The Supreme Court supports the decision to revoke the NOC for starting an Ayurvedic medical hospital, stating that no unchallengeable right can be claimed from an illegal grant.
The Supreme Court rejected an appeal from Jagdish Chand Memorial Trust regarding the cancellation of the No Objection Certificate (NOC) needed to start an Ayurvedic Medical College and Hospital. The court stated that no permanent right can be claimed based on the grant, which was deemed illegal. The appeal contested the NOC’s withdrawal for a private Ayurvedic Medical College and Hospital. Justices Sudhanshu Dhulia and K. Vinod Chandran noted that the argument of promissory estoppel did not apply, as the appellant could not show that they had organized their affairs based on the grant in a way that would lead to unfairness after its withdrawal.
The Trust, founded in 2012 to create educational and research institutions in the medical field, submitted a proposal that was reviewed by the Department of Ayurveda. They were required to provide a project report following the guidelines of the Central Council of Indian Medicine (CCIM), Government of India. A site inspection was carried out by a departmental committee, which allegedly led to the issuance of the NOC. The Trust then sought and received affiliation from Himachal Pradesh University, but the NOC was withdrawn in 2017.
The appellants argued that, based on the NOC from the Department, the appellant Trust established a 60-bed hospital, and for this reason, the High Court should not have upheld the withdrawal. They also noted that the State would gain from having an Ayurvedic College and Hospital, and the Government’s opposite decision seemed arbitrary. The State’s Standing Counsel argued that the NOC was issued without following the proper Rules of Business, which required a policy decision to be presented to the Council of Ministers. The Court was informed that the Chief Minister had initially brought the issue to the Council, but it was later withdrawn by the relevant Minister, who then ordered the Department to issue the NOC.
The Bench acknowledged that the Chief Minister had presented the issue to the Cabinet, then withdrawn it, and later, at the request of the Minister for Ayurveda, brought it back to the Cabinet. While this was ongoing, the Minister took back the files and decided that there was no need to present the NOC matter to the Council of Ministers, instructing the Department to issue the NOC since there were no financial implications involved.
Rule 14 of the Government’s Rules of Business states that all matters in the Schedule must be presented to the Council. The Chief Minister can also bring other issues to the Council as needed. According to Rule 16, the Chief Minister can only decide on matters in the Schedule through a circulation among the Council of Ministers if everyone agrees. If there is disagreement or if the Chief Minister believes a discussion is necessary, the issue must be brought before the Council of Ministers.
The Bench supported the High Court’s opinion that an NOC could not be issued without the Council of Ministers’ agreement. The Chief Minister had already presented the matter to the Council when the NOC was issued by the Minister for Ayurveda. The appellant received a loan of Rs. 5 Cr. from Baghat Urban Cooperative Bank Ltd. just 11 days before the grant was revoked. The Bench did not accept the appellant’s claim that the Hospital was built in less than a month based on the grant. The Bench stated that no absolute right can be claimed from the grant, which was clearly illegal, and there was no commitment from the State or Government due to the invalid order from the Department. The Apex Court noted that any opportunity given by the Department would have been pointless since it could not change the Council of Ministers’ decision. The Bench found no reason to challenge the High Court’s ruling and dismissed the Appeal.
Cause Title: Jagdish Chand Memorial Trust v. State of Himachal Pradesh (Neutral Citation: 2025 INSC 232)
