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PETITIONER: LALIT NARAYAN MISHRA INSTITUTE OF ECONOMIC DEVELOPMENT ANDSO

       Vs.

RESPONDENT: STATE OF BIHAR & ORS. ETC.

DATE OF JUDGMENT23/03/1988

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) MISRA RANGNATH

CITATION:  1988 AIR 1136            1988 SCR  (3) 311  1988 SCC  (2) 433        JT 1988 (1)   635  1988 SCALE  (1)582  CITATOR INFO :  R          1992 SC1277  (22,34,88,95)

ACT:      Bihar ordinances  Nos.  15  of  1986  and  30  of  1986 replaced by  Bihar Private  Educational Institutions (Taking over) Act,  1987-Challenging constitutional  validity of-And validity of  order of  termination of  service  under  Bihar Ordinance No. 15 of 1986.

HEADNOTE: %      In  these  writ  petitions  and  civil  appeals,  Lalit Narayan Mishra  Institute of Economic Development and Social Change, Patna,  a registered society, and its Registrar, Dr. Jagadanand Jha,  challenged the  constitutional validity  of Bihar ordinances Nos. 15 of 1986 and 30 of 1986, replaced by the Bihar  Private Educational  Institutions  (Taking  over) Act, 1987 (’The Act’). Dr. Jagadanand Jha further challenged the validity  of the order of termination of his services as the Registrar  of the Institute, dated April 21, 1986 in the writ petition  (Civil) No.  439 of  1987. As disposal of the writ  petition   (Civil)  No.   431  of   1987  wherein  the constitutional validity  of the  Act was  challenged and the writ petition  (Civil) No.  439  of  1987  above-said  would virtually mean  the disposal of the other writ petitions and appeals, the Court dealt with those two writ petitions.      On April  19,  1986,  the  State  Government  of  Bihar promulgated ordinance  No. 15  of 1986,  whereby  the  Lalit Narayan Mishra  Institute of Economic Development and Social Change, Patna  (’Institute’) was  taken over. On the day the ordinance was  promulgated, possession  of the Institute was taken over  and the  services of  Dr.  Jagadanand  Jha,  the Registrar of  the Institute  were terminated by the impugned order dated  April 21,  1986.  The  petitioners  filed  Writ Petitions before the High Court, challenging the validity of the said  ordinance and  the order  of  termination  of  the services of Dr. Jagadanand Jha. The High Court dismissed the writ petitions,  Both, the  Society and  Dr. Jagadanand Jha, preferred two  appeals by  special leave  being Civil Appeal No.  4142  of  1986  and  Civil  Appeal  No.  4141  of  1986 respectively.  The  Society  and  Dr.  Jagadanand  Jha  also

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challenged the  ordinance No.  30 of  1986 by  Writ Petition (Civil) No.  55 of  1987 and  the constitutional validity of the Act replacing the said two ordinances. 312      Allowing the writ petitions (Civil) Nos. 87 of 1987 and 439 of  1987 and Civil Appeal No. 4141 of 1986, in so far as they related  to the order of termination of the services of Dr.  Jagadanand  Jha,  and  dismissing  the  writ  petitions (Civil) Nos. 55 of 1987 and 431 of 1987 and Civil Appeal No. 4142 of 1986, the Court, ^      HELD: The  provisions of  the Act are the same as those of the  two ordinances  Nos. 15  and 30  of 1986.  The first attack on  the validity  of the  Act and  the ordinances was founded on  the plea  of violation  of  Article  14  of  the Constitution.  It   was  contended  that  the  Act  and  the ordinances were  discriminatory in  nature and  violative of Article 14 of the Constitution of India and should be struck down. The contention was wholly misconceived. The ordinances were not  promulgated and  the Act  was not  passed for  the purpose of  nationalisation of  the Institute  only. It  was apparent from  the provisions  of the ordinances and the Act that the private educational institutions as defined therein were to  be taken  for  the  purpose  as  mentioned  in  the Preambles to  the ordinances and the Act in a phased manner. All the institutions which answered the description given in section 2(a)  of the Act were to be nationalised. It was not correct to  say that  the Institute had been signled out for nationalisation. [319E; 321D; 323D-F]      There can  be no doubt that when nationalisation had to be done  in a  phased manner, all the institutions cannot be taken over at a time. The nationalisation in a phased manner contemplates that  by and  by the  object of nationalisation will be  taken over.  In implementing the nationalisation of the private  institutions in  phased manner, the Legislature had started with the Institute, and the question of singling out the  Institute or  treating it  as a class by itself did not  arise.   It  was  the  legislative  decision  that  the Institute should  be  taken  over  in  the  first  phase  of nationalisation. The  Legislature had  not left  it  to  the discretion of  the executive  government for  the purpose of selecting the  private educational institution for the first phase.  It  was  very  difficult  to  assail  a  legislative decision. Of  course, a legislative decision can be assailed if it  is violative  of any  provision or  part III  of  the Constitution. So  far as Article 14 was concerned, the Court did not think that it had any manner of application inasmuch as the  question of  discrimination did not arise as soon ss it was conceded that it was a case of in a phased manner and that for  the first  phase the  Institute had been chosen by the Legislature itself. The Institute had been chosen by the legislative process.  It was  true that  the ordinance  Were promulgated   under Article  213 of the Constitution, bot it could not be characterised as an executive act. In any even, ultimately, the Legislature itself had 313 passed the  Act with  the inclusion  of the Institute in the Schedule thereto  as the only institution to be nationalised in the  first phase.  Even assuming  that  the  question  of discrimination might arise also for the purpose of selection for the  first phase,  there were  justifiable  reasons  for selecting   the   Institute   for   the   first   phase   of nationalisation; the  State had  changed  the  name  of  the Institute, provided  the site  for the  Institute,  got  the building constructed  through its own agencies and funds and

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supervised the  prescription of  syllabi. The fact could not be excluded  that since  1975  it  is  the  State  of  Bihar nurturing  the  Institute,  spending  money  and  exercising necessary control  over it,  and these facts fully justified the  propriety   of  legislative  wisdom  in  selecting  the Institute for  nationalisation in  the first phase. [323G-H; 324B-C; 325C-E]      There could be no doubt that on the date the ordinances were promulgated  and the Act was passed, the same could not be challenged  on the  ground of  non-implementation of  the legislative intent  in nationalising  similar institutes  by amending the  Schedule. If a legislative enactment cannot be challenged as discriminatory on the date it is passed, it is difficult to  challenge the  same as violative of Article 14 of the  Constitution  on  the  ground  of  inaction  of  the executive in  implementing the  purposes of  the Act, regard being had  to the fact that it was the Legislature which had made the  selection for  the first phase of nationalisation. If no  such selection  had been  made by the Legislature and the entire  thing had  been left  to the  discretion of  the Government, it  might have  been  possible  to  complain  of discriminatory treatment.  It is  common knowledge that when any litigation  ensues and  remains pending,  the Government generally does  not take any step till the final disposal of the litigation. It was apparent that in view of the pendency of litigations, the State Government had granted approval of only  temporary   affiliation  to   the  three  institutions mentioned in  the additional  affidavit of  the  petitioner- society and  that too  on certain  conditions. If  the State Government  had   no  intention   of   taking   over   other institutions in  accordance with  the provisions of the Act, it would  have sanctioned permanent affiliation to the three institutions. The  Court could  not accept the contention of the  petitioner-society   that  the   professed  object   of nationalisation  in   phases  was  a  mere  pretence  and  a colourable device  to single  out the  Institute or that the facts of  exclusion of  eleven similarly situated Institutes and the subsequent recognition of the three other Institutes imparted vice  of discrimination  to the  impugned Act.  The question of  discrimination or  discriminatory treatment  of the Institute  did not  arise  and  the  contention  of  the petitioner-society in  this regard  was  rejected.  [325G-H; 326A-B; F; 327E-F] 314      The  next  attack  of  the  petitioner-society  to  the impugned Act  was A founded on violation of the provision of Article 19(1)(c)  of  the  Constitution.  The  question  was whether the  fundamental right of the petitioner society, as conferred by  Article 19(1)(c),  had been  infringed or not, and,  further,   whether  the   fundamental  right  to  form association,  as   contained  in  Article  19(1)(c)  of  the Constitution, also  included within  it the  concomitants or the activities or the objects or purposes of an association. [327F; 328E ]      Article 19(1)(c)  confers a  right on  the citizens  to form  association.   In  exercise   of  such  a  right,  the petitioner-society   had    constituted   itself   into   an association. That  right of  the Society remained unimpaired and uninterfered  with by  the impugned  Act and ordinances. There was no doubt that the Institute had been taken over by the provisions  of the  ordinances and  the Act. It was true that with  the taking over of the Institute, the Society had lost its  right of  management and control of the Institute, but that  is the  consequence of  all acquisitions.  When  a property is acquired, the owner loses all control, interest,

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and ownership of the property. Similarly, the Society, which was the  owner of  the Institute,  had lost  all control and ownership of  the Institute.  It might  be equally true that the Institute was the only activity of the Society, but what was  concerned   was  the  right  of  the  Society  to  form association. So  long as  there was no interference with the Society, its  constitution or  composition, it was difficult to say that because of the taking over or acquisition of the Institute, which  was the  only property  of activity of the Society, the  fundamental  right  of  the  Society  to  form association had  been infringed.  The decision of this Court in Damyanti Naranga v. Union of India, [1971] 3 SCR 240, had not  manner   of  application   to  the  present  case.  The observations made in the decision of this Court in All India Bank Employees’ Association v. National Industrial Tribunal, [1962] 3  SCR 269,  supported the  view the  Court had taken that the fundamental right guaranteed under Article 19(1)(c) does not  extend to  or embrace  within it  the  objects  or purposes or  activities of an association. It does not carry with it  a further guarantee that the objects or purposes or activities  of   an  association  so  formed  shall  not  be interfered with  by law  except on  grounds as  mentioned in Article 19(4).  In the  circumstances, the contention of the petitioner-society  that   because  of  acquisition  of  the Institute, the Society had lost its right of management over the Institute,  and the Institute being the main or the only activity  of   the  Society,   the   impugned   legislations interfered with  the  right  of  the  society  to  form  and continue the association and, as such, were unconstitutional and void  under Article  19(1)(c) of  the Constitution.  was unsound and rejected. [329C-D; 330B-C, E; 331E-G; 332A-B] 315      Another ground on which the validity of the Act and the ordinances was  assailed  was  the  absence  of  legislative competence  of   the  State  Legislature,  Counsel  for  the petitioner-society submitted  that having regard to the pith and substance  of the  Act, the  Act fell within Entry 66 of List I  and the  Entry 25 of List III and Entry 66 of List I must  be  harmoniously  construed,  but  to  the  extent  of overlapping, the  power conferred  by Entry  66 must prevail over the power of the State under Entry 25. [332C, F]      By the  impugned Act, the Legislature has not laid down any law  relating to the subjects mentioned in the Entry 66, List I,  or in Entry 25, List III. The Act only provides for the taking  over  of  private  educational  institutions  in phases and  has taken  over the  Institute to start with for the first  phase. An  Entry in  any of  the Lists of Seventh Schedule will apply when a law is enacted by the Legislature on any of the subjects mentioned in the Entry. In this case, the impugned  Act does  not lay  down any  law touching  the subject referred  to in  Entry 66, List I, or Entry 25, List III. Therefore,  neither of  these two  Entries applied. The Entry that  applies to  the impugned legislation is Entry 42 of List  III, pertaining  to acquisition  and requisition of property.  The   taking  over  of  the  private  educational institutions and the Institute in the first phase is nothing but acquisition  of property. The Institute was the property of the  petitioner-society  and  by  the  impugned  Act  the property stood  transferred to  and vested absolutely in the State Government  free from all encumbrances. The only Entry relevant is  Entry 42  of List  III. As  soon as Entry 66 of List I was excluded, it was irrelevant which of the Entries- 25 or  42 of  List III-was  applicable, in  either case, the State Legislature was competent to make the enactment. There was no substance in the contention of the petitioner-society

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that the  Act was  invalid because the State Legislature had lacked competence in passing the same. [333B-F]      As it  is held  that  the  impugned  Act  is  really  a legislation relating  to acquisition  of property within the meaning of  Entry 42  of list  III, the question might arise whether  after   the  repeal   of  Article   31(2)  by   the Constitution  (Fourty-Forth   Amendment)  Act,   1978,   any compensation was compulsorily payable for the acquisition of property. The  point was  not ultimately  pressed,  and  the Court was not called upon to decide the point or express any opinion on the same. [334B-D]      The Court  then dealt  with the  case of Dr. Jagadanand Jha,  Registrar   of  the  Institute,  whose  services  were terminated by  an order  dt. April  21, 1986, as a result of the ordinance  No. 15 of 1986 promulgated on April 19, 1986. [334D-E] 316      The petitioner  Dr. Jagadanand  Jha was not a member of the teaching  staff; he  was the Registrar of the Institute, which comes  within  the  expression  "other  categories  of staff" under  sub-section (4)  of  Section  6  of  the  said ordinance. It  is true  that under sub-paragraph (4), it has been provided  that sub-paragraphs  (2) and  (3) shall apply mutatis mutandis,  but such  application will  be limited to the term of appointment and other conditions of service of a member of  non-teaching staff  of the  institution. In other words, the  State Government may appoint a committee for the purpose of  considering the  term of  appointment and  other conditions of  service of  the members  of the  non-teaching staff, and  has to  decide accordingly. It was thus apparent that the  State Government proceeded on the basis that under sub-paragraph (4) of paragraph 6 of the ordinance, it was to consider the  question of termination of the services of the members of  the non-teaching  staff as  in the  case of  the members of  the  non-teaching  staff,  as  provided  in  sub paragraph (3)  of paragraph  6 of  the ordinance. Even then, the Court  was not  impressed with  the manner  and haste in which the  order of termination had been passed. Although it was alleged  that a  Committee had been formed and the State Government had  terminated the services of the petitioner on the report  of the Committee, the Court could not understand the necessity for such haste; in the circumstances, it would not be unreasonable to infer that the Committee or the State Government had  not properly  applied its  mind  before  the order of  termination of  the services  of Dr. Jha was made. [336E-H; 337A-B]      There  can   be  no   dispute  that  when  there  is  a legislative direction  for termination  of the  services  of employees, the  compliance with  the principles  of  natural justice may  not be  read into  such direction  and, if such terminations  are  effected  without  giving  the  employees concerned an opportunity of being heard, no exception can be taken on  the same.  But in  this case, sub-paragraph (4) of paragraph 6  of the ordinance does not contain any direction for the  termination of  the services of the members of non- teaching  staff.  Even  in  spite  of  that,  if  the  State Government  wanted   to  terminate   the  services   of  the petitioner Dr.  Jha, it could not be done without giving him an opportunity  of being  heard, for such an act on the part of the  State Government  would be an administrative act. It is  clear   from  the  provision  of  sub-paragraph  (4)  of paragraph 6  that the  services of  the members  of the non- teaching staff  have been  intended  to  be  continued.  The services of  the petitioner Dr. Jha, who had been working in the post  of Registrar  of the  Institute for  a long  time,

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could not be terminated without giving him an opportunity of being heard. Counsel for the respondents also did not oppose this view. Therefore as the petitioner had not been given an opportunity of being 317 heard, the  impugned order of termination of the services of the petitioner could not be sustained. [337C-G; 338A]      Both  the   Society  and  Dr.  Jha  were  not  able  to substantiate the  allegation of  mala fides against the then Chief Minister  of Bihar.  Even assuming although holding to the contrary,  that the  Chief Minister had acted mala fide, the same  could not  vitiate the  legislative process in the exercise of  which the  impugned Act  and the ordinances had been respectively  passed and  promulgated. The  respondents also had  failed to  prove the  alleged mismanagement of the Institute by  the Society  or Dr.  Jha;  the  allegation  of mismanagement was not pressed . [338B-C]      The impugned  order dated April 21, 1986 of termination of the  services of the petitioner Dr. Jha was quashed. Writ Petitions (Civil)  Nos. 87 of 1987 and 439 of 1987 and Civil Appeal No.  4141 of  1986 in  so far  as they related to the said order  of termination of the services of Dr. Jagadanand Jha, were  allowed. The State Government would be at liberty to consider  the question  of termination  of the service of Dr. Jha  after giving  him a  reasonable opportunity to make representation. The  Writ Petitions  (Civil) Nos. 55 of 1987 and 431  of 1987  and Civil  Appeal No  4142  of  1986  were dismissed. [338D-E]      State of  Rajasthan v.  Mukandchand, [1964]  6 SCR 903; Maganlal Chaganlal  (P) Ltd.  v.  Municipal  Corporation  of Greater Bombay,  [1975] 1  SCR 1;  in re  The Special Courts Bill, 1978,  [1979] 2  SCR 476;  Shri Ram  Krishna Dalmia v. Shri Justice  S.R. Tendolkar  & Ors.,  [5969] SCR  279; B.S. Reddy v.  Chancellor, Osmania  University, [1967] 2 SCR 214; Sakal Papers  (P) Ltd.  v. Union of India, [1962] 3 SCR 842; Dwarkadas Shrinivas of Bombay v. Sholapur Spinning & Weaving Co. Ltd.,  [1954] SCR  674; Damyanti  Naranga  v.  Union  of India,  [1971]   3  SCR   840;  All  India  Bank  employees’ Association v.  National Industrial  Tribunal, [1962]  3 SCR 269; State  of Bihar  v. Maharajadhiraja Sir Kameshwar Singh of Darbhenga,  [1952] SCR  889 (1009)  and K.I  Shephard  v. Union of India & Ors., [1987] 4 SCC 431, referred to.

JUDGMENT:      CIVIL ORIGINAL/APPELLATE  JURISDICTION:  Writ  Petition (Civil) No. 55 of 1987 etc.      (Under Article 32 of the Constitution of India)      Soli J.  Sorabjee, S.N  Kacker, S.  Nariman, R.K  Jain, Singh, Ranjit  Kumar. Dhananjay  Chandrachud, Rakesh Khanna, R.P. Singh, L N Sinha for the appearing parties 318      The Judgment of the Court was delivered by      DUTT, J.  In these  writ petitions  and civil  appeals, Lalit Narayan  Mishra Institute  of Economic Development and Social  Change,   Patna,  a  Society  registered  under  the Societies Registration  Act, 1860,  and its  Registrar,  Dr. Jagadanand Jha,  have challenged the constitutional validity of two ordinances being Bihar ordinances Nos. 15 of 1986 and 30  of  1986  replaced  by  the  Bihar  Private  Educational Institutions (Taking  over) Act,  1987, hereinafter referred to as  ’the Act’.  Dr. Jagadanand Jha has further challenged the validity  of the  order of termination of his service as the Registrar  of the Institute dated April 21, 1986 in Writ

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Petition (Civil)  No. 439  of  1987.  As  disposal  of  Writ Petition (Civil)  No. 431 of 1987 wherein the constitutional validity of  the Act  has been  challenged and Writ Petition (Civil) No.  439 of  1987 in which the legality of the order of termination of service of the said Dr. Jagadanand Jha has been challenged  will virtually  mean disposal  of the other writ petitions  and appeals,  we propose  to deal with these two writ petitions.      The  Institute,   Lalit  Narayan  Mishra  Institute  of Economic Development  and Social  Change,  Patna,  hereafter referred  to  as  ’Institute’,  was  initially  named  Bihar Institute of  Economic Development  and was  started in 1973 under the  Chairmanship of  Dr. Jagannath  Mishra, the  then Minister of  Irrigation and  later on  the Chief Minister of Bihar. It  was named  as Lalit  Narayan Mishra  Institute of Economic Development  and Social  Change to  commemorate the memory of  late Shri Lalit Narayan Mishra, once upon a time, Union Railway Minister. It may be noticed at this stage that the name  of the  Institute and  the name of the Society are the same.      The Institute  was  basically  started  as  a  research institute. In  1974, the  Magadh University  recognised  the Institute for the purpose of research. Subsequently, Ranchi, Patna and Bihar Universities also granted recognition to the Institute as  a research  institute.  In  March,  1977,  the Magadh University  declared the  Institute as  an autonomous Institute under  section 73  of the Bihar State Universities Act, 1975.      on April  19,  1986,  the  State  Government  of  Bihar promulgated ordinance  No. 15  of 1986 whereby the Institute was taken  over.  It  is  alleged  that  the  ordinance  was promulgated and the Institute was taken over at the instance of the  then Chief  Minister of Bihar Sri Bindeshwari Dubey. The petitioner-Society  has also  alleged mala  fides on the part of  the Chief  Minister of  Bihar in  taking  over  the Institute 319 by promulgating  the ordinance. On the day the ordinance was promulgated, possession  of the Institute was taken, and the services of Dr. Jagadanand Jha, who was the Registrar of the Institute, were terminated by the impugned order dated April 21, 1986.  Besides contending  that the  ordinance  and  the order of  termination of  the petitioner  Dr. Jagadanand Jha are illegal and invalid, the petitioner-society and the said Jagadanand Jha  allege that  all these have happened because of the  personal enmity  of the  Chief Minister  against Dr. Jagannath  Mishra  the  Chairman  of  the  Society  and  the Institute.      The petitioners  filed writ  petitions before the Patna High Court  challenging the  validity of  the said ordinance No. 15  of 1986  and the order of termination of services of Dr. Jagadanand  Jha. The  Patna High  Court, however, by its judgment dated  August 26,  1986  dismissed  both  the  writ petitions. Both  the Society  and Dr.  Jagadanand  Jha  have preferred two  appeals by  special leave  being Civil Appeal No.  4142  of  1986  and  Civil  Appeal  No.  4141  of  1986 respectively against  the said  judgment of  the Patna  High Court.  The   Society  and   Dr  Jagadanand  Jha  have  also challenged the  ordinance No  30 of  1986 by  Writ  Petition (Civil) No 55 of 1987 and, as stated already, they have also challenged the  constitutional validity of the Act replacing these ordinances.      At  this  stage,  it  is  necessary  to  refer  to  the provisions of  the Act which are the same as that of the two successive  ordinances   Nos  15   and  30   of  1986.  Some

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submissions have been made at the Bar on the Preamble to the Act which reads as follows:           "To PROVIDE FOR TAKING OVER BY THE STATE               GOVERNMENT OF PRIVATE EDUCATIONAL             INSTITUTIONS OF THE STATE OF BIHAR .                WHEREAS,  the   State  of  Bihar  has  bright           prospects  of   rapid  growth  of  Industrial  and           Economic Development, the relevancy and importance           of specialised  knowledge of  Business  Management           has assumed great importance;                AND,  WHEREAS,   for  that   purpose  it   is           necessary to  ensure a  high level  of educational           and training  facilities and  the co-ordination of           the  training   with  important   industrial   and           business units;                AND,  WHEREAS,   it  has   been  resolved  to           nationa- 320           lise this branch of education in phases."      Clause (a)  of section  2 of  the Act  defines "Private Educational Institutions" as follows:           "S. 2(a).  "Private Educational Institution" means           a  private   educational  college,   institute  or           school, affiliated  to any University of the State           of Bihar or recognised by the State Government and           imparting education,  and/or training  in Business           Management or  Business Administration  or  matter           connected with  Economic  and  Social  Development           and/or conducting  degree or diploma course in one           or the other branch of education mentioned above;"      Chapter II of the Act relates to taking over of Private College/ Institute. Section 3 of chapter II runs as follows:           "S. 3(1)  With effect  from the  date of this Act,           the institution  as specified  in the  Schedule of           this Act shall stand transferred to and shall vest           absolutely in  the State  Government free from all           encumbrances.                (2) The  State Government  may from  time  to           time by a notified order amend the Schedule by the           inclusion of  any institution  and the  same shall           stand vested  and  transferred  to  in  the  State           Government with  effect from the date mentioned in           the notification.                (3) All  the assets  and  properties  of  the           institution,        Governing        Body/Managing           Committee/Association,    whether    movable    or           immovable including  lands,  buildings,  workshop,           stores,  instruments,  machinery,  vehicles,  cash           balance, reserve  fund, investment,  furniture and           others shall  on the  date of  taking over,  stand           transferred to  and vested in the State Government           free from all encumbrances."      Section 4(1)  of the Act provides that the Commissioner shall be  deemed to  have taken  charge of  the  Institution which stands  vested  in  the  State  Government  under  the provisions  of   the  Act.   Section  6   relates   to   the determination of terms of services of the teaching staff and the other  employees of the Institution. The Schedule to the Act specifies  the name  of  the  Institute,  namely.  "L.N. Mishra Institute of 321 Economic Development  and Social  Change, Patna" in terms of section 3(1)  of the  Act. Under the Preamble to the Act, it is necessary  to rationalise  private education  relating to business management  in view of a very good possibility of a

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rapid industrial  and economic  development of  the State of Bihar. The  nationalisation has  been resolved to be made in phases. It  has been already noticed that under section 3(1) of the  Act, the  Institution mentioned in the Schedule will be transferred  to the State Government and will be actually vested in  it  free  from  all  encumbrances.  The  Schedule mentions only  one Institute  and in view of section 3(1) it has vested  in the  State Government.  It is  said that  the first phase  relates to the taking over of the Institute and that has been done. Section 3(2) also provides for amendment of the  Schedule by  including  any  institution.  In  other words, the  other institutions  which answer the description of private educational institutions as defined in clause (a) of section  2 of the Act will also be nationalised, not at a time, but in phases, the first phase having started with the take over of the Institute. This, in short, is the scheme of the Act.      The first  attack to  the validity  of the  Act and the said two  ordinances is  founded on the plea of violation of Article 14  of the  Constitution. It  is  submitted  by  Mr. Sorabjee,  learned   Counsel  appearing  on  behalf  of  the petitioner-Society, that  while it  is true  that Article 14 forbids class  legislation, it  does  not,  however,  forbid reasonable classification.  We are reminded of the principle of law  as laid  down in  State of Rajasthan v. Mukandchand, [1964] 6  SCR 903;  Maganlal Chaganlal (P) Ltd. v. Municipal Corporation of  Greater Bombay, [1975] 1 SCR 1 and in re The Special Courts  Bill, 1978,  [1979] 2  SCR 476. In all these cases, it  has been  laid down  that in order to satisfy the test of  permissible classification  under Article  14,  two conditions  must   be  fulfilled,   namely,  (1)   that  the classification  must   be   founded   on   an   intelligible differentia which  distinguishes persons  or things that are grouped together  from others  left out of the group and (2) that the  differentia must  have a  rational relationship to the object sought to be achieved by the statute in question. It is  urged by the learned Counsel that the impugned Act on the face  of it does not disclose any basis or principle for singling out the Institute and for treating it as a class by itself. It  is submitted that neither in the preamble nor in the provisions  of the Act is there the slightest indication for treating the Institute as a class by itself.      Much reliance  has been  placed by  the learned Counsel for the petitioner on the decision of this Court in Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Ors., [1959] SCR 279. In that case, the 322 Central Government  in exercise of its power under section 3 of  the   Commissions  of   Enquiry  Act,   1952,  issued  a notification dated December 11, 1956 appointing a Commission of Enquiry  to enquire into and report in respect of certain companies  mentioned   in  the   Schedule  attached  to  the notification and  in respect of the nature and extent of the control and  interest which  certain persons  named  in  the notification  exercised  over  these  companies.  Das,  C.J. speaking for  the Court observed that it was not established that  the   petitioners  and   their  companies   had   been arbitrarily singled  out for  the  purpose  of  hostile  and discriminatory treatment  and subjected  to a  harassing and oppressive enquiry.  It was further observed that nowhere in the petitions  was there  even an  averment that  there were other  persons   or  companies  similarly  situated  as  the petitioners and  their companies.  Certain principles of law have been laid down in that decision. These principles still hold  the   field  and   are  helpful   in  considering  the

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constitutionality of  a statute.  One of these principles is that a law may be constitutional even though it relates to a single  individual   if,  on   account   of   some   special circumstances  or   reasons  applicable   to  him   and  not applicable to  others, that single individual may be treated as a class by himself.      The other  decision that  has been  relied upon  by the petitioner is  B.S. Reddy v. Chancellor, Osmania University, [1967] 2  SCR 214.  What happened  in  that  case  was  that section 5  of the Osmania University (Second Amendment) Act, 1966 introduced  into the Osmania University Act, 1959 a new section 13A  whereby it  was provided  that the  person then holding the  office of the Vice-Chancellor of the University could only  hold that office until a new Vice-Chancellor was appointed, and  that such  new amendment must be made within 90 days  of the  commencement  of  the  said  amendment  Act whereupon  the  old  Vice-Chancellor  would  cease  to  hold office. It  was  held  by  this  Court  that  there  was  no justification for  the impugned  legislation, that  is,  the provision of  section 13A,  resulting in a classification of the  Vice-Chancellors   into  two  categories,  namely,  the appellant as  the existing  Vice-Chancellor and  the  future Vice-Chancellors  to   be  appointed   under   the   Osmania University Act.  It was  held  that  both  these  categories constituted  one  single  group  or  class,  and  that  even assuming that  the classification  of  these  two  types  of persons as  coming under two different groups could be made, nevertheless, it  was essential  that such  a classification must be  founded on  an intelligible differentia which would distinguish  the   appellant  from   the  Vice   Chancellors appointed under  the Osmania  University Act. The Court held that there  was no  intelligible differentia on the basis of which the classification could be justified. 323      On the  basis of  the above  principles of  law as laid down by  this Court,  it is submitted by the learned Counsel for the  petitioner that  while it  is true  that  a  single individual may  be treated  as a class by himself on account of some  special circumstances  or reasons applicable to him as laid  down by  this Court  in Dalmia’s case (supra), such classification  must   be   founded   on   an   intelligible differentia which  distinguishes the  person classified from others falling  outside the classification. It is urged that even though  nationalisation of institutes is permissible in a phased manner, and a single institution like the Institute with which we are concerned may be singled out as a class by itself, it  must be  founded on  an intelligible differentia that distinguishes  it  from  other  institutions  and  such differentia for classification must have a rational nexus to the object  sought to be achieved by the Act. It is the case of  the  petitioner-Society  that  there  are  eleven  other similar institutes,  which have  been specifically  named in the petition and there is nothing in the Act to indicate why the Institute  has been singled out. Moreover, there is also nothing to  indicate  either  in  the  Preamble  or  in  the provisions of the Act that the singling out of the Institute from the  other institutions  and treating  it as a class by itself, has a reasonable relation to the object sought to be achieved by  the Act. It is, accordingly, submitted that the Act and  the ordinances  are discriminatory  in  nature  and violative of  Article 14  of the  Constitution and should be struck down on that ground.      The contention made on behalf of the petitioner-Society is wholly  misconceived. The ordinances were not promulgated and  the   Act  was   not  passed   for   the   purpose   of

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nationalisation of  the Institute  only. It is apparent from the provisions  of the  ordinances  and  the  Act  that  the private educational  institutions as  defined therein are to be taken  over for the purpose as mentioned in the Preambles to the  ordinances and  the Act  in a phased manner. All the institutions  which  answer  the  description  as  given  in section 2(a)  of the  Act are  to be  nationalised.  It  is, therefore, not  correct to  say that  the Institute has been singled out for the purpose of nationalisation.      There can  be no doubt that when nationalisation has to be done  in a  phased manner, all the institutions cannot be taken over at a time. The nationalisation in a phased manner contemplates that  by and  by the  object of nationalisation will  be   taken  over.   Therefore,  in   implementing  the nationalisation of  private institutions in a phased manner, the Legislature  has started  with the Institute. Therefore, the question of singling out the Institute or treating it as a class  by itself  does not arise, for as the provisions of the Act and the ordinances go, all the 324 private educational institutions, as defined in section 2(a) of the Act, A will be nationalised in a phased manner.      It is  the  legislative  decision  that  the  Institute should  be   taken  over   in  the   first  phase   of   the nationalisation. The  Legislature has  not left  it  to  the discretion of  the executive  Government for  the purpose of selecting the  private educational institution for the first phase.  It   is  very  difficult  to  assail  a  legislative decision.  Of   course,  there   can  be  no  doubt  that  a legislative decision  can be  assailed if it is violative of any provision  of Part  III of  the Constitution.  So far as Article 14  is concerned,  we do  not think  that it has any manner  of   application  inasmuch   as  the   question   of discrimination does not arise as soon as it is conceded that it is case of nationalisation in a phased manner and for the first phase the Institute has been chosen by the Legislature itself.      The decision  of this  Court in  the  cases  of  Dalmia (supra) and  Osmania University  (supra) have  no manner  of application because  in those  two  cases  the  question  of discrimination did  really arise.  But, in the instant case, there cannot  be any discrimination when nationalisation has to be made in phased manner.      It  is,   however,  submitted   that   there   was   no justification to  pick and choose the Institute even for the first phase.  As has  been stated already, the Institute has been chosen  by legislative  process. It  is true  that  the ordinances  were   promulgated  under  Article  213  of  the Constitution of  India, but it cannot be characterised as an executive act.  In any  event,  ultimately  the  Legislature itself  has  passed  the  Act  with  the  inclusion  of  the Institute in the Schedule thereto as the only Institution to be nationalised  in the  first phase. Even assuming that the question of discrimination may arise also for the purpose of selection for the first phase, we are of the view that there are justifiable reasons, which will be stated presently, for selecting   the   Institute   for   the   first   phase   of nationalisation.      Mr. Kacker,  learned Counsel appearing on behalf of the Chief  Minister   of  Bihar,   has  placed   before  us  two resolutions of the Education Department of the Government of Bihar dated  June 10,  1975 and  November 21,  1975. By  the first mentioned  resolution, it  was decided  to rename  the Bihar Institute  of Economic  Development as  Lalit  Narayan Mishra Institute  of Economic  Development and Social Change

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to commemorate the memory of late Shri Lalit Narayan Mishra, who was  the Railway  Minister, and  to enlarge  the working scope of  the Institute and to develop it into a significant and useful memorial. 325 It was  also resolved  that the  entire expenditure  of  the Institute would  be borne by the State government (Education Department) and  for this  purpose annual  grants  would  be sanctioned. A  steering committee  under the chairmanship of the Education  Minister was  constituted. It is not disputed that since  June, 1975 every expenditure for maintaining and running the  Institute has  been incurred  by the  State  of Bihar.  It  is  submitted  by  Mr.  Kacker  that  the  facts disclosed in  the writ petition have brought out prominently the interest  the State had taken in not only financing, but also controlling  the entire  development and running of the Institute. The  total amount  of money  spent by  the  State Government in  nurturing the  Institute works  out to  about Rs.1.60 crores.  Facts also disclose that not only the State had changed the name of the Institute, but also provided the site for the Institute, got the building constructed through its  own   agencies  and   funds  and  even  supervised  the prescription  of   syllabi.  There  is  much  force  in  the contention  of   Mr.  Kacker  that  in  a  sense  the  State Government  was   running  the   entire  Institute   without nationalisation and  when it  decided  to  nationalise  such institutions for  the purposes mentioned in the Preambles of the Act  and ordinances, this Institute was chosen to be the very first with all sense of justification and propriety. In considering the propriety of legislative wisdom in selecting the Institute  in the  first phase  of  nationalisation,  we cannot exclude  the fact  that since 1975 it is the State of Bihar which  has been  nurturing the  Institute  spending  a considerable sum  of money  and exercising necessary control over it,  as contended  on behalf of the petitioner-Society. The facts  stated above,  in our  opinion, fully justify the propriety of  legislative wisdom  in selecting the Institute as the subject-matter of nationalisation in the first phase.      It is,  however, complained  on behalf of the Institute that since  April 19,  1986 when  the  first  ordinance  was promulgated, no  other institution  has been  added  to  the Schedule,  though  nearly  two  years  have  passed  in  the meantime. It  is submitted  that this fact demonstrates that the professed  object of nationalisation in phases is a mere pretence and a colourable device to single out the Institute for  discriminatory   treatment.  The  taking  over  of  the Institute is  an act  of legislation  and not  an act of the Government. The  question to be considered is whether at the time when  the ordinances  were promulgated  or the  Act was passed, the same suffered the vice of discrimination or not. There can  be no  doubt that on the date the ordinances were promulgated and  the Act  was passed,  the same could not be challenged  on  the  ground  of  non-implementation  of  the legislative intent  in nationalising  similar institutes  by amending the Schedule. If a 326 legislative enactment cannot be challenged as discriminatory on the  date it  is passed, it is difficult to challenge the same as  violative of  Article 14 of the Constitution on the ground of  inaction of  the executive  in  implementing  the purposes of  the Act,  regard being  had to the fact that it was the  Legislature which  had made  the selection  for the first phase  of nationalisation.  If no  such selection  had been made  by the  Legislature and the entire thing had been left to the discretion of the Government, it might have been

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possible  to   contend  of   discriminatory  treatment.  The respondents have,  however, given  an  explanation  for  not including the other similar institutions in the programme of nationalisation, to be precise, in the Schedule to the Act.      In  paragraph   24  of  the  counter-affidavit  of  the respondents Nos.  1, 3  and 4  affirmed by  Shri Ram Shankar Prasad,   Deputy   Secretary,   Department   of   Education, Government of  Bihar, it  has been  stated,  inter  alia  as follows:           "Since the  validity of  the Act  is under  cloud,           being the  subject matter of challenge before this           Hon’ble Court,  the State  Government has  not yet           taken  over   other  Institutes.  However,  it  is           submitted that the proposal to take over two other           institutes in  the second  phase is  at the  final           stage and  is awaiting  the  final  decision  with           regard to  the validity of the Act. When the cloud           is cleared,  further step  for taking  over  other           institutes imparting  education in  similar branch           will be taken."       It is common knowledge that when any litigation ensues and remains  pending, the Government generally does not take any step  till the  final disposal  of the litigation. It is also the  case  of  the  respondents  that  because  of  the pendency of  the litigation  challenging the validity of the ordinances and  the Act,  the Government  did not  take  any steps for  nationalisation of  similar  institutes  for  the second phase.       A grievance has been made on behalf of the petitioner- Society that  even after the promulgation of the ordinances, three other  Institutes, the  details of which have been set out in  the additional  affidavit, have  been recognised. An explanation for  the recognition of the three Institutes has been given  in paragraph  25 of the counter-affidavit of the respondents Nos.  1, 3  and 4.  The explanation  is that the affiliation is  granted under the Bihar State University Act by the University with the approval of the State Government. Three Institutes  mentioned in paragraph 4 of the additional affidavit of the petitioner-Society were 327 recommended by the concerned university for affiliation. The State Government  has concurred  in the  grant of  temporary affiliation subject  to certain  conditions and only for two sessions. In  other words, the explanation is that permanent affiliation has not been granted by the State Government. It is  also  the  case  of  the  said  respondents  that  these institutions are  not  imparting  training  in  the  various courses  which  are  being  taught  in  the  Institute.  The Institute has  sponsored  and  taken  out  various  research programmes and  training in computer which are not available in the  three institutions  named  in  paragraph  4  of  the additional affidavit.  It is  thus apparent  that in view of the  pendency  of  litigations,  the  State  Government  has granted approval  to only temporary affiliation to the three institutions and  that too  on certain  conditions.  If  the State Government  had no  intention  of  taking  over  other institutions in  accordance with  the provisions of the Act, in that case, the Government would have sanctioned permanent affiliation to  the three  institutions. It is made clear in the affidavit  of the  respondents Nos.  1, 3 and 4 that the State Government,  after the  disposal of  the  litigations, that is  to say,  after the disposal of these writ petitions and the  civil appeals, would go on with the nationalisation of other  institutions by  the amendment  of the Schedule to the  Act.  Therefore,  although  there  has  been  delay  in

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implementing the  provisions  of  the  Act,  such  delay  is unintentional and because of the pendency of litigations. In the circumstances,  we are  unable to  accept the contention made on  behalf of the petitioner-Society that the professed object of nationalisation in phases is a mere pretence and a colorable device  to single  out the  Institute or  that the facts of  exclusion of  eleven similarly situated Institutes and the subsequent recognition of the three other Institutes impart vice  of discrimination  to the  impugned Act. As has been stated  already,  the  question  of  discrimination  or discriminatory treatment of the Institute does not arise and the contention  of the  petitioner-Society in this regard is rejected.      The  next  attack  of  the  petitioner-Society  to  the impugned Act  is founded  on violation  of the  provision of Article 19(1)(c)  of the Constitution. It is urged on behalf of the petitioner-Society that in taking over the Institute, there has been an infraction of the fundamental right of the Society to  form association.  It is  contended that  by the impugned Act  the management of the Society has been totally displaced  and  its  composition  changed.  All  assets  and properties are  vested  in  the  State  Government  and  the Commissioner  is   deemed  to   have  taken  charge  of  the Institute. It  is submitted  that all incidents of ownership and management have been taken over by the State and what is being left  to the company is paper ownership and management and, as 328 such, in  substance and  effect the  right of association of the Society  is clearly  affected. It  is submitted that the Act is  not saved  under Article  19(4) of  the Constitution because  the  fundamental  right  of  the  Society  to  form association has been interfered with not in the interests of the sovereignty  and integrity  of India  or public order or morality.      At this stage, it may be pertinent to refer to the fact that by  the impugned  ordinances and the Act, what has been taken over  is the  Institute.  Although  the  name  of  the Society and  of the  Institute is  the same,  these are  two different entities.  It is not disputed that by the impugned legislations the  Institute and  not the  Society  has  been taken over.  No restriction  whatsoever has  been imposed on the functioning  of the  Society. Indeed,  the provisions of the ordinances  and the  Act do not refer to the Society but to the  Institute. The  entire argument  of the  petitioner- Society is  founded on  the infraction  of  the  fundamental right of the Society to form association.      The question,  therefore, is  whether  the  fundamental right of  the petitioner-Society,  as conferred  by  Article 19(1)(c), has  been infringed  or not.  It has  been  stated already that  the Society  has not  been taken  over by  the impugned  Act   or  ordinances.   The  Institute   has  been established by  the Society  in implementation of one of its objects. In  other words,  the Institute  constitutes one of the activities of the Society. The question naturally arises whether  the  fundamental  right  to  form  association,  as contained in  Article 19(1)(c)  of  the  Constitution,  also includes within it the concomitants or the activities or the objects or purposes of an association.      Our attention  has been  drawn to  the principles  laid down  in  two  decisions  of  this  Court  relating  to  the interpretation  of   the  provisions  of  the  Constitution, namely, Sakal  Papers (P)  Ltd. v.  Union of India, [1962] 3 SCR 842  and  Dwarkadas  Shrinivas  of  Bombay  v.  Sholapur Spinning &  Weaving Co.  Ltd., [1954]  SCR 674. In these two

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decisions, it  has been laid down that while considering the nature and content of the fundamental rights, the Court must not  be   too  astute  to  interpret  the  language  of  the Constitution in  so literal a sense as to whittle them down, but must  interpret the  same in a manner which would enable the citizens  to enjoy  the rights  guaranteed by  it in the fullest  measure   subject,  of   course,   to   permissible restrictions. Further,  in construing the Constitution it is the substance  and the  practical result  of the  act of the State that should be considered rather than its purely legal aspects, and  that the correct approach in such cases should be to  enquire as to what in substance is the loss or injury caused to the citizens and not 329 merely what  manner and method has been adopted by the State in placing the restriction.      The  above  principles,  as  laid  down  in  those  two decisions, are well settled and no exception can be taken to them. It  is true  that the  provisions of the Constitution, particularly the  provisions  relating  to  the  fundamental rights, should  not be  construed in  a pedantic manner, but should be  construed in  a  manner  that  would  enable  the citizens to  enjoy the  rights in  the fullest measure. But, that does  not surely  mean and  it was not the intention of this Court  to lay  down that  in construing  the provisions relating to  fundamental rights,  it should  be stretched to the extent of covering even certain extraneous matters which would be  far from  the ambit  and scope  of the fundamental rights. Article  19(1)(c) confers a right on the citizens to form  association.   In  exercise   of  such   a  right  the petitioner-Society   has    constituted   itself   into   an association. That  right of  the Society  remains unimpaired and uninterfered with by the impugned Act and ordinances. It is, however,  complained  that  the  only  activity  of  the Society was  its right  of management of the Institute which was founded  in implementation  of its  objects. Having been taken  over,   the  Society   only  exists  in  paper.  Such interference with  the activity  of the  Society is  really, interference  with   the  right   of  the  Society  to  form association. It  is submitted that Article 19(1)(c) not only guarantees the  fundamental right  to form  association, but also its  continuation. It  is further submitted that in law interfering with  or divesting the management of the Society of the  Institute is  clear interference  with its  right to continue the Association.      In support  of the above contentions, reliance has been placed on  behalf  of  the  petitioner-Society  on  Sholapur Spinnig &  Weaving Company’s case (supra). In that case, the question that  came up  for consideration was whether by the impugned ordinance  there was  deprivation of  the rights of the  Company   in  violation   of  Article   31(2)  of   the Constitution. It  was the  contention of the Government that it had  taken over the superintendence of the affairs of the Company  and   that  the  impugned  legislation  was  merely regulative in  character. In  rejecting the said contention, this Court  observed that the promulgating the ordinance the Government had  not merely taken over the superintendence of the affairs  of the Company, but in effect and substance had taken over the undertaking itself and, in the circumstances, practically all  incidents of  ownership had been taken over by the  State and  nothing was left with the Company but the mere husk  of title.  In the  premises, the impugned statute had over-stepped  the limits  of legitimate  Social  Control Legislation and infringed the fundamental right of 330

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the Company  guaranteed to  it under  Article 31(2)  of  the Constitution and is, therefore, unconstitutional. This Court found as  a fact  that the undertaking itself was taken over in the  guise of  regulatory  legislation  in  violation  of Article 31(2)  of the  Constitution. The  facts of that case are completely  different from  those of  the present  case. There can be no doubt that the Institute has been taken over by the provisions of the ordinances and that Act. It is true that with the taking over of the Institute, the Society lost its right  of management  and control  of the Institute, but that is the consequence of all acquisitions. When a property is acquired,  the owner  loses  all  control,  interest  and ownership of  the property. Similarly the Society, which was the owner  of  the  Institute,  has  lost  all  control  and ownership of  the Institute. It may be equally true that the Institute was  the only  activity of the Society, but we are concerned with the right of the Society to form association. So long  as there  is no  interference with the Society, its constitution or  composition, it  is difficult  to say  that because of  the taking over or acquisition of the Institute, which was  the only property or activity of the Society, the fundamental right  of the  Society to  form association  has been infringed.      Mr.  Sorabjee,  learned  Counsel  for  the  petitioner- Society, has  placed strong  reliance upon  the decision  of this Court  in Damyanti  Naranga v. Union of India, [1971] 3 SCR 840.  In that  case, by a legislative enactment, namely, the Hindi  Sahitya Sammelan Act, 1962, the institution known as the Hindi Sahitya Sammelan was declared an institution of national importance.  By the  said Act  a statutory Sammelan was constituted as a body corporate by the name of the Hindi Sahitya  Sammelan.  Under  section  4(1)  of  the  Act,  the Sammelan was  to consist  of the  first members of the Hindi Sahitya Sammelan, which was a registered Society founded for the development and propagation of Hindi and all persons who might become members thereafter in accordance with the rules made in  that behalf  by the  first  governing  body  to  be constituted by  the Central  Government by notification. The Act provided  for vesting  in the  Sammelan of all property, movable or  immovable, of  or belonging  to the Society. The constitutionality of  the Act  was challenged accordingly on the  ground  that  it  interfered  with  the  right  of  the petitioners to  form association  under Article  19(1)(c) of the Constitution.  It has  been held  that the  Act does not merely regulate  the administration  or the  affairs of  the Society; what  it does  is to  alter the  composition of the Society itself.  The result of this change in composition is that the  members, who  voluntarily formed  the Society, are now compelled  to act in that Association with other members who have  been imposed  as members  by the  Act and in whose admis- 331 sion to  membership they  had no  say. Further,  it has been observed that  the right  to  form  association  necessarily implies that  the persons  forming the Society have also the right to continue to be associated with only those whom they voluntarily admit  in the  Association.  Any  law  by  which members are  introduced in the voluntary association without any option  being given  to the  members to keep them out or any law  which takes  away the  membership of those who have voluntarily joined,  will be  a law  violating the  right to form association.  It has  also been  held  that  the  right guaranteed by  Article  19(1)(c)  is  not  confined  to  the initial  stage  of  forming  an  association,  but  it  also includes within it the right to continue the association.

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    The decision  in Damyanti’s  case (supra) has no manner of application  to the  facts of  the present  case. In that case, the  composition of the Society was interfered with by introducing new  members, which  was construed by this Court as interference with the fundamental right of the Society to form association  and to  continue the  same. In the instant case, the composition of the Society has not been touched at all. All  that has been done is to nationalise the Institute of  the  Society  by  the  acquisition  of  the  assets  and properties  relating  to  the  Institute.  The  Society  may constitute its  governing body  in accordance with its rules without any interference by the Government.      In this  connection, we may refer to a decision of this Court in  All India  Bank Employees’ Association v. National Industrial Tribunal, [1962] 3 SCR 269. Ayyangar, J, speaking for the Court, observes that the right guaranteed by Article 19(1)(c) of  the Constitution  does  not  carry  with  it  a concomitant right  that unions  formed  for  protecting  the interests of labour shall achieve their object such that any interference  to  such  achievement  by  any  law  would  be unconstitutional unless  it could be justified under Article 19(4) as being in the interests of Public order or morality. The  right  under  Article  19(1)(c)  extends  only  to  the formation of  an association  or union  and in so far as the activities of  the association  or union are concerned or as regards the  step which  the union might take to achieve its object, they  are subject  to such laws as may be framed and such  laws  cannot  be  tested  under  Article  19(4).  This observation  supports  the  view  we  have  taken  that  the fundamental right guaranteed under Article 19(1)(c) does not extend to  or embrace  within it  the objects or purposes or the activities  of an  association. In  other words, it does not carry  with it  a further  guarantee that the objects or purposes or activities of an association so formed shall not be interfered  with by law except on grounds as mentioned in Article 19(4), namely, sovereignty and integrity of India or Public order or 332 morality. In  the  circumstances,  the  contention  made  on behalf  of   the  petitioner-Society  that  because  of  the acquisition of  the Institute, the Society lost its right of management over  the Institute  and the  Institute being the main or  the only  activity of  the  Society,  the  impugned legislations interfere with the right of the Society to form and continue  the association and, as such, unconstitutional and void  under Article  19(1)(c) of  the  Constitution,  is unsound and rejected.      Another ground  on which  the validity  of the  Act and ordinances has  been  assailed  is  absence  of  legislative competence of  the State Legislature. It is submitted by the learned Counsel  appearing  on  behalf  of  the  petitioner- Society that  the professed  aims and objects of the Act are to  ensure  the  high  level  of  educational  and  training facilities and  to nationalise this branch of education and, accordingly, having  regard to the pith and substance of the Act, it  falls within  Entry 66  of List  I. Entry  66 is as follows:           "66.  The   co-ordination  and   determination  of           standards in  institutions or  higher education or           research    and     scientific    and    technical           institutions. "       We  may also  refer to Entry 25 of List III which runs as follows:           "25.  Education,  including  technical  education,           medical education  and universities subject to the

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         provisions of Entries 63, 64, 65 and 66 of List I;           vocational and technical training of labour. "       Counsel submits that Entry 25 of List III and Entry 66 of List  I must be harmoniously construed, but to the extent of overlapping  the power conferred by Entry 66 must prevail over the  power of  the State  under Entry  25. On the other hand, it  is submitted  by  Mr.  Kacker  that  the  impugned legislation does not even purport to deal with co-ordination and determination of standards in taking over institution of higher  education.  Counsel  submits  taking  over  of  such institutions would  affirmatively be  covered under Entry 25 itself  and,   negatively,  what   is  carved  out  is  only co-ordination  and   determination  of   standards.  It   is submitted that Entry 25 of List III is enough to sustain the Act.      By the  impugned Act, the Legislature has not laid down any law relating to the subjects mentioned in Entry 66, List I, or  in Entry  25, List III. The Act only provides for the taking over of private educa- 333 tional  institutions  in  phases  and  has  taken  over  the Institute to  start with for the first phase. It may be that the purpose  of  such  taking  over  or  nationalisation  of private educational  institutions is  to ensure a high level of educational and training facilities and the co-ordination of the  training  with  important  industrial  and  business units. An Entry in any of the Lists of Seventh Schedule will apply when a law is enacted by the Legislature on any of the subjects mentioned in the Entry. In the instant case, as has been noticed already, the impugned Act does not lay down any law touching the subject referred to in Entry 66, List 1, or Entry 25,  List III.  In our  opinion, therefore, neither of these two  Entries applies.  Even assuming that one of these two Entries  applies. then it is Entry 25, List III, and not Entry 66, List I; as contended on behalf of the respondents. The impugned  legislation if  held to be one on education or technical education,  is surely  not relating to any matters referred to  in Entry  66, List  I. We  are, however, of the view that Entry 25 also has no application.      The Entry  that applies  to the impugned legislation is Entry  42   of  List   III  pertaining  to  acquisition  and requisition of  property. The  taking over  of  the  private educational institutions  and of  the Institute in the first phase is  nothing but acquisition of property. The Institute was the  property  of  the  petitioner-Society  and  by  the impugned Act  the property  stands transferred to and vested absolutely  in   the  State   Government   free   from   all encumbrances. Thus,  the Institute  has been acquired by the impugned legislation and, therefore, the only Entry which is relevant is  Entry 42  of List  III. As  soon as Entry 66 of List l  is excluded,  it is  quite irrelevant  which of  the Entries-25 or  42  of  List  III-is  applicable.  Therefore, whether it  is Entry  25 or  Entry 42,  in either  case, the State Legislature  is competent  to make enactment There is, therefore, no  substance in the contention made on behalf of the petitioner-Society  that the  Act is invalid because the State Legislature lacked competence in passing the Act.      Now the question is whether after the repeal of Article 31(2) by  the  Constitution  (Forty-Fourth  Amendment)  Act, 1978,  any   compensation  is   compulsorily   payable   for acquisition of  property. The  question may  arise, as it is held that  the impugned Act is really a legislation relating to acquisition of property within the meaning of Entry 42 of List III. Indeed, while urging that the Act falls within the ambit of  Entry 66  of List  I  and,  as  such,  beyond  the

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competence of  the State  Legislature, Mr.  Sorabjee submits that it does not come within the purview of Entry 42 of List III, as no compensation for the acquisition of the Institute has been provided for. He has drawn our attention to 334 the observation  of Chandrasekhara Aiyar, J. in the State of Bihar v.  Maharajadhiraja Sir  Kameshwar Singh of Darbhanga, [1952] SCR  889 (1008)  that payment  of compensation  is an essential element  of the  valid exercise  of the  power  to take. Besides drawing our attention to the said observation, the learned  Counsel has  not  pursued  the  point;  on  the contrary, it  is submitted by him that as on the date of the decision in Kameshwara Singh’s case (supra), that is, before its amendment  by the  Constitution (Seventh Amendment) Act, 1956, Entry  42 related to "principles on which compensation for property  acquired or  acquisition for  any other public purpose is  to be  determined and the form and the manner in which such  compensation  is  to  be  given",  so  the  said observation was made. This means that the learned Counsel is of the  view that  after the  repeal of Article 31(2) of the Constitution, no  compensation is  compulsorily payable  for the acquisition  of property.  In other  words, the point is not ultimately  pressed. In  the circumstances,  we are  not called upon  to decide  the point  or express any opinion on the same.      Now we  may deal  with the  case of Dr. Jagadanand Jha, Registrar of  the Institute.  The first  ordinance,  namely, ordinance No. 15 of 1986, was promulgated by the Governor on April 19, 1986 and the service of Dr. Jha were terminated by an order dated April 21, 1986 which is extracted below:           "The Governor  of Bihar in exercise of power under           section 6  and sub-sections (2), (3) &(4) of Bihar           Private  Educational   Institutions  (Take   over)           Ordinance, 1986 and Bihar Ordinance No. 15 of 1986           and Education Department Notification No. 99/C has           considered the  report of  the Committee  and  has           come to  the conclusion  appointment and promotion           of officers  and workers was not done as per rules           of  the   University,  nor   in  accordance   with           Government directions  and notifications and their           stay in  the Institute  was not in the interest of           the said  Institute. Therefore,  the  services  of           following persons  are  dispensed  with  immediate           effect:                1.   Dr.    Jagannath    Mishra-Chairman-cum-                     Director General.                2.   Sri Jagadanand Jha-Registrar."       Paragraph  6 of  the ordinance,  which is verbatim the same as 335 section 6 of the Act, reads as follows: A           "6. Determination  of terms  of  services  of  the           teaching  staff   and  other   employees  of   the           institution.-(1) As  from the date of the notified           order, all  the staff  employed in the institution           shall cease to be the employee of the institution;                Provided that  they shall  continue to  serve           the institution on an ad-hoc basis till a decision           under sub-section  (3) and  (4) is  taken  by  the           State Government.                (2) The  State Government  will set up one or           more  Committees   of  experts  and  knowledgeable           persons which  will examine  the bio-data  of each           member of the teaching staff and ascertain whether           appointment, promotion or confirmation was made in

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         accordance  with   the  University  Regulation  or           Government  direction/circular   and   take   into           consideration all  other relevant  materials, such           as qualification, experience, research degree etc.           and submit its report to the State Government.                (3) The  State Government  on receipt  of the           report of the Committee or Committees, as the case           may be,  will decide  in respect of each member of           teaching staff on the merits of each case, whether           to absorb  him in Government service or whether to           terminate his  service or to allow him to continue           on an ad-hoc basis for a fixed term or on contract           and shall,  where necessary,  redetermine the rank           pay, allowance and other conditions of service.                (4)  The  State  Government  shall  similarly           determine  the   term  of  appointment  and  other           conditions of service of other categories of staff           of the  Institution on  the basis  of facts  to be           ascertained either by a committee or by an officer           entrusted with  the task  and  the  provisions  of           subsections  (2)   and  (3)  shall  apply  mutatis           mutandis to such case.      Under paragraph  6(1), all  the staff  employed in  the institution shall cease to be the employees of the Institute from the  date of  the notified  order. Under  the  proviso, however, such  employees will  continue on  an ad-hoc  basis till a decision under sub-paragraphs (3) and (4) is taken by the Government. Under sub-paragraph (2) of para- 336 graph 6,  the State  Government is  to set  up one  or  more committees of  experts and  knowledgeable  persons  for  the purpose  of   ascertaining  whether   or  nor   appointment, promotion or  confirmation of  each member  of the  teaching staff was  made in accordance with the University Regulation or Government direction/circular and to submit its report to the State  Government.  Sub-paragraph  (3)  of  paragraph  6 enjoins the  State Government  to decide  in respect of each member of  teaching staff on the merits of each case whether to absorb  him in  Government service  or to  terminate  his service or to allow him to continue on an ad-hoc basis for a fixed term  or on  contract etc.  Subparagraphs (2)  and (3) relate to  the members  of teaching  staff of  the concerned institution.  Sub-paragraph   (4)  of  paragraph  6  of  the ordinance deals  with the cases of other categories of staff of the  institution. It  provides that  the State Government shall similarly  determine the term of appointment and other conditions of  service of  other categories  of staff of the institution. It  is clear  that there  is  some  distinction between sub-paragraph (3) and sub-paragraph (4). While under subparagraph (3),  the State  Government is to decide, among other things,  whether the  service of  a member of teaching staff will  be terminated  or not,  under sub-paragraph (4), the State Government has not been enjoined to decide whether the service  of any  member of  a nonteaching  staff will be terminated or  not, all that has been directed to be decided by the  State Government  under sub-paragraph (4) relates to the term of appointment and other conditions of service.      Admittedly, the petitioner Dr. Jagadanand Jha was not a member of  the teaching  staff, but,  as noticed already, he was the  Registrar of  the Institute, which comes within the expression "other  categories of  staff" under sub-paragraph (4). It  is true  that under  sub-paragraph (4)  it has been provided that sub-paragraphs (2) and (3) shall apply mutatis mutandis but,  such application  will be limited to the term of appointment  and other  conditions of service of a member

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of non-teaching  staff of  the institution.  In other words, the State Government may appoint a committee for the purpose of considering  the term of appointment and other conditions of service  of the members of the non-teaching staff and the State Government has to decide accordingly.      It is thus apparent that the State Government proceeded on the  basis that under sub-paragraph (4) of paragraph 6 of the ordinance,  the State  Government was  to  consider  the question of  termination of  the services of members of non- teaching staff as in the cases of members of teaching staff, as provided in sub-paragraph (3) of paragraph 6 337 of the  Ordinance. Even  then, we are not impressed with the manner and  haste in which the order of termination has been passed. the  ordinance was promulgated on April 19, 1986 and the order  of  termination  was  made  on  April  21,  1986. Although it  is alleged  that a Committee was formed and the State Government  terminated the  services of the petitioner on the  report of  the Committee,  we fail to understand the necessity for  such haste and, in the circumstances, it will not be unreasonable to infer that the Committee or the State Government had  not properly  applied its  mind  before  the order of termination of the services of Dr. Jha was made.      There  can   be  no   dispute  that  when  there  is  a legislative direction  for termination  of the  services  of employees, the  compliance with  the principles  of  natural justice may  not be  read into  such direction  and, if such terminations  are  effected  without  giving  the  employees concerned an opportunity of being heard, no exception can be taken to  the same.  But, in the instant case, sub-paragraph (4) of  paragraph 6  of the  ordinance does  not contain any direction for  the termination of services of the members of non-teaching staff.  Even in  spite of  that, if  the  State Government wants to terminate the services of the petitioner Dr. Jha,  it cannot  be done without giving him a reasonable opportunity of  being heard, for such act on the part of the State Government  would be  an administrative  act. In  this connection, we  may refer to our decision in K.I. Shephard v Union of  India & Ors., [1987] 4 SCC 431 wherein it has been held that  the scheme-making process under section 45 of the Banking Regulation Act, 1949 being administrative in nature, the rules  of natural  justice are  attracted, as the scheme provides for  the termination  of services of the employees. It is  clear from  the provision  of  sub-paragraph  (4)  of paragraph 6 that the services of the members of non-teaching staff have been intended to be continued. The petitioner Dr. Jha has  been working  in  the  post  of  Registrar  of  the Institute for  a pretty long time. We are, therefore, of the view that  his services  cannot be terminated without giving him an  opportunity of  being heard.  The  learned  Counsel, appearing  on   behalf  of  the  respondents,  also  do  not seriously oppose  the view  that in  such circumstances, the petitioner Dr.  Jha should have been given an opportunity of being heard.      It is alleged in the impugned order of termination that the appointment  and promotion  of the  petitioner were  not done as  per the  rules of  the University nor in accordance with the  Government directions  and notifications  and  his stay in  the Institute  was  not  in  the  interest  of  the Institute. If the Petitioner was given an opportunity to 338 make a  representation, he could substantiate that the above findings were erroneous. In any event, as the petitioner was not given  an opportunity of being heard, the impugned order of termination  of the  services of the petitioner cannot be

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sustained.      Before parting  with the cases, we may record that both the Society  and Dr.  Jha have not been able to substantiate the allegation  of mala fide against the then Chief Minister of Bihar.  Even assuming,  although holding to the contrary, that the  Chief Minister  had acted  mala  fides,  the  same cannot vitiate  the legislative  process in  the exercise of which the  impugned Act  and  ordinances  were  respectively passed and  promulgated. The respondents also have failed to prove the  alleged mismanagement  of the  Institute  by  the Society or  by Dr.  Jha. Indeed,  they have  not pressed the allegation of mismanagement.      For  the  reasons  aforesaid,  the  impugned  order  of termination dated  April 21,  1986  of  the  petitioner  Dr. Jagadanand Jha is quashed. Writ Petitions (Civil) Nos. 87 of 1987 and 439 of 1987 and Civil Appeal No. 4141 of 1986 in so far as  they relate  to the  said order  of  termination  of services of  the petitioner  Dr. Jagadanand Jha are allowed. The State  Government will  be at  liberty to  consider  the question of  termination of  service of the petitioner after giving him a reasonable opportunity to make representation.      The Writ  Petitions (Civil)  Nos. 55 of 1987 and 431 of 1987 and Civil Appeal No. 4142 of 1986 are dismissed      There will  be no  order for  costs  in  any  of  these matters. S.L. 339