Grover, J. - (1.) This is an appeal by special leave from a judgment of the Punjab High Court dismissing a petition under Articles 226 and 227 of the Constitution which had been filed by the appellant Municipal Committee challenging the taking over by the State of all the schools which were being run by it together with all the buildings in which the schools were functioning and other movable and immovable properties connected with these institutions which belonged to the Committee. The order of the State for payment of an annual contribution which upto the date of the filing of the writ petition i.e., May 10, 1964 and reached the figure of 53 lakhs was also challenged.
(2.) The appellant Committee is a first class Municipal Committee and has been in existence from a long time. It has been managing its local affairs through the elected representatives from the city who are called Municipal Commissioners. It is constituted and functions under the provisions of the Punjab Municipal Act, 1911. A number of primary schools were being run by the Committee within the municipal limits of the town of Amritsar for which it was getting grant-in-laid from the Punjab Government. It was, however, running schools upto the middle and high standards for girls and boys for which all the expenses were incurred by itself without any grant from the Government. The primary liability, however, for incurring the extra expenditure even in connection with the aided schools was of the Committee. The Punjab Government took an administrative decision to provincials all the schools run by all local bodies in the State with effect from October 1, 1957. This information was conveyed by means of a letter dated July 19, 1957 by the Secretary to the Government, Education Department, though the Deputy Commissioners in Jullundur and Ambala Divisions. At a meeting of the appellant Committed held on July 31, 1957 a resolution was passed that a strong representation be made to the Government against the decision to provincials the schools run by the local bodies. On September, 26, 1957 the Assistant Director of Schools wrote to the District Inspector that "as the local body schools are being provincialised with effect from October 1, 1957 the tuition fees etc., to be realized in such schools after that date should be credited to the Government in the treasury under the head....." Without enacting any legislation the State took over all the schools run by the local bodies on October 1, 1957. A memorandum from the Director of Public Instructions, Punjab to the District Inspector of Schools sent of October 5, 1957 conveyed the following direction: "All the erstwhile Local Body Schools which have been provincialism with effect from the 1st October, 1957 will henceforth be known as Government High/Middle/Primary Schools for Boys or Girls as the case may be". The Executive Officer of the appellant Committee (appointed under the Punjab Municipal Executive Officers Act 1931) wrote to the Deputy Commissioner, Amritsar on November 21, 1957 that no formal orders had been received from the Government requiring the Committee to give up possession of the schools and it appeared that no procedure had so far been devised in that behalf or for the settlement of terms and conditions on which the buildings, furniture, fittings and other materials were to be transferred. He pressed for proper steps being taken. The Secretary to the Government, Punjab, Health and Local Government Department sent a memorandum dated September 10, 1958 to all the Deputy Commissioners saying that the work of proper maintenance of the buildings of the provincialised schools the local bodies would be entrusted to the Public Works Department, Buildings and Roads. A letter was addressed by the same authority dated September 30/October 4, 1958 to the Deputy Commissioners requesting them to supply immediate information showing the contributions actually deposited into the treasuries by the local bodies in respect of the provincialisation of the schools. This was followed by the memorandum dated December 12, 1958 to the effect that all local bodies "be advised to execute the transfer notes in respect of the school buildings etc., by their respective Engineering Establishments in favour of the Superintending Engineers concerned". By means of another memorandum dated December 26, 1958, orders of the Government were conveyed that immediate steps should be taken for getting the contribution from local bodies and also for obtaining transfer of buildings and equipment. The Deputy Commissioners were requested to get the requisite resolutions passed by the local bodies in the prescribed form. The appellant Committee at its meeting held on January 10, 1959 decided not to pay any contribution for the time being. It was also resolved that the Committee was not in favour of transferring the property rights in movable and immovable property which was in possession of the schools.
(3.) It appears that up-till June 17, 1959 the State continued the process of provincialisation of the schools mentioned before without any authority of law. There was no statutory provision which entitled the State to take over the schools of the local bodies including the buildings in which the schools were being run as also furniture etc., which belonged to the local bodies including the buildings in which the schools were being run as also furniture etc., which belonged to the local bodies. Moreover the extraordinary step of demanding annual contribution was also taken without any sanction or authority of law. the appellant Committee which is one of the biggest Committees in the State seems to have resisted the attempt on the part of the Government to take over the schools and acquire and requisition its properties in the manner in which it was done. Legislation was for the first time enacted in the shape of the Punjab Local Authorities (Aided Schools) Act 1959, (Act No. XXII of 1959), hereinafter called the Act. It received the assent of the President on June 9, 1959. According to the preamble the Act was enacted to provide for the management and control of local authorities' schools receiving grants in aid from the State of Punjab. By a deeming provision the Act was to come into force with effect from October 1, 1957. Section 2 gave the definitions of "aided schools", "local authority", and "school" "School" has been defined to include lands, buildings, playgrounds and hostels of the school playgrounds and hostels of the schools and the movable property such as furniture, books, apparatus, maps and equipment pertaining to the school. The following provisions of the Act as amended may be reproduced: S.3. "Power of local authorities to transfer management and control of aided schools to State Government - (1) A local authority may pass a resolution to transfer the management and control of aided school to the State Government and communicate the same to the State Government. (2) On receiving such a resolution, the State Government may direct that the aided schools shall be taken over under its management and control and thereafter all rights and interests including the right of maintenance, management and control shall be transferred to and vest in the State Government and the rights and interests of the local authority in respect of such schools shall cease." S. 4. "Power to withdraw grant-in-aid.- The State Government may withdraw the grant-in-aid from any local authority in respect of aided schools if the resolution mentioned in Sec. 3, has not been passed and communicated to the State Government within a period of three months from the date on which this Act is published in the Official Gazeette." S.5. "Power to take over aided schools where local authority neglects to perform duty. - (1) Wherever the State Government is satisfied that a local authority has neglected to perform its duties in respect of aided schools or that it is necessary in public interest to take over their management for a period not exceeding ten years, it may, after giving the local authority a reasonable opportunity for showing cause against the proposed action, make an order to take over the management: Provided that in cases of emergency, where the State Government is satisfied that such a course in necessary in the interests of the students, it may, without giving such notice, take over the management of such schools after publication of a notification to that effect in the Official Gazettee." (2) and (3).......... S.6 "Amendment of Punjab Acts No. III of 1911 and No. XX of 1883. - Where a local authority has passed a resolution under Sec. 3 or the State Government has taken over management of aided schools of a local authority under Sec 5, the Punjab Municipal Act, 1911, and the Punjab District Boards Act, 1883, shall be deemed to have been amended in the manner specified in the Schedule appended to this Act with effect from the 1st October, 1957." Section 52 (1) of the Punjab Municipal Act, relates to the setting apart of the municipal funds and apply the same for different purposes as mentioned in clauses (a) to (f). By means of the Schedule to the Act after clause (f) of sub-section (1), clause (g) was added which is in the following terms: " (g) seventhly, such sum to be paid annually by the committed to the State Government by way of contribution as is equivalent to:- (i) the total provision made in the budget for the year 1957-58 under the main head 'Education' excluding educational grants and the provision made for 'original works' relating to schools; and (ii) a sum representing one per centum of the total income from its own resources for the year 1957-58, in lieu of the deductions made for 'original works' made under clause (i): Provided that in respect of the financial year 1957-58 the committee shall make a payment to the State Government of the sums which have remained unexpended on 31st March, 1958, out of the provisions under the head "Education" in the budget of 1957-58". Section 59 of the Punjab Municipal Act provides that the Committee may with the sanction of the State Government transfer to the Government any property vesting in the Committee under Section 56 or Section 57 but not so as to affect any trusts or public rights subject to which the property is held. A proviso was added to the section by the schedule which was as follows:- "Provided that where a committee has passed a resolution under Section 3 of the Punjab Local Authorities (Aided Schools) Act, 1959, or the State Government has taken over the management of aided schools of a committee under Section 5 of that Act, all rights and interests in the establishment, maintenance and management of the aforesaid schools immediately before the 1st October, 1957, including all interests in the lands, buildings, playgrounds, hostels of the said schools as also in the movable properties like furniture, books, apparatus, maps and equipment pertaining thereto shall be deemed to have been transferred to the State Government on that date, and all unspent balances in respect of grants and contributions received for the maintenance and promotion of there schools shall be deemed to have been surrendered to the State Government." After the promulgation of the above legislation the appellant Committee passed a resolution on February 24, 1960 reiterating the decision taken is the Local Bodies Conference held at Jullundur and its own decision to request the Punjab Government to restore the schools run by the local bodies to them. At another meeting held on June 9, 1960 the appellant Committee decided not to pass the resolution under Section 3 of the Act transferring its schools and property to the State Government. The Punjab Government, however, issued a notification dated September 26, 1960 saying that the Governor was satisfied that it was necessary in the interests of the students to take over for a period of ten years the management of the schools specified in the Schedule and administered by the Municipal Committee, Amritsar, and therefore in exercise of the powers conferred by exercise of the powers conferred by the proviso to Section 5 of the Act the Government took over for a period of ten years the management of the said schools. The schedule contained the list of 42 such schools. The question of the payment of the contribution which was being demanded by the Government came up for consideration at a meeting of the Appellant Committee on January 3, 1962. It was decided that the payment be made on the basis of formula laid down by State Government in that behalf with effect from October 1, 1957 but that the proprietary rights of the Committee in the school buildings be retained and the use of these buildings free of charge be allowed to the Government for the purpose of running the schools. At a subsequent meeting held on March 28, 1963, the appellant Committee, however, revised its previous decision in view of a resolution passed in the meeting of the Standing Committee of Urban Local Bodies Conference held on June 21, 1962. It was decided that the State Government was not entitled to charge contributions from the Municipal Committee. On April 10, 1964 the Deputy Commissioner, Amritsar, made an order in exercise of the powers vested in him under Section 234 (1) of the Punjab Municipal Act requiring the appellant committee to pay an amount of Rs. 53,66,146 on account of contribution for the maintenance of the provincialised schools for the period 1957-58 to 1963-64 failing which realization was to be made under sub-section (2) of that section. Thereupon the petition under Articles 226 and 227 of the Constitution was filed by the appellant Committee in which apart from other matters the validity and constitutionality of the Act were challenged. In the return filed on behalf of the State reliance was placed on the provisions of the Act, the resolution passed by the Committee itself on January 3, 1962 agreeing to pay the contribution and allow the use of school buildings to the Government free of charge and the notification which had been issued under Section 5 of the Act on September 26, 19 60 whereby the management of the schools of the Committee had been taken over for a period of 10 years.;