Khalsa University and Another vs. The State of Punjab and Another
Background
The Khalsa College Charitable Society, Amritsar (in existence since 1892), obtained government approval to set up a self-financing university under Punjab's 2010 private universities policy, leading to the Punjab Vidhan Sabha passing the Khalsa University Act, 2016. The university began functioning with 215 students across 26 programmes. Shortly after, however, the State Government promulgated an Ordinance and then an Act (the Khalsa University (Repeal) Act, 2017) repealing the very law that had created the university. The university challenged the repeal in the Punjab and Haryana High Court, which dismissed its writ petition; the university then appealed to the Supreme Court.
Decision Breakdown
The Supreme Court allowed the appeal, quashed the High Court's judgment, and struck down the Khalsa University (Repeal) Act, 2017 as unconstitutional. The Court examined the Statement of Objects and Reasons behind the repeal (the stated concern that the new university would overshadow or damage the historic, heritage Khalsa College campus) and found this justification factually baseless: maps and undertakings on record showed the century-old heritage college building was untouched, while only newer, unrelated structures had been converted into university departments. Since the professed reason for repealing the law did not correspond to reality, the Court held the repeal to be manifestly arbitrary and violative of Article 14 of the Constitution (the right to equality, which also bars arbitrary state action). It restored the Khalsa University Act, 2016 to force, with the status quo as it existed just before the repeal.
Lesson Learnt
A legislature cannot repeal or withdraw a benefit/institution it earlier created on a justification that turns out to be factually false or manufactured. Courts will strike down such action as "manifestly arbitrary" and unconstitutional under Article 14, even when the action takes the form of a full-fledged statute rather than an executive order.