A.N. Parasuraman and Ors. Vs. State of Tamil Nadu

Facts

The question involved in these appeals relates to the vires of the Tamil Nadu Private Educational Institutions (Regulation) Act, 1966 (the Act). The appellants are interested in running educational institutions, which are covered by the expression "private educational institution" within the meaning of Section 2(f) of the Act. The main challenge is directed against Sections 2(c), 3(a), 3(b), 6, 7 read with Sections 15, 22 and 28 of the Act. The provisions of the Act which are relevant for appreciating the ground urged by the appellants are Section 3 that mandatorily requires a private educational institution to obtain the permission of the competent authority for the purpose of running it. The Manager of such an institution has to, as required by Section 4, make an application for permission in the prescribed form accompanied by a fee. Section 6 lays down the power of the competent authority to deal with such an application in the specified form.

The High Court struck down Section 28 of the Act and upheld the other sections. That part of the judgment where Section 28 of the Act has been declared to be invalid has not been impugned by the respondent-State. The Act is impugned on the ground that it does not lay down any guide line for the exercise of the power by the delegated authority, as a result of which the authority is in a position to act according to his whims. The Act having failed to indicate the conditions for exercise of power, the decision of the competent authority is bound to be discriminatory and arbitrary.

Key Takeaways for Students

Legal Issue

Whether through the impugned Act the authority is in a position to act according to his whims and hence is invalid?

Holding

State Government has been vested with unrestricted discretion in the matter of the choice of the competent authority under Section 2(2)(c) of the Act as also in picking and choosing the institutions for exemption from the Act under Section 22. Similar is the position under Sections 6 and 7 of the present Act. Section 27(6)(a) of the said Act stated that in the matter of issue or renewal of licences the "Administrator shall have regard to the number of dealers existing in the region in which the applicant intends to carry on business as a dealer". The expression "region" was not defined in the Act and Section 27(6)(b) required the Administrator to have regard to "the anticipated demand, as estimated by him, of ornaments in the region". The other provisions mentioning "suitability of the applicant" in Section 27(6)(e) and "public interest" in Section 27(6)(g) were held to have failed in laying down any objective standard or norm so as to save the Act. Thus, the impugned sections of the Act must be held to be invalid. These provisions are inextricably bound up with the other parts of the Act so as to form part of a single scheme, and it is not possible to sever the other parts of the Act and save them. In the result, the entire Act is declared ultra vires.

Final Decision Appeal Allowed