H.R. Sodhi, J. - (1.) THIS is a petition by Municipal Committee, Hansi, a second class Municipal Committee (described hereinafter as the Committee) constituted under the Punjab Municipal Act, 1911 (hereinafter called the Municipal Act). It was running a number of primary schools and also a Girls High School all of which received financial aid from that State Government in the erstwhile State of Punjab before its reorganisation under the Punjab Reorganisation Act, 1966. According to an averment in the writ petition, which is not specifically denied by the respondents, Committee did not impose any education cess or tax for financing the schools and the funds raised from various sources were utilised in the cause of education. It appears that the State Government took some policy decision to take over all the aided schools under its own administration by provincialising them with effect from 1st October, 1957, and for this purpose instructions were to all the Deputy Commissioners in the State directing them to ask all the Municipal Committee and other local bodies not to open any new schools. Tuition fees etc. to be realised in such schools after that date were required to be credited to Government treasuries. What was hereto before being done in this regard by an executive fiat was later clothed with the authority of law when an Act known as the Punjab Local Authorities (Aided Schools) Act, 1959 (Act No, XXII of 1959), referred to hereinafter as the Aided Schools Act, was passed. The object of this enactment was to enable the Municipal Committees to part with their movable or immovable properties or to make contributions to Government in regard to schools that were being taken over by the State. Section 3(1) of this Act gives an authority to a local body to pass a resolution to transfer the management and control of aided schools to the State Government. The State Government on receipt of such a resolution 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. To ensure that the Municipal Committees did pass resolutions transferring the aided schools to the State Government, power was given under section 4 to the latter to withdraw the grant -in -aid if no such resolution was passed. This was more or less a coercive provision, intended to pressurise the Municipal Committees. The Municipal Act stood amended in the manner specified in the Schedule appended to the Aided Schools Act. Clause (g) was introduced after clauses (f) of sub -section (1) of section 52, and it reads as under: (g) seventhly, such sum to be paid annually by the Committee 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 Municipal Act was also amended. It is not necessary to state in detail the amendments since the relevant provision of the Aided Schools Act and the resultant amendments in the Municipal Act have been reproduced by their Lordships of the Supreme Court in Municipal Committee, Amritsar and others v. The State of Punjab and another : (1969) 2 S.C.C 823. In that case, the State Government had taken action under section 5 of the Aided Schools Act which empowered it to take over the management of the aided schools for a period not exceeding ten years, after giving the local authority a reasonable opportunity of showing cause against the proposed action, if it was satisfied that the local authority had neglected to perform its duties in respect of such schools or it was necessary in public interest to take over the management for the said period, Municipal Committee, Amritsar, moved this Court under Articles 226 and 227 of the Constitution attacking the validity of the Aided Schools Act and the notification issued under section 5 so far as it was affected by the same. The High Court was of the opinion that where the management, control and property in possession of the aided schools is taken by the Government under section 3 of the Aided Schools Act with consent of the Municipal Committee, which has parsed a resolution to that affect, It cannot be said that the property is being compulsorily acquired and, as such, the provisions of article 31(2) of the Constitution are not attracted, In respect of cases under section 5 the view taken by the High Court was that as the management of the property in possession of the schools was being taken over for ten years in public interest, by virtue of the provisions of Article 31 -A(1)(b), the contravention of article 31(2) was of no consequence. An appeal by special leave was allowed by the Supreme Court and judgment of the High Court set aside, It has been declared that section 3(2) of the Act and the amendments which would become operative under section 6 in respect of sections 52(1) and 59 of the Municipal Act are void and unconstitutional. Their Lordships further quashed the orders by which the movable and immovable properties of the Committees had been transferred to the State and such transfers were declared to be wholly void The State Government was prohibited from recovering any contribution in accordance with clause (g) of section 52 of the Municipal Act as also the sun of Rs. 53 lakhs mentioned in the order of the Deputy Commissioner which amount, according to the Government, presumably become due by April 10, 1964.
(2.) ALMOST similar challenge to the validity of the action of the State Government in provincialising the schools run by the Municipal Committee, Hansi, by the erstwhile State of Punjab and calling upon it to make contributions was made in the present writ petition filed on 21st April, 1967. The petition was admitted by the Motion Bench on 25th April, 1967, when Municipal Committee, Amritsar's, case (supra) was pending before the Supreme Court. It is stated by the Committee that the Government through the Deputy Commissioner pressed it to make payment of the contributions claimed from it towards the up -keep of the schools previously run by it and that in this background when the Committee sent its budget estimates for the year 1960 -61 to the Deputy Commissioner, Hissar, for approval, on 21st March, 1960, the latter returned the same or. 10th May, i960, with an observation that under the Education head, adequate provision for contribution towards provincialised schools equivalent to the sum which used to be spent previous to provincialisation should be made. The Committee resisted the demand of the State Government to surrender the management of aided Schools and when the budget was not approved by the Deputy Commissioner, respondent 2, it passed a resolution on 1st July, 1960, to lodge its protest declaring the provincialisaion of the schools without its consent as unconstitutional and illegal. It equally disputed its liability to make contributions and sent the budget estimates again to the Deputy Commissioner who returned them as having been sanctioned subject to the condition that provision for Rs. 92,000/ - instead of Rs. 2,000/ - should be made under the head "Education Contribution." The Committee seems to have agreed to pay the sum of Rs. 2,000/ - to get the budget passed so that its administration, for which finances were necessary, was not, held up for want of budget sanction though it was initially not agreeing to make any contribution whatsoever. The Committee again in its, meeting on 10th November, 1960, refused to provide in its budget a sum of Rs. 92,000/ -and requested the Deputy Commissioner to refer the matter to the Government in case he disagreed with the views of the Committee. This controversy was going on when the Punjab Government by notification No. 4655 -Cl(5CI) -61/28477, dated the 10th July, 1961, superseded the Committee under section 238 of the Municipal Act and appointed a Resident Magistrate as its part -time Administrator. Afterwards, one Shri Dharambir Singh was appointed a whole time Administrator. The Chief Minister of the erstwhile State of composite Punjab wrote a demi -official letter to the Deputy Commissioner, Hissar, asking him that the recalcitrant Committee should be asked to pass the necessary resolution under section 3 of the Aided Schools Act and that since the Committee had not agreed to make payments, the Administrator should accept the liability for contributions to be made to the Government. The Administrator at one stage was also not agreeing to pay but he was advised to pass an order immediately in the prescribed form. It was in these circumstances that payments with retrospective effect were made and continued to be so made till the year 1967. The total amount deposited in the Hansi Sub -Treasury, as stated in the writ petition, was Rs. 1,95,916 and a balance of Rs. 287,004 is still said to be due from the Committee. It may be mentioned that the Administrator relinquished the charge on 4th June, 1964, and the Committee was again being run by elected representative from that date. A few payments were made to the Government by elected representatives as well but it was done only tentatively and the Committee constituted a Sub -Committee to go into the matter before final decision could be taken. The reliefs prayed for in the present writ petition are : (1) That Punjab Act No. 22 of 1959 be declared ultra vires of the Constitution, (2) That movable and immovable property in the shape of schools which was taken over by the Punjab Government be directed to be returned to the Committee so that it can run the schools, management whereof was taken over by the State. (3) That the respondents are not entitled to recover any contribution annually from the Committee under the impugned Act and the amount so far paid be ordered to be refunded to the Committee as the same was paid under an Act which has been declared void.3. Mr. C.D. Dewan learned counsel appearing on behalf of the State of Haryana. concedes that in view of the Supreme Court judgment in the case of Municipal Committee, Amritsar, the writ petition has to be allowed except so far as the refund of the amount paid as contribution by the Committee is concerned. It has been observed in the said case that Section 6 comes into operation as soon as a local authority has passed a resolution under section 3 or the State Government has taken over management under section 5. Then the provisions relating to acquisition of property of the Committee as also of its funds by way of contribution come immediately into operation by virtue of the amendments effected in sections 52(1) and 59 of the Municipal Act. Mr. Dewan further concedes that action in the instant case was taken under section 3 (2) read with section 6 of the Aided Schools Act.
(3.) In view of the concession of Mr. Dewan which, in my opinion, is rightly made, this writ petition has to be allowed with similar directions as given by the Supreme Court in the case of Municipal Committee, Amritsar1, namely, that orders of the State Government transferring the movable and immovable property of the Municipal Committee, Hansi, pertaining to the schools the management of which has been taken over by the State Government shall stand quashed and the respondents restrained from recovering any further contribution under the Aided Schools Act.;