TaxTMI 
TaxTMI 
2016 (5) TMI 1366
X X X X Extracts X X X X
X X X X Extracts X X X X
....(for short, 'Rules, 2008') and the Madhya Pradesh Private Medical and Dental Post Graduate Courses Entrance Examination Rules, 2009 (for short, 'Rules, 2009') which have been framed by the State Government in exercise of the power conferred upon it vide Section 12 of the Act, 2007. The aforesaid Act and Rules regulate primarily the admission of students in post graduate courses in private professional educational institutions and the provisions are also made for fixation of fee. In addition, the said Act and Rules also contain provisions for reservation of seats. All the appellants are private medical and dental colleges which are unaided, i.e. they are not receiving any Government aid and are self financing institutions running from their own funds. It is evident from the reading of the impugned judgment that challenge was laid by the appellants to those provisions of the Act and Rules on four grounds. The same are as under: (i) the challenge to the provisions relating to admission; (ii) the challenge to the provisions relating to fixation of fee; (iii) the challenge to the provisions for reservation; and (iv) the challenge to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ivate unaided educational institutions and that the impugned provisions are saved by Article 19(6) of the Constitution as they amount to 'reasonable restrictions' imposed on the right of admission and fixation of fee, which otherwise vests with the appellants. Before we advert to the arguments of the appellants advanced before us in detail, it would be apposite to give the gist of the provisions of the Act, 2007 as well as Rules, 2008 and Rules, 2009 and also the manner in which the High Court has dealt with the issues at hand. The Act, 2007: The Preamble of the Act mentions that it is to provide for regulation of admission and fixation of fee in private professional educational institutions in the State of Madhya Pradesh and to provide for reservation of seats to persons belonging to the Scheduled Castes, Scheduled Tribes and Other Backward Classes in professional educational institutions. Thus, insofar as the Preamble is concerned, it stipulates that the provisions are made to provide for the 'regulation' of admission and fixation of fee. Further, the Act encompasses private professional educational institutions of all disciplines and is not confined to m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ii) the cost of land and building; (iv) the available infrastructure, teaching, non-teaching staff and equipments; (v) the expenditure on administration and maintenance; (vi) a reasonable surplus required for growth and development of the professional institution; and (vii) any other relevant fact, the committee shall determine, in the manner prescribed, the fee to be charged by a private unaided professional educational institution. (2) The Committee shall give the institution an opportunity of being heard before fixing any fee: Provided that no such fee, as may be fixed by the Committee, shall amount to profiteering or commercialization of education." As pointed out above, the Government has framed Rules, 2009 creating detailed provisions for fixation of fee, to which we shall be referring to at the appropriate stage. Another provision which needs to be mentioned at this stage is Section 10. This provision provides for appeal that can be filed by a person or a professional institution aggrieved by an order of the Committee. Such an appeal can be filed within 30 days before the Appellate Authority constituted under the said provision. U....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ucted by the Government agencies, there was nothing wrong with the impugned provision. The High Court also held that in paragraphs 67 and 68 of T.M.A. Pai Foundation this Court had permitted framing of Regulations for unaided private professional educational institutions for conducting such admission tests. The contention of the educational institutions/ writ petitioners to the effect that T.M.A. Pai Foundation never allowed the State to control admissions in private unaided professional educational institutions so as to compel them to give up a share of available seats to the candidates chosen by the State has been repelled by the High Court by holding that the admission procedure for unaided professional educational institutions, both minority and non- minority, was spelled out in P.A. Inamdar in paragraphs 133 to 138 clearly holding that for achieving the objective of excellence in admission and maintenance of high standards, the State can, and rather must, in the national interest step in. This judgment, thereby, recognised the power of the State to hold such CETs in respect of private educational institutions as well. The High Court, in the process, painfully remarked that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....maintenance, as well as a reasonable surplus required for growth and development of the professional institutions. This was precisely the mandate of T.M.A. Pai Foundation. While dealing with the provisions in the Act, 2007, which pertained to reservation, the High Court discussed the dictum laid down in M.R. Balaji & Ors. v. The State of Mysore & Ors.[ (1993) Supp. 1 SCR 439] wherein the Constitution Bench of this Court, while interpreting Article 15(4) of the Constitution, held that the said provision was made to subserve the interest of the society at large by promoting advancement of weaker sections of the society and, thus, it authorises the State to make special provision for such weaker sections. The only exception was that such a special provision to be made by the State should not completely exclude and ignore the rest of the society. Further, while making such a provision, the State was supposed to approach its task objectively and in a rationale manner and it has to take reasonable and even generous steps to help the advancement of weaker elements; the requirement of the community at large must be borne in mind and a formula must be evolved which should strike a reason....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come final as the State has not filed any appeal there against. In nutshell, the decision of the High Court on the three crucial aspects is on the following premise: (i) Re.: Admissions - Reading Section 6 with Section 3(d) of the Act, 2007, which deals with the CETs, it is held that provisions prescribing a CET for the purpose of admission to private unaided institutions are constitutional and valid since the same are in consonance with the dictum of the Constitution Bench judgment of this Court in the case of T.M.A. Pai Foundation, as per the law specially laid down in paragraphs 58 and 59 of the said judgment. The High Court has pointed out the manner in which the dictum of T.M.A. Pai Foundation is explained in the Constitution Bench judgment of this Court in the case of P.A. Inamdar, and applying the same the High Court had held that there is no violation of the fundamental rights of the writ petitioners since the provisions constituted reasonable restriction as accepted by and, therefore, saved under Article 19(6) of the Constitution. Quoting paragraphs 136 and 137 of P.A. Inamdar, the High Court held that the CET prescribed under Section 6 of the Act, 2007 will en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en if CET is to be held for this purpose, it is these institutions which can join together and hold such a test. The only obligation is that the selection process needs to be fair, transparent and non-exploitative. The State can step in and oversee/supervise the process of admission, which is to be essentially taken by the educational institution to ensure that the aforesaid triple test of fair, transparent and non-exploitative selection process is followed. It is argued that the power given to the State would be only regulatory in nature and under the garb of this power the State cannot take away the right to admit the students which vests with the educational institutions. In nutshell, the submission is that holding of CET by the State under the provisions of the Act, 2007 read with the Rules framed thereunder amounts to impinging upon the fundamental right of the appellants to establish and manage professional educational institutions, which is now brought at par with the rights of minority institutions to establish such institution given to them under Article 30 of the Constitution. It was further argued that whereas the power of supervision on the part of the State may amount ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the impugned judgment with his usual fervor, panache and dexterity. Dr. Rajeev Dhawan was the other senior counsel who made his own detailed submissions with a melange of legal acumen, coupled with passion, thereby exacerbating the attack. They were joined by Mr. Raval, Mr. Ajit Kumar Sinha and Mr. Rakesh Dwivedi, learned senior counsel, who supported them in great measure. Their forceful onslaught was bravely faced and defended by Ms. Vibha Dutta Makhija, learned senior counsel who appeared for the State of Madhya Pradesh. Others, who supported her in countering the submissions of the appellants, depicting in the process the other side with terse and astute aphorisms of the stark ground realities, were Ms. Pinky Anand, learned Additional Solicitor General, Mr. Vikas Singh, learned senior advocate and Mr. C.D. Singh, learned Additional Advocate General. Whether the defence has been able to blunt the attack of the appellants and has emerged successful in its endeavor would be known at the final stages of the judgment when the arguments of both sides are suitably dealt with by this Court. The central theme of the arguments of the learned counsel for the appellants was that by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....93) 1 SCC 645] In that case, this Court considered the conditions and regulations, if any, which the State could impose in the running of private unaided/aided recognized or affiliated educational institutions conducting professional courses. The extent to which the fee could be charged by such institutions and the manner in which admissions could be granted was also considered. The Court thereafter devised a scheme of 'free seats' or the state quota seats and 'payment seats' or the management quota seats, under which a higher fee could be charged from the students taking admission against the 'payment seats' and a lesser fee would be charged from students occupying the 'free seats'. This Court held that a fee higher than that charged by the Government institutions for similar courses for the 'payment seats' can be imposed, but that such fee could not exceed the maximum limit fixed by the State. With regard to private aided recognized/affiliated educational institutions, the Court upheld the power of the Government to frame rules and regulations in matters of admission and fees, as well as in matters such a recruitment and conditions of servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to set up a reasonable fee structure; (iii) a right to appoint staff (teaching and non-teaching); and (iv) a right to take action if there is dereliction of duty on the part of any employees. and (c) the fixing of a rigid fee structure, dictating the formation and composition of a governing body, compulsory nomination of teachers and staff for appointment or nominating students for admissions would be unacceptable restrictions which would not be protected under Article 19(6) of the Constitution. Continuing the narration of judicial pronouncement, the appellants' counsel submitted that in spite of the said observations and the law laid down by this Court in T.M.A. Pai Foundation defining the scope of the right of the private institutions to run and manage the professional colleges, some States did not adhere to the same and issued Government Orders relying on the observations made by this Court in paragraph 68 of the said judgment. The said orders were challenged before this Court, which came to be decided in the case of Islamic Academy or Education & Anr. v. State of Karnataka & Ors.[(2003) 6 SCC 697], which laid down certain bro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plaining their understanding of T.M.A. Pai Foundation and P.A. Inamdar in their own way, a passionate plea was made not to allow such legislations to remain on statute books which were palpably unconstitutional. In addition to the aforesaid issues, which are founded on Article 19(1)(g) of the Constitution, additional arguments raised in this Court touch upon the power of the State to enact such a legislation inasmuch as it is argued that the matter of admission in higher educational institutional falls in Entry 66 of List I to the Seventh Schedule of the Constitution (Union List) and is not covered by Entry 25 of List III of Seventh Schedule (Concurrent List). Learned counsel appearing for the State of Madhya Pradesh put stiff resistance to the aforesaid submissions of the learned counsel for the appellants and submitted with all vehemence at her command that the impugned judgment of the High Court was without blemish, which had given due and adequate consideration to all the aforesaid submissions of the appellants which were advanced before the High Court as well and rightly negated these submissions by correctly reading the ratio of T.M.A. Pai Foundation as explained in Isl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g further in this direction, she referred to certain paragraphs of T.M.A. Pai Foundation and more focused discussion on this aspect of P.A. Inamdar and submitted that these judgments clearly empower the State to regulate the admission to ensure that the triple test ensured in T.M.A. Pai Foundation is adhered to and such regulation would encompass within its power of the State to hold CET coupled with counseling of the students to be admitted in the professional institutions. She further submitted that in P.A. Inamdar the seven Judge Bench rather exhorted the States to come out with legislations regulating admissions and fee in private unaided/aided professional or technical institutions. She pointed out that after the pronouncement of judgment in P.A. Inamdar, many States have enacted laws regulating admissions and fee in such institutions. She submitted that once such a law enacted by the Delhi State was considered by this Court in the case of Indian Medical Association v. Union of India & Ors.[(2011) 7 SCC 179], where the challenge was to the ACMS prescribing for granting admission to only wards of army personnel in colleges managed by ACMS, while upholding the constitutional val....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is placed by the appellants are T.M.A. Pai Foundation and P.A. Inamdar. In the process, judgment in the case of Islamic Academy of Education is also referred to. Interestingly, even the respondents have taken sustenance from the law laid down in the aforesaid judgments. Thus, interestingly, the stichomythia which went on resulting into intense arguments, coupled with emotional exchange between the two sides, had its foundation on the bedrock of same case law. Therefore, in carrying out our analysis, while dealing with the arguments of the counsel on both sides, we would be adverting to the aforesaid judgments, as well as some other judgments which have a bearing on the issue, to arrive at the desirable and just conclusions based upon the foundation laid down therein. We may also observe that in pondering over these arguments and submissions, we have endeavoured to undertake the task sagaciously and with keen penetrative analysis using the periscope of sound legal principles and doing a diagnostic of sorts. ANALYSIS, REASONING & CONCLUSIONS: The history of the dispute regarding Government control over the functioning of private medical colleges is quite old now but the tug of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntroductory remarks, we advert to issue-wise discussion I. Re.: Provisions relating to CET to be conducted by the State machinery under Act, 2007 as well as Rules. The issue involved, which is of seminal nature, requires three tires of judicial review. In the first instance, it is to be examined - whether the right claimed by the appellants is a fundamental right guaranteed under Article 19(1)(g) of the Constitution, and if so, what are the features it encompasses? The second stage would be to find out - whether the statute, which is impugned, imposes any restrictions on the right given to the appellants? If there are restrictions, the third poser would be - whether such restrictions are 'reasonable' and, therefore, protected under clause (6) of Article 19 of the Constitution? Insofar as the first part of the question is concerned, it does not pose any problem and the answer goes in favour of the appellants. We may recapitulate here that Article 26 of the Constitution gives freedom to every religious denomination or any section thereof by conferring certain rights which include right to establish and maintain institutions for religious and charitable purposes. Thus, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase, (1989) 4 SCC 155, correctly interpret the expression "occupation" in Article 19(1)(g)." Having recognised it as an 'occupation' and giving the status of a fundamental right, the Court delineated four specific rights which encompass right to occupation, namely, (i) a right to admit students; (ii) a right to set up a reasonable fee structure; (iii) a right to appoint staff (teaching and non-teaching); and (iv) a right to take action if there is dereliction of duty on the part of any employees. In view of the aforesaid recognition of the right to admit the students and a right to set up a reasonable fee structure treating as part of occupation which is recognised as fundamental right under Article 19(1)(g) of the Constitution, the appellants have easily crossed the initial hurdle. Here comes the second facet of this issue, viz. - what is the scope of this right of occupation? It becomes necessary to point out that while treating the managing of educational institution as an 'occupation', the Court was categorical that this activity could not be treated as 'business' or 'profession'. This right to carry on the occupation that the education is, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at such merit should be determined either by the marks that students obtained at qualifying examination or at the CET conducted by the institutions or in the case of professional colleges, by Government agencies. Paragraph 59 suggesting these modes reads as under: "59. Merit is usually determined, for admission to professional and higher education colleges, by either the marks that the student obtains at the qualifying examination or school-leaving certificate stage followed by the interview, or by a common entrance test conducted by the institution, or in the case of professional colleges, by government agencies." This paragraph very specifically authorises CET to be conducted by Government agencies in the case of professional colleges. In order to ensure that the said CET is fair, transparent and merit based, T.M.A. Pai Foundation also permitted the Government to frame Regulations for unaided private professional educational institutions. Paragraphs 67 and 68 which permit framing of such regulations are reproduced below: "67. We now come to the regulations that can be framed relating to private unaided professional institutions. 68. It would be unfai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inority or non-minority institutions and the extent of Government regulation of the said right. It was held that the right to establish and administer an institution included the right to admit students and to set up a reasonable fee structure. But the said right could be regulated to ensure maintenance of proper academic standards, atmosphere and infrastructure. Fixing of rigid fee structure, dictating the formation and composition of a governing body, compulsory nomination of teachers and staff for appointment or nominating students for admissions would be unacceptable restrictions. However, occupation of education was not business but profession involving charitable activity. The State can forbid charging of capitation fee and profiteering. The object of setting up educational institution is not to make profit. There could, however, be a reasonable revenue surplus for development of education. For admission, merit must play an important role. The State or the University could require private unaided institution to provide for merit based selection while giving sufficient discretion in admitting students. Certain percentage of seats could be reserved for admission by management o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the State Governments to appoint permanent Committees to ensure that the test conducted by association of colleges was fair and transparent. The matter was then considered by a larger Bench of seven judges in P.A. Inamdar. It was held that the two Committees for monitoring admission procedure and determining fee structure as per the judgment in Islamic Academy of Education were permissible as regulatory measures aimed at protecting the students community as a whole as also the minority themselves in maintaining required standards of professional education on non-exploitative terms. This did not violate Article 30(1) or Article 19(1)(g). It was observed that unless the admission procedure and fixation of fees is regulated and controlled at the initial stage, the evil of unfair practice of granting admission on available seats guided by the paying capacity of the candidates would be impossible to curb (emphasis added). On this ground, suggestion of the institutions to achieve the purpose for which Committees had been set up by post-audit checks after the institutions adopted their own admission procedure and fee structure were rejected. The Committees were, thus, allowed to cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that Section 6 read with Section 3 (d) of the Act, 2007, which provide that admissions to sanctioned intake shall be on the basis of common entrance test followed by centralised counselling by the State Government or by any agency authorised by the State Government are in consonance with the judgments of the Supreme Court in T.M.A. Pai Foundation v. Stale of Karnataka (2002) 8 SCC 364 and PA. Inamdar and Ors. v. State of Maharashtra and Ors. (2005) 6 SCC 535. Section 2 of the Act, 2007 makes it clear that it only applies to private unaided educational institutions which impart professional education. Hence, we will have to examine the judgments in T.M.A. Pai Foundation and PA. Inamdar (supra), to find out whether these judgments permit admission to professional educational institutions on the basis of merit as determined in a common entrance test followed by centralised counselling by the State Government or its agencies. xx xx xx 28......It is thus clear from Para 58 of the judgment that in TMA Pai Foundation (supra), quoted above that the Supreme Court has held that the applicant who seeks admission to a professional educational institution in order to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Supreme Court dealt with the admission procedure of unaided professional educational institutions, both minority and non-minority, in Paragraphs 133 to 138 at Pages 603,604 and 605 of the SCC. In Paragraph 134 in P.A. Inamdar (supra), the Supreme Court has held that for professional educational institutions, excellence in admission and maintenance of high standard are a must and to fulfil these objectives, the State can and rather must in the national interest step in because the education, knowledge and learning possessed by individuals collectively constitute national wealth and in Paragraph 135 of the judgment in PA. Inamdar (supra), the Supreme Court has further held that in minority professional educational institutions also, aided or unaided, admission should be at the State Level and transparency and merit have to be assured in admissions. In Paragraphs 136 and 137 in PA. Inamdar (supra), the Supreme Court has observed that admissions in professional educational institutions can be made on the basis of a common entrance test either conducted by the institutions joined together or by the State itself or an agency for holding such test." After referring to paragraphs 136 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments in T.M.A. Pai Foundation and PA. .Inamdar (supra), the right of private unaided professional educational institutions to admit students of their choice is subject to selection of students on the basis of their merit through a transparent, fair and non-exploitative procedure. In our considered opinion therefore, Sections 3 (d), 6 and 7 of the Act, 2007 do not in any way violate the fundamental right of citizens guaranteed under Article 19(1)(g) of the Constitution. In view of this conclusion, it is not necessary for us to decide whether the provisions of Sections 3 (d), 6 and 7 of the Act, 2007 are saved by Article 15(5) of the Constitution or by the second limb of Article 19(6) of the Constitution relating to the power of the State to make a law for creation of monopoly in its favour in respect of any service." We are broadly in agreement with the approach adopted by the High Court having gone through the relied upon judgments which are discussed by us as well as in the earlier part. It would be necessary to clarify the position in respect of educational institutions run by minorities. Having regard to the pronouncement in T.M.A. Pai Foundation, with lucid clarifications t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, (i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business, or (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise." Another significant feature which can be noticed from the reading of the aforesaid clause is that the State is empowered to make any law relating to the professional or technical qualifications necessary for practicing any profession or carrying on any occupation or trade or business. Thus, while examining as to whether the impugned provisions of the statute and Rules amount to reasonable restr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in respect of such rights, there is a thinking that in larger public interest, the extent of their protection can be diminished. However, so far such attempts of the States have been thwarted by the judiciary] and all such rights are related. As per the analysis of Aharon Barak [Supra, note], two key elements in developing the modern constitutional theory of recognising positive constitutional rights along with its limitations are the notions of democracy and the rule of law. Thus, the requirement of proportional limitations of constitutional rights by a sub-constitutional law, i.e. the statute, is derived from an interpretation of the notion of democracy itself. Insofar as Indian Constitution is concerned, democracy is treated as the basic feature of the Constitution and is specifically accorded a constitutional status that is recognised in the Preamble of the Constitution itself. It is also unerringly accepted that this notion of democracy includes human rights which is the corner stone of Indian democracy. Once we accept the aforesaid theory (and there cannot be any denial thereof), as a fortiori, it has also to be accepted that democracy is based on a balance between constitu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al right, such a limitation is constitutional if it is proportional. The law imposing restrictions will be treated as proportional if it is meant to achieve a proper purpose, and if the measures taken to achieve such a purpose are rationally connected to the purpose, and such measures are necessary. This essence of Doctrine of Proportionality is beautifully captured by Chief Justice Dickson of Canada in R. v. Oakes[(1986) 1 SCR 103], in the following words (at page 138): "To establish that a limit is reasonable and demonstrably justified in a free and democratic society, two central criteria must be satisfied. First, the objective, which the measures, responsible for a limit on a Charter right or freedom are designed to serve, must be "of" sufficient importance to warrant overriding a constitutional protected right or freedom...Second ... the party invoking Section 1 must show that the means chosen are reasonable and demonstrably justified. This involves "a form of proportionality test..." Although the nature of the proportionality test will vary depending on the circumstances, in each case courts will be required to balance the interests of society with those of indivi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erala Govt.[(1998) 8 SCC 227], this Court held that in examining the reasonableness of a statutory provision one has to keep in mind the following factors: (1) The Directive Principles of State Policy. (2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. ((4) A just balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). (5) Prevailing social values as also social needs which are intended to be satisfied by the restrictions. (6) There must be a direct and proximate nexus or reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions, and the object of the Act, then a strong presumption ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to the malpractices which are noticed in the CET conducted by such private institutions themselves, for which plethora of material is produced, it is, undoubtedly, in the larger interest and welfare of the students community to promote merit, add excellence and curb malpractices. The extent of restriction has to be viewed keeping in view all these factors and, therefore, we feel that the impugned provisions which may amount to 'restrictions' on the right of the appellants to carry on their 'occupation', are clearly 'reasonable' and satisfied the test of proportionality. Apart from the material placed before the High Court, our attention has also been drawn to a recent report of the Parliamentary Committee to which we will refer in later part of this judgment. The report notes the dismal picture of exploitation in making admissions by charging huge capitation fee and compromising merit. This may not apply to all institutions but if the Legislature which represents the people has come out with a legislation to curb the menace which is generally prevalent, it cannot be held that there is no need for any regulatory measure. "An enactment is an organism in i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....above judgments is that educational activity is essentially charitable in nature and that commercialisation or profiteering through it is impermissible. The said activity subserves the looming larger public interest of ensuring that the nation develops and progresses on the strength of its highly educated citizenry. As such, this Court has been of the view that while balancing the fundamental rights of both minority and non-minority institutions, it is imperative that high standard of education is available to all meritorious candidates. It has also been felt that the only way to achieve this goal, recognising the private participation in this welfare goal, is to ensure that there is no commercialisation or profiteering by educational institutions. In view of the said objectives, this Court had devised the means of setting up regulatory committees to oversee the process of admissions and fee regulations in the case of Islamic Academy of Education. However, while indirectly approving the concept of regulatory bodies, this Court in P.A. Inamdar was of the view that the scheme should not be directed by this Court exercising its powers under Article 142 of the Constitution, but must....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts and educational institutions understood the majority judgment in that case in different perspectives. It led to litigations in several courts. Under the circumstances, a Bench of five Judges was constituted in the case of Islamic Academy of Education v. State of Karnataka so that doubts/anomalies, if any, could be clarified. One of the issues which arose for determination concerned determination of the fee structure in private unaided professional educational institutions. It was submitted on behalf of the managements that such institutions had been given complete autonomy not only as regards admission of students but also as regards determination of their own fee structure. It was submitted that these institutions were entitled to fix their own fee structure which could include a reasonable revenue surplus for the purpose of development of education and expansion of the institution. It was submitted that so long as there was no profiteering, there could be no interference by the Government. As against this, on behalf of the Union of India, State Governments and some of the students, it was submitted, that the right to set up and administer an educational institution is not an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to teachers and staff; (c) future plans for expansion and/or betterment of institution subject to two restrictions, viz. non-profiteering and non-charging of capitation fees." We may hasten to add here itself that Section 9 of the Act, 2007 takes care of the aforesaid parameter in abundance. As can be seen in T.M.A. Pai Foundation case itself, this Court has observed that the Government can provide regulations to control the charging of capitation fee and profiteering. Question No.3 before the Court was as to whether there can be Government regulations, and if so, to what extent in case of private institutions? What the Court has observed in paragraph 57 of the judgment is instructive for our purposes and the same is reproduced below: "57. We, however, wish to emphasize one point, and that is that inasmuch as the occupation of education is, in a sense, regarded as charitable, the Government can provide regulations that will ensure excellence in education, while forbidding the charging of capitation fee and profiteering by the institution. Since the object of setting up an educational institution is by definition "charitable", it is clear that an educational i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o not permissible. This Court went on to observe that it cannot shut its eyes to the hard realities of commercialisation of education and evil practices being adopted by many institutions to earn large amounts for their private or selfish ends. In respect of Question No.3 framed thereunder, which was with respect to the Government regulation in the case of private institutions, this Court, in paragraph 141 of the judgment, answered that every institution is free to device its own fee structure, but the same can be regulated in the interest of preventing profiteering and no capitation fee can be charged. In paragraph 145, the suggestion for post-audit or checks is rejected if the institutions adopt their own admission procedure and fee structure since this Court was of the view that fixation of fees should be regulated and controlled at the initial stage itself. It is in the aforesaid context that we have to determine the question as to whether the provisions relating to fixation of fee are violative of Article 19(1)(g) of the Constitution or they are regulatory in nature, which is permissible in view of clause (6) of Article 19 of the Constitution, keeping in mind that the Gover....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on as well as the reasonable surplus required for growth and development of the institution and all other factors relevant for imparting professional education have to be considered by the Committee while determining the fee. Section 4 (8) of the Act, 2007 further provides that the Committee may require a private aided or unaided professional educational institution to furnish information that may be necessary for enabling the Committee to determine the fees that may be charged by the institution in respect of each professional course. Each professional educational institution, therefore, can furnish information with regard to the fees that it proposes to charge from the candidates seeking admission taking into account all the cost components, the reasonable surplus required for growth and development and other factors relevant to impart professional education as mentioned in Section 9 (1) of the Act, 2007 and the function of the Committee is only to find out, after giving due opportunity of being heard to the institution as provided in Section 9 (2) of the Act, 2007 whether the fees proposed by the institution to be charged to the student are based on the factors mentioned in Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y event, there being no regulations regarding fixation or determination of fees of these institutions to ensure that the same does not allow commercialisation or profiteering, the State Legislature was well competent to enact provisions regarding the same. At the time when the impugned legislations were enacted, the Association of Private Colleges was already conducting its CET from the year 2005 till 2007. The private universities, however, had failed to comply the triple test laid down in T.M.A. Pai Foundation and a large number of complaints were received by the State authorities with regard to denial of admissions to meritorious students. In paragraphs 32 to 39 of the Reply filed by the State Government in the High Court of Madhya Pradesh, it was duly mentioned that numerous complaints were being received with regard to the CET being conducted by the Association of the Private Colleges. It is worthwhile to note that even for the period after the coming in force of the State laws, under the interim order dated May 27, 2009[21] passed by this Court where the private colleges were allowed to continue holding their examinations for 50% seats, excluding the NRI seats, a large num....
X X X X Extracts X X X X
X X X X Extracts X X X X
....objective of profit making (and there is nothing bad about it), while throwing open such kind of business activities in the hands of private sector, the State has introduced regulatory regime as well by providing Regulations under the relevant statutes. Need For Regulatory Mechanism: Regulatory mechanism, or what is called regulatory economics, is the order of the day. In the last 60-70 years, economic policy of this country has travelled from laissez faire to mixed economy to the present era of liberal economy with regulatory regime. With the advent of mixed economy, there was mushroom of public sector and some of the key industries like Aviation, Insurance, Railways, Electricity/Power, Telecommunication, etc. were monopolized by the State. License/permit raj prevailed during this period with strict control of the Government even in respect of those industries where private sectors were allowed to operate. However, Indian economy experienced major policy changes in early 90s on LPG Model, i.e., Liberalization, Privatization and Globalization. With the onset of reforms to liberalize the Indian economy, in July 1991, a new chapter has dawned for India. This period of economic ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....supposed to receive from the persons who are insured, when Regulators can fix the rates at which the producer of electricity is to supply the electricity to the distributors, we fail to understand as to why there cannot be a regulatory mechanism when it comes to education which is not treated as purely economic activity but welfare activity aimed at achieving more egalitarian and prosperous society by empowering the people of this country by educating them. In the field of the education, therefore, this constitutional goal remains pivotal which makes it distinct and special in contradistinction with other economic activities as the purpose of education is to bring about social transformation and thereby a better society as it aims at creating better human resource which would contribute to the socie-economic and political upliftment of the nation. The concept of welfare of the society would apply more vigorously in the field of education. Even otherwise, for economist, education as an economic activity, favourably compared to those of other economic concerns like agriculture and industry, has its own inputs and outputs; and is thus analyzed in terms of the basic economic tools like....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o meet unreasonable demands of capitation fee etc. are not deprived of getting admissions. The impugned provisions, therefore, are aimed at seeking laudable objectives in larger public interest. Law is not static, it has to change with changing times and changing social/societal conditions. III. Re.: Reservation of seats for Scheduled Castes, Scheduled Tribes and Other Backward Classes The main arguments of the appellants, on this issue, is that reservation in private sector is unknown to the constitutional scheme and the same has been held to be by this Court in the case of P.A. Inamdar. It is their submissions that to overrule the ratio of the judgment of this Court in P.A. Inamdar, the Parliament amended the Constitution and introduced Article 15(5) . The said Article 15(5) reads as under: "15(5) Nothing in this article or in sub-clause (g)of clause (1) of Article 19 shall prevent the state from making any special provision, by law, for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes or the Scheduled Tribes in so far as such special provisions relate to their admission to educational institutions including private ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ti Educational and Cultural Trust. The only other argument raised was that a reading of the reservation provisions in Rule 7 of Rules, 2009 would show that it would be difficult to work out said percentage having regard to the fact that number of seats in the post-graduate dental and medical courses in different specialized disciplines are few. The High Court has successfully dealt with this argument by appropriately demonstrating, by means of charges, that not only it was possible to work out extent of reservation provided for different categories, sufficient number of seats were available for general categories as well. We, thus, do not find any merit in the challenge to the reservation of seats for SC/ST and OBC etc. which is in consonance with Article 15(5) of the Constitution. As is evident from the facts mentioned by the State of Madhya Pradesh in its reply filed in IA No. 83 of 2015, the Association of Private Colleges has failed to hold their CETs in a fair, transparent and rational manner. The accountability and transparency in State actions is much higher than in private actions. It is needless to say that the incidents of corruption in the State machinery were brought....
X X X X Extracts X X X X
X X X X Extracts X X X X
....institutions for higher education or research and scientific and technical institutions. List II 32. Incorporation, regulation and winding up of corporation, other than those specified in List I, and universities; unincorporated trading, literacy, scientific, religious and other societies and associations; co- operative societies. List III 25. Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labour." To our mind, Entry 66 in List I is a specific Entry having a very specific and limited scope. It deals with co-ordination and determination of standards in institution of higher education or research as well as scientific and technical institutions. The words 'co-ordination and determination of standards' would mean laying down the said standards. Thus, when it comes to prescribing the standards for such institutions of higher learning, exclusive domain is given to the Union. However, that would not include conducting of examination, etc. and admission of students to such institutions or prescribing the fee in these institutions of high....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al activities, including admissions, have two aspects: The first deals with the adoption and setting up the minimum standards of education. The objective in prescribing minimum standards is to provide a benchmark of the caliber and quality of education being imparted by various educational institutions in the entire country. Additionally, the coordination of the standards of education determined nationwide is ancillary to the very determination of standards. Realising the vast diversity of the nation wherein levels of education fluctuated from lack of even basic primary education, to institutions of high excellence, it was though desirable to determine and prescribe basic minimum standards of education at various levels, particularly at the level of research institutions, higher education and technical education institutions. As such, while balancing the needs of States to impart education as per the needs and requirements of local and regional levels, it was essential to lay down a uniform minimum standard for the nation. Consequently, the Constitution makers provided for Entry 66 in List I with the objective of maintaining uniform standards of education in fields of research, hig....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as to wipe out or abridge the central field, it may be struck down. In State of T.N. & Anr. v. Adhiyaman Educational & Research Institute & Ors.[(1995) 4 SCC 104], it was observed that to the extent that State legislation is in conflict with the Central legislation under Entry 25, it would be void and inoperative. To the same effect is the view taken in Dr. Preeti Srivastava and State of Maharashtra v. Sant Dnyaneshwar Shikshan Shastra Mahavidalaya & Ors.[ (2006) 9 SCC 1] Though the view taken in State of Madhya Pradesh v. Kumari Nivedita Jain & Ors.[ (1981) 4 SCC 296] and Ajay Kumar Singh & Ors. v. State of Bihar & Ors.[ (1994) 4 SCC 401] to the effect that admission standards covered by Entry 66 of List I could apply only post admissions was overruled in Dr. Preeti Srivastava, it was not held that the entire gamut of admissions was covered by List I as wrongly assumed in Bharti Vidyapeeth. We do not find any ground for holding that Dr. Preeti Srivastava excludes the role of states altogether from admissions. Thus, observations in Bharti Vidyapeeth that entire gamut of admissions was covered by Entry 66 of List I cannot be upheld and overruled to that extent. No doubt, Entry 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... even the Parliamentary Standing Committee on Health and Family Welfare in its 92nd report on 'The functioning of Medical Council of India' presented to the Rajya Sabha and the Lok Sabha on March 08, 2016 has gone into the matter. There is perhaps urgent need to review the regulatory mechanism for other service oriented professions also. We do hope this issue will receive attention of concerned authorities, including the Law Commission, in due course. The Committee examined the existing architecture of the regulatory oversight of the medical profession, that is the MCI. It was observed that the MCI was repeatedly found short of fulfilling its mandated responsibilities. Qualify of medical education was at its lowest ebb, the right type of health professionals were not able to meet the basic health need of the country. Products coming out of medical colleges are ill- prepared to serve in poor resource settings like Primary Health Centre and even at the district level. The medical graduates lacked competence in performing basic health care tasks. Instances of unethical practices continued to grow. The MCI was not able to spearhead any serious reforms in medical education. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erspective:- (i) failure to create a curriculum that produces doctors suited to working in Indian context especially in the rural health services and poor urban areas; this has created a disconnect between medical education system and health system; (ii) failure to maintain uniform standards of medical education, both undergraduate and post-graduate; (iii) development of merit in admission, particularly in private medical institutions due to prevalence of capitation fees, which make medical education available only to the rich and not necessarily to the most deserving; (iv) failure to produce a competent basic doctor; (v) non-involvement of the MCI in any standardized summative evaluation of the medical graduates and post-graduates; (vi) failure to put in place a robust quality assurance mechanism when a fresh graduate enters the system and starts practicing; (vii) very little oversight to PG medical education leading to huge variations in standards; (viii) heavy focus on nitty-gritty of infrastructure and human staff during inspections but no substantial evaluation of quality of teaching, training and impartin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cialization of medical education and practice. The situation has gone far beyond the point where incremental tweaking of the existing system or piecemeal approach can give the contemplated dividends. That is why the Committee is convinced that the MCI cannot be remedied according to the existing provisions of the Indian Medical Council Act, 1956 which is certainly outdated. If we try to amend or modify the existing Act, ten years down the line we will still be grappling with the same problems that we are facing today. Nowhere in the world is there an educational process oversight, especially, of medical education done by an elected body of the kind that MCI is. Managing everything of more than 400 medical colleges is too humongous a task to be done by the MCI alone because the challenges facing medical education of the 21st Century are truly gigantic and cannot be addressed with an ossified and opaque body like MCI. Transformation will happen only if we change the innards of the system. (Para 13.4) Game changer reforms of transformational nature are therefore the need of the hour and they need to be carried out urgently and immediately. Because, if revamping of the regulatory struc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....atory structure and found that several of its concerns have been addressed in the suggested new model of regulation of medical education and practice. The Committee is therefore in general agreement with the suggested regulatory structure, and recommends to the government to examine the structure proposed by the Ranjit Roy Chaudhury Committee subject to the recommendations made by this Committee in this report. (Para 13.8) To sum up, the Committee observes, even at the risk of sounding repetitive, that the need for major institutional changes in the regulatory oversight of the medical profession in the country is so urgent that it cannot be deferred any longer. The Committee is, however, aware that any attempt at overhauling the regulatory framework will face huge challenges from the deeply entrenched vested interests who will try to stall ad derail the entire exercise. But if the medical education system has to be saved from total collapse, the Government can no longer look the other way and has to exercise its constitutional authority and take decisive and exemplary action to restructure and revamp India's regulatory system of medical education and practice. The Committee, theref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sikri. I entirely agree with the conclusions which my erudite brother has drawn, based on a remarkable process of reasoning. I would all the same like to add some of my own reasonings, not because the judgment requires any further elaboration but because the substantial questions of law that arise for determination are of considerable importance. 2. In compliance with the directions of this Court in T.M.A. Pai Foundation and Ors. v. State of Karnataka and Ors. (2002) 8 SCC 481, Islamic Academy of Education and Anr. v. State of Karnataka and Ors. (2003) 6 SCC 697 and P.A. Inamdar and Ors. v. State of Maharashtra and Ors. (2005) 6 SCC 537, the State of Madhya Pradesh has enacted M.P. Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (M.P. Act No.21 of 2007). Association of Private Dental and Medical Colleges of State of Madhya Pradesh has filed Writ Petition No.1975 of 2008 challenging the provisions of Act 2007 as unconstitutional beyond legislative competence of the State Legislature and therefore without jurisdiction. In W.P. No.9496 of 2008, the association has also challenged the Admission Rule 2008 framed under Act 2007 as ultra ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unaided private educational institutions infringes the autonomy of the institutions who have a right to determine their own fee structure in terms of Article 19(1)(g) of the Constitution of India. In terms of Section 4 and Regulation 5 Committee is given unbridled power to determine the fees that may be charged by the institution and the Committee can scrutinize the stipulated amounts in various heads which is not in accordance with the right of the unaided private educational institutions as laid down in T.M.A. Pai Foundation case. Section 8 of the Act 2007 providing for reservation in unaided private educational institutions is unknown to the constitutional scheme and it would be an unreasonable restriction which would run afoul of Article 19(1)(g) of the Constitution of India and such unreasonable restriction in effect violates Articles 14 and 15(1) of the Constitution of India. 4. Challenge to Section 8 providing for reservation: Section 8 of Act 2007 provides for reservation of seats in admission in private unaided professional educational institutions for the persons belonging to Scheduled Castes and Scheduled Tribes and other backward classes as may be prescribed by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions for higher education or research and scientific and technical institution. Union of India has the right to make policy decisions to maintain standards in higher education and these will be binding upon State Governments. Entry 25 of the Concurrent List is subject to the provisions of entries 63, 64, 65 and 66 of List 1 and the State cannot have a policy contrary to the Central Act. Under Article 257(1), the executive power of the State Government shall be so exercised as not to impede or prejudice the exercise of the executive power of the Union. 6. While 'education' is a concurrent subject under entry 25 of concurrent list as substituted by Constitution (Forty-second Amendment) Act 1976, entries 65 and 66 of Union List give Union the power to ensure that the standards of research etc. is not lowered at the hands of particular State or States to the detriment of national progress and that the power of the State Legislature must be so exercised as not to directly encroach upon the power of Union under the present entry. Though the field of legislation available to the Parliament and the States has been definite as stated above, more often, a certain amount of overlapping mig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ucation is national wealth essential for the nation's progress and prosperity." 9. By virtue of entry 66 of Union List "Co-ordination and determination of standards in institutions for higher education or research, scientific and technical institutions" is reserved with Union of India. Power to co-ordinate is not merely power to evaluate but to harmonise or secure relationship for concerted action. Oxford Concise Dictionary (7th Edn.) defines 'co-ordinate' as:- "make co-ordinate; bring (parts, movements etc.) into proper relation, cause to function together or in proper order". Black's Law Dictionary (10th Edn.) defines 'determinate' as:- "Having defined limits; fixed; definite" and 'determination' is defined as, "The act of deciding something officially; esp., a final decision by a court or administrative agency". From these definitions, it flows that 'determination' is the official characterization of an expression and 'co-ordination' means through which determined norms or standards are kept in harmony with each other. 10. In Concise Oxford English Dictionary (Tenth Edition, Revised) the meaning of the word 'standard' is given as:- "a level of quality or att....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Honourable Dr. B.R. Ambedkar: Sir, I move: "That after entry 57 of List I, the following new entry be inserted:- '57(A) Co-ordination and maintenance of standards in institutions for higher education, scientific and technical institutions and institutions for research'." This entry is merely complementary to the earlier entry No. 57. In dealing with institutions maintained by the provinces, entry 57A proposes to give power to the Centre to the limited extent of coordinating the research institutions and of maintaining the standards in those institutions to prevent their being lowered. 13. Sir, I also move:- "That in amendment No. 28 of List I (Sixth Week) in the proposed new entry 57A of List I, for the word 'maintenance' the word 'determination be substituted." The said proposal of Dr. Ambedkar was opposed by Shri V.S. Sarwate (Madhya Bharat) by suggesting that only "Promotion by financial assistance or otherwise of standards in institutions for higher education, scientific and technical institutions and institutions for research" be left in the domain of the Union, so as to avoid unnecessary interference with the State's pow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fixes some other standard, then it would be quite a chaotic condition, and the expression that is usually used, that the candidate should be a graduate, I think, would be meaningless. Similarly, there are certain research institutes, on the results of which so many activities of the Central and Provincial Governments depend. Obviously you cannot permit the results of these technical and scientific institutes to deteriorate from the normal standard and yet allow them to be recognized either for the Central purposes, for all-India purposes or the purposes of the State." 14. The intent of our constitution framers while introducing entry 66 of the Union List was thus limited only to empowering the Union to lay down a uniform standard of higher education throughout the country and not to bereft the State Legislature of its entire power to legislate in relation to 'education' and organizing its own common entrance examination. 15. If we consider the ambit of the present entry 66 of the Union List; no doubt the field of legislation is of very wide import and determination of standards in institutions for higher education. In the federal structure of India, as there are many States, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... at all levels of the educational pyramid throughout the country. Concurrency signifies a partnership, which is at once meaningful and challenging; the National Policy will be oriented towards giving effect to it in letter and spirit. 5.30 State level planning and co-ordination of higher education will be done through Councils of Higher Education. The UGC and these Councils will develop coordinative methods to keep a watch on standards. XXX 10.4 State Government may establish State Advisory Boards of Education on the lines of CABE. Effective measures should be taken to integrate mechanisms in the various State departments concerned with Human Resource Development. 10.5 Special attention will be paid to the training of educational planners, administrators and heads of institutions. Institutional arrangements for this purpose should be set up in stages." (mhrd.gov.in/sites/upload_files/mhrd/files/upload_document/NPE86-mod92.pdf) The policy clearly recognised that the State would continue to fulfill its responsibilities. This is also discernible from the amendment to entry 25 of Concurrent List. Had the intention been to keep higher education solely in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....include legislation relating to medium of instruction. If legislation relating to imposition of an exclusive medium of instruction in a regional language or in Hindi, having regard to the absence of textbooks and journals, competent teachers and incapacity of the students to understand the subjects, is likely to result in the lowering of standards, that legislation would, in our judgment, necessarily fall within Item 66 of List I and would be deemed to be excluded to that extent from the amplitude of the power conferred by Item 11 of List II." 20. Subba Rao, J. in Gujarat University case, in his dissenting view stated that no authority had gone so far as to hold that even if the pith and substance of an Act fell squarely within the ambit of a particular entry, it should be struck down on the speculative and anticipatory ground that it might come into conflict with a law made by a co-ordinated legislature by virtue of another entry; if the impact of a State law on a Central Legislation was so heavy and devastating as to wipe out or appreciably abridge the central field, then it might be a ground for holding that the State law was a colourable exercise of power and in pith and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtain design, scheme or plan of development. It, therefore, includes action not only for removal of disparities in standards but also for preventing the occurrence of such disparities. It would, therefore, also include power to do all things which are necessary to prevent what would make 'coordination' either impossible or difficult. This power is absolute and unconditional and in the absence of any valid compelling reasons, it must be given its full effect according to its plain and express intention. (ii) To the extent that the State legislation is in conflict with the Central legislation though the former is purported to have been made under Entry 25 of the Concurrent List but in effect encroaches upon legislation including subordinate legislation made by the Centre under Entry 25 of the Concurrent List or to give effect to Entry 66 of the Union List, it would be void and inoperative. (iii) If there is a conflict between the two legislations, unless the State legislation is saved by the provisions of the main part of clause (2) of Article 254, the State legislation being repugnant to the Central legislation, the same would be inoperative. (iv) Whether ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f such standards. A State has, therefore, the right to control education including medical education so long as the field is not occupied by any Union legislation. Secondly, the State cannot, while controlling education in the State, impinge on standards in institutions for higher education. Because this is exclusively within the purview of the Union Government. Therefore, while prescribing the criteria for admission to the institutions for higher education including higher medical education, the State cannot adversely affect the standards laid down by the Union of India under Entry 66 of List I. Secondly, while considering the cases on the subject it is also necessary to remember that from 1977, education, including, inter alia, medical and university education, is now in the Concurrent List so that the Union can legislate on admission criteria also. If it does so, the State will not be able to legislate in this field, except as provided in Article 254. 36. It would not be correct to say that the norms for admission have no connection with the standard of education, or that the rules for admission are covered only by Entry 25 of List III. Norms of admission can have a dir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he State to shortlist the applicants for admission in an effective manner, when there are more applicants than available seats. Once the power of the State and the examining body, to fix higher qualifications is recognised, the rules and regulations made by them prescribing qualifications higher than the minimum suggested by AICTE, will be binding and will be applicable in the respective State, unless AICTE itself subsequently modifies its norms by increasing the eligibility criteria beyond those fixed by the University and the State. It should be noted that the eligibility criteria fixed by the State and the University increased the standards only marginally, that is, 5% over the percentage fixed by AICTE. It cannot be said that the higher standards fixed by the State or University are abnormally high or unattainable by normal students, so as to require a downward revision, when there are unfilled seats. During the hearing it was mentioned that AICTE itself has revised the eligibility criteria. Be that as it may. 14. The respondents (colleges and the students) submitted that in that particular year (2007-2008) nearly 5000 engineering seats remained unfilled. They contende....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y criteria for admissions, keeping in balance, the need to maintain excellence and high standard in higher education on the one hand, and the need to maintain a healthy ratio between the total number of seats available in the State and the number of students seeking admission, on the other. If necessary, they may revise the eligibility criteria so as to continue excellence in education and at the same time being realistic about the attainable standards of marks in the qualifying examinations." It is clear from the above decision that the State legislation fixing higher qualification than the one prescribed by the AICTE is not outside the legislative competence of the State. 26. In Ambesh Kumar (Dr) v. Principal, L.L.R.M. Medical College, Meerut and Ors., (1986) Supp SCC 543, the State prescribed 55% as minimum marks for admission to post-graduate medical courses. The Court considered the question whether the State can impose qualifications in addition to those laid down by the Medical Council of India and the regulations framed by the Central Government. This Court held that the State Government laying down eligibility qualification, namely, obtaining of certain minimum marks in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the basis of the marks obtained in the qualifying examination, the additional test made applicable is the common entrance test by the State Government. If we proceed to take the standard fixed by AICTE to be the common entrance test then the prescription made by the State Government of having obtained certain marks higher than the minimum in the qualifying examination in order to be eligible to participate in the common entrance test is in addition to the common entrance test. In either event, the streams proposed by AICTE are not belittled in any manner. The manner in which the High Court has proceeded is that what has been prescribed by AICTE is inexorable and that that minimum alone should be taken into consideration and no other standard could be fixed even the higher as stated by this Court in Dr Preeti Srivastava case (1999) 7 SCC 120. It is no doubt true, as noticed by this Court in Adhiyaman case (1995) 4 SCC 104 that there may be situations when a large number of seats may fall vacant on account of the higher standards fixed. The standards fixed should always be realistic which are attainable and are within the reach of the candidates. It cannot be said that the prescr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing to the admission process in universities imparting higher education. 30. I have no hesitation in upholding the vires of the impugned legislation which empowers the state government to regulate admission process in institutions imparting higher education within the state. In fact, the State being responsible for welfare and development of the people of the State, ought to take necessary steps for welfare of its student community. The field of 'higher education' being one such field which directly affects the growth and development of the state, it becomes prerogative of the State to take such steps which further the welfare of the people and in particular pursuing higher education. In fact, the State Government should be the sole entity to lay down the procedure for admission and fee etc. governing the institutions running in that particular state except the centrally funded institutions like IIT, NIT etc. because no one can be a better judge of the requirements and inequalities-in-opportunity of the people of a particular state than that state itself. Only the State legislation can create equal level playing field for the students who are coming out from the State Board and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ple test, the State had taken over the admission procedure. Much emphasis was also laid upon para (65) of T.M.A. Pai case to contend that private educational institutions have the right to select students and a common entrance test by the State decimates the right of autonomy of the private educational institutions which amounts to an unreasonable restriction and the same is liable to be struck down. 34. The claim of absolute 'right to occupation' which the appellants have raised on the basis of T.M.A. Pai, P.A. Inamdar cases is not sustainable. In T.M.A. Pai and P.A. Inamdar, no unfettered right was granted to private unaided educational institutions to carry on trade and business without being restricted by statutory regulations enacted by the competent legislature. A fundamental right is not without measure of control and it will always be subject to reasonable restriction which the State is duty bound to impose in the larger public interest. In Sreenivasa General Traders and Ors. v. State of Andhra Pradesh and Ors. (1983) 4 SCC 353, it was held as under:- "17. The fundamental right of all citizens to practise any profession or to carry on any occupation or trade or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness, the Court has to consider the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to individual citizens by the proposed remedy, to the beneficial effect reasonably expected to result to the general public. It will also be necessary to consider in that connection whether the restraint caused by the law is more than was necessary in the interests of the general public." 37. While determining the reasonableness of the restrictions imposed by the State on the 'freedom of occupation' guaranteed by Article 19(1)(g), the principles which can be taken into account were summed up by this Court in M.R.F. Ltd. v. Inspector, Kerala Government and Ors., (1998) 8 SCC 227, in the following relevant extraction:- "On a conspectus of various decisions of this Court, the following principles are clearly discernible: (1) While considering the reasonableness of the restrictions, the court has to keep in mind the Directive Principles of State Policy. (2) Restrictions must not be arbitrary or of an excessive nature so as to g....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... professional educational institutions, merit plays an important role and held as under:- "58. For admission into any professional institution, merit must play an important role. While it may not be normally possible to judge the merit of the applicant who seeks admission into a school, while seeking admission to a professional institution and to become a competent professional, it is necessary that meritorious candidates are not unfairly treated or put at a disadvantage by preferences shown to less meritorious but more influential applicants. Excellence in professional education would require that greater emphasis be laid on the merit of a student seeking admission. Appropriate regulations for this purpose may be made keeping in view the other observations made in this judgment in the context of admissions to unaided institutions. 59. Merit is usually determined, for admission to professional and higher education colleges, by either the marks that the student obtains at the qualifying examination or school-leaving certificate stage followed by the interview, or by a common entrance test conducted by the institution, or in the case of professional colleges, by government agencie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hall be borne by each State. The infrastructural needs and provision for allowance and remuneration of the Chairman and other members of the Committee shall also be borne by the respective State Government." 41. In P.A. Inamdar, this Court observed that there has to be one common entrance examination to be conducted by the State Government or by the competent authority appointed by the State Government in case more than one university exist in the State and in para (136) of the judgment held as under:- "136. Whether minority or non-minority institutions, there may be more than one similarly situated institutions imparting education in any one discipline, in any State. The same aspirant seeking admission to take education in any one discipline of education shall have to purchase admission forms from several institutions and appear at several admission tests conducted at different places on the same or different dates and there may be a clash of dates. If the same candidate is required to appear in several tests, he would be subjected to unnecessary and avoidable expenditure and inconvenience. There is nothing wrong in an entrance test being held for one group of institut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etermining fee structure in the judgment of Islamic Academy (2003) 6 SCC 697, are in our view, permissible as regulatory measures aimed at protecting the interest of the student community as a whole as also the minorities themselves, in maintaining required standards of professional education on non-exploitative terms in their institutions. Legal provisions made by the State Legislatures or the scheme evolved by the Court for monitoring admission procedure and fee fixation do not violate the right of minorities under Article 30(1) or the right of minorities and non-minorities under Article 19(1)(g). They are reasonable restrictions in the interest of minority institutions permissible under Article 30(1) and in the interest of general public under Article 19(6) of the Constitution. 155. It is for the Central Government, or for the State Governments, in the absence of a Central legislation, to come out with a detailed well- thought-out legislation on the subject. Such a legislation is long awaited. The States must act towards this direction. The judicial wing of the State is called upon to act when the other two wings, the legislature and the executive, do not act. The earli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his superiors and subordinates officers and the general public, his rank in the service and annual confidential report. All these and other factors may have to be taken into account in assessing the merit." Additionally, in Dr. Pradeep Jain and Ors. v. Union of India and Ors., (1984) 3 SCC 654, it was held as under:- "...Merit consists of a high degree of intelligence coupled with a keen and incisive mind, sound knowledge of the basic subjects and infinite capacity for hard work and also calls for a sense of social commitment and dedication to the cause of the poor." 46. It is well known that study of medicine is much sought after by students in India. Due to the high demand for admission in Medical Colleges and limited number of seats, selection and/or screening methods have evolved to select the crème de la crème. Given the surfeit of academically well-qualified applicants, the selection method ought to become highly competitive by placing exceptionally high academic thresholds. It is in this context that 'merit' comes into play in determining the parameters for admissions in institutions of higher education. 47. Merit is the cumulative assessment of worth ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us, having regard to the larger interest and welfare of the student community to promote merit and achieve excellence and curb mal-practices, it would be permissible for the State to regulate admissions by providing a centralized and single window procedure. Holding such CET followed by centralized counselling or single window system regulating admissions does not cause any dent on the fundamental rights of the institutions in running the institution. While private educational institutions have a 'right of occupation' in running the educational institutions, equally they have the responsibility of selecting meritorious and suitable candidates, in order to bring out professionals with excellence. Rights of private educational institutions have to yield to the larger interest of the community. 49. By holding common entrance test and identifying meritorious candidates, the State is merely providing the merit list of the candidates prepared on the basis of a fair common entrance test. If the screening test is conducted on merit basis, no loss will be caused to the private educational institutions. There is neither restriction on the entry of the students in the sanctioned intake of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n any fundamental right, aimed at securing directive principles will be held as reasonable and hence intra vires subject to two limitations: first, that it does not run in clear conflict with the fundamental right, and secondly, that it has been enacted within the legislative competence of the enacting legislature under Part XI Chapter I of the Constitution." 51. It is the obligation of the State under the Constitution to ensure the creation of conditions necessary for good health including provisions for basic curative and preventive health services and assurance of healthy living and working conditions. Under Articles 39(e), 39(f) and 42 of the Constitution, obligations are cast on the State to ensure health and strength of workers, men and women; ensure children are given opportunities & facilities to develop in a healthy manner and to secure just & humane conditions of work and for maternity relief, respectively. Article 47 of the Constitution makes improvement of public health a primary duty of the State. However, right to health is no longer in the sole domain of Part IV of the Constitution. In Kirloskar Brothers Ltd. v. Employees' State Insurance Corp. (1996) 2 SCC 682, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c at large on the other. However, the law is now settled. In such cases where there is a conflict between fundamental right of two parties, this Court in para (59) in Sharda v. Dharmpal (2003) 4 SCC 493 held that only that right which would advance public morality or public interest would prevail. In para (39) in Kureshi Kassab case (supra), this Court held that when a fundamental right clashes with the larger interest of society, it must yield to the latter. The interest of citizens or section of community, howsoever important, is secondary to the interest of the nation public at large and of the right of the students to avail opportunity of merit-based admission in professional unaided educational institutions would advance the public interest and as such the rights of the students would prevail over the rights of the private unaided professional educational institutions. 54. Re-contention: No material to show that the private unaided professional educational institutions failed in triple test-fairness, transparency and non-exploitativeness: In para (137) of the judgment in P.A. Inamdar, this Court has observed that if the admission procedure adopted by private institutions fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l institutions at the behest of the students alleging irregularities and mal-practices. Our attention is drawn to the alleged violation of the order of this Court in Priya Gupta v. State of Chhattisgarh and Ors. (2012) 7 SCC 433, as per which it was made mandatory for each college and university to inform the State and the competent authority of the seats which are lying vacant after each counselling and they shall furnish the complete details, list of seats fell vacant in the respective States immediately after each counselling. Ms. Vibha Dutta Makhija, learned Senior Counsel appearing for the State of Madhya Pradesh and Mr. Purushaindra Kaurav learned AAG appearing for AFRC have submitted that inspite of requests, the private colleges deliberately did not report vacant seats under the State quota after each round of counselling even after the admission procedure was complete and in this context have relied on a number of letters (Annexure A-14 to I.A. 83/2015) addressed to the private colleges by Director of Medical Education, Madhya Pradesh. It was submitted that in the year 2013-2014 there were about 300 irregular admissions in MBBS course by private medical colleges on the Sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (iv) the available infrastructure, teaching, non-teaching staff and equipment; (v) the expenditure on administration and maintenance; (vi) a reasonable surplus required for growth and development of the professional institution; (vii) any other relevant factor, the committee shall determine, in the manner prescribed, the fee to be charged by a private unaided professional educational institution. (2) The Committee shall give the institution an opportunity of being heard before fixing any fee: Provided that no such fees, as may be fixed by the Committee, shall amount to profiteering or comercialisation of education." 59. Various factors indicated in Section 9 including reasonable surplus required for growth and development of the institution and other relevant factors for imparting professional education have to be considered by the committee. Furthermore, in terms of Sections 4(8) and 9(2), before fixing the fee, the committee ought to afford an opportunity of being heard to the institutions which may furnish the necessary information. This ensures that private unaided educational institutions can putforth their legitimate claims pertaini....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tisfied that the fee proposed by a professional educational institution did not amount to profiteering by keeping in view the factors laid down in Section 9 of the Act. The question falling for consideration is whether and to what extent the State can impose restrictions vis-à-vis the fee structure of private unaided professional educational institutions. 63. Article 41 of the Constitution contemplates that "The State shall, within the limits of its economic capacity and development, make effective provisions for securing the right to work, to education......" Article 41 does not prescribe an age group for which this right is to be secured. Primary objective of the State as laid down in Article 41 is to ensure that quality higher education is imparted by educational institutions and to ensure excellence in it. Act 2007 is in furtherance of the constitutional obligation imposed upon the State in the form of Directive Principles of State Policy. 64. The words "the state shall within the limits of its economic capacity..." in Article 41 empowers the State to permit private educational institutions to be established and administer themselves. The hard reality is that priva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e are in agreement with the authors, quoted above, we do not wish to generalise and in the Indian context we may state that there are good schools which even today run keeping in mind laudable charitable objects." 66. Furthermore, in para (61) of T.M.A. Pai, this Court inter alia was of the view that the standards maintained by the private educational institutions are higher and it is in the interest of general public that more quality education institutions are established and such educational institutions shall have the right to admission of the students and fee to be charged. However, para (69) of T.M.A. Pai held private educational institutions were not entitled to charge capitation fee. Para (69) reads as under:- "69. In such professional unaided institutions, the management will have the right to select teachers as per the qualifications and eligibility conditions laid down by the State/university subject to adoption of a rational procedure of selection. A rational fee structure should be adopted by the management, which would not be entitled to charge a capitation fee. Appropriate machinery can be devised by the State or university to ensure that no capitation fe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eaning of Article 30(1) of the Constitution, as per the law declared in Pai Foundation. Every institution is free to devise its own fee structure subject to the limitation that there can be no profiteering and no capitation fee can be charged directly or indirectly, or in any form (paras 56 to 58 and 161 [answer to Question 5(c)] of Pai Foundation are relevant in this regard). Capitation fees 140. Capitation fee cannot be permitted to be charged and no seat can be permitted to be appropriated by payment of capitation fee. "Profession" has to be distinguished from "business" or a mere "occupation". While in business, and to a certain extent in occupation, there is a profit motive, profession is primarily a service to society wherein earning is secondary or incidental. A student who gets a professional degree by payment of capitation fee, once qualified as a professional, is likely to aim more at earning rather than serving and that becomes a bane to society. The charging of capitation fee by unaided minority and non-minority institutions for professional courses is just not permissible. Similarly, profiteering is also not permissible. Despite the legal position, th....