UNNI KRISHNAN, J.P. AND ORS. Etc. irrc v. STATE OF ANDHRA PRADESH AND ORS. ETC. ETC. "

p. 733 Copy page pinpoint

two cases, the respondent institution was a Degree College A managed by a registered co-operative society. A suit was ~- filed against the college by the dismissed principal for reinstatement. It was contended that the Executive Com- mittee of the college which was registered under the Co-operative Societies Act and affiliated to the Agra B University (and subsequently to Meerut University) was a statutory body. The importance of this contention lies in the fact that in such as case, reinstatement could be ~-- ordered if the dismissal is in violation of statutory obliga- tion. But this Court refused to accept the contention. It was observed that the management of the college was not c ~- a statutory body since not created by or under a statute. It was emphasised that an institution which adopts certain statutory provisions will not become a statutory body and the dismissed employee cannot enforce a contract of per- sonal service against a nm1-statutory body." D At paragraphs 15 to 20 it was held:

"If the rights are purely of a private character no mandamus can issue. If the management of the college is purely a private body with no public duty mandamus will E ~ not lie. These are two exceptions to mandamus. But once these are absent anct when the party has no other equally convenient remedy, mandamus cannot be denied. It has to be appreciated that the appellants-trust was managing the affiliated college to which public_ money is paid as F g0verl1lllent aid. Public money paid as government aid plays a major role in the contro~ maintenance and working of educational institutions. The aided institutions like government institutions discharge public function by way of imparting education to students. They are subject to the rules and regulations of the affiliating University. Their G activities are closely supervised by the U oiversity authorities. .Employment ln such institutions, therefore, is not devoid of any public character. (See The Evolving Indian~dministrative Law byM.P. Jain (1983) p. 226) So are the service conditions of the academic staff. When the H

p. 734 Copy page pinpoint

A University takes a decision regarding their pay scales, it will be binding on the management. The service conditions of the academic staff are, therefore, not purely of a private character. It has super-added protection by University decisions creating a legal right-duty relationship between the staff and the management. When there is existence of B this relationship, mandamus cannot be refused to the aggrieved party.

The law relating to mandamus ha!. made the most spectacular advance. It may be recalled that the remedy c by prerogative writs in England started with very limited scope and suffered from many procedural disadvantages. To overcome the difficulties, Lord Gardiner (the Lord Chancellor) in purusance of Section 3(1) (e) of the Law Commission Act, 1965, requested the Law Commission "to review the existing remedies for the judicial control of D administrative acts and omissions with a view to evolving a simpler and more effective procedure". The Law Com- mission made their report in March 1976 (Law Commis- sion Report No. 73). It was implemented by Rules of Court (Order 53) in 1977 and given statutory force in 1981 E by Section 31 of the Supreme Court Act, 1981. It com- bined all the former remedies into one proceeding called Judicial Review. Lord Denning explains the scope of this "judicial review":

F "At one storke the courts could grant whatever relief was appropriate. Not only certiorari and mandamus, but also declaration and injunction. Even damages. The pro- cedure was much more siniple and expeditious. Just a summons instead of a writ. No formal pleadings. The evidence was given by affidavit. As a rule no cross-ex- G amination, no discovery, and so forth. But there were important safeguards. In particular, in order to qualify, the applicant had to get the leave of a judge.

The statute is phrased in flexible terms. It gives scope for development. It uses the 'words "having regard to".

UNNI KRISHNAN v. STA1E OF AP. [MOHAN, J.] 735

Those words are indefinite. The res11lt is that the courts are not bound hand and foot by the previous law. They are to 'have regard to' it. So the previous law as to who are - and who are not - public authorities, is not absolutely binding.. Nor is the previous law as to the matters in respect of which relief may be granted. This means that the judges can develop the public law as they think best. That they 'have done and are doing. (See The Closing Chapter by Rt. Hon. Lord Denning p. 122)"

There, however, the prerogative writ of mandamus is confined only to public authorities to compel performance c of public duty. The 'public authority' for them mean every body which is created by statute - and whose powers and duties are defined by statute. So government departments, local authorities, police authorities, and statutory under- takings and corporations, are .all 'public authorities'. But there is no such limitation for our High Courts to issue the writ in the nature of mandamus. Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226, writs can be issued to "any person or authority''. It can be issued "for the enforcement of any of the fundamental rights and for any other purpose'. •

18. Article 226 reads:

226. Power of High Courts to issue certain writs. - (1) F Notwithstanding anything in Article 32, every High Court s'&all have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority including in appropriate cases, any government, within those territories directions, orders and writs, in- G cluding writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.

,The scope of this article has been explained by Subba H

p. 736 Copy page pinpoint

A Rao, J., In Dwarkanath v. ITO, [1%5) 3 SCR 536:

This article is couched in comprehensive phraseology and it ex-facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature B of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England; but the scope of those writs also is widened by the use of the expression "nature", for the said expression c does not equate the writs that can be issued in India with those in England, but only draws an analogy from them. That apart, High Courts can also issue directions, orders or writs other then the prerogative writs. It enables the High Court to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt to equate the scope of the power of the High Court under J Article 226 of the Constitution with that of the English courts to issue prerogative v.Tits is to introduce the un- necessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of government into a vast country like India function- ing under a federal structure. Such a construction defeats ~ the purpose of the article itself.

The term "authority" used in Article 226, the context must receive a liberal meaning unlike the term in Article

12. Article 12 is relevant only for the purpose of enforce- ment of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fun- -- damental rights. The words "any person or authority" used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the Sta.le. They may cover any other person or body performing public duty. The form of the body concerned is not very ~ much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light

p. 737 Copy page pinpoint

of positive obligation owed by the person or authority to A the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied.

The emphasis in this case is as to the nature of duty imposed on the body. It requires to be observed that the meaning of authority underArticle B 226 came to be laid down distinguishing the same term from Article 12. In spite of it, if the emphasis is on the nature of duty on the same principle it has to be held that these educational institutions discharge public duties. Irrespective of the educational institutions receiving aid it should be held that it is a public duty. The absence of aid does not detract from the nature C of duty.

In R. v. Panel on Take-Overs, 1987 (1). All England Reports 564 at page 568 it is observed: D "The principal issue in this appeal, and the only issue which may matter in the longer term, is whether this remarkable body is above law. Its respectablity is beyond question. So is its bona fides. I do not doubt for one moment that it is intended to and does operate in the public interest and that the enormously wide discretion which it arrogates to itself is necessary if it is to function efficiently and effectively. While not wishing to become involved in the political controversy on the relative merits of self-regulation and governmental or statutory regulation, I am content to as- sume for the purposes of this appeal that self-regulation is preferable in the public interest. But that said, what is to __-. happen if the pa.'lel goes off the rails ? Suppose, perish the thought, that it were to use its powers in a way in which was manifestly unfair. What then ? Counsel for the panel submits that the panel would lose the support of public opinion in the financial markets and would be unable to continue to operate. Further or alternatively, Parliament could and would intervene. Maybe, but how long would that take and who in the meantime could or would come· to the assistance of those who were being oppressed by such conduct ?" H

p. 738 Copy page pinpoint

A At page 574 it is held:

'The picture which emerges is clear. As an act of government it was decided that, in relation to take-overs, there should be a central self-regulatory body which would be supported and sustained by a periphery of statutory B powers and penalties wherever non-statutory powers and penalties were insufficient or non-existent or where EEC requirements called for statutory provisions.'

.At page 577 it is held: c "In fact, given its novelty, the panel fits surprisingly well into the format which this court had in mind in R.v. Criminal Injuries Compensation Board. It is without doubt performing a public duty and an important one. This is clear from the expressed willingness of the Secretary of D State for Trade and Industry to limit legislation in the field T of take-overs and mergers and to use the panel as the centrepiece of his regulation of that market. The rights of citizens are indirectly affected by its decisions, some, but by no means all of whom, may in a technical sense be said to have assented to this ~ituation, e.g. the members of the E Stock Exchange. At least in its determination of whether ,i._ there has been a breach cif the code, it has a duty to act judicially and it·asserts that its raison de'tre is to do equity between one shareholder and another. It~ source of power is only partly based on moral persuasion and the assent of institu\jons and their members, the bottom line being the statutory powers exercised by the Department of Trade and Industry and the Bank of England. In this context I should be very disappointed if the courts could not recognise the realities of executive power and allowed their vision to the clouded by the subtlety and sometimes complexity of the way in which it ·can be exerted.

Given that it is really unthinkable that, in the absence . of legislation such as affects trade unions, the panel should .,.(_ go on its way cocooned from the attentio~ of the courts, in defence of the citizenry, we sought to investigate

p. 739 Copy page pinpoint

wheth~r it could conveniently be controlled bY established forms of private law e.g. torts such as actionable combina- ~ lions in restraint of trade, and, to this end, pressed counsel for the applicants to draft a writ. Suffice it to say that the result was wholly unconvincing and, not surprisingly, coun- sel for the panel did not admit that it would be in the least effective."

At page 584 it is held:

"More recently m . R.v. BBC, exp Lavelle, (1983) 1 All' ER 2451 (1983) 1 WLR Woolf J bad to consider an c application for judicial review where the relief sought was an injuction under Ord 53, 1 (2). The case was brought by an employee of the BBC. In refusing relief Woolf J said (1983) ~ All ER 241 at 249, 1983 1 WLR 23 at 31:

T "Paragraph (2) of r 1 of Ord 53 does not strictly confine D applications for judicial review to cases where an order for mandamus, prohibition or Certiorari could be granted. It Merely requires that the court should have regard to the nature of the matter in respect of which such relief may be granted. However, although applications for judi- E __._ cial review are not confined to those cases where relief could be granted by way of prerogative order, I regard the wording of Ord 53, r 1 (2) and sub-s (2) of s 31 of the Supreme Court Act 1981 as making it clear that the application for judicial review is confined to reviewing ac- titivities of a public nature as opposed to those of a purely F private or domestic character. The disciplinary appeal pro- cedure set up by the BBC depends purely on the contract of employment between the applicant and the BBC, and therefore it is a procedure of a purely private or domestic character." G PRIVATE COLLEGES AND THEIR ROLE: ;,..__ The Union of India takes the stand that the Central Government does not have the resources to undertake any additional financial respon- sibilty for medical or technical education. Taking the case of medical H

p. 740 Copy page pinpoint

A education, the total plan outlay for the health sector is 3.2 per cent and medical education gets a pro-rata share after aportionn:ent of priorities and allocation of available funds. Priorities include promotions of primary -./ health, hospital services etc. The Government in particular is unable to aid any private educational institution financially at levels higher than at present. Certain statistical .J;,tails regarding the cost of medical education B have been given in the counter affidavit of the Central Government. Paragraphs 5 to 9 of the affidavit may kindly be seen in this connection.

It has, therefore, been the policy of the Central Government to involve private and voluntary efforts in the sector of education in conform- C ity with accented norms and goals. The adverse consequences which will follow if private educational institutions have to limit themselves to a fee structure which is charged in Government medical and technical educa- tional ·institutions have been enumerated in paragraph 9 of the counter affidavit of the Union of India.

D The Central Government's policy on education was formulated in the year 1986. Modifications were undertaken in 1992.

The relevant extracts from the National Policy on Education, being paragraph 6.20, 10.1, 10.9 and 11.2 are set out herein below: E '6.20 In the interests of maintaining standards and for several other valid reasons, the commercialisation of tech- nical and professional education will be curbed. An alter- native system will be devised to involve private and voluntary effort in this sector of education, in conformity F with accepted norms and goals."

'10.1 An overhaul of the system of planning and the management of education will receive high priority. The guiding considerations will be: G (a) Evolving a long-term planning and mangement perspective of education and its integration with the country's developmental and manpower needs:

(b) Decentralisation and the creation of a spirit of H autonomy for educational institutions;

p. 741 Copy page pinpoint

(c) Giving pre-eminence to people, involvement, including A association of non-governmental agencies and voluntary effort;

( d) Inducting more women in the planning and manage- ment of education; B (e) Establishing the principle of accountability in relation to given objectives and norms. 11

"10.9 Non-Government and voluntary effort including so- cial activist groups will be encouraged, subject to proper c management, and financial assistance provided. At the same time, steps will be taken to prevent the establishment of institutions set up to commercialise education."

"11.2 Resources, to the extent possible, will be raised by D mobilising donations, asking the beneficiary communities to maintain school buildings and supplies of some con- sumables, raising fees at the higher levels of education and effecting some savings by the efficient use of facilities. Institutions involved with research and the development of technical and scientific manpower should also mobilize E -1_ some funds by levying a cess or charge on the user agencies, including Government departments, and enterpreneurs. All these measures will be taken not only to reduce the burden on State resources but also for creating a greater sense of responsibility within the educational system. How- F ever, such measures will contribute only marginally to the total funding. The Government and the community in general will find funds for such programmes as; the univer- salisation of elementary education; liquidating illiteracy; equality of access to educational opportunities to all sec- lions throughout the country; enhancing the social G relevance, quality and functional effectiveness of educa- tional programmes; generating knowledge and developing technologies in scieDtific fields crucial to self-sustaining :.-. economic development and creating a critical conscious- ness of the values and imperatives of national survival." H

p. 742 Copy page pinpoint

A Therefore, as on today, it would be unrealistic and unwise to dis- courage private initiative in providing educational facilities, particularly for higher education. The private sector should be involved and indeed en- couraged to augment the much needed resources in the field of education, thereby making as much progress as possible in achieving the constitutional goals in this respect. It could be concluded that the private colleges are the B felt necessities of time. That does not mean one should tolerate the "so-called colleges" run in thatched huts with hardly any equipment, with no or improvised laboratories, scarce facility to learn in an unhealthy atmosphere, far from conducive to education. Such of them must be put down ruthlessly with an iron hand irrespective of who has started the c institution or who desires to set up such an institution. They are poisonous weeds in the field of education. Those who venture are financial adven- turers without morals or scrupules. Their only aim is to make money, driving a hard bargain, exploiting eagerness to acquire a professional degree which would be a passport for employment in a country rampant D with unemployment. They could be even called pirates in the high seas of education.

At this juncl ure, it is worthwhile to refer to the Resolution passed at the 48th All India Medical Conference:

E "Resolution No. 2

Racketeering in Medical Education:

Whereas, a number of institutions have sprung up in the country that style themselves as Medical College; and F Whernas, such institutions charge large sums as capita- tion fees, a practice which the Indian Medical Association and the Medical Council of India have opposed a number of times; and

G Whereas, such institutions neither have suitable build- ings, nor proper equipment and even lack adequate staff of requisite qualifications and further it has come to light that these institutions swindle the public by taking large sums of money from students although these institutions H have not been recognised by the authorities;

p. 743 Copy page pinpoint

This 48th All India Medical Conference urges upon A the Governments to take stringent measures against per- ~ sonsfmstitutions who/which run such medical colleges and close them and recommend to the Medical Council of India not to grant them recognition.

(48th Conference Dec. 29, 31, 1972 at Ahmedaad)" B

However, a word of caution requires to be uttered. Not all the private :J... instutions belong to this category. There are institutions which have at- tained great reputation by devotion and by nurturing high educational standards. They surpass the colleges run by the Government in many respects. They require encouragement. From this point of view regulatory c _,_ controls have to be continued and strengthened. The commercialisation of education, the racketeering must be prevented. The State should strive its utmost in this direction.

'r Regulatory measures must so ensure that private educational institu- D lions maintain minimum standards and facilities. Admission within all groups and categories should be based only on merit. There may be reservation of seats in favour of the weaker sections of the >ociety and other groups which deserve special treatment. The norms for admission should be pre-determined, objective and transparent. E ,.i. Before the scheme, a question may arise whether a mandamus could issue for the enforcement of scheme if proposed by the Court. For this, we may look up at Suman Gupta and Ors. v. State of J & Kand Ors., [1983] 3 SCR 985 at page 991: F '"The Medical Council of India is directed to forniulate a proper constitutional basis for determining the selection ~ of candidates for nomination to seats in Medical Colleges outside the State in the light of the observations contained in this judgment. Until a policy is so formulated and concrete criteria are embodied in the procedure selected, G the nominations shall be made by selecting candidates strictly on the 'basis of merit, the candidates nominated _>... being those, in order of merit, immediately below the candidates selected for admission to the Medical Colleges of the home State.' H

p. 744 Copy page pinpoint

A It cannot be gainsaid that profiteering is an evil. If a public utility like electricity could b.e controlled, certainly, the professional colleges also -/ require to be re!(lllated.

In Kera/a State Electricity Board v. S.N. Govinda Prabhu, [1986) 3 SCR it is held: B "It is a public utility monopoly undertaking which may not be driven by pure profit notive not that profit is to be shunned hut that service and not profit should inform its actions. It is not the function of the Board to so manage c its affairs as to earn the maximum profit even as a private corporate body may be inspired to earn huge profits with a view to paying large dividends to its shareholders. But it does not follow that the Board may not and need not - earn profits for the purpose of performing its duties and discharghg its obligations under the statute. It stands to D common sense that the Board must manage its affairs on sound economic principles. Having ventured into the field of Commerce, no public service urdertaking can afford to say it will ignore business principles which are as essential to public service undertakings as to Commercial ventures." E At pages 650-51 it is held:

"The Board may not allow its character as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house. Neither F the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion that the Board has shed its public utility character. When that happens the ·~. Court may strike down the re\i,ion of tariffs as plainly a!bitr~ry."

G ln Oil and Natural Gas Commission andAnr v.Association of Natural Gas Consuming Industries of Gujarat and otllers, [1990) Supp. SCC 397 at 399 it is held:

"The notion that the 'cost plus' basis can be the only criterion for fixation of prices in the case of public

UNNI KRISHNAN v. STAIB OF AP. [MOHAN, J.) 745

enterprises stems basically from the concept that such enterprises should function either on a no profit no loss basis or on a minimum profit basis. This is not a correct approach. In the case of vital commodities or services, while private concerns must be allowed a minimal return on capital invested, public undertakings or utilities may even have to run at losses, if need be and even a minimal return may not be assured. In the case of less vital, but still basic commodities, they may be required to catr,r to needs with a minimal profit margin for themselves. But given a favourable area of operation, "commercial profits" need not be either anathema or forbidden fruit even to c public sector enterprises."

In Hindustan Zinc Ltd v. A.P.S.E.B., [1991] 3 SCC 299 at pages 306-307 it is held:

D 'This Court expressly rejected the submission which had found favour with the Kerala High Court that in the absence of a specification by the State Government, the position would be as it was before the 1978 amendment, that is, the Board was to carry on its affairs and adjust the tariffs in such a manner as not to incur a loss and no more. E While rejecting the submission, this Court held as under: (SCC pp. 213-14, para 10)

"We are of the view that the failure of the government to specify the surplus which may be generated by the F ··Board cannot prevent the Board from generating a surplus after meeting the expenses required to be met. Perhaps, the quantum of surplus may not exceed what a prudent public service undertaking may be expected to generate without sacrificing the interests it is expected to serve and without being obsessed by the pure profit motive of the G private entrepreneur. The Board may not allow its char- acter as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house. Neither the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion

p. 746 Copy page pinpoint

A that the Board has shed its public utility character. When that happens the Court may strike down the revision of tariffs as plainly arbiirary. But not until then. Not, merely because a surplus has been generated, a surplus which can by no means be said to be extravagant. The court will then refrain from touching the tariffs. After all, as has been B said by this Court often enough 'price fixation' is neither the forte nor the function of the Court."

It cannot be conteded that education must be available free and it ·~ must be run on a charitable basis. In this connection, we may usefully quote C P.R. Ganapathy lyer's The Law relating to Hindu and Mahomedan En- dowments, as to the concept of charity which is elastic. At page 46 of Chap. III it is stated:

"A charitable establishment is a choultry, college, dis- pensary etc., while a religious establishment is a mosque, temple etc. For these endowments may be made.'

At page 47 it is stated:

'In English law the word 'charity'' has both a popular and a technical meaning. The popular meaning of the word does not coincide with its legal or technical meaning. Even according to the popular or ordinary meaning the word is used in more senses than one. In a narrow and limited sense the ordinary acceptation of the word is "relief of physical necessity or want". (Per Lord Shand in F Baird's Trustees v. Lord Advocate, 15 Sess. Cas. 4th Series 682) In a somewhat more extended sense, the ordinary and popular acceptation of the word is "relief of poverty'' and 'a charitable act or purpose" consists in relieving poverty or want. (Ibid per Lord President (Inglis). In a still more extended sense and in its popular and ordinary G acceptation "charity" comprehends all benefits, whether religious, intellectual or physical bestowed upon persons who, by reason of their poverty, are unable to obtain such benefits for the~elves without assistance. (Per Lord Wat- som in Commissioners for special purposes of Income-tax H v. Pemse/ (1891) A.C. 531 (557).'

p. 747 Copy page pinpoint

At page 49 it is stated: A

~ "Charity in its legal sense as understood in the English Law comprises four principal divisions:- (1) trusts for the relief of poverty; (2) trusts for the advancement of educa- tion; (3) trusts for advancement of religion; ( 4) and trusts for other purposes beneficial to the community not falling B under any of the preceding heads."

In B.K. Mukherjee on the The Hindu Law of Religious and Charitable Trust at page 58 para 2. 7A it is stated:

'2.7A. Education:- The second category on charitable c trusts in Lord McNaghten's classification comprises trusts for education. These trusts need not be meant exclusively for the poor. Of course, there must be a public purpose, something tending to the benefit of the community. There must be general public benefit through the advancement or furtherance of some educational purpose. But if this important condition is satisfied, the scope of "education" would appear to be fairly wide in several respects."

In St. Stephen's College v. University of Delhi, [1992) 1 SCC 558 at page 609-10 it is held: ~ "The educational institutions are not business houses. They do not generate wealth. They cannot survive without public funds or private aid. It is said there is also restraint on collection· of students fees. With the restraint on col- F lection of fees, the minorities cannot be saddled with the burden of maintaining educational institutions without ~· grant-in-aid. They do not have economic advantage over others. It is not possible to have educational institutions without State aid. This was also the view expressed by Das, G CJ., in Kera/a Education Bill case, (1970) 2 SCC 417: [1971) 1 SCR 734. The minorities cannot, therefore, be asked to maintaill educational institutions on their own." >-....

The time is not yet ripe to hold that education must be made available on a charitable basis. It is true whenever trusts are made for H

p. 748 Copy page pinpoint

A advancement o~ education it was held to be a charitable purpose. In Special Commissioners of Income-tax v. Pemsel, 3 Tax Cases 53 at 96 the dictum >./ of Lord Macnagbten is as follows:

"No doubt, the popular meaning of the words "charity" and "charitable" does not coincide with their legal mean- B ing, and no doubt it is easy enough to collect from the books a few decisions which seem to push the doctrine of the Court to the extreme, and to present a contrast be- ....,, tween the two meanings in an aspect almost ludicrous. But still it is difficult to fix the point of divergence, and no one c has yet succeeded in defining the popular meaning of the word "charity". The learned counsel for the Crown did not attempt the task. Even the paraphrase of the Master of the Rolls is not quite satisfactory .......... "Charity" . in its ' legal sense comprises four principal divisions: trusts for the relief of poverty, trusts for the advancement of educa- ~ ' D tion, trusts for the advancement of religion, and trusts for other purposes beneficial to the community not falling under any of the preceding heads. Thr, trusts last referred •" to are not the less charitable in the eye of the law because incidentally they benefit the rich as well as the poor, as indeed every charity that deserves the name must. do, ~ either directly or indirectly." >--.. The next case to which reference can be made is The King v. The t Commissioner for Special Purposes of the Income-tax, 5 T&X cases 408. The question arose whether the University College of North Wales could be held as established for charitable purposes. Fletcher Moulton, L.J. relying on Pemsel's case (supra) held that a trust for advancement of education~ was charitable.

In TheAbbey Malvern Wells, Ltd v. Minister of Town and Co11ntry G Planning, 1951 (2) All England Law Reports 154 at pages 160-161 it was held:

"In the present case, it seems to me that one is entitled, and indeed, bound, to look at the constitutional of the company to see who, in fact, is in control. I find that, by H Art. 3 of the company's articles, the company i~ controlled

p. 749 Copy page pinpoint

entirely by a body called a council, a body of persons, and, A by Art. 64 that body of persons must be the trustees of the trust deed. Therefore, while the company, theoretical- ly, has the power to apply its property and assets for the purpose of making profits and devoting the resulting profit to the distribution of divident among the members, I find that the persons who regulate the operations of the com· B pany are not free persons unrestricted in their operations, but are the trustees of the trust deed, and, under the terms of the trust deed, they may use the property of the com- pany only in a particular way and must not make us of the assets of the company for the purpose of a profit-making c concern. I find that they are strictly bound by the trusts of the trust deed, and that those trusts are charitable trusts. It seems to me, therefore, that, while nominally the . property of the company is held under the provisions of the memorandum and articles of association, in actual fact D the property of the company is regulated by the terms of the memorandum and articles of association plus the provisions of the trust deed, and, therefore, the company is restricted in fact in application of its property and assets and may apply them only for the charitable purposes which are mentioned in the trust deed." E This may be so, for the purpose of defining charity, but; in a country like ours it is impossible to hold tht •mch theories could be advanced or implemented.

N.P.V. Petitions and Appeals disposed of.