The State of Madras vs The Savitri Vidyasala Hindu Girls' High School

Ramaprasada Rao, J.—The Defendant is the Appellant. The Plaintiff is a permanently recognised educational institution, which has the benefit of the grant-in-aid as provided for in the Grant-in-aid Code of the Madras Educational Department. During the year 1960-61, the Plaintiff institution secured a surplus in its funds. It is common ground that teaching grants on behalf of this school was also available to the institution. But in the course of its management, it appears, the Plaintiff secured an available surplus, which it utilised for purposes of constructing a well, overhead tank and bath room, besides installing pumpsets within the campus of the school and electrifying new buildings constructed in it and also putting up of. a road to the school building. It is also common ground that before the amounts were spent for the above improvements, no prior approval of the Director of School Education was obtained. After the financial year was over, the accounts of the Plaintiff-institution were audited. It was only then, it was discovered by the auditor that a sum of Rs. 11,490.56 was spent by the authorities from the available surplus towards the above improvements. When this was brought to the notice of the Director, the correspondent was requested to offer his remarks as to how the amounts were spent without the prior sanction of the Department. Consequent upon this attitude, a further grant, which ought to have been made in the usual courses to the extent of Rs. 11,490, was withheld from the teaching grant pending consideration of the objections to the audit report as above and of the explanation called for from the institution. The Inspectress of Girls'' Schools, Thanjavur Circle, reported that the necessity and urgency of the work compelled the institution to undertake it without taking prior sanction. After protracted correspondence, the Director of Public Instruction, informed the Plaintiff-institution on 20th February 1963 that as the expenditure was incurred without obtaining the prior approval of the Director as required under the rules, the amount withheld for the subsequent year towards the teachers'' grant cannot be released. A further appeal for re-consideration to the very same authority was of no avail. The subsequent request for revision of the order was rejected on 25th January 1965. The Plaintiff, therefore, has come to Court stating that the withholding of the grant for the year under consideration by the Director of Public Instruction, in the circumstance stated above, is neither just nor legal. The case of the Plaintiff is that as the expenditure was incurred for the improvement of the institution and particularly, for educational purposes, and as there is no specific rule to the effect that the prior approval of the Director of Public Instruction is necessary in the matter of expending surplus money in the hands of recognised schools to spend on improvements to the school, it is entitled to the grant of the sum of Rs. 11,490, as according to it, there was no violation of any of the conditions of recognition or aid as prescribed in the rules.

The Defendant filed a written statement specifically taking the stand that under Rule 32(iii) of the Grant-in-aid Code, such prior approval of the Director was necessary: and as no such permission was admittedly obtained prior to the expending of the surplus amount in the hands of the institution, the order challenged by the Plaintiff whereby, the grant of Rs. 11,490 for the year in question was withheld, was in order. It is also claimed that the said order is in accordance with the rules of the Code. It is significant, however, to note that in the written statement, the Defendant did not take up the position that the expenditure was not towards the improvements of this school or its building. The Defendant would also say that it was the Director, who is entitled under the Code to interpret the rules and he had also the discretion to refuse, withdraw and modify any grant to be granted under the Code to any institution. It is claimed that the Plaintiff has no right to enforce sanction of the payment of grant, since no civil right has been affected and, therefore, the suit as framed by the plaintiff is not entertainable in law.

The learned Subordinate Judge of Tiruchirappalli, who tried the suit, after hearing the parties and after considering the documentary evidence filed, came to the conclusion that the only rule relied upon by the Defendant to sustain its case that there was a violation of the prescriptions, therein, namely, Rule 32(iii) does not expressly provide for prior approval of the Director before the improvements to the school are undertaken by an institution, which improvements are to be made from and out of the profits or surplus gained by the aided institutions during a particular financial year. He was, therefore, of the view that the Plaintiff was entitled to a decree as prayed for. It is as against this, the present appeal has been filed.

Two contentions were raised by the learned Government Pleader. The first one is that under exhibit B-1 detailed instructions were given by the Educational Department to the persons, who have to administer the fund and grants-in-aid under it. He would in particular refer to paragraph 19 of such instructions, which says that full details regarding the expenditure should be furnished and the number and date of the Director''s proceedings approving the expenditure as required in Rule 32(iii) of the Grant-in-aid Code should be quoted. This not having been done, it is said that there is a violation of the conditions of recognition or aid. Secondly on the text of Rule 32(iii) it is argued that such prior approval is a condition precedent for undertaking any improvements to the school from and out of the surplus funds as per the conditions laid down in the Grant-in-aid Code, and the main ground which is pressed into service to sustain the contention of the State, is that under Rule 32(iii), no such improvements could be done without the prior sanction.

We have therefore, to consider the above two contentions of the learned Government Pleader in the light of the conditions laid down in the Grant-in-aid Code.

It is no doubt true that the paragraphs enumerated and contained in the Grant-in-aid Code are administrative instructions, which by themselves do not create a right or trust as is ordinarily understood. But even administrative instructions have their weightage when they come for interpretation in the hands of Courts. It is not the case of the State that no institution to whom a grant-in-aid is made under these rules can come to Court questioning the action of the authorities administering such institutions or granting such aids. As a matter of fact, Rule 36 is a pointer to the fact as to when and in what circumstances the Director may withhold, reduce or suspend the grant to an aided institution. It says that such withholding, rejection or suspension of the grant is possible on amount of the falsification of the registers or misrepresentation regarding fees attendance or other matters or violation of any of the conditions of recognition or aid or other proved fraud or irregularity. The parenthesis "violation of any of the conditions of recognition or aid" sandwiched as it is between the various factors, which would enable the Director to withhold, reduce or suspend the grant should be interpreted ejusdem generis and not arbitrarily, as is sought to be done by the Department in the instant case. It is not the case of the Appellant that Rule 52 of the conditions of grant which appears in Chapter VIII of the Code and which applies in case of grant over buildings, building sites and playgrounds, is attracted in the instant case. The sole reliance was placed before the Court below and before us on Rule 32(iii) of the Code. We may at once state that an attempt was made by the learned Counsel for the Appellant to invoke Rule 52 at this stage which we repelled. It, is, therefore, necessary for us to understand the real purport of Rule 32(iii) and we would make it clear that our interpretation of Rule 32 (iii) is on the facts and circumstances of the instant case. In the very Grant-in-aid Code, there are other rules, which make it clear that for a particular act, previous sanction of the Director is necessary. As an illustration, we may refer to Rule 28 and Rule 52 (ii). Further, the expenditure incurred by the institution was from and out of its accumulated surplus. No other rule in the code has been brought to our notice which has an impact on this aspect. It is, therefore, clear that a special rule has been made in-the matter of the expenditure of amounts available to an institution which could be characterised as profits or accumulated surplus in any official year. Even assuming that Rule 52 might be attracted as is sought to be made out, the circumstances which, according to us, would govern the situation, coming within the purview of Rules 51 and 52, are not present here. As we said, the special feature of Rule 32(iii) is that it is an enabling provision. It enables the registered managements and schools to retain its profits that they make during the year, subject to the condition that the money thus retained is not allowed to be accumulated; but is spent with the approval of the Director on improvements to the school. The rules does not contemplate prior approval. No doubt the instructions given to the Department might lend support to this contention. We are here called upon to interpret Rule 32 (iii) as such. Further, it is seen that the instructions under exhibit B-1 appear to be more advisory in nature as is seen in Clauses (i), (k), etc., of paragraph 30 of exhibit B-1. Even otherwise as we said Rule 32 (iii) is a special rule and as a special rule always excludes the general rule, we have to interpret the rule as it stands without providing any missing links as is sought to be done by the learned Counsel for the Appellant. Approval of the Director in the instant case does not mean prior approval of the Director. If it was so, the rule could have said so. It did not say so. Again the rule as it stands, is for the benefit of the institution and in order to ensure improvements to the school. As long as there is no complaint that no such improvements were done to the school, we are of the view that there is no violation of any of the conditions of the recognition or aid, which is one of the circumstances, under which the Director may penalise the institution under Rule 36. The fact that an enquiry was instituted by the Director obviously for the purpose of finding out, whether improvements were done and such an enquiry ranged between 1962 and 1963, is also a pointer to the fact that the prior approval of the Director is not a condition precedent for effecting such improvements. If such were the intention of the rules, nor was it understood as the practice, then, the Director could have straight away penalised the institution when the auditor pointed out that such expenses were incurred by the institution and when it was known to the Director that no prior approval was obtained, when it was expended. Under these circumstances and in the facts and circumstances of this case, we are unable to disagree with the finding of the Court below that the Defendant should suffer for want of prior approval of the Director of Public Instruction, although it is not in dispute that as the expenses enumerated in the plaint were for the benefit of the institution and are admittedly carried out from and out of the surplus fund available with it. There can be no unjust enrichment either.

The appeal, therefore, fails and it is dismissed. But there will be no order as to costs.