Kiran Raj

The Calcutta High Court Single Bench of Justice Subhendu Samanta  upheld the termination of a Memorandum of Understanding (MOU) between an educational institution and a collaborating partner, ruling that the decision was legally sound and in accordance with institutional prerogatives. The dispute, cantered on allegations regarding academic standards and contractual obligations, was examined by the court, which ultimately found no illegality or impropriety in the termination process.

The case originated from an agreement between a private educational entity, Avlon Shiksha Niketan, and Sarojini Naidu College for Women for the operation of a self-financing Bachelor of Business Administration (BBA) course in Tourism, Aviation, and Hospitality. The program was affiliated with the West Bengal State University and commenced in the academic session 2019-20. The MOU was executed on February 6, 2019, outlining the terms of the collaboration and specifying operational responsibilities.

During the tenure of the agreement, students were enrolled in the program, and academic activities continued in collaboration with Avlon Shiksha Niketan. However, concerns regarding compliance with academic standards emerged. Reports from oversight bodies raised multiple deficiencies in the conduct of the course, particularly stating issues such as non-provision of study materials, failure to employ qualified faculty as per University Grants Commission (UGC) norms, and non-compliance with internship obligations under the syllabus.

Citing these concerns, the Governing Body of the college passed a resolution on May 13, 2022, recommending the termination of the MOU. Subsequently, on May 15, 2022, the college administration issued a formal termination notice citing "unavoidable circumstances." The decision was contested by Avlon Shiksha Niketan, which claimed that the termination was arbitrary and sought judicial intervention through a writ petition.

In an earlier proceeding, WPA 10275 of 2022, a Co-ordinate Bench had directed the State to review the matter and provide a reasoned decision. In compliance with this directive, the Director of Public Instructions reviewed the submissions of both parties and upheld the termination, stating that the college was within its rights to discontinue the agreement in light of academic concerns and regulatory requirements.

Avlon Shiksha Niketan challenged this administrative ruling in the present writ petition, asserting that the termination was conducted without due process. The petitioner argued that they were not given prior notice, depriving them of the opportunity to address the concerns raised by the college. They further contended that the decision was motivated by financial disputes and was a retaliatory response to their claim for a revenue share exceeding fifty lakh rupees.

The college authority countered these claims by reiterating that the termination was based on documented deficiencies in course management. They stated that oversight committees had found multiple lapses, including the engagement of underqualified faculty, inadequate academic resources, and substandard internship arrangements. Additionally, complaints from students regarding inadequate supervision and exploitative internship placements were also noted in the reports.

The court examined whether the termination complied with procedural and substantive legal standards. It was recorded that "the impugned order disclosed that the parties were given sufficient opportunity of being heard and they have placed their documents and written notes of arguments." The judgment stated that no procedural lapses were found in the administrative review process conducted by the Director of Public Instructions.

The petitioner’s claim that the review committee reports were not disclosed was examined in detail. The court found no record of such a grievance being raised during the administrative hearing. Moreover, it was noted that one of the expert evaluators had advised the college authority to seek an explanation from the petitioner, indicating that Avlon Shiksha Niketan was aware of the concerns raised by the oversight committees.

Addressing the legal precedent set in ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., the court distinguished the present case by stating that the dispute involved factual determinations rather than pure contractual interpretation. It was observed that "the memorandum of understanding was terminated in terms of the reports of both committees," which had documented substantial non-compliance with academic regulations. Unlike cases where legal interpretation was central to the dispute, the present case involved fact-based assessments requiring administrative expertise.

Additionally, the court examined whether the principle of natural justice had been violated. It was noted that "the petitioner was given sufficient opportunity to present its case before the administrative authority." The court found that the decision-making process had adhered to due process and that the termination was based on substantive findings rather than arbitrary action.

The court further examined the contract’s provisions regarding renewal and termination. It was found that "the agreement explicitly provided that continuation beyond the initial term was subject to performance review and institutional approval." The college had conducted a performance review in accordance with the MOU, and its decision to discontinue the agreement was within the stipulated contractual framework.

The court held that the termination was legally justified and did not warrant judicial interference. It was held that "the college authority in terms of the said memorandum of understanding has reviewed the performance of the petitioner No. 1, which was non-satisfactory." Consequently, the petition challenging the termination was dismissed.

Case Title: Avlon Shiksha Niketan & Ors. vs. State of West Bengal & Ors.

Case Number: WPA 27376 of 2022

Bench: Justice Subhendu Samanta

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