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REPORTABLE

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

A.K. SIKRI, J.

In  all  these  appeals,  validity  and  correctness  of  the  common  

judgment  dated  May  15,  2009  passed  by  the  High  Court  of  Madhya  

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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.

2) 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:

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(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 admission.

3) 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  

1 (2002) 8 SCC 481

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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.

4) 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'  

2 (1964) 4 SCR 680 3 (2005) 6 SCC 537

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imposed on the right  of  admission and fixation of  fee,  which otherwise  

vests with the appellants.

5) 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:

6) 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 aggrieved.

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7) 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.

8) 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  Government.”

CET is defined in Section 3(d) of the Act, 2007 and reads as follows:

“(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  

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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'.

9) 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 institution;

(ii) the nature of the professional course;

(iii) the cost of land and building;

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

(v) the expenditure on administration and maintenance;

(vi)  a  reasonable  surplus  required  for  growth  and  development of the professional institution; and

(vii) any other relevant fact, the committee shall determine, in  the manner prescribed, the fee to be charged by a private  unaided professional educational institution.

(2)  The Committee shall give the institution an opportunity of  being heard before fixing any fee:

Provided  that  no  such  fee,  as  may  be  fixed  by  the  Committee, shall amount to profiteering or commercialization  

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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.

10) 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.

11) It may be mentioned that Circular/Notification dated February 28, 2009 and  

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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

12) 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  

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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  

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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 institutions.

13) 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  

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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  

Foundation.

14) 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   

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& 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  4 (1993) Supp. 1 SCR 439

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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.

15) 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  

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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.

16) 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  

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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 &  

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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.

17) 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  

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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  

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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  

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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.

18) 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  

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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.

19) 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  

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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.

20) 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.

21) 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  

5 (2007) 4 SCC 361 6 (1993) 1 SCC 645

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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.

22) 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  

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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.

23) 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  

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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);          and

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

and

(c) the fixing of a rigid fee structure, dictating the formation and composition of  

a governing body, compulsory nomination of teachers and staff for appointment  

or nominating students for admissions would be unacceptable restrictions which  

would not be protected under Article 19(6) of the Constitution.

24) 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  

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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  

7 (2003) 6 SCC 697

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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  

unconstitutional.

25) 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  

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power of the State to enact such a legislation inasmuch as it is argued that  

the matter of admission in higher educational institutional falls in Entry 66  

of List I to the Seventh Schedule of the Constitution (Union List) and is not  

covered by Entry 25 of List III of Seventh Schedule (Concurrent List).

26) 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  

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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  

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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  8 (2011) 7 SCC 179

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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.  

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Union  of  India9.   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.

27) 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.

28) 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  

9 (2004) 5 SCC 583 10 (2014) 8 SCC 1

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respondents  have  taken  sustenance  from  the  law  laid  down  in  the  

aforesaid judgments. Thus, interestingly, the stichomythia which went on  

resulting  into  intense  arguments,  coupled  with  emotional  exchange  

between the two sides, had its foundation on the bedrock of same case  

law.   Therefore,  in  carrying  out  our  analysis,  while  dealing  with  the  

arguments of  the counsel on both sides,  we would be adverting to the  

aforesaid  judgments,  as  well  as  some  other  judgments  which  have  a  

bearing on the issue, to arrive at the desirable and just conclusions based  

upon the  foundation  laid  down therein.   We may  also  observe  that  in  

pondering over these arguments and submissions, we have endeavoured  

to undertake the task sagaciously and with keen penetrative analysis using  

the periscope of sound legal principles and doing a diagnostic of sorts.

ANALYSIS, REASONING & CONCLUSIONS:

29) 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  

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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.    

30) 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  

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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 non-exploitativeness.

With these introductory remarks, we advert to issue-wise discussion

I. Re.:  Provisions  relating  to  CET  to  be  conducted  by  the  State  machinery under Act, 2007 as well as Rules.

31) 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?

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32) 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   

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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).”

33) 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  

11 1957 SCR 874

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right  to  set  up a  reasonable  fee structure;  (iii)   a  right  to  appoint  staff  

(teaching  and  non-teaching);  and  (iv)  a  right  to  take  action  if  there  is  

dereliction of duty on the part of any employees.  In view of the aforesaid  

recognition  of  the  right  to  admit  the  students  and  a  right  to  set  up  a  

reasonable fee structure treating as part of occupation which is recognised  

as  fundamental  right  under  Article  19(1)(g)  of  the  Constitution,  the  

appellants have easily crossed the initial hurdle.  Here comes the second  

facet of this issue, viz. – what is the scope of this right of occupation?

34) 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  

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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.

35) 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  institutions.”

36) In order to see that merit is adjudged suitably and appropriately, the Court  

candidly  laid  down that  procedure for  admission should  be so  devised  

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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.

37) 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:

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“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.”

38) 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  

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regulate  such  admission  tests  to  be  conducted  by  the  educational  

institutions and could not take away the function of holding the CET.   

39) 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  

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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.   

40) 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  

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for three years at the end of which a revision could be sought.

41) 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.

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42) 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  

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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.

43) 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.

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44) 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'.

45) 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  

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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.”

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

observed:

“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  

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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.”

47) 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  

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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  

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50) 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.

51) 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:

52) 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  

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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.”

53) 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  

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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 satisfied13, 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.

54) Modern  theory  of  constitutional  rights  draws  a  fundamental  distinction  

13 Proportionality:  Constitutional  Rights  and Their  Limitation by Aharon Barak,  Cambridge University  Press  2012.

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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.

55) It is now almost accepted that there are no absolute constitutional rights14  

and all such rights are related.  As per the analysis of Aharon Barak15, 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  

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 judiciary.

15 Supra, note

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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  

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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.

56) 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  

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measures are necessary.

This essence of Doctrine of Proportionality is beautifully captured by Chief  

Justice Dickson of Canada in R. v. Oakes16, 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.”

57) 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  

16 (1986) 1 SCR 103

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weighing up of competitive values, and ultimately an assessment based on  

proportionality i.e. balancing of different interests.

58) 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  

17 (1982) 2 SCC 33

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Hanif Quareshi Mohd. v.  State of Bihar18).  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,  

18 1959 SCR 629 19 (1998) 8 SCC 227

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and the object of the Act, then a strong presumption in favour the  

constitutionality of the Act will naturally arise.

59) 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:

60) 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  

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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  

maladministration.

61) 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  

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malpractices.  The extent of restriction has to be viewed keeping in view all  

these factors and, therefore, we feel that the impugned provisions which  

may amount to 'restrictions' on the right of the appellants to carry on their  

'occupation',  are  clearly  'reasonable' and  satisfied  the  test  of  

proportionality.

62) 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 society.

63) The High Court in its judgment has analysed the provisions of the Act and  

20 Justice Frankfuter: 'A Symposium of Statutory Construction: Forward', 3, Vand L. Rev. 365, 367 (1950)

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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?

64) 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  

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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.

65) 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.

66) 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  

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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.

67) 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.

68) 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  

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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.

69) 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 manner:

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“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  

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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)”

70) 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 fees.”

We may hasten to add here itself that Section 9 of the Act, 2007 takes  

care of the aforesaid parameter in abundance.

71) 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  

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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  

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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.

72) 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.

73) 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  

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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.

74) 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  

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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  

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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  

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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.

75) 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  

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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.

76) 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, 200921 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  

21 (2009) 7 SCC 751

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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.

77) 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  

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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.

78) 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:

79) 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  

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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 economy.

80) 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  

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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.

81) 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.

82) 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  

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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.

83) 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  

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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.

84) 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  

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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  

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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

85) 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.

86) 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  

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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 India.

87) 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,  

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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.

88) 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  

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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.

89) 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.

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

90) 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 institutions.

91) 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

92) 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  

22 (2004) 11 SCC 755 23 1964 (Supp.) 1 SCR 112 24 (1999) 7 SCC 120

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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.”

93) 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  

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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 II25.  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 amended26.  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  

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'

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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.

94) 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  

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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.

95) 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  

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that which was specifically covered by Entry 63 to 66 of the List I.

96) 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 Mysore27,  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  

27 (1964) 6 SCR 368 28 (1995) 4 SCC 104

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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 Vidyapeeth.

97) 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.  

29 (2006) 9 SCC 1 30 (1981) 4 SCC 296 31 (1994) 4 SCC 401

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98) 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.

EPILOGUE:

99) 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  

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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 course.

100) The  Committee  examined  the  existing  architecture  of  the  regulatory  

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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  

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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  

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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 deserving;

(iv) failure to produce a competent basic doctor;

(v)  non-involvement  of  the  MCI  in  any  standardized  summative  evaluation  of  the  medical  graduates  and post- graduates;

(vi)  failure  to  put  in  place  a  robust  quality  assurance  mechanism when a fresh graduate enters the system and  starts practicing;

(vii)  very little oversight to PG medical education leading to  huge variations in standards;

(viii)  heavy focus on nitty-gritty of infrastructure and human  staff  during  inspections  but  no  substantial  evaluation  of  quality of teaching, training and 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-

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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  

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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  

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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  

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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) ”

101) 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.  

102) 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.

103) 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:

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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)

104) 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.

105) 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.

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

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necessary.

.............................................J. (ANIL R. DAVE)

.............................................J. (A.K. SIKRI)

.............................................J. (R.K. AGRAWAL)

.............................................J. (ADARSH KUMAR GOEL)

.............................................J. (R. BANUMATHI)

NEW DELHI; MAY 02, 2016.

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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4060 OF 2009

MODERN DENTAL COLLEGE AND RESEARCH CENTRE & ORS.                               ..Appellants  

Versus

STATE OF MADHYA PRADESH & ORS.              …Respondents  

With

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

R. BANUMATHI, J  .   

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  

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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  

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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.

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• 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  

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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:-

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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  

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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  

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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”.

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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 evaluations.”   

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  

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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.  

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:-   

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“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 substituted."

The  said  proposal  of  Dr.  Ambedkar  was  opposed  by  Shri  V.S.  

Sarwate (Madhya  Bharat)  by  suggesting  that  only  “Promotion  by  

financial assistance or otherwise of standards in institutions for higher   

education,  scientific  and  technical  institutions  and  institutions  for   

research" be left in the domain of the Union, so as to avoid unnecessary  

interference with the State’s 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   

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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 provinces.”  

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  

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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.

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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   

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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.

XXX 10.4 State Government may establish State Advisory Boards of   Education on the lines of CABE.  Effective measures should be   taken to integrate mechanisms in the various State departments   concerned with Human Resource Development.   

10.5 Special attention will be paid to the training of educational   planners, administrators and heads of institutions. Institutional   arrangements  for  this  purpose  should  be  set  up  in  stages.”   (mhrd.gov.in/sites/upload_files/mhrd/files/upload_document/N PE86-mod92.pdf)

The policy clearly recognised that the State would continue to fulfill its  

responsibilities.  This is also discernible from the amendment to entry  

25 of Concurrent List.  Had the intention been to keep higher education  

solely in 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   

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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  

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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.  

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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 law.   

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 Constitution”.

23. In  State  of  T.N.  and  Anr.  v.  Adhiyaman  Educational  and  

Research Institute and Ors.,  (1995) 4 SCC 104, the question involved  

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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  

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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  

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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  

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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  

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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  

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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  

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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  

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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  

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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 State.

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.   

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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  

streams.

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-

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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  

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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  

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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  

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agency authorized by it amounts to a reasonable restriction.   

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  

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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 812.)”

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  

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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  institutions.

59. Merit is usually determined, for admission to professional  and higher education colleges, by either the marks that the  student  obtains  at  the  qualifying  examination  or  school- leaving  certificate  stage  followed  by  the  interview,  or  by  a  

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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 under:-

“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,  

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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 under:-

“136. Whether minority or non-minority institutions, there may  be  more  than  one  similarly  situated  institutions  imparting  education  in  any  one  discipline,  in  any  State.  The  same  aspirant  seeking  admission  to  take  education  in  any  one  discipline of education shall have to purchase admission forms  from several institutions and appear at several admission tests  conducted at different places on the same or different dates and  there may be a clash of dates. If the same candidate is required  to  appear  in  several  tests,  he  would  be  subjected  to  unnecessary  and  avoidable  expenditure  and  inconvenience.  There is nothing wrong in an entrance test being held for one  group of 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  

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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  

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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 jurisdiction.”

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  

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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  

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social commitment and dedication to the cause of the poor.”

46. It is well known that study of medicine is much sought after  

by students in India.  Due to the high demand for admission in Medical  

Colleges  and  limited  number  of  seats,  selection  and/or  screening  

methods have evolved to select the crème de la crème.  Given the surfeit  

of academically well-qualified applicants, the selection method ought to  

become  highly  competitive  by  placing  exceptionally  high  academic  

thresholds.   It  is  in  this  context  that  ‘merit’  comes  into  play  in  

determining  the  parameters  for  admissions  in  institutions  of  higher  

education.  

47. Merit is the cumulative assessment of worth 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  

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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  

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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  

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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  

intact.   

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  

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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  

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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  

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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 professionals.     

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  

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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-

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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  

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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-

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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   

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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 institution;

(ii)  the nature of the professional course; (iii) the cost of land and building; (iv) the available infrastructure, teaching, non-teaching staff  

and equipment; (v) the expenditure on administration and maintenance; (vi) a reasonable surplus required for growth and development  

of the professional institution; (vii)any other relevant factor,  the committee shall determine, in the manner prescribed, the  fee to be charged by a private unaided professional  educational institution.

(2)  The Committee shall give the institution an opportunity of  being heard before fixing any fee: Provided that no such fees, as may be fixed by the Committee,  shall amount to profiteering or comercialisation of education.”

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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   

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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)  

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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)  

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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 education.”

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.

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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 under:-

“69. In such professional unaided institutions, the management  will  have the right to select teachers as per the qualifications  and  eligibility  conditions  laid  down  by  the  State/university  subject  to  adoption  of  a  rational  procedure  of  selection.  A  rational fee structure should be adopted by the management,  which  would  not  be  entitled  to  charge  a  capitation  fee.  Appropriate machinery can be devised by the State or university  to ensure that no capitation 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  

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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  

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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  

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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.

          .…………………….J                 (R. BANUMATHI)

New Delhi;

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May 02, 2016

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