Statutory approval and legitimate expectation bar wholesale cancellation of approved school applications without authority or fair hearing

A statutory approval granted at an intermediate stage under Rule 2A(5) was treated as more than a tentative administrative step: it created a legitimate expectation and enforceable right to further consideration under Rule 9 and Rule 11. The Government had no power under the special rules, or by relying on Section 20 of the Kerala General Clauses Act, to cancel the approved list in toto merely because of a revised policy. The cancellation was also unsustainable for breach of natural justice and reliance on extraneous considerations, including financial burden and general policy objections.

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Issues: (i) Whether approval granted to the respondents under Rule 2A(5) conferred a legally enforceable right to have their applications carried forward for consideration under Rule 9 and Rule 11. (ii) Whether the Government could, under the Act, the Rules, or Section 20 of the Kerala General Clauses Act, cancel in toto the approval already granted under Rule 2A(5) on a revised policy basis. (iii) Whether the cancellation order was vitiated by breach of natural justice and by reliance on irrelevant considerations.

Issue (i): Whether approval granted to the respondents under Rule 2A(5) conferred a legally enforceable right to have their applications carried forward for consideration under Rule 9 and Rule 11.

Analysis: The statutory scheme provided a staged process. The final list of selected localities under Rule 2(4) had binding effect, and Rule 2A(1) required applications to be invited only for those areas. Once an applicant was approved under Rule 2A(5), the application did not become a completed licence to open a school, but it did move the matter to the next statutory stage. The approval created a legitimate expectation and a justiciable entitlement to have the application considered further under Rule 9 and disposed of under Rule 11. The applicant was therefore not a mere stranger with no legal interest.

Conclusion: The respondents acquired a right to continuation of the statutory process and to further consideration under Rule 9 and Rule 11. This issue is decided in favour of the respondents.

Issue (ii): Whether the Government could, under the Act, the Rules, or Section 20 of the Kerala General Clauses Act, cancel in toto the approval already granted under Rule 2A(5) on a revised policy basis.

Analysis: The Rules did not provide any power to withdraw an approval already granted under Rule 2A(5) merely because of a change in policy. Section 20 of the Kerala General Clauses Act could not be applied in a manner inconsistent with the subject matter and scheme of the special statute. The approval under Rule 2A(5) was not an empty or tentative administrative act, but part of a structured statutory process which the Government itself was bound to carry forward. A wholesale cancellation of the approved list was therefore beyond power.

Conclusion: The Government had no authority to cancel the approval in toto on the basis of a revised policy. This issue is decided in favour of the respondents.

Issue (iii): Whether the cancellation order was vitiated by breach of natural justice and by reliance on irrelevant considerations.

Analysis: The cancellation adversely affected the respondents' statutory position and was made without giving them an opportunity of hearing. The reasons recorded in support of cancellation, including projected financial burden and general policy objections, were not germane to setting aside approvals already granted under the statutory scheme. Those considerations were extraneous to the question whether the approved applications should proceed to the next stage of scrutiny. The order was thus tainted both by procedural unfairness and by irrelevant factors.

Conclusion: The cancellation order was vitiated by breach of natural justice and by extraneous considerations. This issue is decided in favour of the respondents.

Final Conclusion: The approved applicants were entitled to have their applications processed further in accordance with the statutory sequence, and the attempted wholesale cancellation of that approval could not stand.

Ratio Decidendi: Where a statutory scheme creates a structured sequence of approvals, an approval at an intermediate stage may confer a legitimate expectation and enforceable right to further consideration, and it cannot be withdrawn by a general policy reversal absent statutory authority and fair procedure.

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