the course. In case any representation is made for instalments, the appellant may grant easy instalments or obtain a bond from the appellant for payment of the tuition fee covering the back period. So far as the future years of the course are concerned, the 1st respondent has anyway to pay the fees. Subject to the above directions against the 1st respondent, the appeal is allowed. The writ petition is dismissed. There will be no order as to costs.

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    Principal, Madhav Institute Of Technology & Science v. Rajendra Singh Yadav And Others
    (Aug 2, 2000)