1.Leave granted.
2.The seminal question in this appeal is: whether the State Government had unjustly revoked the Essentiality Certificate granted to Gyanjeet Sewa Mission Trust1 for establishing a medical college at Jabalpur in the State of Madhya Pradesh, being contrary to the decision of a two-Judge Bench of this Court DEEPAK SINGH 1 For short, “the appellant-Trust” or “the appellant-College” in Chintpurni Medical College and Hospital & Anr. Vs. State of Punjab & Ors.2?
3.Shorn of unnecessary details, the Government of Madhya Pradesh, on an application made by the appellant-Trust, issued the stated Essentiality Certificate as prescribed in Form-2 appended to the Medical Council of India Establishment of Medical College Regulations, 19993. The same reads thus: “Government of Madhya Pradesh Medical Education Department, Bhopal F.No. F-5-56/2014/1/55 Date: 27.08.2014 To, The Chairman, GhyanjeetSewa Mission Trust, SukhSagar Medical College & Hospital Jabalpur Jabalpur Sir, The desired certificate is as follows: 1. No. of institutions already 6 Autonomous Medical existing in the State. Colleges 7 Private Medical Colleges 2. No. of seats available or No. 1770 MBBS Seats of doctors being produced annually. 3. No. of doctors registered Not Updated with the State Medical Council.
4.No. of doctors in Not Updated Government service. 3 For short, “the 1999 Regulations”
5.No. of Government posts Not Updated vacant and those in rural/difficult areas.
6.No. of doctors registered Not Updated with Employment Exchange.
7.Doctor population ratio in The population of State the State. is 7,26,27000 as per 2011 census. The population of Jabalpur Division, where the Medical College is proposed is 24,63,289
8.How the establishment of By increasing qualified the college would resolve Medical Doctors in the the problem of deficiencies state of Madhya of qualified medical Pradesh. personnel in the State and improve the availability of such medical manpower in the State.
9.The restrictions imposed by No restrictions. The the State Government, if admission will be made any, on students who are through M.P. not domiciled in the State Professional from obtaining admissions Examinations Board. in the State, be specified.
10.Full justification for For opening of the opening of the proposed proposed Medical college. College, the applicant is a Registered Trust, possessing 27.27 acres of land with 300 bedded running hospital and adequate planning & time bound programme. The Applicant is developing Staff Quarters, Nurses Quarters, Boys & Girls Hostel along with ample Administrative Block, Parking Space, Sports Ground and having well managed funds to run the Medical College & Hospital. The Hospital would serve the growing population of Jabalpur. People will get modern health treatment under one roof. The opening of medical college will give 150 trained & educated Medical Professionals to the society every year, who will contribute in serving the public at large. Thus, opening up of a Medical College and Hospital in Jabalpur would not only bridge the huge gap but will definitely contribute on its part for the service of needy patients of Jabalpur, in particular and the state at large.
11.Doctor-patient ratio Marginally increased
proposed to be achieved
The Ghyanjeet Sewa Mission Trust, has applied for establishment of a new Medical College at Jabalpur. On careful consideration of the proposal, the Government of Madhya Pradesh has decided to issue an essentiality certificate to the [sic] applicant for the establishment of a Sukh Sagar Medical College & Hospital Jabalpur with 150 seats in MBBS Programme under following conditions: 1. Institute will fulfil the norms of MCI before inspection of Medical Council of India. 2. Institute will appoint the staff as per norms of MCI. 3. Government will neither bear any financial burden nor provide grant to the institute. 4. Institute will follow all the rules/conditions of MCI and State/Central Government.
5. Institute will admit the student only after written
permission from Central Government, MCI and State
Government.
6. Institute will admit the students by adopting
transparent procedure as decided by admission and fee
regulatory committee appointed by the State Government.
7. Institute will charge the fee as decided by the State
Government (admission and fee regulatory committee). No
other fee will be admissible.
It is certified that:
i. The applicant owns and manages a 300 bedded
hospital.
j. It is desirable to establish a Medical College in the
public interest.
k. Adequate clinical material as per the Medical Council of
India norms is available.
It is further certified that in case the applicant fails
to create infrastructure for the medical college as per
MCI norms and admissions are stopped by the Central
Government, the State Government shall take over the
responsibility of the students already admitted in the
college with the permission of the Central Government.
By order in the name of Governor of Madhya Pradesh.
Sd/
27.08.2014
(Sanjeev Shrivastava)
Deputy Secretary
Govt. of Madhya Pradesh
Medical Education Deptt.
Dated /08/2014”
4. After issuance of the aforementioned Essentiality Certificate,
the appellant-Trust submitted a scheme to the Medical Council of
India4, for establishment of a new medical college at Jabalpur in
4 For short, “the MCI”
the name and style of Sukh Sagar Medical College & Hospital
with annual intake of 150 students in MBBS course for the
academic year 2016-17. The MCI after due inspection had
submitted a negative report to the Central Government due to
gross deficiencies, including fake records regarding the patients
and resident staff, as a result of which the Ministry of Health and
Family Welfare, Government of India vide letter dated 10.6.2016,
rejected the proposed scheme. However, in light of the directions
dated 13.6.2016 issued by the Supreme Court Mandated
Oversight Committee (OC)5, the Ministry of Health and Family
Welfare issued a letter on 20.8.2016 in supersession of its earlier
letter, according permission to the appellant-Trust for
establishing a medical college on certain conditions mentioned
therein. This permission was valid for a period of one year, to be
renewed on yearly basis subject to the verification of the
achievement of annual targets as indicated in the scheme
submitted by the Trust and revalidation of performance Bank
Guarantee. It was made clear that the process of renewal of
permission will continue till such time the establishment of
medical college and expansion of hospital facilities were to be
5 For short, “the SCMOC”
completed and a formal recognition of the medical college is
granted in furtherance thereof. It was also made clear to the
Trust that the next batch of students in MBBS course for the
academic year 2017-18 be admitted in the college only after
obtaining prior permission of Central Government and fulfilling
conditions stipulated by the SCMOC referred to in paragraph 2 of
the Letter of Permission (LoP). The MCI inspected the college and
found that the undertaking given by the management was
breached and violated, as a result of which the Central
Government debarred the college for academic years 2017-18 and
2018-19.
5. It is an admitted position that for the subsequent academic
years i.e. 2017-18, 2018-19 and 2019-20, no renewal of
permission was accorded to the appellant-College. The latest
assessment report of the MCI dated 3rd and 4th January, 2019,
would indicate that the appellant-College was unable to rectify
the deficiencies pointed out by the Inspecting Committee of the
MCI. The deficiencies noted in the assessment report read thus:
“…
1. No orientation & basic course undergone by MEU.
2. One Lecture theatre for college lacking, hospital Lecture
Theatre not gallery type.
3. In Central Library:
- Number of books less by 798
- Indian Journals less by 14
- Foreign Journals less by 06
4. Hostel accommodation less by 176 (Required 360 –
available 224).
5. Biometric device not yet installed.
6. Bed Occupancy 3.65% (15 patients on 410 beds).
7. Minor surgeries, normal deliveries, caesarean section
– Nil
8. Ba, IVP – Nil, CT Scan not installed.
9. Number of admissions only 2, casualty attendance one
(01).
10. Cytopathology Nil, Static X-ray in casualty – Nil
11. Separate casualty for OBGY not available.
12. Defibrillators total 04 in OT block and are being shared
between various theatres.
13. No patients in ICCU, ICU, SICU, NICU and PICU.
14. 01 mobile 60 mA, 01 Static 800 mA, CT not available in
Radiology department.
15. No mannequins available in Pharma department.
16. No accommodation available for students in RHTC,
Students go to RHTC but not in UHTC.
17. Deficiency of Faculty 88.03% (103/117)
18. Deficiency of Residents 90.9% (60-66)
…”
Resultantly, the Board of Governors in Supersession of MCI, vide
letter dated 30.5.2019, declined to accept the request for renewal
of permission for admission to 150 students in MBBS course for
the academic year 2019-20.
6. In this backdrop, the Additional Secretary, Medical
Education Department of Government of Madhya Pradesh, issued
a show-cause notice dated 7.8.2019, calling upon the appellant
to show cause as to why the Essentiality Certificate issued in
favour of the appellant-Trust should not be cancelled.
7. The appellant assailed the said show-cause notice by filing a
writ petition before the High Court of Madhya Pradesh, Principal
Seat at Jabalpur6, being Writ Petition No. 17946/2019. During
the pendency of the said writ petition, the appellant submitted
response to the show-cause notice and questioned the authority
of the State Government to revoke the Essentiality Certificate,
mainly relying on the decision of this Court in Chintpurni
Medical College (supra).
8. Additional Secretary, Medical Education Department,
Government of Madhya Pradesh, after giving due opportunity to
the appellant and considering its response to the show-cause
notice, eventually proceeded to pass an order directing
cancellation/revocation/withdrawal of the Essentiality Certificate
6 For short, “the High Court”
dated 27.8.2014. It is apposite to advert to the reasons that
weighed with the authority in cancelling the Essentiality
Certificate. The authority has taken into account that the
appellant had failed to remove the deficiencies pointed out by the
MCI from time to time and no renewal of permission was granted
for academic years 2017-18, 2018-19 and 2019-20 on that
count. Thus, the appellant had failed to provide even the
minimum clinical material for running of a medical college,
contrary to the conditions specified in clause numbers 1, 2 and 4
of the Essentiality Certificate. In substance, the college had
failed and neglected to provide for the minimum standards
specified by the MCI for running of a medical college, despite
several opportunities given in that regard since academic year
2016-17. The deficiencies (as noted in the assessment report of
the MCI), were gross and had even jeopardised the academic
career of the first batch of 150 students admitted in the college
during academic year 2016-17. It had also come to the notice of
the State authorities that the College had declined to impart
education to those students who had not deposited fees, which
was again in violation of the conditions specified in the
Essentiality Certificate. During a joint meeting between the
Collector, Jabalpur, management of the College and students,
convened on 19.7.2019, the grievances of the students were
considered and direction was issued to the management to take
corrective measures within ten days and provide the basic
minimum facilities to the students and resume the classes.
However, that did not happen. In the concluding part of the
order dated 5.9.2019, therefore, it is noted as follows:
“…..
(xvii) Also regarding the Sukh Sagar Medical College &
Hospital, the acts of not providing proper infrastructure
facilities for the study of medical students, lack of necessary
academic staff for teaching the course, non-availability of
clinical material due to the very less numbers of patients to
be admitted in the hospital, and the fact of not granting
recognition by the MCI for the Sessions 2017-18, 2018-19
and 2019-20 due to the different deficiencies, misbehaving
with the students, are the gross violation of the conditions
and basis conditions of grant of Essentiality Certificate
issued by the State Government. In this regard, due to the
failure of College Management in taking necessary action
continuously for a period of 3 years, it is itself clear that
they have been completely failed in serving the main
objective of issuance of Essentiality Certificate i.e.
providing better medical facility to the patients and
increasing the numbers of medical professionals. On the
other hand, in the lack of necessary facilities required
for the medical training of the students admitted in the
session 2016-17, their future has gone in dark. Therefore,
Show Cause Notice (SCN) issued by the State Government to
the Sukh Sagar College, is in accordance with law.
(xviii) In W.P. No. 17946/2019, Sukhsagar Medical College
& Hospital vs. State of M.P. & Ors., the Hon’ble High Court
has directed the Competent Authority to decide the present
case after taking into cognizance all the aspects related to
the present case. In this continuation, the Report of
Collector, Jabalpur and the different objections submitted by
the Sukh Sagar Medical College Management, were examined
in detail and pointwise examination was made in compliance
of the directions issued by the Hon’ble Supreme Court in the
matter of Chintpurni Medical College & Hospital (supra). On
the basis of detailed examination of all the points, the
decision to be taken by the Government is in accordance
with the interim order passed by the Hon’ble High Court in
W.P. No. 17946/2019.
Therefore, after due consideration, the State
Government has decided that the Essentiality Certificate
(Desirability & Feasibility Certificate) issued to the Sukh
Sagar Medical College & Hospital, Jabalpur vide Letter
No. F 5-56/2014/1/55 dated 27th August, 2014 of the
Department, is hereby cancelled with immediate effect.
This order, shall subject to the final order passed by the
Hon’ble High Court, Jabalpur, in W.P. No. 17946/2019 titled
as Sukhsagar Medical College & Hospital vs. State of M.P. &
Ors.
…”
9. The appellant, therefore, amended the pending writ petition
and challenged the order dated 5.9.2019 passed by the
Additional Secretary, cancelling the Essentiality Certificate (dated
27.8.2014). Before we advert to the impugned decision of the
High Court, in passing, it is relevant to note that the students
who were admitted in the first batch for academic year 2016-17,
had filed a writ petition before the High Court being Writ Petition
No. 12682/2019 for issuing direction to the State Government to
accommodate the students of appellant-College in some other
recognised Government/private colleges in the State, in light of
the conditions specified in the Essentiality Certificate, which was
still in vogue. The High Court had disposed of the said writ
petition on 9.7.2019 with direction to the State authorities to
consider the representation of the concerned students and take
necessary measures as per law. Eventually, after the Essentiality
Certificate was cancelled by the State Government vide order
dated 5.9.2019, the concerned students belonging to the first
batch of 2016-17 came to be adjusted/reallocated in six
recognised private colleges within the State of Madhya Pradesh as
per the permission granted by the Ministry of Health and Family
Welfare, Government of India vide letter dated 25.11.2019.
10. Reverting to the impugned judgment, summarily rejecting
the subject writ petition filed by the appellant, by a speaking
order, the High Court proceeded to hold that the decision in
Chintpurni Medical College (supra) does not completely forbid
the State Government from exercising power to revoke the
Essentiality Certificate. The High Court also held that the State
Government acted within the excepted categories referred to in
the reported decision of this Court. Inasmuch as, the State
Government has taken into account the fraud played by the
college in securing the Essentiality Certificate, the inability of the
college to provide for the minimum standards of infrastructure
and other facilities specified by the MCI for running of a medical
college and also complete loss of substratum and larger public
interest, as reasons for revocation of Essentiality Certificate by
the State. While rejecting the writ petition, however, the High
Court gave liberty to the appellant to remove the deficiencies
pointed out by the MCI in its order dated 30.5.2019 and apply
afresh for the Essentiality Certificate to the State Government
and if the same is refused thereafter, the appellant was free to
question such decision being a fresh cause of action. The writ
petition has been disposed of by the High Court with these
observations.
11. We have heard Mr. Dushyant Dave, learned senior counsel
for the appellant, Mr. Vikas Singh, learned senior counsel for the
Medical Council of India and Mr. Saurabh Mishra, learned
Additional Advocate General for the State of Madhya Pradesh.
12.At the outset, we deem it apposite to closely analyse the
two-Judge Bench decision of this Court in Chintpurni Medical
College (supra). For, much emphasis has been placed on the
said decision as involving similar fact situation. Even in that
case, the medical college had started in the year 2011 in the
State of Punjab. The permission for the first batch was granted
in the year 2011-12. For subsequent academic years i.e. 2012
13 and 2013-14, no renewal of permission was granted to the
college, as it was found to be deficient during the inspection
carried out by the MCI. For the academic year 2014-15, however,
a Letter of Permission (LoP) was granted in terms of order of this
Court in Hind Charitable Trust Shekhar Hospital Private
Limited vs. Union of India & Ors.7. Thereafter, no renewal of
permission was granted to the petitioner for the academic year
2015-16. The college had applied for grant of recognition under
Section 11 of the Indian Medical Council Act, 19568 in the year
2015. During the inspection carried out by the MCI, deficiencies
to the extent of 100% came to be noted. Despite that, in terms of
the decision of this Court in Modern Dental College &
Research Centre vs. State of Madhya Pradesh9, the scheme
submitted by the college was processed further. The SCMOC
directed the MCI to conduct inspection and in case the college
8 For short, “the IMC Act”
was found deficient, it was to be banned for a period of two years.
The MCI conducted inspection of the concerned college on
7.3.2017 and found it deficient, thus recommended to the
Central Government to debar the college from admitting students
against the allowed intake for two academic years i.e. 2017-18
and 2018-19. The above decision was unsuccessfully challenged
by the concerned college by way of a writ petition. In the
meantime, the State Government decided to withdraw the
Essentiality Certificate issued to the concerned college. That
decision was challenged by way of a separate writ petition before
this Court. While considering that challenge, the Court examined
the scheme of the provisions of the IMC Act and the purpose for
which Essentiality Certificate was required to be issued by the
State Government. It noted that the same has been made
condition precedent at the time of submitting the scheme for
grant of Letter of Intent (LoI)/Letter of Permission (LoP) to start a
new medical college. It noted that the State Government is
required to certify by way of Essentiality Certificate, its approval
for establishment of a medical college with a specified number of
seats in public interest, and further that such establishment is
feasible. Thus, an Essentiality Certificate from the State
Government mentioning therein that it is essential to have a
medical college, as proposed by the applicant, is to prevent the
establishment of a college where none is required or to prevent
unhealthy competition between too many medical colleges.
Further, the only purpose of the Essentiality Certificate is to
enable the Central Government acting under Section 10-A of the
IMC Act to facilitate the competent authority to take an informed
decision for permitting the opening or establishment of a new
medical college and once the college is established, its
functioning and performance and even the derecognition of its
courses is governed by the provisions of the IMC Act and not any
other law. Having said that, in paragraph 17, the Court observed
as follows:
“17. It would be impermissible to allow any authority
including a State Government which merely issues an
essentiality certificate, to exercise any power which could
have the effect of terminating the existence of a medical
college permitted to be established by the Central
Government. This the State Government may not do either
directly or indirectly. Moreover, the purpose of the
essentiality certificate is limited to certifying to the Central
Government that it is essential to establish a medical college.
It does not go beyond this. In other words, once the State
Government has certified that the establishment of a
medical college is justified, it cannot at a later stage say
that there was no justification for the establishment of
the college. Surely, a person who establishes a medical
college upon an assurance of a State Government that such
establishment is justified cannot be told at a later stage that
there was no justification for allowing him to do so.
Moreover, it appears that the power to issue an
essentiality certificate is a power that must be treated as
exhausted once it is exercised, except of course in cases
of fraud. The rules of equity and fairness and promissory
estoppel do not permit this Court to take a contrary view.”
The Court then went on to hold that the State Government is
designated by the 1999 Regulations only for the purpose of
Essentiality Certificate to justify the establishment of a medical
college within its territories and that too when approached by a
person seeking to establish a medical college. There is no direct
conferral of any power of general inspection on the State and
neither can such a power be read into the Regulations nor be
implied as necessary to carry out an expressly conferred power
which does not exist. While rejecting the argument of the State
about the inherent right of the State to withdraw the Essentiality
Certificate, in paragraph 24, the Court observed thus:
“24. The learned counsel for the State of Punjab submitted
that since the essentiality certificate certifies the availability
of adequate clinical material for the proposed medical
college, as per the Regulations, the State has the necessary
power of inspection of the college even after its establishment
to ensure that there is adequate clinical material. This
submission must also be rejected since the State is
enjoined to certify adequate clinical material only at the
time of proposal of the medical college and not after it is
established. But we find from the submissions that the State
has misinterpreted the term “adequate clinical material”
completely. According to the State, “adequate clinical
material” means “people” i.e. doctors, patients, staff, etc.
Whereas, the term is understood in the field of medical
education to mean data about number of admissions,
number of discharges, number of deaths, number of
surgeries, number of procedures, X-rays and laboratories
investigations. Thus, what the State is required to certify is
the data available in the region to justify the establishment of
the proposed medical college. Obviously, for the purpose of
justifying the existence of a medical college, the State's claim
that it must have the right to inspect a college after it is
established to see whether there are adequate numbers of
doctors, patients, etc. to justify its continued existence is
completely hollow and unfounded.”
The Court then noted the argument of the State about the
existence of its power ascribable to Section 21 of the General
Clauses Act, 189710. In that regard, the Court noted that the
certificate is neither a notification nor an order or rule or bye-law
as contemplated by Section 21 of the 1897 Act. Further, the act
of issuance of Essentiality Certificate by the State is a quasi
judicial function. It is neither a legislative nor an executive
function as such, so as to attract Section 21 of the 1897 Act.
Further, advisedly, there is no provision in the IMC Act or the
1999 Regulations empowering the State to revoke or cancel the
Essentiality Certificate once granted by it in respect of an
established medical college. In absence of an express provision
in that regard and issuance of an Essentiality Certificate being a
quasi-judicial function, Section 21 of the 1897 Act will be of no
10 For short, “the 1897 Act”
avail. In other words, the State had no power to withdraw the
Essentiality Certificate once granted in respect of an established
college. At the same time, the Court following earlier decisions of
this Court observed that even in such a situation, the State
would be competent to withdraw the certificate, where it is
obtained by fraud or in circumstances where the very substratum
on which the Essentiality Certificate was granted disappears or
any other reason of the like nature. For that, the Court has
referred to the decisions of this Court in Indian National
Congress (I) vs. Institute of Social Welfare & Ors.11,
Industrial Infrastructure Development Corporation (Gwalior)
Madhya Pradesh Limited vs. Commissioner of Income Tax,
Gwalior, Madhya Pradesh12, Ghaurul Hasan & Ors. vs. State
of Rajasthan & Anr.13 and Hari Shankar Jain vs. Sonia
Gandhi14 and of the High Court of Andhra Pradesh in
Government of Andhra Pradesh & Anr. vs. Y.S. Vivekananda
Reddy & Ors.15.
13.At the outset, we may straightaway agree with the dictum in Chintpurni Medical College (supra) that the act of the State in issuing Essentiality Certificate is a quasi-judicial function, which view is supported by the analogy deduced from the reported decisions referred to above. Having said that, it must follow that Section 21 of the 1897 Act cannot be invoked and in absence of an express provision in the IMC Act or the 1999 Regulations empowering the State Government to revoke or cancel the Essentiality Certificate, such a power cannot be arrogated by the State relying on Section 21. That, however, does not deprive the State Government to revoke or withdraw the Essentiality Certificate in case where (a) it is secured by playing fraud on the State Government, (b) the substratum for issuing the certificate has been lost or disappears and (c) such like ground, where no enquiry is called for on the part of the State Government. In Indian National Congress (I) (supra), the Court while dealing with similar argument to assail the decision of the Election Commission to review its order registering the political party, observed as follows: “33. However, there are three exceptions where the Commission can review its order registering a political party. One is where a political party obtained its registration by playing fraud on the Commission, secondly, it arises out of sub-section (9) of Section 29-A of the Act and thirdly, any like ground where no enquiry is called for on the part of the Election Commission, for example, where the political party concerned is declared unlawful by the Central Government under the provision of the Unlawful Activities (Prevention) Act, 1967 or any other similar law.” And again, in paragraphs 41(3) and 41(4), while summing up the judgment, the Court held as follows: “41. To sum up, what we have held in the foregoing paragraph is as under: 3. However, there are exceptions to the principle stated in paragraph 2 above where the Election Commission is not deprived of its power to cancel the registration. The exceptions are these: (a) where a political party has obtained registration by practising fraud or forgery; (b) where a registered political party amends its nomenclature of association, rules and regulations abrogating therein conforming to the provisions of Section 29-A(5) of the Act or intimating the Election Commission that it has ceased to have faith and allegiance to the Constitution of India or to the principles of socialism, secularism and democracy or it would not uphold the sovereignty, unity and integrity of India so as to comply with the provisions of Section 29-A(5) of the Act; and (c) any like ground where no enquiry is called for on the part of the Commission. 4. The provisions of Section 21 of the General Clauses Act cannot be extended to the quasi-judicial authority. Since the Election Commission while exercising its power under Section 29-A of the Act acts quasi-judicially, the provisions of Section 21 of the General Clauses Act have no application.” As noted earlier, even in Chintpurni Medical College (supra), the Court has clarified that the State Government can cancel/revoke/withdraw Essentiality Certificate in exceptional cases, by observing thus: “36. We may not be understood to be laying down that under no circumstances can an essentiality certificate be withdrawn. The State Government would be entitled to withdraw such certificate where it is obtained by playing fraud on it or any circumstances where the very substratum on which the essentiality certificate was granted disappears or any other reason of like nature.” In other words, we hold that Chintpurni Medical College (supra) does not lay down in absolute terms that the State cannot revoke the Essentiality Certificate once granted for opening of a new medical college within the State. The observations in paragraph 36 of the reported decision also reiterate this position and make it amply clear that in exceptional circumstances referred to therein, the State is free to do so.
14.The core issue in the present appeal, therefore, is whether the decision of the State Government, dated 5.9.2019, falls within one of the excepted categories. The first excepted category is where the appellant had obtained the Essentiality Certificate by playing fraud on the State Government. It is well-settled that fraud vitiates any act or order passed by any quasi-judicial authority, even if no power of review is conferred upon it, as held in paragraph 34 of the decision in Indian National Congress (I) (supra) in the following words: “34. Coming to the first exception, it is almost settled law that fraud vitiates any act or order passed by any quasi judicial authority even if no power of review is conferred upon it. In fact, fraud vitiates all actions. In Smith v. East Elloe Rural Distt. Council [(1956) 1 All ER 855], it was stated that the effect of fraud would normally be to vitiate all acts and orders. In Indian Bank v. Satyam Fibres (India) (P) Ltd. [(1996) 5 SCC 550] it was held that a power to cancel/recall an order which has been obtained by forgery or fraud applies not only to courts of law, but also to statutory tribunals which do not have power of review. Thus, fraud or forgery practised by a political party while obtaining a registration, if comes to the notice of the Election Commission, it is open to the Commission to deregister such a political party.” As to when it would be a case of fraud played on the State Government, would depend on whether it was an attempt by the appellant to present facts, so as to misrepresent the State. The fraud can either be actual or constructive fraud. The actual fraud is a concealment or false representation through an intentional or reckless statement or conduct that injures another who relies on it in acting, whereas the constructive fraud is unintentional deception or misrepresentation that causes injury to another. The actual or constructive fraud as predicated in Black’s Law Dictionary16 is as follows: “actual fraud. A concealment or false representation through an intentional or reckless statement or conduct that injures another who relies on it in acting. – Also termed fraud in fact; positive fraud; moral fraud.” “constructive fraud. 1. Unintentional deception or misrepresentation that causes injury to another. 2. Fraud in law. Fraud that is presumed under the circumstances, without regard to intent, usu. through statutorily created inference. Fraud may be presumed, for example, when a debtor transfers assets and thereby impairs creditors’ efforts to collect sums due. This type of fraud arises by operation of law, from conduct that, if sanctioned, would (either in the particular circumstance or in common experience) secure an unconscionable advantage, irrespective of evidence of an actual intent to defraud. – Also termed legal fraud; fraud in contemplation of law; equitable fraud; fraud in equity.” It may be also useful to advert to the meaning of “actionable fraud” in the Sixth Edition of the same Law dictionary, as follows: “Actionable fraud. Deception practiced in order to induce another to part with property or surrender some legal right. A false representation made with an intention to deceive; such may be committed by stating what is known to be false or by professing knowledge of the truth of a statement which is false, but in either case, the essential ingredient is a falsehood uttered with intent to deceive. To constitute “actionable fraud,” it must appear that defendant made a material representation; that it was false; that when he made it he knew it was false, or made it recklessly without any knowledge of its truth and as a positive assertion; that he made it with intention that it should be acted on by plaintiff; that plaintiff acted in reliance on it; and that plaintiff thereby 16 Black’s Law Dictionary 11th Edition suffered injury…. Essential elements are representation, falsity, scienter, deception, reliance and injury.”
15.Indeed, in the present case, the State Government in its order dated 5.9.2019, has adverted to several aspects including the assessment report of the MCI and inspection report of the Committee. The substance of the reason weighed with the State Government, as can be culled out from the stated order, is that the appellant had failed to fulfil the commitment given to the State at the relevant time - of providing minimum infrastructure and fulfilment of the norms of MCI and appointing the staff as per norms of MCI - for all this period and was incapable in doing so despite repeated opportunities given since 2016 by the MCI. Further, even though the appellant was granted conditional Letter of Permission (LoP) for academic year 2016-17, it had failed to remove the deficiencies, as a result of which not even the first batch could pursue or complete the medical course in the appellant-College. The concerned students kept on making earnest representation to the State authorities to rescue them from the hiatus situation in which they were trapped. Indisputably, the concerned students (admitted in the first batch of 2016-17) were eventually reallocated to another recognised college after November, 2019, as no renewal of permission to the appellant-College was forthcoming for three successive academic sessions i.e. 2017-18, 2018-19 and 2019-20.
16.Such circumstances reckoned by the State, by no stretch of imagination, can be disregarded as irrelevant, intangible or imaginary. Rather, the totality of the situation reinforces the fact that the appellant-College had failed and neglected to discharge its commitment given to the State at the relevant time; and is incapable of fulfilling the minimum norms specified by the MCI for starting and running a medical college. It had thus misrepresented the State Government at the relevant time by giving a sanguine hope of ensuring installation of minimum infrastructure and setting up of a robust organisational structure for running of a medical college “in a time bound programme”. Therefore, it can be safely deduced that it is a case of constructive fraud played upon the State Government. For, even after lapse of over five years from the date of issuance of Essentiality Certificate (27.8.2014), the appellant-College is not in a position to secure the requisite permission(s) from the MCI and the Central Government to run a medical college as per the scheme.
17.The State Government whilst discharging its role of parens patriae of the student community cannot remain a mute spectator and expose them to a college, which is deficient in many respects. The fact that no renewal permission has been granted by the MCI for three successive academic sessions due to gross deficiencies in the appellant-College, is itself indicative of the state of affairs in the appellant-College, warranting a legal inference that the substratum on the basis of which Essentiality Certificate was issued to the appellant-College had completely disappeared. For, even the first batch of students admitted in the appellant-College could not pursue their medical course and were eventually reallocated by the State Government to other recognised private medical colleges within the State as per the obligation specified in the Essentiality Certificate, after obtaining permission of the Central Government in that behalf in November, 2019.
18.The Essentiality Certificate was issued on the representation of the appellant-College that it would give 150 fully trained and qualified doctors each year to the State, thereby improving the doctor-patient ratio and provide healthcare to the nearby population in the attached hospital. All this has become a mirage due to the failure of the appellant-College to get permission of Central Government for four successive academic sessions starting from 2016-17 till 2019-20. Not even one doctor has been produced by the appellant-College after issuance of the Essentiality Certificate nor the hospital attached to the college is provided with minimum standards specified by the MCI and is found to be grossly deficient. On a comprehensive view of the state of affairs, the fulfilment of MCI norms and other allied conditions must be understood as an implied imperative for the consideration/continuation of Essentiality Certificate. For, there can be no deviation from the standards. This being a clear case of a non-functioning college, warranted immediate intervention of the State Government in larger public interest and also because the substratum had disappeared. It would certainly come within the excepted category, where the power of withdrawal of Essentiality Certificate ought to be exercised by the State and more particularly not being a case of an established college per se.
19.The term “established” is not defined in the IMC Act or the 1999 Regulations. The common parlance meaning of this expression, as predicated in the Black’s Law Dictionary 11th Edition, reads thus: “established, 1. Having been brought about or into existence. 2. Having existed for a long period; already in long-term use. 3. Proven; demonstrated beyond doubt. 4. Known to do a particular job well because of long experience with good results. 5. (Of a church or religion) officially recognised and sponsored by the government.” In the present case, however, the appellant-College was at the threshold stage of only opening and starting first year course for academic year 2016-17. It failed and neglected to fulfil even the minimum benchmark of standards specified by the MCI allowing it to run the medical college. Admittedly, no renewal permissions from the Central Government were issued for the successive academic years. In that sense, it is not a case of withdrawal of the Essentiality Certificate of an “established” medical college as such. Had it been a case of well-established and a running medical college having basic minimum infrastructure as per the specifications of the MCI and State Government was to withdraw its Essentiality Certificate, that matter would stand on a different footing than the case at hand, where the college has miserably failed to ensure completion of medical course even of the first batch for three successive academic sessions from 2016-17 due to non-renewal of permission by the MCI.
20.Be that as it may, there would be legitimate expectation amongst the stakeholders, after issuance of Essentiality Certificate by the State Government, that the applicant-college shall fulfil the basic norms specified by the MCI in a time bound manner, so as to open the medical college and operate it as per the norms. That, however, has not happened in the present case since August, 2014 until the issuance of subject show-cause notice in August, 2019 and passing of the impugned order of withdrawal of Essentiality Certificate. The fact that the applicant has made certain investments for starting the medical college, by itself, cannot be the basis to undermine power of the State Government coupled with duty to ensure that the medical college is established in terms of the Essentiality Certificate within a reasonable time.
21.While dealing with the case of maintaining standards in a professional college, a strict approach must be adopted because these colleges engage in imparting training and education to prospective medical professionals and impact their academic prospects. Thus, the future of the student community pursuing medical course in such deficient colleges would get compromised besides producing inefficient and incompetent doctors from such colleges. That would be posing a bigger risk to the society at large and defeat the sanguine hope entrenched in the Essentiality Certificate issued by the State.
22.Indeed, the fact that the Essentiality Certificate given to the appellant-College stands withdrawn, it does not follow that the need to have a new medical college in the concerned locality or the State ceases to exist. For, the raison d’etre behind Essentiality Certificate, amongst others, is likely improvement of doctor-patient ratio and access to healthcare for the population in the attached hospital. As a matter of fact, the need would get bigger due to the failure of the new medical college to fulfil the scheme in a time bound manner in right earnest. That entails in enhancing the mismatch of demand and supply ratio of doctors required to achieve the medical manpower of the State. It would not be in public interest nor appropriate for the State Government to remain a mute spectator and not move into action when the college miserably fails to translate the spirit behind the Essentiality Certificate within a reasonable time. By no stretch of imagination, five years period, to fulfil the minimum requirement and standards specified by the MCI, can be countenanced.
23.Article 47 of the Constitution of India encompassed in Directive Principles of State Policy, enjoins the State with a duty to provide for and ensure good public health and a constant endeavour to improve the same to effectuate the fundamental right to life guaranteed by the Constitution to all. Thus understood, the State’s duty under Article 47 is to act as an “enabler” for the wholesome exercise of right to life. A right to have access to proper public health care would be of little value if the State does not create the requisite conditions for proper exercise of such right. Access to medical college and hospital is, no doubt, a part of the said conditions. In Paschim Banga Khet Mazdoor Samity & Ors. vs. State of West Bengal & Anr.17, this Court observed that it is the “Constitutional obligation of the State to provide adequate medical services to the people. Whatever is necessary for this purpose has to be done.”
24.What is necessary in the present factual matrix, as discussed above, is for the State to assess the dire need of medical infrastructure within the State or the locality, as the case may be. The very fact that an Essentiality Certificate is issued in the first place, in itself, is a testimony of the “essentiality” of such infrastructure. The authority of the State to grant Essentiality Certificate is both power coupled with a duty to ensure that the substratum of the spirit behind the Certificate does not disappear or is defeated. The exercise of power and performance of duty with responsibility and in right earnest must co-exist. Notably, the duty under Article 47 is, in the constitutional sense, fundamental in the governance of the State. This duty does not end with mere grant of a certificate, rather, it continues upto the point when essentiality of basic medical infrastructure is properly taken care of within a reasonable time frame. Any future application for such certificate, be it by the present appellant (in terms of directions in this judgment) or by a different applicant, must be dealt with accordingly, and supervision of the State must continue to ensure that the purpose and substratum for grant of such certificate does not and has not disappeared.
25.We are conscious of the view taken and conclusion recorded in Chintpurni Medical College (supra). Even though the fact situation in that case may appear to be similar, however, in our opinion, in a case such as the present one, where the spirit behind the Essentiality Certificate issued as back as on 27.8.2014 has remained unfulfilled by the appellant-College for all this period (almost six years), despite repeated opportunities given by the MCI, as noticed from the summary/observation in the assessment report, it can be safely assumed that the substratum for issuing the Essentiality Certificate had completely disappeared. The State Government cannot be expected to wait indefinitely, much less beyond period of five years, thereby impacting the interests of the student community in the region and the increased doctor-patient ratio and denial of healthcare facility in the attached hospital due to gross deficiencies. Such a situation, in our view, must come within the excepted category, where the State Government ought to act upon and must take corrective measures to undo the hiatus situation and provide a window to some other institute capable of fulfilling the minimum standards/norms specified by the MCI for establishment of a new medical college in the concerned locality or within the State. Without any further ado, we are of the view that the appellant College is a failed institute thus far and is unable to deliver the aspirations of the student community and the public at large to produce more medical personnel on year to year basis as per the spirit behind issuance of the subject Essentiality Certificate dated 27.08.2014. To this extent, we respectfully depart from the view taken in Chintpurni Medical College (supra).
26.To complete the record, we may mention the argument of the appellant that the attached hospital of the appellant has now been taken over by the State Government recently for providing treatment to Covid patients. That, however, will be of no avail to answer the matter in issue. We do not intend to dilate on this argument any further.
27.Taking overall view of the matter, in the facts of the present case, we uphold the order of the High Court rejecting the subject writ petition filed by the appellant-College, whereby it had assailed the order of the State Government dated 5.9.2019, withdrawing the Essentiality Certificate dated 27.8.2014. At the same time, we reiterate the liberty given by the High Court to the appellant-College to forthwith remove all the deficiencies pointed out by the MCI in its order dated 30.5.2019 and apply afresh for the Essentiality Certificate to the State Government and if that request is refused, to pursue appropriate remedy as per law being a fresh cause of action.
28.The appeal is accordingly dismissed being devoid of merits. No order as to costs. Pending applications, if any, are also disposed of. (A.M. Khanwilkar) (Dinesh Maheshwari) (Sanjiv Khanna) New Delhi; July 31, 2020.