Supreme Court Upholds Dissolution of CMJ University due to Mismanagement: CMJ Foundation vs. State of Meghalaya (2025)

Date of the Judgment: February 13, 2025

Citation: 2025 INSC 211

Judges: Pamidighantam Sri Narasimha, J., Sandeep Mehta, J.

Can a state government dissolve a private university for mismanagement? The Supreme Court of India recently addressed this critical question in the case of CMJ Foundation vs. State of Meghalaya. The court examined the legality of the Meghalaya government’s decision to dissolve CMJ University, focusing on whether the correct procedures were followed and if the university’s operations justified such action. This judgment clarifies the extent of state oversight in the functioning of private universities.

The Supreme Court, in a judgment delivered by Justices Pamidighantam Sri Narasimha and Sandeep Mehta, upheld the dissolution of CMJ University by the State of Meghalaya. The court found that the university had not adhered to the prescribed procedures for appointing its Chancellor and that the dissolution was carried out in compliance with the CMJ University Act, 2009.

Case Background

In 2004, the Chandra Mohan Jha Foundation was registered in Shillong, Meghalaya. Subsequently, the Meghalaya Legislative Assembly enacted the Chandra Mohan Jha University Act, 2009, to establish CMJ University. The aim was to provide high-quality, industry-relevant education across various disciplines.

On July 29, 2009, the CMJ Foundation’s Board of Trustees appointed Shri Chander Mohan Jha as the Chancellor, as per Section 14(1) of the CMJ University Act, 2009. The university then sought approval from the Governor of Meghalaya, who held the ex-officio position of Visitor, for this appointment. Despite reminders, no approval was received.

In a letter dated April 1, 2010, the university informed the State Government that if approval was not granted by April 25, 2010, it would be “deemed” that the Visitor had granted approval. However, no response was received. Despite this, the State Government sanctioned the establishment of CMJ University on June 17, 2010, following UGC guidelines. The UGC later confirmed that CMJ University was established by state legislation and was authorized to award degrees under Section 22 of the University Grants Act, 1956.

In April 2013, the Visitor raised concerns about the appointment of the Chancellor, stating it was irregular as it lacked Visitor approval. The university responded with information, but the Visitor identified anomalies. On April 30, 2013, the Visitor directed the university to recall all awarded degrees, submit a fresh proposal for Chancellor appointment, frame admission rules, and cease new admissions until compliance and proper Chancellor appointment.

Timeline:

Course of Proceedings

Initially, the appellants filed Writ Petition(C) No. 106 of 2013 before the learned Single Judge of the High Court, which was disposed of on May 16, 2013, upholding the legality of the Visitor’s letter. Subsequently, a Writ Appeal (SH) No. 16 of 2013 was dismissed on May 31, 2013. The appellants then filed a Special Leave Petition before the Supreme Court.

During the pendency of the SLP, the Visitor recommended the dissolution of CMJ University due to mismanagement and irregularities. The Supreme Court, in its order dated September 13, 2013, directed the State Government to take appropriate action under Section 48 of the CMJ University Act, 2009, after providing the appellants with a notice and hearing opportunity.

In compliance, the State Government issued show cause notices on November 12, 2013, and January 24, 2014. Finding the replies unsatisfactory, the State Government dissolved the university on March 31, 2014. This decision was challenged in Writ Petition(C) No. 177 of 2014, which was initially allowed by a Single Judge on July 16, 2015, but later appealed by the State Government in Writ Appeal No. 14 of 2017.

The legal proceedings saw further twists, including an interim stay, a transfer of the case to Gauhati High Court, and eventual return to the Meghalaya High Court following Supreme Court intervention. The Division Bench of the High Court of Meghalaya allowed Writ Appeal No. 14 of 2017 on May 6, 2021, remanding the matter to the Single Judge for reconsideration, a decision which led to the current appeals before the Supreme Court.

Legal Framework

The legal framework for this case is primarily based on the Chandra Mohan Jha University Act, 2009. Key provisions include:

• Section 14: The Chancellor

  This section outlines the appointment, tenure, powers, and responsibilities of the Chancellor. Specifically, Section 14(1) states, “The Sponsor shall appoint a person suitable to be appointed as the Chancellor of the University subject to the approval of the Visitor.”

• Section 48: Dissolution of University

  This section details the conditions and procedures for dissolving the university. Section 48(2) states, “On identification of mismanagement, mal-administration, in-discipline, failure in the accomplishment of the objectives of (sic) University and economic hardships in the management systems of University, the State Government will issue directions to the management system of the University. If the directions are not followed within such time as may be prescribed, the right to take the decision for winding up of the University would vest in the State Government.”

These provisions are crucial for understanding the powers of the State Government and the responsibilities of the university’s management in maintaining standards and achieving its objectives.

Arguments

Arguments on Behalf of the Appellants (CMJ Foundation):

• The university was established under the CMJ University Act, 2009, with significant investment in infrastructure.
• The UGC granted recognition in 2010, empowering the university to award degrees.
• Section 14(1) does not require prior approval for Chancellor appointment; “subject to approval” means valid unless disapproved, citing U.P. Avas Evam Vikas Parishad & Anr v. Friends Coop. Housing Society Ltd. & Anr [1995 Supp (3) SCC 456], High Court of Judicature for Rajasthan v. P.P. Singh & Anr [(2003) 4 SCC 239], and Ashok Kumar Das & Ors v. University of Burdwan & Ors [(2010) 3 SCC 616].
• The trustees appointed Shri Chander Mohan Jha as Chancellor on July 29, 2009, and sought Visitor approval, but received no response.
• A letter dated April 1, 2010, stated that approval would be “deemed” if not received by April 25, 2010; thus, the university assumed “deemed approval.”
• Section 26 stipulates that university proceedings are valid despite vacancies or defects in the constitution.
• The State Government did not comply with the Supreme Court’s order dated September 13, 2013, to proceed strictly according to the Act.
• The State Government failed to comply with Section 48(2) and (3), which require directions for rectification before dissolution.
• Show cause notices lacked specific instances of mismanagement.
• The Single Judge rightly concluded that principles of natural justice and Section 48 were not followed.

Arguments on Behalf of the Respondent (State of Meghalaya):

• The Division Bench granted imprimatur to the dissolution procedure.
• The State Government complied with the Supreme Court’s order of September 13, 2013.
• Section 14(1) requires the Visitor’s approval for Chancellor appointment.
• The appellants do not dispute the lack of Visitor approval.
• “Deemed approval” is not valid without statutory provision, citing Chet Ram Vashist v. MCD and Another [(1980) 4 SCC 647] and Balasubramaniam & Others v. Tamilnadu Housing Board & Others [(1987) 4 SCC 738].
• The university acted unilaterally without Chancellor approval, rendering actions void.
• Section 26 applies only when posts are initially filled correctly.
• The Visitor was empowered to issue directions under Section 13(3)(a) and (b), which the university failed to comply with.

Submissions Table:

Issues Framed by the Supreme Court

1. “Whether the appointment of the Chancellor of the CMJ University was made with due adherence to the procedure, as mandated by law”?
2. “Whether the dissolution order dated 31st March, 2014 was passed with due adherence to the procedure provided under Section 48 of the CMJ University Act, 2009 and in compliance of the directions issued by this Court vide order dated 13th September, 2013 in SLP(C) No. 19617 of 2013 titled as “CMJ Foundation & Ors. v. State of Meghalaya and Ors.” ?
3. “Whether the Division Bench of the High Court of Meghalaya was justified in remanding the matter to the learned Single Judge for reconsideration on merit, while allowing the Writ Appeal No. 14 of 2017”?

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 authorities:

Judgment

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

How each authority was viewed by the Court?

• K.R.C.S. Balakrishna Chetty & Sons & Co. v. State of Madras [1960 SCC OnLine SC 179]: The court followed this precedent to interpret “subject to” as “conditional upon,” reinforcing the requirement of Visitor approval.
• V. Balasubramaniam v. T.N. Housing Board [(1987) 4 SCC 738]: This authority was used to reiterate that “subject to approval” means “conditional upon approval,” further emphasizing the necessity of the Visitor’s consent.
• Vijay S. Sathaye v. Indian Airlines Ltd. [(2013) 10 SCC 253]: The court referenced this case to define “approval” as an act of confirming, ratifying, or sanctioning, highlighting the Visitor’s role in making a considered judgment.
• Sant Lal Gupta & Ors. v. Modern Co-operative Group Housing Society Ltd. and Ors. [2010 SCC OnLine SC 1169]: This case was cited to support the principle that a legal fiction cannot be created without a statutory provision, thus rejecting the appellant’s argument of “deemed approval.”
• The court also cited Trilochan Mishra etc. v. State of Orissa & Ors., Union of India & Ors. v. M/s Bhimsen Walaiti Ram, State of Orissa & Ors. v. Harinarayan Jaiswal & Ors., State of U.P. & Ors. v. Vijay Bahadur Singh & Ors., and Laxmikant & Ors. v. Satyawan & Ors. to emphasize that if a statute provides for approval of a higher authority, the order cannot be given effect to unless it is approved.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several key factors:

• Non-compliance with Statutory Requirements: The university’s failure to secure the Visitor’s approval for the Chancellor’s appointment, as mandated by Section 14(1) of the CMJ University Act, 2009, was a critical factor.
• Lack of Legal Basis for “Deemed Approval”: The court rejected the appellant’s argument that the Visitor’s silence implied “deemed approval,” emphasizing that such legal fictions require explicit statutory provisions.
• Adherence to Procedural Fairness: The court affirmed that the State Government had followed the necessary procedures under Section 48 of the Act, providing the university with adequate notice and opportunity to respond.
• Irregularities and Mismanagement: The court acknowledged the irregularities and mismanagement issues that led to the dissolution order, reinforcing the State Government’s decision.

Fact:Law Ratio

Logical Reasoning

Issue: Whether the appointment of the Chancellor of the CMJ University was made with due adherence to the procedure, as mandated by law?

Judgment

The Supreme Court dismissed the appeal filed by CMJ Foundation and allowed the appeal filed by the State of Meghalaya in part. The court affirmed the decision of the State Government to dissolve CMJ University, stating that the dissolution order was passed with strict adherence to the procedural requirements outlined under Section 48 of the CMJ University Act, 2009.

The court quoted:

“On perusal of the sub -section (1) of Section 14 of the Act, it becomes crystal clear that the Sponsor must appoint a person suitable to be appointed as the Chancellor of the University, however, such appointment is ‘subject to the approval ’ of the Visitor.”

“After minutely going through the scheme of the Act, we do not find any deeming provision creating such legal fiction as was assumed by the appellants . Therefore, the contention of the learned counsel for the appellants that the failure of the Visitor to grant approval for appointment of the Chancellor would lead to a ‘deemed approval’ is totally misplaced and unsubstantiated by law.”

“In light of the above discussion, we hold that the dissolution order dated 31st March, 2014 has been passed with strict adherence to the procedural requirements outlined under Section 48 of the Act, and in compliance with the directions issued by this Court vide order dated 13th September, 2013 passed in SLP(C) No. 19617 of 2013. Hence, we affirm the decision of the State Government in dissolving the CMJ University vide order dated 31st March, 2014.”

Key Takeaways

• Private universities must strictly adhere to statutory requirements, including obtaining necessary approvals for key appointments.
• The concept of “deemed approval” is not valid unless explicitly provided in the governing statute.
• State governments have the authority to dissolve universities for mismanagement, provided they follow due process and comply with relevant legislation.

Directions

The State Government is now at liberty to take appropriate measures pursuant to the affirmed decision to dissolve CMJ University.

Development of Law

The ratio decidendi of this case reinforces the importance of adhering to statutory procedures in the appointment of key university officials and the dissolution of universities. It clarifies that the absence of a statutory provision for “deemed approval” means that such an assumption is legally invalid. This decision reaffirms the state’s power to ensure compliance and address mismanagement in private universities.

Conclusion

The Supreme Court upheld the dissolution of CMJ University, emphasizing the necessity of adhering to statutory requirements and rejecting the concept of “deemed approval” in the absence of explicit legal provisions. This judgment reinforces the state’s authority to ensure compliance and address mismanagement in private universities, setting a precedent for similar cases in the future.