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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

IA     Nos.     57     &     59      

IN

CIVIL     APPEAL     NO.     4060     OF     2009         

 Modern Dental College and Research  Centre and others     …. Applicants  

Versus  

State of Madhya Pradesh & Ors.             ….  Respondents  

O     R     D     E     R   

K.S.     Radhakrishnan,     J.   

1. We are in these applications called upon to  

decide the question as to whether the unfilled NRI  

seats are to be transferred to general pool and be  

shared equally to be filled up on the basis of the

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Common Entrance Test conducted by the State level  

Committee – Vyavsayik Pariksha Mandal (VYAPAM) or  

by the Common Entrance Test conducted by the  

Association of Private Dental and Medical Colleges  

(APDMC), so far as the private unaided medical/dental  

colleges in the State of Madhya Pradesh are  

concerned.   

2. Applicants, herein had filed Writ Petition No.  

2732 of 2009 before the High Court of Madhya  

Pradesh (Jabalpur) challenging the constitutional  

validity of Madhya Pradesh Niji Vyavsayik Shikshan  

Sanstha (Pravesh Ka Viniyaman Avam Shulk ka  

Nirdharan) Adhiniyam, 2007 (in short ‘the Act’) and  

the Rules framed thereunder.  The High Court vide its  

judgment dated 15.5.2009 repelled the challenge to  

the Act and the Rules but declared that the provisions  

of Rule 10(2)(iii) of 2009 as ultra vires. The High  

Court also held that the Judgment would not affect the  

Common Entrance Test already conducted by VYAPAM

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for the year 2009-10.  The above-mentioned Writ  

Petition was disposed of along with other similar  

matters and a common Judgment was delivered by  

the High Court.

3. Aggrieved by the judgment in Writ Petition No.  

2732 of 2009, Civil Appeal No. 4060 of 2009 was filed  

by the applicants herein.  While admitting the appeal,  

a Bench of this Court had prima facie found that the  

provisions of the Act handing over the entire selection  

process to the State Government or the agencies  

appointed by the State Government for  

undergraduate, graduate and postgraduate  

medical/dental colleges and fee fixation was contrary  

to and inconsistent with the principles laid down by  

the eleven-Judges Bench Judgment in TMA Pai  

Foundation and Others v. State of Karnataka and  

Others [(2002) 8 SCC 481] (for short ‘Pai  

Foundation’) and the Judgment in P.A. Inamdar  

and others v. State of Karnataka and others

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[(2005) 6 SCC 537] (in short ‘Inamdar’).  The Court  

also observed that 2007 Act would become  

unconstitutional, if read literally, but an interim  

arrangement was made with regard to the admissions  

in the private unaided medical/dental colleges in the  

State of Madhya Pradesh for the year 2009-10; the  

operative portion of that order reads as follows:  

“We, therefore, direct that the admissions  in the private unaided medical/dental  colleges in the State of Madhya Pradesh will  be done by first excluding 15% NRI seats  (which can be filled up by the private  institutions as per para 131 of Inamdar  case), and allotting half of  the 85% seats  for admission to the undergraduate and post  graduate courses to be filled in by an open  competitive examination by the State  Government, and the remaining half by the  Association of the Private Medical and  Dental Colleges.  Both the State  Government as well as the Association of  Private Medical and Dental Colleges will hold  their own separate entrance examination for  this purpose.  As regards “the NRI seats”,  they will be filled as provided under the Act  and the Rules, in the manner they were  done earlier.”

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4. The Court also observed that the solution arrived  

at might not be perfect, but it had only tried to find  

out a best via media for admissions for the academic  

year 2009-10.  However, it was recommended that  

the same might also be considered for future sessions.  

The order passed by the Court is reported in Modern  

Dental College and Research Centre and Ors. v.  

State of Madhya Pradesh and Ors. [(2009) 7 SCC  

751]. (in short Modern Dental College)   

5. The above arrangement indicates that 15% of  

the total sanctioned intake in the unaided Private  

Medical and Dental Colleges was set apart for giving  

admission to NRI students and the remaining 85%  

seats would be filled up equally through the  

examination conducted by the State and the Common  

Entrance Test conducted by the Colleges.  

Controversy now is only with regard to unfilled NRI  

seats due to lack of sufficient NRI students, and in  

what manner those seats have to be filled up.  State,

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has maintained the stand that those unfilled seats  

would also go to the general pool and be shared by  

both the State and the Colleges equally.  Such a stand  

was taken by the State on the basis of the  

interpretation placed by this Court in filling up the  

unfilled NRI seats in its judgment dated 30.9.2010 in  

R.D. Gardi Medical College and Anr. etc. v. State  

of M.P. and Ors. (2010) 10 SCC 225 (in short Gardi  

Medical College), wherein, while interpreting Rule 8  

of the M.P. Admission Rules, 2008 the two-Judges  

Bench of this Court observed as follows:

“A plain reading of the above leaves no  manner of doubt that unfilled NRI seats had  to be transferred to the general pool to be  filled up on the basis of the merit of the  candidates in the State-level common  entrance test conducted by the Madhya  Pradesh Vyavsayik Pariksha Mandal or by  any other agency authorised by the State  Government for that purpose.  The unfilled  seats in the NRI quota were, therefore, to  be treated as a part of the general pool and  once that was done the share of the college  in terms of the order passed by this Court  would be 50% out of the said seats.  The

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High Court has, in that view, rightly held  that while the management was justified in  filling up 5 unfilled seats in NRI quota, the  remaining 5 could not have been filled up  otherwise than on the basis of the entrance  test referred to in Rule 8.”

Court, in the above case, was dealing with the  

admissions for the academic year 2010-11.

6. The State Government while framing the Madhya  

Pradesh Private Medical and Dental Under Graduate  

Course Entrance Examination Rules, 2011  

incorporated Rule 5 with regard to unfilled NRI seats  

with specific reference to the above-mentioned  

judgment dated 30.9.2010.  The Rule reads as  

follows:

“RESERVATION: Every Institution shall be  allowed to fill up to 15% of the sanctioned  seats by NRI candidates only, in the  manner prescribed by the admission and  Fee Regulatory Committee.  These NRI  seats shall be filled up through a separate  counselling.  NRI seats remaining vacant  shall be merged into the counselling of Non  NRI Candidates, as per Hon’ble Supreme  Court Order in Civil Appeal No. 8429- 8430/2010 dated 30.9.2010.”

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7. The applicants, noticing that the judgment dated  

30.9.2010 in Gardi Medical College would seriously  

affect the rights of unaided educational institutions in  

the matter of filling up of unfilled NRI seats, filed IA  

Nos. 51-52 of 2011 in Civil Appeal No. 4060 of 2009  

for appropriate modification / clarification of the  

orders passed by two-Judges Bench in Modern  

Dental College as well as R.D. Gardi Medical  

College.  The applications came up for hearing before  

two-Judges Bench of this Court on 1.8.2011 and this  

Court passed the following order:

“We are of the opinion that there appears  to be some conflict between the  observations made in para 28 of the  judgment of the two-Judges Bench  rendered in the case of R.D. Gardi  Medical College and Another. etc. v.  State of M.P. and Ors. [(2010) 10 SCC  225], quoted below:

28. A plain reading of the above leaves  no manner of doubt that unfilled NRI  seats had to be transferred to the  general pool to be filled up on the basis  of the merit of the candidates in the  State-level common entrance test

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conducted by the Madhya Pradesh  Vyavsayik Pariksha Mandal or by any  other agency authorised by the State  Government for that purpose. The  unfilled seats in the NRI quota were,  therefore, to be treated as a part of  the general pool and once that was  done the share of the College in terms  of the order passed by this Court would  be 50% out of the said seats. The High  Court has, in that view, rightly held  that while the management was  justified in filling up 5 unfilled seats in  NRI quota, the remaining 5 could not  have been filled up otherwise than on  the basis of the entrance test referred  to in Rule 8.

and the observations made in para 27(1),  quoted below, of T.M.A. Pai Foundation  and others v. State of Karnataka and  others [(1995) 5 SCC 220] which is a  three Judge Bench decision:

“27(1) So far as NRI quota is  concerned, it is fixed at fifteen per cent  for the current academic year.  It shall  be open to the management to admit  NRI students and foreign students up  to the aforesaid specified percentage,  it shall be open to them to admit  students on their own, in the order of  merit, within the said quota.  This  direction shall be a general direction  and shall operate in the case of all the  States where admissions have not  been finalized.  It is, however, made  clear that by virtue of this direction, no  student who has already been

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admitted shall be disturbed or  removed.”   

The Court, therefore, referred the matter to a larger  

Bench.  However, by the time year 2011-2012  came  

to a close hence, the larger Bench could not resolve  

the apparent conflict and hence, a two Judges Bench  

of this Court disposed of both IA Nos.51 and 52 vide  

its order dated 23.9.2011.

8. The same issue, has again been cropped up, now  

for the academic year 2012-13, hence, it is necessary  

to clarify the order dated 27.5.2009 in Modern  

Dental College and the judgment of this Court dated  

30.9.2010 in R.D. Gardi Medical College as to how  

the unfilled NRI seats be filled up.  For the said  

purpose, the applicants have filed IA Nos.57-59 of  

2011, which came up for hearing before two-Judges  

Bench of this Court on 9.12.2011 and the Court

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ordered that the applications be placed before the  

Constitution Bench.     

9. Since main issue referred to Constitution Bench  

is not likely to come up for hearing shortly and the  

issue projected in I.As with regard to unfilled seats is  

of urgent nature, thus, they have been considered by  

us.  Hence, these applications have come up before us  

for consideration vide order passed by Hon’ble the  

Chief Justice of India.   

10. We have heard learned senior counsel - Shri C.A.  

Sundaram and Dr. Rajeev Dhawan and learned  

counsel for the State of Madhya Pradesh -  Shri B.S.  

Banthia.  We may at the outset point out that in the  

instant applications, we are concerned only with the  

question as to how and in what manner the unfilled  

NRI seats be filled up for the year 2012-13 till the  

appeal is finally disposed of, which issue, in our view,

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is no more res integra.  This Court had earlier in  

various judgments dealt with the purpose and object  

of creating NRI quota and the manner in which those  

quota had to be filled up.  A three-Judges Bench of  

this Court in TMA Pai Foundation and Others v.  

State of Karnataka and Others (1994) 4 SCC 728  

had an occasion to consider how, the vacant seats, in  

the NRI quota be filled up and ordered as follows:

“So far as NRI quota is concerned, we  fixed the same as 15% last year.  We fixed  NRI quota in respect of minorities’  institutions as 5%.  Although the NRI  quota should not, normally, be more than  5% but keeping in view the reduction in  the fee structure, we fix the same as 10%  (of the total seats) for this year.  We  further     make     it     clear     that     in     case     any     in    the     NRI     quota     remains     unfilled,     the     same    can     be     filled     by     the     Management     at     its    discretion.”

Later another three-Judges Bench of this Court in  

TMA Pai Foundation and Others v. State of  

Karnataka and Others (1995) 5 SCC 220 had also  

endorsed the same view holding that it would be open

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to the Management to admit NRI students and foreign  

students within that quota and in case they were not  

able to get the NRI or foreign students upto the  

aforesaid specified percentage, it would be open to  

them to admit students on their own, in the order of  

merit, within the said quota.  The operative portion of  

the order with regard to NRI quota for the year 1995-

96 was as follows:  

(1) So far as NRI quota is  concerned, it is fixed at fifteen per cent  for the current academic year.  It     shall     be    open     to     the     management     to     admit     NRI    students     and     foreign     students     within     this    quota     and     in     case     they     are     not     able     to     get    the     NRI     or     foreign     students     upto     the    aforesaid     specified     percentage,     it     shall     be    open     to     them     to     admit     students     on     their    own,     in     the     order     of     merit,     within     the     said    quota.      This     direction     shall     be     a     general    direction     and     shall     operate     in     the     case     of    all     the     States     where     admissions     have     not    been     finalized  .  It is, however, made clear  that by virtue of this direction, no student  who has already been admitted shall be  disturbed or removed.”

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Similar order was also passed by this Court in AP (P)  

Engg. College Management Assn. v. Govt. of A.P.  

(2000) 10 SCC 565.  The operative portion of the  

order of the two-Judges Bench reads as follows:

“4. After hearing learned counsel for the  parties, we direct that the State of Andhra  Pradesh shall allow the 5% NRI quota in  the private engineering colleges in the  State of Andhra Pradesh to be filled up in  the manner earlier directed by this Court  and to permit the management of the  private engineering colleges to fill up the  unfilled NRI quota, at its own discretion,  subject, however, to the criteria of merit,  qualification and fee structure –  as  prescribed by the Government not only for  the current academic year but also for  successive academic years, till the main  matter is decided by this Court in the  pending cases.”  

11. We may also in this connection refer to the  

judgment of the  seven-Judges Bench in P.A.  

Inamdar v. State of Maharashtra [(2005) 6 SCC  

537], wherein this Court had dealt with the rights of  

unaided minority and non-minority educational  

institutions and held that the State cannot regulate or

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control admissions, 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 up,  the seats  

available, to be filled up at its discretion in such  

private institutions.   Court held that would amount to  

nationalization of seats, 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 the right and autonomy of private professional  

educational institutions.  It was also ordered that such  

appropriation of seats can also not be held to be a  

regulatory measure in the interest of the minority  

within the meaning of Article 30(1) or a reasonable  

restriction within the meaning of Article 19(6) of the  

Constitution.   

Inamdar having said so dealt with NRI seats  

as well.  In Para 131 of judgment, the Court had only  

dealt with the question as to how NRI seats had to be

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filled up:   First,  it was ordered that the seats should  

be utilized bona fide by NRIs only and for their  

children or wards.  Further, it was ordered that within  

quota, merit should not be given a complete go-bye.  

Further, it was also ordered that the amount of  

money, in whatever form collected from such NRIs,  

should be utilized for benefiting students such as from  

economically weaker sections of the society, whom,  

on well defined criteria, the educational institution  

might admit on subsidized payment of their fee.   

Further, In para 132 of the Inamdar, it had  

also been clearly held that the policy of reservation  

should not be enforced by the State nor any quota or  

percentage of admissions could be carved out to be  

appropriated by the State in a minority or non-

minority unaided educational institution.

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12. We are of the considered view that the above  

principles laid down by a larger Benches of this Court,  

in the matter of filling up of NRI seats were not  

correctly understood or applied by this Court in R.D.  

Gardi Medical College while interpreting Rule 8 of  

the M.P. Admission Rules, 2008.   The finding  

recorded in R.D. Gardi Medical College that the  

unfilled seats in NRI quota in unaided professional  

colleges should be treated as a part of the general  

pool and be shared equally by the State and the  

unaided professional colleges goes contrary to the  

principles laid down by the eleven-Judges Bench in  

Pai Foundation, Inamdar as well as the Judgments  

rendered by the three Judges Bench in Pai  

Foundation referred to earlier.  The wrong  

interpretation given by in R.D. Gardi Medical  

College is seen incorporated in Rule 5 of the Madhya  

Pradesh Private Medical and Dental Under Graduate  

Course Entrance Examination Rules 2011 as well,  

which in our view cannot be legally sustained.

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13.  We are, therefore, inclined to allow both the  

applications and over rule the direction given by the  

two learned Judges of this Court in R.D. Gardi  

Medical College and hold that it is open to the  

unaided professional educational institutions to fill up  

unfilled NRI seats for the year 2012-13 and for the  

succeeding years through the entrance test conducted  

by them till the disposal of the appeal subject to the  

conditions laid down in  Inamdar  strictly on the basis  

of merits.    

14. IA Nos. 57 and 59 of 2011 in Civil Appeal No.  

4060 of 2009 are allowed to the extent mentioned  

above and disposed of on the basis of the above  

modifications and clarifications.

..……………………………………………J (Deepak Verma)

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……………………………………………J.       (B.S. Chauhan)  

…………………………………………...J.        (K.S. Radhakrishnan)

New Delhi, April 3, 2012