Right To Get Aid From Govt Not Fundamental Right, There Cannot Be Any Difference Between Minority & Non- Minority Aided Institutions: Supreme Court

The Supreme Court observed that there is no difference between minority and non-minority aided institutions and that their right to get an aid from the Government is not a fundamental right.

An institution receiving aid is bound by the conditions imposed and therefore expected to comply, the bench of Justices Sanjay Kishan Kaul and MM Sundresh observed while allowing the appeal filed by State of Uttar Pradesh against the Allahabad High Court judgment that declared that Regulation 101 framed under the Intermediate Education Act, 1921 is unconstitutional.

The court added that an institution can never be allowed to say that the grant of aid should be on its own terms.  

The case of writ petitioners before the High Court against the impugned Regulation 101 was that (1) it is a clear violation of Article 14 of the Constitution of India in filling the sanctioned post of Class "IV" employees alone by way of "Outsourcing" (2) Section 16G of the Act is sought to be impliedly overruled by the impugned regulation (3) The main regulation which affects the right to get aid violates the fundamental rights granted to minority institutions under Article 30(1) of the Constitution of India. The High Court accepted these contentions and ruled that regulation 101 is unconstitutional. Challenging this ruling, the State contended before the Apex Court that the institutions being the recipients of aid are bound by the conditions attached, as there exists neither a fundamental right to receive aid nor a vested one. 

Allowing the appeal, the judgment authored by Justice MM Sundresh contains the following significant observations:

32. When it comes to aided institutions, there cannot be any difference between a minority and non-minority one. Article 30 of the Constitution of India is subject to its own restrictions being reasonable. A protection cannot be expanded into a better right than one which a non-minority institution enjoys. Law has become quite settled on this issue and therefore does not require any elaboration. 

Decision to grant aid is by way of policy 

29. A decision to grant aid is by way of policy. While doing so, the government is not only concerned with the interest of the institutions but the ability to undertake such an exercise. There are factors which the government is expected to consider before taking such a decision. Financial constraints and deficiencies are the factors which are considered relevant in taking any decision qua aid, including both the decision to grant aid and the manner of disbursement of an aid.  

31. Once we hold that right to get an aid is not a fundamental right, the challenge to a decision made in implementing it, shall only be on restricted grounds. Therefore, even in a case where a policy decision is made to withdraw the aid, an institution cannot question it as a matter of right. Maybe, such a challenge would still be available to an institution, when a grant is given to one institution as against the other institution which is similarly placed. Therefore, with the grant of an aid, the conditions come. If an institution does not want to accept and comply with the conditions accompanying such aid, it is well open to it to decline the grant and move in its own way. On the contrary, an institution can never be allowed to say that the grant of aid should be on its own terms.  

33. Thus, on the aforesaid issue we have no hesitation in reiterating the principle that an institution receiving aid is bound by the conditions imposed and therefore expected to comply. Once we hold so, the challenge made on various grounds, falls to the ground.  

In this regard, the court referred to judgments in T.M.A. Pai Foundation vs. State of Karnataka, (2002) 8 SCC 481 and SK Md. Rafique vs. Management Committee Contai Rahamania High Madrasah (2020) 6 SCC 689 .

Challenge to a regulation stands on a different footing 

The court noted that the amendment to the Regulation 101 is a policy decision in the form of subordinate legislation. In this regard, the court observed thus:

37.A policy decision is presumed to be in public interest, and such a decision once made is not amenable to challenge, until and unless there is manifest or extreme arbitrariness, a constitutional court is expected to keep its hands off.

38.A challenge to a regulation stands on a different footing than the one that can be made to an enactment. However, when the regulation is nothing but a reiteration of a policy reinforcing the decision of the Government made earlier,  then the parameters required for testing the validity of an Act are expected to be followed by the Court.

39.An executive power is residue of a legislative one, therefore the exercise of said power i.e., the amendment of the impugned regulation, cannot be challenged on the basis of mere presumption. Once a rule is introduced by way of a policy decision, a demonstration on the existence of manifest, excessive and extreme arbitrariness is needed.

"Outsourcing" cannot be declared as ultra vires of the constitution on the basis of mere presumption and assumption

The court noted that "Outsourcing" as a matter of policy is being introduced throughout the State.

"It is one thing to say that it has to be given effect to with caution as recommended by the Seventh Central Pay Commission, and another to strike it down as unconstitutional. "Outsourcing" per se is not prohibited in law. It is clear that a recruitment by way of "Outsourcing" may have its own deficiencies and pit falls, however, a decision to take "Outsourcing" cannot be  declared as ultra vires of the constitution on the basis of mere presumption and assumption. Obviously, we do not know the nature of the scheme and safeguards attached to it.."

One cannot simply presume that "Outsourcing" as a method of recruitment would necessarily be adopting contract labour and that there exists an element of unfair trade practice, as sought to be contended by the respondents

Article 14 does not prohibit valid discrimination

Article 14 is positive in nature. Adequate leverage is to be provided to the law maker in making the classification. Article 14 of the Constitution of India does not prohibit discrimination, what is required is a valid discrimination against a hostile one

Persons who challenged has to satisfy 'Unconstitutionality'

When a challenge is made either to a regulation, rule or an Act, it is for the persons who challenged, to satisfy the Court that they cannot be sustained in the eyes of law. Such a challenge has to be considered within the contours of law. Mere fact that a counsel representing the State is not able to satisfy the Court on the policy challenged would not ipso facto lead to a declaration that it is unconstitutional. (Para 51)

Concept of "always speaking" as a principle of interpretation

The concept of "always speaking" as a principle of interpretation is to be applied for a proper understanding of an old enactment. After all, such a statute having its intended object which certainly includes regulating the functions of aided institutions requires to be interpreted to deal with the past, present and future situations. Therefore, an interpretation which is reasonable, constructive and purposive would serve the purpose

While setting aside the High Court judgment, the court also directed the state to undertake the necessary exercise to ensure there is a mechanism available for the proper implementation of "Outsourcing".

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