A Few Preliminary observations

20. Before we embark upon dealing with the issues posed before us for resolution, we would like to make a few preliminary observations as a preface to our judgment inasmuch as that would outline the scope of the controversy with which we are actually dealing here. At the very outset, we may state that our task is not to pronounce our own independent opinion on the several issues which arose for consideration in Pai Foundation. Even if we are inclined to disagree with any of the findings amounting to declaration of law by the majority in Pai Foundation, we cannot; that being a pronouncement by 11- Judge Bench, we are bound by it. We cannot express a dissent or disagreement howsoever we may be inclined to do so on any of the issues. The real task before us is to cull out the ratio decidendi of Pai Foundation and to examine if the explanation or clarification given in Islamic Academy runs counter to Pai Foundation and if so, to what extent. If we find anything said or held in Islamic Academy in conflict with Pai Foundation, we shall say so as being a departure from the law laid down by Pai Foundation and on the principle of binding efficacy of precedents, over-rule to that extent the opinion of the Constitution Bench in Islamic Academy.

21. It is pertinent to note, vide paras 2, 3 and 35 of Islamic Academy, that most of the petitioners/applicants therein were unaided professional educational institutions (both minority and non-minority). The purpose of constituting the Constitution Bench, as noted at the end of para 1, was "so that doubts/anomalies, if any, could be clarified." Having answered the questions, the Constitution Bench treated all interlocutory applications as regards interim matters as disposed of (see para 23). All the main matters (writ petitions, transfer petitions and special leave petitions) were directed to be placed before the regular Benches for disposal on merits.

22. Islamic Academy in addition to giving clarifications on Interlocutory Applications, directed setting up of two committees in each State: one committee "to give effect to the judgment in Pai Foundation" and to approve the fee structure or to propose some other fee which can be charged by minority institutions (vide para 7), and the other committee - to oversee the tests to be conducted by the association of institutions (vide para 19).

23. Since the direction made in Islamic Academy for appointment of the Committees has been vehemently assailed during the course of hearing before us, we would extract from the judgment in Islamic Academy the following two passages wherein, in the words of Khare, CJ, the purpose and the constitution of the Committees, the powers conferred on and the functions enjoined upon them are given:

"...we direct that in order to give effect to the judgment in T.M.A. Pai case the respective State Governments/concerned authority shall set up, in each State, a committee headed by a retired High Court Judge who shall be nominated by the Chief Justice of that State. The other member, who shall be nominated by the Judge, should be a Chartered Accountant of repute. A representative of the Medical Council of India (in short "MCI") or the All India Council for Technical Education (in short "AICTE"), depending on the type of institution, shall also be a member. The Secretary of the State Government in charge of Medical Education or Technical Education, as the case may be, shall be a member and Secretary of the Committee. The Committee should be free to nominate/co-opt another independent person of repute, so that the total number of members of the Committee shall not exceed five. Each educational institute must place before this Committee, well in advance of the academic year, its proposed fee structure. Along with the proposed fee structure all relevant documents and books of accounts must also be produced before the Committee for their scrutiny. The Committee shall then decide whether the fees proposed by that institute are justified and are not profiteering or charging capitation fee. The Committee will be at liberty to approve the fee structure or to propose some other fee which can be charged by the institute. The fee fixed by the Committee shall be binding for a period of three years, at the end of which period the institute would be at liberty to apply for revision. Once fees are fixed by the Committee, the institute cannot charge either directly or indirectly any other amount over and above the amount fixed as fees. If any other amount is charged, under any other head or guise e.g. donations, the same would amount to charging of capitation fee. The Governments/appropriate authorities should consider framing appropriate regulations, if not already framed, whereunder if it is found that an institution is charging capitation fees or profiteering that institution can be appropriately penalised and also face the prospect of losing its recognition/affiliation. (para 7)

We now direct that the respective State Governments do appoint a permanent Committee which will ensure that the tests conducted by the association of colleges is fair and transparent. For each State a separate Committee shall be formed. The Committee would be headed by a retired Judge of the High Court. The Judge is to be nominated by the Chief Justice of that State. The other member, to be nominated by the Judge, would be a doctor or an engineer of eminence (depending on whether the institution is medical or engineering/technical). The Secretary of the State in charge of Medical or Technical Education, as the case may be, shall also be a member and act as the Secretary of the Committee. The Committee will be free to nominate/co-opt an independent person of repute in the field of education as well as one of the Vice-Chancellors of the University in that State so that the total number of persons on the Committee do not exceed five. The Committee shall have powers to oversee the tests to be conducted by the association. This would include the power to call for the proposed question paper(s), to know the names of the paper-setters and examiners and to check the method adopted to ensure papers are not leaked. The Committee shall supervise and ensure that the test is conducted in a fair and transparent manner. The Committee shall have the powers to permit an institution, which has been established and which has been permitted to adopt its own admission procedure for the last, at least, 25 years, to adopt its own admission procedure and if the Committee feels that the needs of such an institute are genuine, to admit, students of their community, in excess of the quota allotted to them by the State Government. Before exempting any institute or varying in percentage of quota fixed by the State, the State Government must be heard before the Committee. It is clarified that different percentage of quota for students to be admitted by the management in each minority or non-minority unaided professional college(s) shall be separately fixed on the basis of their need by the respective State Governments and in case of any dispute as regards fixation of percentage of quota, it will be open to the management to approach the Committee. It is also clarified that no institute, which has not been established and which has not followed its own admission procedure for the last, at least, 25 years, shall be permitted to apply for or be granted exemption from admitting students in the manner set out hereinabove. (para 19)"

24. Sinha, J. has not specifically spoken of the Committees. Nevertheless he made a reference to these Committees in his opinion and thus impliedly recorded his concurrence with the constitution of these Committees.

25. Vide para 20, the Constitution Bench has made it clear that the setting up of two sets of Committees in the States has been directed in exercise of the power conferred on this Court by Article 142 of the Constitution and such Committees "shall remain in force till appropriate legislation is enacted by Parliament". Although the term 'permanent' has been used, but it appears to us that these Committees are intended to be transitory in nature.

Reference for constituting a Bench of a coram higher than Constitution Bench.

26. These matters have been directed to be placed for hearing before a Bench of seven Judges under Orders of the Chief Justice of India pursuant to Order dated July 15, 2004 in P.A. Inamdar and Ors. v. State of Maharashtra and Ors.,(2004) 8 SCC 139 and Order dated July 29, 2004 in Pushpagiri Medical Society v. State of Kerala and Ors., (2004) 8 SCC 135. The aggrieved persons before us are again classifiable in one class, that is, unaided minority and non-minority institutions imparting professional education. The issues arising for decision before us are only three:

(i) the fixation of 'quota' of admissions/students in respect of unaided professional institutions;

(ii) the holding of examinations for admissions to such colleges, that is, who will hold the entrance tests; and

(iii) the fee structure.

The questions spelled out by Orders of Reference

27. In the light of the two orders of reference, referred to hereinabove, we propose to confine our discussion to the questions set out hereunder which, according to us, arise for decision:-

(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 therefrom 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?

28. The issues posed before us are referable to headings 3 and 5 out of 'five headings' formulated by Kirpal, CJ in Pai Foundation. So also speaking by reference to the 11 questions framed in Pai Foundation, the questions and answers relevant for us would be referable to question Nos. 3 (b), 4, 5 (a) (b) (c) and (9).