Supreme Court allows Vruddhashram appeals, directs inclusion in non-grant-aid list: Raja Shri Shivrai Pratishthan vs. State of Maharashtra (28 July 2008)

Date of the Judgment: 28 July 2008

Judges: B.N. Agrawal, G.S. Singhvi

Can a government arbitrarily exclude established old age homes from a list of institutions selected for running Vruddhashrams (old age homes) on a non-grant-aid basis, especially when these homes have been operating satisfactorily? The Supreme Court of India addressed this question in a case involving Raja Shri Shivrai Pratishthan and Siddhai Mahila Mandal, who challenged their exclusion from a list of institutions selected to run Vruddhashrams in Maharashtra. The bench, comprising Justices B.N. Agrawal and G.S. Singhvi, ruled in favor of the appellants, finding their exclusion arbitrary and violative of Article 14 of the Constitution of India.

Case Background

Raja Shri Shivrai Pratishthan, Pune, and Siddhai Mahila Mandal, Kolhapur, are non-governmental organizations that established old age homes under the Matoshree Vruddhashram Scheme. In 1995, the State Government of Maharashtra framed rules for providing grant-in-aid to recognized Vruddhashrams. The Vruddhashrams established by the appellants were among the institutions selected for grant-in-aid.

However, the State Government reviewed its decision and, on December 3, 2001, issued a resolution to conduct Vruddhashrams through private voluntary institutions on a permanent non-grant-aid basis. The resolution stipulated that all recognized Vruddhashrams would be entitled to apply, and preference would be given to institutions whose work was found satisfactory and who agreed to abide by the terms and conditions enumerated in the government resolution.

In response to the advertisement issued by the Director, Social Welfare, Maharashtra, both appellants submitted applications with the required information and documents. However, in a resolution dated April 20, 2002, the government notified the list of institutions selected for conducting Vruddhashrams on a non-grant-aid basis, and the names of the appellants were excluded. Instead, private respondents were selected for running Vruddhashrams at Pune and Kolhapur.

Timeline:

Arguments

Appellant’s Arguments

• ✓ The non-selection of the appellants for running Vruddhashrams on a non-grant-aid basis is arbitrary, capricious, and violative of Article 14 of the Constitution.
• ✓ The concerned authorities did not afford them an opportunity for a hearing before rejecting their applications, violating the rules of natural justice.
• ✓ The Vruddhashram established by Raja Shri Shivraya Pratishthan, Pune, was being conducted satisfactorily, with no deficiency to justify denial of the benefit of para 2 of the resolution dated December 3, 2001.
• ✓ There was no adversity in the running of Vruddhashrams by their clients, making the government’s decision not to select them arbitrary and violative of the doctrine of equality.

Respondent’s Arguments

• ✓ The non-selection of the appellants for conducting Vruddhashrams on a non-grant-aid basis was as per the policy decision taken by the government.
• ✓ The institutions which were found suitable were selected by the competent authority.

Issues Framed by the Supreme Court

1. Whether the non-selection of the appellants for running Vruddhashrams on a non-grant-aid basis is arbitrary and violative of Article 14 of the Constitution.
2. Whether the appellants were entitled to a hearing before the rejection of their applications.

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Authorities

The court considered the following:

• ✓ Resolution dated 3rd December, 2001: The court emphasized that the appellants were entitled to preferential treatment in the matter of selection for conducting Vruddhashrams on a non-grant-aid basis, as per this resolution.
• ✓ Article 14 of the Constitution: The court held that the non-selection of the appellants was violative of Article 14, as it was arbitrary and without any valid reason.

Judgment

The Supreme Court allowed the appeals and set aside the impugned order of the High Court. The court directed the State of Maharashtra to include the names of the appellants in the list of institutions selected by Government order dated 20th April, 2002, by making an amendment therein. This order was to be carried out within one month from the date of the judgment.

What weighed in the mind of the Court?:

The court’s decision was primarily influenced by the lack of evidence from the respondents to justify the exclusion of the appellants from the list of selected institutions. The court emphasized that the appellants were entitled to preferential treatment as per the government’s policy decision and that their exclusion was arbitrary and without any valid reason.

Key Takeaways

• ✓ Government decisions must be based on valid reasons and not be arbitrary, especially when dealing with established institutions.
• ✓ Policy decisions should be consistently applied, and preferential treatment clauses should be honored.
• ✓ Lack of evidence to support a decision can lead to it being deemed arbitrary and violative of Article 14 of the Constitution.

Directions

The Supreme Court directed the State of Maharashtra to include the names of the appellants in the list of institutions selected by Government order dated 20th April, 2002, by making an amendment therein. This order was to be carried out within one month from the date of the judgment.

Development of Law

The ratio decidendi of the case is that government decisions regarding the selection of institutions for public schemes must be based on valid reasons and not be arbitrary. The court reinforced the importance of adhering to policy decisions and honoring preferential treatment clauses. This case clarifies that the lack of evidence to support a decision can lead to it being deemed arbitrary and violative of Article 14 of the Constitution.

Conclusion

In conclusion, the Supreme Court’s judgment in Raja Shri Shivrai Pratishthan vs. State of Maharashtra underscores the importance of fair and non-arbitrary decision-making by the government, especially in matters concerning established institutions and policy decisions. The court’s emphasis on the lack of evidence to justify the exclusion of the appellants highlights the need for transparency and accountability in government actions.

Category

Law

• Constitutional Law
• Article 14
• Social Welfare
• Vruddhashram Scheme

FAQ

1. What was the case about?

   The case was about the arbitrary exclusion of two organizations, Raja Shri Shivrai Pratishthan and Siddhai Mahila Mandal, from a list of institutions selected for running old age homes (Vruddhashrams) on a non-grant-aid basis by the State Government of Maharashtra.

2. What did the Supreme Court decide?

   The Supreme Court ruled in favor of the organizations, stating that their exclusion was arbitrary and violated Article 14 of the Constitution. The court directed the State Government to include their names in the list of selected institutions.

3. What is Article 14 of the Constitution?

   Article 14 of the Constitution ensures equality before the law and prohibits discrimination. In this context, it means that the government cannot act arbitrarily and must have valid reasons for its decisions.

4. What does this mean for other organizations running Vruddhashrams?

   This judgment reinforces that government decisions must be based on valid reasons and not be arbitrary, especially when dealing with established institutions. It also emphasizes the importance of adhering to policy decisions and honoring preferential treatment clauses.