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2018 INSC 44
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  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Citation Codes
Neutral Citations
2018 INSC 44
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

Multiple Miscellaneous Applications, Interlocutory Applications and a writ petition were filed in the Supreme Court seeking clarification and modification of the directions issued on 3-11-2017 in “Orissa Lift Irrigation Corpn. Ltd. v. Rabi Sankar Patro, (2018) 1 SCC 468”. The 2017 judgment had declared engineering degrees obtained through distance-learning programmes from certain deemed-to-be universities invalid unless the holders passed a test to be conducted by the All India Council for Technical Education (AICTE). The present order, delivered by Uday U. Lalit, J., addresses requests from:

  • Candidates who relied on the disputed B.Tech degrees for fresh UPSC-based appointments.
  • Candidates who obtained M.Tech or other higher qualifications based on the questioned B.Tech degrees.
  • Holders of distance-mode engineering diplomas.
  • Candidates who studied at Vinayaka Missions Research Foundation (VMRF).
  • The concerned deemed universities themselves (e.g., IASE).

All applications were heard together along with AICTE, represented by the learned Additional Solicitor General.

Legal Issues Presented

  1. Whether the 2017 judgment covered diploma programmes in engineering offered through distance education by the deemed-to-be universities.
  2. Whether the judgment applied to postgraduate (M.Tech) degrees obtained through the same distance-learning mode.
  3. Whether candidates who had secured employment through independent, competitive processes (e.g., UPSC) could be exempted from the mandatory AICTE test or allowed to retain the benefits of their degrees pending the test.
  4. Whether any special consideration should be accorded to programmes offered by Vinayaka Missions Research Foundation on the ground that it had recognised expertise in engineering.

Arguments of the Parties

Applicants

  • The 2017 ruling was primarily aimed at in-service diploma-holders who upgraded to degrees; it should not extend to those who gained employment directly on the basis of the disputed degrees (V. Giri, Sr. Adv.).
  • Degrees vetted by competitive selection bodies (e.g., UPSC, NMDC) or earned through reputed study centres such as ITM International should be treated as valid (Meenakshi Arora, Sr. Adv.; Vikramjit Banerjee, Sr. Adv.).
  • Masters degrees were not in issue; therefore holders of such postgraduate qualifications should not be forced to take the AICTE test (Kapil Sibal, Sr. Adv.).
  • The AICTE advertisement calling even diploma-holders to the test exceeded the scope of the original judgment (Dhruv Mehta & M. L. Verma, Sr. Advs.).
  • VMRF enjoyed recognised excellence in engineering, distinguishing it from JRN, IASE and AAI; its degrees should be spared (Anupam Lal Das, Adv.).
  • Additional weightage should be given to candidates who have subsequently earned higher qualifications (R. S. Suri, Sr. Adv.).

AICTE

  • Supported the view that all distance-mode engineering degrees—graduate or postgraduate—lacked approval and that candidates must undergo the prescribed test (submissions noted from the learned Additional Solicitor General).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Orissa Lift Irrigation Corpn. Ltd. v. Rabi Sankar Patro (2018) 1 SCC 468 Declared invalid all engineering degrees awarded through distance education by certain deemed universities unless candidates pass an AICTE test; suspended benefits of such degrees. Formed the entire legal foundation for the present clarification applications; the Court interpreted, reaffirmed and, to a limited extent, relaxed its earlier directions.

Court's Reasoning and Analysis

The Court analyzed each category of applicants seriatim:

  • Diploma-holders: Paras 43, 44 and 57 of the 2017 judgment dealt only with degrees; hence diploma courses were outside its scope. The AICTE advertisement, insofar as it included diplomas, required clarification. The Court accepted this submission, stating that diploma programmes were never impugned.
  • Postgraduate degree-holders: Both graduate and postgraduate distance-mode engineering degrees were squarely covered; the Court rejected the contention that M.Tech degrees were exempt.
  • VMRF candidates: Although VMRF possessed greater expertise in engineering than the other three deemed universities, that distinction did not cure the fundamental illegality—AICTE had never approved distance-mode engineering degrees. The Court refused to carve out an exception.
  • Employment-based exemptions: The Court held that the invalidity of the degrees was “basic and fundamental”. Competitive selection processes or later promotions could not validate an unapproved degree. However, the Court acknowledged practical hardship and granted a limited, one-time relaxation.

Balancing strict adherence to regulatory norms with equitable considerations, the Court allowed candidates enrolled during 2001-2005 to keep using their degrees and related service benefits until one month after the AICTE test results or 31-7-2018, whichever came earlier. Success in the first test would regularise their status; failure or non-appearance would reactivate the original suspension. No second-chance relaxation was granted.

Holding and Implications

DISPOSED OF WITH PARTIAL RELIEF AND CLARIFICATIONS.

Key operative directions:

  • Degrees (graduate or postgraduate) in engineering obtained through distance education remain suspended unless the holder passes the AICTE test; but diploma programmes are unaffected.
  • One-time relaxation: candidates enrolled in 2001-2005 may retain degrees and job benefits until the earlier of one month after the May–June 2018 AICTE test results or 31-7-2018.
  • All other submissions seeking broader exemptions were rejected.

Implications are confined to the parties: affected candidates gain temporary protection, but the Court sets no new precedent beyond clarifying the scope of its 2017 decision.

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    Orissa Lift Irrigation Corporation Limited v. Rabi Sankar Patro And Others

    Uday U. Lalit, J.— These applications have been preferred seeking clarification and modification of directions issued by this Court in its judgment and order dated 3-11-2017 (“the judgment”, for short) in Orissa Lift Irrigation Corpn. Ltd. v. Rabi Sankar Patro (2018) 1 SCC 468. Various directions were issued in the judgment and more particularly in para 66 of the judgment. The gist of the applications and the contentions advanced by the learned counsel were as follows.

    A. MAs Nos. 1795-96 of 2017 in Civil Appeals 17869-70 of 2017 (IA No. 138771 of 2017)

    MAs Nos. 1797-98 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138778 of 2017)

    MAs Nos. 1799-1800 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 13890 of 2017)

    MAs Nos. 1801-02 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138791 of 2017)

    MAs Nos. 1803-04 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138793 of 2017)

    MAs Nos. 1805-06 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138795 of 2017)

    2. The applicants, holding diplomas in Engineering, enrolled themselves in 2005 in courses leading to award of B.Tech degree offered by deemed to be university in question through distance learning mode. Later, on the basis of the degrees awarded by the deemed to be universities, they underwent independent selection undertaken by the Union Public Service Commission and entered certain services as direct recruits and have presently either been engaged in the same service or have advanced in career on the basis of such selection by UPSC.

    3. Mr V. Giri, learned Senior Advocate submitted that the controversy in the judgment was principally concerning the cases of in-service candidates who were initially employed as diploma-holders but while in service had been awarded degrees in Engineering by deemed to be universities in question through distance learning mode; and that this Court was not called upon to consider cases where such degrees themselves became the foundation for a subsequent employment or selection and further advancement in career. He further submitted that an exception be made in favour of such candidates whose qualifications were independently considered by an authority such as UPSC and were selected through competitive selection process and in any case, even if the judgment were to apply to such candidates, the suspension of their degrees and all advantages flowing therefrom till they pass the test as indicated in the judgment ought not to be insisted upon. He submitted that unlike in-service candidates who may not be losing their jobs, such candidates, who had independently undergone fresh selection and were directly appointed would lose their jobs completely and even if they were to successfully pass the test conducted by Aicte, restoration of their original position and jobs would itself become a difficult proposition.

    B. MAs Nos. 13-14 of 2018 in CAs Nos. 17869-70 of 2017 (IAs Nos. 991 & 994 of 2018)

    MAs Nos. 15-16 of 2018 in CAs Nos. 17869-70 of 2017 (IA No. 1019 of 2018)

    4. The applicants had completed B.Tech courses in Computer Science through distance education mode in 2004. According to them, instructions were imparted in ITM International and they were awarded degrees by Allahabad Agricultural Institute, Deemed to be University. Later they acquired degrees in M.Tech and other qualifications based on such B.Tech degree and have thereafter advanced in career.

    5. Ms Meenakshi Arora, learned Senior Advocate while adopting the submissions of Mr V. Giri, learned Senior Advocate submitted that ITM International is an institution of repute and no infirmity could be attributed to their degrees. Further, her clients in any case had undergone further selection process where knowledge of the candidates was independently tested and they were appointed in other posts.

    C. Diary No. 356 of 2018 in CAs Nos. 17869-70 of 2017 (IA No. 1080 of 2018)

    MAs Nos. 17-18 of 2018 in CAs Nos. 17869-70 of 2017 (IAs Nos. 1049 and 1054 of 2018)

    6. The candidates had acquired first degrees in Engineering from a regular and approved institution and as such their first degrees are not invalid or irregular on any count. However, these candidates had later acquired Masters degrees in Engineering from deemed to be universities through distance education mode.

    7. Mr Kapil Sibal, learned Senior Advocate invited our attention to the advertisement issued by Aicte in which all candidates including those who had secured Masters' degrees in Engineering from deemed to be universities in question through distance education mode were also required to appear at the test. In his submission this Court was principally concerned with first degrees in Engineering which were acquired through distance education mode and not the Masters' degrees. He further submitted that those candidates who had acquired such Masters' degrees in Engineering were not covered by the judgment.

    D. MAs Nos. 1866-67 of 2017 in CAs Nos. 17869-70 of 2017 (IAs Nos. 141892 of 2017)

    MAs Nos. 1868-69 of 2017 in CAs Nos. 17869-70 of 2017 (IAs Nos. 141912 of 2017)

    MAs Nos. 1872-73 of 2017 in CAs Nos. 17869-70 of 2017 (IAs Nos. 141948 of 2017 on IA No. 516 of 2018 on IA No. 516 of 2018)

    8. The applicants were awarded diplomas in Engineering through distance education mode by the deemed to be universities concerned.

    9. Mr Dhruv Mehta, learned Senior Advocate invited our attention to paras 43, 44 and 57 of the judgment and submitted that this Court was concerned with courses leading to degrees of Engineering and not to diplomas and as such rigour of the judgment ought not to apply to pure and simply diploma-holders. In his submission, the public notice issued by Aicte was beyond the scope of the matter.

    E. Diary No. 39667 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138802 of 2017)

    MAs Nos. 1807-08 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 138799 of 2017)

    Diary No. 42444 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 487 of 2018)

    MAs Nos. 5-6 of 2017 in CAs Nos. 17869-70 of 2017 (IA No. 511 of 2018)

    10. In the present case, the applicants had enrolled themselves in courses offered by Vinayaka Missions Research Foundation (VMRF) through distance education mode.

    11. Mr Anupam Lal Das, learned Advocate submitted that as is evident from the affidavit of Mr Ved Prakash, Chairman, UGC as extracted in the judgment, VMRF was granted deemed to be university status for its excellence in subjects including Engineering and Technology unlike other deemed to be universities, namely, JRN, IASE and AAI. He invited our attention to paras 27, 43, 44 and 50 of the judgment and submitted that the case of VMRF stood on a different footing and the courses offered by VMRF were not in any way found to be on the wrong side.

    F. MAs Nos. 1874-75 of 2017 in CA No. 17869 of 2017 (IA No. 141960 of 2017)

    MAs Nos. 1876-77 of 2017 in CA No. 17869 of 2017 (IA No. 141971 of 2017)

    12. These applicants after being awarded degrees in Engineering by deemed to be universities through distance education mode had completed their postgraduate courses.

    13. While adopting submissions of Mr V. Giri and Ms Meenakshi Arora, learned Senior Advocates, Mr R.S. Suri, learned Senior Advocate submitted that some weightage be given to the higher qualifications acquired by the candidates.

    G. MAs Nos. 11-12 of 2018 in CAs Nos. 17869-70 of 2017 (IAs Nos. 972 of 2017, 644-45 and 973 of 2018)

    14. The applicants had acquired degrees in Mining Engineering through distance education mode and have advanced in their career in NMDC, a statutory corporation.

    15. Mr Vikramjit Banerjee, learned Senior Advocate submitted that their ability was tested by the said organisation and his clients be exempted from appearing in examination.

    H. Writ Petition Civil No. 1233 of 2017

    16. These applicants were awarded degrees in Engineering through distance education mode by deemed to be universities in question. It is stated that most of the applicants have joined private, corporate and government services and some of them are in corporate jobs and even in foreign countries. Some of them are stated to have obtained M.Tech and further degrees and have advanced in life.

    17. Mr Ranajit Kumar, Mr P.N. Mishra and Mr Huzefa Ahmadi, learned Senior Advocates, appearing for the applicants advanced submissions on lines similar to the submissions advanced by Mr V. Giri, Ms Arora and Mr Sibal.

    I. MA No. 38 of 2018 in CA No. 17907 of 2017

    18. The applicant, IASE, Deemed to be University seeks clarification that the judgment applied only to courses leading to degrees in Engineering awarded by deemed to be universities through distance education mode and that diploma courses are not covered by the judgment.

    19. Mr M.L. Verma, learned Senior Advocate invited our attention to the advertisement issued by Aicte. His submissions on the issue in question are on lines similar to the submissions advanced by Mr Dhruv Mehta, learned Senior Advocate.

    20. We also heard Mr Maninder Singh, learned Additional Solicitor General who appeared on behalf of Aicte.

    21. It is true, as is evident from paras 43, 44 and 57 of the judgment that the controversy in the present case pertained to validity of degrees in Engineering conferred by the deemed to be universities through distance education mode and this Court was not called upon to consider validity of diplomas conferred by such deemed to be universities. However the advertisement issued by Aicte covers diploma courses as well. We therefore accept the submissions advanced by Mr Dhruv Mehta and Mr M.L. Verma, learned Senior Advocates and clarify that validity of such courses leading to diplomas was not the subject-matter of the judgment.

    22. At the same time, courses leading to award of degrees, whether graduate or postgraduate degrees, was certainly the matter in issue. We therefore reject the submission of Mr Kapil Sibal, learned Senior Advocate and do not find any infirmity in the understanding of the advertisement issued by Aicte.

    23. Mr Anupam Lal Das, learned Advocate is right that JRN, AAI and IASE had no expertise in the field or subjects of Engineering and the status of deemed universities conferred on them was not because of their excellence in the field of Engineering. As against these three deemed to be universities, the case of VMRF stood on a better footing as its field of activity and excellence also included subjects in Engineering. However that was not the only basis of the judgment. The facts still remain that conferral of degrees in Engineering through distance education mode was never approved in principle by Aicte and the Study Centres were never inspected or approved. We therefore reject the submission of Mr Anupam Lal Das, learned Advocate.

    24. If award of degrees in Engineering through distance education mode by deemed to be universities, as a concept or principle was not accepted by Aicte, it is immaterial whether the Study Centre in question was ITM International. Said institution was not by itself authorised to award degrees in Engineering on its own nor was it affiliated to any State or Central University at the relevant time. The courses conducted by the said institution led to award of degrees of AAI, which had no expertise or excellence in the field of Engineering and through distance education mode. We therefore reject the submission advanced by Ms Meenakshi Arora, learned Senior Advocate.

    25. We now turn to the general submission advanced by all the learned counsel that the candidates after securing the degrees in Engineering through distance education mode, have advanced in career and that their ability was tested at various levels and as such requirement of passing the examination in terms of the judgment be dispensed with in their case. We cannot make any such exception. The infirmity in their degrees is basic and fundamental and cannot be wished away. At the same time, we find some force in their submission that if the suspension of their degrees and all advantages were to apply as indicated in the judgment, the candidates concerned may lose their jobs and even if they were to successfully pass the test, restoration of their jobs and present position would pose some difficulty.

    26. We, therefore, as a one-time relaxation in favour of those candidates who were enrolled during the academic years 2001-2005 and who, in terms of the judgment, are eligible to appear at the test to be conducted by Aicte, direct:

    26.1. All such candidates, who wish to appear at the forthcoming test to be conducted by Aicte in May-June 2018 and who exercise option to appear at the test in terms of the judgment, can retain the degrees in question and all the advantages flowing therefrom till one month after the declaration of the result of such test or till 31-7-2018 whichever is earlier.

    26.2. This facility is given as one-time exception so that those who have the ability and can pass the test in the first attempt itself, should not be put to inconvenience. If the candidates pass in such first attempt, they would be entitled to retain all the advantages. But if they fail or choose not to appear, the directions in the judgment shall apply, in that the degrees and all advantages shall stand suspended and withdrawn. At the cost of repetition, it is made clear that no more such chances or exceptions will be given or made. They will undoubtedly be entitled to appear on the second occasion in terms of the judgment but this exception shall not apply for such second attempt.

    26.3. We direct Aicte to conduct the test in May-June 2018 and declare the result well in time, in terms of our directions in the judgment and this order. Aicte shall however extend the time to exercise the option to appear at the test suitably.

    27. Except for the directions given in the preceding paragraph i.e. para 26 and the clarification as regards courses leading to award of diplomas as mentioned hereinabove, we reject all the other submissions.

    28. All applications, petitions and writ petitions stand disposed of in aforesaid terms. No costs.

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    Orissa Lift Irrigation Corporation Limited v. Rabi Sankar Patro And Others
    (Jan 22, 2018)