ANDHRA PRADESH STATE COUNCIL OF HIGHER EDUCATION versus UNION OF INDIA & ORS. ETC.

Citation: [2016] 2 S.C.R. 1008 · Decided: 18-03-2016 · Supreme Court of India · Bench: V. GOPALA GOWDA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2016] 2 S.C.R. I 008 
A 
ANDHRA PRADESH STATE COUNCIL OF HIGHER 
B 
c 
D 
E 
I' 
G 
EDUCATION 
v. 
UNION OF INDIA & ORS. ETC. 
(Civil Appeal Nos.3019-3020of2016) 
MARCH 18,2016 
[V. GOPALA GOWDA AND ARUN MISHRA, JJ.] 
Andhra Pradesh Reorganisation Act, 2014: s.75 - Bifurcation 
of States - APSC 11•a.1· constituted under s.3 of APSC of Higher 
Education Act, 1988 to advise the State Government in matters 
relating to Higher Education in the State - On 2.6.201./, existing 
State of Andhra Pradesh bifurcared into lll'o separate States na111ely, 
State ofAndhra Pradesh and State of Telangana - Jn terms of s. 75, 
of the A. P Reorganisation Act, 20 I./ APSC was required to continue 
Its fimctions in respect of both the States, i.e. Andhra Pradesh and 
Telangana until an agree111ent was reached between the two 
Successor States - On 2.8.2014, the Government of Telangana 
adopted the Act of 1988 and TSC came in1U existe11ce to discharge 
the same fu11ctio11s for the State of Telanga11a as the APSC for the 
State of Andhra Pradesh - TSC sent a co111111u11ication to the Banks 
staling that TSC is the successor organization to APSC as per the 
201./ Act a11d requested the Bank to freeze the operation of accounts 
ofAPSC - Challenge against - Held: Whe11 an existing Stale is 
bifurcated to for111 two ne11• States, there must be an equitable 
bifi1rcation of the assets and liabilities of the statutory bodies a111ong 
the two successor States as well, lo ensure ll'elfare of the public at 
large residing within these territories - In the instant case. the Stale 
of Telangana has clai111ed 011'11ership over the entire fimds and assets 
of the (erst1l'hi/r·1 APSC - This could surely 11ot have been the 
i11te11tion of the legislature ll'hile e11acti11g the Reorganisation Act, 
2014 - The action of the Banks of freezing the bank accounts of 
APSC is ll'holly 1111te11able - Reorganisation of State - Constitution 
of India, 1950 - Article 3. 
Inte11Jretatio11 ()f statutes: Legislarions like Reorganisation Act, 
2014 - Interpretation of 
Allowing the appeals filed by the State of Andhra Pradesh 
H 
and APSC and disposing of the pending applications, the Court 
1008 
ANDHRA PRADESH STATE COUNCIL OF HIGHER 
1009 
EDUCATION v. UNION OF INDIA & ORS. ETC. 
HELD: 1. The Constitution of India envisages a federal 
feature., which has been held to be a part of the basic structure of 
the Constitution of India. Article 3 of the Constitution of India 
confers the power of formation of new states on the Parliament. 
The issue of bifurcation of States is both sensitive as well as tricky. 
Adequate care has to be taken by the legislature while drafting 
legislations such as the Reorganisation Act, 2014 to ensure a 
smooth division of all assets, liabili.ties and funds between the 
states to make sure .that the interests of the citizens Jiv.ing in 
these states are protected adequatc,ly. Therefore, care must be 
taken to ens11rc that no discrimination is done against either of 
the successor state. Thus while interpreting statutes of such 
nature, the courts must ensure that all parts of the statute arc 
given effect to. [Paras 20, 21, 221 [1022-H; 1023-F; 1024-A-BI 
S.R. Bommai & Ors. v. Union of India 1994 (2) SCR 
644 : (1994) 3 SCC 1; Raja Ram Pal" l/011 'b/e Speaker. 
Lok Sabha 2007 (1) SCR 317 : (2007) 3 SCC 184; 
· HH Maharajadhiraja Madhav Rao Jivaji Rao Scindia 
Bahadur of Gwalior & Ors. '' Union of India 1971 (3) 
SCR 9 : (1971) 1 SCC 85; Prakash Kumar@ Prakash 
Bhutto v. State of Gujarat 2005 (I) SCR 408 : (2005) 
2 sec 409 - followed. 
2. It is natural that when an existing State if bifurcated to 
form two new States, there must be an equitable bifurcation of 
the assets and liabilities of the statutory bodies among the two 
successor Stat.es as well, to ensure welfare of the public at large 
residing within these territories. In the instant case, the State of 
Telangana has claimed owncrshi11 over the entire funds and assets 
of the (erstwhile) APSC. This could surely not have been the 
intention of the legislature while enacting the Reorganisation Act, 
2014. The action of the Banks of freezing the bank accounts of 
APSC is wholly untenable in law, which must be set aside. By no 
stretch of imagination can it be assumed that the complete 
takeover of assets of the erstwhile APSC by TSC, on the ground 
that the State institution happens to be in Hyderabad, which is 
now a part of Tclangana, was what the legislature had in 
contemplation w
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