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Judgment
. Heard both sides finally considering exigency in the matter and order passed by the Apex Court.
The learned counsel for the respondent Nos. 1 and 2 has tendered on record affidavit in reply.
The petitioner is questioning orders dated 04.09.2026 and 16.09.2026 passed by the respondent No. 2 imposing penalty of Rs. 1,00,00,000/- (Rs One Crore only), withholding teachers code of 19 faculties and prohibiting the petitioner in participating in the admission process for the year 2026-2027.
The petitioner has been granted permission to run Ayurvedic College from the year 2025-2026 with intake capacity of 200 students. Accordingly 190 students were admitted in the I year of B.A.M.S. course. Out of them 85 are reported to be qualified for II year. The petitioner has 26 teachers.
This Court is adjudicating the matter when admission process is at the verge of CAP round III, which would close on 27.10.2026. For participating in the said round the applications of the students should be received by 24.10.2026. In pursuance to the order dated 23rd September, 2026, which is subsequently reversed by the Hon’ble Apex Court, the petitioner deposited Rs. 25,00,000/- on 29.09.2026. In this backdrop action taken under the National Commission for Indian System of Medicine (Minimum Essential standards, Assessment and Rating for Undergraduate Ayurveda Colleges and Attached Teaching Hospitals) Regulations, 2024 (for the sake of brevity and convenience hereinafter referred as to the ‘Regulations of 2024’) against the petitioner needs to be examined.
Learned counsel Mr. Chetan Patil appearing for the petitioner submits that petitioner has no effective remedy against the impugned order and the writ petition is maintainable. He submits that order dated 04.09.2026 is vitiated as the timeline in Regulation 55(7) is violated. The imposition of the multiple penalties is disproportionate, harsh and arbitrary. No reasons are assigned for imposition of maximum penalty of Rs.1,00,00,000/-. There is violation of principles of double jeopardy. The order dated 16.09.2026 is passed without hearing the petitioner and it is bad in law. It is further submitted that drastic action and multiple penalties are not warranted because the defects are curable. The objective scrutiny has not been conducted properly while passing the impugned orders. The hardship to the students who are already admitted is overlooked. The faculties are found to be present when inspection was conducted on 17.03.2026. It is submitted that petitioner is ready to remove the objections and has already paid Rs.25,00,000/-.
Per contra, learned counsel Mr. Ganbavale submits that writ petition is not maintainable as effective remedy of First Appeal as well as Second Appeal is available under the Regulations. The timeline provided by Regulation 55(7) is directory in nature. The respondent No.4 extended opportunity of hearing not only to the Management but to the teachers also and due procedure was followed in passing the orders. The petitioner has raised disputed questions of facts which cannot be gone into. The respondents have issued general instructions which are annexed at Exh.R-1 to R-4 and the petitioner was bound to them. The inspecting team has reported that neither AEBAS system nor cameras were operational at any point of time.
I propose to deal with preliminary objection. The inspection was conducted on 27.03.2026 by respondent No.2 - Medical Assessment and Rating Board for Indian System of Medicine (MARBISM). The petitioner was called upon to attend the hearing on 16.04.2026. The inquiry was conducted on 16.04.2026 and 21.05.2026. The respondent No.2 – MARBISM passed orders on 04.09.2026 under Section 29(7) of National Commission for Indian System of Medicine Act, 2020 (hereinafter referred to as “the Act” ) imposing penalty of Rs.1,00,00,000/-. It is incorporated in the order that the decision of the Board is susceptible to Appeal as per Regulation 65 of 2024 and Section 29(5) of the Act. By order passed on 09.09.2026, the teachers code for 19 teachers was withdrawn as they were physically absent and further penalty of Rs.1,50,000/- is imposed. By further order dated 16.09.2026 the permission to the petitioner to admit the students for the Academic session 2026-27 is denied for non-compliance of the conditions and the provisions of Regulation.
Pertinently, the admission process for Academic Session 2026-27 commenced from 25.08.2026 as per the admission programme placed on record at Exh. “U”. The respondent No.2 is expected to take decision prior to 60 days before the commencement of the councelling process as per Regulation 55(7) which is not done. Hearing was conducted in the month of April and May 2026 and the first impugned order under Section 29(7) is passed on 04.09.2026. The relevant provision is as follows :-
“29.(1) ………..
(2)………..
(3)……….
(4)………..
(5)Where a scheme is disapproved under sub-section (3), or where no order is passed within three months of submitting a scheme under sub-section (2), the person concerned may prefer an appeal to the Commission within fifteen days of such disapproval or, as the case may be, after lapse of three months, in such manner as may be specified by regulations.
(6)……….
(7)The Medical Assessment and Rating Board for Indian System of Medicine may conduct evaluation and assessment of any University or medical institution at any time. either directly or through any other expert, having integrity and experience in medical profession, without any prior notice and assess and evaluate the performance, standards and benchmarks of such University or medical institution.”
The impugned order passed on 04.09.2026 by the respondent No.2 expressly imposes penalty of Rs.1,00,00,000/- as 19 faculty members were found to be physically absent. Thus, the impugned order is not covered by Sub-Section (7). Rather, it is passed as per Section 28(1)(f) of the Act r/w Regulation 71(3)(a). Pertinently, the impugned order refers to the remedy of Appeal under Section 29(5) of the Act. Sub-Section (5) quoted above which speaks about disapproval of the scheme. It’s not a case of disapproval of any scheme hence, sub-Section (5) of Section 29 has no application.
The impugned order further refers to remedy of Appeal under Regulation 65. The appeal is maintainable before the commission against the order of denial of recognition or permission for admission of students or allotment of intake capacity by the Board. The cause of action for the petitioner is the imposition of penalty, suspension of the teachers code and imposition of fine of Rs.1,50,000/-. Hence, the remedy under Regulation 65 is not attracted. Consequentially, there can be no remedy of preferring further Second Appeal against the decision of Commission before Central Government under Section 9(6) of the Act. The petitioner is required to challenge the impugned orders after commencement of the admission process for the present Academic Year. I find no merit in the submission of Mr. Ganbavle that efficacious alternate remedy is available for the petitioner.
I have gone through the Regulation 55(7) which speaks about timeline of 60 days for rendering decision before the date of commencement of counselling process. No provision is made in the Act to indicate the consequences if the timeline is not followed. I find substance in the submission of Mr. Ganbavale that timeline provided is not mandatory but it is directory. The impugned orders are not vitiated for non adherence to the timeline.
The petitioner has placed reliance on the judgment of Royal Medical Trust (Registered) and Anr. Vs. Union of India and Anr. (2015) 10 SCC 19. The facts are distinguishable. I have already observed that timeline in Regulation 55(7) is not mandatory. This judgment will not help the petitioner.
Both the counsels have made rival submissions regarding objective scrutiny conducted by respondent No.2 in respect of the absence of 19 faculties. It is tried to be demonstrated by the petitioner that two faculties - Sachin Shinde and Dadasaheb Patil were present but they are shown to be absent. These are disputed questions of facts. This Court is not exercising appellate jurisdiction. Hence, the submissions of the petitioner cannot be accepted.
It is tried to be demonstrated that due to technical fault, AEBAS system and cameras installed were not functional when the inspection was conducted. The findings of facts recorded by expert members of the team regarding non adherence to the AEBAS system cannot be faulted. I find no substance in the justification tendered by the petitioner. Further explanation that camp was arranged and few faculty members were attending the camp outside the premises of the college also can not be accepted. Once the respondents have issued instructions which are annexed to the reply at Exh.R-1 to R-4, those are bound to be followed. The findings recorded in this regard also cannot be faulted.
The petitioner is harping upon the imposition of multiple and drastic penalties against it. As per Regulation 71(3), the respondent Board is empowered to penalise the erring institution. As per Regulation 73(3)(a) maximum monetary penalty would be of Rs.1,00,00,000/-. The impugned order dated 04.09.2026 imposes the penalty for Rs.1,00,00,000/-. No reasons are assigned for imposing maximum penalty. When recourse is taken to the drastic and harsh action, the Authority should have been satisfied. The penalty is imposed for absence of 19 teachers. I find that there is substance in the submission of Mr. Chetan Patil that penalty is disproportionate.
Reliance is placed by Mr. Chetan on the judgment of Division Bench in Special Director, Directorate of Enforcement (WR) Vs. Jaipur IPL Cricket Pvt. Ltd. (2023) SCC OnLine Bom 2657. Following are the relevant parameters for imposition of penalty.
“22.The parameters for imposition of penalty have also been considered by the Hon'ble Supreme Court of India in Excel Crop Care Ltd. (supra) and it has been held as follows:
"42..........Imposition of penalty is not automatic. Levy of penalty is not only discretionary in nature but such discretion is required to be exercised on the part of the Assessing Officer keeping relevant factors in mind........ Penalty proceedings are not to be initiated, as has been noticed by the Wanchoo Committee, only to harass the Assessee. The approach of the Assessing Officer in this behalf must be fair and objective."
23.In Hindustan Steel Ltd. (supra), the Apex Court has held as follows:
"8....... An order imposing penalty for failure to carry out statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. Penalty will also not be imposed because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially or on a consideration of all relevant circumstances…………..”
24.In Coimbatore District Central Co-operative Bank (supra), the Supreme Court has explained the concept of proportionality in the following manner:
"18.'Proportionality' is a principle where the Court is concerned with the process, method or manner in which the decision maker has ordered is priorities, reached a conclusion or arrived at a decision. The very essence of decision making consists in the attribution of relative importance to the factors and considerations in the case
19.........the principle of proportionality needs to be imbibed in to any penalty imposed under Section 27 of the Act. Otherwise excessively high fines may over-deter, by discouraging potential investors which is not the intention of Act……….”
25.We find that the Special Director has completely failed to apply the doctrine of proportionality as interpreted and elucidated by the Apex Court in its various decisions, while choosing to impose maximum penalty on Respondents. Having gone through the impugned order, this Court does not find anything perverse in the findings, reasoning and conclusion of the Tribunal. We are in agreement with the finding of the Tribunal that in the absence of any discussion or justification pertaining to the basis for imposing the maximum penalty and juxtaposing this with the alleged acts attributed to each individual, the order of the Special Director is unsustainable.” The ratio laid down is squarely applicable to the facts of the present case.
By order dated 04.09.2026 further penalty of withholding of teachers code of 19 faculty members is also imposed. As the default was for the first time, therefore, the teacher code is suspended for one year only. By order dated 09.09.2026 independent penalty of Rs.1,50,000/- is imposed for absence of 19 teachers. Thus, the petitioner suffered multiple penalties at the hands of the respondent no.2 which does not stand to the logic and reasons.
Another impugned order dated 16.09.2026 imposes prohibition against the petitioner from participating in the admission process of current academic year. For the selfsame default on the part of the petitioner the penalty is imposed. No hearing as such was conducted before imposing the penalty. If the respondents propose to conduct inquiry for taking measures against the petitioner or for the disciplinary action, then inquiry should have been conducted independently. The affidavit-in-reply is silent as to whether independent hearing was conducted or as to whether opportunity was given. The punishment imposed is unsustainable. Reliance is placed on the judgment of Vetindia Pharmaceuticals Ltd. Vs. State of Uttar Pradesh and Anr. (2021) 1 SCC 804 to buttress that show-cause notice was not given before passing the order dated 16.09.2026. I find substance in the submission.
It is not pointed out by learned counsel for the respondent that respondent – board is empowered to impose multiple penalties simultaneously. The impugned orders are against the principles of double jeopardy. The defects noticed by the inspecting team were curable to the extent of AEBAS system and CCTV footage. The disciplinary action should have been restricted to absence of 19 teachers only. The respondents are unreasonable and harsh. The punishments are totally disproportionate.
Further reliance is placed on the judgment of learned single bench of Karnataka High Court in Mahaganapati Ayurvedic Medical College Vs. The Union of India and Ors. (Writ Petition No. 107436 of 2026, decided on 23.09.2026). I have gone through paragraph nos. 12 and 13 of the judgment which have persuasive value and supports the submission regarding proportionality of the punishment.
The petitioner has not challenged order dated 09.09.2026. The order dated 16.09.2026 is challenged by amending the petition. I am not inclined to quash the penalty of Rs.1,50,000/- imposed upon the petitioner vide order dated 09.09.2026.
The respondent no.2 board totally overlooked that the petitioner is not the habitual defaulter of the norms and the regulation. The suspension of the teachers code of 19 faculties has serious repercussions. In all there are 26 teachers and if 19 out them are prohibited from the work then imparting of education would collapse. The petitioner has admitted 190 students in the last year and out of them 85 students will be going to the second year. The hardship likely to be faced by the students and the petitioner has not been taken into account.
The petitioner has shown readiness to remove the defects in paragraph no.9 of the last impugned order, the Management is called upon to make compliance by 31.12.2026. The petitioner shall have to abide by stipulation. The petitioner is bound to follow the instructions stipulated in Exh.R-1 to R-4.
For the reasons stated above, I find that case is made out to cause interference. Hence, I pass following order.
O R D E R
The impugned orders dated 04.09.2026 and 16.09.2026 are quashed and set aside thereby quashing following penalties:-
Fine of Rs. 100,00,000/- (Rupees One Crore).
Suspension of Teacher’s Code of 19 faculties.
Prohibition in participating in the admission process for Academic Session 2026-27.
The respondent no.2 shall reconsider the matter to the extent of quantum of punishment and the amount of Rs.25 lakhs deposited by the petitioner shall be either adjusted or refunded to the petitioner.
The petitioner is permitted to participate in further CAP rounds for the Academic Session 2026-27.
The petitioner shall remove the deficiencies and submit the compliance report as stipulated in paragraph no.9 of the impugned order dated 16.09.2026 and shall abide by the norms, instructions and regulation of the respondents.
The Writ Petition is allowed in the above terms. There shall be no order as to costs.