PREM CHAND JAIN & ANR. v. R. K. CHHABRA

The Judgment of the Court was delivered by RANGANATH MISRA, J. Both these appeals are by Special leave and challenge is to the conviction and sentence of fine imposed c under Section 24 of the University Grants Gommission Act, 1956 (III of 1956) ('Act' for short) by the learned Additional Sessions Judge and upheld by the Delhi High Court in appeal.

Commercial University Limited (CUL for short) was incor- •ID <porated under the Companies Act, 1913 (VII of 1913) with objects, inter alia, to promote commercial education, encourage and impart commercial education by opening institutes, colleges· and schools .and provide, prescribe. and maintain various standards of studies and examinations in the study of. commercial subjects and 'to ascer: lain by means of examinations and/or otherwise the persons who acquire the prescribetl standards and to confer on such persons any academic diplomas, degrees, etc. It has a Board of Governors and the Registrar of the University is one of the Ex-Officio Governors. This institution claims to have expanded its activities and regular convocations have been held for awarding degrees and diplomas. The Act came into force in 1 956 and for the· first time provided restrictions under ss. 22 and 23 of the Act to the following effect : , "S.22. the right io confer degrees-

(!) The right of conferring or granting degrees shall be exercised only by· a University established or incorpo- G rated by or under a Central Act, a Provincial Act or a State Act or an institution deemed to be a University under sec- tion 3 or an institution specially empowered by an Act of Parliament to confer or grant degrees.

(2) Save as provided in sub-section (I) no person or H authority shall confer, or grant, or hold himself or itself out as entitled to confer or grant, any degree.

PREM CHAND JAIN v. R. K. CHHABRA (Ranganath Misr11, J.) gg7

(3) For the purpose of this section, "degree means any A .. r such degree as may, with the previous approval of the Central Government, be specified in this behalf by the Com- mission by notification in the official gazeUe."

"S.53. No institution, whether a corporate body or not, other than a University established or incorporated by or under a Central Act, a Provincial Act or a State Act shall be entitled to have the word 'University' associated with its name in any manner whatsoever :

Provided.that nothing in this section shall, for a period of two years from the commencement of this Act, apply to an institution which, immediately before such commence- ment, had the word 'University' associated with its name." Penalties for contravening the proyisions of ss.22 and 23 were provided in s. 24 and whoever contravened those provisions became punishable with fine which would extend to rupees one thousand and if the person contravening was an association or other body of individuals, every member of such association or other body, who knowingly or willingly authorised or permitted the contravention was punishable with fine which would also extend to one thousand rupees. .,, E The appellants came to be prosecuted for the offence under s. 24 of the Act as CUL continued to bear the description of University even after the period indicated in the proviso to s. 23 of the Act was over.

Before coming into force of the Act, there was no legislation in India which prohibited any individual or body from establishing a university and such university was free to confer degrees and diplomas. Section 22 prohibited privately established universities from conferring degrees and restricted such conferment to univer- sities established by Acts passed by State legislatures or Parliament or institutions which were deemed to .be universities in the manner provided by the Act. Similarly, before the Act came into force there was no law which restricted the use of the wo~d 'University' and all institutions were free to associate this word with their names if they liked. Section 23, however, imposed the . restriction in absolute term and the proviso allowed a period of two years within which adjustments to the new situation brought about by law had to be made,

p. 888 Copy page pinpoint

A Originally there were five accused persons. One of them died and in respect of another the prosecution was withdrawn as he resigned from CUL. .The prosecution continued against the remain •. ing three-Shri P.C. Jain and Smt. Sushi[a Sohni who are appel· !ants in Criminal Appeal No. 253 of 1972 and Shri L.N. Mehra B who is appellant in the connected criminal appeal. Mr. Shanti Bhushan appearing for the appellants anvanced four contentions :-(I) CUL had been incorporated under the Companies Act of 1913 and is deemed to be a company under s. 3 ,~~~- c . of the Companies Act, 1956, the prosecution was misconceived as the prohibition in s. 23 was not attracted. (II) The restriction imposed under s. 23 of the Actwas ultra vires because entry 11 which read ·as "Education including universities" was in list.II of Schedule VII of the Constitution and was a State subject but the Act in question was passed by Parliament. The long title of the Act D reads as "an Act to make provision for the coordination and deter- 'j mination of standards in universities and for that purpose, to establish a University Grants Commission" and is covered by entry 66 oflist I of the Seventh Schedule. The restriction provided py s. 23 as such does not appear to be a matter squarely within the 'ambit of the entry and therefore such a provision is ultra vires the Constitution. (III) This Court observed in S. Azeez Basha & Anr. E v. .Union of India(') as per Wanchoo, C. J. : " ...... we should like to say that the words 'educational institutions' are of very wide import and would include a university also, This was not disputed on behalf of the ·union of India and therefore it may be accepted that a religious minority had the right to establish a university F under Art. 30 (I). The position with respect to the establish- ment of Universities before the Constitution came into force in 1950 was this. There was no law in India which prohibited any private individual or body to establish a university ......... Thus, in law in India there was no prohibi- G tion against establishment ·of universities by private indivi· duals or bodies and if any university was so established it · . must of necessity be granting degrees before it could be called a university. But though such a univetsity might be grant- ing degrees it did not follow that the Government of the country was bound to recognise those degrees ............. " H (!) (1968) I S. C. R. 833.

PREM CHAND JAIN v. R .IC. CHHABRA (Ranganath Misra, J.) 889

It was urged by Mr. Shanti Bhushan that since Art. 30 guaran- A teed the right to establish a university to the minotity communities, the restrictions imposed by the Act would not be operative and to that extent the provision would be ultra vires the Constitution; (IV) All the three accused appellauts had severed their connection with CUL-Smt. Sohni resigned in Angus!, 1962; Shri Mehra in December, 1965; and Shri Jain in 1970. On the same analogy B which led to withdrawal of the prosecution against Shri Anand Singh, the present prosecution should not have been pursued against the appellants.

The word 'university' has been defined in s. 2 (f) of the Act c to mean: "a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, and includes any such institution as may, in consultation with the University con- cerned, be recognised by the commission in accordance with the regulations made in this behalf under this Act". Section 23 of the Act imposing the prohibtion for use of the word 'University' also D provides that way. Undoubtedly under the Companies Act when a company is duly registered, it gets incorporated and such incor- poration brings into existence an independent legal entity different from the share-holders constituting it. Yet we are not prepared to agree with Mr. Shanti Bhushan that the Act intended to admit a E company incorporated under the Companies Act into the definition or for the purpose of s. 23. The word "established" or "incorpo- rated" referred to· Acts under which universities are ·es.tablished or incorporated Several universities in this country have been either established or incorporated under special statutes, such as the Delhi University Act, the Banaras Hindu University Act, the F Allahabad University Act etc. In these cases, there is a special Act either of the Ce11tral or the Provincial or the State legislatures esta- blishing and incorporating the particular universities. There is also another pattern-where under one compendious Act several univer- sities are either established or incorporateds-for instance, the Madhya Pradesh Universities Act, 1973. The definition of univer- G sity and provisions in s. 23 of the Act refer to Acts of the Central, Provincial or the State legislatures by which one or more univer- sities are established or incorporated and not to institutions incor- porated under a general statue providing for incorporation. We do not accept 'the contention of Mr. Shanti Bhushant that CUL H when incorporated under the Companies Act satisfied the definition as also the provisions of s. 23 of Act and, therefore, there could

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A be no prosecution. We agree with the observation of Lord Somer- vell to the effect :

"The mischief against which the statute is directed and, perhaps though to an undefined extent, the surrounding circumstances can be considered", B "In ascertaining the true legislative intention. (A. G. v. H. R. H. Augustus('). Lord Porter also spoke to the same effcet while speaking for the Board in the following words : ·"A right construction of the Act can only be attained c if its whole scope and object together with an analysis of its working and the circumstances in which it is enacted are taken into consideration."

PREM CHAND JAIN v. R. K. CHHABRA (Ranganath Misra, J.) 891

A settled that the entries incorporated in the lists covered by Sche· dule VII are not powers of legislation but· 'fields' of legislation. Harakchand v. Union of India(1). In State of Bihar :v. Kameswar(') this Court has indicated that such entries are mere legislative heads and are of an enabling character. This Court, has clearly ruled that the language of the entries should be given h the widest scope or 'amplitude.. Navinchandra v. C.T.T. (3) Each general word has been asked to be extended to all ancillary or subsidiary matters which can fairly and reasonably be compre- hended. See State of Madras v. Gannon Dunkerley('). It has also been held ·by this Court in The Check Post Officer and • Others. v. K.P. · Abdulla Bros (5) that an entry confers power c upon the legislature to legislate for matters ancillary or incidental, including provision for avoiding .the law. As long as the legisla· tion is within the permissible field in pith and substance, objection would not be entertained merely on the ground that while enacting legislation, provision has been made for a matter which though germane for the purpose for. which competent legisl.ation is made D it covers an aspect beyond it. In a seiies ·of decisions this Court has opined that if an enactment substantially falls wiihin the powers expressly conferred by the Constituiion upon the legis- lature enacting it, it cannot be heid to be invalid merely because it incidentally encroaches on matters· assigned to another legis· lature. See State of Karnataka v. Ranganatha (6);' KSE Board E v. India Aluminium (7); Subramanyam Chettiar v. Mutuswami ('); Prafulla ·Kumar Mukherjee & Othere v. Bank of Commerce('); Ganga Sugar Co. v. UP. State (10). We, therefore, do not accept the submission that the definition of university "given in.s. 2 (f) or the prohibition in s. 23 of the Act are ultra vires the Parlia- F ment on the ground that such provisions are beyond its legislative competence.

(1) ·(1970] 1 S. C.R. 479 at p. 489. (2) (195.2] S. C. R. 889. (3) (1955] 2 S. C. R. 129 at p. 836. G (4) (1959] S. C, R. 379 at p. 391. (5) (1971] 2 S. C.R. 817. (6) (1978] IS. C.R. 641 at p. 661. . ~,.

(7) (1976] ! S. C. R. 552. (8) (1945) F. C.R. 179. (9) · [1947] F. C.R. 28. H (10) (1960] S. C.R. 569 at p. V82.

SUPREME COURT REPORTS (1984} 2 s.C.R.

A In the decision of this Court in the case of. Azee• Basha, the observations relied upon were with reference to the rights of the minority community to establish a university in exercise of its right giiaranteed under Art. · 30 of the Constitution. Admitte- dly, CUL is not an institution belonging to any minority commu- nity. We do not think it is appropriate to allow arguments to B be canvassed in this case on the basis of what had been observed with reference to an institution belonging to the minority commu- ' uity. Nor is it appropriate that the vires of the Act should be examined with reference io what does not arise for consideration in the appeals before us. ;

There is no dispute that prosecution against Shri Anand Singh c was withdrawn as he had ·resigned from CUL after the case was launched. The claim of Mr. Shanti Bhushan that the three accused persons have resigned between 1962 to 1970 as already indicated has not been disputed. Though the proviso to s. 23 had specified a period of two years within which the word 'univer- D sity' had to be omitted by the institution not entitled to its use, yet there is scope for the submission of Mr. Shanti Bhushan that being incorporated under a Central Act, the people connec- ted with CUL worked under the bona fide impression that such incorporation satisfied the requirements of the Act. In such circumstances, we think it appropriate to accept the submission advanced on behalf of the appellants to a limited extent and allow the appeals and set aside the conviction of the appellants under s. 24 of the Act. · They are acquitted of the offence and fines if already realised be refunded.

Before we part with the matter, we think it appropriate to deal with another aspect. Under s. 3 of the Act provision has been made that the Central Government may on .the advice of the Commission declare by notification in the official gazette any institution for higher education other than a university to be deemed to be a uuiversity for the purposes of the Act and when such declaration is made, all the provisions of the Act would apply to such an institution as if it were a university within the definition of the term in s. 2 (f). CUL may make an application to the Central Government for such recognition and on the advice of the University Grants Commission, the Central Government should dispose of the same in accordance with law. We have been told that the institution has been working very satisfactorily and has, to its credit, a long history of service in the field of

PREM CHAND iAIN v. i!.. K. CHHABRA (Ranganath Missra, i.) 893

education. We are hopeful that taking all aspects into consid~ra­ A tion botJj the Commission as also the Central Government would r consider the request of the institution to be recognised under s. 3 of the Act. If it is so recognised the institution would be able to confer degrees as provided in s. 22 of the Act.

It is for the Central Government next to consider whether B an institution covered by s. 3 of the Act would not satisfy the provision of s. 23 of the Act and if in the opinion of the Central Government such an institution is not covered, whether an appro- priate amendment to s .. 23 should not be made so as to exclude recognised institutions under s. 3 of the Act from the · field of prohibition covered by s. 23 of the Act. CUL should make the c application within one month from now and the Central Govern- ment should examine the matter appwpriately and pass proper orders or directions within six months thereafter. At any rate the institution should have reasonable time-until end of 1984-to take such.appropriate steps as it may be advised, to avoid fnrther Prosecution under the Act. D

S.R. Appeal partly allowed.