29. A number of learned counsel addressed the Court at the time of hearing raising very many issues and canvassing different view-points of law referable to those issues. We propose to place on record, as briefly as we can, the principal submissions made confined to the issues arising for decision before us.
30. The arguments on behalf of the petitioners were led by senior counsel Shri Harish Salve. Extensively reading various relevant paragraphs and observations in different opinions in Pai Foundation, learned counsel contends that the directions for setting up permanent committees for regulating admissions and fixing fee structure in unaided minority and non-minority institutions issued in the case of Islamic Academy are contrary to the ratio of judgment in Pai Foundation. According to learned counsel, the directions clearly run counter to all earlier Constitution Bench decisions of this Court in St. Stephen's, St. Xavier's and Kerala Education Bill.
31. It is argued that in the judgment of the eleven judges in Pai Foundation which deals with several diverse issues of considerable complexity, every observation has to be understood in its context. Paragraph 68 in Pai Foundation has wrongly been read as the ratio of the judgement by the Bench of five judges in the case of Islamic Academy. It is submitted that paragraph 68 in the majority opinion in Pai Foundation has to be read and understood in the context of the constitutional interpretation placed on Articles 29 & 30 of the Constitution. Reading thus, the directions for setting up permanent committees, for fixing quota and fee structure seriously impinge on the constitutional guarantee of autonomy to minority institutions under Article 30 and to unaided non-minority institutions under Article 19(1)(g). It is submitted that taking over the right to regulate admission and fee structure of unaided professional institutions is not a 'reasonable restriction' within the meaning of Article 19(6) of the Constitution. Such restriction is virtual negation of the constitutional protection of autonomy to minorities in running educational institutions 'of their choice' as provided in Article 30 of the Constitution.
32. Elaborating his legal propositions, learned senior counsel Shri Salve argued that establishing and running an educational institution is a guaranteed fundamental right of 'occupation' under Article 19(1)(g) of the Constitution. Article 19(6) permits State to make regulations and place reasonable restrictions in public interest upon the rights enjoyed by citizens under Article 19(1)(g) of the Constitution. Any imposition of a system of selection of students for admission would be unreasonable if it deprives the private unaided institutions of the right of rational selection which it has devised for itself. Subject to the minimum qualifications that may be prescribed and to some system of computing the equivalence between different kinds of qualifications like a common entrance test, it can evolve a system of selection involving both written and oral tests based on principle of fairness. Reference is made to paragraph 40 of the judgment in Pai Foundation.
33. It is submitted that the State can prescribe minimum qualifications and may prescribe systems of computing equivalence in ascertaining merit; however, the right of rational selection, which would necessarily involve the right to decide upon the method by which a particular institution computes such equivalence, is protected by Article 19 and infringement of this right constitutes an unreasonable encroachment upon the constitutionally guaranteed autonomy of such institutions.
34. It is further argued that where States take over the right of the institution to grant admission and/or to fix the fees, it constitutes nationalization of educational institutions. Such nationalization of education is an unreasonable restriction on the right conferred under Article 19. Reliance is placed on paragraph 38 of the judgment in Pai Foundation.
35. Learned counsel further argues that schemes framed relating to grant of admission and fixing of fees in Unni Krishnan has been held to be unconstitutional by the 11-Judge Bench in Pai Foundation. [Reference is made to paragraph 45 of the judgment in Pai Foundation] It is submitted that the directions to set up committees for regulation of admission and fee structure in Islamic Academy virtually do the same exercise as was done in Unni Krishnan and disapproved in the larger Bench decision in Pai Foundation. The submission in substance made is that Unni Krishnan was disapproved in Pai Foundation and has wrongly been re-introduced in Islamic Academy.
36. It is argued that State necessity cannot be a ground to curtail the right of a citizen conferred under Article 19(1)(g) of the Constitution. The Constitution casts a duty upon the States to provide educational facilities. The State is obliged to carry out this duty from revenue raised by the State. The shortfall in the efforts of the State is met by the private enterprise, that however, does not entitle the State to nationalize, whether in the whole or in part, such private enterprise. This, it is submitted, is the true ratio of the Pai Foundation in so far as Article 19 of the Constitution is concerned.
37. It is next argued that as held in St. Xavier's and re- affirmed in Pai Foundation the right to establish and administer educational institutions by minorities under Article 30 of the Constitution is not an absolute right meaning thereby that it is subject to such regulations that satisfy a dual test that is : the test of 'reasonableness' and 'any regulation regulating the educational character of the institutions so that it is conducive to making the institution an effective vehicle of education for the minority community and for the others who resort to it'. Any regulation which impinges upon the minority character of the institutions is constitutionally impermissible. It is submitted that between the right of minorities to establish and administer the educational institutions and the right of the State to regulate educational activities for maintaining standard of education, a balance has to be struck. The regulation in relation to recognition/affiliation operates in the area of standard of excellence and are unquestionable if they do not seriously curtail or destroy the right of minorities to administer their educational institutions. Only in maintaining standards of education, State can insist by framing regulations that they be followed but in all other areas the rights of minority must be protected. It is conceded that mal-administration is not protected by Article 30 of the Constitution. Similarly, secular laws with secular object that do not directly impinge upon the right of minority institutions and operate generally upon all citizens do not impinge upon Article 30 of the Constitution. This has been the constitutional interpretation of Article 30 not because Article 30 admits no exception like Article 19(6) but because the right conferred under Article 30 does not extend to these areas. The laws that serve national interest do not impinge upon Article 30.
38. Learned counsel in elaborating his argument tried to make a distinction between the rights of aided institutions and unaided institutions. Article 29(2) places a limitation on the right of an aided institution by providing that if State aid is obtained, 'no citizen shall be denied admission on grounds only of religion, race, caste, language or any of them'. It is submitted that as a necessary corollary, no such limitation can be placed while regulating admission in an unaided minority institution which may prefer to admit students of minority community. So far as unaided minority educational institutions are concerned, the submission made is that government has no right or power, much less duty, to decide as to which method of selection of students is to be adopted by minority institutions. The role of the government is confined to ensuring that there is no mal- administration in the name of selection of students or in the fixation of fees. No doubt, the State is under a duty to prevent mal-administration, that is to control charging of capitation fees for the seats regardless of merit and commercializing education resulting in exploitation of students, but to prevent mal- administration of the above nature or on the ground that there is likelihood of such mal-administration, the State cannot take over the administration of the institutions themselves into its own hands. The likelihood of an abuse of a constitutional right cannot ever furnish justification for a denial of that right. An apprehension that a citizen may abuse his liberty does not provide justification for imposing restraints on the liberty of citizens. Similarly, the apprehension that the minorities may abuse their educational rights under Article 30 of the Constitution cannot constitute a valid basis for the State to take over those rights.
39. Learned senior counsel Shri Ashok Desai appearing on behalf of unaided Karnataka Private Medical Colleges (through its Association) of both categories of minority and non-minority has questioned the correctness of the directions in the case of Islamic Academy for setting up permanent committees for fixation of quota and determination of fees. According to him, as held in Pai Foundation, in the name of controlling capitation, there cannot be indirect nationalization and complete State control of unaided professional institutes. In the case of Islamic Academy, the ratio of Pai Foundation that autonomy of unaided non-minority institutions is an important facet of their right under Article 19(1)(g) and in case of minority under Article 19(1)(g) read with Article 30 of the Constitution has been ignored.
40. On behalf of unaided private professional
colleges, learned counsel further submitted that there are many private
educational institutes which have been set up by people belonging to a region
or a community or a class in order to promote their own groups. As long as
these groups form an unaided minority institution, they are entitled to have
transparent criteria to admit students belonging to their group. For instance,
scheduled castes and scheduled tribes have started
41. According to learned counsel, the State control in unaided private professional colleges can only be to the extent of monitoring or overseeing its working so that they do not indulge in profiteering by charging capitation fees and sacrifice merit. According to the learned counsel, in the directions contained in Islamic Academy, the main ratio of Pai Foundation that the unaided institutions should have autonomy in the matter of admission and fees structure has been totally forgotten. The learned counsel raised very serious objections to the manner in which the various permanent committees set up in several States on the directions of Islamic Academy are conducting themselves and forcing their decisions on private institutions. The proposed fee structure is required to be placed before the Committee in advance of the academic year by the institute. It is the Committee which has to decide whether the fees proposed by the institute are justified and do not amount to profiteering or charging of capitation fees. The Committee has been given liberty to approve the fee structure of the institute or to propose a different fee structure. The fee fixed by the Committee is binding for a period of three years and at the end of the said period the institute would be at liberty to apply for revision. Learned counsel gave in writing certain illustrations of decisions of the Fee Committee in few unaided colleges in the State of Karnataka and pointed out that without proper financial expertise and without studying the relevant documents and accounts, the Committee determined the fee structure by only taking into account the affordability of the parents of the students with no regard whatsoever to the viability of the institute on the basis of finances so generated. It is argued as to why private professional institutes should not be allowed to modernize its facilities and provide better professional education than government institutes. It is pointed out that in the case of non-minority unaided M.S. Ramaiaya Medical College, Bangalore, the Fee Committee initially fixed annual fee at Rs.2.55 lacs for MBBS course as against the justification shown by the institute for demanding Rs. 3.90 lacs. The decision of the Fee Committee led to the filing of writ petition by the institute in the High Court of Karnataka and agitation and demonstrations by the students' union. The Committee under the pressure of the student community reduced the annual fee to Rs.1.6 lacs which was re- affirmed after the High Court directed that the management of the unaided college should be heard before reducing the annual fee.
42. Thus the learned counsel on behalf of the
Karnataka Private Medical College Association questioned the correctness of the
directions of the Bench in Islamic Academy. It is
submitted that as decided in Pai Foundation by a larger
Bench, the essence of private educational institutions is the autonomy that the
institution must have in its management and administration. The 'right to
establish and administer' particularly comprises the right a) to admit students
and b) to set up reasonable fee structure. The autonomy of the institution,
therefore, predicates that all seats would be filled by the management and
there can be no reservations or quotas in favour of the State. In Pai
Foundation, the only observations made were that some colleges may
be required to admit a small percentage of students belonging to weaker
sections of the society by granting them freeships or scholarships. It is
conceded that autonomy of a private educational institution to admit students
of its choice does not mean that there can be no insistence on transparency in
the admission procedure and on merit being the criterion for admission. It is
submitted that autonomy of a private educational institution could mean that
they can, according to the objects and purposes of their institutions, give
preference to a particular class or group of students like SC/ST in Ambedkar
Medical College, students from backward area in Bijapur college and transport
employees' children in Madras State Corporation Employees' College or the
children of employees of Larson & Turbo Company in a college established by
that company. The right to charge fees so as to run the college and to generate
sufficient funds for its betterment and growth cannot be controlled by the
State. That would seriously encroach upon the autonomy of the private unaided
institution. It is submitted, by quoting Dr. S. Radhakrishnan, the then
Chairman of the University Education Commission, that interests of democracy
lie with the resistance of the trend towards governmental domination of the
educational process. In conclusion, learned counsel representing Association of
private unaided colleges in Karnataka submits that the decision in Islamic
Academy and the directions made therein go far beyond the law laid
down by the larger Bench in Pai Foundation. The Bench in Islamic
Academy virtually reviewed the larger Bench decision in Pai
Foundation in guise of implementation of the said decision and on
the basis of later developments. In Islamic Academy, the
Bench accepted that there could be no rigid fee structure fixed by the
government for private institutions. An institute should have the freedom to
fix its own fee structure for day-to-day running of the institute and to
generate funds for its further growth. Only capitation and diversion of profits
and surplus of the institute to any other business or enterprise was
prohibited. It is submitted that Islamic Academy contrary
to the legal position explained in Pai Foundation, could
not set up in each State permanent committees headed by retired High Court
Judges with the power to decide on the justification of the fee proposed by the
institute and propose any other fees. It could also not make the fee fixed by
the Committee binding for a period of three years. Learned counsel submits that
once the college infrastructure and hospital facilities attached to the medical
college have been approved by the Medical Counsel of
43. Learned senior counsel Shri F. S. Nariman also supported the submissions made by other counsel on behalf of the unaided professional institutions and added that the observations of the Bench in Islamic Academy clearly go far beyond anything said by eleven judges in Pai Foundation. It is submitted that the question of quota 50:50 for State and management as referred to in St. Stephen's was in respect of aided minority educational institutions and in Pai Foundation, the Bench never suggested fixation of quota for State and management in case of unaided professional institutions. Learned senior counsel particularly pointed out that in Islamic Academy, the observations that different percentage of quota for students to be admitted by the management in each minority and non-minority unaided professional institutions shall be separately fixed on the basis of their need by the respective State Government, was a totally new direction, nowhere to be found or supported by any of the observations in any of the opinions of the 11-Judge Bench in Pai Foundation. With regard to the most controversial observations contained in paragraph 68 of the opinion prepared by Justice Kirpal (the then CJI) in Pai Foundation, learned counsel contended that the decision in Unni Krishnan having been overruled by 11-Judge Bench in Pai Foundation, the observations in paragraph 68 which are more in tune with Unni Krishnan should not be read as the ratio of the case. Senior counsel was also critical of all the observations in fixing quota for the State in unaided institutions on the basis of local needs and not the needs of the community for which the institution was set up. Learned counsel also criticized the directions in Islamic Academy which according to him are contrary to the findings in Pai Foundation that certain unaided private educational institutions which had been adopting its own admission procedure for the last 25 years be allowed to continue to do so. It is submitted that as a part of autonomy of the private unaided institution, the quantum of fees to be charged must be left to the institution and except for checking profiteering and capitation fees, the State can have no say in fixation of fees. The scheme of setting up permanent committees for even unaided minority and non-minority institutions was not at all envisaged in Pai Foundation. The Islamic Academy which was the case before a smaller Bench could not do anything beyond and contrary to what has been stated in Pai Foundation.
44. Learned senior counsel Shri R.F. Nariman in supporting the argument advanced against the directions in Islamic Academy submitted that any interference with the autonomy of the institution, other than to prevent mal-administration, would not be saved by Article 19(6) of the Constitution. The concept of administration includes choice in admitting students and fixing a reasonable fee structure. In the matter of admission, if objective criteria are adopted so as to reflect the merit, it would be unexceptionable. So far as fee structure is concerned, no institution can be allowed to charge capitation fees which only means something taken over and above what the institution needs by way of revenue and capital expenditure plus a reasonable surplus. Once Unni Krishnan was overruled, private education cannot be allowed to be nationalized. It is submitted that it may be possible for the State to scrutinize the expenditure of revenue and capital expenditure of an aided and unaided institution to ensure good administration but the State cannot devise its own admission procedure and determine in advance a fee structure for the unaided private institutions. On the question of deducing ratio in Pai Foundation, learned counsel referred to Halsbury Laws of England Vol. 37 page 378 in which the meaning of ratio decidendi has been explained. It is submitted that it is only the essence of the reason or principle upon which the question before a court has been decided which is alone binding as a precedent. It is dangerous to take one or two observations out of a long judgment and to treat them as if they give the ratio decidendi of the case.
45. Dr. Rajiv Dhawan, learned senior counsel in assailing directions issued in Islamic Academy for setting up permanent committees to fix quota and fee structure highlighted that the State of Maharashtra has encroached upon the rights of unaided institutions by directing in one of its Government Memoranda dated 13.02.2003 that even in the quota of seats fixed for management, the unaided non-minority institutions should implement the rule of reservation (communal reservation) of the State Government.
46. Learned senior counsel contends that the net result of such illegal directions is that the reservation policy for schedule castes, schedule tribes and OBCs is to be applied not only for 50% seats of government quota but also for the remaining 50% of management quota of unaided non-minority institutions. Virtually, the management of non-aided institutions has been completely taken over by the state and as a result of communal reservations, the quota of seats fixed for government and quota fixed for the management may be filled by granting admissions to students of non-minority communities .
47. Learned senior counsel contends that in Pai Foundation, maximum autonomy is conceded in favour of unaided institutions. The only insistence is on maintenance of transparency in method of admission and fixation of such fee structure that does not permit charging of capitation fee. Interpreting provisions of Article 19(6) and Article 30 it is contended that constitutional limitation necessarily would vary in imposing reasonable restriction where the institution is unaided or aided.
48. On the issue of constitutional protection to the unaided minority institutions, the contention advanced that general restrictions permissible under Article 19(6) can also be applied to unaided minority institutions, it is submitted, is misconceived. The submission is that education is a recognized head of charity. The object of establishing educational institution is not to make profit. Imparting education is essentially charitable in nature. The charitable nature of the occupation of establishing and running an educational institution has been recognized in Pai Foundation. Therefore, all restrictions, which are permissible under Article 19(6) in case of other kind of professions and occupations, cannot apply to educational activities. It is submitted that restrictions imposed should satisfy the requirements of Article 30 and not only of Article 19(6).
49. In Pai Foundation, for determining linguistic and religious minorities, the unit to be taken is State. Therefore, when Tamilians, who are in majority in Tamil Nadu, establish an institution for Tamil students in Karnataka, it would be a minority institution in Karnataka. What would be the rights of such an institution of linguistic minority has not been answered either in Pai Foundation or in Islamic Academy. Therefore, this Bench should decide what are the rights of such cross- border institutions.
50. In short, the submission made by Sr. Counsel Dr. Rajiv Dhawan is that there is nothing in Pai Foundation, which permits fixation of quotas for government seats, fixation of fee structure by the State, imposition of its reservation policy and imposition of candidates on the basis of common entrance test conducted by the State. In Pai Foundation, the State can have some controlling influence on unaided institutions for the purpose of ensuring transparency in admissions and checking the collection of capitation fee. In Pai Foundation, no preemptive action by setting up permanent committees by the State was envisaged or even indirectly approved.
51. The decision in Islamic Academy, it is submitted, is contrary to the decision by the larger Bench in Pai Foundation, and deserves therefore to be so declared by this Bench.
52. Learned senior counsel Shri U.U. Lalit
appears for the sole
(a) 25% students will be charged five times of the average fee, which was in vogue before TMA Pai's judgment.
(b) 50% students will be charged average fee.
(c) Remaining 25% will be charged 1/4th of the average fee.
53. It is submitted that in the above proposed fee structure, meritorious students coming from all sections of society will be able to take admissions. At the same time, the educational institutions will be able to recover the amount required for running the educational institution in the best possible manner. It is, therefore, prayed that Bombay High Court judgment dated 23.08.2003 prescribing uniform fee structure for all the students be set aside and minority educational institutions be allowed in the exercise of their fundamental right, to prescribe fee under a three-tier system subject to the rider of non-profiteering and not charging capitation fee.
54. In reply, on behalf of the respondents, senior counsel, Shri K.K. Venugopal, who appeared for the States of Kerala led the arguments. It may be noted at this stage that after the decisions in Pai Foundation and Islamic Academy, in the States of Kerala, Karnataka, Maharashtra and Tamil Nadu, their respective legislatures have passed Acts regulating admissions and charging of fee in both aided and unaided minority and non- minority private educational institutions engaged in imparting education in professional, medical, engineering and allied courses.
55. On behalf of the State of
56. To justify fixation of quota for seat sharing between State and the private management and fixing a reasonable fee structure to avoid profiteering and capitation, the learned counsel highlighted certain illicit practices, which are being resorted to, by the private institutions to exploit the student community. It is submitted both the judgments in Pai Foundation and Islamic Academy, profiteering, commercialization of education and the collection of capitation fee have been condemned. This court had expressly held that it would be open to the government to make regulations for the purpose of preventing commercialization of professional education. It is on the line suggested by this court that the Government of Kerala had made regulations both for the purpose of admissions as well as for fixing reasonable fee which will cover not only the expenditure incurred by the institution but also give them a reasonable revenue surplus for further growth and betterment of the institution.
57. The High Court of Kerala by its judgment of 23.08.2003
has fixed rupees 1.50 lacs provisionally per annum as the fee. The Government
has fixed 1.76 lacs. What is being disclosed by
58. It is submitted that if the scheme as evolved in Islamic Academy of setting up of permanent Committees is not allowed, education which is already commercialized to some extent would be wholly inaccessible to students coming from middle classes, lower-middle classes and poor sections of the society. To provide access to professional education even to weaker sections of the society in fifty percent quota of seats to be filled by the government, the reservation policy of the government has been applied. The fifty-fifty percent quota between government and management fixed by the government has been changed to twenty five-seventy five per cent by the court. Similarly, the court has struck down Regulation 11 framed by the State on the ground that the State cannot foist fee of students on the institution and it would be left to the management to make provisions for poorer sections of the society through free-ships or scholarships.
59. In the above-mentioned background, learned counsel Shri Venugopal submits that this Bench is not considering the correctness of judgment in Islamic Academy. It will not and cannot go into the question of correctness of judgment in Pai Foundation which is of a larger Bench. This Bench has a limited jurisdiction to examine whether the 5-Judge Bench decision in Islamic Academy is in any manner inconsistent with 11-Judge Bench judgment in Pai Foundation. It is submitted that if there are certain inherent inconsistencies between various paragraphs particularly 59 and 68 of the judgment in Pai Foundation, they have to be resolved and that was exactly what was done by the five judges in Islamic Academy.
60. In Pai Foundation, observation in paragraph 68 under the heading "Private Unaided Professional Colleges" read with para 69 indicates appropriate machinery to be evolved to regulate admissions in both categories of private institutions to check exploiters who are charging capitation fee.
61. It is submitted that if the attempt by the Bench in Islamic Academy to resolve the apparent inconsistency in the judgment of Pai Foundation, indicated a reasonable and plausible interpretation of the 11-Judge Bench judgment in Pai Foundation, this court should refrain from substituting another interpretation.
62. It is for the first time in Pai Foundation that the question of application of Article 30 to minority professional colleges arose. All earlier judgments of this court were only concerning education in schools and colleges other than those imparting professional education. For the first time in Pai Foundation, the court held that running an educational institution is an 'occupation' and Article 19(1) (g) guarantees it as a fundamental right.
63. It is submitted that regulation of non-minority unaided professional institution is permissible under Article 19(6) of the Constitution to prevent profiteering, levy of capitation fee and selection of non-meritorious candidates. Such regulation also does not violate right of minority professional institutions under Article 30, which this Court has repeatedly held, is not an absolute right but is merely a protection extended to minorities against oppression by the majority.
64. The issue relating to reservation of seats for schedule castes, schedule tribes or OBCs, either in management quota or in Government quota did not come up for consideration either in Pai Foundation or Islamic Academy. This has to be separately dealt with by the present Bench
65. Similarly, it is submitted that right of minority institutions to admit students from all over the country, irrespective of their religion and community and also from abroad such as NRIs never arose directly for consideration either in Pai Foundation or Islamic Academy. In this respect, it is submitted that the status of minority both religious and linguistic is to be determined at the state level. The minority institutions cannot claim a right to cater to the educational needs of their community from all over the country and even from abroad.
66. In paragraph 68 of the judgment in Pai Foundation the use of the phrase 'certain percentage based on local needs' and further phrase 'different percentages can be fixed' for minority unaided and non-minority unaided professional colleges' clearly convey that quotas can be fixed based on local needs for management and for the Government. Meritorious students from weaker sections are not to be sidelined from higher and professional education. It is argued that the phrase 'local need' as used in paragraph 68 in the judgment of Pai Foundation cannot be read to mean the needs of the institution concerned. So far as the selection based on merit is concerned, common entrance test has been suggested both for aided and non-aided professional colleges. When there is no common entrance test, merit becomes the casualty and the rich and the affluent corner the seats.
67. So far as the right to fix a fee structure for unaided minority or non-minority colleges or institutes is concerned, the argument that pre-fixation of fee is a serious encroachment on the rights of minority and non-minority, it is submitted, is not valid as full discretion is given to the management in fixing their fee structure. However, they would not be allowed to fix such high fee as would deny many meritorious students a chance of admission only because they come from economically weaker sections. It would be of no consolation to them to find that after admissions are over and classes have started, the fee has been lowered by the monitoring committee. If the committee is allowed to scrutinize the justification of fee fixation after the admissions and the fee is lowered, it would not be possible for the meritorious students to again seek admission. Through the Committees set up in Islamic Academy, the fee structure would be known before hand and would serve the interest of the institution as also the students seeking admission. The Committee has to fix fee for each college depending upon its peculiar conditions and its assets and availability of funds. Coming to the question of cross subsidy, it is submitted that in Pai Foundation, cross-subsidizing the weaker sections by the more affluent ones has not been held to be impermissible. The Bench in Pai Foundation overruled the judgment in Unni Krishnan. The latter provided for "marginally less merited rural or poor students bearing the burden of rich and urban students." The learned counsel suggests that solution can be to set apart fifteen percent of total seats in a local college to be filled by NRI/ person of independent origin/ foreign students who would volunteer to fill up the allotted seats on the management quota but on inter se merit. Each NRI student would subsidize two other students belonging to the economically and socially weaker sections based on an annual income of say less than rupees 2.5 lacs. This would cater to the financial needs of at least 30 out of 50 students selected on merit forming part of the Government quota and this would be a constitutionally permissible solution.
68. To streamline and further improve the admission procedure and fixation of fee structure, learned counsel has made the following proposals in writing submitting that they may be of practical value to the Committees directed to be set up by Islamic Academy:-
A. ADMISSION:
Six months prior to the commencement of the academic year, the Government would fix the percentage of students to be admitted by a minority (religious/linguistic) professional college (other than engineering), taking into account the local needs of the State, the region as well as that of the minority- community. It would be a huge and cumbersome exercise in practice, to fix a percentage for each one of the institutions separately and it would be a pragmatic approach to have a fixed percentage for all the minority institutions which is fair and reasonable. A practical approach to the problem would require a very definite percentage to be fixed for minority institutions, say, 50% so that even if candidates of their choice, belonging to the minority institutions, are only 25% they would still have the right to select non-minority students to make up the 50%, of course, from the CET held by the Government.
1. The CET held by Government would ensure that the various devices adopted by professional colleges to secretly demand capitation fees and take the same in black money, thus resulting in merit being the casualty, would not take place. No prejudice will be caused to the management of the professional colleges as they could select the minority students based on inter se merit in the CET held by the Government.
2. There would equally be no disadvantage to any particular section or to Government if the same 50% rule is applied even to unaided non-minority professional colleges as well.
3. The result of following this procedure is that a consortium holding the tests for admissions is done away with and a monitoring committee, preferably headed by a retired High Court or Supreme Court judge would ensure fairness and transparency both in the minority and non-minority professional institutions.
4. ...
5. ...
B. FEES:
The Committee suggested by Islamic Academy and the procedure mentioned therein, appears to be the only safe method of ensuring that extortionate fees are not charged by the medical colleges. At the same time, it would be wrong to deny expenditure which the institution undertakes for ensuring excellence in education. Equally, a reasonable surplus should be permitted so that the fees charged cover the entire revenue expenditure and in addition leaves a reasonable surplus for future expansion. This alone would prevent the clandestine collection of capitation fees and would result in entrepreneurs investing in new medical colleges.
The Committee suggested by Islamic Academy appears to be the ideal one consisting of a chartered accountant, a representative of the MCI or AICTE as the case may be, with a retired judge of the High Court or the Supreme Court as the head.
The fee is to be fixed on the proposal of the institution supported by documents and the procedure of fee finalization should commence at least 6 months in advance of the commencement of the academic year.
These proposals should all be by way of an interim arrangement as held by Islamic Academy in para 20 with the Parliament bringing in a law, as suggested by Islamic Academy without dragging its feet any longer."
69. With regard to the ambit of the constitutional guarantee of protection of educational rights of minorities under Article 30, learned counsel submits that both religious and linguistic minority, as held in Pai Foundation , are to be determined at the State level. On this understanding of the concept of 'minority', Article 30 has to be harmoniously construed with Article 19(1)(g) and in the light of the Directive Principles of the State Policy contained in the Articles 38, 41 and 46. Rights of minorities cannot be placed higher than the general welfare of the students and their right to take up professional education on the basis of their merit.
70. The real purpose of Article 30 is to prevent discrimination against members of the minority community and to place them on an equal footing with non-minority. Reverse discrimination was not the intention of Article 30. If running of educational institutions cannot be said to be at a higher plane than the right to carry on any other business, reasonable restriction similar to those placed on the right to carry on business can be placed on educational institutions conducting professional courses. For the purpose of these restrictions both minorities and non-minorities can be treated at par and there would not be any violation of Article 30(1), which guarantees only protection against oppression and discrimination of the minority from the majority. Activities of education being essentially charitable in nature, the educational institutions both of non-minority and minority character can be regulated and controlled so that they do not indulge in selling seats of learning to make money. They can be allowed to generate such funds as would be reasonably required to run the institute and for its further growth.
71. On behalf of the State of
72. With regard to the quota fixation, learned counsel submits that paragraph 68 in Pai Foundation allows reservation of quota for management and for the Government for available seats. It is submitted that the educational institutions cannot merely read the answer to question no.4 given by judgment in Pai Foundation and ignore the other observations in other paragraphs of the judgment.
73. So far as the case of minority and non-minority unaided institutions is concerned, learned counsel submits that the balancing act has been performed in the judgment of Pai Foundation by regulating the economy of educational institutions moderated by necessary State legislation. Observation in paragraph 68 in Pai Foundation does not amount to permitting nationalization or takeover of the private institutions which was the main feature found foul in the decision in Unni Krishnan and was consequently overruled. The observation in Pai Foundation in paragraph 68 strikes the balance between the academy and education. To read paragraph 68 as merely giving an instance would be to ignore the concern of the Bench in Pai Foundation of providing reservation to poorer or backward sections of society even in private institutions. The description of percentage of reservation in paragraph 68 is different from reservation policy of the State for State institutions and in State quota.
74. It is submitted that the reservation spoken of in paragraph 68 of Pai Foundation is to cater to the needs of poorer and weaker sections and also other students depending upon the local needs.
75. So far as the regulation of fee structure is concerned, it is submitted that in paragraph 69 in Pai Foundation there is a mention of "appropriate machinery to be devised by the State or University to ensure that no capitation fee is charged and profiteering is checked." The judgment in Islamic Academy merely implements the legal position explained by Pai Foundation by providing a fee determination committee. In reply to the argument that post-fixation audit may be permitted to check profiteering and capitation, the learned counsel answers that if the role of the Committee is limited to supervisory post fixation audit, it would amount to denying credible restriction to the charging of capitation fee. It is chimerical to suggest that the student should first pay the exorbitant fee fixed by the institution and later on complain about it to the post audit machinery to recover the excess through court of law. The controlling of the fee fixing machinery is necessarily to be done before it is charged otherwise it is meaningless to the benefit of the students for whom it is suggested in paragraph 69. The general principle for scrutinizing the fee structure is two-fold; (1) that education is a charity, (2) that educational institutions cannot charge such fee as is not required for the purpose of fulfilling that object which means cost plus reasonable surplus for expansion and growth of the institution. These are the parameters before the Committee whose decisions, in any case, are subject to judicial review.
76. So far as the admissions based on common entrance test are concerned, it is submitted that paragraphs 58 and 59 of Pai Foundation permit regulations to be framed for admission in professional institutions by State agency to ensure admission on merit. In the absence of CET and centralized counseling, private educational institutions would pick and choose candidates ignoring merit, as has been evident from the Karnataka experience. If the private professional educational institutions conceive that merit cannot be ignored in granting admission, direction to make selection based on CET does not in any manner adversely affect the character of the minority institution. The State regulation providing for CET is a reasonable restriction and it will pass the test of Article 19(6) both in respect of aided and unaided non-minority institutions. Private unaided institutions have also to admit students on the basis of merit in a fair and transparent manner in the interest of student community. Right of private educational institutions to admit students can be regulated. Such regulations if in national and public interest do not in any manner impinge on the right of minority.
77. Learned counsel points out that so far as the
State of
78. Arguments were also advanced supporting the
directions in Islamic Academy by learned senior counsel
Shri P.P. Rao appearing for the State of
79. Learned counsel pressed into service Article 51A(j) providing for Fundamental Duties in the Constitution. It is submitted that fundamental duty is enjoined on citizens to so direct their individual and collective activities that the nation constantly rises to higher levels of endeavour and achievement. This duty implies that the State on its part is to facilitate discharge of duties by the citizen in relation to the professional education. The State is bound to ensure admission to colleges that are made purely on relative merit to be objectively assessed by a responsible agency. The decisions of this court rendered from time to time consistently and unanimously held that regulation could be made for achieving standards of excellence in education. Reliance is placed on Dr. Prithvi v. State of MP; Professor Yashpal v. State of Chhattisgarh (2005) 2 SCC 61 at 79 paragraph 90.