Chintpurni Medical College and Hospital & Anr. vs State of Punjab & Ors.

HELD: 1.1 The Essentiality Certificate certifies that it is essential having regard to specified factors that the opening of the proposed college is essential in the State, in public interest. What is significant to note is that the law requires that an applicant must possess an Essentiality Certificate from the State Government mentioning therein that it is essential to have a Medical College as proposed by him. The purpose is interalia to prevent the establishment of a college where none is required or to prevent unhealthy competition between too many Medical Colleges. Thus, the Legislative scheme for permission to establish a Medical College prescribes, as a qualifying criterion, that the applicant must have an Essentiality Certificate issued by the State Government. The State Government certifies the justification for establishing a proposed Medical College as a part of the Legislative scheme under the Act. It does not do so under any other law including a State enactment. The only purpose of the Essentiality Certificate is to enable the Central Government acting under Section 10A of the Medical Council Act, 1956 to take an informed decision for permitting the opening or establishment of a new Medical College. Once the college is established, its functioning and performance and even the derecognition of its courses is controlled only by the provisions of the IMC Act. [Para 14, 15][160-H; 161-A-D]

1.2 It would be impermissible to allow any authority including a State Government which merely issues an Essentiality Certificate, to exercise any power which could have the effect of terminating the existence of a Medical College permitted to be established by the Central Government. The State Government may not do either directly or indirectly. Moreover, the purpose of the Essentiality Certificate is limited to certifying to the Central Government that it is essential to establish a Medical College. It does not go beyond this. In other words, once the State Government has certified that the establishment of a Medical College is justified, it cannot at a later stage say that there was no justification for the establishment of the College. Surely, a person who establishes a Medical College upon an assurance of a State Government that such establishment is justified cannot be told at a later stage that there was no justification for allowing him to do so. Moreover, it appears that the power to issue an Essentiality Certificate is a power that must be treated as exhausted once it is exercised, except of course in cases of fraud. The rules of equity and fairness and promissory estoppel do not permit this Court to take a contrary view. [Para 16][161-F-H; 162-A-B]

1.3 The reasons given by the State for rescinding the Essentiality Certificate are not relevant or germane to the establishment of a Medical College. They refer to the deficiencies in the functioning of a Medical College for a particular period. Deficiencies by their nature are curable and can be removed. To allow the State Government to withdraw an Essentiality Certificate and say that it is no more essential that there should be a college at all, would lead to gross arbitrariness since logically the existence of the Medical College would again be justified if the deficiencies are removed. The question of justified existence of a college and the irregular/illegal functioning of an existing college belong to a different order of things and cannot be mixed up. A certificate constitutes a solemn statement by an authority certifying certain conditions of things. Persons acting on such certificates are entitled to assume that the certificate will ensure and not be pulled out from under their feet for extraneous reasons. None of the reasons for withdrawing the Essentiality Certificate pertain to factors which are certified as true in the prescribed Form 2. [Para 17][162-C-E]

1.4 Relying on the Condition No.(VII)-doctor population ratio in the State, it was submitted that the State Government has the power to carry out inspections, since it is responsible for the students of the college which is shut down by the MCI or otherwise. If such inspections reveal any deficiencies, the State is entitled to withdraw the Essentiality Certificate. This submission cannot be accepted, the IMC Act and the Regulations under which the State Government has purported to issue Essentiality Certificate confers the power of inspection on any medical institution, college or hospital where any medical education is given, on Visitors/Inspectors appointed by MCI under Sections 17 and 18 of IMC Act. [Para 20][163-D-E]

1.5 The State Government is designated by the Regulations only for the purpose of issuing an Essentiality Certificate to justify the establishment of a medical college within its territories and that too when approached by a person seeking to establish a medical college. There is no direct conferral of any power of general inspection on the State and neither can such a power be read into the Regulations nor be implied as necessary to carry out an expressly conferred power which doesn’t exist. In fact, it might be difficult to even construe that the IMC Act has delegated any powers to the State Government including that of issuing of an Essentiality Certificate. The IMC Act merely requires an applicant to obtain an Essentiality Certificate from the State Government to justify the establishment of a medical college. However, the Act prescribes the form in which such a certificate must be obtained from the State. Significantly, the form does not confer any power of inspection. The mere requirement of an Essentiality Certificate by the State as a qualifying criterion cannot imply the delegation of a power which must be express and clear. It is, therefore, clear that such power has been arrogated by the State without any justification and is likely to lead to a conflict with the power meant to be exercised by the Central Government and potentially, result in conflicting inspection reports. The condition imposed by the State Government is therefore, ultra-vires the IMC Act and the Regulations. [Para 21][164-A-E]

1.6 The submission that since the Essentiality Certificate requires the State Government to assume responsibility of the students in case the college closes down, the State must be held to have an inherent right to withdraw the Essentiality Certificate, is ejected as fallacious since the consequence of withdrawing the Essentiality Certificate can only be that the college closes down, and the State must bear the burden of accommodating the students in another institution. [Para 22][164-F-G]

1.7 The submission that since the Essentiality Certificate certifies the availability of adequate clinical material for the proposed Medical College, as per the Regulations, the State has the necessary power of inspection of the college even after its establishment to ensure that there is adequate clinical material, cannot be accepted since the State is enjoined to certify adequate clinical material only at the time of proposal of the Medical College and not after it is established. But it is found that the State has misinterpreted the term ‘adequate clinical material’ completely. According to the State, “adequate clinical material” means “people” i.e. doctors, patients, staff etc. Whereas, the term is understood in the field of Medical Education to mean data about number of admissions, number of discharges, number of deaths, number of surgeries, number of procedures, X-rays and laboratories investigations. Thus, what the State is required to certify is the data available in the region to justify the establishment of the proposed Medical College. Obviously, for the purpose of justifying the existence of a Medical College, the State’s claim that it must have the right to inspect a college after it is established to see whether there are adequate numbers of doctors, patients etc. to justify it’s continued existence is completely unfounded. [Para 23][165-B-D]

1.8 The function of the State Government in granting an Essentiality Certificate must be construed as a quasi judicial function. The Government is required to, while issuing the certificate in Form 2, to determine the justification and feasibility of opening the proposed college in the State. Towards this purpose, it is bound to enquire and determine the existence of several factors such as the number of existing institutions, the number of doctors becoming qualified annually, the number of doctors registered with the State Medical Council and employed in Government Service, registered with employment exchange etc. It must also determine the doctor population in the State, the doctor - patient ratio to be achieved and the impact of the proposed college on the availability of medical manpower in the State. The issuance of certificate must therefore be construed to be a quasi judicial act. The upshot is that such an act is not liable to be construed as an “order” contemplated by Section 21 of the General Clauses Act. Not being an order, and certainly not being a notification, rule or bye-law, s. 21 has no application whatsoever. [Para 27][166-D-F]

1.9 No provision of the IMC Act confers any power on the State Government or Union Territory Administration to issue an Essentiality Certificate. What the Regulations do is lay down that an Essentiality Certificate is the qualifying criterion for making an application for opening a medical college. In that sense, the provision recognizes an Essentiality Certificate issued by the State Government. It is nobody’s case that the State Government is conferred with the power or duty to issue such a certificate under any State law. In any case, in view of the fact that the field is occupied by a parliamentary law i.e. MC Act, 1956, a State law even if already existing would have no efficacy in the field. As a consequence, the executive power of the State under Article 162 cannot be invoked. [Para 28][166-G-H; 167-A-B]

1.10 The Essentiality Certificate must be taken to have been issued under the IMC Act read with Regulations and not in exercise of any independent power of the State. Significantly, where no power to issue certificate is shown to have been conferred by the IMC Act or the Regulations, it would be futile to enquire if a corresponding power to withdraw the same has been conferred on the State. Even assuming that a power to issue such a certificate has been impliedly conferred by the Regulations under the Act, certainly, no power to withdraw the same has been so conferred. Such a power cannot be arrogated relying on Section

21 of the General Clauses Act. [Para 29][167-B-D]

1.11 In the instant case, the petitioner college has acted on the Essentiality Certificate and has established a college which has functioned; may be deficiently. The conditions having changed since the grant of the Essentiality Certificate, Section 21 is not available in the absence of any power to withdraw conferred by the IMC Act. Condition No. (XI) is ultra-vires the provisions of the IMC Act and Regulations. The order issued by respondent No. 1-State of Punjab, withdrawing the Essentiality Certificate is quashed and set aside and Condition Nos.(VII) and (XI) are declared illegal. [Paras 32, 33][168-B-D]

1.13 This Court may not be understood to be laying down that under no circumstances can an Essentiality Certificate be withdrawn. The State Government would be entitled to withdraw such certificate where it is obtained by playing fraud on it or any circumstances where the very substratum on which the Essentiality Certificate was granted disappears or any other reason of like nature. [Para 35][168-E-F]

Modern Dental College and Research Centre v. State of Madhya Pradesh (2016) 7 SCC 353; Anirudhsinhji Karansinhji Jadeja v. State of Gujarat (1995) 5 SCC

302 : [1995] 2 Suppl. SCR 637; Dipak Babaria v. State of Gujarat (2014) 3 SCC 502 : [2014] 2 SCR 71; Dr. Preeti Srivastava v. State of Madhya Pradesh (1999) 7 SCC 120 : [1999] 1 Suppl. SCR 249; Indian National Congress (I) v. Institute of Social Welfare (2002) 5 SCC

685 : [2002] 3 SCR 1040; Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. v. Commissioner of Income Tax, Gwalior (2018) SCC Online SC 126; Ghaurul Hasan vs. State of Rajasthan AIR 1967 SC 107 : 1962 SCR 772; Hari Shanker Jain vs. Sonia Gandhi (2001) 8 SCC 233 : [2001] 3 Suppl. SCR 38; Government of Andhra Pradesh vs. Y.S. Vivekanand Reddy AIR 1995 AP 1 – referred to.

Wade and Forsyth in Administrative Law, 10th Edn p.

269 – referred to.