K. N. Singh, J. - (1.) BY means of this petition validity of the order of the State Government dated 31-7-1974 appointing an Authorised Controller to take over the management of the Arya Kanya Vidyalaya, Kanpur, is challenged.
(2.) ARYA Kanya Vidyalaya, Govind Nagar, Kanpur, is a Registered Society. It runs an Intermediate College known as ARYA Kanya Inter College, Govind Nagar. It is an aided and recognised Institution under the U. P. Intermediate Education Act. On 27-1-1974, a notice under Section 16-D(2) was issued to the Manager of the ARYA Kanya Inter College, hereinafter referred to as the College, pointing out a number of defects and deficiency in the administration of the College. On 11 - 2-1974, the Manager of the College submitted his detailed reply to the notice. The Director of Education was of the opinion that the management failed to comply with the directions contained in the notice dated 27-1- 1974 inasmuch as the defects pointed out therein were not removed. By his order dated 28-4-1974 he issued notice to the management of the College under Section 16-D(3) directing the management to show cause within 7 days as to why recommendations should not be made to the State Government for appointing Authorised Controller under Section 16-D(5) of the Act. The management submitted its detailed reply on 3-5-1974. Thereupon the Director recommended to the State Government for taking action against the management of the College under Section 16-D (5) of the Act. The State Government considered the recommendations of the Director of Education as well as the explanation given by the management of the College, and issued the impugned order dated 31-7-1974 appointing Laxmi Prasad Khanna as Authorised Controller under Section 16-D(5-A) of the Act. Learned counsel for the petitioner urged that the order of the State Government was void as it did not contain any special or exceptional reasons as required by Section 16-D(5-A) for the appointment of Authorised Controller. Section 16-D(5-A) lays down that if on receipt of recommendations made by the Director of Education under sub-Section (4) the State Government is satisfied that the affairs of the institution are being mismanaged or that the management of the institution has wilfully or persistently failed in the performance of its duties and that the action under sub-Section (4) would not be effective to safeguard the interest of the institution, it may appoint an Authorised Controller and direct the Institution to hand over management of the institution including the right of management of land, building, funds and other assets belonging to the Institution to the Authorised Controller. Sub-Section (5-A) further lays down that the order appointing Authorised Controller may be issued only after the State Government is "satisfied that special and exceptional , reasons exist which require action in the interest of the institution". Recording of special and exceptional reasons is condition precedent to the issue of an order under sub-Section (5-A) for appointing Authorised Controller. In the absence of recorded reasons the order of appointment would be illegal. The State Government is under a legal duty to record reasons bringing out exceptional and special reasons to show that action under sub-Section (4) of Section 16-D could not be sufficient to meet the situation and that adequate grounds existed to take action under sub Section (5-A). Sub-Section (4) confers power on the State Government to appoint Authorised Controller and invest him with limited jurisdiction to issue directions to the Committee of Management in carrying out the administration and management of the institution. The Authorised Controller, if appointed under that sub-section, is not entitled to exercise any right of management nor he is invested with any power to manage the institution, its land, building or funds to the exclusion of the management. On the other hand, an Authorised Controller appointed under sub-Section (5-A) is empowered to take over the management of the institution to the complete exclusion of the Managing Committee and he is further invested with power to manage land, building, funds and other assets belonging to the institution. There is a marked distinction in the two sub-sections. Under sub-Section (4) the right of the Managing Committee to manage the institution remains intact, it is however required to follow orders or direction which the Authorised Controller may issue, but its right to manage the institution, its, land, building and other properties continues to vest in it. On the other hand if the Authorised Controller is appointed under sub Section (5-A) the right of the management is completely suspended and the Authorised Controller is invested with complete power of administration of the institution including its land, buildings and funds. The legislature, therefore, contemplated that whenever the State Government considers it necessary to take drastic step of superseding the right of the Committee of Management of the institution, it should record special and exceptional reasons to justify its action under sub-Section (5-A). The reasons must furnish grounds which may indicate as to why the State Government considered it necessary to appoint Authorised Controller under sub-Section (5-A) and not under sub-Section (4) of Section 16-D of the Act. If this requirement is not fulfilled and no reasons are recorded, the order of the State Government would be rendered invalid.
(3.) IN the instant case, the impugned order of the State Government dated 31st July, 1974 (Annexure V to the petition) shows that the State Government recorded findings that there were serious disputes relating to the election of the Committee of Management and there were irregularities and mismanagement prevailing in the institution. The institution had collected donations but no entry of the same was made in cash book or in any other registers and no receipts had been issued to the donors. The amount deposited in the students funds was also mis-used. IN addition to the Manager of the institution, other members of the Committee of Management had been sending letters of recommendations to the principal in various matters. The management had failed to pay lease rent of its land expeditiously. The State Government considered the notice issued by the Director of Education and the explanation furnished by the management and thereafter it reached a conclusion that there was mismanagement and a number of irregularities prevailed in the institution which seriously affected the smooth running of the institution. After recording these findings the State Government considered the question whether action should be taken under sub-Section (4) or under sub-Section (5-A) of Section 16-D of the Act for appointing authorised Controller for the management of the institution. Paragraph 3 of the Government Order contains reasons for taking action under sub-Section (5-A). The. reasons contained therein show that the State Government was satisfied that the explanation furnished by the Committee of Management was not satisfactory and that various financial and administrative irregularities were prevailing in the institution as a result of which difficulties had arisen in smooth functioning of the institution and the condition of the institution was deteriorating every day. Further the management has been violating orders and directions issued by the officers and authorities of the Education Department. For these reasons, the State Government was of the opinion that if action under Section 16-D (4) was taken and an Authorised Controller was appointed with limited powers, there was no possibility that the institution would be managed and run in a smooth manner, therefore it considered it necessary to appoint Authorised Controller under sub-Section (5-A) for a period of one year to manage the institution to the complete exclusion of the Committee of Management of the institution with the restriction that the Authorised Controller will have no power to transfer or sell any property of the institution. IN my opinion the impugned order contains reasons as required by Section 16-D (5-A) of the Act. Learned counsel for the petitioner urged that the State Government has not recorded reasons, instead it has recorded conclusions. I do not find any substance in the contention. If the correspondence between the management and the State Government and the replies sent by the Committee of Management (which have been filed by the petitioner) are perused, it will be clear that there were serious allegations of mis-management and financial irregularities against the Committee of Management. The Director of Education pointed out these defects but the management failed to remove them. The management no doubt claimed that it bad removed the irregularities, but the Regional Inspectress of Schools visited the College and gave opportunity to the management to meet the allegations against it. She submitted her report on 2nd March, 1974. A perusal of that report, Annexure I to the Supplementary Counter affidavit of Genda Lal Dikshit, shows that the management could not give any valid explanation for the irregularities committed in the maintenance of accounts. Paragraph 3 of the order of the State Government contains reasons as to why action under Section 16-D(4) could not have been sufficient to meet the situation which was prevailing in the institution. The impugned order contains reasons and not merely conclusions. The reasons are contained in the order which clearly indicate that the State Government did apply its mind to the provisions contained in Section 16 D(5-A) and it was after considering relevant matters that it passed the impugned order and recorded reasons for the same. In this view of the matter I hold that the impugned order has been passed in accordance with Section 16-D(5-A) of the Act.;