Supreme Court Allows Two-Year Temporary Relaxation Of AICTE Land Requirements To Protect Students' Careers

A bench of Justice B.R. Gavai and Justice Augustine George Masih heard appeals filed by M/s A.J. Shetty & Co. Pvt. Ltd. against a Division Bench judgment of the Karnataka High Court dated 11 September 2024 which had affirmed the trial court decree directing surrender of possession of leased hotel premises and awarding mesne profits. The appeals also raised the collateral issue of whether national regulatory requirements should inhibit the appellant from temporarily relocating its Hotel Management Institute so that enrolled students could complete their courses.

The Court allowed leave, recorded that the parties reached an amicable settlement during Court-referred mediation, took the settlement on record and exercised its extraordinary jurisdiction to fashion interim directions. The Court, while disposing the appeals in terms of the settlement, directed that the All India Council for Technical Education (AICTE) and Mangalore University would not insist, for a period of two years, on compliance with the requirement that the institute be run only from land owned by it or on a lease of at least 30 years, provided the temporary premises met other AICTE infrastructure norms. The Court also directed the appellant to complete the full-compliant campus within two years and to shift thereon before 30 April 2027; it treated the settlement as an undertaking and fixed mediator’s fees to be shared equally. The Court, in its reasoning, observed: "We find that this is a fit case wherein this court should exercise its extraordinary jurisdiction under Article 142 of the Constitution of India to meet the ends of justice. If we fail to exercise the said power, the career of about 250 students would be jeopardized. In that view of the matter, we are inclined to issue the following directions:"

Background

The dispute arose from long-standing lease arrangements in respect of a suit property at Attavara, Mangaluru. A permanent lease in 1912 and a subsequent 50‑year lease dated 23 September 1961 enabled construction and operation of Hotel Motimahal. The hotel’s leasehold and business passed to the appellant by sale deed in 1984. In October 2009 the lessor refused to renew the lease; proceedings for possession and mesne profits followed. Respondent No.1 filed O.S. No. 144 of 2011 seeking surrender of possession and mesne profits; the appellant filed a suit for specific performance seeking renewal under O.S. No. 165 of 2012 (later O.S. No. 162 of 2014). The Trial Court, on 15 February 2018, directed delivery of vacant possession to the lessor and awarded mesne profits, and the High Court on 11 September 2024 dismissed the appellant’s appeals and affirmed the decree.

On 11 November 2024 the Supreme Court referred the matter for mediation to a former judge. The parties executed a settlement memorandum dated 31 January 2025 in which the appellant accepted the trial court and High Court rejection of its specific performance claim and agreed to vacate by 30 April 2025 and to hand over the premises "on ‘as is where is basis’." The settlement modified the mesne profits decree: "the first party shall now pay the mesne profits calculated at the rate of Rs.23,000/ per day from 03.09.2011 onwards till the date of vacating from the suit schedule premises. The said amount shall not attract interest." The settlement provided for adjustment of deposited sums, payment of the balance by 30 April 2026 (with 18% interest thereafter), and undertakings treated as binding on the parties.

Confronted with the settlement and the practical difficulty that the appellant’s compliant new campus would not be ready for about two years, the appellant sought Court directions to permit temporary relocation so that around 240–250 students already enrolled would not be prejudiced. AICTE’s counsel submitted that the Approval Process Handbook required ownership or a long‑term lease of not less than 30 years for continuity of approval, and that no formal proposal for relocation had been received. Having recorded the settlement and the factual matrix, the Court invoked Article 142 to grant a limited, conditional relaxation for two years, subject to conformity with other AICTE requirements, completion of the full campus within two years and the appellant’s compliance with settlement obligations. The appeals were disposed of in those terms; the Court directed payment and adjustment of mediator’s fees and recorded appreciation for the mediator’s role.

Case No.: CIVIL APPEAL NO. ______________ OF 2025 (Arising out of SLP (C) NO. 26214 OF 2024) and CIVIL APPEAL NO. ______________ OF 2025 (Arising out of SLP (C) NO. 26316 OF 2024) Case Title: M/s A.J. Shetty & Co. Pvt. Ltd. v. St. Antony’s Charity Institutes & Others Appearances: For the Petitioner(s): Shri P. Vishwanatha Shetty, Senior Counsel For the Respondent(s): Shri Harish Pandey, Counsel for AICTE (appearance recorded); other party counsels as per record.