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Friday, May 13, 2016

'Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007' (hereinafter referred to as the 'Act, 2007'). The appellants also challenged vires of Admissions Rules, 2008 (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. = I hold that the State has the legislative competence to enact the impugned legislation-Act 2007 to hold common entrance test for admission to professional educational institutions and to determine the fee and the High Court has rightly upheld the validity of the impugned legislation. Regulations sought to be imposed by the impugned legislation on admission by common entrance test conducted by the State and determination of fee are in compliance of the directions and observations in T.M.A. Pai, Islamic Academy of Education and P.A. Inamdar. Regulations on admission process are necessary in the larger public interest and welfare of the student community to ensure fairness and transparency in the admission and to promote merit and excellence. Regulation on fixation of fee is to protect the rights of the students in having access to higher education without being subjected to exploitation in the form of profiteering. With the above reasonings, I concur with the majority view in upholding the validity of the impugned legislation and affirm the well merited decision of the High Court.


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 4060 OF 2009

|MODERN DENTAL COLLEGE AND                  |                             |
|RESEARCH CENTRE & ORS.                     |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|STATE OF MADHYA PRADESH & ORS.             |.....RESPONDENT(S)           |

                                   W I T H
                        CIVIL APPEAL NO. 4061 OF 2009

                        CIVIL APPEAL NO 4062 OF 2009

                        CIVIL APPEAL NO 4063 OF 2009

                        CIVIL APPEAL NO 4064 OF 2009

                                    A N D

                        CIVIL APPEAL NO 4065 OF 2009

                               J U D G M E N T

                 In all these  appeals,  validity  and  correctness  of  the
common judgment dated May 15, 2009  passed  by  the  High  Court  of  Madhya
Pradesh, Principal Bench at Jabalpur, has been questioned.   The  appellants
in these appeals had filed writ petitions challenging the validity/vires  of
the provisions of the statute passed by  the  State  Legislature,  which  is
known as 'Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam  Shulk
Ka Nirdharan)  Adhiniyam,  2007'  (hereinafter  referred  to  as  the  'Act,
2007').  The appellants also challenged  vires  of  Admissions  Rules,  2008
(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  the  provisions  relating  to   eligibility   for

Insofar as provisions relating to admission, eligibility for  admission  and
fixation of fee are concerned, the main contention  of  the  appellants  was
that these medical and dental colleges being private  unaided  colleges,  it
is their fundamental right under Article 19(1)(g)  of  the  Constitution  of
India to lay down the eligibility  criteria  for  admission  and  admit  the
students as well as fix their fee.  Relying  upon  the  eleven  Judge  Bench
decision of this  Court  in  T.M.A.  Pai  Foundation  &  Ors.  v.  State  of
Karnataka & Ors.[1], it was argued  that  right  to  administer  educational
institution is recognised as an 'occupation' and  is,  thus,  a  fundamental
right to carry on such an occupation  as  stipulated  in  Article  19(1)(g).
According to the appellants, the provisions in the aforesaid Act  and  Rules
impinge upon the fundamental right guaranteed to  these  institutions  under
the Constitution and,  therefore,  the  said  provisions  are  violative  of
Article 19(1)(g) of the  Constitution.  Insofar  as  provision  relating  to
reservation  of  seats  to  Scheduled  Castes,  Scheduled  Tribes,  etc.  is
concerned, the emphasis of the  appellants  was  two  fold:  First,  it  was
argued that private educational institutions  cannot  be  foisted  with  the
obligation to admit students of reserved class, which was the obligation  of
the State.  Secondly,  the  provisions  of  the  Act,  2007  made  excessive
reservations thereby leaving hardly any  seats  for  unreserved  categories,
which is not permissible in view  of  the  judgment  of  this  Court  in  T.
Devadasan v. Union of India & Anr.[2] and subsequent  decisions  reiterating
the dicta in T. Devadasan.
            As would be noticed hereinafter, the  basis  of  attack  to  the
constitutional validity of the provisions of the Act and Rules  remains  the
same.  Additionally, however, the challenge to the said  Act  and  Rules  is
laid  before  us  also  on  the  ground  of  the  competence  of  the  State
Legislature as, according to the appellants, the  subject  matter  falls  in
the domain that is exclusively reserved for the Parliament.

The High Court has repelled the challenge  on  first  three  counts  holding
that the judgment in T.M.A. Pai Foundation, as explained in P.A.  Inamdar  &
Ors. v. State of Maharashtra & Ors.[3], permits the Government  to  regulate
the admissions as well as fee,  even  of  the  private  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

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 medical  and  dental  professions.
However, writ  petitions  were  filed  raising  the  grievance  against  the
aforesaid enactment only by medical  and  dental  educational  institutions.
Institutions imparting other kind of professional education  have  not  felt
Be that as it may, for regulating the admission and fixation  of  fee  under
Section 4 of the Act, a committee known as  'Admission  and  Fee  Regulatory
Committee' (hereinafter referred to as the 'Committee') is  constituted  for
the supervision and guidance of the admission process and for  the  fixation
of fee to  be  charged  from  candidates  seeking  admission  in  a  private
professional educational institution.  This  Section  further  provides  for
composition, disqualification and functions of the Committee.

Chapter III which comprises of Sections 5 to 8 deals with  'Admission'.   As
per Section 5, the eligibility for admission to such institutions  shall  be
such as may be notified by the  appropriate  authority.   These  eligibility
conditions are provided  in  Rules,  2008.   Section  6  prescribes  'Common
Entrance Test' (for short, 'CET') on the basis of which admissions would  be
made and the same reads as under:
“6.  Common Entrance Test –  In  private  unaided  professional  educational
institution, admission to sanctioned intake shall be on  the  basis  of  the
common entrance test in such manner  as  may  be  prescribed  by  the  State

            CET is defined in Section 3(d) of the Act,  2007  and  reads  as
“(d)  “Common  entrance  test”  means  an  entrance  test,   conducted   for
determination of merit of the candidates followed by centralized  counseling
for the purpose  of  merit  based  admission  to  professional  colleges  or
institutions through a single window procedure by the  State  Government  or
by any agency authorized by it;”

            As per Section 7, any admission made contrary to the  provisions
of the Act or Rules is  to  be  treated  as  void.   Section  8  deals  with
'reservation of seats'.

Insofar as fixation of fee is concerned, the facts which have  to  be  taken
into consideration while fixing the fee are provided in Section 9, which  is
under Chapter IV of the Act, and reads as follows:
“9.  Factors – (1) Having regard to -

(i)  the  location  of  the   private   unaided   professional   educational

(ii) the nature of the professional course;

(iii) the cost of land and building;

(iv)  the  available  infrastructure,  teaching,  non-teaching   staff   and

(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.  Under  Section  12,   the   State
Government may, by notification, make Rules for carrying out the purpose  of
the Act.  Section 13 empowers  the  State  Government  to  make  Regulations
consistent with the Act and the Rules made thereunder, inter alia,  relating
to the eligibility of admission,  manner  of  admission  and  allocation  of
seats in a professional educational institution, including  the  reservation
of seats, as well as the manner or criteria for determination of fee  to  be
charged by professional educational institutions from the students  and  the
fee that is to be charged by the professional educational institutions.

It may be mentioned that Circular/Notification dated February 28,  2009  and
March 15, 2009 was issued by the State Government under  Section  6  of  the
Act, 2007 appointing the Professional Examination Board,  Bhopal  (which  is
known as VYAPAM) as the agency to conduct the entrance examination  for  the
Post-graduate  Entrance  Examination   of   Private   Medical   and   Dental
universities and under-graduate examination respectively.

The Impugned Judgment
As already mentioned above, the High Court classified the challenge  to  the
provisions of the aforesaid Act and Rules into four  heads  and  then  dealt
with each head separately.  Insofar as challenge to the  provision  relating
to admission is concerned, the High Court has concluded that the  provisions
of Section 6 read with Section 3(d) of the Act,  2007,  which  provide  that
admissions to the sanctioned intake shall be on the basis  of  CET  followed
by  centralised  counselling  by  the  State  Government  or  by  an  agency
authorised by the State Government, are in consonance with the  judgment  of
this Court in T.M.A. Pai  Foundation  and  P.A.  Inamdar.   The  High  Court
reproduced paragraphs 58 and 59 of T.M.A. Pai Foundation wherein this  Court
emphasised that the admission is to be made on the basis of merit, which  is
usually  determined  either  by  marks  that  the  student  obtains  at  the
qualifying examination or school leaving certificate stage followed  by  the
interview or by a CET conducted  by  the  institution  or  in  the  case  of
professional colleges, by Government agencies.  From this,  the  High  Court
concluded that since merit has to be the prime consideration and one of  the
recognised mode of ascertaining the merit is  through  CET  and  insofar  as
professional colleges are concerned, T.M.A. Pai Foundation itself  permitted
such CET to be conducted 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
admission procedure which  was  adopted  by  the  private  institutions  had
failed to satisfy  the  triple  test  of  transparency,  fairness  and  non-
exploitativeness thereby compelling the State to substitute the same by  its
own procedure and sufficient material was produced  by  the  respondents  on
record to show that prior to the enactment of  the  Act,  2007,  there  were
number  of  complaints  of  malpractices  in  admissions  in   the   private
professional educational institutions which were found to be true.
                 In nutshell, the High Court took the  opinion  that  having
regard to the larger interest of the welfare of the  students  community  to
promote merit, achieve excellence, curb malpractices and to secure grant  of
merit based admission in transparent manner, the Legislature in  its  wisdom
had passed the  Act  in  question,  also  keeping  in  mind  the  prevailing
conditions relating to admissions in  such  institutions  in  the  State  of
Madhya Pradesh.  It, thus, concluded on this aspect that  Sections  3(d),  6
and 7 of the Act, 2007 do not impinge on the fundamental right to  carry  on
the 'occupation' of establishing and administering professional  educational

Dealing with the challenge to the provisions relating to fixation  of  fees,
viz. Sections 4(1), 4(8) and 9 of  the  Act  in  question,  the  High  Court
recognised the right of these educational institutions, as found  in  T.M.A.
Pai Foundation, that decision on the fee to be charged  is  to  be  left  to
private educational institutions. Notwithstanding, the same  judgment  gives
power to the State to regulate the exercise  of  power  of  the  educational
institution to ensure that there is no 'profiteering' and Sections 4  and  9
of the Act, 2007 were aimed at achieving that purpose only.   In  substance,
these provisions empower the  Committee  to  satisfy  itself  that  the  fee
proposed by a private professional educational institution  did  not  amount
to profiteering or commercialisation of  education  and  was  based  on  the
factors mentioned in Section 9(1) of the Act, 2007.  The  Court  noted  that
these factors which  were  mentioned  in  Section  9(1)  were  the  relevant
factors for fixation of fee as they  ensured  fixation  of  such  fee  which
would take into consideration the nature of professional courses,  the  cost
of land and building, the available infrastructure,  teaching,  non-teaching
staff and equipment, the expenditure on administration and  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

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.[4]  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  reasonable  balance
between the several relevant considerations.  Likewise, after the  insertion
of clause (5) to Article 15 by  the  Constitution  (Ninety-Third  Amendment)
Act, 2005, another enabling provision was introduced  empowering  the  State
to make any special provision by law for advancement  of  any  socially  and
educationally backward classes of citizens or for the  Scheduled  Tribes  or
the Scheduled Castes insofar as such special provision relates to  admission
to  the  educational  institutions,  including  the   private   professional
educational institutions, whether aided  or  unaided.   Thus,  in  terms  of
Article 15(5) of the  Constitution,  the  State  was  empowered  to  provide
reservation  to  such  weaker  sections   even   in   respect   of   unaided
institutions, including minority institutions.  In that  context,  the  High
Court went into the arithmetic of the seats that have been  earmarked  under
Rule 7 of  Rules,  2009  for  candidates  belonging  to  different  reserved
categories in different disciplines or subjects and on that  basis  came  to
the conclusion that the distribution of seats to  those  categories  clearly
demonstrates that sufficient number of seats have  been  allotted  also  for
unreserved categories in different disciplines or subjects of post  graduate
medical and dental courses in Medical and Dental colleges in  the  State  of
Madhya Pradesh.  In the process, the High Court dispelled the  fear  of  the
writ petitioners that the unreserved category candidates scoring high  marks
than the reserved category candidates will not get seats in  the  discipline
or subjects of their choice.

Rule 10 of Rules, 2009 lays down the eligibility conditions  for  candidates
for taking the CET  for  admission  to  post  graduate  medical  and  dental
courses in private unaided medical and  dental  colleges  in  the  State  of
Madhya  Pradesh.  One  of  the  eligibility  conditions  specified  in  Rule
10(2)(iii) is that an eligible candidate must permanently be  registered  by
Madhya Pradesh Medical/ Dental Council (and/or MCI/DCI) on or  before  April
30, 2009.  The validity of this Rule was challenged  by  some  of  the  writ
petitioners  on  the  ground  that  this  Rule  bars  candidates   who   are
permanently registered with other State Medical/Dental Councils from  taking
the CET.   This  contention  of  the  writ  petitioners  has  been  accepted
declaring  Rule  10(2)(iii)  of  the  Rules,  2009  as  ultra  vires.    The
conclusion of the High Court on this aspect has become final  as  the  State
has not filed any appeal thereagainst.

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
ensure that the merit is maintained.  It  is  also  concluded  by  the  High
Court that sufficient material that was placed on record to  establish  that
prior to the enactment of the  Act,  2007  clearly  exhibited  that  private
unaided institutions were not able to ensure a fair,  transparent  and  non-
exploitative admission procedure.   As  such,  the  High  Court  upheld  the
provisions of the Act, 2007 and the  Rules,  2008  read  with  notifications
issued thereunder to be constitutionally valid.

(ii)  Re.: Fee Regulation – With regard to the challenge to  Sections  4(1),
4(8) and 9 of the Act, 2007 read with Rule 10 of  the  Rules,  2008,  it  is
held that the power of the Fee Regulatory  Committee  under  the  provisions
was only 'regulatory' and the purpose of which was to empower the  Committee
to  be  satisfied  that  the  fee  proposed  by  the  private   professional
institutions  did  not  amount  to  profiteering  or  commercialisation   of
education and was based on intelligible factors mentioned  in  Section  9(1)
of Act, 2007 providing a canalised power which  was  not  violative  of  the
fundamental rights of the private professional institutions to charge  their
own fee.

(iii) Re.: Reservation – The challenge to Section 8 of Act, 2007  and  Rules
4 & 7 of Rules, 2008 relating to reservations were not seriously pressed  by
the appellants in view of the amendment to Article 15,  whereby  clause  (5)
was inserted, by the Constitution (Ninety-Third Amendment),  2005.   In  any
case, the High Court has examined the said  provisions  and  concluded  that
sufficient number of seats were allotted  for  the  unreserved  category  in
different disciplines and subjects, and that a reasonable balance  had  been
struck between the rights of the  unreserved  category  candidates  and  the
reserved category candidates.

The aforesaid background, as narrated by us, would make it  clear  that  the
attack to the constitutional validity of the  Act,  2007  read  with  Rules,
2008 and Rules, 2009 primarily touches upon the following three aspects:

(i) The impugned provisions usurp the rights of educational institutions  to
conduct exam and admit the students.  It is argued that this right has  been
specifically recognised in T.M.A. Pai Foundation, which  legal  position  is
reiterated in P.A. Inamdar. Therefore, right to  admission  of  students  in
unaided recognised educational institutions is  to  be  exercised  by  these
institutions. Even 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  to  reasonable
restriction and, therefore,  that  would  satisfy  the  test  laid  down  in
Article 19(6) of the Constitution, but taking away the  power  of  admission
entirely by conducting CET and  even  counseling  would  fall  foul  of  the
fundamental right to carry on occupation guaranteed under Article  19(6)  of
the Constitution and such provisions cannot be saved under Article 19(6)  of
the Constitution as well as they disturb the  Doctrine  of  Proportionality.
It was submitted that the State's intervention, if at all, can only be  with
consensual arrangement and not otherwise.

(ii)  Likewise, it is argued by the appellants that as a  facet  of  Article
19(1)(g) of the Constitution, right to fix the fee is conferred  upon  these
educational institutions which are unaided and, therefore, the State  cannot
assume that power to itself.   Here  again,  the  power  of  the  State  was
limited to that of 'policing', viz., to ensure that the  fee  fixed  by  the
educational institutions does not amount to 'profiteering' and that it  does
not result in  'commercialisation'  of  the  education.   According  to  the
appellants, to ensure this, the only mechanism that can be provided  is  the
'Complaint Mechanism' whereunder after the fee is fixed by  the  educational
institution and if there is grievance of the students  or  parents  or  even
the authorities against the same there can be a scrutiny by the  appropriate
committee (to be set up for this purpose) to see that the fee fixed  is  not
excessive and meets the parameters laid down in T.M.A.  Pai  Foundation.  It
was conceded that while doing so the State can also, as a  watchdog,  ensure
that no capitation fee is charged  from  the  students  by  the  educational
institutions.  It was submitted that contrary to the above, in  the  instant
case, the provisions of Act, 2007, read  with  Rules  thereunder,  authorize
the Committee set up by the Government to fix the fee thereby  denuding  the
institutions of their right completely, which is anathema to  the  right  of
the educational institution to carry on their 'occupation'  of  running  the
educational institutions, as a fundamental right.

(iii) Third challenge is to the provision of Section 8  of  Act,  2007   and
Rules 4 and 7 of Rules, 2008 dealing with the reservations.

Mr. K.K. Venugopal,  learned  senior  counsel  appearing  for  some  of  the
appellants, spearheaded the attack 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 the impugned legislation the State seeks to wipe  out
the choice available with the appellants institutions to  devise  their  own
admission procedure and the provisions of Section 6 read with  Section  3(d)
necessitate that the admission be carried out only on the basis of a CET  to
be conducted by  the  State  Government  or  any  agency  appointed  by  it.
Section 7 of the Act  provides  that  the  admission  in  violation  of  the
provisions of the Act (i.e. in a manner otherwise than by  a  CET  conducted
by the State Government or the agency appointed by it)  would be  void.   In
addition, Section 9 of the Act provides  for  the  Committee  defined  under
Section 3(c) of the Act to 'determine' and 'fix' the fees to be  charged  by
the appellants and thereby completely trample the rights of  the  appellants
to determine and charge the  fee.   The  Committee  is  not  an  independent
Committee but is manned by Government officials and, therefore,  effectively
the State Government has devised the said mechanism to fix the fees  of  the
private  colleges.   Section  8  provides   for   reservation   in   private
institutions, including post-graduate courses, which the  appellants  submit
is impermissible in light of the law laid down by this Court in the case  of
Ashok Kumar Thakur v. Union of India & Ors.[5].

It is their submission that right available to the  appellants  institutions
is to devise their own admission procedure, subject to  the  condition  that
the procedure so  devised  ought  to  be  'fair',  'transparent'  and  'non-
exploitative'.   Thus,  the  rights  available  to  the  institutions  under
Article 19(1)(g) includes a right to admit students on a fair basis  and  as
such the appellants can choose to admit students on the  basis  of  the  CET
conducted by an association of institutions coming  together  (as  has  been
provided in P.A. Inamdar) or one conducted by the State and the choice  also
includes to a right to admit students on the basis of the CET  conducted  by
the Central Government.  The right to choose is the right that is  available
to the individual institutions  under  Article  19(1)(g)  and  the  impugned
legislation which abrogates the said right falls foul of Article 12  of  the
Constitution of India.

The counsel for the appellants traced the history  of  judicial  journey  by
referring to the judgment in in Unni Krishnan,  J.P.  &  Ors.  v.  State  of
Andhra  Pradesh  &  Ors.[6]   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 service of teachers and staff.

The learned counsel emphasised that the aforesaid control  mechanism  failed
and the position was remedied by this Court in T.M.A.  Pai  Foundation.   It
held that if the institutions are entirely self-financing, the  State  shall
have minimal interference and the interference can  be  made  only  for  the
purposes of Maintaining Academic Standards.  Besides this, it was held  that
the  colleges  enjoy  the  greatest  autonomy  and  the  same  ought  to  be
protected.   The  Court  has  considered  the  scope  of   the   'reasonable
restrictions' that can be provided by the State under Article 19(6)  of  the
Constitution and held that the said power does not confer upon the State  to
take over the control of the affairs of the  institutions  which  have  been
held  to  be  reasonable  restrictions.   The  appellants  referred  to  the
observations made in paragraph 54 with great emphasis:

“54. The right to establish an educational institutional can  be  regulated;
but such regulatory measures must, in general, be to ensure the  maintenance
of proper  academic  standards,  atmosphere  and  infrastructure  (including
qualified staff) and  the  prevention  of  mal-administration  by  those  in
charge of management.  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.”

      It was argued that  this  Court,  by  overruling  Unni  Krishnan,  has
recognised the need and importance of private educational  institutions  and
the necessity of giving them the requisite autonomy  in  their  functioning,
management and administration.

The submission was that this Court in T.M.A. Pai Foundation  laid  down  the
following principles and the scope of the  rights  enjoyed  by  the  private
institutions imparting professional education:
(a)   that the institutions have a fundamental right to establish,  run  and
maintain professional institutions and the rights flow  from  Article  30(1)
in respect of minority institutions  and  Article  19(1)(g)  in  respect  of
minority as well as non-minority private unaided institution;
(b)   the private institutions that do not receive  any  aid  out  of  State
funds enjoy a greater autonomy  in  their  day-to-day  functioning  and  the
autonomy includes:-
      (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);

      (iv)  a right to take action if there is dereliction of duty on
               the part of any employees.


(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.[7],  which  laid  down  certain  broad  modalities  and   creation   of
Committees for 'regulating' the admission procedure and the  fee  structure.
It was submitted that certain  States  enacted  laws  which  were  again  in
violation  of  the  fundamental  rights  and,  therefore,  the   same   were
challenged before this Court.  The matter was referred to  a  larger  Bench,
which answered the reference in the case of P.A.  Inamdar,  wherein  it  was
held as under:

“132.  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).

“There is nothing wrong in an entrance test being  held  for  one  group  of
institution  imparting  same  or  similar  education.    Such   institutions
situated in one State or in more than one State may join together  and  hold
a common entrance test......”

                          xx          xx         xx

141.  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.

                          xx          xx         xx

144.  The two Committees for monitoring admission procedure and  determining
fee  structure  in  the  judgment  of  Islamic  Academy  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.”

            Explaining 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

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

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 Islamic Academy of Education and put beyond  pale
of controversy by P.A.  Inamdar.   She  referred  to  and  relied  upon  the
reasoning given in the impugned judgment by the  High  Court  and  submitted
that no interference therein was called for.  In  nutshell,  her  submission
was  that  Act,   2007   as   well   as   Rules   framed   thereunder   were
unconstitutional/violative  of  fundamental   rights   of   the   appellants
guaranteed  under  Article  19(1)(g)  of  the  Constitution  of  India.  Her
submission was that undoubtedly  the  Court  recognised  the  right  of  the
citizens to establish and manage educational  institutions,  as  fundamental
right, by regarding the same as an 'occupation' under  Article  19(1)(g)  of
the Constitution in T.M.A. Pai Foundation and  also  bringing  them  at  par
with the similar rights which were  already  conferred  upon  minorities  to
establish  and  manage  professional/technical  institutions  under  Article
30(1)  of  the  Constitution.   She,  however,  sought  to  highlight   that
analogously the Court  also  made  it  clear  that  these  were  subject  to
reasonable restrictions which can be imposed  under  Article  19(6)  of  the
Constitution.  She argued that  T.M.A.  Pai  Foundation,  in  this  process,
expounded on the nature and extent of control on  the  basis  of  levels  of
education which has to be kept in mind and cannot  be  glossed  over.   This
was explained in paragraph 61 of the judgment by observing that  insofar  as
school level education is  concerned,  unaided  private  schools  must  have
maximum autonomy since at the school level it is not possible to assess  the
merit of the  students.   Therefore,  admission  at  this  stage  cannot  be
granted on the basis of selection based only on  merit.   Likewise,  private
unaided undergraduate colleges which are imparting  non-technical  education
would  also  enjoy  same  kind  of  maximum  autonomy  similar  to  schools.
However, whenever it comes to the  higher  education,  particularly  in  the
field of professional  education,  private  unaided  institutions  imparting
professional education would  not  be  extended  the  principle  of  maximum
autonomy.  Here, the Court categorically  stated  that  maximum  regulations
could be framed with regard to these institutions  since  the  principle  of
maintaining merit was inviolable and primary.  The Court was categorical  in
clarifying that in the  field  of  professional  education,  the  Government
could  enforce  a  regulation  for  ensuring  a   merit   based   selection.
Proceeding 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.[8], 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  validity  of  the  Delhi  Professional
Colleges/Institutions  (Prohibition  of  Capitation   Fee,   Regulation   of
Administration, Fixation of Non-Exploitative  Fee  &  Other  Measures)  Act,
2007, this Court  struck  down  the  ACMS  notification  holding  that  non-
minority private unaided professional  colleges  do  not  have  a  right  to
choose their own 'source' from a general pool.  It was  held  that  'neither
the  minority  nor  non-minority  institutions  could  mal-administer  their
educational institutions, especially professional institutions, that  affect
the quality of education, and by choosing students arbitrarily  from  within
the sources that they are entitled to choose from'.   Insofar  as  provision
regarding fee  regulations  are  concerned,  her  submission  was  that  the
mechanism which was provided did not take away the power of the  educational
institutions to fix the fee.  On the contrary, even  as  per  the  procedure
laid down the fee which the appellants intend to charge  had  to  be  placed
before the Committee constituted under the Rules and the  Committee  was  to
consider whether proposed fee is proper or not and on  that  basis  fix  the
fee keeping in view the parameters laid down in  the  Act  and  Rules  which
were in consonance with the principles enunciated in T.M.A.  Pai  Foundation
and P.A. Inamdar as well as Modern School v. Union of India[9].  She,  thus,
argued that this was only  a  regulatory  mechanism.   Ms.  Makhija  further
submitted that principles of natural justice were duly incorporated  in  the
procedure established by incorporation of sub-section (2) of  Section  9  of
the Act, 2007 and even  provision  of  appeal  process  was  provided  under
Section 10 of the said Act.

Insofar as provision relating to reservation  is  concerned,  she  submitted
that the issue whether provisions  of  Article  15(5)  of  the  Constitution
apply or not to the private unaided institutions was no longer  res  integra
since the same has already been upheld in the  Constitution  Bench  judgment
rendered in Pramati Educational & Cultural  Trust  (Registered)  &  Ors.  v.
Union of India & Ors.[10] She also pointed out that challenge  to  the  said
provision relating  to  reservation  had  not  been  forcefully  pressed  by
appellants before the High Court.
            Other counsel made their submissions on same lines.

The discussion of the case upto now fairly demonstrates that the  two  cases
on which strong  reliance  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.


The  history  of  the  dispute  regarding  Government   control   over   the
functioning of private medical colleges is quite old now but the tug of  war
continues. There seems to be some conflict of  interest  between  the  State
Government  and  the  bodies  that   establish   institutions   and   impart
professional medical education to the youth of this country.  While  on  the
one hand the State Governments want to control the institutions  for  socio-
political considerations and on the other the people who invest, set up  and
establish the institutions  have  a  genuine  desire  to  run  and  exercise
functional control over  the  institution  in  the  best  interests  of  the
students, it cannot be disputed that the State does not  enjoy  monopoly  in
the field of imparting medical education and the  private  medical  colleges
play a very significant role in this regard.  The State lacks funds that  is
imperative to provide best  infrastructure  and  latest  facilities  to  the
students so that they emerge as the best in their respective fields.

In  the  modern  age,  therefore,   particularly   after   the   policy   of
liberalization adopted by the State,  educational  institutions  by  private
bodies are allowed to be established. There is a paradigm  shift  over  from
the era of complete Government control over education (like  other  economic
and commercial activities) to a situation where private players are  allowed
to mushroom.  But  at  the  same  time,  regulatory  mechanism  is  provided
thereby ensuring that such private institutions work within such  regulatory
regime. When it comes to education, it  is  expected  that  unaided  private
institutions provide quality education and at the same time they  are  given
'freedom in joints' with minimal Government interference, except what  comes
under regulatory regime. Though education is now treated as an  'occupation'
and, thus, has become a fundamental right guaranteed under Article  19(1)(g)
of the Constitution, at the same time  shackles  are  put  insofar  as  this
particular occupation is concerned which is termed as  'noble'.   Therefore,
profiteering and commercialisation are not permitted and no  capitation  fee
can be charged.  The admission of students has to be on  merit  and  not  at
the whims and fancies of the educational institutions. Merit can  be  tested
by adopting some methodology and few such methods are  suggested  in  T.M.A.
Pai Foundation, which includes holding of CET.  It is  to  be  ensured  that
this admission process meets the triple test of transparency,  fairness  and
                 With these introductory remarks, we  advert  to  issue-wise

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,   insofar   as   religious
denominations or any section thereof are concerned, they  were  given  right
to  establish  and  maintain  institutions  for  religious  and   charitable
purposes making it a fundamental right.  Likewise, Article 30  confers  upon
minorities  fundamental  right  to  establish  and  administer   educational
institutions. Insofar as  Article  26  is  concerned,  it  comes  under  the
caption 'Right to Freedom of Religion'.  As far as Article 30 is  concerned,
it is under the heading 'Cultural and Educational Rights'.  Thus, rights  of
the minorities to establish  and  administer  educational  institutions  was
always recognised as fundamental rights.   Further,  the  right  of  private
unaided  professional  institutions  to  establish  and  manage  educational
institutions was not clearly  recognised  as  a  fundamental  right  covered
under Article 19(1)(g) and categorically rejected by the Constitution  Bench
of this Court comprising of five Judges in the case of  Unni  Krishnan.   It
was held in paragraph 198 of the judgment that “(w)e are, therefore, of  the
opinion  adopting  the  line  of  reasoning  in  State  of  Bombay  v.   RMD
Chamarbaugwala & Anr.[11] that imparting  education  cannot  be  treated  as
trade or business.   Education  cannot  be  allowed  to  be  converted  into
commerce nor can petitioners seek to obtain the said result  by  relying  on
the wider meaning of 'occupation'”.  In that case, this Court also  rejected
the argument that the said activity could be classified as  a  'profession'.
However, the right of professional  institutions  to  establish  and  manage
educational institutions was finally regarded as an  'occupation'  befitting
the recognition of this right as a fundamental right under Article  19(1)(g)
in T.M.A. Pai Foundation in the following words:

“25. The establishment and running of an  educational  institution  where  a
large number of persons are employed as teachers  or  administrative  staff,
and an activity is carried on that results in the imparting of knowledge  to
the students, must necessarily be regarded as an occupation, even  if  there
is no element of profit generation.  It  is  difficult  to  comprehend  that
education, per se, will not fall  under  any  of  the  four  expressions  in
Article 19(1)(g). “Occupation” would be an activity of a  person  undertaken
as  a  means  of  livelihood  or  a  mission  in  life.   The   above-quoted
observations in Sodan Singh case, (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

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, the same is not  put
at  par  with  other  occupations  or  business  activities  or  even  other
professions.  It is a category apart which was carved out by this  Court  in
T.M.A. Pai Foundation.  There was a  specific  purpose  for  not  doing  so.
Education is treated as a noble 'occupation' on 'no profit no  loss'  basis.
Thus, those who establish and are managing the educational institutions  are
not  expected  to  indulge  in  profiteering  or  commercialise  this  noble
activity.  Keeping this objective in mind, the Court did not  give  complete
freedom to the educational institutions in respect of  right  to  admit  the
students and also with regard to fixation of fee.  As far  as  admission  of
students is concerned, the Court was categorical that such  admissions  have
to be on the basis of merit when it comes to higher education,  particularly
in professional institutions.

Ms. Vibha Datta Makhija is right in  her  submission  that  the  significant
feature of T.M.A. Pai Foundation is that it  expounded  on  the  nature  and
extent of its control on the basis of level of education.  When it comes  to
higher education, that too in professional institutions,  merit  has  to  be
the sole criteria.  This is so explained in paragraph  58  of  the  judgment
which reads 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

In order to see that merit  is  adjudged  suitably  and  appropriately,  the
Court candidly laid down that procedure for admission should be  so  devised
which satisfies  the  triple  test  of  being  fair,  transparent  and  non-
exploitative. The next question was as to how the aforesaid objective  could
be achieved?  For determining such merit,  the  Court  showed  the  path  in
paragraph 59 by observing that 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 unfair to apply the same rules and  regulations  regulating
admission to both aided and unaided professional institutions.  It  must  be
borne in  mind  that  unaided  professional  institutions  are  entitled  to
autonomy in their administration while,  at  the  same  time,  they  do  not
forego  or  discard  the  principle  of  merit.  It  would,  therefore,   be
permissible for the university or the Government, at the  time  of  granting
recognition, to require a private unaided institution to provide for  merit-
based selection while, at the same time, giving  the  management  sufficient
discretion in admitting students. This can be done through various  methods.
For instance, a  certain  percentage  of  the  seats  can  be  reserved  for
admission by the management out  of  those  students  who  have  passed  the
common entrance test held by itself or  by  the  State/university  and  have
applied to the college concerned for admission, while the rest of the  seats
may be filled up on the basis of counselling by the State agency. This  will
incidentally take care of poorer and backward sections of the  society.  The
prescription  of  percentage  for  this  purpose  has  to  be  done  by  the
Government according to the local needs and  different  percentages  can  be
fixed  for  minority  unaided  and  non-minority  unaided  and  professional
colleges. The same principles may be applied to other  non-professional  but
unaided educational institutions viz. graduation  and  post-graduation  non-
professional colleges or institutes.”

A plea was raised by the appellants that by exercising the  power  to  frame
Regulations, the State could not usurp the very function of conducting  this
admission test by the educational institutions.  It was argued that it  only
meant that such a CET is to be conducted  by  the  educational  institutions
themselves and the Government could only frame the Regulations  to  regulate
such admission tests to be conducted by  the  educational  institutions  and
could not take away the function of holding the CET.

This argument has to be rejected in view of the unambiguous and  categorical
interpretation given by the Supreme Court in P.A. Inamdar  with  respect  to
certain  observations,  particularly  in  paragraph   68   in   T.M.A.   Pai
Foundation.  In this behalf, we would like to recapitulate  that  in  T.M.A.
Pai Foundation, a Bench of eleven Judges dealt with the issues of  scope  of
right to set up  educational  institutions  by  private  aided  or  unaided,
minority  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  out  of
students  who  have  passed  CET  held  by  the  institution   or   by   the
State/University.  Interpretation of certain observations  in  paragraph  68
of the judgment in T.M.A. Pai Foundation has been  a  matter  of  debate  to
which we advert to in detail hereinafter.

As  pointed  out  above,  immediately  after  the  judgment  in  T.M.A.  Pai
Foundation, a group of writ petitions were filed in this Court,  which  were
dealt with by a Bench of five judges in Islamic Academy of  Education.  Four
of the Judges were the same who were party to the  judgment  in  T.M.A.  Pai
Foundation.  The issue considered was the extent of autonomy in  fixing  the
fee structure and making admissions.  This Court held that while  there  was
autonomy with the institutions to fix  fee  structure,  there  could  be  no
profiteering and  no  capitation  fee  could  be  charged  as  imparting  of
education was essentially charitable in nature.   This required  setting  up
of a Committee by each  of  the  States  to  decide  whether  fee  structure
proposed by an institute was justified and did not  amount  to  profiteering
or charging of capitation fee.  The fee so fixed shall be binding for  three
years at the end of which a revision could be sought.

With regard to the autonomy in admission, it  was  noted  that  the  earlier
judgment kept in mind the 'the sad reality that there are a large number  of
professional  colleges  which  indulge  in  profiteering   and/or   charging
capitation fees'.  For this reason, it was provided that admission  must  be
based on merit.   It was  impossible  to  control  profiteering/charging  of
capitation fee unless admission was on merit.  It was further observed  that
requiring a student to appear at more than one entrance test  led  to  great
hardship as the students had to pay  application  fee  for  each  institute,
arrange for and pay for the transport to appear  in  the  individual  tests.
Thus, management could select students either on the basis of CET  conducted
by the State or association of all  colleges  for  a  particular  type,  for
example, medical, engineering or technical etc.  Some  of  the  institutions
have their own admission procedure since long against which  no  finger  had
ever been raised and no complaint made regarding fairness  and  transparency
– which claim was disputed.  Such institutions as had been  established  for
25 years could apply for exemption to the Committee directed  by  the  Court
to be constituted.  This Court directed 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  continue  for  regulating
the admissions and  the  fee  structure  until  a  suitable  legislation  or
regulations framed by the States.  It was left to  the  Central  Governments
and the State Governments to come out  with  a  detailed  well  thought  out
legislation  setting  up  a  suitable  mechanism  for  regulating  admission
procedure and fee structure.  Paragraph 68 in  T.M.A.  Pai  Foundation  case
was explained by stating that  observations  permitting  the  management  to
reserve certain seats was meant for poorer  and  backward  sections  as  per
local needs.  It did not mean to ignore the merit.  It was  also  held  that
CET could be held, otherwise merit becomes casualty.   There  is,  thus,  no
bar to CET being held by a State agency when law so provides.

Thus, the contention raised on behalf of the  appellants  that  the  private
medical colleges had absolute right to make admissions or to fix fee is  not
consistent with the earlier decisions of this Court. Neither merit could  be
compromised in admissions to professional institutions  nor  capitation  fee
could be permitted.  To achieve these objects it is open  to  the  State  to
introduce regulatory measures.  We are  unable  to  accept  the  submissions
that  the  State  could  intervene  only  after  proving  that   merit   was
compromised or capitation  fee  was  being  charged.   As  observed  in  the
earlier decisions of this Court, post-audit  measures  would  not  meet  the
regulatory requirements.  Control was required at the initial stage itself.
            Therefore, our answer to  the  first  question  is  that  though
'occupation' is a fundamental right, which gives right  to  the  educational
institutions to admit the students and also fix the fee, at the  same  time,
scope of such rights has been discussed and  limitations  imposed  thereupon
by the aforesaid judgments themselves explaining the nature  of  limitations
on these rights.

Insofar as the  second  question  is  concerned,  it  again  can  be  easily
answered by  accepting  that  the  impugned  legislation  and  Rules  impose
certain restrictions.  Question is, whether these  are  in  consonance  with
the law laid down in the aforesaid judgments?  This  discussion  relates  to
the third stage of judicial review where we are called upon to decide as  to
whether these restrictions are 'reasonable'.

We may note that while upholding the regulatory  provision  for  admissions,
the High Court has observed:

“27.  We are of the considered opinion 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 become a competent professional must  be  a  meritorious  candidate
and he cannot be  put  at  a  disadvantage  by  preferences  shown  to  less
meritorious but more influential applicants and,  therefore,  excellence  in
professional education would require that greater emphasis be  laid  on  the
merit of the students seeking admission. It will be further clear from  Para
59 of the judgment in TMA Pai Foundation (supra), quoted above,  that  merit
is  usually  determined  for  admission  to   a   professional   educational
institution either by the marks  that  the  students  obtain  at  qualifying
examination or at a common entrance test conducted  by  the  institution  or
'in the case of professional colleges, by Government agencies". In  TMA  Pai
Foundation (supra), therefore, the Supreme Court was of the view that  merit
for admission to a professional institution could be  determined  by  common
entrance test conducted by the Government agencies.”

Referring to  paragraphs  67  and  68  in  T.M.A.  Pai  Foundation,  it  was

“29.…..It will be clear from the aforesaid portion of the  judgment  in  TMA
Pai Foundation (supra), that unaided professional  educational  institutions
are entitled to autonomy in admissions but they  cannot  forego  or  discard
the principle of merit  and  it  would  therefore  be  permissible  for  the
Government to  require  the  private  unaided  educational  institutions  to
provide for a merit based admission  while  at  the  same  time  giving  the
management sufficient discretion in admissions. In the aforesaid portion  of
the judgment in TMA Pai Foundation (supra), the Supreme  Court  has  further
held that this can be ensured through various methods and one method  is  by
providing that certain percentage of seats can be reserved for admission  by
the management out of those students who have  passed  the  common  entrance
test held by itself or  by  the  State  and  have  applied  to  the  college
concerned for admission, while the rest of the seats may  be  filled  up  on
the basis of counselling by the State agency. Here  also,  the  judgment  of
the Supreme Court in TMA Pai Foundation (supra), is clear that in the  seats
reserved for admissions by the management,  only  those  students  who  have
passed the common entrance test held by the management or by the  State  can
be admitted.

                          xx          xx         xx

31.  We are unable to accept the aforesaid submission of Mr. Verma  and  Mr.
Tankha. In PA. Inamdar (supra), 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 and 137 in P.A. Inamdar, it was observed:
“It will be thus clear from the Paragraphs 136 and 137 of  the  judgment  in
PA. Inamdar (supra),  quoted  above,  that  admissions  to  private  unaided
professional educational institutions can be made on the basis of  merit  of
candidates determined in the common entrance test  followed  by  centralised
counseling by  the  institutions  imparting  same  or  similar  professional
education together or by the State or by an agency which must  enjoy  utmost
credibility and expertise and that the  common  entrance  test  followed  by
centralised  counselling  must  satisfy  the  triple  test  of  being  fair,
transparent and non-exploitative. Thus, the judgments of the  Supreme  Court
in TMA Pai Foundation and PA. Inamdar (supra), permit holding  of  a  common
entrance test for determination of merit for admission  to  private  unaided
professional educational institutions by the State as  well  as  any  agency
which enjoy utmost credibility and expertise in the matter and which  should
ensure transparency in merit.

34. Sections 3(d), 6 and 7 of the Act, 2007 by  providing  that  the  common
entrance test for determining merit for admissions in  the  private  unaided
professional educational institutions  by  a  common  entrance  test  to  be
conducted by the State or by an  agency  authorised  by  the  State  do  not
interfere with the autonomy  of  private  unaided  professional  educational
institutions, as such  private  professional  educational  institutions  are
entitled to collect the fees from the students admitted to the  institutions
on the basis of merit, appoint their own staff (teaching and  non-teaching),
discipline  and  remove  the  staff,  provide   infrastructure   and   other
facilities for students and do all such other things  as  are  necessary  to
impart professional education to the students. Sections 3 (d), 6  and  7  of
the Act, 2007, therefore, do not impinge on the fundamental right  to  carry
on  the  occupation   of   establishing   and   administering   professional
educational institutions as an occupation. The only purpose  of  Sections  3
(d), 6 and 7 of the Act, 2007 is to ensure that students of  excellence  are
selected on the basis of a common entrance test conducted by  the  State  or
an agency authorised by the State and that students without  excellence  and
merit do not make entry into  these  professional  educational  institutions
through malpractices and influence. As has been held both in  the  judgments
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 to the said judgment  given
by this Court in P.A.  Inamdar,  it  becomes  clear  that  insofar  as  such
regulatory measures are concerned, the same can be adopted by the  State  in
respect of minority run  institutions  as  well.   Reliance  placed  by  the
appellants in the case of St. Stephen's College v. University  of  Delhi[12]
may not be of much help as that  case  did  not  concern  with  professional
educational institutions.
At this  juncture,  we  would  like  to  deal  with  the  arguments  of  the
appellants that the provisions contained in the Act and the Rules  have  the
effect  of  completely  taking  away  the  rights   of   these   educational
institutions to admit the students.

It is well settled that the right under Article 19(1)(g) is not absolute  in
terms  but  is  subject  to  reasonable  restrictions  under   clause   (6).
Reasonableness has to be determined having regard to  the  nature  of  right
alleged to be infringed, purpose of the restriction, extent  of  restriction
and other relevant factors.  In applying  these  factors,  one  cannot  lose
sight of the Directive Principles of State Policy.  The Court has to try  to
strike a  just  balance  between  the  fundamental  rights  and  the  larger
interest of the society.  Court interferes with  a  statute  if  it  clearly
violates the fundamental rights.  The Court proceeds  on  the  footing  that
the Legislature understands the needs of the people.   The  Constitution  is
primarily for the common  man.   Larger  interest  and  welfare  of  student
community to promote merit, achieve excellence and  curb  malpractices,  fee
and admissions can certainly be regulated.

Let us carry out this discussion in some more detail as this is the  central
issue raised by the appellants.
Doctrine Of Proportionality Explained & Applied:
Undoubtedly, the right to establish and manage the educational  institutions
is a fundamental right recognised under Article 19(1)(g)  of  the  Act.   It
also cannot be denied that this right is not 'absolute' and  is  subject  to
limitations i.e. 'reasonable restrictions' that can be  imposed  by  law  on
the exercise of the rights that are conferred under clause  (1)  of  Article
19.  Those restrictions, however, have  to  be  reasonable.   Further,  such
restrictions  should  be  'in  the  interest  of  general   public',   which
conditions are stipulated in clause (6) of Article 19, as under:

“(6) Nothing in  sub  clause  (g)  of  the  said  clause  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 restrictions and are brought out  in  the  interest  of
the general public, the exercise that is required to be  undertaken  is  the
balancing of fundamental right to carry on occupation on the  one  hand  and
the restrictions imposed on the other  hand.   This  is  what  is  known  as
'Doctrine of Proportionality'.  Jurisprudentially, 'proportionality' can  be
defined as the  set  of  rules  determining  the  necessary  and  sufficient
conditions for limitation of a constitutionally protected right by a law  to
be constitutionally permissible. According to  Aharon  Barak  (former  Chief
Justice,  Supreme  Court  of  Israel),  there  are  four  sub-components  of
proportionality  which  need  to  be  satisfied[13],  a  limitation   of   a
constitutional right will be constitutionally  permissible  if:  (i)  it  is
designated for a proper purpose; (ii) the measures undertaken to  effectuate
such a limitation are  rationally  connected  to  the  fulfillment  of  that
purpose; (iii) the measures undertaken are necessary in that  there  are  no
alternative measures that may similarly achieve that  same  purpose  with  a
lesser degree of limitation; and finally (iv) there needs  to  be  a  proper
relation  ('proportionality  stricto  sensu'  or  'balancing')  between  the
importance of achieving the proper purpose  and  the  social  importance  of
preventing the limitation on the constitutional right.

Modern theory of  constitutional  rights  draws  a  fundamental  distinction
between the scope of the  constitutional  rights,  and  the  extent  of  its
protection.  Insofar as the scope of constitutional rights is concerned,  it
marks the outer boundaries of the said  rights  and  defines  its  contents.
The extent of its protection prescribes the limitations on the exercises  of
the rights within its scope.  In that sense, it  defines  the  justification
for limitations that can be imposed on such a right.

It is  now  almost  accepted  that  there  are  no  absolute  constitutional
rights[14] and all such rights are related.  As per the analysis  of  Aharon
Barak[15], 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  constitutional  rights  and  the  public
interests.  In fact, such a provision in Article 19 itself on the  one  hand
guarantees some certain freedoms in clause (1) of  Article  19  and  at  the
same time empowers the State to  impose  reasonable  restrictions  on  those
freedoms in public interest.  This notion accepts the modern  constitutional
theory that the constitutional rights are related.   This  relativity  means
that a constitutional license to limit those rights is granted where such  a
limitation will be justified to protect public interest  or  the  rights  of
other.  This phenomenon – of both  the  right  and  its  limitation  in  the
Constitution – exemplifies the  inherent  tension  between  democracy's  two
fundamental elements.  On  the  one  hand  is  the  right's  element,  which
constitutes a fundamental component of substantive democracy; on  the  other
hand is the  people  element,  limiting  those  very  rights  through  their
representatives.  These  two  constitute  a  fundamental  component  of  the
notion of democracy, though this time in its formal aspect.   How  can  this
tension be resolved? The answer is that this  tension  is  not  resolved  by
eliminating the 'losing' facet from the Constitution.  Rather,  the  tension
is resolved by way of a proper balancing of the competing principles.   This
is one  of  the  expressions  of  the  multi-faceted  nature  of  democracy.
Indeed, the inherent tension  between  democracy's  different  facets  is  a
'constructive  tension'.   It  enables   each   facet   to   develop   while
harmoniously co-existing with the others.  The  best  way  to  achieve  this
peaceful co-existence is through balancing between the competing  interests.
 Such balancing enables each facet to develop alongside  the  other  facets,
not in their place.  This tension between  the  two  fundamental  aspects  –
rights on the one hand and its limitation on the  other  hand  –  is  to  be
resolved by balancing the two so that they harmoniously co-exist  with  each
other.  This balancing is to be done keeping in  mind  the  relative  social
values of each competitive aspects when considered in proper context.

In this direction, the next question that arises is as to what  criteria  is
to be adopted for a proper balance between the two facets  viz.  the  rights
and limitations imposed upon it by a statute.  Here  comes  the  concept  of
'proportionality', which is a proper criterion. To put it  pithily,  when  a
law limits a constitutional 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[16],  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  individuals  and
groups.   There  are,  in  my  view,  three  important   components   of   a
proportionality test.  First the  measures  adopted  must  be  ...rationally
connected to the objective.  Second, the means ...should impair  “as  little
as possible” the right or freedom  in  question...Third,  there  must  be  a
proportionality between the effects of the measures  which  are  responsible
for limiting the Charter right or freedom, and the objective which has  been
identified as of “sufficient importance”.  The more severe  the  deleterious
effects of a measure, the more  important  the  objective  must  be  if  the
measure is to be  reasonable  and  demonstrably  justified  in  a  free  and
democratic society.”

The exercise which, therefore, to be taken is to find out as to whether  the
limitation of constitutional rights is for a purpose that is reasonable  and
necessary in  a  democratic  society  and  such  an  exercise  involves  the
weighing up of competitive values, and ultimately  an  assessment  based  on
proportionality i.e. balancing of different interests.

We  may  unhesitatingly  remark  that  this  Doctrine  of   Proportionality,
explained hereinabove in brief, is enshrined in Article 19  itself  when  we
read clause (1) along with clause (6) thereof.  While defining  as  to  what
constitutes a reasonable restriction, this Court in  plethora  of  judgments
has held that the expression 'reasonable  restriction'  seeks  to  strike  a
balance between the freedom guaranteed by any of the sub-clauses  of  clause
(1) of Article 19 and the social control permitted by  any  of  the  clauses
(2) to (6).  It is held that the expression 'reasonable' connotes  that  the
limitation imposed on a person in the enjoyment of the right should  not  be
arbitrary or  of  an  excessive  nature  beyond  what  is  required  in  the
interests of public.  Further, in order to be  reasonable,  the  restriction
must have a reasonable relation to the object which  the  legislation  seeks
to achieve, and must not go in excess of that object {See  P.P.  Enterprises
& Ors. v. Union of India & Ors.[17]}.  At the same time,  reasonableness  of
a restriction has to be determined in  an  objective  manner  and  from  the
standpoint of the interests of the general public and not from the point  of
view of the persons upon whom the restrictions are imposed or upon  abstract
considerations {See Hanif Quareshi Mohd. v. State of Bihar[18]).  In  M.R.F.
Ltd. v. Inspector Kerala Govt.[19], 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 in favour the constitutionality  of  the  Act
will naturally arise.

      Keeping in mind the aforesaid principles, we have adjudged  the  issue
in our detailed discussion undertaken above.   We  may  summarise  the  said
discussion as follows:

Undoubtedly, right to establish and administer educational  institutions  is
treated as a fundamental right as it is termed 'occupation',  which  is  one
of the freedoms guaranteed under Article 19(1)(g).   It  was  so  recognised
for the first time in T.M.A. Pai Foundation.   Even  while  doing  so,  this
right came with certain clutches and shackles.   The  Court  made  it  clear
that it is a noble occupation which would not  permit  commercialisation  or
profiteering and, therefore, such educational institutions are to be run  on
'no profit no loss basis'.  While explaining the scope of this right,  right
to admit students and right to fix  fee  was  accepted  as  facets  of  this
right, the Court again added caution thereto by  mandating  that  admissions
to  the  educational  institutions  imparting  higher  education,   and   in
particular professional education, have  to  admit  the  students  based  on
merit.  For judging the merit, the Court indicated that there can be a  CET.
 While doing so, it also specifically stated that in case  of  admission  to
professional courses such a CET can be conducted by the State.   If  such  a
power is exercised by the State assuming the function of CET,  this  was  so
recognised in T.M.A. Pai Foundation itself,  as  a  measure  of  'reasonable
restriction on the  said  right'.   Islamic  Academy  of  Education  further
clarified the contour of such  function  of  the  State  while  interpreting
T.M.A. Pai  Foundation  itself  wherein  it  was  held  that  there  can  be
Committees constituted to supervise conducting of such  CET.   This  process
of interpretative balancing  and  constitutional  balancing  was  remarkably
achieved in P.A. Inamdar by not only giving its premature  to  deholding  of
CET but it went further to hold that agency conducted the CET  must  be  the
one which enjoys the utmost credibility  and  expertise  in  the  matter  to
achieve fulfillment of twin objectives of transparency  and  merit  and  for
that purpose it permitted the State to provide a procedure of holding a  CET
in the interest of securing fair and merit based admissions  and  preventing
We are of the view that the larger public interest warrants such a  measure.
 Having regard 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

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 its environment”[20].  It is rightly said that the law is not an Eden  of
concepts but rather an everyday life of  needs,  interests  and  the  values
that a given society seeks to realise in a given time.  The law  is  a  tool
which is intended to provide solutions for the problems of human being in  a

The High Court in its judgment has analysed the provisions of  the  Act  and
found that provisions for merit  based  admissions  and  procedure  for  fee
fixation did not violate fundamental right of the  private  institutions  to
conduct admissions and to fix fee.  We are in agreement with the  said  view
and hold that provisions relating to admission as contained in the  Act  and
the Rules are not offensive of Article 19(1)(g) of the Constitution.

II.   Re.: Provisions in the Act Rules  relating  to  fixation  of  fee  are
unconstitutional being violative of Article 19(1)(g) of the Constitution?

We may again remind ourselves that though  right  to  establish  and  manage
educational institution is treated as a  right  to  carry  on  'occupation',
which is the fundamental right under Article 19(1)(g), the Court  in  T.M.A.
Pai Foundation had  also  cautioned  such  educational  institution  not  to
indulge  in  profiteering  or   commercialisation.    That   judgment   also
completely bars these  educational  institutions  from  charging  capitation
fee.    This   is   considered   by   the   appellants    themselves    that
commercialisation and exploitation is not permissible  and  the  educational
institutions are supposed to run on 'no profit, no loss basis'.   No  doubt,
it was also recognised that cost of education may vary from  institution  to
institution and in this respect many variable factors may have to  be  taken
into account  while  fixing  the  fee.   It  is  also  recognized  that  the
educational institutions may charge the fee that would take care of  various
expenses incurred by these educational institutions plus provision  for  the
expansion  of  education  for  future  generation.   At   the   same   time,
unreasonable demand cannot be made  from  the  present  students  and  their
parents.  For this purpose, only a 'reasonable surplus' can be generated.

Thus,  in  T.M.A.  Pai  Foundation,  P.A.   Inamdar   and   Unni   Krishnan,
profiteering and commercialisation of  education  has  been  abhorred.   The
basic thread of  reasoning  in  the  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
be statutorily regulated by the Center or the State laws.

The principles enunciated in T.M.A. Pai Foundation  and  P.A.  Inamdar  were
applied in the case of Islamic Academy of Education where  a  challenge  was
mounted against the directions issued by the Director of  Education  to  the
recognised unaided schools under Section 24(3) read with Section  18(4)  and
18(5) of the Delhi School Education Act, 1973 inter alia directing  that  no
fees/funds collected from parents/students would  be  transferred  from  the
Recognised  Unaided  School  Fund  to  a  Society  or  Trust  or  any  other
institution.  After examining the directions and the  accounting  principles
in detail, this Court upheld the said directions on the ground that  it  was
open to the State to regulate the fee in such a manner so as to ensure  that
no profiteering or commercialisation of education takes place.

To put it in nutshell, though the  fee  can  be  fixed  by  the  educational
institutions and it may vary from institution to institution depending  upon
the  quality  of  education  provided   by   each   of   such   institution,
commercialisation is not permissible.  In order to see that the  educational
institutions are not indulging in commercialisation  and  exploitation,  the
Government is equipped with necessary powers  to  take  regulatory  measures
and to ensure that these educational institutions  keep  playing  vital  and
pivotal role to spread education and not to make money.   So  much  so,  the
Court was categorical in holding that when it comes to  the  notice  of  the
Government that a particular institution was charging fee or  other  charges
which are excessive,  it  has  a  right  to  issue  directions  to  such  an
institution to reduce the same.

The next question that arises is as to how such a regulatory framework  that
ensures no excessive fee is charged by the educational institutions  can  be
put in place.   In  the  case  of  Modern  School,  this  Court  upheld  the
direction of the Delhi High Court for setting up of a committee  to  examine
as to whether fee charged by the schools (that was a  case  of  fixation  of
fee by schools in Delhi which are governed by  the  Delhi  School  Education
Act, 1973) is excessive or not.   The  ratio  of  judgments  in  T.M.A.  Pai
Foundation and Islamic Academy of Education was discussed in  the  following

“16. The judgment in T.M.A. Pai Foundation  case  was  delivered  on  31-10-
2002. The Union of India, State  Governments  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  absolute  right
and it is subject to reasonable restrictions. It was submitted that  such  a
right is subject to public and national interests.  It  was  contended  that
imparting education was a State function but due  to  resource  crunch,  the
States were not in a position to establish sufficient number of  educational
institutions  and  consequently   the   States   were   permitting   private
educational institutions to perform State functions. It was  submitted  that
the Government had a statutory right to fix the fees to  ensure  that  there
was no profiteering. Both  sides  relied  upon  various  passages  from  the
majority  judgment  in  T.M.A.  Pai  Foundation  case.  In  view  of   rival
submissions, four questions were  formulated.  We  are  concerned  with  the
first question, namely, whether the educational  institutions  are  entitled
to fix their own fee structure. It was held that there  could  be  no  rigid
fee structure.  Each  institute  must  have  freedom  to  fix  its  own  fee
structure, after taking into account the need to generate funds to  run  the
institution and to provide facilities  necessary  for  the  benefit  of  the
students. They must be able to generate  surplus  which  must  be  used  for
betterment and growth of that educational  institution.  The  fee  structure
must be fixed keeping in mind the infrastructure and  facilities  available,
investment made, salaries paid to  teachers  and  staff,  future  plans  for
expansion and/or betterment of  institution  subject  to  two  restrictions,
namely, non-profiteering and non-charging of capitation fees.  It  was  held
that surplus/profit can be generated but they shall be used for the  benefit
of that educational institution. It was held that profits/surplus cannot  be
diverted for any other use or purposes  and  cannot  be  used  for  personal
gains or for other business or enterprise.  The  Court  noticed  that  there
were various statutes/regulations which governed the fixation  of  fee  and,
therefore, this Court directed the respective State Governments to set up  a
committee headed by a retired High Court Judge to be nominated by the  Chief
Justice of that State to approve the fee structure or to propose some  other
fee which could be charged by the institute.
                                                        (emphasis supplied)”

This  Court  also  held  that  for  fixing  the  fee  structure,   following
considerations are to be kept in mind:
(a)   the infrastructure and facilities available;

(b)   investment made, salaries paid 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

            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
institution cannot charge such a fee as is not required for the  purpose  of
fulfilling that object. To put it differently, in the  establishment  of  an
educational institution,  the  object  should  not  be  to  make  a  profit,
inasmuch as education  is  essentially  charitable  in  nature.  There  can,
however, be a reasonable revenue surplus, which  may  be  generated  by  the
educational institution for the purpose  of  development  of  education  and
expansion of the institution.”

            In paragraph 69 of the judgment, while dealing with this  issue,
this Court again observed that an appropriate machinery can  be  devised  by
the State or University to ensure that no  capitation  fee  is  charged  and
that  there  is  no  profiteering,  though  a  reasonable  surplus  for  the
furtherance of education is permissible.  Although the Court  overruled  the
earlier judgment in Unni Krishnan, which was to the  extent  of  the  scheme
framed therein and the directions to impose the same, part of  the  judgment
holding that primary education is a fundamental right was held to be  valid.
 Similarly, the principle  that  there  should  not  be  capitation  fee  or
profiteering was also held to be correct.

When we come to the judgment in Islamic  Academy  of  Education,  the  first
question framed by this Court was whether the educational  institutions  are
entitled to fix their own fee structure.  It is pertinent to note that  this
judgment brought in a Committee to regulate the fee structure which  was  to
operate until the Government/appropriate  authorities  consider  framing  of
appropriate Regulations.  It is also material to note that in  paragraph  20
the Court has held that the direction to set up  Committees  in  the  States
was passed under Article 142 of the Constitution and was to remain in  force
till appropriate legislation was enacted by the Parliament.

The judgment in P.A. Inamdar,  though  sought  to  review  the  judgment  in
Islamic Academy of Education, left the mechanism of  having  the  Committees
undisturbed.  In paragraph 129 of the judgment in P.A. Inamdar,  this  Court
observed that the State regulation should be minimal and  only  to  maintain
fairness in admission  procedure  and  to  check  exploitation  by  charging
exorbitant money or capitation fees.  In paragraph 140,  it  has  been  held
that the  charge  of  capital  fee  by  unaided  minority  and  non-minority
institutions for professional courses is just not  permissible.   Similarly,
profiteering is also 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 Government has the power to regulate  the  fixation
of fee in the interest of preventing profiteering and further that  fixation
of fee has to be regulated and  controlled  at  the  initial  stage  itself.
When we scan through Section 9 of the Act, 2007 from  the  aforesaid  angle,
we find that the parameters which are laid down therein that has to be  kept
in mind while fixing the fee are in fact the one which have been  enunciated
in the judgments of this Court referred to above.  It  is  also  significant
to note that the Committee  which  is  set  up  for  this  purpose,  namely,
Admission and Fee  Regulatory  Committee,  is  discharging  only  regulatory
function.  The fee which  a  particular  educational  institution  seeks  to
charge from its students  has  to  be  suggested  by  the  said  educational
institution itself.  The Committee is empowered with a  purpose  to  satisfy
itself that the fee proposed by the educational institution did  not  amount
to  profiteering  or  commercialisation  of  education  and  was  based   on
intelligible factors mentioned in Section 9(1) of the  Act,  2007.   In  our
view, therefore, it is only a regulatory measure and does not take away  the
powers of the educational institution to fix their own fee.  We, thus,  find
that the analysis of these provisions by the  High  Court  in  the  impugned
judgment, contained in paragraph 39, is perfectly in order,  wherein  it  is
observed as under:

“39.  We are of the view that Sections 4 (1) and 4  (8)  of  the  Act,  2007
have to be read with Section 9 (1)  of  the  Act,  2007,  which  deals  with
factors which have to be taken into consideration  by  the  Committee  while
determining the  fee  to  be  charged  by  a  private  unaided  professional
educational institution. A reading of Sub-section (1) of Section  9  of  the
Act, 2007 would show that  the  location  of  private  unaided  professional
educational institution, the nature of the professional course, the cost  of
land and building,  the  available  infrastructure,  teaching,  non-teaching
staff and equipment, the expenditure on administration  and  maintenance,  a
reasonable surplus required for growth and development of  the  professional
institution  and  any  other  relevant  factor,  have  to  be   taken   into
consideration by the Committee while determining the fees to be  charged  by
a private unaided professional educational institution. Thus, all  the  cost
components  of  the  particular  private  unaided  professional  educational
institution 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 Section 9  (1)  of  the
Act, 2007 and did not amount to profiteering and  commercialisation  of  the
education.  The  word  "determination"  has  been  defined  in  Black's  Law
Dictionary, Eighth Edition, to mean a final decision  by  the  Court  or  an
administrative agency. The Committee, therefore, while determining  the  fee
only gives the final approval to the proposed fee to be charged after  being
satisfied that it was based on the factors mentioned in  Section  9  (1)  of
the Act,  2007  and  there  was  no  profiteering  or  commercialisation  of
education. The expression 'fixation of fees' in Section 4 (1)  of  the  Act,
2007 means that the fee to be charged from candidates seeking  admission  in
the private professional educational institution did not vary  from  student
to student and also remained fixed for a  certain  period  as  mentioned  in
Section 4(8) of the Act, 2007. As has been held  by  the  Supreme  Court  in
Peerless General Finance v. Reserve Bank of India (supra), the Court has  to
examine the substance of the provisions of  the  law  to  find  out  whether
provisions of the law impose reasonable restrictions in the interest of  the
general public. The provisions in Sections 4 (1), 4 (8) and 9  of  the  Act,
2007 in substance empower the Committee to be only satisfied  that  the  fee
proposed by a private professional educational institution  did  not  amount
to profiteering or commercialisation of  education  and  was  based  on  the
factors mentioned in Section 9 (1) of the Act, 2007. The provisions  of  the
Act, 2007 do not  therefore,  violate  the  right  of  private  professional
educational institution to charge its own fee.”

      Further reasons in support of Issue Nos. 1 & 2  which  are  common  to
both Issues:

            Provisions relating to admission of students through  Government
test to be conducted by the State and the provision relating to fixation  of
fee by setting up a Committee to oversee that institutions are not  charging
a  fee  which  amounts  to  capitation  or   profiteering   are   reasonable
restrictions and do not suffer from any constitutional vice.

The provision of the Act and the Rules are,  therefore,  in  tune  with  the
sentiments and directions contained  in  P.A.  Inamdar.   The  enactment  in
question does not run foul of any of the existing central laws.  As  far  as
the introduction of a CET at a national level is  concerned,  the  same  was
not enforced during the period of operation of the State  statute.   In  any
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 number  of  complaints  were
received by the  State.   If  a  particular  law  is  necessitated  to  curb
malpractices and/or ills that have prevailed in  a  system,  Legislature  is
fully  competent  to  enact  such  laws,  provided  it  meets  the  test  of
constitutionality, which it does in the instant case.

No doubt, we  have  entered  into  an  era  of  liberalization  of  economy,
famously termed as 'globalization' as well.  In  such  an  economy,  private
players are undoubtedly given much more freedom in economic  activities,  as
the recognition has drawn to the realities  that  the  economic  activities,
including profession, business, occupation etc. are not normal forte of  the
State and the State should have  minimal  role  therein.   It  is  for  this
reason, many sectors which were hitherto  State  monopolies,  like  telecom,
power, insurance, civil  aviation  etc.  have  now  opened  up  for  private
enterprise.  Even in the field of education State/ Government was playing  a
dominant role inasmuch as it was thought desirable that in a  welfare  State
it is the fundamental duty, as  a  component  of  Directive  Principles,  to
impart education to the masses and commoners as well as weaker  sections  of
the society, at affordable rates.  It was almost treated as solemn  duty  of
the Government to establish adequate number of educational  institutions  at
all levels, i.e., from primary level to higher education and in  all  fields
including technical, scientific and professional, to  cater  to  the  varied
sections of the society, particularly, when one-third of the  population  of
the country is poverty stricken with large percentage  as  illiterate.  With
liberalization,  Government  has  encouraged  establishments  of   privately
managed institutions.  It is done with the  hope  that  the  private  sector
will  play  vital  role  in  the  field  of  education  with   philanthropic
approach/ideals in mind as this activity is not to be taken for the  purpose
of profiteering, but more as a societal welfare.

It is, therefore, to be borne in mind is that the  occupation  of  education
cannot be treated at par with other  economic  activities.  In  this  field,
State cannot remain a mute spectator and  has  to  necessarily  step  in  in
order to prevent exploitation, privatization and  commercialisation  by  the
private sector.  It would be pertinent to mention that even  in  respect  of
those economic  activities  which  are  undertaken  by  the  private  sector
essentially with the 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 transition has had  a  tremendous  impact
on the overall economic development of  almost  all  major  sectors  of  the

When we have liberal economy which is regulated by the market  forces  (that
is why it is also termed as market economy), prices of  goods  and  services
in such an economy are determined in a free price system set  up  by  supply
and demand. This is often contrasted with  a  planned  economy  in  which  a
Central Government determines the price of goods and services using a  fixed
price system. Market economies are also contrasted with mixed economy  where
the price system is not entirely free, but under some Government control  or
heavily regulated, which is  sometimes  combined  with  State  led  economic
planning that is not extensive enough to constitute a planned economy.

With the advent of  globalization  and  liberalization,  though  the  market
economy is restored,  at  the  same  time,  it  is  also  felt  that  market
economies should not exist in pure form.  Some  regulation  of  the  various
industries is  required  rather  than  allowing  self-regulation  by  market
forces.  This  intervention  through  regulatory  bodies,  particularly   in
pricing, is considered necessary for the welfare  of  the  society  and  the
economists  point  out  that  such  regulatory  economy  does  not  rob  the
character of  a  market  economy  which  still  remains  a  market  economy.
Justification for regulatory bodies  even  in  such  industries  managed  by
private sector lies in the welfare of people. Regulatory measures  are  felt
necessary to promote  basic  well-being  for  individuals  in  need.  It  is
because of  this  reason  that  we  find  Regulatory  bodies  in  all  vital
industries like, Insurance, Electricity and Power, Telecommunications, etc.

Thus, it is felt that in any welfare economy, even for  private  industries,
there is a need for regulatory body and  such  a  regulatory  framework  for
education sector becomes all the more necessary. It would be more  so  when,
unlike other industries, commercialisation of education is not permitted  as
mandated by the Constitution of India, backed by various judgments  of  this
Court to the effect that profiteering in the education is to be avoided.

Thus, when there can be Regulators which can fix  the  charges  for  telecom
companies in respect of various services that such companies provide to  the
consumers; when Regulators can fix the premium and other charges  which  the
insurance companies are  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  the
laws of return, principle of equimarginal utility and  the  public  finance.
Guided by these principles, the State is supposed to invest in education  up
to a point where the socio-economic returns  to  education  equal  to  those
from other State expenditures, whereas  the  individual  is  guided  in  his
decision to pay for a type  of  education  by  the  possibility  of  returns
accruable to him. All these considerations make out a case  for  setting  up
of a stable Regulatory mechanism.

In this sense, when imparting of quality education to cross-section  of  the
society, particularly, the weaker section and when such private  educational
institutions are  to  rub  shoulders  with  the  state  managed  educational
institution  to  meet  the   challenge   of   the   implementing   ambitious
constitutional promises, the matter is to be examined in  a  different  hue.
It is this spirit which we have kept in mind while balancing  the  right  of
these educational institutions given to them under Article 19(1)(g)  on  the
one hand and reasonableness of the restrictions which have been  imposed  by
the impugned legislation.  The right to admission or right to  fix  the  fee
guaranteed to these appellants is not  taken  away  completely,  as  feared.
T.M.A. Pai Foundation gives  autonomy  to  such  institutions  which  remain
intact.  Holding of CET under the control of  the  State  does  not  impinge
this autonomy.  Admission is still  in  the  hands  of  these  institutions.
Once it is even conceded by the appellants that  in  admission  of  students
'triple test' is to be met, the impugned legislation aims  at  that.   After
all, the sole purpose of holding CET is to adjudge merit and to ensure  that
admissions which are done by the educational institutions, are  strictly  on
merit.  This is again to  ensure  larger  public  interest.   It  is  beyond
comprehension that merely by assuming the power  to  hold  CET,  fundamental
right of the appellants to admit the  students  is  taken  away.   Likewise,
when it comes to fixation of fee, as already  dealt  with  in   detail,  the
main purpose is that State acts as a regulator  and  satisfies  itself  that
the fee which is proposed by the educational institution does not  have  the
element of profiteering and also that no capitation  fee  etc.  is  charged.
In fact, this dual function of regulatory nature is  going  to  advance  the
public interest inasmuch as those students  who  are  otherwise  meritorious
but are not in a position to 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 educational institutions,  whether  aided  or
unaided by the State,  other  than  the  minority  educational  institutions
referred to in clause(1) of Article30.
It is submitted  that  the  caste  based  reservation  policy  or  a  social
engineering policy of the State Government cannot be run  on  the  shoulders
of the private institutions which enjoy fundamental rights  under  Part  III
of the Constitution.  It is submitted that the  extent  and  the  manner  in
which the right can be regulated has been set out  under  Article  19(6)  of
the Constitution.  It is submitted that in  P.A.  Inamdar,  this  Court  has
held that the provision for reservation in private institutions would be  an
'unreasonable' restriction and, therefore, would fall foul of  19(1)(g)  and
would not be protected by 19(6) of the Constitution of India.  It is,  thus,
submitted that the reasoning on the basis of which reservations  in  private
institutions  have  been  rejected  is  that  this  Court  found  that  such
restrictions  would   be   'unreasonable'   restrictions   and,   therefore,
effectively violate Articles 14 and 15(1) of the Constitution of India.   It
is submitted that the provisions of Article 15(5) are not  an  exception  to
Article  14  and,  therefore,  when  the  Court  has  held  that  the   said
reservations  in  private  institutions  are  unreasonable,   the   impugned
provisions would be in violation  of  Article  14  of  the  Constitution  of

In any case, since this Court in P.A. Inamdar has held that there cannot  be
any fixation of Quota or appropriation of seats by  the  State,  reservation
which inheres setting aside Quotas, would not be permissible.  It is,  thus,
argued that the provisions seek to bring back the Unni  Krishnan  system  of
setting up State Quotas which has been expressly held by this  Court  to  be
impermissible. This argument is to be noted to be  rejected.   In  fact,  as
can be seen from the impugned judgment having regard to  the  provisions  of
Clause (5)  of  Article  15  of  the  Constitution,  there  was  no  serious
challenge laid to Section 8 read with Rules 4(2), 7 and  15  of  the  Rules,
2008.  In fact, counsel for  the  appellants  conceded  that  they  had  not
challenged 93rd  Constitutional  Amendment  vide  which  Article  15(5)  was
inserted into the Constitution.  In any case, there is hardly any ground  to
challenge the said constitutional amendment, which has already  been  upheld
by a Constitution Bench judgment in the  case  of  Pramati  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 in the  public  eye  immediately  and  have
been addressed expeditiously.  The same could never have been done  in  case
of private actions.  Even on a keel of comparative efficiency,  it  is  more
than evident that the State process is far more transparent  and  fair  than
one that is devised by the private colleges which have no mechanism  of  any
checks and balances.  The  State  agencies  are  subject  to  the  Right  to
Information  Act,  Audit,  State  Legislature,   Anti-Corruption   agencies,
Lokayukta, etc.

The very object of setting up  institutions  for  the  State  is  a  welfare
function, for the purpose of excelling  in  educational  standards.  On  the
other hand, the primary motivation for private parties is profit  motive  or
philanthropy.  When  the  primary  motivation  for  institutions  is  profit
motive, it is natural that many means to achieve the same shall  be  adopted
by the private institutions which leads to a large  degree  of  secrecy  and
corruption.  As such, the mechanism of regulations as  envisaged  under  the
impugned laws is legal, constitutional, fair,  transparent  and  uphold  the
primary criteria of merit.  The same does not infringe  on  the  fundamental
rights of either the minorities  or  the  non-minorities  to  establish  and
administer educational institutions and must as such be upheld as valid.

IV.   Whether the impugned legislation is beyond the legislative  competence
of the State of Madhya Pradesh?

The next issue to be considered is whether the subject matter of  admissions
was covered exclusively by Entry 66 of List I, thereby the States having  no
legislative competence whatsoever to deal with the subject of admissions  or
determination  of  fee   to   be   charged   by   professional   educational

Main reliance placed on behalf of the appellants  is  on  Bharti  Vidyapeeth
(Deemed University) &  Ors.  v.  State  of  Maharashtra  &  Anr.[22]   Heavy
reliance was also placed by the appellants on Gujarat University &  Anr.  v.
Shri Krishna  Ranganath  Mudholkar  &  Ors.[23]  and  the  judgment  of  the
Constitution Bench in the case of Dr. Preeti Srivastava & Anr. v.  State  of
M.P. & Ors.[24]

The competing Entries are: List I, Entry 66 and List III, Entry 25.  In  the
process, List II, Entry 32 also needs a glance.  Thus, for proper  analysis,
we reproduce these Entries below:
“List I

66.  Co-ordination  and  determination  of  standards  in  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  higher
education,  etc.   In  fact,  such  co-ordination   and   determination   of
standards, insofar  as  medical  education  is  concerned,  is  achieved  by
Parliamentary legislation in the form of Medical Council of India Act,  1956
and by creating the statutory  body  like  Medical  Council  of  India  (for
short, 'MCI') therein.  The functions  that  are  assigned  to  MCI  include
within its sweep determination of standards  in  a  medical  institution  as
well as co-ordination of standards and  that  of  educational  institutions.
When it comes  to  regulating  'education'  as  such,  which  includes  even
medical education as  well  as  universities  (which  are  imparting  higher
education), that is prescribed in Entry  25  of  List  III,  thereby  giving
concurrent powers to both Union as well as States.   It  is  significant  to
note that earlier education, including universities, was the subject  matter
of Entry 11 in List II[25].  Thus, power to this extent  was  given  to  the
State Legislatures.  However, this Entry was  omitted  by  the  Constitution
(Forty-Second Amendment) Act, 1976 with effect from July  03,  1977  and  at
the same time Entry 25 in List II  was  amended[26].   Education,  including
university education, was thus transferred to Concurrent  List  and  in  the
process technical and medical  education  was  also  added.   Thus,  if  the
argument of the appellants is accepted, it may render  Entry  25  completely
otiose.  When two Entries relating to education, one in the Union  List  and
the  other  in  the  Concurrent  List,  co-exist,  they  have  to  be   read
harmoniously.  Reading in this manner, it would become  manifest  that  when
it comes to co-ordination  and  laying  down  of  standards  in  the  higher
education or research  and  scientific  and  technical  institutions,  power
rests with the Union/Parliament to the exclusion of the State  Legislatures.
 However,  other  facets  of  education,  including  technical  and  medical
education, as well as governance of universities is  concerned,  even  State
Legislatures are given power by virtue of Entry 25.  The  field  covered  by
Entry 25 of List III is wide enough and  as  circumscribed  to  the  limited
extent of it being subject to Entries 63, 64, 65 and 66 of List I.

Most educational 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,  higher
education and technical education.

The second/other aspect of Education is with regard  to  the  implementation
of the  standards  of  education  determined  by  the  Parliament,  and  the
regulation  of  the  complete  activity   of   Education.    This   activity
necessarily entails the application  of  the  standards  determined  by  the
Parliament in all educational institutions in accordance with the local  and
regional needs.  Thus, while Entry 66 List I dealt  with  determination  and
coordination of standards, on the other hand, the original Entry 11 of  List
II granted the States the exclusive power to legislate with respect  to  all
other aspects of education, except the determination  of  minimum  standards
and coordination which was in national  interest.   Subsequently,  vide  the
Constitution (Forty-second Amendment) Act, 1976, the  exclusive  legislative
field of the State Legislature with regard  to  Education  was  removed  and
deleted, and the same was replaced by amending Entry 25, List III,  granting
concurrent powers to both Parliament and  State  Legislature  the  power  to
legislate with respect to all other aspects of Education, except that  which
was specifically covered by Entry 63 to 66 of the List I.

No doubt, in Bharti Vidyapeeth it has been observed that  the  entire  gamut
of admission falls under Entry 66 of List I.  The said judgment by  a  Bench
of two Judges is, however, contrary to  law  laid  down  in  earlier  larger
Bench decisions. In Gujarat University, a Bench of five Judges examined  the
scope of Entry 2 of List II (which  is  now  Entry  25  of  List  III)  with
reference to Entry 66 of List I.   It was held that the power of  the  State
to legislate in respect of education to the extent it is  entrusted  to  the
Parliament, is deemed to be restricted.  Coordination and  determination  of
standards was in the purview of List I and power of the  State  was  subject
to power of the Union on the  said  subject.   It  was  held  that  the  two
entries overlapped to some extent and  to  the  extent  of  overlapping  the
power conferred by Entry 66 of List I must prevail over power of the  State.
Validity of a  state  legislation  depends  upon  whether  it  prejudicially
affects ‘coordination or determination of standards’, even in absence  of  a
union legislation.  In R. Chitralekha  v.  State  of  Mysore[27],  the  same
issue was again considered.  It was observed that if  the  impact  of  State
law is heavy or devastating 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.[28], 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.[29]  Though the view taken in State  of
Madhya Pradesh v. Kumari Nivedita Jain & Ors.[30]  and Ajay  Kumar  Singh  &
Ors. v. State of Bihar & Ors.[31] 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

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
25 of List III is subject to Entry 66 List I, it is not possible to  exclude
the entire gamut  of  admissions  from  Entry  25  of  List  III.   However,
exercise of any power under Entry 25 of List III has  to  be  subject  to  a
central law referable to Entry 25.

In view of the above, there was no violation of right  of  autonomy  of  the
educational institutions in the CET being  conducted  by  the  State  or  an
agency nominated by the State or in fixing fee.  The right of a State to  do
so is subject to a central law. Once the  notifications  under  the  Central
statutes for conducting the CET called 'NEET' become operative, it  will  be
a matter between the States and the Union, which will have to be sorted  out
on the touchstone of Article  254  artof  the  Constitution.   We  need  not
dilate on this aspect any further.

Before parting with the matter, we may observe that we have decided the  lis
between the parties, but that by itself does not  cure  all  the  ills  with
which the system suffers and something more needs to be done on  that  front
as well.  It would be necessary to refer to the grievance voiced  on  behalf
of the appellants that admissions conducted even by an agency  nominated  by
the State, under a state law or a central law may  lack  credibility.   This
concern has also been noticed by this Court in P.A. Inamdar.  An astute  and
segacious approach is also necessary to  deal  with  the  ground  realities.
This Court had earlier appointed  committees  headed  by  the  retired  High
Court  Judges  in  all  the  States  to  regulate  the  admissions  and  fee
structure.  This was a stopgap arrangement  till  suitable  legislation  was
framed and  once  the  admission  process  under  a  statutory  law  becomes
operative,  the  grievance  of  all  concerned  on  the  subject  of  proper
functioning of the regulatory mechanism will need to be properly  addressed.
 It was brought to  our  notice  that  the  Central  Government  itself  had
appointed a group of  experts  headed  by  Dr.  Ranjit  Roy  Chaudhury  vide
notification dated July 07, 2014 to study the Indian  Medical  Council  Act,
1956 and to make recommendations.  The said Committee  gave  its  report  on
September 25, 2014 suggesting reforms in the  regulatory  oversight  of  the
medical profession by the Medical Council.  The recommendations covered  the
subject of overseeing under graduate and post graduate medical education  as
well as other related issues.   It  was  also  pointed  out  that  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

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.   The  MCI  neither  represented  the   professional
excellence  nor  its  ethos.   Nominees  of  Central  Government  and  State
Governments were also from corporate  private  hospitals  which  are  highly
commercialized.  They were also found to be violating  value  framework  and
indulging  in  unethical  practices  such  as   carrying   out   unnecessary
diagnostics tests and surgical procedures in order  to  extract  money  from
hapless  patients.   The  electoral  processes  brought  about  a   lot   of
compromises and tend to attract professionals who may  not  be  best  fitted
for the regulatory body.  Regulators of highest  standards  of  professional
integrity  and  excellence  could  be  appointed  through   an   independent
selection process.  The  Committee  concurred  with  recommendation  of  the
Ranjit Roy Chaudhury Committee Report that regulatory  structure  should  be
run by  persons  selected  through  transparent  mechanism  rather  than  by
election or nomination.  The Central Government had  no  power  to  disagree
with the MCI though the Government was the main stakeholder in  shaping  the
health schemes.  The Government should have power to give policy  directives
to the regulatory body.  The existing system of graduate  medical  education
was required to be re-invented. The admission process was  not  satisfactory
as majority of seats in private medical colleges  were  being  allotted  for
capitation fee.  The system keeps out most meritorious  and  underprivileged
students. The unitary CET will tackle the capitation  fee  and  bring  about
transparency.  The post  graduate  seats  were  being  sold  in  absence  of
transparent and streamlined process of admission.  It also noted  deficiency
in the teaching  faculty  and  in  regulation  of  professional  conduct  of
doctors. Taking note of corruption  in  the  MCI  it  was  recommended  that
expeditious action should be taken to amend the  statute  and  enact  a  new
legislation.  Current system of inspections was found to be  unsatisfactory.
 The conclusions of the Committee are:
“The Committee observes that the Medical Council of India as  the  regulator
of medical education  in  the  country  has  repeatedly  failed  on  all  it
mandates over the decades.  The  Committee  in  the  earlier  part  of  this
Report has dealt with these failures in some details.  In this section,  the
Committee before suggesting remedy to the problem,  would  like  to  briefly
touch upon the following prominent failures of MCI in order  to  put  things
into proper perspective:-

(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

(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 imparting of skills;

(ix)  abysmal doctor-population ratio;

(x)  failure to create a transparent system of medical  college  inspections
and grant of recognition or de-recognition;

(xi)  failure to guide setting up of medical college in the country  as  per
need, resulting in geographical mal-distribution of  medical  colleges  with
clustering in some states and absence   in  several  other  states  and  the
disparity in healthcare services across states;

(xii)  acute shortage of medical teachers;

(xiii)  failure to oversee and guide the  Continuing  Medical  Education  in
the country, leaving this important task in  the  hands  of  the  commercial
private industry;

(xiv) failure to instill respect for a professional code of  ethics  in  the
medical professional and take  disciplinary  action  against  doctors  found
violating the code of Ethics, etc. (Para 13.1)

            The Committee simultaneously observes that the onus  of  failure
of medical education system  cannot  be  laid  exclusively  on  the  Medical
Council of India.  The successive Governments have also their share  in  it.
The fact that there is imbalance in  the  distribution  of  medical  college
across States is  not  so  much  MCI’s  fault;   it  is  the  fault  of  the
successive Governments that they have not pushed the MCI in that  direction.
 There is also failure on the part of the State Government. (Para 13.2)

            The need for radical reforms in the regulatory framework of  the
medical profession has been on  the  agenda  for  several  years  now.   The
National Commission for Human  Resources  for  Heal  Bill,  2011  which  was
introduced in the Rajya Sabha on the 22nd December, 2011 was  reported  upon
by this Committee and the 60th Report thereon  presented  to  Parliament  on
the 23rd November, 2012.  In its 60th Report, the Committee had  recommended
to the Ministry of Health and Family  Welfare  to  re-examine  the  concerns
expressed by it and bring forward a fresh Bill.   Rather  than  seizing  the
opportunity to come up with a better Bill, the Ministry  remained  apathetic
to the state of  affairs  and  did  not  respond  with  vigorous  corrective
measures.  (Para 13.3)

            Due to massive failures of the MCI and lack  of  initiatives  on
the part of the Government in unleashing  reforms,  there  is  total  system
failure due to which the medical education system is fast sliding  downwards
and quality  has  been  hugely  side-lined  in  the  context  of  increasing
commercialization 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 structure  is  delayed
any further on any grounds including political expediency, it  will  be  too
late as too much momentum  will  have  been  built  to  offset  attempts  at
reversing the direction later, with the result that  our  medical  education
system will fall into a bottomless pit and the country will have  to  suffer
great social, political and financial costs.  (Para 13.5)

            Keeping all these facts in  mind,  the  Committee  is  convinced
that the much needed reforms will have to be led by the Central  Government.
 The MCI can no longer be entrusted with that responsibility in view of  its
massive failures.  The people of India will not be  well-served  by  letting
the modus operandi of MCI continue unaltered to  the  detriment  of  medical
education and  decay  of  health  system.   The  Government  must  therefore
fulfill its commitment to preserve, protect and promote the  health  of  all
Indians by leading the way for a radical reform which cleanses  the  present
ills and elevates medical education  to  contemporary  global  pedagogy  and
practices while retaining focus on national relevance.  (Para 13.6)

            The expert committee led by (late)  Prof.  Ranit  Roy  Chaudhury
constituted by the Government in  July,  2014  to  suggest  reforms  in  the
regulatory framework of medical  profession  has  submitted  its  report  in
February, 2015, a copy of which has  been  supplied  to  this  Parliamentary
Committee. The expert committee has recommended major changes in  the  ethos
of  the  regulatory  body  and  major  structural  reconfiguration  of   its
functions.  The expert committee has suggested the formation of  a  National
Medical Commission (NMC)  through  a  new  Act.   The  NMC  will  have  four
verticals (i) UG Board of Medical Education and Training, (ii) PG  Board  of
Medical Education and Training (iii) National Assessment  and  Accreditation
Board and (iv) National  Board  for  Medical  Registration.   Besides  these
vertical heads, the expert committee has also recommended the formation f  a
National Advisory Council which will  consist  of  members  from  the  State
Governments,   Union   Territories,   State   Medical   Councils,    Medical
Universities and members of NMC.  The Committee has been informed  that  the
creation of National Medical Commission  and  the  structure  (at  Appendix)
envisaged has been endorsed by a group  of  eminent  medical  educationists,
experts and pubic health persons.  (Para 13.7)

            The Committee has done a rigorous analysis of the suggested  new
regulatory 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,  therefore,  exhorts  the
Ministry of Health, and Family  Welfare  to  implement  the  recommendations
made by it in this report immediately and bring a new comprehensive Bill  in
Parliament for this purpose at the earliest.    (Para 13.9) ”

In view of the above, while the Expert Committee Report mentioned  above  is
yet to be acted upon by the Government, we do not express any  view  on  its
contents.  We direct the Central Government to  consider  and  take  further
appropriate action in the matter at the earliest.

At the same time, we do  feel  that  pending  consideration  at  appropriate
executive or legislature level, an Oversight Committee needs to  be  set  in
place in exercise  of  powers  of  this  Court  under  Article  142  of  the
Constitution to oversee the functioning of the MCI  and  all  other  matters
considered by the Parliamentary Committee.

In view of the above, while we do not find any error in the  view  taken  by
the High Court and dismiss these appeals, we direct the constitution  of  an
Oversight Committee consisting of the following members:
                 1.    Justice R.M. Lodha
                       (former Chief Justice of India)

                 2.    Prof. (Dr.) Shiv Sareen
                       (Director, Institute of Liver and Biliary Sciences)

                 3.    Shri Vinod Rai
                       (former Comptroller & Auditor General of India)

A Notification with respect to constitution of the said Committee be  issued
within two weeks from today.  The  Committee  be  given  all  facilities  to
function.  The remuneration of the Members of the Committee may be fixed  in
consultation with them.

The said  Committee  will  have  the  authority  to  oversee  all  statutory
functions under the MCI Act.  All policy decisions of the MCI  will  require
approval of the Oversight Committee.  The Committee will be  free  to  issue
appropriate remedial directions.   The  Committee  will  function  till  the
Central Government puts in place any other appropriate mechanism  after  due
consideration of the Expert Committee Report.  Initially the Committee  will
function for a period of one year, unless suitable mechanism is  brought  in
place earlier which will substitute the said  Committee.  We  do  hope  that
within the said  period  the  Central  Government  will  come  out  with  an
appropriate mechanism.

List the matter after one year for such further  directions  as  may  become

                                                              (ANIL R. DAVE)

                                                                (A.K. SIKRI)

                                                              (R.K. AGRAWAL)

                                                         (ADARSH KUMAR GOEL)

                                                              (R. BANUMATHI)
MAY 02, 2016.

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 4060 OF 2009

RESEARCH CENTRE & ORS.                               ..Appellants
STATE OF MADHYA PRADESH & ORS.                 …Respondents

   C.A. No.4061 of 2009, C.A. No.4062 of 2009, C.A. No.4063 of 2009, C.A.
                  No.4064 of 2009 and C.A. No.4065 of 2009

                               J U D G M E N T


I have had the advantage of going through the draft judgment proposed by  my
esteemed brother Hon’ble Justice A.K. 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  vires   the
Constitution and M.P. Act 2007.   The  State  Government  issued  orders  on
28.02.2009 that the State Government shall conduct the Common Entrance  Test
(CET) for admission to the post-graduate medical and dental courses for  the
academic session 2008-2009 through Madhya Pradesh  Professional  Examination
Board (VYAPAM). The Association has  challenged the order  dated  28.02.2009
authorizing VYAPAM  to  conduct  the  CET  for  admission  to  post-graduate
medical and dental courses as arbitrary and contrary to the  law  laid  down
in T.M.A. Pai Foundation and P.A. Inamdar cases in  W.P.  No.2764  of  2009.
Madhya Pradesh High  Court  by  the  common  impugned  judgment  upheld  the
validity of the provisions of the Act and also the Rules and  dismissed  all
the Writ Petitions.  Rule 10(2)(iii) of 2009  Rules  which  prescribed  that
the candidate should have obtained permanent  registration  with  the  State
Medical Council of Madhya Pradesh and not from  State  Medical  Councils  of
other States for securing admission to post-graduate medical courses in  any
of the medical institution in the State of Madhya Pradesh  was  held  to  be
ultra vires.
3.           Contentions:  Though  in   the   pleadings   and   submissions,
appellants have raised various contentions, in essence, substance  of  their
contentions are:-
Madhya Pradesh Act of 2007 is not referable to entry 25  in  the  concurrent
list and common entrance test for admission is an  important  facet  of  the
standards of higher education falling within entry  66  of  Union  List  and
State Legislature was not competent to legislate on the subject  covered  in
the Union List.

In para (50) of T.M.A.  Pai  Foundation  it  was  held  that  the  right  to
establish and administer the educational institution includes interalia  the
rights  to (a) admit students; (b) to set up  a  reasonable  fee  structure;
and (c) to constitute a governing  body…..;  while  so,   Section  3(d)  and
Section 6 of the M.P. Act 2007 stipulating that admission shall  be  on  the
basis of common entrance test in such manner as may  be  prescribed  by  the
State  infringes  the  fundamental  right  of  unaided  private  educational
institutions and the rights of the institutions as laid down in  T.M.A.  Pai
Foundation case and the same would be an unreasonable restrictions  as  held
in T.M.A. Pai Foundation case.

Section 9 read with Section 4(1) of Act 2007  empowering  the  committee  to
determine  the  fee  structure  to  be  charged  by  the   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 the State Government. This  reservation  is  pursuant  to  the
Ninety  Third  Constitution  Amendment  inserting  Article  15(5)   of   the
Constitution.  In para (41) of the impugned judgment, it  is  observed  that
Ninety  Third  Constitution  Amendment  inserting  Article  15(5)   of   the
Constitution has been challenged by some  of  the  petitioners  in  separate
writ  petitions  and  therefore  no  arguments  was  advanced  in  the  writ
petitions challenging  the  views  of  Act  2007.   It  is,  therefore,  not
necessary to go into the vires of Section 8 of  Act 2007.
5.          Re-contention: Lack of legislative competence of  the  State  to
enact Act 2007 as the field is occupied by entry 66 of Union  List:   It  is
to be pointed out that the  issue  of  legislative  competence  was  neither
raised nor argued before the High Court as is  apparent  from  the  lack  of
discussion on this  issue  of  constitutional  importance  in  the  impugned
judgment. Be that as it may, to appreciate  the  contentions,  it  would  be
advantageous to have a glimpse into the relevant  constitutional  provisions
on the distribution  of  legislative  fields  between  the  Centre  and  the
States.  The legislative powers of the Central  and  State  Governments  are
governed by the relevant  entries  in  the  three  Lists  given  in  Seventh
Schedule.   Entry  66  in  Union  List  provides  for   ‘co-ordination   and
determination of standards in institutions for higher education or  research
and scientific and technical institutions’.  Prior  to  Constitution  Forty-
Second  Amendment,  “education  including  universities   subject   to   the
provisions of the entries 63, 64, 65, 66 of  Union  List  and  entry  25  of
Concurrent  List”  was  shown  in  entry  11  of  the  State  List.  By  the
Constitution (Forty-second Amendment) Act 1976 with effect from  03.01.1977,
entry 11 was deleted from the State List and amalgamated with  entry  25  of
the Concurrent List.
Entry 66 of List I-Union List reads as under:-
Entry 66. Co-ordination and determination of standards in  institutions  for
higher education or research and scientific and technical institutions.

Entry 25 of List III-Concurrent List is as under:-

Entry 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.

Under entry 66 of the Union List, Government of India  is  required  to  co-
ordinate and maintain standards in  institutions  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   might   become
unavoidable; the legislation  which  thus  overlaps  would  not  however  be
rendered invalid, if, in ‘pith and substance’  the  legislation  is  on  the
subject reserved in favour of that Legislature. In order  to  enable  smooth
functioning  of  federal  structure   of   our   Constitution,   ‘incidental
encroachment’ into or ‘overlapping’ of the  field  covered  by  one  of  the
entries in the other Lists is permissible so long as it does not  transgress
the limit of legislation earmarked  for  the  legislature  making  the  law,
judged by the standards fixed by the doctrine of ‘pith and substance’.
7.          In Dr. Preeti Srivastava and Anr. v.  State  of  M.P.  and  Ors.
(1999) 7 SCC 120, it was held that the word ‘education’ under  entry  25  of
Schedule VII List III is of wide import.  It would include in its  fold  the
taught, the teacher, the textbook and also training  as  practical  training
is required to be imparted to students pursuing the course of  post-graduate
medical education. Curricula is also covered by the term ‘education’.
8.          While elaborating the concept of ‘education’ after referring  to
the dictionary meaning and ‘India Vision-2020’,  in P.A.  Inamdar  case,  in
paras (88) to (90), it was held as under:-
 “88. Education is:
“… continual growth of personality, steady  development  of  character,  and
the qualitative improvement of life. A trained  mind  has  the  capacity  to
draw spiritual nourishment from every experience, be it defeat  or  victory,
sorrow or joy. Education is training the mind and not stuffing the brain.”

(See Eternal Values for A Changing Society, Vol. III—  Education  for  Human
Excellence, published by Bharatiya Vidya Bhavan, Bombay, at p. 19.)

“We want that education by which character is formed, strength  of  mind  is
increased, the intellect is expanded, and by which one can  stand  on  one’s
own feet. … The end of all education, all training,  should  be  man-making.
The end and aim of all training is to make the man  grow.  The  training  by
which the current and expression of  will  are  brought  under  control  and
become fruitful is called education.” (Swami Vivekanand as quoted ibid.,  at
p. 20.)

89. Education, accepted as a useful activity, whether  for  charity  or  for
profit, is an occupation. Nevertheless, it does not cease to  be  a  service
to society.  And even though an occupation, it cannot be equated to a  trade
or a business.

90. In short, education  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 attainment, a required or agreed level of quality  or
attainment  (in  elementary  schools)  a  grade  of  proficiency  tested  by
examination, something used as a  measure,  norm  or  model  in  comparative

Black’s Law Dictionary (10th Edn) defines ‘standard’ as:-

“a model accepted as correct by custom, consent, or authority;  a  criterion
for measuring acceptability, quality or accuracy.”

Ramanatha Aiyar’s Law Lexicon 3rd Edn. also defines ‘standard’ as:-

“something that is established by authority, customs or general  consent  as
a model or example to be followed [s.18(4), expln, Beedi and  Cigar  Workers
(Conditions of Employment) Act (32 of 1966)]
Specifications approved and prescribed by a  recognized  body  for  repeated
and continuous  application.  Standard  usually  prescribe  a  basic  though
higher than average level of quality.”

11.         The legislative history of entry 66, Union List might  lay  down
a better picture in this regard.  Profitably, we may refer  to  the  history
of ‘education’ as a subject of legislation in the  Indian  perspective  must
be  ascertained.   The  Government  of  India  Act,  1935  laid   down   the
legislative lists in the Seventh Schedule.  Entry  17  of  List  II  therein
i.e. the Provincial State List reads as under:-
“Education including universities other than those specified in paragraph
13 of List I”

Paragraph 13 of List I i.e. the federal legislative list reads as under:

“The Benaras Hindu University and the Aligarh Muslim University”

Evidently, ‘education’ as a field of legislation including universities  was
available to the Provinces except the  two  Universities  i.e.  the  Benaras
Hindu University and Aligarh Muslim University which lay in  the  domain  of
the federal legislative competence.   Even when the constitution  was  being
drafted, the idea of ‘education’ being a  State  subject  and  the  role  of
Union to be limited only to co-ordinate  educational  institution  was  very
firm in the minds of our constitution framers.

1 12.       If we refer to volume IX of  the  Constituent  Assembly  Debates
held  on  Wednesday,  the  31st  August  1949,   it  transpires  that  while
introducing entry 66 of List I (as it stands in its present form), Dr.  B.R.
Ambedkar proposed nothing  more  than  empowering  the  Union  to  set  mere
standards for higher education and to co-ordinate between the  institutions.
Relevant excerpts from the debate is quoted below:-

“The 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

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
power to legislate  in  relation  to  ‘education’.  While  highlighting  the
importance of ‘education’ being a State subject, Shri V.S.  Sarwate observed
as under:-
“The modern trend in education is that education should be adapted  to  each
individual so that the personality of each individual might be developed  to
its fullest extent, of course consistently with the personalities  of  other
individuals. If this is the desideratum in education,  then  there  must  be
full scope for variety. There should not be any uniformity in  education  as
uniformity would kill the growth of the  individual.  Nobody  can  say  that
there should be a standard of intellectual weights and  measures  for  human
beings. Therefore I think that education should  be  left  entirely  to  the

Shri V.S. Sarwate went to oppose introduction of entry 66 of List I (in  the
present form) by observing that the Union would not be competent  enough  to
lay  down  standards  for  technical  education  such  as  that  of  medical
education. His observation is quoted as under:-
“One word more, Sir, I think that it will be  difficult  for  Parliament  or
the Central Government to fix standards of higher education, for example  in
higher medical education. Would it be possible for the  Parliament  to  find
out what are the standards for medical education?”

In order to answer  the  concern  of  other  constitution  framers,      Dr.
Ambedkar went on to clarify the limited scope of entry 66 of List I  (as  in
the present form), as proposed by him in the following words:-
“Entry 57A merely  deals  with  the  maintenance  of  certain  standards  in
certain classes  of  institutions,  namely,  institutions  imparting  higher
education,  scientific  and   technical   institutions,   institutions   for
research, etc. You may ask, “why  this  entry?”  I  shall  show  why  it  is
necessary. Take for instance the B.A. Degree examination which is  conducted
by the different universities in India. Now, most provinces and the  Centre,
when advertising for candidates, merely say that the candidate should  be  a
graduate of a university. Now, suppose the Madras  University  says  that  a
candidate at the B.A. Examination, if he obtained 15 per cent of  the  total
marks shall be deemed to have  passed  that  examination;  and  suppose  the
Bihar University says that a candidate who has  obtained  20  per  cent.  of
marks shall be deemed to have passed the B.A. Degree examination;  and  some
other university 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, it is  for  the  Union
to co-ordinate between the States to cause them to  work  in  the  field  of
higher education in their respective States as per the standards  determined
by the Union.  Entry 25 in the Concurrent List  is  available  both  to  the
Centre and the States.  However, power  of  the  State  is  subject  to  the
provisions of entries 63, 64, 65, and 66 of Union List; while the  State  is
competent to legislate  on  the  education  including  technical  education,
medical education and universities, it should be as per  the  standards  set
by the Union.
16.         The words ‘co-ordination’ and ‘determination  of  the  standards
in higher education’ are the preserve of the Parliament and are  exclusively
covered  by  entry  66  of  Union  List.   The  word  ‘co-ordination’  means
harmonisation with a view to forge a uniform pattern for  concerted  action.
The term ‘fixing of standards of institutions for higher education’  is  for
the purpose of harmonising co-ordination of  the  various  institutions  for
higher education across the country.  Looking at  the  present  distribution
of legislative powers between the Union and the States with  regard  to  the
field of ‘education’,  that  State’s  power  to  legislate  in  relation  to
“education,   including   technical   education,   medical   education   and
universities” is analogous to that of the Union.   However,  such  power  is
subject to entries 63, 64, 65 and 66 of Union List, as laid  down  in  entry
25 of Concurrent List.  It is the responsibility of the  Central  Government
to determine the standards of higher education and the same  should  not  be
lowered at the hands of any particular State.
17.         Even the National Educational Policy recognised that  the  Union
shall take the larger responsibility of setting the standards.   The  Policy
of 1986 states:-
“3.13 …While the  role  and  responsibility  of  the  States  in  regard  to
education will remain essentially  unchanged,  the  Union  Government  would
accept a larger responsibility to reinforce  the  national  and  integrative
character of education, to maintain quality and standards  (including  those
of the teaching  profession  at  all  levels),  to  study  and  monitor  the
educational requirements of the country as a whole  in  regard  to  manpower
for development, to cater to the needs of research and  advanced  study,  to
look after  the  international  aspects  of  education,  culture  and  Human
Resource Development and, in general, to promote excellence  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.
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

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.”

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 the hands of the Union, only the omission of entry  11  from  State  List
would have sufficed.  The legislative intent was to allow the Union  to  set
the standards through its organs, which the States would facilitate.
18.         Thus, what emerges is that under List I, responsibility  of  the
Union is with respect to formulation  and  co-ordination  of  standards  for
higher  education  institutions.  “Determination  of  Standard   in   Higher
Education” implies that the Parliament is empowered to prescribe such  norms
to  maintain  quality  in  the  institutions  for  higher  education.    The
expression  ‘co-ordination  and  determination  of   standards   in   higher
education’ means that it is for the  Parliament  to  take  concerted  action
towards maintaining the standards. The reason  for  empowering  the  Central
Legislature with entry 66  was  to  ensure  that  the  standards  of  higher
education were not lowered at  the  hands  of  a  particular  State  to  the
detriment of the national progress and  that  the  power  exercised  by  the
State did not directly encroach upon power of the Union  entry 66.
19.          An  elucidation  of  the  connotation,  “co-ordination”  as  it
appears in entry 66 of list I, is contained in the discussion  by  Shah  J.,
while expressing the majority view in The Gujarat University & Anr. v.  Shri
Krishna Ranganath Mudholkar & Ors. [1963] Supp.1 SCR  112.   In  this  case,
the  Constitution  Bench  of  this  Court  considered  whether   the   State
Legislature could impose  Gujarati  and/or  Hindi  in  Devnagari  script  as
exclusive medium of instruction and examination in  institutions  affiliated
to the university and constituent colleges.  It was held that:-
“if a legislation imposing a regional language or  Hindi  as  the  exclusive
medium of instruction is likely to result in lowering of standards, it  must
necessarily fall within Item 66 of List I and be  excluded  to  that  extent
from Item 11 of List II”

Medium of instruction was held to have an important bearing on the
effectiveness of instruction and resultant standards achieved thereby.  It
was further held as under:
“If adequate textbooks are not available or  competent  instructors  in  the
medium, through which instruction  is  directed  to  be  imparted,  are  not
available, or the students are not able to receive  or  imbibe  instructions
through the medium in which it is  imparted,  standards  must  of  necessity
fall, and legislation for coordination of standards in  such  matters  would
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 substance it fell not under the State entry, but under the Union  entry.

21.         In R. Chitralekha & Anr. v. State of Mysore & Ors. (1964) 6  SCR
368, State Government informed the Director of Technical Education  that  it
had been decided to fix 25% of the maximum  marks  for  the  examination  in
optional subjects as interview marks and  on  that  basis,  selections  were
made for admission to Engineering and  Medical  Colleges.   Considering  the
impact of State law providing for such standards it was held that the  State
law  prescribing  a  higher  percentage  of   marks   for   extra-curricular
activities in the matter of admission to  colleges  cannot  be  said  to  be
encroaching on the field covered by entry 66 of  Union  List  and  that  the
State Government would be within its rights to prescribe qualifications  for
admission to colleges so long as its action does not  contravene  any  other
22.         It was observed in the case of Government of  Andhra  Pradesh  &
Anr. v. Medwin Educational Society & Ors. (2004) 1 SCC  86,   that  “keeping
in view the practical difficulties faced by the Central  Government  or  the
statutory bodies like MCI or UGC, some power is sought to  be  delegated  to
the State so as to make the Parliamentary statute workable.  Such  ‘play  in
joint’ is also desirable having regard  to  the  federal  structure  of  our
23.         In State of T.N. and Anr. v. Adhiyaman Educational and  Research
Institute and Ors., (1995) 4 SCC 104,  the  question  involved  was  whether
after coming into force of the Central  Act,  All  India  Council  Technical
Education Act, 1987, the  State  Government  had  the  power  to  grant  and
withdraw permission to start educational institution.  It was held  that  to
that extent after coming into operation of the Central Act  under  entry  66
of Union List, to co-ordinate  and  determine  the  standards  of  technical
institutions as in entry 25  of  Concurrent  List,  the  provisions  of  the
University Act will be deemed  to  have  become  unenforceable  in  case  of
technical colleges like engineering colleges.   In  para  (41),  this  Court
summarized the principles as under:-
“41. What emerges from the above discussion is as follows:
(i) The expression ‘coordination’ used in Entry 66 of the Union List of  the
Seventh Schedule to the Constitution does not  merely  mean  evaluation.  It
means harmonisation with a view to forge a uniform pattern for  a  concerted
action according to a certain 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 the State law encroaches upon Entry 66 of the Union List or  is
repugnant to the law made by the Centre under Entry  25  of  the  Concurrent
List, will have to be determined by the examination  of  the  two  laws  and
will depend upon the facts of each case.
(v) When there are more applicants than the available situations/seats,  the
State authority is not  prevented  from  laying  down  higher  standards  or
qualifications than those laid down by the Centre or the  Central  authority
to short-list the applicants. When the State authority does so, it does  not
encroach upon Entry 66 of the Union List or make a law  which  is  repugnant
to the Central law.
(vi)  However,  when  the  situations/seats  are  available  and  the  State
authorities deny an applicant the same on the ground that the  applicant  is
not qualified according to its standards or qualifications, as the case  may
be, although the applicant satisfies the standards  or  qualifications  laid
down by the Central law, they  act  unconstitutionally.  So  also  when  the
State authorities  de-recognise  or  disaffiliate  an  institution  for  not
satisfying the standards or requirement  laid  down  by  them,  although  it
satisfied the norms and requirements laid down  by  the  Central  authority,
the State authorities act illegally.”

24.         In Dr. Preeti Srivastava case, this Court considered the
question whether it was open to the State to prescribe different admission
criteria, in the sense of prescribing different minimum qualifying marks,
for special category candidates seeking admission to the post-graduate
medical courses under the reserved seats category as compared to the
general category candidates.  While considering the question whether norms
for admission have any connection with the standards of education,
observing that norms for admission have a nexus with standards of education
or rules of admission which are covered under entry 25 of concurrent list,
it was held that the minimum standards as laid down by the Central Statute
have to be complied with by the States.  In paras (35) and (36) it was held
as under:-
“35.  ….Both the Union as well as the States have the power to legislate  on
education including medical education, subject, inter alia, to Entry  66  of
List I which deals with laying down standards  in  institutions  for  higher
education or research and scientific  and  technical  institutions  as  also
coordination of 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
direct impact on the standards of education. Of course, there can  be  rules
for admission which are consistent with  or  do  not  affect  adversely  the
standards of education prescribed by the Union in exercise of  powers  under
Entry 66 of List  I.  For  example,  a  State  may,  for  admission  to  the
postgraduate medical courses, lay down qualifications in addition  to  those
prescribed under  Entry  66  of  List  I.  This  would  be  consistent  with
promoting higher standards for admission to the higher educational  courses.
But any lowering of the norms laid down can and does have an adverse  effect
on the standards  of  education  in  the  institutes  of  higher  education.
Standards of education in  an  institution  or  college  depend  on  various
factors. Some of these are:
(1)   the calibre of the teaching staff;
(2)   a proper syllabus designed to achieve a high  level  of  education  in
the given span of time;
(3)   the student-teacher ratio;
(4)   the ratio between the students and  the  hospital  beds  available  to
each student;
(5)   the calibre of the students admitted to the institution;
(6)   equipment  and  laboratory  facilities,  or  hospital  facilities  for
training in the case of medical colleges;
(7)   adequate accommodation for the college and the attached hospital; and
(8)    the standard of examinations held including the manner in  which  the
papers are set and examined and the clinical performance is judged.”

25.         As laid down in the decision in Preeti Srivastava, it is  within
the legislative competence of the State Legislature, in  exercise  of  power
under  entry  25  of  concurrent  list  to  prescribe   higher   educational
qualifications and higher marks for admission in addition to the  one  fixed
by the Indian Medical Council in order to bring out the  higher  qualitative
output from the students who pursue  medical  course.  Following  the  above
dictum,  in paragraphs (13) and (14)  of  the  decision  of  this  Court  in
Visveswaraiah Technological University & Anr. v. Krishnendu Halder  &  Ors.,
reported in (2011) 4 SCC 606, held as under:-
“13. The object of the  State  or  University  fixing  eligibility  criteria
higher than those fixed by AICTE, is twofold. The first and foremost  is  to
maintain excellence  in  higher  education  and  ensure  that  there  is  no
deterioration in the quality of  candidates  participating  in  professional
engineering courses. The second is to enable  the  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 contended that whenever a  large  number  of  seats  remained
unfilled, on account  of  non-availability  of  adequate  candidates,  paras
41(v) and (vi) of Adhiyaman (1995) 4  SCC  104  would  come  into  play  and
automatically the lower minimum standards prescribed by  AICTE  alone  would
apply. This contention is liable to be rejected in view  of  the  principles
laid  down  in  the  Constitution  Bench  decision  in   Preeti   Srivastava
(Dr.)(1999) 7 SCC 120 and the decision of the larger Bench in S.V.  Bratheep
(2004) 4 SCC 513 which explains the observations in Adhiyaman (1995)  4  SCC
104 in the correct perspective. We summarise below  the  position,  emerging
from these decisions:
(i)    While  prescribing  the  eligibility  criteria   for   admission   to
institutions of higher  education,  the  State/University  cannot  adversely
affect  the  standards  laid  down  by  the  central  body/AICTE.  The  term
“adversely affect the standards” refers to lowering of the norms  laid  down
by the central body/AICTE. Prescribing higher  standards  for  admission  by
laying down qualifications in addition to or higher  than  those  prescribed
by AICTE, consistent with the  object  of  promoting  higher  standards  and
excellence  in  higher  education,  will  not  be  considered  as  adversely
affecting the standards laid down by the central body/AICTE.
(ii)  The observation in para 41(vi) of Adhiyaman (1995) 4 SCC  104  to  the
effect that where seats remain unfilled, the State authorities  cannot  deny
admission to any student satisfying  the  minimum  standards  laid  down  by
AICTE, even though he is not qualified according to its  standards,  is  not
good law.
(iii)       The fact that there are unfilled seats  in  a  particular  year,
does not mean that in that year,  the  eligibility  criteria  fixed  by  the
State/University would cease  to  apply  or  that  the  minimum  eligibility
criteria suggested by AICTE alone would apply. Unless and  until  the  State
or the University chooses to modify the eligibility criteria fixed by  them,
they will continue to apply in spite of the fact that  there  are  vacancies
or unfilled seats in any year. The main object  of  prescribing  eligibility
criteria is not to ensure that all seats in  colleges  are  filled,  but  to
ensure that excellence in standards of higher education is maintained.
(iv)  The State/University (as also  AICTE)  should  periodically  (at  such
intervals as they deem fit) review the prescription of eligibility  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 the examination by  candidates  is  neither  an  encroachment  upon
regulation made under the  Medical  Council  Act  nor  any  infringement  of
Union’s power provided in entry 66 of Union List.  It was held as under:-
“…The State Government by laying down the eligibility  qualification  namely
the obtaining of certain minimum  marks  in  the  MBBS  Examination  by  the
candidates has not in any way encroached upon  the  regulations  made  under
the Indian Medical Council Act  nor  does  it  infringe  the  Central  power
provided in Entry 66 of List I of the Seventh Schedule to the  Constitution.
The order merely provides an additional eligibility qualification.”

27.         Observing that the scope of the relevant entries in the Seventh
Schedule of the Constitution has to be understood in the manner as stated
in Dr. Preeti Srivastava case, in State of T.N. and Anr. v. S.V. Bratheep
(minor) and Ors. (2004) 4 SCC 513, this Court held as under:-
9. Entry 25 of List III and Entry 66 of List I have to be read together  and
it cannot be read in such a manner as to form an exclusivity in  the  matter
of admission but  if  certain  prescription  of  standards  have  been  made
pursuant to Entry 66 of List I, then those standards will prevail  over  the
standards fixed by the State in exercise of powers under Entry  25  of  List
III insofar as they adversely affect the standards laid down  by  the  Union
of India or any other authority functioning under it. Therefore, what is  to
be seen in the present case is whether the  prescription  of  the  standards
made by the State Government is in any way adverse to, or  lower  than,  the
standards fixed by AICTE. It is no doubt  true  that  AICTE  prescribed  two
modes of admission — one is merely dependent on the  qualifying  examination
and the other, dependent upon the marks  obtained  at  the  common  entrance
test. The appellant in the present  case  prescribed  the  qualification  of
having secured certain percentage of marks in the related subjects which  is
higher than the minimum  in  the  qualifying  examination  in  order  to  be
eligible for admission.  If  higher  minimum  is  prescribed  by  the  State
Government than what had been prescribed by AICTE, can it be  said  that  it
is in any manner adverse to the standards fixed  by  AICTE  or  reduces  the
standard fixed by it? In our opinion, it does not. On the other hand, if  we
proceed on the basis that the norms fixed by  AICTE  would  allow  admission
only 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  prescriptions  by  the   State
Government in addition to those of AICTE in the present case are such  which
are not attainable or which are not within the reach of the  candidates  who
seek admission for engineering colleges. It is not a  very  high  percentage
of marks  that  has  been  prescribed  as  minimum  of  60%  downwards,  but
definitely higher than the mere pass marks. Excellence in  higher  education
is always insisted upon by a series of decisions of this Court including  Dr
Preeti Srivastava case (1999) 7 SCC 120. If higher minimum marks  have  been
prescribed, it would certainly add  to  the  excellence  in  the  matter  of
admission of the students in higher education.

28.         Another argument that has been putforth is  that  the  power  to
enact laws laying down process of admission in universities  etc.  vests  in
both Central and State Governments under entry 25  of  the  concurrent  list
only. Under entry 25 of concurrent list and  erstwhile  entry  11  of  State
List, the State Government has enacted various legislations that inter  alia
regulate  admission  process  in   various   institutions.   For   instance,
Jawaharlal Nehru Krishi Vishwavidyalaya Adhiniyam, Rajiv  Gandhi  Prodyogiki
Vishwavidyalaya  Adhiniyam,  Rashtriya   Vidhi   Sansathan   Vishwavidyalaya
Adhiniyam etc. were established by  the  State  Government  in  exercise  of
power under entry 25 of concurrent list.  Similarly, the Central  Government
has also enacted various legislations relating  to  higher  education  under
entry 25 of concurrent list  pertaining  to  centrally  funded  universities
such as  Babasaheb  Bhimrao  Ambedkar  University  Act  1994,  Maulana  Azad
National  Urdu  University  Act,  1996,  Indira   Gandhi   National   Tribal
University Act,  2007  etc.   Central  Government  may  have  the  power  to
regulate the admission process for centrally funded institutions like  IITs,
NIT, JIPMER etc. but not in respect of other  institutions  running  in  the
29.         In view of the above discussion,  it can be  clearly  laid  down
power of Union under entry 66  of  Union  List  is  limited  to  prescribing
standards of higher education to bring about  uniformity  in  the  level  of
education imparted throughout the country.  Thus,  the  scope  of  entry  66
must be construed limited to its actual sense of ‘determining the  standards
of higher education’ and not of laying down admission process.  In  no  case
is the State denuded of its power to legislate under Entry 25 of  List  III.
 More so, pertaining 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  other
31.         Whether the impugned legislation imposes reasonable  restriction
under Article 19(6) of the Constitution of India on the  fundamental  rights
of  the  Unaided  Private  Educational  Institutions  in   its   “Right   to
Occupation” under Article 19(1)  (g):   In  T.M.A.  Pai  case,  eleven-Judge
Bench  in  paras  (20)  and  (25)  held  that  running  of  an   educational
institution was an occupation within the meaning  of  Article  19(1)(g)  and
that the right to establish and administer  an  educational  institution  is
guaranteed to all the citizens under Article 19(1)(g)  of  the  Constitution
of India and to minorities specifically under Articles  26  and  30  of  the
Constitution  of  India.   These  rights   to   establish   an   educational
institution also stand affirmed in P.A. Inamdar.
32.         Object of the Act 2007 is “…to provide  for  the  regulation  of
admission  and  fixation  of  fee  in   private   professional   educational
institutions in the State of Madhya Pradesh…”. Section 6  of  the  Act  2007
provides  that  admission  to   sanctioned   intake   in   private   unaided
professional educational  institution  shall  be  on  the  basis  of  common
entrance test in such manner as may be prescribed by the  State  Government.
In Section 3(d) ‘common entrance test’ has been defined to mean an  entrance
test conducted for determination of the merit of the candidates followed  by
centralized  counselling  based  on  merit  to  professional   colleges   or
institutions through a single window procedure by the  State  Government  or
by any agency authorized by it.
33.         Contention of  the  appellants  is  that  Section  6  read  with
Section 3(d) of the Act, 2007 creates a monopoly in favour of the  State  in
the  matter  of  conducting  common  entrance  test  and  that  it  directly
encroaches  upon  the  fundamental  right  of  private  unaided  educational
institutions under Article 19(1)(g) of the Constitution  of  India.   It  is
further submitted that as held in para (137) of P.A. Inamdar  case  only  if
the admission procedure adopted by the private institutions or  a  group  of
institutions fails to satisfy the triple test of fairness, transparency  and
non-exploitativeness, can the State take over  the  admission  procedure  by
substituting its own procedure; but by the impugned provision in  Section  6
and Section 3(d) of the Act, 2007 even in the absence  of  any  material  to
show that the entrance test conducted by  the  private  unaided  institution
failed to satisfy the triple 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  business  guaranteed  under  Article
19(1)(g) has its own limitations. The liberty of an individual to do  as  he
pleases is not absolute. It must yield  to  the  common  good.  Absolute  or
unrestricted individual rights do not and cannot exist in any modern  State.
There is no protection of the rights themselves unless there  is  a  measure
of control and regulation of the rights of each individual in the  interests
of all.”

35.         M.P. Act 2007 was enacted for “the 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, the Scheduled Tribes and  Other  Backward
Classes”. Act 2007 is thus in furtherance of the  constitutional  obligation
imposed upon the State to ensure equality of  opportunity  in  admission  to
meritorious candidates who seek to pursue the medical education.   Act  2007
enables the State to  conduct  common  entrance  test  in  the  interest  of
securing higher standards of medical education so that quality  doctors  are
trained leading to advancement in health sector of the nation. Point  to  be
considered is whether the common entrance test to be conducted by the  State
Government  or  any  agency  authorized  by  it  amounts  to  a   reasonable
36.         From time to time, it has been held that ‘in  the  interests  of
the general public’, the State would be  justified  in  imposing  reasonable
restriction, even if it affects the interests of particular individuals,  or
even causes  hardship  to  particular  individuals  owing  to  the  peculiar
conditions in which they are placed.  Reference can be made to the  decision
of this Court in Narendra Kumar & Ors. v. Union of India & Ors. AIR 1960  SC
430, wherein it was held as under:-
“15.  It is clear that in the  following  three  cases  viz.  Chintaman  Rao
(1950) 1 SCR 759, Cooverjee AIR 1954 SC 220 and  Madhya  Bharat  Association
Ltd. AIR 1954 SC 634, the Court considered the real question to  be  whether
the interference with the fundamental right was “reasonable” or not  in  the
interests of the general public and that if the answer to the  question  was
in the affirmative, the law would be valid and it would be  invalid  if  the
test of reasonableness was not passed. Prohibition was in  all  these  cases
treated as only a kind of “restriction”.
18.  In applying the test of reasonableness, 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
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 clause (6) of Article 19.
(5)   Prevailing social values as also social needs which  are  intended  to
be satisfied by restrictions have to be borne in mind. (See: State  of  U.P.
v. Kaushailiya AIR 1964 SC 416.)
(6)   There must be a direct and proximate nexus or a 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 in favour of  the  constitutionality  of  the  Act
will naturally arise. (See: Kavalappara Kottarathil  Kochuni  v.  States  of
Madras and Kerala AIR 1960 SC 1080; O.K. Ghosh v. E.X. Joseph  AIR  1963  SC

A similar view was also expressed in State of Madras v. V.G. Row,  AIR  1952
SC 196 and K.K. Kochuni v. State of Madras and Kerala, AIR 1960 SC 1080.
38.          In  T.M.A.  Pai,  while  this  Court  acknowledged  ‘right   to
occupation’ of private educational institutions as guaranteed under  Article
19(1)(g) of the Constitution of India, in para (54), this  Court  laid  down
general law pertaining to  the  authority  of  State  Government  to  impose
regulatory means  in  respect  of  private  aided  and  unaided  educational
institutions, which reads as under:-
“54. The right to establish an educational  institution  can  be  regulated;
but such regulatory measures must, in general, be to ensure the  maintenance
of proper  academic  standards,  atmosphere  and  infrastructure  (including
qualified staff) and the prevention of maladministration by those in  charge
of management. 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.”

39.         In T.M.A. Pai, in paras (58) and (59), the Constitution Bench
reiterated that for seeking admission into the 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

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.”

40.          In  order  to  clarify  the  doubts/anomalies  in  T.M.A.  Pai,
Constitution Bench was constituted in Islamic Academy of  Education  wherein
this Court reiterated that admission  to  professional  colleges  should  be
based on merit by a common entrance test conducted by  government  agencies.
Furthermore, in exercise of power under Article  142,  this  Court  directed
setting up of two committees headed by a retired High Court Judge  nominated
by the Chief Justice of the State to oversee the entrance test conducted  by
the association and also to  approve  the  fee  structure  proposed  by  the
institute.  In paras (19) and (20) of the said  judgment,  it  was  held  as
“19. 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 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  power  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…..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.

20. Our direction for setting up two sets of Committees in  the  States  has
been passed under Article 142 of  the  Constitution  of  India  which  shall
remain in force till appropriate legislation is enacted by  Parliament.  The
expenses incurred on the setting up of such Committees  shall  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
“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  institutions  imparting  same  or  similar
education. Such institutions situated in one  State  or  in  more  than  one
State may join together and hold a common entrance test  or  the  State  may
itself or through an agency arrange for holding of such test.  Out  of  such
common merit list the successful candidates can  be  identified  and  chosen
for being allotted to different institutions depending  on  the  courses  of
study offered, the number of seats,  the  kind  of  minority  to  which  the
institution belongs and other relevant factors. Such  an  agency  conducting
the common entrance test (“CET” for  short)  must  be  one  enjoying  utmost
credibility and expertise in  the  matter.  This  would  better  ensure  the
fulfilment of twin objects of transparency and merit. CET  is  necessary  in
the interest of achieving the  said  objectives  and  also  for  saving  the
student community from harassment and exploitation. Holding of  such  common
entrance test followed  by  centralised  counselling  or,  in  other  words,
single-window system regulating admissions does not cause any  dent  in  the
right of minority unaided educational  institutions  to  admit  students  of
their choice. Such  choice  can  be  exercised  from  out  of  the  list  of
successful candidates prepared at CET without altering the  order  of  merit
inter se of the students so chosen.”

42.         In para (138), it was further held that having regard to the
larger interest and welfare of the student community, it would be
permissible to regulate the admissions by providing a centralized and
single-window procedure.  Para (138) reads as under:-
“138. It needs to be specifically stated that having regard  to  the  larger
interest and welfare of the student  community  to  promote  merit,  achieve
excellence and curb  malpractices,  it  would  be  permissible  to  regulate
admissions by providing a centralised and single-window  procedure.  Such  a
procedure, to a large extent, can secure grant of merit-based admissions  on
a transparent basis. Till regulations are framed, the  Admission  Committees
can oversee admissions so as to ensure that merit is not the casualty.”

43.         Affirming the view taken in Islamic Academy on  constitution  of
two committees and the responsibilities of the  State  Governments  to  come
out with a well-thought out legislation on the subject, it was held in  P.A.
Inamdar in paras (144) and (155) as under:-
“144. The two Committees for monitoring admission procedure and  determining
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  earlier  the  Union  of  India  and  the  State
Governments  act,  the  better  it  would  be.  The  Committees   regulating
admission procedure and fee structure shall continue to exist, but  only  as
a temporary measure and  an  inevitable  passing  phase  until  the  Central
Government or the State Governments are able to devise a suitable  mechanism
and appoint a competent authority in consonance with the  observations  made
hereinabove. Needless to say, any decision taken by such Committees  and  by
the Central or the State Governments, shall be open to  judicial  review  in
accordance  with  the  settled  parameters  for   the   exercise   of   such

44.          In  para  (155)  of  P.A.  Inamdar,  as  quoted  above,   State
Governments  have  been  directed  to  frame  a  detailed  well-thought  out
legislation on the subject with a  further  observation  that  any  decision
taken by the Committees and by the Central or  State  Governments  shall  be
open to judicial review in accordance with the settled  parameters  for  the
exercise of such jurisdiction.  The impugned legislation-Act 2007  has  thus
been enacted in compliance with the  directions  issued  by  this  Court  in
T.M.A. Pai, Islamic Academy and P.A. Inamdar with a view to ensure  fairness
and transparency in the admissions process.
45.          Common  entrance  test-single  window  system  which  regulates
admission to unaided private professional educational institutions does  not
cause any dent in the fundamental rights of those  institutions:  In  T.M.A.
Pai and P.A. Inamdar,  this  Court  categorically  held  that  admission  to
professional courses must be on the basis of merit.   The  word  ‘merit’  is
word of Latin origin, deriving roots from meritum, meaning ‘due reward’  and
mereri meaning ‘earn, deserve’.  Concise  Oxford  English  Dictionary  (11th
Edn)  defines  ‘merit’  as  ‘excellence;  worth’.    P.  Ramanatha   Aiyar’s
Advanced Law Lexicon (3rd Edn.) on the  topic  of  merit  makes  mention  of
Guman Singh v. State of Rajasthan (1971) 2 SCC 452, wherein it was  observed
as under:-
“…merit is a sum total of various qualities and attributes  of  an  employee
such as his academic qualifications, his distinction in the university,  his
character,  integrity,  devotion  to  duty  and  the  manner  in  which   he
discharges his  official  duties.  Allied  to  this  may  be  various  other
matters, or factors, such as his punctuality in work, the quality  and  out-
turn of work done by him and the manner of his dealings with  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
47.         Merit is the cumulative assessment of worth  of  any  individual
based on different screening methods.  Ideally, there should be  one  common
entrance test conducted by the State both for government  colleges  and  for
private unaided educational institutions to ensure  efficacy,  fairness  and
public confidence.  As rightly contended by Mr. Purushaindra  Kaurav,  Addl.
Advocate General for the State of  Madhya  Pradesh  appearing  for  AFRC,  a
common entrance test conducted by the State is more advantageous viz.:-  (i)
having adhered to the time schedule as laid down in Mridul Dhar case  (2005)
2 SCC 65; (ii) multiple centres of examination  and  counselling  throughout
the State and a single window system for admission; (iii) standard  question
papers, preservation of question papers  and  answer  books,  prevention  of
leakage of question papers and fair evaluation and (iv) minimal  litigation.
 That apart, procedure  for  preparation  of  merit  list,  counselling  and
allotments to various colleges is subject to Right to  Information  Act  and
thus ensures fairness and transparency in the entire process.
48.          Having  regard  to  the  prevailing  conditions   relating   to
admissions in private professional educational institutions in the State  of
Madhya Pradesh, the Legislature in its wisdom has taken the view that  merit
based admissions  can  be  ensured  only  through  a  common  entrance  test
followed by centralized counselling either by the  State  or  by  an  agency
authorized by the State.  In  order  to  ensure  rights  of  the  applicants
aspiring  for  medical  courses  under  Articles  14,  15  and  16  of   the
Constitution of India, legislature by the  impugned  legislation  introduced
the system of Common Entrance Test (CET) to secure merit based admission  on
a transparent basis. If private unaided educational institutions  are  given
unfettered right to devise their own admission procedure and fee  structure,
it would lead to situation  where  it  would  impinge  upon  the  “right  to
equality” of the students who aspire to take admissions in such  educational
institutions.  Common Entrance Test by  State  or  its  agency  will  ensure
equal  opportunity  to  all  meritorious   and   suitable   candidates   and
meritorious candidates can be identified for  being  allotted  to  different
institutions depending on the courses of study,  the  number  of  seats  and
other relevant factors. This would ensure twin objects:-  (i)  fairness  and
transparency and (ii) merit apart from preventing mal-administration.  Thus,
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 the institutions nor on their right  to
collect  fees  from  the  students.   The  freedom  of  private  educational
institutions to establish and run  institution,  impart  education,  recruit
staff, take disciplinary action, admit students, participate in fixation  of
fees is in no way being abridged by the  impugned  legislation;  it  remains
50.         While considering the reasonableness  of  the  restriction,  the
court has to keep in mind the Directive  Principles  of  State  Policy:  For
deciding the constitutional validity of any statute or  executive  order  or
considering the reasonableness of a restriction  cast  by  the  law  on  the
exercise of any fundamental right,  the  court  has  to  keep  in  mind  the
Directive Principles of  State  Policy.   A  law  or  measure  designed  for
promoting or having the effect of advancing directive principles is  per  se
reasonable and in public interest.  The State has  a  duty  to  balance  the
direct impact on  the  fundamental  right  of  individuals  as  against  the
greater public or social interest.  In State of  Bombay  and  Anr.  v.  F.N.
Balsara [1951] SCR 682, a Constitution Bench of  this  Court  held  that  in
judging the reasonableness of the restriction  imposed  on  the  fundamental
right, one has to bear in mind the Directive Principles of State Policy  set
forth in Part IV of the Constitution, while examining the challenge  to  the
constitutional validity of law by  reference  to  Article  19(1)(g)  of  the
Constitution.  In State of Gujarat v. Mirzapur  Moti  Kureshi  Kassab  Jamat
and Ors. (2005) 8 SCC 534, this Court held that  ban  on  slaughter  of  cow
progeny is not a prohibition but only a reasonable  restriction.   A  seven-
Judge Bench of this Court in para (41) held as under:-
“41. The message of Kesavananda Bharati (1973)  4  SCC  225  is  clear.  The
interest of a citizen or section of a  community,  howsoever  important,  is
secondary to the interest of the  country  or  community  as  a  whole.  For
judging the reasonability of restrictions imposed on fundamental rights  the
relevant considerations are not only those as stated in  Article  19  itself
or in Part III of the Constitution: the directive principles stated in  Part
IV  are  also  relevant.  Changing  factual  conditions  and  State  policy,
including  the  one  reflected  in  the  impugned  enactment,  have  to   be
considered  and  given  weightage  to  by  the  courts  while  deciding  the
constitutional validity of legislative enactments. A restriction  placed  on
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,  it was held  that  right
to health is a fundamental right of workers and the  maintenance  of  health
is  most  imperative  constitutional   goal   whose   realization   requires
interaction of many social  and  economic  factors.   In  Rajasthan  Pradesh
Vaidya Samiti, Sardarshahar and another v. Union of India and others  (2010)
12 SCC 609, this Court held that the citizens of this country have  a  right
under Article 21 of the Constitution of India which includes the  protection
and safeguarding the health and life of public from  mal-medical  treatment.
More recently in Centre for Public Interest Litigation  v.  Union  of  India
(2013) 9 SCR 1103, again this Court has recognized that right to life  under
Article 21 includes right to health.
52.         Maintenance and improvement of  public  health  and  to  provide
health care and medical services is the  constitutional  obligation  of  the
State. To discharge this constitutional obligation, the State must have  the
doctors with professional excellence and commitment who are  ready  to  give
medical  advice  and  services  to  the   public   at   large.   State   can
satisfactorily  discharge  its  constitutional  obligation  only  when   the
aspiring students enter into the profession based on merit.  None  of  these
lofty ideals can be achieved  without  having  good  and  committed  medical
53.         Fundamental Rights  of  private  unaided  professional  colleges
must yield to public interest and rights of the students at large: Right  to
be treated fairly  and  to  get  admission  through  a  non-arbitrary,  non-
discriminatory, fair and transparent procedure is  a  fundamental  right  of
the students  under  Article  14.   Any  law  which  creates  an  artificial
classification between private unaided institutions and  other  institutions
and creates a disparity in the matter of  admission  whereby  a  meritorious
student could be denied admission to pursue higher education  in  a  private
unaided institution solely because such institution has an unfettered  right
to choose its own students  without  following  a  uniform  and  transparent
admission procedure would  be  violative  of  the  rights  of  the  aspiring
students guaranteed under Article 14.  Right of the  students  to  admission
in private unaided medical colleges is a right of equality  in  opportunity.
On many occasions, this has led to a conflict between fundamental rights  of
private educational institutions on the one hand and the rights of  students
and public 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 fails to satisfy all or any  of  the  triple
test, then admission procedure can be taken over by the  State  substituting
its own procedure and not otherwise.  Contention of the appellants  is  that
there  is  absolutely  no  material  to  show   that   private   educational
institutions  were  not  able  to  ensure  a  fair,  transparent  and   non-
exploitative  admission  procedure  and  that   the   impugned   legislation
empowering the State or agency nominated by it to  conduct  common  entrance
test is in violation of the directions of this Court.  In  so  far  as  this
contention, High Court has observed thus:-
“…Sufficient materials have been filed before us by the respondents to  show
that prior to the enactment of the Act 2007,  this  Court  as  well  as  the
committee constituted as per the orders of  the  Supreme  Court  in  Islamic
Academy of Education (supra) had to enquire into complaints of  mal-practice
in admissions in private professional  educational  institutions  and  after
finding the complaints  to  be  true,  directed  the  institutions  to  give
admission to the aggrieved students in the next academic sessions  and  this
would show that the private professional educational institutions  were  not
able to ensure a fair, transparent and non-exploitative admission  procedure
before Act, 2007 was enacted….”

55.         Our attention was drawn to the advertisement of  DMAT  2006  for
admission in MBBS/BDS course in  the  private  colleges  in  Madhya  Pradesh
scheduled to be conducted on 16.07.2006 and number of writ  petitions  filed
by the students pertaining to DMAT 2006.  It was submitted that in W.P.  (C)
No. 1796 of 2006, High Court stayed DMAT 2006  and  directed  the  State  to
appoint a committee as per Islamic Academy of Education  and  the  committee
managing  DMAT  cancelled  DMAT  2006.   Having  regard  to  the  number  of
complaints  and  litigations,  High  Court  was  right  in  observing   that
sufficient materials had been  placed  before  it  to  show  that  prior  to
enactment of Act 2007, the High Court  as  well  as  the  committee  had  to
enquire into the complaints of mal-practice in  admissions.   It  is  not  a
case of no materials, where state would not be justified in taking over  the
admission procedure.
56.         Learned Senior Counsel for the respondents  submitted  that  the
State Government had filed  complaints  before  the  AFRC  against  some  of
private colleges and criminal proceedings had also  been  initiated  against
unaided private professional 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  State  quota
and on the alleged violation, AFRC imposed a  fine  of  Rs.13.10  crores  on
various  private  colleges.   This  was  later  affirmed  by  the  appellate
authority (Annexure A-17 to I.A. 83/2015).  The order affirming the fine  is
the subject matter of writ petitions pending before the  High  Court  and  I
do not propose to go into the merits of this aspect.   Suffice  it  to  note
that there are prima facie materials to indicate that  the  private  unaided
professional educational institutions have not passed triple  test  as  laid
down in P.A.  Inamdar.   In  this  factual  background,  it  does  not  seem
inappropriate on the part of the State to come up with the  Act  2007  which
lays down a mechanism for  conducting  common  entrance  test  in  order  to
ensure merit based admission in the private institutions.
57.         Whether the provisions of Act 2007 regarding   determination  of
fees  are  violative  of  ‘right  to  occupation’  of  private   educational
institutions: As stated earlier, the object of Madhya Pradesh  Act  2007  is
to “provide for the 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  Scheduled  Castes,
the Scheduled Tribes and Other Backward Classes in professional  educational
institutions and the matters connected  therewith  or  incidental  thereto”.
The Act  authorizes the State to fix the fees to be charged by  the  private
educational institutions, while taking relevant factors  into  consideration
and also after ensuring  an  opportunity  of  being  heard  to  the  private
educational institutions.
58.         As per Section 3(e), ‘fee’ means all fees including tuition  fee
and development charges. Section 4 of the Act deals  with  constitution  and
functions of the Committee.  As per Section 4(1), Committee  is  constituted
for supervision and guidance of the admission process and for  the  fixation
of the fees to be charged by private educational institutions.    Section  9
deals with factors to be taken  into  consideration  by  the  Committee  for
determination  of  fee  that  may  be   charged   by   private   educational
institutions.  Section 9 reads as under:-
9.    Factors:
(1) Having regard to:
(i)    the  location  of  the  private  unaided   professional   educational
(ii)  the nature of the professional course;
(iii) the cost of land and building;
(iv)   the  available  infrastructure,  teaching,  non-teaching  staff   and
(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 pertaining to  fees  which  is  to  be  charged  from  the
students admitted in these institutions.   Though  Section  9  empowers  the
committee to determine the fee, the High  Court  read  down  Sections  4(1),
4(8) and Section 9 of Act 2007 holding that those provisions  “in  substance
empower the committee to be only  satisfied  that  the  fee  proposed  by  a
private  professional   educational   institutions   did   not   amount   to
profiteering or commercialization of education and was based on the  factors
mentioned in Section 9(1) of the Act 2007…”.
60.         Contention of the appellants is that  Sections  4(1),  4(8)  and
Section 9 relating to fixation of fees in the  Act  2007  are  violative  of
their  right  to  occupation”  guaranteed  under  Article  19(1)(g)  of  the
Constitution of India.  It is submitted  that  when  eleven-Judge  Bench  of
this Court in T.M.A. Pai held that “…The decision on the fee to  be  charged
must necessarily be left to the private educational  institution  that  does
not seek or is not dependent upon any  funds  from  the  Government.”,  then
private institutions have  an  indefeasible  right  to  fix  their  own  fee
structure and there  is  no  occasion  for  the  Government  to  enact  such
legislation empowering the committee to determine the fees to be charged.
61.         Drawing our attention to para (39) of T.M.A. Pai,  it  has  also
been contended that T.M.A. Pai recognizes the importance of private  unaided
educational institutions by citing figures as to how numbers  of  government
colleges have remained  stagnant  whereas  numbers  of  private  educational
institutions have increased.  It was  submitted  that  as  the  eleven-Judge
Bench recognised the right of  private  educational  institutions  to  admit
students and determine  their  own  fee  structure,  the  right  of  private
unaided institutions to charge their own fees cannot  be  curtailed  by  the
impugned legislation and therefore Sections 4(1), 4(8) and Section 9 of  Act
2007 are liable to be struck down.
62.         Per contra, learned counsel for the respondents  submitted  that
relevant provisions of the Act empowering the  committee  to  determine  the
fee that are only to ensure that the fees charged  are  not  exorbitant  and
such regulation  are  not  an  impediment  to  the  exercise  of  “right  to
occupation”  of  the  private  unaided  educational  institutions.  It   was
submitted that the High Court has read down Sections 4(1),  4(8)  and  9  of
the Act 2007 by holding that the committee need only be satisfied  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 private educational institutions are a necessity in the present  day
context and T.M.A. Pai, in para  (39)  has  recognized  this  importance  of
private unaided educational institutions.  Para (39) reads as under:-
“39. That private educational institutions are a necessity  becomes  evident
from  the  fact  that  the  number  of  government-maintained   professional
colleges  has  more  or  less  remained  stationary,  while   more   private
institutions have been established. For example, in the State  of  Karnataka
there are 19 medical colleges out of which  there  are  only  4  government-
maintained medical  colleges.  Similarly,  out  of  14  dental  colleges  in
Karnataka, only one has been established by the  Government,  while  in  the
same State, out of 51 engineering colleges, only 12  have  been  established
by the Government. The aforesaid  figures  clearly  indicate  the  important
role played by private unaided educational institutions, both  minority  and
non-minority, which cater to the  needs  of  students  seeking  professional

65.         Observing that education has been a business for  a  long  time,
in Modern School v. Union of India and Ors. (2004) 5 SCC 583, in  paras  (3)
to (5), this Court has held as under:-
“3.    In modern times, all over the world, education is  big  business.  On
18-6-1996,  Professor  G.  Roberts,  Chairman  of  the  Committee  of  Vice-
Chancellors and Principals commented:
“The annual turnover of the higher education sector has now passed the £  10
billion mark. The massive increase in participation that  has  led  to  this
figure, and the need to prepare for further increases, now demands  that  we
make revolutionary advances, in  the  way  we  structure,  manage  and  fund
higher education.”

4.     In  the  book  titled  Higher  Education  Law  (2nd  Edn.)  by  David
Palfreyman and David Warner, it is stated that in  modern  times,  all  over
the world, education is big business. On account  of  consumerism,  students
all over the world are  restless.  That  schools  in  private  sector  which
charge fees may be charitable provided they are  not  run  as  profit-making
ventures. That educational charity must be established for  the  benefit  of
the public rather than for  the  benefit  of  the  individuals.  That  while
individuals may derive  benefits  from  an  educational  charity,  the  main
purpose of the charity must be for the benefit of the public.

5.    At the outset, we hasten to clarify that although we 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
“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 fee is charged and that there is no profiteering,  though
a reasonable surplus  for  the  furtherance  of  education  is  permissible.
Conditions granting recognition or affiliation can  broadly  cover  academic
and educational matters including the welfare of students and teachers.”

67.         In order to expound the aforesaid position, in  Islamic  Academy
of Education, the first question that came up for consideration was  whether
private unaided educational institutions are entitled to fix their  own  fee
structure. This Court in order to harmonize the plea of private  educational
institutions to earn a reasonable surplus and with  the  aim  of  preventing
commercialization of education, directed the State to  set  up  a  committee
headed by a retired High  Court  Judge  to  approve  the  fee  structure  or
propose some other fee which can be charged by the institute.  In  para  (7)
of Islamic Academy of Education this Court directed as under:-
“7.   ….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 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...”

68.         Referring to paras (69) and (70) of T.M.A. Pai  and  reiterating
that fee charged by private educational institutions should  not  amount  to
profiteering, in P.A. Inamdar case, it was held as under:-
“129. In Pai Foundation, it has been very clearly  held  at  several  places
that unaided professional institutions should be given greater  autonomy  in
determination of admission procedure and  fee  structure.  State  regulation
should  be  minimal  and  only  with  a  view  to  maintain   fairness   and
transparency in  admission  procedure  and  to  check  exploitation  of  the
students by charging exorbitant money or capitation fees.

 139. To set up a reasonable fee structure  is  also  a  component  of  “the
right to establish and administer an  institution”  within  the  meaning  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,  this
Court 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.  If  capitation  fee  and
profiteering is to be checked, the method of admission has to  be  regulated
so that the admissions are based on merit and transparency and the  students
are  not  exploited.  It  is  permissible  to  regulate  admission  and  fee
structure for achieving the purpose just stated.”

69.         From the above discussion, it clearly emerges that  in  exercise
of their “right to occupation”, private institutions cannot  transgress  the
rights of the students.  Discernibly, the Act does not give unbridled  power
to the authority to determine the fee.   Determination  of  fee  has  to  be
based on the factors stipulated in  Section  9  of  the  Act.   Further,  an
opportunity of  appeal  is  also  provided  for  in  the  Act  2007  to  the
aggrieved.  Fundamental rights of  colleges  to  run  their  administration,
includes fixation of fee.  However, such right in turn has  to  be  balanced
with the rights  of  the  students,  so  that  they  are  not  subjected  to
exploitation in the form of profiteering.
70.         For the foregoing discussion, I hold  that  the  State  has  the
legislative competence to enact the impugned legislation-Act  2007  to  hold
common entrance test for admission to professional educational  institutions
and to determine the fee and the High Court has rightly upheld the  validity
of the impugned legislation.   Regulations  sought  to  be  imposed  by  the
impugned legislation on admission by common entrance test conducted  by  the
State and determination of fee are  in  compliance  of  the  directions  and
observations in T.M.A. Pai, Islamic Academy of Education and  P.A.  Inamdar.
Regulations  on  admission  process  are  necessary  in  the  larger  public
interest and welfare  of  the  student  community  to  ensure  fairness  and
transparency  in  the  admission  and  to  promote  merit  and   excellence.
Regulation on fixation of fee is to protect the rights of  the  students  in
having access to higher education without being  subjected  to  exploitation
in the form of profiteering.  With the above reasonings, I concur  with  the
majority view in upholding the validity  of  the  impugned  legislation  and
affirm the well merited decision of the High Court.

                                       (R. BANUMATHI)

New Delhi;
May 02, 2016
[1]   (2002) 8 SCC 481
[2]   (1964) 4 SCR 680
[3]   (2005) 6 SCC 537
[4]   (1993) Supp. 1 SCR 439
[5]   (2007) 4 SCC 361
[6]   (1993) 1 SCC 645
[7]   (2003) 6 SCC 697
[8]   (2011) 7 SCC 179
[9]   (2004) 5 SCC 583
[10]  (2014) 8 SCC 1
[11]  1957 SCR 874
[12]  (1992) 1 SCC 558
[13]  Proportionality: Constitutional Rights and Their Limitation by  Aharon
Barak, Cambridge University Press 2012.
[14]   Though,  debate  on  this  vexed  issue  still  continues  and   some
constitutional experts claim that there  are  certain  rights,  albeit  very
few, which can still be treated as 'absolute'. Examples given are:
      (a) Right to human dignity which is inviolable,
      (b) Right not to be subjected to torture or to be inhuman or
degrading treatment or punishment.
      Even 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
[15]  Supra, note
[16]  (1986) 1 SCR 103
[17]  (1982) 2 SCC 33
[18]  1959 SCR 629
[19]  (1998) 8 SCC 227
[20]  Justice Frankfuter: 'A Symposium of Statutory Construction: Forward',
3, Vand L. Rev. 365, 367 (1950)
[21]  (2009) 7 SCC 751
[22]  (2004) 11 SCC 755
[23]  1964 (Supp.) 1 SCR 112
[24]  (1999) 7 SCC 120
[25]  Entry 11: 'Education' including universities, subject to provisions
of Entries 63, 64, 65 and 66 of List I and Entry 25 of List III
[26]  Unamended Entry 25 in List III read as: 'Occasional and Technical
Training of Labour'
[27]  (1964) 6 SCR 368
[28]  (1995) 4 SCC 104
[29]  (2006) 9 SCC 1
[30]  (1981) 4 SCC 296
[31]  (1994) 4 SCC 401

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