Grant-in-aid cannot be stopped under Rule 16(A) on non-statutory grounds without proper hearing.

The petitioners challenged the order dated 26.05.2025 passed by the competent authority, seeking its quashing under Article 226 of the Constitution.

Counsel for the petitioners submitted that the controversy had already been decided in Munnalal and Others v. State of M.P. and Others, W.P. No. 5963 of 2026, decided on 16.09.2026, and that the petitioners were entitled to identical relief.

The State was unable to distinguish the facts of the present case from Munnalal.

In Munnalal, the impugned order had stopped grant-in-aid to a school under Rule 16(A) of the Grant-in-Aid Rules, 1985, principally on the ground that other primary schools existed nearby, without establishing a rule violation warranting such action and without affording a proper opportunity of hearing.

Whether the order dated 26.05.2025 stopping grant-in-aid was legally sustainable under Rule 16(A) of the Grant-in-Aid Rules, 1985.

Whether the petitioners were entitled to the same relief granted in Munnalal and Others v. State of M.P. and Others, where the materially identical controversy had already been decided.

Whether the petitioners were entitled to payment of salary for the period during which they had actually worked.

Article 226 of the Constitution empowers the High Court to quash administrative orders that are illegal, jurisdictionally defective, or passed in breach of natural justice.

Rule 16(A) of the Grant-in-Aid Rules, 1985 permits stoppage, reduction, or recovery of grant-in-aid where an aided institution fails to satisfy the competent authority regarding compliance with the specified conditions or violates the Rules, but only after notice and an opportunity to rectify the alleged irregularity.

An administrative order stopping grant-in-aid cannot be sustained on a ground that does not constitute a violation of the applicable Rules, particularly where the affected institution has not been given a meaningful opportunity to respond.

The principle of mutatis mutandis application permits a prior decision governing an indistinguishable controversy to be applied to the present case.

The Court accepted the petitioners’ submission that the controversy was governed by its decision in Munnalal. The State could not identify any material factual or legal distinction between the two cases.

In Munnalal, the Court had found that the order stopping grant-in-aid was based on the existence of other schools in the vicinity, rather than on a proved violation of the Grant-in-Aid Rules, 1985; it had also held that the statutory mechanism under Rule 16(A), including proper notice and an opportunity to rectify the alleged irregularity, had not been validly followed.

Applying that reasoning, the Court directed that the Munnalal order would apply mutatis mutandis to the present petition.

It additionally protected the petitioners’ entitlement to salary for any period during which they had actually worked.

Accordingly, the impugned order dated 26.05.2025 stood governed by the directions in Munnalal, under which it was quashed and the matter remitted to the Collector for issuance of a proper notice, consideration of the institution’s response and documents, and a fresh order after affording due opportunity of hearing.

The respondents were further directed to pay salary to the petitioners for the period during which they had actually worked.

Any pending interlocutory application was also disposed of.