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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO.525 OF 2017 (With I.A. No.84899 of 2017)

Annaii Medical College & Hospital and Anr. ….Petitioners

Versus

Union of India and Anr. …..Respondents

J U D G M E N T

A.M. KHANWILKAR, J.

1. The petitioners have assailed the decision dated 31st May,

2017 of  the Under Secretary to the Government of  India,

Ministry of Health & Family Welfare (Department of Health

&  Family  Welfare),   declining  to  confirm  the  conditional

Letter  of  Permission  (for  short,  “LOP”)  granted  to  the

petitioners to establish a new medical college in the name

and  style  of  ‘Annaii  Medical  College  &  Hospital,

Kancheepuram,  Chennai’,  from  the  academic  session

2016-17 and debarring the college from admitting students

for  the  next  two  academic  sessions  i.e.  2017-2018  and

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2018-2019 and further authorising the Medical Council of

India (for  short,  “MCI”)  to  encash the  bank guarantee  of

Rs.2 crore offered by the petitioner college.   

2. The  petitioners  had  submitted  an  application  for

establishment  of  a  new  medical  college  from  academic

session  2016-17  onwards  with  intake  capacity  of  150

students.  That proposal was processed and, pursuant to

the directives issued by the Oversight Committee (for short,

“OC”,  constituted  by  this  Court),  the  Ministry  issued  a

conditional LOP for the academic session 2016-17, despite

a negative report submitted by the MCI pointing out several

deficiencies.  The LOP dated 20th August, 2016 incorporated

the conditions specified by the OC. The MCI then carried

out the verification of compliance submitted by the college

on  3rd &  4th November,  2016,  noting  the  following

deficiencies:-  

“i. Deficiency of faculty is 27.69 % as detailed in the report. ii. Shortage of Residents is 26.08% as detailed in the report. iii.  Bed occupancy is  51.6% on day of  assessment at 10 a.m.. iv. There were only 2 Major Operations & 1 Minor Operations on day of assessment. v.  There  was  only  1  Normal  Delivery  &  NIL  Caesarean Section on day of assessment. vi.  There  was  NIL  patient  in  ICCU  &  NICU  on  day  of assessment.

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vii.  In  blood  Blood  Bank  no  blood  unit  is  issued  after 13/07/2016. viii. Casualty: Separate Casualty for O.G. is not available. ix.  Paramedical  and non-teaching staff:  76 Paramedical  & Non-teaching staff are available against requirement of 100. x. Pharmaco Vigilance Committee is yet to be constituted. xi. Gender Harassment Committee is yet to be constituted. xii.  Wards:  Pantry  rooms  are  available  but  there  are  no facilities. xiii. ETO Sterilizer is not functional. xiv. NIL Cadaver is available. xv. Website: Information uploaded is not complete. Citizens’ charter is not available.”

In view of the deficiencies, the Executive Committee of the MCI

decided  to  send  a  negative  recommendation  to  the  Ministry.

Accordingly, MCI vide letter dated 26th December, 2016, informed

the Ministry as under:-  

“In view of the above, the college has failed to abide by the undertaking it had given to the Central Govt. that there are no deficiencies as per clause 3.2(i) of the directions passed by the  Supreme  Court  mandated  Oversight  Committee  vide communication dated 11/08/2016. The Executive Committee, after due deliberation and discussion, have decided that the college has failed to comply with the stipulation laid down by the  Oversight  Committee.  Accordingly,  the  Executive Committee recommends that as per the directions passed by Oversight  Committee   in  para  3.2(b)  vide  communication dated  11/08/2016  the  college  should  be  debarred  from admitting students in the above course for a period of  two academic years i.e. 2017-18 & 2018-19 as even after giving an  undertaking  that  they  have  fulfilled  the  entire infrastructure  for  establishment  of  new medical  college  at Pennalur,  Kancheepuram  Dist.  Tamilnadu  by  Sri Karumariamman  Educational  Trust,  Tamilnadu,  with  an annual intake of 150 MBBS students under The Tamilnadu Dr. MGR Medical University, Chennai the college was found to  be  grossly  deficient.  It  has  also  been  decided  by  the

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Executive Committee that the Bank Guarantee furnished by the  college  in  pursuance  of  the  directives  passed  by  the Oversight Committee as well as GOI letter dated 20/08/2016 is liable to be encahsed.”

3. The Ministry granted a personal hearing to the college on

17th January,  2017 before the Director General  of  Health

Services  (for,  short,  “DGHS”).  The  Hearing  Committee

considered the explanation offered by the petitioner college

and  opined  that  the  same  was  neither  satisfactory  nor

substantiated, from the material placed before it and that it

was necessary to verify the position in the medical college.

The opinion of the Hearing Committee was forwarded by the

Ministry  to  the  OC for  guidance.   The OC,  in  turn,  vide

letter dated 14th May, 2017 opined that the deficiencies were

duly  explained  by  the  college  and  were  within  the

permissible limit.   It  opined that  the LOP deserved to be

confirmed. This opinion of the OC was then considered by

the  Ministry  along  with  the  negative  recommendation

submitted  by  the  MCI  and  the  opinion  of  the  Hearing

Committee  (DGHS).  The  Ministry  chose  to  accept  the

recommendation of the MCI in view of the deficiencies noted

in  the  college  during  the  inspection.  As  a  result,  the

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Ministry  vide letter  dated 31st May,  2017,  communicated

the  decision  of  the  Competent  Authority  of  the  Central

Government to the petitioner college, debarring the college

from  admitting  students  for  two  academic  years  i.e.

2017-18 & 2018-19 and also authorising MCI to encash the

bank guarantee. The said communication reads thus:-

“ANNEXURE-P/22 Speed Post

No. U.12012/127/2016-ME-I [3084749] Government of India

Ministry of Health & Family Welfare (Department of Health & Family Welfare)

Nirman Bhawan, New Delhi Dated the 31st May, 2017

To  

The Principal/Dean, Annaii Medical College, Pennaalur Kancheepuram, Chennai – 602117, Tamilnadu.

Subject: Conditional  permission  granted  for establishment  of  Medical  College  in 2016-17-Decision of the Central Government – Annaii Medical College, Pennalur – reg.

Sir/Madam,

In  continuation  to  this  Ministry’s  letter  dated 20.08.2016  granting  conditional  permission  for establishment  of  a  medical  college  150  seats  for  the academic  year  2016-17  on  the  basis  of  approval communicated  by  Supreme  Court  Mandated  Oversight Committee on MCI and after granting an opportunity of hearing  to  the  College  with  reference  to  the

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recommendation  of  the  MCI’s  letter  No.  MCI-34(41) (E-80)/2016-Med.  154505  dated  26.12.2016,  I  am directed to convey the decision of the Central Government to debar Annaii Medical College, Chennai from admitting students  in  next  two  academic  years  i.e.  2017-18  & 2018-19 and also to authorize MCI to encash the Bank Guarantee of Rs. 2.00 crore.  2. You are therefore, directed not to admit students in the  MBBS  course  in  the  academic  years  2017-18  & 2018-19  at  your  College.  Thereafter,  next  batch  of students  shall  be  admitted  in  the  College  only  after obtaining  permission  of  the  Central  Government  for renewal.  3. Admissions made in violation of the above directives will  be  treated as irregular  and action  will  be  initiated under IMC Act & Regulations made thereunder.  

Yours faithfully,

Sd/- (D.V.K. Rao)

Under Secretary to the Govt. of India Telefax: 011-23062959”

4. The petitioners, being aggrieved, have filed the present writ

petition.  In view of the decision in Glocal Medical College

and Super Speciality Hospital & Research Centre Vs.

Union of India and Another,1 the Central Government was

directed  to  reconsider  the  matter  afresh  after  giving

opportunity of hearing to the petitioners including further

submission,  if  any,  and  to  pass  a  reasoned  order.

Accordingly, the Hearing Committee granted opportunity of

hearing to the petitioner college on 4th August,  2017 and

1   2017 (8) SCALE 356

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after  considering  the  record  and  oral  and  written

submissions,  the  Hearing  Committee  reiterated its  earlier

decision. After receipt of the opinion given by the Hearing

Committee,  the  Competent  Authority  of  the  Central

Government reiterated its earlier decision dated 31st May,

2017,  vide order  dated  10th August,  2017.  The  last  two

paragraphs  of  the  impugned  decision  dated  10th August,

2017 are relevant, which read thus:-

“17. Now, in compliance with the above direction of Hon’ble Supreme Court dated 1.8.2017, the Ministry granted hearing to  the college on 4.8.2017.   The Hearing Committee  after considering the record and oral & written submission of the college submitted its report to the Ministry. The findings of the Hearing Committee are as under:-

The inspection was conducted on 3-4 November. This was just after Diwali on 29.10.2016 and thus 12 faculty and 7 residents were on leave.  One faculty was not accepted as he  appeared  in  the  Government  college  inspection  in September.  He had superannuated in October and joined the  college  in  November.   Biometric  machines  have  been installed  and 30-31 August is  the  date  given  by  MCI for faculty mapping.  

The college could provide compliance on other deficiencies

College  has  146  students  in  the  first  year  and  the management requested that it is in the interest of students that the college is not debarred.

The  Committee  agrees  with  the  decision  of  the  Ministry conveyed by letter dated 31.05.2017 to debar the college for 2 years and also permit MCI to encash bank guarantee.

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18.   Accepting  the  recommendations  of  the  Hearing Committee, the Ministry reiterates its earlier decision dated 31.05.2017 to debar the college from admitting students for a period of two years i.e. 2017-18 and 2018-19 and also to authorize  MCI  to  encash  the  Bank  Guarantee  of  Rs.  2 crores.”

Aggrieved,  the  petitioners  have  challenged  the  aforementioned

decision by filing an Interlocutory Application (I.A. No.84899 of

2017) in this Court.  

5. The principal ground urged by the petitioners is that once

again, the Competent Authority of the Central Government

has  passed a  mechanical  order.  In  that,  the  explanation

offered by the petitioners which commended to the OC, has

not been considered. The opinion of OC has been completely

disregarded  by  the  Competent  Authority.  It  is  submitted

that the deficiencies noted in the Assessment Report dated

3rd & 4th November,  2016,  could not  be held against  the

college  as  the  inspection  was  done  around  the  time  of

Diwali festival. Further, the faculty and residents who were

on leave were called back and could not be counted against

the  deficiencies.  It  is  submitted  that  the  OC  had  justly

noted  that  on  excluding  such  faculty  members  and

residents,  the  deficiencies  would  be  within  acceptable

limits. The petitioners, relying on the recent decision of this

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Court  and  in  the  case  of  Dr.  Jagat  Narain  Subharti

Charitable Trust & Anr. Vs. Union of India and Ors. 2,

would contend that this is a fit case to confirm the LOP for

the  academic  session  2016-2017  and  also  to  direct  the

respondents to permit the petitioner college to admit upto

150  students  for  the  academic  session  2017-2018  and

further, restrain the respondents from encashing the  bank

guarantee.   

6. Per contra, the respondents, would contend that there is no

infirmity in the decision of the Competent Authority in its

order dated 31st May, 2017. The impugned decision dated

10th August, 2017, passed by the Competent Authority is a

well considered decision. It has taken into account all the

relevant  records  and  previous  proceedings  whilst

considering the explanation offered by the petitioners.  The

explanation  did  not  find  favour  with  the  Competent

Authority,  whose opinion must be  taken as final.  Having

rejected  the  explanation,  it  would  follow  that  the

deficiencies noticed in the Assessment Report dated 3rd &

4th November, 2016, were beyond the permissible limit. It is

submitted that in the fact situation of the present case, no

2  Writ Petition (C) No. 513 of 2017, decided on 30.08.2017.

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relief be granted to the petitioners. Further, the decision of

this Court relied upon by the petitioners was on the facts of

that  case  which  has  no  application  to  the  case  of  the

petitioners.  

7. We have heard Mr. Mukul Rohatgi, learned senior counsel

for the petitioners, Mr. Maninder Singh, learned Additional

Solicitor  General  for  the  Union  of  India  and  Mr.  Vikas

Singh,  learned  senior  counsel  along  with  Mr.  Gaurav

Sharma, learned counsel for the Medical Council of India.  

8. On  a  bare  perusal  of  the  impugned  decision  dated  10th

August, 2017, it is manifest that the Competent Authority

inter alia noticed as follows:-

(i) Absence  of  large  number  of  faculty  members  and

residents beyond the permissible limit on the day of

inspection.  

(ii) Explanation  offered  by  the  petitioners  about  the

absence of faculty members and residents due to leave

granted to them and also because the inspection was

done just after Dewali festival, was unsatisfactory.  

(iii) Explanation regarding one faculty was not accepted as

he  was  present  during  the  Government  college

inspection in September.

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(iv) No  compliance  was  provided  in  respect  of  other

deficiencies.

9. As  regards  the  deficiencies  of  faculty  members  and

residents, it was contended before the Hearing Committee

that the absence of such large number of medical staff was

mainly  attributable  to  Diwali  festival.  The  Hearing

Committee has dealt with that contention and noted that

Diwali was on 29th October, 2016, whereas the inspection

was  conducted  on  3rd &  4th November,  2016.   That  was

obviously  beyond  two  days  from Diwali  festival  and  was

permissible  in  terms  of  Clause  8  (3)(1)(d)  of  the

Establishment  of  Medical  College  Regulations,  1999.  A

similar argument has been considered and rejected by this

Court in the case of  Shri Venkateshwara University Vs.

Union of India3 and in Royal Medical Trust & Anr. Vs.

Union of India & Anr. 4 Hence, no fault can be found with

the  view taken by the  Competent  Authority.  The Hearing

Committee  also  considered  the  explanation  given  by  the

petitioners  regarding  one  faculty  whose  presence  was

noticed during the inspection of the Government College in

3  Writ Petition (C) No. 445 of 2017, decided on 01.09.2017. 4  Writ Petition (C) No. 747 of 2017, decided on 12.09.2017.

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September,  2016.  The  Hearing  Committee  then  observed

that the college could not provide compliance in respect of

other  deficiencies.   The  other  deficiencies  noticed  in  the

Assessment Report dated 3rd & 4th November, 2016, which

remained unexplained, were very significant and cannot be

overlooked. It is seen that the Bed Occupancy on the day of

assessment was only 51.6%. It  was also noticed that the

Hospital, with so many indoor patients, had not utilized any

blood unit after 30th July, 2016. Indeed, the petitioners have

asserted that the concerned staff who was maintaining the

Blood Bank Register was not available and the “up-to-date

register” was kept by him in his locker.  This explanation

did not find favour with the authorities. The other critical

deficiency noticed in the Assessment Report was that only

76  paramedical  &  non-teaching  staff  were  available  as

against requirement of 100. The statutory scheme provides

for a minimum ratio of staff and Beds to be maintained. The

OC, however, brushed aside these deficiencies by observing

that there was no minimum standard requirement MSR in

that regard.

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10.Considering the above, it is not possible to countenance the

argument  of  the  petitioners  that  the  view  taken  by  the

Competent Authority is unjust, manifestly wrong or suffers

from the  vice  of  extraneous consideration.  The impugned

decision dated 10th August, 2017 refers to all the relevant

materials  pointing  towards  the  deficiencies  in  the  college

which still persisted, notwithstanding the undertaking given

by the college to remove the same. That undertaking was

the  basis  for  issuing  conditional  LOP  for  the  academic

session 2016-2017.   

11.Be that  as  it  may,  it  is  also  not  possible  to  sustain the

argument of the petitioners that the impugned decision is a

mechanical  order  passed  by  the  Competent  Authority.

Similar argument has been considered and rejected in the

case  of   Royal  Medical  Trust  (supra).  The  dictum  in

paragraph 52 of the said decision will  apply on all  fours.

The same reads thus:-

“52. What Dr. Dhawan submits basically is that as the order passed by the Central Government after the order passed by the High Court of Kerala does not really reflect any reason, this Court should axe the same treating it as arbitrary and grant the LOP and that would be within the power of judicial review. The order passed by the Central Government has to be  appreciated  in  its  entirety.  We  repeat  at  the  cost  of repetition  that  neither  the  Central  Government  nor  the Hearing  Committee  is  expected  to  pass  a  judgment as  a

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Judge is expected to do. The order must reflect application of mind and should indicate reasons. We may reiterate that the order dated 31st May, 2017, was bereft of reason, but the order impugned, that is the order dated 14th August, 2017, cannot be said to be sans reason. Learned senior counsel would contend with all the vigour at his command that it is not a reasoned one and for the same 23 (2004) 2 SCC 150 50  our  attention  has  been  drawn  to  the  penultimate paragraph of the order.”

12.Notably,  this  Court  in  the  aforementioned case  of  Royal

Medical Trust  (supra), has ordained that no relief can be

granted  to  such  institutions  to  admit  students  for  the

academic session 2017-2018, since, the cut-off date for the

admission to the MBBS course is  over and the academic

session has  commenced.  Resultantly,  we  may  mould  the

relief as done in the case of  Varunarjun Trust and Anr.

Vs. Union of India and Ors. 5 wherein it is observed thus:-  

“18. Be that as it may, the opinion of the Hearing Committee, which  is  the  basis  for  passing  the  impugned  decision,  is founded on the performance  of  the  college  on the  day of inspection dated 18th – 19th November, 2016. The question is: whether absence of faculty members and residents on the given day, assuming it to be substantial in number, per se, could  be  the  basis  for  determining  the  efficiency  and performance  of  the  college  for  the  rest  of  the  academic session  while  considering  the  proposal  for  grant  of permission?  There is nothing in the opinion of the Hearing Committee or the decision of  the Competent Authority that requisite number of faculty members and residents was not employed in the petitioner  college or  that the claim of  the petitioner  college  in  that behalf  was  bogus.  The  noting  is about  the  absence  of  such  large  number  of  faculty  and residents  on  the  day  of  inspection  and  during  the  duty

5  Writ Petition (C) No. 787 of 2017, decided on 12.09.2017.

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hours.  Assuming  that  the  college  could  not  secure  the presence of those persons at the time of inspection, it does not follow that those faculty members and residents were not on the pay roll and in the employment of the petitioner college. This aspect certainly requires proper verification and consideration by the concerned authority.    19.  A priori,  we may adopt the  course  as  in  the  case  of World  College  of  Medical  Sciences  &  Research  Vs. Union of India6, by directing the respondents to allow the students  already admitted in  the  petitioner  college  on the basis of conditional LOP for the academic session 2016-17, to continue their studies.  The MCI shall send its Inspection Team  within  a  period  of  three  months  to  submit  an assessment report  regarding  the  overall  performance  and efficiency of  the petitioner college and deficiencies,  if  any, and  give  time  to  the  petitioner  college  to  remove  those deficiencies  within  the  time  specified  in  that  regard.  The petitioner  medical  college  shall  then  report  its  compliance and  communicate  the  removal  of  deficiencies  to  MCI, whereafter it will be open to the MCI to verify the position and  then  submit  its  recommendation  to  the  Central Government.  The Ministry shall take a final decision within one month of  the  receipt of  the recommendation from the MCI. Until such decision is taken and communicated to the petitioners, the Bank Guarantee offered by the petitioners in the sum of Rs. Two Crore shall not be encashed by the MCI but the petitioners shall keep the same alive. In the event the final  decision  of  the  Competent  Authority  of  the  Central Government is adverse to the petitioners, it will be open to them to take recourse to such remedies as may be available in law.”

13.Accordingly,  we  dispose  of  this  writ  petition  and

interlocutory application in the same terms, as follows:-  

(i) The respondents are directed to allow the students

already admitted in  the  petitioner  college  on the

basis of conditional LOP for the academic session

2016-17, to continue their studies.   6  Writ Petition (C) No. 514 of 2017, decided on 05.09.2017.

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(ii) The MCI shall depute its Inspection Team within a

period  of  two  months  to  submit  an  assessment

report  regarding  the  overall  performance  and

efficiency of the petitioner college and deficiencies,

if  any,  and give  time  to  the  petitioner  college  to

remove those deficiencies within the time specified

in that regard.

(iii) The petitioner medical college shall then report its

compliance  and  communicate  the  removal  of

deficiencies to MCI,  whereafter  it  will  be open to

the MCI to verify the position and then submit its

recommendation to the Ministry. The Ministry shall

then take a final decision within one month of the

receipt of the recommendation from the MCI.  

(iv)  We direct that until the final decision is taken by

the Ministry and communicated to the petitioners,

the Bank Guarantee offered by the petitioners in

the sum of Rs. Two Crore shall not be encashed by

the  MCI but the  petitioners shall  keep the  same

alive.  In  the  event  the  final  decision  of  the

Competent Authority of the Central Government is

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adverse to the petitioners, it will be open to them to

take  recourse  to  such  remedies  as  may  be

permissible in law.  

(v) We  direct  that  the  stated  inspection  to  be

conducted  by  the  MCI  will  be  to  consider

confirmation of LOP in favour of petitioner college

for the academic session 2016-2017.

(vi) We  further  direct  the  respondents  to  treat  the

renewal  application  submitted  by  the  petitioner

college for the academic session 2017-18 as having

been made for the academic session 2018-19 and

process  the  same  in  accordance  with  law  with

promptitude.

14. Writ petition and interlocutory application are disposed of

in the above terms. No order as to costs.        

……………………………….CJI.     (Dipak Misra)

.………………………………...J.     (A.M. Khanwilkar)

………………………………….J. (Dr. D.Y. Chandrachud)  

New Delhi, Dated:  September 14, 2017.