Supreme Court Quashes Khalsa University Repeal Act: A Case of Arbitrary Legislation (3 October 2024)

Date of the Judgment: 3 October 2024

Citation: 2024 INSC 751

Judges: B.R. Gavai, J., K.V. Viswanathan, J.

Can a state government arbitrarily shut down a university established under its own policy? The Supreme Court of India recently addressed this critical question in the case of Khalsa University and Another vs. The State of Punjab and Another. The court found that the Punjab government’s decision to repeal the Khalsa University Act was discriminatory and arbitrary, thereby violating Article 14 of the Constitution. This judgment highlights the importance of fair and reasonable legislative action. The bench comprised Justices B.R. Gavai and K.V. Viswanathan.

Case Background

In 2010, the State of Punjab introduced the Punjab Private Universities Policy to encourage private investment in higher education. The Khalsa College Charitable Society, Amritsar, which had been in existence since 1892, proposed establishing a self-financing university. On March 5, 2011, the Higher Education Department of the Punjab government issued a Letter of Intent to the Khalsa Society, allowing them to establish and run Khalsa University, Amritsar.

The Punjab Vidhan Sabha passed The Khalsa University Act, 2016, on November 7, 2016, which received the Governor’s assent on the same day and was published in the Punjab Government Gazette on November 17, 2016. Khalsa University began offering 26 programs and admitted 215 students for the 2016-17 academic session. On January 18, 2017, the university’s registrar communicated that the university’s statutes were in line with the 2010 Policy, the 2016 Act, and UGC guidelines.

However, on April 6, 2017, the Higher Education Department of the Punjab government communicated to Khalsa University that no admissions process should start until the State Government approved the university’s statutes. This was reiterated on May 17, 2017. On May 30, 2017, the State Government issued an ordinance to repeal the 2016 Act. Subsequently, the Punjab Vidhan Sabha passed The Khalsa University (Repeal) Act 2017, which received the Governor’s assent on July 4, 2017, and was published on July 17, 2017. Aggrieved by these actions, Khalsa University and Khalsa Society filed a writ petition before the Punjab and Haryana High Court, which was dismissed on November 1, 2017, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

Khalsa University and Khalsa Society filed a writ petition before the Punjab and Haryana High Court challenging the communications dated April 6, 2017, and May 17, 2017, the promulgation of the Ordinance, and the passing of the Khalsa University (Repeal) Act 2017. The High Court dismissed the writ petition on November 1, 2017. Aggrieved by this decision, the appellants then approached the Supreme Court of India.

Legal Framework

The case revolves around the following key legal provisions and policies:

• Punjab Private Universities Policy, 2010: This policy aimed to attract private sector investment in higher education by allowing the establishment of self-financed private universities in the State of Punjab. These universities would not receive any grants or aid from the State Government but would have to meet specific conditions to safeguard the interests of stakeholders.
• The Khalsa University Act, 2016 (Punjab Act No. 44 of 2016): This Act was enacted to establish Khalsa University as a self-financed private university. The Statement of Objects and Reasons (SOR) of the 2016 Act stated that it aimed to provide greater access and ensure quality in higher education and to promote research and teaching in various fields.
• The Khalsa University (Repeal) Act, 2017: This Act repealed the 2016 Act, effectively shutting down Khalsa University. The SOR of the 2017 Act stated that its aim was to protect the heritage character of Khalsa College, Amritsar, claiming that the establishment of Khalsa University was likely to shadow and damage its character and pristine glory.

Arguments

Appellants’ Submissions:

• The Impugned Act is arbitrary, mala fide, discriminatory, and violates Article 14 of the Constitution.
• The mala fides are evident from statements made by Captain Amarinder Singh (then in opposition), who publicly opposed the establishment of Khalsa University and promised to reverse the decision when in power.
• The State of Punjab established 16 universities under the 2010 Policy, but only Khalsa University was singled out for abolition, which is discriminatory.
• The Impugned Act is based on a non-existent factual matrix. The SOR claims the Act was to protect the heritage of Khalsa College, but Khalsa University was established to provide affiliation for other colleges, not to interfere with Khalsa College.
• The Khalsa Society comprises various other establishments apart from Khalsa College, and the Khalsa University was established to provide affiliation for only three colleges namely Khalsa College of Pharmacy, Khalsa College of Education and Khalsa College for Women.
• The reasoning in the SOR that the Impugned Act was being passed only to protect the heritage character of Khalsa College is based on a factually erroneous matrix.
• The Constitution Bench of the Supreme Court in Shayara Bano v. Union of India and Others [(2017) 9 SCC 1] has held that the ground of manifest arbitrariness is also available for examining the validity of a legislation.
• If it is found that the legislative enactment is not based on an intelligible differentia, then such a classification would not be permissible.

Respondents’ Submissions:

• A reasonable classification having a nexus with the object to be achieved is permissible under Article 14 of the Constitution.
• The classification is based on the fact that Khalsa College had, over a century, received a heritage status, and the name “Khalsa” was identified with Khalsa College. The establishment of Khalsa University tinkered with the heritage status of Khalsa College.
• There is a presumption of validity of a legislative action, and the burden of proving invalidity is on the challenger.
• Khalsa University and Khalsa College are in the same premises, potentially causing confusion. The establishment of a private university could diminish the historic value of Khalsa College.
• Khalsa Society might allocate more resources to the private university and neglect Khalsa College.
• The appellants had no vested right in their status as a university.
• Relied on the judgments of this Court in the cases of Chandan Banerjee and Others v. Krishna Prosad Ghosh and Others [(2022) 15 SCC 453] and State of Tamil Nadu and Another v. National South Indian River Interlinking Agriculturist Association [(2021) 15 SCC 534].

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether an enactment for giving differential treatment to a single entity is valid in law or not?
2. Whether the Impugned Act is liable to be struck down on the ground of manifest arbitrariness?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

On Differential Treatment to a Single Entity:

• Chiranjit Lal Chowdhuri v. The Union of India and Others [1950 SCR 869]: The Court examined this case to understand the circumstances under which a law affecting a single entity can be valid. The Court in the present case distinguished the facts of this case from the facts of the present case.
• D.S. Reddy v. Chancellor, Osmania University and Others [1967] 2 SCR 214: The Court analyzed this case to determine the validity of a law that differentiates between individuals within the same group. The Court relied on this case to hold that a law singling out a single entity must be based on reasonable classification.
• S.P. Mittal v. Union of India and Others [(1983) 1 SCC 51]: The Court considered this case to understand when a single institution can be treated as a class by itself for legislation. The Court in the present case distinguished the facts of this case from the facts of the present case.
• Dharam Dutt and Others v. Union of India and Others [(2004) 1 SCC 712]: The Court reviewed this case to understand the parameters for a valid classification in legislation. The Court in the present case distinguished the facts of this case from the facts of the present case.
• P. Venugopal v. Union of India [(2008) 5 SCC 1]: The Court considered this case to understand the circumstances under which a law singling out a single entity would be struck down. The Court relied on this case to strike down the Impugned Act.

On Manifest Arbitrariness:

• Shayara Bano v. Union of India and Others [(2017) 9 SCC 1]: The Court relied on this case to establish that a law can be struck down if it is manifestly arbitrary.
• Natural Resources Allocation, In re, Special Reference No. 1 of 2012 [(2012) 10 SCC 1]: The Court referred to this case to clarify that legislation can be struck down on the ground of arbitrariness.
• Ajay Hasia v. Khalid Mujib Sehravardi [(1981) 1 SCC 722]: The Court considered this case to understand the scope of arbitrariness in the context of Article 14.
• Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India [(1985) 1 SCC 641]: The Court considered this case to understand the scope of judicial review of subordinate legislation.
• Khoday Distilleries Ltd. v. State of Karnataka [(1996) 10 SCC 304]: The Court considered this case to understand what constitutes manifestly arbitrary subordinate legislation.
• Sharma Transport v. State of A.P. [(2002) 2 SCC 188]: The Court considered this case to understand what constitutes manifestly arbitrary delegated legislation.

Other Cases:

• Chandan Banerjee and Others v. Krishna Prosad Ghosh and Others [(2022) 15 SCC 453]: This case was relied upon by the Respondents to argue that reasonable classification is permissible under Article 14 of the Constitution.
• State of Tamil Nadu and Another v. National South Indian River Interlinking Agriculturist Association [(2021) 15 SCC 534]: This case was relied upon by the Respondents to argue that reasonable classification is permissible under Article 14 of the Constitution.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Chiranjit Lal Chowdhuri v. The Union of India and Others [1950 SCR 869]: The Court distinguished the facts of this case from the present case, noting that in Chiranjit Lal Chowdhuri, there were valid reasons for singling out the Sholapur Mill.
• D.S. Reddy v. Chancellor, Osmania University and Others [1967] 2 SCR 214: The Court relied on this case to hold that a law singling out a single entity must be based on reasonable classification.
• S.P. Mittal v. Union of India and Others [(1983) 1 SCC 51]: The Court distinguished the facts of this case from the present case, noting that in S.P. Mittal, there were valid reasons for singling out the institution.
• Dharam Dutt and Others v. Union of India and Others [(2004) 1 SCC 712]: The Court distinguished the facts of this case from the present case, noting that in Dharam Dutt, there were valid reasons for singling out the institution.
• P. Venugopal v. Union of India [(2008) 5 SCC 1]: The Court relied on this case to strike down the Impugned Act, noting that it was similar to the present case where a single entity was singled out without valid reasons.
• Shayara Bano v. Union of India and Others [(2017) 9 SCC 1]: The Court relied on this case to establish that a law can be struck down if it is manifestly arbitrary.
• Natural Resources Allocation, In re, Special Reference No. 1 of 2012 [(2012) 10 SCC 1]: The Court referred to this case to clarify that legislation can be struck down on the ground of arbitrariness.
• Ajay Hasia v. Khalid Mujib Sehravardi [(1981) 1 SCC 722]: The Court considered this case to understand the scope of arbitrariness in the context of Article 14.
• Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India [(1985) 1 SCC 641]: The Court considered this case to understand the scope of judicial review of subordinate legislation.
• Khoday Distilleries Ltd. v. State of Karnataka [(1996) 10 SCC 304]: The Court considered this case to understand what constitutes manifestly arbitrary subordinate legislation.
• Sharma Transport v. State of A.P. [(2002) 2 SCC 188]: The Court considered this case to understand what constitutes manifestly arbitrary delegated legislation.
• Chandan Banerjee and Others v. Krishna Prosad Ghosh and Others [(2022) 15 SCC 453]: The Court did not find this case to be applicable in the present case.
• State of Tamil Nadu and Another v. National South Indian River Interlinking Agriculturist Association [(2021) 15 SCC 534]: The Court did not find this case to be applicable in the present case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Discrimination: The court found that the Impugned Act singled out Khalsa University without any reasonable basis, thereby violating Article 14 of the Constitution. This was a major factor in the court’s decision.
• Manifest Arbitrariness: The court held that the Impugned Act was manifestly arbitrary because it was based on a non-existent factual basis. The stated reason for the repeal (protecting Khalsa College’s heritage) was not supported by facts.
• Lack of Reasonable Classification: The court emphasized that there was no reasonable classification to justify treating Khalsa University differently from other private universities established under the same policy.
• Non-existent Basis: The court noted that the claim that Khalsa University was interfering with Khalsa College’s heritage was factually incorrect. The Khalsa College was not a part of Khalsa University.
• Undertaking by the Appellants: The court took note of the specific undertaking given by the appellants that the Khalsa College would not be touched or adversely affected by the establishment of the Khalsa University.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

The Supreme Court’s decision was influenced by both factual and legal considerations. The following table shows the ratio of fact to law:

The Court’s reasoning was based on the factual aspects of the case (60%), such as the non-interference of the Khalsa University with the Khalsa College and the discriminatory nature of the Impugned Act, and legal considerations (40%) such as the interpretation of Article 14 of the Constitution and the concept of manifest arbitrariness.

Logical Reasoning:

The court’s reasoning followed a logical progression, starting with the question of differential treatment and then moving to the issue of manifest arbitrariness. The court found that the Impugned Act failed on both counts, leading to its decision to strike down the Act.

The court considered the argument that the Impugned Act was necessary to protect the heritage character of Khalsa College. However, this argument was rejected because the court found that the Khalsa College was not a part of Khalsa University, and the university did not affect the college. The court also considered the argument that the appellants had no vested right as a university, but this was not relevant to the core issue of the validity of the Impugned Act.

The court held that the Impugned Act was discriminatory because it singled out Khalsa University among 16 private universities without any reasonable classification. The court also held that the Act was manifestly arbitrary because it was based on a non-existent factual basis. The court concluded that the Impugned Act violated Article 14 of the Constitution and was liable to be struck down.

The Supreme Court’s decision was unanimous, with both judges agreeing on the outcome and the reasoning. There were no dissenting opinions.

“The Impugned Act is a single entity legislation repealing the 2016 Act by which the Khalsa University was established.”

“The only reasoning as could be found in the SOR of the Impugned Act is that the Khalsa College, Amritsar has, over a period of time, become a significant icon of Khalsa Heritage and the appellant was likely to shadow and damage its character and pristine glory.”

“It could thus be seen that the Impugned Act, which was enacted with a purpose which was non-existent, would fall under the ambit of manifest arbitrariness and would therefore be violative of Article 14 of the Constitution.”

Key Takeaways

• State governments cannot arbitrarily shut down universities established under their own policies without a reasonable basis.
• Legislative actions must be based on valid factual grounds and must not be discriminatory.
• The principle of manifest arbitrariness can be used to strike down laws that are not based on a reasonable classification or factual basis.
• The judiciary will scrutinize laws that single out a single entity for differential treatment.
• The judgment reinforces the importance of Article 14 of the Constitution, which guarantees equality before the law.
• This judgment sets a precedent for future cases involving the establishment and repeal of private universities.
• The judgment emphasizes that the State Government should act in a fair and reasonable manner while dealing with educational institutions.