P.A. !NAMDAR AND ORS. v. STATE OF MAHARASHTRA AND ORS.

unaided non-minority and unaided minority professional institutions, only by ... taking into consideration the interests of students. In the State of Kamataka for the academic year 2004-2005, by illustration, it is shown that 75% of the intake capacity is the Government quota in which are included 5% quota for sports, defence and NCC; 50% quota for Scheduled Castes/Economically B backward classes/Scheduled Tribes/OBC, there is total 55% reservation quota in 75% of the government quota. The remaining 25% quota left for the management is also to be taken over by the Government insisting on admitting students from the select list prepared on the common entrance test conducted by the State.

C Learned senior counsel Shri F. S. Nariman also supported the submissions made by other counsel on behalf of the unaided professional institutions and added that the observations of the Bench in Islamic Academy clearly go far beyond anything said by eleven judges in Pai Foundation. It is submitted that the question of quota 50:50 for State and management as referred to in St. D Stephen's was in respect of aided minority educational institutions and in Pai Foundation, the Bench never suggested fixation of quota for State and management in case of unaided professional institutions. Learned senior counsel particularly pointed out that in Islamic Academy, the observations that different percentage of quota for students to be admitted by the management in each minority and non-minority unaided professional E institutions shall be separately fixed on the basis of their need by the respective State Government, was a totally new direction, nowhere to be found or supported by any of the observations in any of the opinions of the 11-Judge Bench in Pai Foundation. With regard to the most controversial observations contained in paragraph 68 of the opinion prepared by Justice F Kirpal (the then CJI) in Pai Foundation, learned counsel contended that the decision in Unni Krishnan having been overruled by 11-Judge Bench in Pai Foundation, the observations in paragraph 68 which are more in tune with Unni Krishnan should not be read as the ratio· of the case. Senior counsel was also critical of all the observations in fixing quota for the State in unaided institutions on the basis of local needs and not the needs of the community for which the institution was set up. Learned counsel also critici:zed the directions in Islamic Academy which according to him are contrary to the findings in Pai Foundation that certain unaided private educational institutions which had been adopting its own admission procedure for the last 25 years be allowed to continue to do so. It is submitted that as a part of autonomy of the private unaided institution, the quantum of fees to be charged must

- P.A. !NAMDAR v. STATE [LAHOTI, CJ.) 645

be left to the institution and except for checking profiteering and capitation fees, the State can have no say in fixation of fees. The scheme of setting up A

- permanent committees for even unaided minority and non-minority institutions . was not at all envisaged in Pai Foundation. Tiie Islamic Academy which was the case before a smaller Bench could not do anything beyond and contrary to what has been stated in Pai Foundation. B Learned senior counsel Shri R.F. Nariman in supporting the argument advanced against the directior.s in Islamic Academy submitted that any interference with the autonomy of the institution, other than to prevent mal- administration, would not be saved by Article 19(6) of the Constitution. The concept of administration includes choice in admitting students and fixing c a reasonable fee structure. In the matter of admission, if objective criteria are adopted so as to reflect the merit, it would be unexceptionable. So far as fee structure is concerned, no institution can be allowed to charge capitation fees which only means something taken over and above what the institution needs by way of revenue and capital expenditure plus a reasonable surplus. Once D Unni Krishnan was overruled, private education cannot be allowed to be nationalized. It is submitted that it may be possible for the State to scrutinize the expenditure of revenue and capital expenditure of an aided and unaided institution to ensure good administration but the State cannot devise its own admission procedure and determine in advance a fee structure for the unaided private institutions. On t~e question of deducing ratio in Pai Foundation, E learned counsel referred to Halsbury Laws of England Vol. 37 page 378 in which the meaning of ratio decidendi has been explained. It is submitted that it is only the essence of the reason or principle upon which the qu~stion before a court has been decided which is alone binding as a precedJit. It is dangerous to take one or two observations out of a long judgment an to treat F them as if they give the ratio decidendi of the case.

Dr. Raj iv Dhawan, learned senior counsel in assailing directions issued in Islamic Academy for setting up permanent committees to fix quota and fee structure highlighted that the State of Maharashtra has encroached upon the rights of unaided institutions by directing in one of its Government Memoranda G dated 13.02.2003 that even in the quota of seats fixed for management, the unaided non-minority institutions should implement the rule of reservation (communal reservation) of the State Government.

• Learned senior counsel contends that the net result of such illegal H

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A directions is that the reservation policy for schedule castes, schedule tribes and OBCs is to be applied not only for 50% seats of government quota but also for the remaining 50% of management quota of unaided non-minority institutions. Virtually, the management of non-aided institutions has been completely taken over by the state and as a result of communal reservations, B the quota of seats fixed for government and quota fixed for the management may be filled by granting admissions to students of non-minority communities.

Learned senior counsel contends that in Pai Foundation, maximum autonomy is conceded in favour of unaided institutions. The only insistence is on maintenance of transparency in method of admission and fixation of c such fee structure that does not permit charging of capitation fee. Interpreting provisions of Article 19(6) and Article 30 it is contended that constitutional limitation necessarily would vary in imposing reasonable restriction where the institution is unaided or aided.

D On the issue of constitutional protection to the unaided minority institutions, the contention advanced that general restrictions permissible under Article 19(6) can also be applied to unaided minority institutions, it is submitted, is misconceived. The submission is that education is a recog- nized head of charity. The object of establishing educational institution is not to make profit. Imparting education is essentially charitable in nature. The charitable nature of the occupation of establishing and running an educational institution has been recognized in Pai Foundation. Therefore, all restrictions, which are permissible under Article 19(6) in case of other kind of professions and occupations, cannot apply to educational activities. It is submitted that restrictions imposed should satisfy the requirements of Article 30 and not only of Article 19(6).

·In Pai Foundation, for determining linguistic and religious minorities, the unit to be taken is State. Therefore, when Tamilians, who are in majority in Tamil Nadu, establish an institution for Tamil students in Karnataka, it ·G would be a minority institution in Kamataka. What would be the rights of such an institution of linguistic minority has not been answered either in Pai Foundation or in Islamic Academy. Therefore, this Bench should decide what are the rights of such cross-border institutions.

H In short, the submission made by Sr. Counsel Dr. Rajiv Dhawan is that

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 647

there is nothing in Pai Foundation, which permits fixation of quotas for A government seats, fixation of fee structure by the State, imposition of its

- reservation policy and imposition of candidates on the basis of common entrance test conducted by the State. In Pai Foundation, the State can have some controlling influence on unaided institutions for the purpose of ensuring transparency in admissions and checking the collection of capitation fee. In B Pai Foundation, no preemptive action by setting up permanent committees by the State was envisaged or even indirectly approved.

The decision in Islamic Academy, it is submitted, is contrary to the decision by the larger Bench in Pai Foundation, and deserves therefore to be so declared by this Bench. C

Learned senior counsel Shri U.U. Lalit appears for the sole Dental College established by Muslims in the State of Maharashtra. Apart from supporting the contention advanced by other counsel against the scheme of committees evolved in Islamic Academy, learned counsel submitted that the judgment of the Bombay High Court against which they have filed an appeal before this court has resulted in a situation where affluent students are getting admission at lesser fee and poorer students are kept out of college. It was submitted that the petitioner institute being the sole institute set up for Muslim community, their desire to cater to the educational needs of Muslim students from all over cannot be discouraged. Objecting to the fee structure prescribed by the committees in Maharashtra, the suggestion made on behalf of the institute is as under :-

- (a) 25% students will be charged five times of the average fee, which was in vogue before TMA Pai's judgment. F

(b) 50% students will be charged average fee.

(c) Remaining 25% will be charged I/4th of the average fee.

It is submitted that in the above proposed fee structure, meritorious G students coming from all sections of society will be able to take admissions. At the same time, the educational institutions will be able to recover the · amount required for running the educational institution in the best possible manner. It is, therefore, prayed that Bombay High Court judgment dated H

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A 23.08.2003 prescribing unifonn fee structure for all the students be set aside and minority educational institutions be allowed in the exercise of their fundamental right, to prescribe fee under a three-tier system subject to the rider of non-profiteering and not charging capitation fee.

In reply, on behalf of the respondents, senior counsel, Shri K.K. B Venugopal, who appeared for the States of Kerala led the arguments. It may be noted at this stage that after the decisions in Pai Foundation and Islamic Academy, in the States of Kerala, Kamataka, Maharashtra and Tamil Nadu, their respective legislatures have passed Acts regulating admissions and charging of fee in both aided and unaided minority and non-minority private c educational institutions engaged in imparting education in professional, medical, engineering and allied courses.

On behalf of the State of Kerala, it is pointed out that only 25% seats in private professional colleges have been reserved to be filled on the basis D of common entrance test and remaining 75% seats are to be filled by the management. It is submitted that the group of paragraphs starting with 67 and ending with 70 in the majority opinion in Pai Foundation carries the title "Private Unaided Professional Colleges." This heading covers both unaided minority and non-minority professional colleges. Since paragraph 68 in the majority opinion in Pai Foundation has been differently understood by the E High Court of Kamataka and Kerala, an occasion has arisen to resolve the controversy by a Bench of the present combination of seven judges.

To justify fixation of quota for seat sharing between State and the private management and fixing a reasonable fee structure to avoid profiteering and F capitation, the learned counsel highlighted certain illicit practices, which are being resorted to, by the private institutions to exploit the student community. It is submitted both the judgments in Pai Foundation and Islamic Academy, profiteering, commercialization of education and the collection of capitation fee have been condemned. This court had expressly held that it would be open- to the government to make regulations for the purpose of preventing G •commercialization of professional education. It is on the line suggested by this ~that the Government ofKerala had made regulations both for the purpose or admissions as well as for fixing reasonable fee which will cover not only the expenditure incurred by the institution but also give them a reasonable revenue surplus for further growth and bettennent of the institution. H

P.A. !NAMDAR v. STATE (LAHOTI, CJ.) 649

The High Court of Kerala by its judgment of 23.08.2003 has fixed A' rupees 1.50 lacs provisionally per annum as the fee. The Government has fixed 1.76 lacs. What is being disclosed by Pushpgiri Medical College itself is that they had collected rupees 4.38 lacs and rupees 22 lacs from different students. The explanation given is that these collections are for the whole period of five years to prevent the students from leaving the college mid-way. B This explanation on the face of it is disingenuous as rupees 22 lacs was not collected uniformly from all the students. Despite the students leaving the course mid-way, the seats would still be filled. It is due to this menace and evil practice of exploiting parents and students that a Committee was required to be set up for restricting admissions in proportion to the need of the peculiar character of the institution and to check profiteering. c It is submitted that if the scheme as evolved in Jslamic Academy of setting up of permanent Committees is not allowed, education which is already commercialized to some extent would be wholly inaccessible to students coming from middle classes, lower-middle classes and poor sections D of the society. To provide access to professional education even to weaker sections of the society in fifty percent quota of seats to be filled by the government, the reservation policy of the government has been applied. The fifty-fifty percent quota between government and management fixed by the government has been changed to twenty five-seventy five per cent by the court. Similarly, the court has struck down Regulation I l framed by the State E on the ground that the State cannot foist fee of students on the institution and it would be left to the management to make provisions for poorer sections of the society through free-ships or scholarships.

In the above-mentioned background, learned counsel Shri Venugopal F submits that this Bench is not considering .the correctness of judgment in Islamic Academy. It will not and cannot go into the question of correctness of judgment in Pai Foundation which is of a larger Bench. This Bench has a limited jurisdiction to examine whether the 5-Judge Bench decision in Islamic Academy is in any manner inconsistent with I I-Judge Bench judgment in Pai Foundation. It is submitted that ifthere are certain inherent G inconsistencies between various paragraphs particularly 59 and 68 of the judgment in Pai Foundation, they have to be resolved and that was exactly what was done by the five judges in Islamic Academy.

In Pai Foundation, observation in paragraph 68 under the heading H

p. 650 Copy page pinpoint

A "Private Unaided Professional Colleges" read with para 69 indicates appropriate machinery to be evolved to regulate admissions in both categories of private institutions to check exploiters who are charging capitation fee.

It is submitted that if the attempt by the Bench in Islamic Academy to resolve the apparent inconsistency in the judgment of Pai Foundation, B indicated a reasonable and plausible interpretation of the I I-Judge Bench judgment in Pai Foundation, this court should refrain from substituting another interpretation.

It is for the first time in Pai Foundation that the question of application c of Article 30 to minority professional colleges arose. All earlier judgments of this court were only concerning education in schools and colleges other than those imparting professional education. For the first time in Pai Foundation, the court held that running an educational institution is an 'occupation' and Article 19(1) (g) guarantees it as a fundamental right. D It is submitted that regulation of non-minority unaided professional institution is permissible under Article 19(6) of the Constitution to prevent profiteering, levy of capitation fee and selection of non-meritorious candidates. Such regulation also does not violate right of minority professional institutions under Article 30, which this Court has repeatedly held, is not an absolute right but is merely a protection extended to minorities against oppression by the majority.

The issue relating to reservation of seats for schedule castes, schedule tribes or OBCs, either in management quota or in Government quota did not come up for consideration either in Pai Foundation or Islamic Academy. This has to be separately dealt with by the present Bench

Similarly, it is submitted that right of minority institutions to admit students from all over the country, irrespective of their religion and community and also from abroad such as NRls never arose directly for consideration either in Pai Foundation or Islamic Academy. In this respect, it is submitted that the status of minority both religious and linguistic is to be determined at the state level. The minority institutions cannot claim a right to cater to the educational needs of their community from all over the country and even from abroad. H

p. 651 Copy page pinpoint

In paragraph 68 of the judgment in Pai Foundation the use of the phrase A 'certain percentage based on local needs' and further phrase 'different percentages can be fixed' for minority unaided and non-minority unaided professional colleges· clearly convey that quotas can be fixed based on local needs for management and for the Government. Meritorious students from weaker sections are not to be sidelined from higher and professional B educatkn. It is argued that the phrase 'local need' as used in paragraph 68 in the judgment of Pai Foundation cannot be read to mean the needs of the institution concerned. So far as the selection based on merit is concerned, common entrance test has been suggested both for aided and non-aided professional colleges. When there is no common entrance test, merit becomes the casualty and the rich and the affluent comer the seats. c So far as the right to fix a fee structure for unaided minority or non- minority colleges or institutes is concerned, the argument that pre-fixation of fee is a serious encroachment on the rights of minority and non-minority, it is submitted, is not valid as full discretion is given to the management in fixing their fee structure. However, they would not be allowed to fix such high fee as would deny many meritorious students a chance of admission only because they come from economically weaker sections. It would be of no consolation to them to find that after admissions are over and classes have started, the fee has been lowered by the monitoring committee. If the committee is allowed to scrutinize the justification of fee fixation after the admissions and the fee is lowered, it would not be possible for the meritorious students to again seek admission. Through the Committees set up in Islamic Academy, the fee structure would be known before hand and would serve the interest of the institution as also the students seeking admission. The Committee has to fix fee for each college depending upoo its peculiar conditions and its assets and availability of funds. Coming to the question of cross subsidy, it is submitted that in Pai Foundation, cross-subsidizing the weaker sections by the more affluent ones has not been held to be impermissible. The Bench in Pai Foundation overruled the judgment in Unni Krishnan. The latter provided for "marginally less merited rural or poor students bearing the burden ofrich and urban students." The learned counsel suggests that solution can be to set apart fifteen percent of total seats in a local college to be filled by NRI/ person of independent origin/ foreign students who would volunteer to fill up the allotted seats on the management quota but on inter se merit. Each NRI student would subsidize two other students belonging to the economically and socially weaker sections liased H

p. 652 Copy page pinpoint

A on an annual income of say less than rupees 2.5 lacs. This would cater to the financial needs of at least 30 out of 50 students selected on merit fanning part of the Government quota and this would be a constitutionally pennissible solution.

B To streamline and further improve the admission procedure and fixation of fee structure, learned counsel has made the following proposals in writing submitting that they may be of practical value to the Committees directed to be set up by Islamic Academy:-

A. ADMISSION: c Six months prior to the commencement of the academic year, the Government would fix the percentage of students to be admitted by a minority (religious/linguistic) professional college (other than engineering ), taking into account the local needs of the State, the region as well as that of the minority-community. It would be a huge and cumbersome exercise in practice, to fix a percentage for each one of the institutions separately and it would be a pragmatic approach to have a fixed percentage for all the minority institutions which is fair and reasonable. A practical approach to the problem would require a very definite percentage to be fixed for minority institutions, say, 50% so that even if candidates of their choice, belonging to the minority institutions, are only 25% they would still have the right to select non-minority students to make up the 50%, of course, from the CET held by the Government.

F 1. The CET held by Government would ensure that the various devices adopted by professional colleges to secretly demand capitation fees and take the same in black money, thus resulting in merit being the casualty, would not take place. No prejudice will be caused to the management of the professional colleges as they could select the minority students based on inter se merit in the CET held by the G Government.

2. There would equally be no disadvantage to any particular section or to Government if the same 50% rule is applied even to unaided non-minority professional colleges as well. H

. P.A. !NAMDAR v. STATE (LAHOTI, CJ.] 653

3. The result of following this procedure is that a consortium A holding the tests for admissions is done away with and a monitoring committee, preferably headed by a retired High Court or Supreme Court judge would ensure fairness and transparency both in the minority and non-minority professional institutions.

B. FEES:

The Committee suggested by Islamic Academy and the procedure c mentioned therein, appears to be the only safe method of ensuring that extortionate fees are not charged by the medical colleges. At the same time, it would be wrong to deny expenditure which the institution undertakes for ensuring excellence in education. Equally, a reasonable surplus should be permitted so that the fees charged cover the entire revenue expenditure and in addition leaves a reasonable surplus for future expansion. This alone would prevent the clandestine collection of capitation fees and would result in entrepreneurs investing in new medical colleges.

The Committee suggested by Islamic Academy appears to be the ideal one consisting of a chartered accountant, a representative of the MCI or AICTE as the case may be, with a retired judge of the High Court or the Supreme Court as the head.

The fee is to be fixed on the proposal of the institution supported by documents and the procedure offee finalization should commence at least 6 months in advance of the commencement of the academic year.

These proposals should all be by way of an interim arrangement as held by Islamic Academy in para 20 with the Parliament bringing in a law, as suggested by Islamic Academy without dragging its feet any longer."

With regard to the ambit of the constitutional guarantee of protection of educational rights of minorities under Article 30, learned counsel submits H

p. 654 Copy page pinpoint

A that both religious and linguistic minority, as held in Pai Foundation, are to be determined at the State level. On this understanding of the concept of 'minority', Article 30 has to be harmoniously construed with Article 19(1)(g) and in the light of the Directive Principles of the State Policy contained in the Articles 38, 41 and 46. Rights of minorities cannot be placed higher than B the general welfare of the students and their right to take up professional education on the basis of their merit.

The real purpose of Article 30 is to prevent discrimination against members of the minority community and to place them on an equal footing with non-minority. Reverse discrimination was not the intention of Article c 30. If running of educational institutions cannot be said to be at a higher plane than the right to carry on any other business, reasonable restriction similar to those placed on the right to carry on business can be placed on educational institutions conducting professional courses. For the purpose of these restrictions both minorities and non-minorities can be treated at par and there would not be any violation of Article 30(1), which guarantees only protection against oppression and discrimination of the minority from the majority. Activities of education being essentially charitable in nature, the educational institutions both of non-minority and minority character can be regulated and controlled so that they do not indulge in selling seats of learning to make money. They can be allowed to generate such funds as would be reasonably required to run the institute and for its further growth.

On behalf of the State of Karnataka, learned senior counsel Shri T.R. Andhyarujina supported the judgment in Islamic Academy of setting up permanent Committees for regulating admission and fee structure. Learned F senior counsel submitted that relevant parts of paragraphs 58, 59 and 68 and answer to question no. 4 in Pai Foundation have to be read and reconciled. They cannot be ignored simply as obiter. A com~ined reading of the relevant paragraphs and the answer to question no.4 makes it clear that regulations can be made by the State for admission in minority and non-minority private educational institutions and more so in professional institutions. The merit G for admission to professional courses is generally determined by Government agencies. In Pai Foundation the reservation on certain percentage of seats by the Government to be filled up by counseling by state agency, is held permissible.

H With regard to the quota fixation, learned counsel submits that paragraph

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 655

68 in Pai Foundation allows reservation of quota for management and for A the Government for available seats. It is submitted that the educational institutions cannot merely read the answer to question no.4 given by judgment in Pai Foundation and ignore the other observations in other paragraphs of the judgment. B So far as the case of minority and non-minority unaided institutions is concerned, learned counsel submits that the balancing act has been performed in the judgme~t of Pai Foundation by regulating the economy of educational institutions moderated by necessary State legislation. Observation in paragraph 68 in Pai Foundation does not amount to permitting nationalization or takeover of the private institutions which was the main feature found foul in the decision in Unni Krishnan and was consequently overruled. The observation in Pai Foundation in paragraph 68 strikes the balance between the academy and education. To read paragraph 68 as merely giving an instance would be to ignore the concern of the Bench in Pai Foundation of providing reservation to poorer or backward sections of society even in private institutions. The description of percentage of reservation in paragraph 68 is different from reservation policy of the State for State institutions and in State quota.

It is submitted that the reservation spoken of in paragraph 68 of Pai Foundation is to cater to the needs of poorer and weaker sections and also other students depending upon the local needs.

So far as the regulation offee structure is concerned, it is submitted that in paragraph 69 in Pai Foundation there is a mention of "appropriate machinery to be devised by the State or University to ensure that no capitation fee is charged and profiteering is checked." The judgment in Islamic Academy merely implements the legal position explained by Pai Foundation by providing a fee determination committee. In reply to the argument that post-fixation audit may be permitted to check profiteering and capitation, the learned counsel answers that if the role of the Committee is limited to supervisory post fixation audit, it would amount to denying credible restric- G tion to the charging of capitation fee. It is chimerical to suggest that the student should first pay the exorbitant fee fixed by the institution and later on complain about it to the post audit machinery to recover the excess through court of law. The controlling of the fee fixing machinery is necessarily to be done before it is charged otherwise it is meaningless to the benefit of the H

p. 656 Copy page pinpoint

A students for whom it is suggested in paragraph 69. The general principle for scrutinizing the fee structure is two-fold; (1) that education is a charity, (2) that educational institutions cannot charge such fee as is not required for the purpose of fulfilling that object which means cost plus reasonable surplus for expansion and growth of the institution. These are the parameters before the B Committee whose decisions, in any case, are subject to judicial review.

So far as the admissions based on common entrance test are concerned, it is submitted that paragraphs 58 and ·59 of Pai Foundation pennit regulations to be framed for admission in professional institutions by State agency to ensure admission on merit. In the absence of CET and centralized c counseling, private educational institutions would pick and choose candidates ignoring merit, as has been evident from the Karnataka experience. If the private professional educational institutions conceive that merit cannot be ignored in granting admission, direction to make selection based on CET does not in any manner adversely affect the character of the minority institution. The State regulation providing for CET is a reasonable restriction and it will pass the test of Article 19(6) both in respect of aided and unaided non- minority institutions. Private unaided institutions have also to admit students on the basis of merit in a fair and transparent manner in the interest of student community. Right of private educational institutions to admit students can be regulated. Such regulations if in national and public interest do not in any manner impinge on the right of minority.

Learned counsel points out that so far as the State of Karnataka is concerned, no reservation policy is being insisted upon in the seats or quota given to the management.

F Arguments were also advanced supporting the directions in Islamic Academy by learned senior counsel Shri P.P. Rao appearing for the State of Tamil Nadu. It is submitted that already a statement had been made in the· High Court that the State of Tamil Nadu would not be insisting on communal reservation based on State policy in the minority institution. G Learned counsel pressed into service Article 5 I-AG) providing for Fundamental Duties in the Constitution. It is submitted that fundamental duty is enjoined on citizens to so direct their individual and collective activities that the nation constantly rises to higher levels of endeavour and achievement. This duty implies that the State on its part is to facilitate discharge of duties by the citizen in relation to the professional education. The State is bound

P.A. !NAMDAR v. STATE [LAHOT!, CJ.] 657

to ensure admission to colleges that are made purely on relative merit to be objectively assessed by a responsible agency. The decisions of this court rendered from time to time consistently and unanimously held that regulation could be made for achieving standards of excellence in education. Reliance is placed on Dr. Prithvi v. State of MP, [1999] 7 SCC 120 at 153 and 155; Professor Yashpal v. State ofChhattisgarh, [2005] 2 sec 61at79 paragraph B 90.

v A few concepts

There are a few concepts which should be very clear in our minds at c the very outset, as these are the concepts which flow as undercurrents in the sea of issues surfacing for resolution in all edui;ational cases. These concepts are referable to : (i) What is 'education'? (ii) What is the inter-relationship of Articles 19( 1)(g), 29 and 30 of the Constitution? (iii) In the context of minority educational institutions, what difference does it make if they are aided or unaided or if they seek recognition or affiliation or do not do so? D (iv) Would it make any difference if the instructions imparted in such educational institutions relate to professional or non-professional courses of study?

Education E 'Education' according to Chambers Dictionary is "bringing up or training; strengthening of the powers of body or mind; culture."

In Advanced Law Lexicon (P. Ramanatha Aiyar, 3rd Edition, 2005, Vol.2) 'education' is defined in very wide terms. It is stated: "Education is the bringing up; the process of developing and training the powers and capabilities of human beings. In its broadest sense the word comprehends not merely the instruction received at school, or college but the whole course of training moral, intellectual and physical; is not limited to the ordinary instruction of the child in the pursuits of literature. It also comprehends a proper attention to the moral and religious sentiments of the child. And it is sometimes used as synonymous with 'learning'."

In The Sole Trustee, Lok Shikshana Trust v. C.l.T., [1976] l SCC 254, the term 'education' was held to mean - "the systematic instruction, schooling or training given to the young in preparation for the work of life. H

p. 658 Copy page pinpoint

A It also connotes the whole course of scholastic instruction which a person . has received. What education connotes is the process of training and developing the knowledge, skill, mind and character of students by formal schooling."

In 'India - Vision 2020' published by Planning Commission of India, B it is stated (at p.250)- "Education is an important input both for the growth of the society as well as for the individual. Properly planned educational input can contribute to increase in the Gross National Products, cultural richness, build positive attitude towards technology and increase efficiency and effectiveness of the governance. Education opens new horizons for an c individual, provides new aspirations and develops new values. It strengthens competencies and develops commitment. Ed•1cation generates in an individual a critical outlook on social and political realities and sharpens the ability to self-examination, self-monitoring and self-criticism."

D "The term 'Knowledge Society', 'Information Society' and 'Leaming Society' have now become familiar expressions in the educational parlance, communicating emerging global trends with far-reaching implications for growth and development of any society. These are not to be seen as mere cliche or fads but words that are pregnant with unimaginable potentialities. Information revolution, information technologies and knowledge industries, constitute important dimensions of an information society and contribute effectively to the growth of a knowledge society." (ibid, µ.246)

"Alvin Toffler ( 1980) has advanced the idea that power at the dawn of civilization resided in the 'muscle'. Power then got associated with money and in 20th century it shifted its focus to 'mind'. Thus the shift from physical power to wealth power to mind power is an evolution in the shifting foundations of economy. This shift supports the observation of Francis Bacon who said 'knowledge itself is power'; stressing the same point and upholding the supremacy of mind power, in his characteristic expression, Winston Churchill said, "the Empires of the future shall be empires of the mind". Thus, G he corroborated Bacon and profess..:d the emergence of the knowledge· society." (ibid, p.247)

Quadri, J. has well put it in his opinion in Pai Foundation (para 287) - "Education plays a cardinal role in transforming a society into a civilised nation. It accelerates the progress of the country in every sphere of national

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 659

activity. No section of the citizens can be ignored or left behind because it would hamper the progress of the country as a whole. It is the duty of the State to do all it could, to educate every section of citizens who need a helping hand in marching ahead along with others".

According to Dr. Zakir Hussain, a great statesman with democratic credentials, a secularist and an educationist, a true democracy is one where each and every citizen is involved in the democratic process and this end cannot be achieved unless we remove the prevailing large-scale illiteracy in • our country. Unless universal education is achieved which allows every citizen to participate actively in the processes of democracy, we can never claim to be a true democracy. Dr. Zakir Hussain sought to ensure that the C

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 rrom every experience, be it defeat or victory, sorrow or joy. Education is training the mind and not stuffing the H

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A 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 B end and air.i 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 in ibid, at p.20)

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

In short, education is national wealth essential for the nation's progress and prosperity.

Articles 19(J)(g), 29(2) and 30(1): inter-relationship between

The right to establi~h an educational institution, for charity or for profit, being an occupation, is protected by Article 19(1) (g). Notwithstanding the fact that the right of a minority to establish and administer an educational institution would be protected by Article 19(1 )(g) yet the Founding Fathers of the Constitution felt the need of enacting Article 30. The reasons are too obvious to require elaboration. Article 30(1) is intended to instill confidence in minorities against any executive or legislative encroachment on their right to establish and administer educational institution of their choice. Article 30(1) though styled as a right, i~ more in the nature of protection for minorities. But for Article 30, an educational institution, even though based on religion or language, could have been controlled or regulated by law enacted under Clause (6) of Article 19, and so, Article 30 was enacted as a guarantee to the minorities that so far as the religious or linguistic minorities are concerned, educational institu~ions of their choice will enjoy protection from such legislation. However, such institutions cannot be ciiscriminated against by the State solely on account of their being minority institutions. The minorities being numerically less qua non-minorities, may not be able to protect their religion or language and such cultural values and their educational institutions will be protected under Article 30, at the stage of law making.

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 661

However, merely because Article 30(1) has been enacted, minority educational institutions do not become immune from the operation of regulatory measure because the right to administer does not include the right to mat-administer. r To what extent the State regulation can go, is the issue. The real purpose sought to be achieved by Article 30 is to give minorities some additional protection. Once aided, the autonomy conferred by the protection of Article B 30(1) on the minority educational institution is diluted as provisions of Article 29(2) will be attracted. Certain conditions in the nature of regulations can legitimately accompany the State aid.

- As an occupation, right to impart education is a fundamental right under Article l9(l)(g) and, therefore, subject to control by clause (6) of Article 19. C This right is available to all citizens without drawing a distinction between minority and non-minority. Such a right is, generally speaking, subject to laws imposing reasonable restrictions in the interest of the general public. In particular, laws may be enacted on the following subjects: (i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business; (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. Care is taken of minorities, religious or lin3uistic, by protecting their right to establish and administer educational institutions of their choice under Article 30. To some extent, what may be permissible by way of restriction under Article l 9(6) may fall foul of Article 30. This is the additional protection which Article 30(1) grants to the minorities.

The employment of expressions 'right to establish and administer' and 'educational institution of their choic.e' in Article 30(1) gives the right a very wide amplitude. Therefore, a minority educational institution has a right to admit students of its own choice, it can, as a matter of its own freewill, admit students ofnon-minority community. However, non-minority students cannot be forced upon it. The only restriction on the freewill of the minority educational institution admitting students belonging to non-minority community is, as spelt out by Article 30 itself, that the manner and number of such admissions should not be violative of the minority character of the institution.

Aid and affiliation or recognition, both by State, bring in some amount of regulation as a condition of receiving grant or recognition. The scope of H

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A such regulations, as spelt out by 6-Judge Bench decision in Rev. Sidhrajbhai case AIR (1963) SC 540 and 9-Judge Bench case in St. Xavier's must satisfy the following tests: (a) the regulation is reasonable and rational; (b) it is regulative of the essential character of the institution and is conducive to making the institution an effective vehicle of education for the minority B community or other persons who resort to it; (c) it is directed towards maintaining excellence of the education and efficiency of administration so as to prevent it from falling in standards. These tests have met the approval of Pai Foundation. However, Rev. Sidhrajbhai's case and St. Xavier's go on to say that no regulation can be cast in 'the interest of the nation' if it does not serve the interest of the minority as well. This proposition (except when c it is read in the light of the opinion of Quadri, J.) stands overruled in Pai Foundation where Kirpal, CJ, speaking for majority has ruled (vide para I 07) - "any regulation framed in the national interest must necessarily apply to all educational institutions, whether run by the majority or the minority. Such " a limitation must necessarily be read into Article 30. The right under Article D 30( 1) cannot be such as to override the national interest or to prevent the Government from framing regulations in that behalf'. (Also see, paras I I 7 to 123 and para 138 of Pai Foundation where Kirpal, CJ has dealt with St. Xavier's in details). No right can be absolute. Whether a minority or a non- minority, no community can claim its interest to be above the national interest. E 'Minority' And 'Minority Educational Institutions'

The tenn 'minority' is not defined in the Constitution. Chief Justice Kirpal, speaking for the majority in Pai Foundation, took clue from the provisions of the State Reorganisation Act and held that in view of India having been divided into different linguistic States, carved out on the basis of the language of the majority of persons of that region, it is the State, and not the whole of India, that shall have to be taken as the unit for detennining linguistic minority viz-a-viz Article 30. Inasmuch as Article 30(1) places on par religions and languages, he held that the minority status, whether by reference to language or by reference to religion, shall have to be detennined by treating the State as unit. The principle would remain the same whether it is a Central legislation or a State legislation dealing with linguistic or religious minority. Khare, J. (as His Lordship then was), Quadri, J. and Variava & Bhan, JJ. in their separate concurring opinions agreed with Kirpal, H CJ. According to Khare, J., take the population of any State as a unit, find

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 663

out its demography and calculate if the persons speaking a particular A language or following a particular religion are less than 50% o: the population, then give them the status of linguistic or religious minority. The population of the entire country is irrelevant for the purpose of determining such status. Quadri, J. opined that the word 'minority' literally means 'a non- dominant' group. Ruma Pal, J. defined the word 'minority' to mean B 'num.erically less'. However, she refused to take the Sta!e as a unit for the purpose of determining minority status as, in her opinion, the question of minority status must be determined with reference to the country as a whole. She assigned reasons for the purpose. Needless to say, her opinion is a lone voice. Thus, with the dictum of Pai Foundation, it cannot be doubted that minority, whether linguistic or religious, is detenninable only by reference c to the demography of a State and not by taking into consideration the population of the country as a whole.

Such definition of minority resolves one issue but gives rise to many a questions when it comes to defining 'minority educational institution'. D Whether a minority educational institution, though established by a minority, can cater to the needs of that minority only? Can there be an enquiry to identify the person or persons who have really established the institution? Can a minority institution provide cross-border or inter-State educational facilities • and yet retain the character of minority educational institution? E In Kera/a Education Bill, the scope and ambit of right conferred by Article 30(1) came up for consideration. Article 30(1) does not require that minorities based on religion should establish educational institutions for teaching religion only or that linguistic minority should establish educational institution for teaching its language only. The object underlying Article 30(1) F is to see the desire of minorities being fulfilled that their children should be brought up properly and efficiently and acquire eligibility for higher university education and go out in the world fully equipped with such intellectual attainments as will make them fit for entering public services, educational institutions imparting higher instructions including general secular education. Thus, the twin objects sought to be achieved by Article 30(1) in the interest G of minorities are: (i) to enable such minority to conserve its religion and language, and (ii) to give a thorough, good general education to the children belonging to such minority. So long as the institution retains its minority character by achieving and continuing to achieve the above said two objectives, the institution would remain a minority institution. H

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A The learned Judges in Kera/a Education Bill were posed with the issue projected by Article 29(2). What will happen if the institution was receiving aid out of State funds? The apparent conflict was resolved by the Judges employing a beautiful expression. They said, Article 29(2) and 30(1), read together, clearly contemplate a minority institution with a 'sprinkling of B outsiders' admitted in it. By admitting a member of non-minority into the minority institution, it does not shed its character and cease to be a minority institution. The learned Judges went on to observe that such 'sprinkling' would enable the distinct language, script and culture of a minority being propagated amongst non-members of a particular minority community and that would indeed better serve the object of conserving the language, religion c and culture of that minority.

Chief Justice Hidayatullah, speaking for the Constitution Bench in State ·" of Kera/a, Etc. v. Very Rev. Mother Provincial, Etc., [1970] 2 SCC 417, has not used the expression 'sprinkling' but has explained the reason why that D was necessary. He said - "It matters not if a single philanthropic individual with his own means, founds the institution or the community at large contributes the funds. The position in law is the same and the intention in either case must be to found an institution for the benefit of a minority community by a member of that community. It is equally irrelevant that in addition to the minority community others from other minority communities .. E or even from the majority community can take advantage of these institutions. Such other communities bring in income and they do not have to be turned away to enjoy the protection". (para 8)

Much of controversy can be avoided if only the nature of the right conferred by Articles 29 and 30 is clearly understood. The nature and content of these articles stands more than clarified and reconciled inter seas also with other articles if only we understand that these twv articles are intended to confer protection on minorities rather than a right as such. In St. Stephen's, their Lordships clearly held (vide para 28) that Article 30(1) is "a protective measure only" and further said (vide para 59) that Article 30(1) implied certain 'privilege'. Articles 29 and 30 can be better understood and utilized if read as a protection and/or a privilege of minority rather than an abstract right.

In this background arises the complex question of trans-border opera- H tion of Article 30(1). Pai Foundation has clearly ruled in favour of the State

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 665

(or a province) being the unit for the purpose of deciding minority. By this declaration of law, certain consequences follow. First, every community in India becomes a minority because in one or the other State of the country it will be in minority - linguistic or religious. What would happen if a minority belonging to a particular State establishes an educational institution in that State and administers it but for the benefit of members belonging to that minority domiciled in the neighbouring State where that community is in majority? Would it not be a fraud on the Constitution? In St. Stephen's, their Lordships had ruled that Article 30(1) is a protective measure only for the benefit of religious and linguistic minorities and "no illfit or camouflaged institution should get away with the constitutional protection" (para 28). The question need not detain us for long as it stands answered in no uncertain c terms in Pai Foundation. Emphasising the need for preserving its minority character so as to enjoy the privilege of protection under Article 30(1), it is necessary that the objective of establishing the institution was not defeated. "If so, such an institution is under an obligation to admit the bulk of the students fitting into the description of the minority community. Therefore, D the students of that group residing in the State in which the institution is located have to be necessarily admitted in a large measure because they constitute the linguistic minority group as far as that State is concerned. In other words, the predominance of linguistic minority students hailing from the State in which the minority educational institution is established should E be present. The management bodies of such institutions cannot resort to the device ofadmitting the linguistic students of the adjoining State in which they are in a majority, under the fagade of the protection given under Article 30(1)." (para !53). The same principle applies to religious minority. If any other view was to be taken, the very objective of conferring the preferential right of admission by harmoniously constructing Articles 30(1) and 29(2), F may be distorted.

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

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A Minority educational institutions: classifiable in three

To establish an educational institution is a Fundamental Right. Several educational institutions have come up. In Kera/a Education Bill, 'minority educational institutions' came to be classified into three categories, namely, B (i) those which do not seek either aid or recognition from the State; (ii) those which want aid; and (iii) those which want only recognition but not aid. It was held that the first category protected by Article 30(1) can "exercise that right to their hearts' content" unhampered by restrictions. The second category is most significant. Most of the educational institutions would fall in that category as no educational institution can, in modem times, afford to c subsist and efficiently function without some State aid. So is with the third category. An educational institution may survive without aid but would still stand in need of recognition because in the absence of recognition, education imparted therein may not really serve the purpose as for want of recognition the students passing out from such educational institutions may not be entitled to admission in other educational institutions for higher studies and may also not be eligible for securing jobs. Once an educational institution is granted aid or aspires for recognition, the State may grant aid or recognition accompanied by certain restrictions or conditions which must be follo\\'.,,ed as essential to the grant of such aid or recognition. This Court clarified in Kera/a Educational Bill that 'the right to establish and administer educational institutions' conferred by Article 30(1) does not include the right to mal- administer, and that is very obvious. Merely because an educational institution belongs to minority it cannot ask for aid or recognition though running in unhealthy surroundings, without any competent teachers and which does not maintain even a fair standard of teaching or which teaches matters subversive to the welfare of the scholars. Therefore, the State may prescribe reasonable regulations to ensure the excellence of the educational institutions to be granted aid or to be recognized. To wit, it is open to the State to lay down conditions for recognition such as, an institution must have a particular amount of funds or properties or number of students or standard of education and so on. The dividing line is that in the name of laying down conditions for aid or recognition the State cannot directly or indirectly defeat the very protection conferred by Article 30(1) on the minority to establish and administer educational institutions. Dealing with the third category of institutions, which seek only recognition but not aid, their Lordships held that 'the right to establish and administer educational institutions oftheir choice' H must mean the right to establish real institutions which will effectively serve

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 667

the needs of the community and scholars who resort to these educational A institutions. The dividing line between how far the regulation would remain within the constitutional limits and when the regulations would cross the limits and be vulnerable is fine yet perceptible and has been demonstrated in several judicial pronouncements which can be cited as illustrations. They bve been dealt with meticulous precision coupled with brevity by S.B. B Sinha, J. in his opinion in Islamic Academy. The considerations for granting recognition to a minority educational institution and casting accompanying regulation would be similar as applicable to a non-minority institution subject to two overriding considerations: (i) the recognition is not denied solely on the ground of the educational institution being one belonging to minority, and (ii) the regulation is neither aimed at nor has the effect of depriving the institution of its minority status.

Article 30(1) speaks of 'educational institutions' generally and so does Article 29(2). These Articles do not draw any distinction between an educational institution dispensing theological education or professional or non-professional education. However, the terrain of thought as has developed through successive judicial pronouncements culminating in Pai Foundation is that looking at the concept of education, in the backdrop of constitutional provisions, the professional educational institutions constitute a class by themselves as distinguished from the educational institutions imparting non-professional education. It is not necessary for us to go deep into this aspect of the issue posed before us inasmuch as Pai Foundation has clarified that merit and excellence assume special significance in the context of professional studies. Though merit and excellence are not anathema to non-professional education, yet at that level and due to the nature of education which is more general, the need for merit and excellence therein is not of the degree, as is called for in the context of professional education.

Difference between professional and non-professional education institutions

Dealing with unaided minority educational institutions, Pai Foundation holds that Article 30 does not come in the way of the State stepping in for the purpose of securing transparency and recognition of merit in the matter of admissions. Regulatory measures for ensuring educational standards and maintaining excellence thereof are no anathema to the protection conferred by Article 30( I). However, a distinction is to be drawn between unaided . minority educational institution of the level of schools and undergraduate H

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A colleges on one side and the institutions of higher education, in particular, those imparting professional education on the other side. In the fonner, the scope for merit based selection is practically nil and hence may not call for regulation. But in the case of latter, transparency and merit have to be unavoidably taken care of and cannot be compromised. There could be B regulatory measures for ensuring educational standards and maintaining excellence thereof. (See para 161, Answer to Q.4, in Pai Foundation). The source of this distinction between two types of educational institutions referred to hereinabove is to be found in the principle that right to administer does not include a right to mal-administer.

C S.B. Sinha, J. has, in his separate opinion in Islamic Academy, described (in para 199) the situation as a pyramid like situation and suggested the right of minority to be read along with fundamental duty. Higher the level of education, lesser are the seats and higher weighs the consideration for merit. It will, necessarily, call for more State intervention and lesser say for minority.

Educational institutions imparting higher education, i.e. graduate level and above and in particular specialized education such as technical or professional, constitutes a separate class. While embarking upon resolving issues of constitutional significance, where the letter of the Constitution is not clear, we have to keep in view the spirit of the Constitution, as spelt out by its entire scheme. Education aimed at imparting professional or technical qualifications stand on a different footing from other educational instruction. Apart from other provisions, Article 19(6) is a clear indicator and so are clauses (h) and G) of Article 51 A. Education upto undergraduate level aims at imparting knowledge just to enrich mind and shape the personality of a student. Graduate level study is a doorway to admissions in educational institutions imparting professional or technical or other higher education and, therefore, at that level, the considerations akin to those relevant for professional or technical educational institutions step in and become relevant. This is in national interest and strengthening the national wealth, education included. G Education up to undergraduate level on one hand and education at graduate and post-graduate levels and in professional and technical institutions on the other are to be treated on different levels inviting not identical considerations, is a proposition not open to any more debate after Pai Foundation. A number of legislations occupying the field of education whose constitutional validity has been tested and accepted suggest that while recognition or affiliation may

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 669

not be a must for education up to undergraduate level or, even if required, may be granted as a matter of routine, recognition or affiliation is a must and subject to rigorous scrutiny when it comes to educational institutions awarding degrees, graduate or post-graduate, post-graduate diplomas and degrees in technical or professional disciplines. Some such legislations are found referred in paras 81 and 82 of S.B. Sinha, J's opinion in Islamic B Academy.

Having so stated and clarified these principles which would be germane to answering the four questions posed before us, now we take up each of the four questions seriatim and answer the same. c And yet, before we do so, let us quote and reproduce paragraphs 68, 69 and 70 from Pai Foundation to enable easy reference thereto as the core of controversy touching the four questions which we are dealing with seems to have originated therefrom. These paragraphs read as under: D "68.(I) It would be unfair to apply the same rules and regula- tions 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 Govern- E ment, 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. F (II) 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 G 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- H

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A professional but unaided educational institutions viz. graduation and postgi:aduation non-professional colleges or institutes.

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 B 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 c furtherance of education is permissible. Conditions granting recognition or affiliation can broadly cover academic and educational matters including the welfare of students and teachers.

70. It is well established all over the world that those who seek professional education must pay for it. The number of seats available in government and government-aided colleges is very small, compared to the number of persons seeking admission to the medical and engineering colleges. All those eligible and deserving candidates who could not be accommodated i~ government colleges would stand deprived of professional education. This void in the field of medical and technical education has been filled by institutions that are established in different places with the aid of donations and the active part taken by public-minded individuals. The object of establishing an institution has thus been to provide technical or professional education to the deserving candidates, and is not necessarily a commercial venture. In order that this intention is meaningful, the institution must be recognized. At the school level, the recognition or affiliation has to be sought from the educational authority or the body that conducts the school-leaving examination. It is only on the basis of that examination that a school-leaving certificate is granted, which enables a student to seek admission in further courses of study after school. A college or a professional educational institution has to get recognition from the university concerned, which normally requires certain conditions to be fulfilled before recognition. It has been held that conditions of affiliation or recognition, which pertain to the academic and educational character of the institution and ensure uniformity, efficiency and excelience

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 671

in educational courses are valid, and that they do not violate even the provisions of Article 30 of the Constitution; but conditions that are laid down for granting recognition should not be such as may lead to governmental control of the administration of the private educational institutions. B In /s/amic Academy the majority has (vide para 12) paraphrased the contents of para 68 by dividing it into seven parts. S.B. Sinha, J has read the same para 68 by paraphrasing it in five parts (vide para 172 of his opinion). However, we have reproduced para 68 by dividing it into two parts. A reading of the majority judgment in Pai Foundation in its entirety supports the conclusion that while the first part of para68 is law laid down by the majority, c the second part is only by way of illustration, tantamounting to just a suggestion or observation, as to how the State may devise a possible mechanism so as to take care of poor and backward sections of the society. The second part of para 68 cannot be read as law laid down by the Bench. It is only an observation in passing or an illustrative situation which may be reached by consent or agreement or persuasion.

A Comment

It was submitted at the Bar that a flourish of language or just a flow of thoughts placed on paper when read in isolation gives an impression as if such is the law laid down though in reality even the author of the judgment had not intended to do so. A mere observation or a reasoning leading to formulation of ultimate opinion on a disputed· question of law cannot be read as a ratio of the decision. Such submissions forcefully advanced at the Bar, have been kept in view by us while reading the several opinions in Pai F Foundation and Islamic Academy. In Islamic Academy the petitioners- applicants were private unaided institutions (minority and non-minority both) and the petitioners-applicants before us are also private unaided institutions, non-minority and minority (religions and linguistic) both. It was submitted that the majority opinion in Islamic Academy has, while embarking upon clarifying the law laid down in Pai Foundation, not only reiterated some of G the propositions of law laid down in Pai Foundation but has also added something more which was not said in Pai Foundation and the two have been so intertwined as to become inseparable and that has been the reason for a spate of litigation post Islamic Academy. S.B. Sinha, J., writing his separate opinion in Islamic Academy, has not himself chosen to say whether his is a H

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A concurring opinion or a dissenting one. However, it was pointed out that S.B. Sinha, J's opinion is analytical, clear and more in consonance with the majority opinion of Pai Foundation. It.was urged that the task was difficult and unwittingly, for the sake of aiming at brevity, certain omissions have taken place. Illustratively it was pointed out that vide para 59 of Pai B Foundation Kirpal, CJ, has said -

"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 c conducted by the institution, or in the case of professional colleges, by governm~nt agencies." (emphasis by us)

In Islamic Academy, vide para 70, sub-para (2)(i)(a), the abovesaid D passage has been quoted as under:-

"Admission to professional colleges should be based on merit by a ccmmon entrance test conducted by the government agencies". (emphasis by us)

E It was pointed out that Pai Foundation vide para 59 was just making a note of what is 'prevailing as the usual systems' for admitting students but Islamic Academy vide para 70 gives an impression that the view taken in Pai Foundation is to confine to common entrance test conducted by the government agencies as the only source of admission to professional F colleges.

While expressing their appreciation of the task performed in Islamic Academy of attempting resolution of several issues raised post Pai Foundation, the learned counsel addressing us have tried to put across and demonstrate several such anomalies which Islamic Academy read in juxta position with G Pai Foundation has raised.

Having generally dealt with the several legal propositions, relevant for our purpose, now we come to specifically dealing with the questions before us. H

P.A. !NAMDAR v. STA TE [LAHOTI, CJ.] 673

Q.1. Unaided educational institutions; appropriation of quota by State and enforcement of reservation policy

First, we shall deal with minority unaided institutions.

We have in the earlier part of this judgment referred to Kera/a Education Bill and stated the three categories of minority educational institutions as classified and dealt with therein. The 7-Judge Bench decision in Kera/a Education Bill still holds the field and has met the approval of I/- Judge Bench in Pai Foundation. We cull out and state what Pai Foundation has to say about such category of institutions:- c .. (i) Minority educational institution, unaided and unrecognized

Pai Foundation is unanimous on the view that the right to establish and administer an institution, the phrase as employed in Article 30( I) of the Constitution, comprises of the following rights: (a) to admit students; (b) to set up a reasonable fee structure; (c) to constitute a governing body; (d) to appoint staff (teaching and non-teaching); and (e) to take action if there is dereliction of duty on the part of any of the employees. (para 50)

A minority educational institution may choose not to take any aid from the State and may also not seek any recognition or affiliation. It may be imparting such instructions and may have students learning such knowledge that do not stand in need of any recognition. Such institutions would be those where instructions are imparted for the sake of instructions and learning is only for the sake of learning and acquiring knowledge. Obviously, such institutions would fall in the category of those who would exercise their right under the protection and privilege conferred by Article 30( I) "to their hearts content" unhampered by any restrictions excepting those which are in national interest based on considerations such as public safety, national security and national integrity or are aimed at preventing exploitation of students or teaching community. Such institutions cannot indulge in any activity which is violative of any law of the land. G They are free to admit all students of their own minority community if they so choose to do. (para 145, Pai Foundation)

(ii) Minority unaided educational institutions asking for affiliation or recognition H

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A Affiliation or recognition by the State or the Board or the University competent to do so, cannot be denied solely on the ground that the institution is a minority educational institution. However, the urge or need for affiliation or recognition brings in the concept of regulation by way of laying down conditions consistent with the requirement of ensuring merit, excellence of education and preventing mal-administration. For example, provisions can be B made indicating the quality of the teachers by prescribing the minimum qualifications that they must possess and the courses of studies and curricula. The existence of infrastructure sufficient for its growth can be stipulated as a pre-requisite to the grant of recognition or affiliation. However, there cannot be interference in the day-to-day administration. The essential ingre- c dients of the management, including admission of students, recruiting of staff and the quantum of fee to be charged, cannot be regulated. (para 55, Pai Foundation)

Apart from the generalized position of law that right to administer does not include right to mal-administer, an additional source of power to regulate by enacting condition accompanying affiliation or recognition exists. Balance has to be struck between the two objectives: (i) that of ensuring the standard of excellence of the institution, and (ii) that of preserving the right of the minority to establish and administer its educational institution. Subject to reconciliation of the two objec.:tives, any regulation accompanying affiliation or recognition must satisfy the triple tests: (i) the test of resonableness and rationality, (ii) the test thatthe regulation would be conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it, and (iii) that there is no in-road on the protection conferred by Article 30(1) of the Constitution, that is, by framing the regulation the essential character of the institution being a minority educational institution, is not taken away. (para 122, Pai Foundation)

(iii) Minority educational institutions receiving State aid

Conditions which can normally be permitted to be imposed on the educational institutions receiving the grant must be related to the proper utilization of the grant and fulfillment of the objectives of the grant without diluting the minority status of the educational institution, as held in Pai Foundation (See para 143 thereof). As aided institutions are not before us and we are not called upon to deal with their cases, we leave the discussion at that only.

P.A. !NAMDAR v. STA TE [LAHOTI, CJ.] 675

So far as appropriation of quota by the State and enforcement of its reservation policy is concerned, we do not see much of difference between non-minority and minority unaided educational institutions. We find great force in the submission made on behalf of the petitioners that the States have no power to insist on seat sharing in the unaided private professional educational institutions by fixing a quota of seats between the management and the State. The State cannot insist on private educational institutions which receive no aid from the State to implement State's policy on reservation for granting admission on lesser percentage of marks, i.e. on any criterion except merit.

As per our understanding, neither in the judgment of Pai Foundation C nor in the Constitution Bench decision in Kera/a Education Bill, which was approved by Pai Foundation, there is anything which would allow the State to regulate or control admissions in the unaided professional educational institutions so as to compel them to give up a share of the available seats to the candidates chosen by the State, as if it was filling the seats available to be filled up at its discretion in such private institutions. This would amount to nationalization of seats which has been specifically disapproved in Pai Foundation. Such imposition of quota of State seats or enforcing reservation policy of the State on available seats in unaided professional institutions are acts constituting serious encroachment on th1.. right and autonomy of private professional educational institutions. Such appropriation of seats can also not be held to be a regulatory measure in the interest of minority within the meaning of Article 30( 1) or a reasonable restriction within the meaning of Article I 9(6) of the Constitution. Merely because the resources of the State in providing professional education are limited, private educational institutions, which intend to provide better professional education, cannot be forced by the State to make admissions available on the basis of reservation policy to less meritorious candidate. Unaided institutions, as they are not deriving any aid from State funds, can have their own admissions if fair, transparent, non- exploitative and based on merit.

The observations in paragraph 68 of the majority opm1on in Pai G Foundation, on which the learned counsel for the parties have been much at variance in their submissions, according to us, are not to be read disjointly from other parts of the main judgment. A few observations contained in certain paragraphs of the judgment in Pai Foundation, if read in isolation, appear conflicting or inconsistent with each other. But if the observations H

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A made and the conclusions derived are read as a whole, the judgment nowhere lays down that unaided private educational institutions of minorities and non- minorities can be forced to submit to seat sharing and reservation policy of the State. Reading relevant parts of the judgment on which learned counsel have made comments and counter comments and reading the whole judgment (in the light of previous judgments of this Court, which have been approved B in Pai Foundation) in our considered opinion, observations in paragraph 68 merely permit unaided private institutions to maintain merit as the criterion of admission by voluntarily agreeing for seat sharing with the State or adopting selection based on common entrance test of the State. There are also observations saying that they may frame their own policy to give free-ships c and scholarships to the needy and poor students or adopt a policy in line with the reservation policy of the state to cater to the educational needs of weaker and poorer sections of the society.

Nowhere in Pai Foundation, either in the majority or in the minority D _opinion, have we found any justification for imposing seat sharing quota by the State on unaided private professional educational institutions and reservation policy of the State or State quota seats or management seats.

We make it clear that the observations in Pai Foundation in paragraph 68 and other paragraphs mentioning fixation of percentage of quota are to be read and understood as possible consensual arrangements which can be reached between unaided private professional institutions and the State.

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.

For the aforesaid reasons, we cannot approve of the scheme evolved in G Islamic Academy to the extent it allows States to fix quota for seat sharing between management and the States on the basis of local needs of each State, in the unaided private educational institutions of both mi110rity and non- minority categories. That part of the judgment in Islamic Academy, in our considered opinion, does not lay down the correctJaw and runs counter to H Pai Foundation.

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 677

NRI seats A

Here itself we are inclined to deal with the question as to seats allocated for Non-Resident Indians ('NRI', for short) or NRJ seats. It is common knowledge that some of the institutions grant admiss·ions to certain number of students under such quota by charging a higher amount of fee. In fact, B the term 'NRI' in relation to admissions is a misnomer. By and large, we have noticed in cases after cases coming to this Court, neither the students who get admissions under this category nor their parents are NRis. In effect and reality, under this category, less meritorious students, but who can afford to bring more money, get admission. During the course of hearing, it was pointed out that a limited number of such seats should be made available as c the money brought by such students admitted against NRI quota enables the educational institutions to strengthen its level of education and also to enlarge its educational activities. It was also pointed out that people of Indian origin, who have migrated to other countries, have a desire to bring back their children to their own country as they not only get education but also get reunited with Indian cultural ethos by virtue of being here. They also wish the money which they would be spending elsewher$' on education of their children should rather reach their own motherland. A limited reservation of such seats, not exceeding 15%, ill: our opinion, may be made available to NRls depending on the discretion of the management subject to two conditions. First, such seats should be utilized bona fide by the NRis only and for their children or wards. Secondly, within this quota, the merit should not be given a complete go-by. The amount of money, in whatever form collected from such NR!s, should be utilized for benefiting students such as from economically weaker sections of the society, whom, on well defined criteria, the educational institution may admit on subsidized payment of their fee. To prevent misutilisation of such quota or any malpractice referable to NRI quota seats, suitable legislation or regulation needs to be framed. So long as the State does not do it, it will be for the Committees constituted pursuant to the directions in Islamic Academy to regulate.

Our answer tv 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 H

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A 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).

Q.2. Admission procedure of unaided educational institutions. B So far as the minority unaided institutions are concerned to admit students being one of the components of "right to establish and administer an institution", the State cannot interfere therewith. Upto the level of undergraduate education, the minority unaided educational institutions enjoy > total freedom. c However, different considerations would apply for graduate and post- graduate level of education, as also for technical and professional educational institutions. Such education cannot be imparted by any institution unless recognized by or affiliated with any competent authority created by law, such D as a University, Board, Central or State Government or the like. Excellence in education and maintenance of high standards at this level are a must. To fulfill these objectives, the State can and rather must, in national interest, step in. The education, knowledge and learning at this !eve! possessed by individuals collectively constitutes national wealth.

E Pai Foundation has already held that the minority status of educational institutions is to be determined by treating the States as units. Students of that community residing in other States where they are not in minority, shall not be considered to be minority in that particular State and hence their admission would be at par with other non-minority students of that State. Such F admissions will be only to a limited extent that is like a 'sprinkling' of such admissions, the tenn we have used earlier borrowing from Kera/a Education Bill, 1957. In minority educational institutions, aided or unaided, admissions shall be at the State level. Transparency and merit shall have to be assured.

Whether minority or non-minority institutions, there may be more than G 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 same or different dates and there may be a clash of dates. H If the same candidate is required to appear in several tests, he would be

- P.A. !NAMDAR v. STA TE [LAHOTI, CJ.]

subjected to unnecessary and avoidable expenditure and inconvenience. There is nothing wrong in an entrance test being held for one group of 679

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 Common Entrance Test (CET, for short) must be one enjoying utmost credibility and expertise in the matter. This would better ensure the fulfillment 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 centralized counseling 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. D Such choice can be exercised from out of list of successful candidates prepared at the CETwithout altering the order of merit inter se of the students so chosen.

Pai Foundation has held that minority unaided institutions can legitimately claim unfettered fundamental right to choose the students to be allowed admissions and the procedure therefor subject to its being fair, transparent and non-exploitative. The same principle applies to non-minority unaided institutions. There may be a single institution imparting a particular type of education which is not being imparted by any other institution and having its own admission procedure fulfilling the test of being fair, transparent and non-exploitative. All institutions imparting same or similar professional education can join together for holding a common entrance test satisfying the abovesaid triple tests. The State can also provide a procedure of holding a common entrance test in the interest of securing fair and merit-based admissions and preventing mal-administration. The admission procedure so adopted by private institution or group of institutions, if it fails to satisfy all or any of the triple tests, indicated hereinabove, can be taken over by the State substituting its own procedure. The second question is answered accordingly.

It needs to be specifically stated that having regard to the larger interest and welfare of the student community to promote merit, achieve excellence H

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A and curb mal-practices, it would be permissible to regulate admissions by providing a centralized and single window procedure. Such a procedure, to a large extent, can secure grant of merit based__adinissions on a transparent basis. Till regulations are framed, the admission committees can oversee admissions so as to ensure that merit is not the casualty. B Q. 3 Fee, regulation of

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 c institution is free to devise its own fee structure subject to the limitation that there can be no profiteering and no capitation fee can be charged directly or indirectly, or in any form (Paras 56 to 58 and 161 [Answer to Q.5(c)] of Pai Foundation are relevant in this regard).

D Capitation Fees

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 ilt earning rather than serving and that becomes a bane to the 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 commercialization of education and evil p!"r:ctices 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.

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.

P.A. !NAMDAR v. STATE [LAHOTI, CJ.] 681

Q.4. Committees formed pursuant to Islamic Academy A

Most vehement attack was laid by aH the learned counsel appearing for the petitioner-applicants on that part of Islamic Academy which has directed the constitution of two committees dealing with admissions and fee structure. Attention of the Court was invited to paras 35,37, 38, 45 and 161 (answer B to question 9) of Pai Foundation wherein similar scheme framed in Unni Krishnan was specifically struck down. Vide para 45, Chief Justice Kirpal has clearly ruled that the decision in Unni Krishnan insofar as it framed the scheme relating to the grant of admission and the fixing of the fee, was not correct and to that extent the said decision and the consequent directions given to UGC, AICTE, MCI, the Central and the State Governments etc. are c overruled. Vide para 161, Pai Foundation upheld Unni Krishnan to the extent to which it holds the right to primary education as a fundamental right, but the scheme was overruled. However, the principle that there should not be capitation fee or profiteering was upheld. Leverage was allowed to educa- tional institutions to generate reasonable surplus to meet cost of expansion and augmentation of facilities which would not amount to profiteering. It was submitted that Islamic Academy has once again restored such Committees which were done away with by Pai Foundation.

The learned senior counsel appearing for different private professional institutions, who have questionec:[ the scheme of permanent Committees set up in the judgment of Islamic Academy, very fairly do not dispute that even unaided minority institutions can be subjected to regulatory measures with a view to curb commercialization of education, profiteering in it and exploitation of students. Policing is permissible but not nationalization or total take over, submitted Shri Harish Salve, the learned senior counsel. F Regulatory measures to ensure fairness and transparency in admission procedures to be based on merit have not been opposed as objectionable though a mechanism other than formation of Committees in terms of Islamic Academy was insisted on and pressed for. Similarly, it was urged that regulatory measures, to the extent permissible, may form part of conditions of recognition and affiliation by the university concerned and/or MCI and G AICTE for maintaining standards of excellence in professional education. Such measures have also not been questioned as violative of the educational rights of either minorities or non· minorities.

The f\vo committees for 1nonitoring admission procedure and determining H

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