Sukh Sagar Medical College Case: Supreme Court holds that State can withdraw Essentiality certificate

With this, the apex court has substantiated that the state governments have the power to revoke the essentiality certificate or take the rightful action against the errant institutes which fail to fulfil the stipulated norms as mandated.

The order to this effect was pronounced by the Honourable Justices, AM Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna based on the petition filed by the Madhya Pradesh based Gyanjeet Sewa Mission Trust whose authorities called out the state government's decision of revoking the essentiality certificate of its Sukh Sagar Medical College.

The principal contention of the trust was that the State Government has no power to withdraw Essentiality Certificate on the ground of Deficient Functioning of the institute. In support of this contention, the medical college mainly relied on an earlier Supreme Court judgment in Chintpurni Medical College and Hospital vs the State of Punjab.

In 2016-17, after issuance of the Essentiality Certificate, the Trust submitted a scheme to the Medical Council of India for the establishment of a new medical college at Jabalpur -Sukh Sagar Medical College & Hospital with an annual intake of 150 students in MBBS course.

The MCI after the due inspection had submitted a negative report to the Central Government due to gross deficiencies, including fake records regarding the patients and resident staff, as a result of which the Ministry of Health and Family Welfare, Government of India rejected the proposed scheme. Thereafter, the ministry accorded its permission to the Trust for establishing a medical college on certain conditions mentioned therein.

This permission was valid for a period of one year, to be renewed on yearly basis subject to the verification of the achievement of annual targets as indicated in the scheme submitted by the Trust and revalidation of performance Bank Guarantee. It was made clear that the process of renewal of permission will continue till such time the establishment of medical college and expansion of hospital facilities were to be completed and formal recognition of the medical college is granted in furtherance thereof. It was also made clear to the Trust that the next batch of students in MBBS course for the academic year 2017­-18 be admitted in the college only after obtaining prior permission of Central Government and fulfilling conditions stipulated by the authorities.

However, later, the MCI inspected the college and found that the undertaking given by the management was breached and violated, as a result of which the Central Government debarred the college for academic years 2017-­18 and 2018­-19.

Thus, for the subsequent academic years i.e. 2017­18, 2018­19 and 2019­20, no renewal of permission was accorded to the medical college. The latest assessment report of the MCI dated 3rd and 4th January, 2019, indicated that the medical ­College was unable to rectify the deficiencies pointed out by the Inspecting Committee of the MCI.

Resultantly, the Board of Governors in Supersession of MCI, (MCI BoG) declined to accept the request for renewal of permission for admission to 150 students in MBBS course for the academic year 2019-­20.

Additional Secretary, Medical Education Department, Government of Madhya Pradesh, after giving due opportunity to the appellant and considering its response to the show­cause notice, eventually proceeded to pass an order directing cancellation/revocation/withdrawal of the Essentiality Certificate.

The authority had taken into account that the medical college had failed to remove the deficiencies pointed out by the MCI from time to time and no renewal of permission was granted for academic years 2017-­18, 2018-­19 and 2019-­20 on that count. Thus, the appellant had failed to provide even the minimum clinical material for running of a medical college, contrary to the conditions specified in clause numbers 1, 2 and 4 of the Essentiality Certificate. In substance, the college had failed and neglected to provide for the minimum standards specified by the MCI for running a medical college, despite several opportunities given in that regard since the academic year 2016-­17. The deficiencies (as noted in the assessment report of the MCI), were gross and had even jeopardised the academic career of the first batch of 150 students admitted in the college during academic year 2016­17. It had also come to the notice of the State authorities that the College had declined to impart education to those students who had not deposited fees, which was again in violation of the conditions specified in the Essentiality Certificate.

Last year, the concerned students belonging to the first batch of 2016-­17 came to be adjusted/reallocated in six recognised private colleges within the State of Madhya Pradesh as per the permission granted by the Ministry.

Aggrieved by the loss of the essentiality certificate, the trust had moved the MP High Court proceeded to hold that the decision in Chintpurni Medical College (supra) does not completely forbid the State Government from exercising power to revoke the Essentiality Certificate. The High Court also held that the State Government acted within the excepted categories referred to in the reported decision of the apex court. The HC had asserted:

the State Government has taken into account the fraud played by the college in securing the Essentiality Certificate, the inability of the college to provide for the minimum standards of infrastructure and other facilities specified by the MCI for running of a medical college and also complete loss of substratum and larger public interest, as reasons for revocation of Essentiality Certificate by the State.

While rejecting the writ petition, however, the High Court gave liberty to the trust to remove the deficiencies pointed out by the MCI in its order and apply afresh for the Essentiality Certificate to the State Government and if the same is refused thereafter, the medical college and the trust was free to question such decision being a fresh cause of action.

Hearing all the submissions by the concerned parties, the Supreme court bench noted the key contention laid by the trust while questioning the state's authority of revoking the essentiality certificate on the basis of apex court's judgment on Chintpurni medical college case.

Then, the 3 judge bench noted that the act of the State in issuing Essentiality Certificate is a quasi judicial function and observed:

" Having said that, it must follow that Section 21 of the 1897 Act cannot be invoked and in absence of an express provision in the IMC Act or the 1999 Regulations empowering the State Government to revoke or cancel the Essentiality Certificate, such a power cannot be arrogated by the State relying on Section 21. That, however, does not deprive the State Government to revoke or withdraw the Essentiality Certificate in case where (a) it is secured by playing fraud on the State Government, (b) the substratum for issuing the certificate has been lost or disappears and (c) such like ground, where no enquiry is called for on the part of the State Government."

Further clarifying its judgment on the Chintpurni case, the apex court stated in Chintpurni Medical College (supra), it was clarified that the State Government can cancel/revoke/withdraw Essentiality Certificate in exceptional cases:

­ " The State Government would be entitled to withdraw such certificate where it is obtained by playing fraud on it or any circumstances where the very substratum on which the essentiality certificate was granted disappears or any other reason of like nature."

The court observed the dilemma faced by the MBBS students due to the gross deficiencies committed by the institute and said:

even though the appellant was granted conditional Letter of Permission (LoP) for academic year 2016­17, it had failed to remove the deficiencies, as a result of which not even the first batch could pursue or complete the medical course in the appellant­College. The concerned students kept on making earnest representation to the State authorities to rescue them from the hiatus situation in which they were trapped. Indisputably, the concerned students (admitted in the first batch of 2016­17) were eventually reallocated to another recognised college after November, 2019, as no renewal of permission to the appellant­College was forthcoming for three successive academic sessions i.e. 2017-­18, 2018­-19 and 2019­-20.

It noted that the medical college had failed and neglected to discharge its commitment given to the State at the relevant time, and is incapable of fulfilling the minimum norms specified by the MCI for starting and running a medical college. It had thus misrepresented the State Government at the relevant time by giving a sanguine hope of ensuring the installation of minimum infrastructure and setting up of a robust organisational structure for running of a medical college "in a time bound programme". Therefore, it can be safely deduced that it is a case of constructive fraud played upon the State Government.

Deeming the state's action in revoking the essentiality certificate as right, the bench observed:

The State Government whilst discharging its role of parens patriae of the student community cannot remain a mute spectator and expose them to a college, which is deficient in many respects. The fact that no renewal permission has been granted by the MCI for three successive academic sessions due to gross deficiencies in the appellant­College, is itself indicative of the state of affairs in the appellant­College, warranting a legal inference that the substratum on the basis of which Essentiality Certificate was issued to the appellant­College had completely disappeared.

The bench further said that the Essentiality Certificate was issued on the representation of the medical ­College that it would give 150 fully trained and qualified doctors each year to the State, thereby improving the doctor-­patient ratio and provide healthcare to the nearby population in the attached hospital. All this has become a mirage due to the failure of the medical institute to get permission of Central Government for four successive academic sessions starting from 2016­-17 till 2019-­20. Not even one doctor has been produced by the appellant­College after issuance of the Essentiality Certificate nor the hospital attached to the college is provided with minimum standards specified by the MCI and is found to be grossly deficient.

On a comprehensive view of the state of affairs, the fulfilment of MCI norms and other allied conditions must be understood as an implied imperative for the consideration/continuation of Essentiality Certificate. For, there can be no deviation from the standards.

It observed that the authority of the State to grant Essentiality Certificate is both power coupled with a duty to ensure that the substratum of the spirit behind the Certificate does not disappear or is defeated.

The exercise of power and performance of duty with responsibility and in right earnest must co­exist. Notably, the duty under Article 47 is, in the constitutional sense, fundamental in the governance of the State. This duty does not end with mere grant of a certificate, rather, it continues upto the point when essentiality of basic medical infrastructure is properly taken care of within a reasonable time frame. Any future application for such certificate, be it by the present appellant (in terms of directions in this judgment) or by a different applicant, must be dealt with accordingly, and supervision of the State must continue to ensure that the purpose and substratum for grant of such certificate does not and has not disappeared.

Lastly, laying emphasis on the power and duty of the state government in maintaining the standard of institutes, the bench that the fact that the trust has made certain investments for starting the medical college, by itself, cannot be the basis to undermine the power of the State Government coupled with the duty to ensure that the medical college is established in terms of the Essentiality Certificate within a reasonable time.

"While dealing with the case of maintaining standards in a professional college, a strict approach must be adopted because these colleges engage in imparting training and education to prospective medical professionals and impact their academic prospects. Thus, the future of the student community pursuing medical course in such deficient colleges would get compromised besides producing inefficient and incompetent doctors from such colleges. That would be posing a bigger risk to the society at large and defeat the sanguine hope entrenched in the Essentiality Certificate issued by the State."