IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION(C) NO. 358 OF 2004

MODERN DENTAL COLLEGE & RESEARCH  CENTRE & ORS.

.....PETITIONERS

Versus

STATE OF MADHYA PRADESH & ORS. .....RESPONDENTS

WITH

W.P.(C) NO.261/2004 W.P.(C) NO.441/2004 W.P.(C) NO.265/2004 W.P.(C) NO.442/2004 W.P.(C) NO.359/2004 W.P.(C) NO.443/2004 W.P.(C) NO.360/2004 W.P.(C) NO.445/2004 W.P.(C) NO.361/2004 W.P.(C) NO.446/2004 W.P.(C) NO.362/2004 W.P.(C) NO.447/2004 W.P.(C) NO.363/2004 W.P.(C) NO.448/2004 W.P.(C) NO.380/2004 W.P.(C) NO.449/2004 W.P.(C) NO.386/2004 W.P.(C) NO.450/2004 W.P.(C) NO.397/2004 W.P.(C) NO.451/2004 W.P.(C) NO.416/2004 W.P.(C) NO.452/2004 W.P.(C) NO.421/2004 W.P.(C) NO.453/2004 W.P.(C) NO.422/2004 W.P.(C) NO.454/2004 W.P.(C) NO.424/2004 W.P.(C) NO.455/2004 W.P.(C) NO.427/2004 W.P.(C) NO.456/2004 W.P.(C) NO.428/2004 W.P.(C) NO.457/2004 W.P.(C) NO.430/2004 W.P.(C) NO.458/2004 W.P.(C) NO.436/2004  W.P.(C) NO.459/2004 W.P.(C) NO.437/2004  W.P.(C) NO.304/2005 W.P.(C) NO.438/2004 W.P.(C) NO.309/2005 W.P.(C) NO.439/2004 W.P.(C) NO.462/2004  W.P.(C) NO.440/2004  

AND

C.A.No.7969-7971/2004  C.A.No.7972/2004  C.A.No.7973/2004  C.A.No.7974/2004

C.A.No.7975/2004  C.A.No.7995/2010 [Arising out of SLP(C)No.13448/2007]

O R D E R

R.V. RAVEENDRAN J.

Leave granted in SLP(C) No.13448/2007.

Issue involved in the writ petitions

2. The petitioners in these writ petitions are all private  

unaided  professional  colleges  in  Madhya  Pradesh.  Though  

various  questions  were  raised  in  these  writ  petitions,  

during arguments, parties agreed that the only issue that  

now survives for consideration in these writ petitions is  

the question of fee structure in regard to medical, dental  

and other health related professional institutions in Madhya  

Pradesh for the years 2003-04 and 2004-05.  

3. The other issues that were raised in the writ petitions  

related  to  (i)  right  of  Association  of  private  unaided  

colleges  to  have  a  separate  common  entrance  test  for  

admissions;  (ii)  validity  of  the  order  of  the  State  

Government  fixing  the  management  quota  as  50%;  (iii)  

validity of the order of the State Government directing the

unaided colleges to admit students according to the merit on  

the common entrance test conducted by the State Government;  

(iv) validity of the Rules regarding the conduct of common  

entrance  test  and  validity  of  the  guidelines  by  the  

Admission Committee regarding admissions. Prayers relating  

to these issues have now become infructuous and redundant on  

account of either passage of time, or account of other laws  

being made replacing the rules/guidelines challenged or on  

account of the clarification of various issues of this Court  

in PA Inamdar vs. State of Maharashtra – 2005 (6) SCC 537.  

Facts and issues in the Civil Appeals

4. One Nidhi Bhargava approached the Madhya Pradesh High  

Court inter alia contending that she had been allotted a  

merit seat by the State Government and the college to which  

she was allotted, namely RD Gardi Medical College, Ujjain  

was  asking  for  a  caution  money  in  addition  to  the  fee  

prescribed which was impermissible. In the said petition,  

the High Court made an order dated 15.9.2003, directing R D  

Gardi Medical College to give admission to the petitioner  

therein  by  applying  the  state  fee  structure.  On  an  

application for clarification of the order dated 15.9.2003  

made in the said writ petition, the High Court issued an  

interim order dated 26.9.2003 directing that no institution  

shall charge more fees than what was stipulated by the state

government subject to revision by the state government for  

the  academic  year  2003-04  and  that  no  institution  shall  

charge any capitation fee.  In the said proceedings, the  

High Court made a further interim order dated 29.9.2003, the  

operative portion of which is extracted below:

“6. After a long debate a broad consensus was arrived  at before us, to pass directions as interim measures  pending final disposal of the present applications. We  proceed to enumerate them as under:  This direction is  applicable to the four private management institutions  mentioned in the paragraph.

(a) 12 seats which are available in the R.D. Gardi  Medical College, Ujjain shall be filled up from the  Government quota on the basis of the fee structure  prescribed by the State Government.  The management  would be at liberty to collect the caution money of  Rs.60,000/- as 38 students have already paid the same.  However, if the students do not come forward to take  admission tomorrow, i.e. on 30.9.2003 the seats shall  be  filled  up  by  the  management  quota  only  after  obtaining the leave of the court.

(b) The students who have already taken the admission  and  who  are  going  to  take  admission  would  give  necessary undertaking in all cases that if eventually  the fee structure is enhanced they would abide by the  same and made good the same.

(c)  As  the  State  Government  has  fixed  the  fee  at  Rs.38,500/-  the  State  shall  issue  letters  to  the  institutions as the counter guarantee to make good the  amount to the institutions in case the students who  have taken the admission do not pay the enhanced fee.

(d) The management through its counsel undertaken that  if after due inspection the fee structure is submit it  shall return the amount to the students concerned in  the management quota.

(e)   The  aforesaid  directions  would  be  without  prejudice to the contentions raised in course of final  hearing of the matters.”

By a further interim order dated 7.10.2003, the High Court  

also  issued  certain  direction  regarding  admission  to

students  to  state  quota  seats  in  medical  and  dental  

colleges.  

5. The  said  orders  dated  26.9.2003,  29.9.2003  and  

7.10.2003 passed by the High Court are challenged  by the  

several  colleges  in  C.A.  Nos.7969-7971/2004,  7972/2004,  

7973/2004 and 7974/2004. Being aggrieved by that part of the  

order dated 29.9.2003, which directs the State Government to  

issue letters to the colleges by way of counter guarantee  

undertaking to make good the amount to the institution in  

case the students who take admission do not pay the enhanced  

fee that may be ultimately fixed (as the State had fixed the  

fee at Rs.38,500/-, the State Government has filed CA No.  

7975/2004).

6. The  last  Civil  Appeal  (arising  out  of  SLP(C)  

No.13448/2007)  is  filed  by  R.D.  Gardi  Medical  College  

challenging the order dated 27.4.2007 in W.P. No.219/2005  

challenging the fixation of fee at Rs.38,500/- for the year  

2003-04 in regard to students directed to be admitted to  

free seats in MBBS and BDS course.

Re: Fee Structure for 2003-04 and 2004-05

7. An  eleven  Judge  Bench  of  this  Court  in  T.M.A.  Pai  

Foundation & Ors. Vs. State of Karnataka & Ors - (2002) 8

SCC 481 held that the Scheme framed by this Court in Unni  

Krishnan Vs. State of Andhra Pradesh & Ors - (1993) 1 SCC  

645  in  regard  to  admissions  and  fixation  of  fees  was  

unreasonable, invalid and unconstitutional. This Court held  

that it would be unfair to apply the rules and regulations  

regulating admissions and fee structure in the case of aided  

professional  institutions,  to  unaided  professional  

institutions. This Court also held that the managements of  

unaided professional institutions were entitled to autonomy  

in administration but at the same time bound to follow the  

principle of merit; and that they should adopt a rational  

fee  structure  but  will  not  be  entitled  to  charge  any  

capitation fee. In Unni Krishnan, this Court had evolved a  

Scheme of 50% free seats and 50% payment seats for admission  

to  professional  colleges.  The  State  Governments  and  the  

colleges were following the Unni Krishnan scheme for about a  

decade. In view of the decision in  TMA Pai Foundation, it  

became  necessary  to  reconsider  and  re-adjudicate  the  

question of admissions and fee structure as various state  

governments  and  educational  institutions  understood  the  

decision in TMA Pai Foundation,  in different perspectives.  

Consequently  various  issues  arising  therefrom  were  

considered by a Constitution Bench of this Court in Islamic  

Academy of Education & Ors. Vs. State of Karnataka & Ors.,  

(2003)  6  SCC  697  so  as  to  clarify  any  doubts/anomalies  

arising  from  diverse  interpretations.  In  regard  to  the

question whether educational institutions are entitled to  

fix their own fee structure and what should be the factors  

to be taken note of for fixing the fee, this Court held as  

under:  

“There can be no fixing of a rigid fee structure by  the government. Each institute must have the freedom  to fix its own fee structure taking into consideration  the need to generate funds to run the institution and  to provide facilities necessary for the benefit of the  students. They must also be able to generate surplus  which must be used for the betterment and growth of  that educational institution. In paragraph 56 of the  judgment  (in  TMA  Pai  Foundation)  it  has  been  categorically laid down that the decision on the fees  to be charged must necessarily be left to the private  educational institutions that do not seek and which  are not dependent upon any funds from the Government.  Each institute will be entitled to have its own fee  structure. The fee structure for each institute must  be  fixed  keeping  in  mind  the  infrastructure  and  facilities available, the investments made, salaries  paid  to  the  teachers  and  staff,  future  plans  for  expansion and/or betterment of the institution etc. Of  course  there  can  be  no  profiteering  and  capitation  fees cannot be charged. It thus needs to be emphasized  that  as  per  the  majority  judgment  imparting  of  education  is  essentially  charitable  in  nature.  Thus  the surplus/profit that can be generated must be only  for the benefit/use of that educational institution.  Profits/surplus cannot be diverted for any other use  or purpose and cannot be used for personal gain or for  any other business or enterprise. As, at present, mere  are statutes/regulations which govern the fixation of  fees and as this Court had, not yet considered the  validity of those statutes/regulations, we direct that  in order to give effect to the judgment in TMA PAI's  case  the  respective  State  Governments  concerned  authority shall set up, in each State, a committee  headed  by  a  retired  High  Court  judge  who  shall  be  nominated  by  the  Chief  Justice  of  that  State.  The  other member, who shall be nominated by the Judge,  should  be  a  Chartered  Accountant  of  repute.  A  representative  of  the  Medical  Council  of  India  (in  short 'MCI') or the All India Council for Technical  Education (in short 'AICTE'), depending on the type of  institution, shall also be a member. The Secretary of  the State Government in charge of Medical Education or  Technical Education, as the case may be, shall be a  member and Secretary of the Committee. The Committee  should be free to nominate/co-opt another independent  person of repute, so that total number of members of

the Committee shall not exceed five. Each educational  Institute must place before this Committee, well in  advance  of  the  academic  year,  its  proposed  fee  structure. Along with the proposed fee structure all  relevant documents and books of accounts must also be  produced before the committee for their scrutiny. The  Committee shall then decide whether the fees proposed  by  that  institute  are  justified  and  are  not  profiteering or charging capitation fee. The Committee  will be at liberty to approve the fee structure or to  propose some other fee which can be charged by the  institute. The fee fixed by the committee shall be  binding for a period of three years, at the end of  which  period  the  institute  would  be  at  liberty  to  apply  for  revision.  Once  fees  are  fixed  by  the  Committee, the institute cannot charge either directly  or  indirectly  any  other  amount  over  and  above  the  amount fixed as fees. If any other amount is charged,  under any other head or guise e.g. donations the same  would  amount  to  charging  of  capitation  fee.  The  Governments/appropriate  authorities  should  consider  framing  appropriate  regulations,  if  not  already,  framed, whereunder if it is found that an institution  is  charging  capitation  fees  or  profiteering  that  institution  can  be  appropriately  penalised  and  also  face  the  prospect  of  losing  its  recognition/  affiliation.”

8. As  the  judgment  was  rendered  on  14.8.2003,  the  

principles laid down therein could be applied only for the  

academic year 2004-05 onwards. This is also evident from the  

fact  that  in  paragraph  21  of  the  judgment,  this  Court  

observed that in so far as the academic year 2003-04 was  

concerned, time was running out as the outer time limit for  

admissions  had  elapsed  and  there  should  be  an  ad  hoc  

arrangement for that year. It can, therefore, be inferred  

that whatever was stated with reference to academic year  

2003-04 in Islamic Academy, was only intended to be an adhoc  

arrangement.  Be that as it may.

9. The  State  Government,  by  circular  memorandum  dated

3.7.2003  fixed  the  tuition  fees  for  Graduate  and  Post  

Graduate courses for academic session 2003-04 in private and  

Government  Medical,  Dental,  Nursing,  Ayurveda,  Unani  and  

Homeopathic Colleges as follows:

S.  No.

Name of the  Institution

Free Seats   Rs.

Payment  Seats  Rs.

NRI  Seats (In US  Dollars)

1. Autonomous  Medical  and Dental Colleges

35000 1,50,000 10000

2. Medical  and  Dental  College  established  in Private Sector

38500 1,65,000 12000

3. Autonomous  Nursing  college  (B.Sc.)  course

10000 50000 -

4. Nursing  Colleges  of  private sector

11000 55000 -

5. Govt.  Autonomous  Private/Ayurveda,  Unani,  Homeopathy  College

11000 25300 3600

6. Autonomous  Medical/Dental  College  

Diploma  -  40000

 Post Graduate  Degree   -  45000

By  subsequent  memorandum  dated  8.9.2003,  the  State  

Government fixed the fee as Rs.38,500/- for free seats and  

Rs.1,65,000/- for payment seats (and US $ 12000 for NRI  

quota  seats)  in  regard  to  three  unaided  private  dental  

colleges in the State (that is School of Dental Science,  

Indore,  Modern  Dental  College,  Indore  and  RKDF  Dental  

College, Bhopal) and one unaided private medical college (RD  

Gardi Medical College, Ujjain).  

10. Some of the colleges gave representations to the State  

Government for increasing the fees. They contended that if  

the fee structure was calculated on the basis of principles  

laid down in  Islamic Academy (extracted above), their fee  

structure should be much higher. They also requested that  

the matters be referred to a Fee Fixation Committee headed  

by a retired High Court Judge.  

11. The  State  Government,  by  order  dated  4.11.2003  

appointed a Committee presided over by a retired High Court  

Judge for Fixation of Fees for Professional Institutions.  

The said Committee called upon the colleges to supply the  

information that is referred to in the judgment of this  

Court in Islamic Academy in regard to fixation of fees. Only  

the medical college and the dental colleges responded. Other  

colleges  did  not  respond.  In  the  circumstances,  the  

Committee  announced  a  public  hearing  with  reference  to  

fixation of fee. It also gave detailed instructions as to  

how  the  data  should  be  furnished  for  the  purpose  of  

determination of fees. It gave personal hearing to all those  

who were present.  

12. Thereafter by order dated 31.5.2004, the Fee Fixation  

Committee fixed the fee for three academic sessions that is  

2004-05 to 2006-07 with an observation that the fees fixed  

may also be applied to academic session 2003-04 in regard to

the medical and dental colleges as per the directions of the  

High Court. It fixed the following fee structure:  

Name  of  College  

Tuition  Fee

Educational  Fees

Student  Funds

Caution  Money  (one  time  deposited)

College Hostel

Hostel  Fees

R  D  Gardi  Medical,  Ujjain  

164000/ -

- 1000/- 25000/- 1200/- 6000/-

College  of  Dental  Science,  Rau, Indore

146000/ -

- 1000/- 10000/- 1200/- 6000/-

Other  Dental  Colleges

112000/ -

- 1000/- 10000/- 1200/- 6000/-

Nursing  Colleges  

48000/- - 1000/- 5000/- 1200/- 6000/-

Ayurvedic  Colleges  

52000/- 2000/- 1000/- 5000/- 1200/- 6000/-

Homeopathic  Colleges

22000/- 2000/- 1000/- 5000/- 1200/- 6000/-

Unani  Colleges.  

42000/- 2000/- 1000/- 1000/- 1200/- 6000/-

The  Fee  Fixation  Committee  also  clarified  that  the  

institutions will not be entitled to charge any fee other  

than what has been fixed by it. What is significant to be  

noted  in  the  said  order  is  that  except  in  the  case  of  

R.D.Gardi Medical College, Ujjain, and College of Dental  

Sciences, Rau, Indore, the fee fixed by the Fee Fixation  

Committee was uniformly applicable for all colleges in a  

particular  discipline,  that  is  one  rate  of  fee  for  all  

Dental Colleges, one rate for all Nursing Colleges, one rate  

of fee for all Ayurvedic Colleges, one rate of fee for all

Homeopathic  Colleges  and  one  rate  of  fee  for  all  Unani  

Colleges. As per the said order dated 31.5.2004, the fees  

determined  were  applicable  both  in  regard  to  management  

quota seats and State quota seats.

13. By  another  order  dated  15.7.2004,  the  Fee  Fixation  

Committee  made  certain  modifications  to  the  order  dated  

31.5.2004 and also made it clear that the fee fixation by  

order  dated  31.5.2004  was  only  an  interim  arrangement  

pending final determination. The Committee made it clear  

that it would examine the matter of fixation of fees in  

further  detail  and  pass  final  orders  regarding  the  fees  

subsequently.

14. However, in spite of Fee Fixation Committee clarifying  

in its order dated 15.7.2004 that the fee fixation made in  

its order dated 31.5.2004 was only an interim arrangement,  

the  State  Government  issued  an  order  dated  10.12.2004  

finally fixing the following fees for the year 2003-04 for  

the State quota seats and the management quota seats in  

regard  to  one  unaided  private  medical  college  and  five  

unaided private dental colleges:  

Sl.No. Name  of  the  Institution  

State  quota  seats

Management  quota seats

1 RD  Gardi  Medical  College, Ujjain

Rs.38,500/- Rs.1,64,000/-

2 College  of  Dental  Science, Rau, Indore   

Rs.38,500/- Rs.1,46,000/-

3 Modern Dental College,  Indore

Rs.38,500/- Rs.1,12,000/-

4 RKDF  Dental  College,  Bhopal

Rs.38,500/- Rs.1,12,000/-

5 Maharana Pratap Dental  College, Gwalior

Rs.38,500/- Rs.1,12,000/-

6 People’s  College  of  Dental  Science  and  Research  Center,  Bhopal

Rs.38,500/- Rs.1,12,000/-

What  was  determined  by  the  Fee  Fixation  Committee  as  a  

uniform interim fee fixation without any distinction between  

the State quota seats and management quota seats was thus  

adopted by the said government order dated 10.12.2004 as  

final  fee  fixation  for  management  quota  seats  only.  In  

regard to State quota seats, an uniform fee of Rs.38,500/-  

was fixed by the State. No reasons were assigned for either  

of the decisions.  

15. In these writ petitions, this court on 10.8.2004 issued  

an  interim  direction  that  the  fees  prescribed  by  the  

Committee  shall  prevail  for  the  time  being  though  

provisional and it would be open to the Colleges to take an  

undertaking from the students that in case higher fee is  

payable, they will pay the same.  

16. Thereafter, the matter again came up before the Fee

Fixation  Committee  and  it  made  an  order  dated  9.3.2005  

stating that it did not propose to make any fee fixation for  

the year 2003-04, as this Court in Islamic Academy did not  

confer jurisdiction on the Fee Fixation Committee to decide  

the fee structure for 2003-04. However, in regard to the  

year 2004-05 and subsequent years, the Fee Committee held  

that it has the jurisdiction to decide the fee structure.  

17. The  position  emerging  from  the  above  orders  may  be  

summarized thus:

(i) The  Fee  Fixation  Committee  prescribed  the  same  fee  

structure for the State quota seats and the management quota  

seats by order dated 31.5.2004, as an interim measure by its  

order dated 31.5.2004, pending final determination.

(ii)  The  state  government  however  applied  different  fee  

structures for the State quota seats and management quota  

seats, as per its order dated 10.12.2004, without assigning  

any reasons.

(iii)  As far as academic year 2003-04 is concerned, there  

was  no  adjudicatory  determination  either  by  the  Fee  

Committee or by any Court or by the State Government which  

could  be  considered  as  final.  There  is,  however,  a  fee  

fixation by the Government by its order dated 10.12.2004 for  

the year 2003-04 which is not supported by any reasons.

(iv) In regard to State quota seats, there is absolutely no  

basis  or  reasoning  to  show  how  a  lesser  annual  fee  of  

Rs.38,500/- was arrived at as the annual fee. Even in regard  

to management quota seats, the determination is by adopting  

the  interim  fee  arrangement  made  by  the  Fee  Fixation  

Committee, as final determination.   

18. Therefore,  it  follows  that  as  far  as  2003-04  is  

concerned there is no legally valid or binding fee fixation.  

The  fixation  of  fee  involves  examination  of  various  

accounting aspects with reference to principles/guidelines  

given in Islamic Academy  and Inamdar (supra). It can be done  

only by a Fee Fixation Committee by giving due opportunity  

to  the  concerned  colleges  and  after  hearing  the  State  

Government. Such a determination of fee becomes necessary in  

regard  to  the  year  2003-04.  In  the  circumstances,  the  

Government order dated 10.12.2004 fixing the fee for 2003-04  

has to be considered only as an interim arrangement pending  

final determination by the Fee Fixation Committee.  

19. In so far as the academic year 2004-2005 is concerned,  

the position is not much different. As noticed above, the  

determination  by  the  order  dated  31.5.2004  was  also  

provisional,  purely  as  an  interim  measure.  There  is  no  

subsequent order of the Fee Fixation Committee fixing the  

fee for 2004-05. We are, therefore, of the view that for the  

2004-05 also, the fixation of fee has to be done by a Fee  

Fixation Committee after examining the various aspects and

after hearing the State Government and the colleges.

20. We  may  at  this  stage  notice  two  subsequent  

developments. The first is that this Court in P.A. Inamdar  

(supra, decided on 12.8.2005) reiterated the direction in  

Islamic  Academy  of  Education for  constitution  of  Fee  

Fixation Committees to deal with fee structure. This Court  

held as follows:

“139. To set up a reasonable fee structure is also a  component of "the right to establish and administer  an institution" within the meaning of Article 30(1)  of the Constitution, as per the law declared in Pai  Foundation. Every institution is free to devise its  own  fee  structure  subject  to  the  limitation  that  there can be no profiteering and no capitation fee  can be charged directly or indirectly, or in any form  (Paras 56 to 58 and 161 [Answer to Q.5(c)] of Pai  Foundation are relevant in this regard).   141.  Our  answer  to  Question-3  is  that  every  institution is free to devise its own fee structure  but the same can be regulated in the interest of  preventing profiteering.  No capitation fee can be  charged.

144. The  two  Committees  for  monitoring  admission  procedure  and  determining  fee  structure  in  the  judgment  of  Islamic  Academy,  are  in  our  view,  permissive as regulatory measures aimed at protecting  the interest of the student community as a whole as  also  the  minorities  themselves,  in  maintaining  required standards of professional education on non- exploitative  terms  in  their  institutions.  Legal  provisions  made  by  the  State  Legislatures  or  the  scheme evolved by the Court for monitoring admission  procedure and fee fixation do not violate the right  of  minorities  under  Article  30(1)  or  the  right  of  minorities and non-minorities under Article 19(1)(g).  They are reasonable restrictions in the interest of  minority institutions permissible under Article 30(1)  and in the interest of general public under Article  19(6) of the Constitution.

145. The suggestion made on behalf of minorities and  non-minorities  that  the  same  purpose  for  which

Committees have been set up can be achieved by post- audit or checks after the institutions have adopted  their own admission procedure and fee structure, is  unacceptable for the reasons shown by experience of  the educational authorities of various States. Unless  the  admission  procedure  and  fixation  of  fees  is  regulated and controlled at the initial stage, the  evil  of  unfair  practice  of  granting  admission  on  available seats guided by the paying capacity of the  candidates would be impossible to curb.

146.  Non-minority  unaided  institutions  can  also  be  subjected  to  similar  restrictions  which  are  found  reasonable and in the interest of student community.  Professional education should be made accessible on  the criterion of merit and on non-exploitative terms  to  all  eligible  students  on  an  uniform  basis.  Minorities  or  non-minorities,  in  exercise  of  their  educational  rights  in  the  field  of  professional  education  have an obligation and a duty to maintain  requisite  standards  of  professional  education  by  giving admissions based on merit and making education  equally  accessible  to  eligible  students  through  a  fair  and  transparent  admission  procedure  and  on  a  reasonable fee-structure.  

147. In our considered view, on the basis of judgment  in Pai Foundation and various previous judgments of  this Court which have been taken into consideration  in that case, the scheme evolved of setting up the  two  Committees  for  regulating  admissions  and  determining fee structure by the judgment in Islamic  Academy  cannot  be  faulted  either  on  the  ground  of  alleged infringement of Article 19(1)(g) in case of  unaided professional educational institutions of both  categories and Article 19(1)(g) read with Article 30  in  case  of  unaided  professional  institutions  of  minorities.   

148. A fortiori, we do not see any impediment to the  constitution of the Committees as a stopgap or adhoc  arrangement made in exercise of the power conferred  on  this  Court  by  Article  142  of  the  Constitution  until a suitable legislation or regulation framed by  the State steps in. Such Committees cannot be equated  with Unni Krishnan Committees which were supposed to  be permanent in nature.

149.  However,  we  would  like  to  sound  a  note  of  caution  to  such  Committees.  The  learned  counsel  appearing  for  the  petitioners  have  severely  criticised the functioning of some of the Committees  so constituted. It was pointed out by citing concrete  examples that some of the Committees have indulged in

assuming such powers and performing such functions as  were never given or intended to be given to them by  Islamic Academy.  Certain decisions of some of the  Committees  were  subjected  to  serious  criticism  by  pointing out that the fee structure approved by them  was abysmally low which has rendered the functioning  of  the  institutions  almost  impossible  or  made  the  institutions  run  into  losses.   In  some  of  the  institutions, the teachers have left their job and  migrated to other institutions as it was not possible  for  the  management  to  retain  talented  and  highly  qualified  teachers  against  the  salary  permitted  by  the Committees. Retired High Court Judges heading the  Committees are assisted by experts in accounts and  management.  They also have the benefit of hearing  the contending parties. We expect the Committees, so  long as they remain functional, to be more sensitive  and to act rationally and reasonably with due regard  for realities. They should refrain from generalizing  fee  structures  and,  where  needed,  should  go  into  accounts, schemes, plans and budgets of an individual  institution for the purpose of finding out what would  be  an  ideal  and  reasonable  fee  structure  for  that  institution.

151.  On  Question-4,  our  conclusion,  therefore,  is  that the judgment in Islamic Academy, in so far as it  evolves the scheme of two   Committees, one each for  admission and fee structure, does not go beyond the  law laid down in Pai Foundation and earlier decisions  of this Court, which have been approved in that case.  The  challenge  to  setting  up  of  two  Committees  in  accordance  with  the  decision  in  Islamic  Academy,  therefore,  fails.  However,  the  observation  by  way  clarification, contained in the later part of para 19  of Islamic Academy which speaks of quota and fixation  of  percentage  by  State  Government  is  rendered  redundant  and  must  go  in  view  of  what  has  been  already  held  by  us  in  the  earlier  part  of  this  judgment while dealing with Question No.1.”

21. The  second  development  is  that  the  Fee  Fixation  

Committee  which  was  constituted  on  4.11.2003  and  which  

passed the orders dated 31.5.2004, 15.7.2004 and 9.3.2005 is  

no longer in existence. In pursuance of a new enactment -  

the Madhya Pradesh Niji Vyavsayik Shikshan Sanstha (Pravesh  

Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (‘2007

Act’  for  short)  -  a  Fee  Regulatory  Committee  has  been  

constituted by the State Government.  

22. Having regard to the principles laid down in TMA Pai  

Foundation, Islamic Academy Education  and  Inamdar whereby  

the  previous  scheme  in  Unni  Krishnan  was  held  to  be  

unconstitutional, in so far as private unaided professional  

educational institutions are concerned, the question of two  

fee structures - one for the ‘State quota’ students and one  

for the ‘management quota’ students does not arise. These  

decisions contemplate the determination of fee structure for  

each college with reference to the various parameters like  

location, nature of the professional course, investment in  

infrastructure including land and building, infrastructure  

and  facilities  available  by  way  of  buildings,  labs,  

equipments,  salaries  to  faculty  and  staff,  the  cost  of  

administration and maintenance and reasonable surplus for  

growth and development of the institution mentioned therein.  

There  can  therefore  be  only  one  fee  structure  for  all  

students  of  a  private  unaided  professional  educational  

institution. This of course does not come in the way of  

different  fee  structures  being  applied  in  regard  to  

government institutions and aided institutions, nor does it  

come in the way of weaker sections of students admitted to  

unaided private professional educational institutions being  

extended scholarships, grants, fee concessions etc. on a

voluntary basis, either by the institutions themselves or by  

the government.

23. In the peculiar facts of the case and the subsequent  

events, the counsel for the petitioner Colleges as also the  

counsel for the State fairly submitted that they have no  

objection for the fixation of the fees in regard to the said  

two  years  (2003-04  and  2004-05)  being  done  by  the  Fee  

Regulatory Committee which has been constituted under the  

2007  Act.  Though,  the  said  statutory  Fee  Regulatory  

Committee is not constituted for fixing the fee for the  

years 2003-04 and 2004-05, interests of justice could be  

best served by referring the question of fixation of fees  

for  2003-04  and  2004-05  to  the  said  Fee  Regulatory  

Committee, instead of this Court constituting a separate Fee  

Fixation Committee for those years.

Re : Civil Appeals  

24. In view of our decision in the writ petitions, the  

civil  appeals  by  the  Colleges  do  not  survive  for  

consideration.  

25. The State Government has challenged the interim order  

dated 29.9.2003 of the High Court on the ground that it had  

not  given  an  undertaking  as  noted  in  the  order  dated  

29.9.2003.  The  High  Court  has  specifically  recorded  the

consensus arrived at among the parties and it relates to  

only four colleges mentioned in the order and that too for  

the 2003-04. The interim order also makes it clear that the  

State's liability will be only where the colleges are not  

able to recover the amounts from the students. We find that  

the said order was made in the background of the peculiar  

facts as the State had prevented the college from recovering  

any  amount  in  excess  of  Rs.38,500/-  from  state  quota  

students. The said order dated 29.9.2003 therefore does not  

call for any interference.  

Conclusion

26. We, accordingly, allow these writ petitions in part as  

follows:

(a) It is declared that the fixation of fees so far done,  

either by the Fee Fixation Committee/State Government for  

the  year  2003-04  and  2004-05  was  only  as  an  interim  

provisional measure, subject to final determination that is  

yet to be done.

(b) The  Fee  Regulatory  Committee,  which  was  constituted  

under the 2007 Act, is hereby entrusted with the function of  

determining the fee structure for the petitioner colleges

(unaided private colleges) for the Academic Years 2003-2004  

and  2004-2005  after  giving  due  hearing  to  the  colleges  

concerned  and  the  State  Government.  It  is  open  to  the  

Committee to consider any written representation submitted  

by the concerned students also, while fixing the fee for  

those years. The students are not entitled to claim personal  

hearing. The Fee Regulatory Committee for this purpose will  

have all powers that have been vested in it by the 2007 Act.  

The State Government shall take all steps and do everything  

necessary to enable the said Fee Regulatory Committee to  

complete the process of fee fixation expeditiously.  

(c) All questions are left open and nothing stated in the  

several orders of the High Court or by this Court shall be  

considered  as  expression  of  opinion  in  regard  to  fee  

structure for the said academic years (2003-04 and 2004-05)  

and the Fee Regulatory Committee shall determine the fees  

with reference to the facts, figures and material placed  

before it.

(d) In the event of the fees determined by the Committee  

being more than what has been collected from the students of  

2003-04 and 2004-05, it is open to the colleges to recover  

the balance by enforcing the bank guarantee or undertaking,  

if any, obtained from the students. In so far a 2003-04 is  

concerned,  if  there  is  any  non-recovery  or  shortfall  in

recovery, with reference to any student, the same shall be  

made good by the State Government in accordance with the  

order dated 29.9.2003 (extracted above). It is made clear  

that the said indemnity by the State Government is only with  

reference  to  four  colleges  mentioned  in  the  order  dated  

29.9.2003 in regard to 2003-2004. The State will have no  

liability to pay any difference in fee in so far as other  

colleges are concerned.   

(e) If the fee determined by the Committee is less than  

what has been already recovered, the concerned College shall  

refund the excess fee collected to the respective student.  

27. As no other point is urged and all the petitioners  

agreed that the only point that was to be decided was in  

regard to the fees, the remaining issues raised are not  

decided (and left open) as having become infructuous.

28. As a consequence, all the civil appeals are disposed of  

in view of the directions given while disposing of the writ  

petitions.  

    .....................J.          ( R.V. RAVEENDRAN )

      .....................J.     ( H.L. GOKHALE )

New Delhi;

September 08, 2010.