Grant withdrawal and recognition cancellation require a genuine inquiry and a meaningful opportunity to be heard.

Petitioner No. 1, a public trust, manages petitioner No. 2, a composite pre-university college admitted to grant-in-aid in 2012.

The State issued show-cause notices alleging violations of Sections 59, 60 and 107 of the Karnataka Education Act, 1983, in connection with the lease of part of the trust’s property.

The college replied and sought an enquiry and an opportunity to produce supporting material.

In July 2026, the State withdrew the grant-in-aid, cancelled recognition and approval, and directed the transfer of grant-in-aid staff, stating that the replies were unsatisfactory.

The college challenged that order, principally on the ground that the statutory enquiries required by Sections 39 and 53 had not been conducted.

Whether the State could withdraw the college’s grant-in-aid and recognition under Sections 53 and 39 of the Act without conducting the enquiries contemplated by those provisions and affording the college a proper opportunity to present its case.

Whether the alleged property transfer and lease violations under Sections 59, 60 and 107 justified the impugned action on the record before the Court.

Section 39(1) of the Karnataka Education Act, 1983 permits withdrawal of recognition or other action for specified defaults only after the institution has an opportunity to make a representation; withdrawal of recognition is a drastic measure, and that opportunity includes a personal hearing.

Section 53 empowers the State, after such enquiry as it deems fit and after giving the institution an opportunity to make a representation, to withhold, reduce or withdraw grant-in-aid; the enquiry must be meaningful and allow the institution to place relevant material.

These principles were drawn from Sri Srinivas Education Society (R) v. State of Karnataka, W.A. Nos. 24/2020 c/w 21/2020, decided 27 January 2020, and Sri Vinayaka Vidhya Samsthe v. State of Karnataka, W.P. No. 45749/2017, decided 1 March 2018.

Sections 60 and 107 regulate transfers of educational property in their respective circumstances; Section 107(4) provides that a transaction made contrary to Section 107(1) is void.

The Court found that the impugned order merely stated that the college’s replies were unsatisfactory; it did not show that the State had conducted the enquiries required by Sections 39 and 53 or allowed the college to substantiate its replies with documents.

Given the serious consequences of withdrawing recognition and grant-in-aid, issuing show-cause notices and considering written replies alone did not satisfy the statutory process.

Although the State argued that the property was shown as an institutional asset and could not be leased without permission, the Court did not finally determine the disputed property issues.

It held that the order could not stand in the absence of the required statutory enquiry and remitted the matter for reconsideration in accordance with law.

The matter was remanded to the competent authority to conduct the enquiries required under Sections 39 and 53, consider the college’s earlier reply and any further reply and documents, and pass a lawful order within three months.

Because the teachers were still working but were not being paid, the authorities were directed to release grant-in-aid immediately to the concerned teachers’ accounts.