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Supreme Court Judgements

No State Quotas In Institutions
By Sanjeev Nayyar, August 12, 2005 [[email protected]]

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No state quotas, reservations in pvt institutions’ read the Hindustan Times headlines of August 13. It did not matter whether the private institution was run by the majority of minority community. The Apex court also directed that taking capitation fees would no longer be permitted, gave unaided institutions the unfettered right to choose students and lay down the procedure for this provided the exercise was fair, transparent and on-exploitative. It recommended that admissions be regulated by a single window procedure having regard to the larger interest and welfare of the student community.

Three cheers to the Supreme Court! But politicians howled! How can the SC do away with reservations? What would happen to the poorer sections of Society? Madam Jayalalitha, CM of Tamil Nadu threatened to take over the management of private colleges. PM Manmohan Singh promised to bring in appropriate legislation in the winter session of Parliament. Secular don Arjun Singh called for an all-party meeting demanding reservation for SC & ST.

Media, print and electronic got their next big story. Confrontation between Executive and Judiciary was the buzzword now! Behavior of politicians and the media build up upset the Chief Justice of India. August 24 headlines of HT read, ‘Supreme anger at politicians’. The CJI told Attorney General Milon Bannerjee, “You must tell your people (read the government) to exercise self-restraint. You do your job and we well do ours”. He also asked: “Why are you telling day in day out that (government) not taking a confrontationist attitude? When the AG tried to explain, the CJI told him: “You tell your client (the government), we will wind up the courts and then you do whatever you want. Should you not tell your client to give the courts the respect they deserve”?

Key Decisions:
• Neither the policy of reservation nor the quota or % of admissions can be decided by the State, in both a minority and non-minority provided these institutions are not aided by the State meaning they receive no government grants.
• The admission procedure adopted by private institution or group of institutions, if it failed to satisfy all or any of the triple tests can be taken over by the State substituting its own procedure. Till regulations are framed, the admission committees can oversee admissions so as to ensure that merit is the only basis for admission.
• Every institution is free to devise its own fee structure but the same can be regulated to prevent profiteering. No capitation fee can be charged.
• The Court allows the constitution of a Committees as a stopgap or adhoc arrangement until a suitable legislation or regulation framed by the State steps in.

Highlights of Judgment:
1. In Pai Foundation, 11 questions were framed for being answered. Detailed submissions were made centering around the 11 questions.

2. The majority led by Kirpal, CJ, in Pai Foundation did say that the expression "minorities" in Article 30 of the Constitution of India, whether linguistic or religious, has to be determined by treating the State and not the whole of India as unit.

3. Pai Foundation Judgment was delivered on 31.10.2002. The Union of India, various State Governments and the Educational Institutions, each understood the majority judgment in its own way.  The issues arising for decision before us are only four:
(1) To what extent the State can regulate the admissions made by unaided (minority or non- minority) educational institutions? Can the State enforce its policy of reservation and/or appropriate to itself any quota in admissions to such institutions?
(2)  Whether unaided (minority and non-minority) educational institutions are free to devise their own admission procedure or whether direction made in Islamic Academy for compulsorily holding entrance test by the State or association of institutions and to choose there from the students entitled to admission in such institutions, can be sustained in light of the law laid down in Pai Foundation?
(3)  Whether Islamic Academy could have issued guidelines in the matter of regulating the fee payable by the students to the educational institutions?
(4)  Can the admission procedure and fee structure be regulated or taken over by the Committees ordered to be constituted by Islamic Academy?

4. Thus, with the dictum of Pai Foundation, it cannot be doubted that minority, whether linguistic or religious, is determinable only by reference to the demography of a State and not by taking into consideration the population of the country as a whole.

5. It necessarily follows from the law laid down in Pai Foundation that to establish a minority institution the institution must primarily cater to the requirements of that minority of that State else its character of minority institution is lost. However, to borrow the words of Chief Justice S.R. Das (in Kerala Education Bill) a 'sprinkling' of that minority from other State on the same footing as a sprinkling of non-minority students, would be permissible and would not deprive the institution of its essential character of being a minority institution determined by reference to that State as a unit.

6.  Our answer to the first question is that neither the policy of reservation can be enforced by the State nor any quota or percentage of admissions can be carved out to be appropriated by the State in a minority or non-minority unaided educational institution. Minority institutions are free to admit students of their own choice including students of non-minority community as also members of their own community from other States, both to a limited extent only and not in a manner and to such an extent that their minority educational institution status is lost. If they do so, they lose the protection of Article 30(1). (See para 129 of Judgment).

7. There may be a single institution imparting a particular type of education which is not being imparted by any other institution and having its own admission procedure fulfilling the test of being fair, transparent and non-exploitative. All institutions imparting same or similar professional education can join together for holding a common entrance test satisfying the above said triple tests. The State can also provide a procedure of holding a common entrance test in the interest of securing fair and merit-based admissions and preventing mal-administration. The admission procedure so adopted by private institution or group of institutions, if it fails to satisfy all or any of the triple tests, indicated hereinabove, can be taken over by the State substituting its own procedure. The second question is answered accordingly. Till regulations are framed, the admission committees can oversee admissions so as to ensure that merit is not the casualty. (See para 134 & 135 of Judgment).

8. Our answer to Question-3 is that every institution is free to devise its own fee structure but the same can be regulated in the interest of preventing profiteering. No capitation fee can be charged.

9. A fortiori, we do not see any impediment to the constitution of the Committees as a stopgap or adhoc arrangement made in exercise of the power conferred on this Court by Article 142 of the Constitution until a suitable legislation or regulation framed by the State steps in. (refer para 145 of judgment). We make it clear that in case of any individual institution, if any of the Committees is found to have exceeded its powers by unduly interfering in the administrative and financial matters of the unaided private professional institutions, the decision of the Committee being quasi-judicial in nature, would always be subject to judicial review. (para 147 of judgment).

10. This judgment shall not have the effect of disturbing the admissions already made or with regard to which the process has already commenced. The law, as laid down in this judgment, shall be given effect to from the academic year commencing next after the pronouncement of this judgment.
I believe that this minority thing, linguistic or religious has divided the country, made people more aware of the differences amongst them. Can we not have a policy that looks at people as human beings first, next how rich or poor they are and lastly their religion.

Due to our socialist beliefs private institutions are discouraged from making profits meaning there are not enough quality institutions to take care of India’s burgeoning education needs. No wonder schools from U.S.A, U.K., Australia and New Zealand are wooing Indian students.

So mired are we in old mindsets that we cease to realize the loss caused by Indian students going abroad. According to, “India sent more students to study in the U.S.A. than any other country in the 2001-02 academic year, according to a study released by Institute of International Education in Washington. The total number of Indian students is 66,836”. If each parent remitted an average of Rs 12 lakhs p.a. roughly Rs 8,000 crs was remitted to every year. If only we allow private institutions to run independently it would attract investment and prevent atleast 50% of the students to study in India as well as get foreign students to study here. Look at the multiplier effect of Indian remittances on the U.S. economy!

But non-resident Indians have excelled! Says Subhash Kak, Professor in the Asian Studies and Cognitive Science Programs, Louisiana State University, “NRIs have done well in the West because the West has institutions that reward excellence, whereas India is mired in sloppy socialist notions”.

We need a transparent regulatory framework for the education sector managed by an All India Regulator. To read judgment see below.

Private Educational Institutions
Appellants: P.A. Inamdar and Ors.
Respondent: State of Maharashtra and Ors.
Hon'ble Judges: (copyright Supreme Court, decided August 12, 2005)
R.C. Lahoti, C.J., Y.K. Sabharwal, D.M. Dharmadhikari, Arun Kumar, G.P. Mathur, Tarun Chatterjee and P.K. Balasubramanyan, JJ.
Subject: Constitution
Catch Words:
Administer Educational Institution, Aggrieved Person, Allotment, Application of Article, Appropriated by the State, Backward Area, Backward Class, Borrowing, Capitation Fee, Chief Justice of India, Concurrent List, Constitution of India, Constitutional Interpretation, Constitutional Limitation, Constitutional Validity, Definition, Directive Principle, Discharge, Disciplinary Action, Discrimination, District Judge, Domicile, Duty of the State, Educational Institution, Educational Right, Efficiency of Administration, Essential Facet, Financial Matter, Fraternity, Fraud on the Constitution, Fundamental Duties, Fundamental Duty, Fundamental Right, General Principle, Give Effect To, Guarantee, Interest of Minorities, Interest of Minority, Interest of the General Public, Interim Order, Interpretation, Judicial Officer, Jurisdiction, Legislation, Liberty, Linguistic Minorities, Linguistic Minority, Majority Judgment, Medical Council of India, Minorities, Minority Community, Minority Institution, Minority Student, National Interest, Parliament, Particular Religion, Private Institution, Privilege, Purpose of Article, Qualification, Question of Law, Ratio Decidendi, Reasonable Restriction, Regulation, Religious Minority, Reservation of Seat, Reservations, Retired Judge, Right Conferred, Right of Minorities, Right of Minority, Right to Education, Rights Conferred, Salaries, Scheduled Caste, Scheduled Tribe, Service Condition, Special Leave Petition, State Legislature, State List, Statutory Provision, Subject to the Provision, The Executive, Unreasonable Restriction, Violation of Article, Weaker Section
Constitution (42nd Amendment) Act, 1976; Constitution of India - Articles 14, 15(1) 19, 19(1), 19(6), 21, 26, 29, 29(1), 29(2), 30, 30(1), 38, 41, 46, 51A and 142; State Reorganisation Act
Cases Referred:
T.M.A. Pai Foundation v. State of Karnataka, Academy of Education and Anr. v. State of Karnataka and Ors. Unni Krishnan, J.P. v. State of Andhra Pradesh, St. Stephen's College v. University of Delhi,; Ahmedabad St. Xavier's College Society v. State of Gujarat,; In Re: Kerala Education Bill, 1957, (1958) SCR 995; P.A. Inamdar and Ors. v. State of Maharashtra and Ors., (2004) 8 SCC 139; Pushpagiri Medical Society v. State of Kerala and Ors., (2004) 8 SCC 135; Dr. Prithvi v. State of MP,; Professor Yashpal v. State of Chhattisgarh, (2005) 2 SCC 61; The Sole Trustee, Lok Shikshana Trust v. C.I.T., Rev. Sidhrajbhai case, AIR 1963 SC 540; State of Kerala, Etc. v. Very Rev. Mother Provincial, Etc.
R.C. Lahoti, C.J.
1. Leave granted in all SLPs.
2. A Coram of 11 Judges, not a common feature in the Supreme Court of India, sat to hear and decide T.M.A. Pai Foundation v. State of Karnataka (hereinafter 'Pai Foundation', for short). It was expected that the authoritative pronouncement by a Bench of such strength on the issues arising before it would draw a final curtain on those controversies. The subsequent events tell a different story. A learned academician observes that the 11-Judge Bench decision in Pai Foundation is a partial response to some of the challenges posed by the impact of Liberalisation, Privatisation and Globalisation (LPG); but the question whether that is a satisfactory response, is indeed debatable. It was further pointed out that 'the decision raises more questions than it has answered' (see: Annual Survey of Indian Law, 2002 at p.251, 254). The Survey goes on to observe "the principles laid down by the majority in Pai Foundation are so broadly formulated that they provide sufficient leeway to subsequent courts in applying those principles while the lack of clarity in the judgment allows judicial creativity ..." (ibid at p.256).
3. The prophecy has come true and while the ink on the opinions in Pai Foundation was yet to dry, the High Courts were flooded with writ petitions, calling for settlements of several issues which were not yet resolved or which propped on floor, post Pai Foundation. A number of Special Leave Petitions against interim orders passed by High Courts and a few writ petitions came to be filed directly in this Court. A Constitution Bench sat to interpret the 11-Judge Bench decision in Pai Foundation which it did vide its judgment dated 14.8.2003 (reported as - Islamic Academy of Education and Anr. v. State of Karnataka and Ors., "Islamic Academy" for short). The 11 learned Judges constituting the Bench in Pai Foundation delivered five opinions. The majority opinion on behalf of 6 Judges was delivered by B.N. Kirpal, CJ. Khare, J (as His Lordship then was) delivered a separate but concurring opinion, supporting the majority. Quadri, J, Ruma Pal, J and Variava, J (for himself and Bhan, J) delivered three separate opinions partly dissenting from the majority. Islamic Academy too handed over two opinions. The majority opinion for 4 learned Judges has been delivered by V.N. Khare, CJ. S.B. Sinha, J, has delivered a separate opinion.
4. The events following Islamic Academy judgment show that some of the main questions have remained unsettled even after the exercise undertaken by the Constitution Bench in Islamic Academy in clarification of the 11-Judge Bench decision in Pai Foundation. A few of those unsettled questions as also some aspects of clarification are before us calling for settlement by this Bench of 7 Judges which we hopefully propose to do.
5. Pai Foundation and Islamic Academy have set out the factual backdrop of the issues leading to the formulation of 11- Judge and 5-Judge Benches respectively. For details thereof a reference may be made to the reported decisions. A brief summary of the past events, highlighting the issues as they have travelled in search of resolution would be apposite.

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