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CASE NO.: Appeal (civil)  5041 of 2005

PETITIONER: P.A. Inamdar & Ors.                                        

RESPONDENT: State of Maharashtra & Ors.                       

DATE OF JUDGMENT: 12/08/2005

BENCH: R.C.LAHOTI CJI & Y.K.SABHARWAL & D.M.DHARMADHIKARI & ARUN KUMAR & G.P.MATHUR & TARUN CHATTER JEE & P.K.BALASUBRAMANYAN   

JUDGMENT: JUDGMENT

DELIVERED BY: R.C.LAHOTI,CJI  

(Arising out of Special Leave Petition (C) No.9932 of 2004)

WITH  

Civil Appeal No. 5042 of 2005 (@ SLP(C) No.9935/2004);  Civil  Appeal No. 5043 of 2005 (@ SLP(C) No. 9936/2004); W.P. (C)  No. 276/2004; W.P. (C) No. 330/2004; W.P. (C) No. 357/2004;  I.A. NOS. 26, 27, 30, 31 AND 33 IN W.P. (C) No.350/1993; Civil  Appeal No. 5035 of 2005 (@ SLP(C) No.11244/2004; W.P.(C)  No. 302/204; W.P. (C) No. 347/2004; W.P. (C) No. 349/2004;  W.P. (C) No. 350/2004; W.P. (C) No. 387/2004; W.P. (C) No.  423/2004; W.P. (C) No. 480/2004; W.P. (C) No. 19/2005; W.P.  (C) No. 261/2004; W.P. (C) No. 265/2004; W.P. (C) No.  380/2004; W.P. (C) No. 358/2004; W.P. (C) No. 359/2004; W.P.  (C) No. 360/2004; W.P. (C) No.361/2004; W.P. (C) No.  362/2004; W.P. (C) No. 363/2004; C.A. No. 5257-5258/2004;   C.A. No.  5259/2004; C.A. No. 5260-5261/2004; C.A. No. 5262- 5263/2004; C.A. No. 5996/2004; C.A. No. 5992/2004; C.A. No.  5997-5998/2004; 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; W.P. (C) No.  371/2004;        W.P.   (C)    No.     368/2004; C.A.   No.  7117-7119/2004; C.A. No. 7124- 7126/2004; CONMT.PET. (CIVIL) No. 561-563/2004 In C.A. No.  7117-7119/2004; CONMT. PET. (Civil) No. 564-566/2004 in   C.A.  No. 7124-7126/2004; W.P. (C) No. 251/2004; Civil Appeal  No. 5036 of 2005 (@ SLP (C) No. 17464/2004); Civil Appeal No.  5037 of 2005 (@ SLP (C) No. 17549/2004); W.P. (C) No.  318/2004; Civil Appeal No. 5038 of 2005 (@ SLP(C) No.  17930/2004;  Civil Appeal No. 5039 of 2005 (@ SLP (C) No.  17931/2004); Civil Appeal No. 5040 of 2005 (@ SLP (C) No.  17326/2003); W.P. (C) No. 386/2004;  W.P. (C) No. 397/2004  

R.C. Lahoti, CJI

Preliminary

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       Leave granted in all SLPs.

       A Coram of 11 Judges, not a common feature in the  Supreme Court of India, sat to hear and decide T.M.A.Pai  Foundation v. State of Karnataka (2002) 8 SCC 481  (hereinafter ’Pai Foundation’, for short).  It was expected that  the authoritative pronouncement by a Bench of such strength on  the issues arising before it would draw a final curtain on those  controversies. The subsequent events tell a different story. A  learned academician observes that the 11-Judge Bench decision  in Pai Foundation is a partial response to some of the  challenges posed by the impact of Liberalisation, Privatisation  and Globalisation (LPG); but the question whether that is a  satisfactory response, is indeed debatable.  It was further  pointed out that ’the decision raises more questions than it has  answered’ (see : Annual Survey of Indian Law, 2002 at p.251,   254).  The Survey goes on to observe "the principles laid down  by the majority in Pai Foundation are so broadly formulated  that they provide sufficient leeway to subsequent courts in  applying those principles while the lack of clarity in the judgment  allows judicial creativity \005" (ibid at p.256).   

       The prophecy has come true and while the ink on the  opinions in Pai Foundation was yet to dry, the High Courts  were flooded with writ petitions, calling for settlements of  several issues which were not yet resolved or which propped on  floor, post Pai Foundation.  A number of Special Leave  Petitions against interim orders passed by High Courts and a few  writ petitions came to be filed directly in this Court. A  Constitution Bench sat to interpret the 11-Judge Bench decision  in Pai Foundation which it did vide its judgment dated  14.8.2003 (reported as - Islamic Academy of Education &  Anr. v. State of Karnataka & Ors., (2003) 6 SCC 697;  "Islamic Academy" for short). The 11 learned Judges  constituting the Bench in Pai Foundation delivered five  opinions. The majority opinion on behalf of 6 Judges was  delivered by B.N. Kirpal, CJ.  Khare, J (as His Lordship then was)  delivered a separate but concurring opinion, supporting the  majority.  Quadri, J, Ruma Pal, J and Variava, J (for himself and  Bhan, J) delivered three separate opinions partly dissenting from  the majority.  Islamic Academy too handed over two opinions.   The majority opinion for 4 learned Judges has been delivered by  V.N. Khare, CJ.  S.B. Sinha, J, has delivered a separate opinion.           The events following Islamic Academy judgment show  that some of the main questions have remained unsettled even  after the exercise undertaken by the Constitution Bench in  Islamic Academy in clarification of the 11-Judge Bench  decision in  Pai Foundation. A few of those unsettled questions  as also some aspects of clarification are before us calling for  settlement by this Bench of 7 Judges which we hopefully propose  to do.  

       Pai Foundation and Islamic Academy have set out the  factual backdrop of the issues leading to the formulation of 11- Judge and 5-Judge Benches respectively. For details thereof a  reference may be made to the reported decisions. A brief  summary of the past events, highlighting the issues as they have  travelled in search of resolution would be apposite.  II BACKDROP

       Education used to be charity or philanthropy in good old  times.  Gradually it became an ’occupation’.  Some of the  Judicial dicta go on to hold it as an ’industry’.  Whether, to  receive education, is a fundamental right or not has been

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debated for quite some time.  But it is settled that establishing  and administering of an educational institution for imparting    knowledge to the students is an occupation, protected by Article  19(1)(g) and additionally by Article 26(a), if there is no element  of profit generation.   As of now, imparting education has come  to be a means of livelihood for some professionals and  a mission  in life for some altruists.

       Education has since long been a matter of litigation. Law  reports are replete with rulings touching and centering around  education in its several aspects. Until Pai Foundation, there  were four oft quoted leading cases holding the field of education.  They were Unni Krishnan v. State of Andhra Pradesh (1993)  1 SCC 645, St. Stephen’s College v. University of Delhi  (1992)1 SCC 558, Ahmedabad St. Xavier’s College Society  v. State of Gujarat (1974)1 SCC 717  and In Re: Kerala  Education Bill, 1957, (1958) SCR 995.  For convenience sake,  these cases will be referred to as Unni Krishnan, St.  Stephen’s, St. Xavier’s and Kerala Education Bill  respectively. All these cases amongst others came up for the  consideration of this Court in Pai Foundation.

       Correctness of the decision in St. Stephen’s was doubted  during the course of hearing of Writ Petition No. 350 of 1993  filed by Islamic Academy.   As St. Stephen’s  is a  pronouncement of  5-Judge Bench, the matter was directed to  be placed before 7-Judge Bench.  

       An event of constitutional significance which had already  happened, was taken note of by the Constitution Bench.  "Education" was a State Subject in view of the following Entry 11  placed in List II ___  State List:-  

"11. Education including universities,  subject to the provisions of entries 63,  64, 65 and 66 of List I and entry 25 of  List III."

       By the Constitution (42nd Amendment) Act 1976, the  abovesaid Entry was directed to be deleted and instead Entry 25  in List III \026 Concurrent List, was directed to be suitably amended  so as to read as under:-  

"25.  Education, including technical  education, medical education and  universities, subject to the provisions of  entries 63, 64, 65 and 66 of List I;  vocational and technical training of  labour."  

       The 7-Judge Bench felt that the matter called for hearing  by a 11-Judge Bench. The 11-Judge Bench felt that it was not  bound by the ratio propounded in Kerala Education Bill  and   St. Xavier’s and was free to hear the case in wider perspective  so as to discern the true scope and interpretation of Article 30(1)  of the Constitution and make an authoritative pronouncement.  

Eleven Questions and Five Heads of Issues in Pai  Foundation

       In Pai Foundation, 11 questions were framed for being  answered.  Detailed submissions were made centering  around  the 11 questions.  The Court dealt with the questions by

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classifying the discussion under the following five heads:

1.      Is there a fundamental right to set up educational  institutions and if so, under which provision? 2.      Does Unni Krishnan require reconsideration? 3.      In case of private institutions, can there be government  regulations and, if so, to what extent? 4.      In order to determine the existence of a religious or  linguistic minority in relation to Article 30, what is to be  the unit __ the State or the country as a whole? 5.      To what extent can the rights of aided private minority  institutions to administer be regulated?

Having dealt with each of the abovesaid heads, the Court  through the majority opinion expressed by B.N. Kirpal, CJ,  recorded answers to the 11 questions as they were framed and  posed for resolution. The questions and the answers as given by  the majority are set out hereunder:

"Q.1.  What is the meaning and content of the expression  "minorities" in Article 30 of the Constitution of India?

A. Linguistic and religious minorities are covered by the  expression "minority" under Article 30 of the Constitution.  Since  reorganization of the States in India has been on linguistic lines,  therefore, for the purpose of determining the minority, the unit  will be the State and not the whole of India.  Thus, religious and  linguistic minorities, who have been put on a par in Article 30,  have to be considered Statewise.

Q.2.  What is meant by the expression "religion" in Article  30(1)? Can the followers of a sect or denomination of a  particular religion claim protection under Article 30(1) on the  basis that they constitute a minority in the State, even though  the followers of that religion are in majority in that State?

A.   This question need not be answered by this Bench; it will be  dealt with by a regular Bench.

Q.3 (a) What are the indicia for treating an educational  institution as a minority educational institution?  Would an  institution be regarded as a minority educational institution  because it was established by a person(s) belonging to a  religious or linguistic minority or its being administered by a  person(s) belonging to a religious or linguistic minority?

A.  This question need not be answered by this Bench; it will be  dealt with by a regular Bench.

Q.3(b) To what extent can professional education be treated as  a matter coming under minorities’ rights under Article 30?

A. Article 30(1) gives religious and linguistic minorities the right  to establish and administer educational institutions of their  choice.  The use of the words "of their choice" indicates that  even professional educational institutions would be covered by  Article 30.

Q.4.  Whether the admission of students to minority educational  institution, whether aided or unaided, can be regulated by the  State Government or by the university to which the institution is  affiliated?

A.  Admission of students to unaided minority educational  institutions viz. schools and undergraduate colleges where the

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scope for merit-based selection is practically nil, cannot be  regulated by the State or university concerned, except for  providing the qualifications and minimum conditions of eligibility  in the interest of academic standards. [emphasis by us]

       The right to admit students being an essential facet of the  right to administer educational institutions of their choice, as  contemplated under Article 30 of the Constitution, the State  Government or the university may not be entitled to interfere  with that right, so long as the admission to the unaided  educational institutions is on a transparent basis and the merit is  adequately taken care of.  The right to administer, not being  absolute, there could be regulatory measures for ensuring  educational standards and maintaining excellence thereof, and it  is more so in the matter of admissions to professional  institutions.  [emphasis by us]

       A minority institution does not cease to be so, the moment  grant-in-aid is received by the institution.  An aided minority  educational institution, therefore, would be entitled to have the  right of admission of students belonging to the minority group  and at the same time, would be required to admit a reasonable  extent of non-minority students, so that the rights under Article  30(1) are not substantially impaired and further the citizens’  rights under Article 29(2) are not infringed. What would be a  reasonable extent, would vary from the types of institution, the  courses of education for which admission is being sought and  other factors like educational needs.  The State Government  concerned has to notify the percentage of the non-minority  students to be admitted in the light of the above observations.   Observance of inter se merit amongst the applicants belonging  to the minority group could be ensured.  In the case of aided  professional institutions, it can also be stipulated that passing of  the common entrance test held by the State agency is necessary  to seek admission.  As regards non-minority students who are  eligible to seek admission for the remaining seats, admission  should normally be on the basis of the common entrance test  held by the State agency followed by counselling wherever it  exists.  

Q.5(a) Whether the minorities’ rights to establish and  administer educational institutions of their choice will include the  procedure and method of admission and selection of students?

A.  A minority institution may have its own procedure and  method of admission as well  as selection of students, but such a  procedure must be fair and transparent, and the selection of  students in professional and higher education colleges should be  on the basis of merit. The procedure adopted or selection made  should not be tantamount to mal-administration.  Even an  unaided minority institution ought not to ignore the merit of the  students for admission, while exercising its right to admit  students to the colleges aforesaid, as in that event, the  institution will fail to achieve excellence.  

Q.5(b) Whether the minority institutions’ right of admission of  students and to lay down procedure and method of admission, if  any, would be affected in any way by the receipt of State aid?

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A.  While giving aid to professional institutions, it would be  permissible for the authority giving aid to prescribe bye __ rules  or regulations, the conditions on the basis of which admission  will be granted to different aided colleges by virtue of merit,  coupled with the reservation policy of the State qua non-minority  students.  The merit may be determined either through a  common entrance test conducted by the university or the  Government concerned followed by counselling, or on the basis  of an entrance test conducted by the individual institutions \026 the  method to be followed is for the university or the Government to  decide.  The authority may also devise other means to ensure  that admission is granted to an aided professional institution on  the basis of merit.  In the case of such institutions, it will be  permissible for the Government or the university to provide that  consideration should be shown to the weaker sections of the  society.

Q.5(c) Whether the statutory provisions which regulate the  facets of administration like control over educational agencies,  control over governing bodies, conditions of affiliation including  recognition/withdrawal thereof, and appointment of staff,  employees, teachers and principals including their service  conditions and regulation of fees, etc. would interfere with the  right of administration of minorities?

A.   So far as the statutory provisions regulating the facets of  administration are concerned, in case of an unaided minority  educational institution, the regulatory measure of control should  be minimal and the conditions of recognition as well as the  conditions of affiliation to a university or board have to be  complied with, but in the matter of day-to-day management, like  the appointment of staff, teaching and non-teaching, and  administrative control over them, the management should have  the freedom and there should not be any external controlling  agency.  However, a rational procedure for the selection of  teaching staff and for taking disciplinary action has to be evolved  by the management itself.                  For redressing the grievances of employees of aided and  unaided institutions who are subjected to punishment or  termination from service, a mechanism will have to be evolved,  and in our opinion, appropriate tribunals could be constituted,  and till then, such tribunals could be presided over by a judicial  officer of the rank of District Judge.

       The State or other controlling authorities, however, can  always prescribe the minimum qualification, experience and  other conditions bearing on the merit of an individual for being  appointed as a teacher or a principal of any educational  institution.  

       Regulations can be framed governing service conditions for  teaching and other staff for whom aid is provided by the State,  without interfering with the overall administrative control of the  management over the staff.

       Fees to be charged by unaided institutions cannot be  regulated but no institution should charge capitation fee.

Q.6(a) Where can a minority institution be operationally  located?  Where a religious or linguistic minority in State A  establishes an educational institution in the said State, can such  educational institution grant preferential admission/reservations  and other benefits to members of the religious/linguistic group  from other States where they are non-minorities?

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A.   This question need not be answered by this Bench; it will be  dealt with by a regular Bench.

Q. 6. (b)   Whether it would be correct to say that only the  members of that minority residing in State A will be treated as  the members of the minority vis-‘-vis such institution?

A.  This question need not be answered by this Bench; it will be  dealt with by a regular Bench.

Q.7.  Whether the member of a linguistic non-minority in one  State can establish a trust/society in another State and claim  minority status in that State?

A.  This question need not be answered by this Bench; it will be  dealt with by a regular Bench.

Q.8. Whether the ratio laid down by this Court in St. Stephen’s  case (St. Stephen’s College v. University of Delhi, (1992) 1  SCC 558)  is correct? If no, what order?  

A.  The basic ratio laid down by this Court in St. Stephen’s  College case (supra) is correct, as indicated in this judgment.   However, rigid percentage cannot be stipulated.  It has to be left  to authorities to prescribe a reasonable percentage having  regard to the type of institution, population and educational  needs of minorities.

Q. 9.  Whether the decision of this Court in Unni Krishnan, J.P.  v. State of A.P., (1993) 1 SCC 645 (except where it holds that  primary education is a fundamental right) and the scheme  framed thereunder require reconsideration/modification and if  yes, what?

A.   The scheme framed by this Court in Unni Krishnan case  (supra) and the direction to impose the same, except where it  holds that primary education is a fundamental right, is  unconstitutional.  However, the principle that there should not be  capitation fee or profiteering is correct.  Reasonable surplus to  meet cost of expansion and augmentation of facilities does not,  however, amount to profiteering.  

Q. 10. Whether the non-minorities have the right to establish  and administer educational institution under Articles 21 and  29(1) read with Articles 14 and 15(1), in the same manner and  to the same extent as minority institutions? and

Q. 11.  What is the meaning of the expressions "education" and  "educational institutions" in various provisions of the  Constitution?  Is the right to establish and administer  educational institutions guaranteed under the Constitution?

A.   The expression "education" in the articles of the Constitution  means and includes education at all levels from the primary  school level up to the postgraduate level.  It includes  professional education.  The expression "educational institutions"  means institutions that impart education, where "education" is  as understood hereinabove.

       The right to establish and administer educational  institutions is guaranteed under the Constitution to all citizens  under Articles 19(1)(g) and 26, and to minorities specifically  under Article 30.

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       All citizens have a right to establish and administer  educational institutions under Articles 19(1)(g) and 26, but this  right is subject to the provisions of Articles 19(6) and 26(a).   However, minority institutions will have a right to admit students  belonging to the minority group, in the manner as discussed in  this judgment."

       The majority led by Kirpal, CJ, in Pai Foundation did say  that the expression "minorities" in Article 30 of the Constitution  of India, whether linguistic or religious, has to be determined by  treating the State and not the whole of India as unit.  Questions  such as: (i) what is religion, (ii) what is the indicia for  determining if an educational institution is a minority institution,  (iii) whether a minority institution can operate extra-territorially  extending its activities into such states where the minority  establishing and administering the institution does not enjoy  minority status, (iv) the content and contour of minority by  reference to territories, were not answered in Pai Foundation  and were left to be determined by the regular Benches in  individual cases to be heard after the decision in Pai  Foundation.  We also do not propose to involve ourselves by  dealing with these questions except to the extent it may become  necessary to do so for the purpose of answering the questions  posed before us.

Pai Foundation explained in Islamic Academy Pai Foundation Judgment was delivered on 31.10.2002.   The Union of India, various State Governments and the  Educational Institutions, each understood the majority judgment  in its own way.  The State Governments embarked upon  enacting laws and framing the regulations, governing the  educational institutions in consonance with their own  understanding of Pai Foundation.  This led to litigation in  several Courts.  Interim orders passed therein by High Courts  came to be challenged before this Court. At the hearing, again  the parties through their learned counsel tried to interpret the  majority decision in  Pai Foundation in different ways as it  suited them. The parties agreed that there were certain  anomalies and doubts, calling for clarification. The persons  seeking such clarifications were unaided professional educational  institutions, both minority and non-minority. The Court  formulated four questions as arising for consideration in view of  the rival submissions made before the Court in Islamic  Academy:

"(1)    whether the educational institutions are entitled to fix their  own fee structure; (2)     whether minority and non-minority educational institutions  stand on the same footing and have the same rights; (3)     whether private unaided professional colleges are entitled  to fill in their seats, to the extent of 100% , and if not, to  what extent; and (4)     whether private unaided professional colleges are entitled  to admit students by evolving their own method of  admission."                                 

We could attempt at formulating the gist of the answers  given by the Constitution Bench of the Court as under:  

(1)     Each minority institution is entitled to have its own fee  structure subject to the condition that there can be no  profiteering and capitation fees cannot be charged.  A provision  for reasonable surplus can be made to enable future expansion.   The relevant factors which would go into determining the

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reasonability of a fee structure, in the opinion of majority, are:  (i) the infrastructure and facilities available, (ii) the investments  made, (iii) salaries paid to the teachers and staff, (iv) future  plans for expansion and betterment of the institution etc.

       S.B. Sinha, J, defined what is ’capitation’ and ’profiteering’  and also said that reasonable surplus should ordinarily vary from  6 per cent to 15 per cent for utilization in expansion of the  system and development of education.  

(2)  In the opinion of  the majority, minority institutions stand on  a better footing than non-minority institutions.  Minority  educational institutions have a guarantee or assurance to  establish and administer educational institutions of their choice.   State Legislation, primary or delegated, cannot favour non- minority institution over minority institution.  The difference  arises because of Article 30, the protection whereunder is  available to minority educational institutions only.  The majority  opinion called it a "special right" given under Article 30.

       In the opinion of S.B. Sinha, J, minority educational  institutions do not have a higher right in terms of Article 30(1);  the rights of minorities and non-minorities are equal. What is  conferred by Article 30(1) of the Constitution is "certain  additional protection" with the object of bringing the minorities  on the same platform as that of non-minorities, so that the  minorities are protected by establishing and administering  educational institutions for the benefit of their own community,  whether based on religion or language.  

       It is clear that as between minority and non-minority  educational institutions, the distinction made by Article 30(1) in  the fundamental rights conferred by Article 19(1)(g) has been  termed by the majority as "special right" while in the opinion of  S.B.Sinha, J, it is not a right but an "additional protection".   What difference it makes, we shall see a little later.

(3)&(4).        Questions 3 and 4 have been taken up for  consideration together.  A reading of the opinion recorded in  Islamic Academy shows that paras 58, 59 and 68 of Pai  Foundation were considered and sought to be explained.  It  was not very clear as to what types of institutions were being  dealt with in the above referred to paragraphs by the majority in  Pai Foundation.   Certainly, distinction was being sought to be  drawn between professional colleges and other educational  institutions (both minority and unaided).  Reference is also found  to have been made to minority and non-minority institutions. At  some places, observations have been made regarding  institutions divided into groups only by reference to aid,  that is  whether they are aided or unaided educational institutions  without regard to the fact whether they were minority or non- minority institutions.  It appears that there are a few  passages/sentences wherein it is not clear which type of  institutions the majority opinion in Pai Foundation was  referring to thereat. However, the majority opinion in Islamic  Academy has by explaining Pai Foundation   held as under:

(1)     In professional institutions, as they are unaided, there will  be full autonomy in their administration, but the principle  of merit cannot be sacrificed, as excellence in profession is  in national interest.  

(2)     Without interfering with the autonomy of unaided  institutions, the object of merit based admissions can be

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secured by insisting on it as a condition to the grant of  recognition and subject to the recognition of merit, the  management can be given certain discretion in admitting  students. (3)     The management can have quota for admitting students at  its discretion but subject to satisfying the test of merit  based admissions, which can be achieved by allowing  management to pick up students of their own choice from  out of those who have passed the common entrance test  conducted by a centralized mechanism.  Such common  entrance test can be conducted by the State or by an  association of similarly placed institutions in the State.  

(4)     The State can provide for reservation in favour of  financially or socially backward sections of the society.

(5)      The prescription for percentage of seats, that is allotment  of different quotas such as management seats, State’s  quota, appropriated by the State for allotment to reserved  categories etc., has to be done by the State in accordance  with the "local needs" and the interests/needs of that  minority community in the State, both deserving  paramount consideration. The exact concept of "local  needs" is not clarified. The plea that each minority unaided  educational institution can hold its own admission test was  expressly overruled. The principal consideration which  prevailed with the majority in Islamic Academy for  holding in favour of common entrance test was to avoid  great hardship and incurring of huge cost  by the hapless  students in appearing for individual tests of various  colleges.  

       The majority opinion carved out an exception in favour of  those minority educational professional institutions which were  established and were having their own admission procedure for  at least 25 years from the requirement of joining any common  entrance test, and such institutions were permitted to have their  own admission procedure.  The State Governments were  directed to appoint a permanent Committee to ensure that the  tests conducted by the association of colleges is fair and  transparent.  

       S.B. Sinha, J, in his separate opinion, agreed with the  majority that the merit and merit alone should be the basis of  selection for the candidates.  He also agreed that one single  standard for all the institutions was necessary to achieve the  object of selection being made on merit by maintaining  uniformity of standard,  which could not be left to any individual  institution in the matter of professional courses of study.   However, the merit criterion in the opinion of Sinha, J, was  required to be associated with the level of education.  To quote  his words: "the merit criterion would have to be judged like a  pyramid. At the kindergarten, primary, secondary levels,  minorities may have 100% quota.  At this level the merit may  not have much relevance at all but at the level of higher  education and in particular, professional education and  postgraduate-level education, merit indisputably should be a  relevant criterion.  At the postgraduation level, where there may  be a few seats, the minority institutions may not have much say  in the matter.  Services of doctors, engineers and other  professionals coming out from the institutions of professional  excellence must be made available to the entire country and not  to any particular class or group of people.  All citizens including  the minorities have also a fundamental duty in this behalf."  

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Before we part with the task of summing up the answers  given to the four questions in Islamic Academy, we would like  to make a few observations of ours in this regard.  First, the  majority opinion spread over 30 printed pages, and the minority  opinion spread over 60 printed pages, both though illuminating  and instructive, have nonetheless not summed up or pointedly  answered  the  questions.  We have endeavoured to cull out and  summarize the answers, noted above, as best and as briefly as  we could from the two opinions.  We would, therefore, hasten to  add that in order to fully appreciate the ratio of the two opinions,  they have to be read in detail and our attempt at finding out and  placing in a few chosen words the ratio decidendi of the two  separately recorded opinions, is subject to this limitation.   However, we shall make a reference to relevant passages from  the two opinions as and when it becomes necessary. A point of  significance which we would like to briefly note here itself,  a  detailed discussion being relegated to a later part of this  judgment, is that the opinion of S.B. Sinha, J, has examined in  detail, the scope of protection conferred on minority institutions  by reference to their right to seek recognition or affiliation, an  aspect of wider significance which does not seem to have  received consideration with that emphasis  either in Pai  Foundation  or in the majority opinion in Islamic Academy.   We shall revert to this aspect a little later.  III Issues herein

A Few Preliminary observations Before we embark upon dealing with the issues posed  before us for resolution, we would like to make a few preliminary  observations as a preface to our judgment inasmuch as that  would outline the scope of the controversy with which we are  actually dealing here. At the very outset, we may state that our  task is not to pronounce our own independent opinion on the  several issues which arose for consideration in Pai Foundation.    Even if we are inclined to disagree with any of the findings  amounting to declaration of law by the majority in Pai  Foundation, we cannot; that being a pronouncement by 11- Judge Bench, we are bound by it.  We cannot express a dissent  or disagreement howsoever we may be inclined to do so on any  of the issues.  The real task before us is to cull out the ratio  decidendi  of Pai Foundation and to examine if the explanation  or clarification given in Islamic Academy runs counter to Pai  Foundation and if so, to what extent.  If we find anything said  or held in Islamic Academy in conflict with Pai Foundation,  we shall say so as being a departure from the law laid down by  Pai Foundation and on the principle of binding efficacy of  precedents, over-rule to that extent the opinion of the  Constitution Bench in Islamic Academy.

       It is pertinent to note, vide paras 2, 3 and 35 of Islamic  Academy, that most of the petitioners/applicants therein were  unaided professional educational institutions (both minority and  non-minority).  The purpose of constituting the Constitution  Bench, as noted at the end of para 1, was "so that  doubts/anomalies, if any, could be clarified."  Having answered  the questions, the Constitution Bench treated all interlocutory  applications as regards interim matters as  disposed of (see para  23).  All the main matters (writ petitions, transfer petitions and  special leave petitions) were directed to be placed before the  regular Benches for disposal on merits.

       Islamic Academy in addition to giving clarifications on  Interlocutory Applications, directed setting up of two committees

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in each State: one committee "to give effect to the judgment in  Pai Foundation" and to approve the fee structure or to propose  some other fee which can be charged by minority institutions  (vide para 7), and the other committee __  to oversee the tests  to be conducted by the association of institutions (vide para 19).  

       Since the direction made in Islamic Academy for  appointment of the Committees has been vehemently assailed  during the course of hearing before us, we would extract from  the judgment in Islamic Academy the following two passages  wherein, in the words of Khare, CJ, the purpose and the  constitution of the Committees, the powers conferred on and the  functions enjoined upon them are given:  "\005..we direct that in order to give effect to  the judgment in T.M.A. Pai case the  respective State Governments/concerned  authority shall set up, in each State, a  committee headed by a retired High Court  Judge who shall be nominated by the Chief  Justice of that State. The 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 the 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.  (para 7)

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        We now direct that the respective State  Governments do appoint a permanent  Committee which will ensure that the tests  conducted by the association of colleges is fair  and transparent. For each State a separate  Committee shall be formed. The Committee  would be headed by a retired Judge of the  High Court.  The Judge is to be nominated by  the Chief Justice of that State. The other  member, to be nominated by the Judge,  would be a doctor or an engineer of eminence  (depending on whether the institution is  medical or engineering/technical). The  Secretary of the State in charge of Medical or  Technical Education, as the case may be, shall  also be a member and act as the Secretary of  the Committee. The Committee will be free to  nominate/co-opt an independent person of  repute in the field of education as well as one  of the Vice-Chancellors of the University in  that State so that the total number of persons  on the Committee do not exceed five.  The  Committee shall have powers to oversee the  tests to be conducted by the association.  This  would include the power to call for the  proposed question paper(s), to know the  names of the paper-setters and examiners  and to check the method adopted to ensure  papers are not leaked. The Committee shall  supervise and ensure that the test is  conducted in a fair and transparent manner.  The Committee shall have the powers to  permit an institution, which has been  established and which has been permitted to  adopt its own admission procedure for the  last, at least, 25 years, to adopt its own  admission procedure and if the Committee  feels that the needs of such an institute are  genuine, to admit, students of their  community, in excess of the quota allotted to  them by the State Government. Before  exempting any institute or varying in  percentage of quota fixed by the State, the  State Government must be heard before the  Committee. It is clarified that different  percentage of quota for students to be  admitted by the management in each minority  or non-minority unaided professional  college(s) shall be separately fixed on the  basis of their need by the respective State  Governments and in case of any dispute as  regards fixation of percentage of quota, it will  be open to the management to approach the  Committee. It is also clarified that no  institute, which has not been established and  which has not followed its own admission  procedure for the last, at least, 25 years, shall  be permitted to apply for or be granted  exemption from admitting students in the  manner set out hereinabove. (para 19)"

       Sinha, J. has not specifically spoken of the Committees.  

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Nevertheless he made a reference to these Committees in his  opinion and thus impliedly recorded his concurrence with the  constitution of these Committees. Vide para 20, the Constitution Bench has made it clear  that the setting up of two sets of Committees in the States has  been directed in exercise of the power conferred on this Court  by Article 142 of the Constitution and such Committees "shall  remain in force till appropriate legislation is enacted by  Parliament". Although the term ’permanent’ has been used, but  it appears to us that these Committees are intended to be  transitory in nature.

Reference for constituting a Bench of a coram higher than  Constitution Bench

       These matters have been directed to be placed for hearing  before a Bench of seven Judges under Orders of the Chief  Justice of India pursuant to Order dated July 15, 2004 in P.A.  Inamdar and Ors. v. State of Maharashtra and Ors., (2004)  8 SCC 139 and Order dated July 29, 2004 in Pushpagiri  Medical Society v. State of Kerala and Ors., (2004) 8 SCC  135.  The aggrieved persons before us are again classifiable in  one class, that is, unaided minority and non-minority institutions  imparting professional education.  The issues arising for decision  before us are only three:  (i) the fixation of ’quota’ of  admissions/students in respect of unaided  professional institutions;

(ii) the holding of examinations for admissions  to such colleges, that is, who will hold the  entrance tests; and

(iii) the fee structure.   

The questions spelled out by Orders of Reference         In the light of the two orders of reference, referred to  hereinabove, we propose to confine our discussion to the  questions set out hereunder which, according to us, arise for  decision:-

(1)     To what extent the State can regulate the  admissions made by unaided (minority or non- minority) educational institutions? Can the  State enforce its policy of reservation and/or  appropriate to itself any quota in admissions to  such institutions?    

(2)     Whether unaided (minority and non-minority)  educational institutions are free to devise their  own admission procedure or whether direction  made in Islamic Academy for compulsorily  holding entrance test by the State or  association of institutions and to choose  therefrom the students entitled to admission in  such institutions, can be sustained in  light of  the law laid down in Pai Foundation?  

(3)     Whether Islamic Academy could have issued  guidelines in the matter of regulating the fee  payable by the students to the educational

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institutions?  

(4)     Can the admission procedure and fee structure  be regulated or taken over by the Committees  ordered to be constituted by Islamic  Academy?           The issues posed before us are referable to headings 3  and 5 out of ’five headings’ formulated by Kirpal, CJ in Pai  Foundation. So also speaking by reference to the 11 questions  framed in Pai Foundation, the questions and answers relevant  for us would be referable to question Nos. 3 (b), 4, 5 (a) (b) (c)  and (9).   IV Submissions made         A number of learned counsel addressed the Court at the  time of hearing raising very many issues and canvassing  different view-points of law referable to those issues.  We  propose to place on record, as briefly as we can, the principal  submissions made confined to the issues arising for decision  before us.

       The arguments on behalf of the petitioners were led by  senior counsel Shri Harish Salve. Extensively reading various  relevant paragraphs and observations in different opinions in Pai  Foundation, learned  counsel contends that the directions for  setting up permanent committees for regulating admissions and  fixing fee structure in unaided minority and non-minority  institutions issued in the case of Islamic Academy are contrary  to the ratio of judgment in Pai Foundation. According to  learned counsel, the directions clearly run counter to all earlier  Constitution Bench  decisions of  this Court in  St. Stephen’s,   St. Xavier’s and Kerala Education Bill.  

       It is argued that in the judgment of the eleven judges in  Pai Foundation which deals with several diverse issues of  considerable complexity, every observation has to be understood  in its context. Paragraph 68 in Pai Foundation has wrongly  been read as the ratio of the judgement by the Bench of five  judges in the case of Islamic Academy. It is submitted that  paragraph 68 in the majority opinion in Pai Foundation has to  be read and understood in the context of the constitutional  interpretation placed on Articles 29 & 30 of the Constitution.  Reading thus, the directions for setting up permanent  committees, for fixing quota and fee structure seriously impinge  on the constitutional guarantee of autonomy to minority  institutions under Article 30 and to unaided non-minority  institutions under Article 19(1)(g). It is submitted that taking  over the right to regulate admission and fee structure of unaided  professional institutions is not a ’reasonable restriction’ within  the meaning of Article 19(6) of the Constitution. Such restriction  is virtual negation of the constitutional protection of autonomy to  minorities in running educational institutions ’of their choice’ as  provided in Article 30 of the Constitution.  

       Elaborating his legal propositions, learned senior counsel  Shri Salve argued that establishing and running an educational  institution is a guaranteed fundamental right of ’occupation’  under Article 19(1)(g) of the Constitution. Article 19(6) permits  State to make regulations and place reasonable restrictions in  public interest upon the rights enjoyed by citizens under Article  19(1)(g) of the Constitution. Any imposition of a system of  selection of students for admission would be unreasonable if it

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deprives the private unaided institutions of the right of rational  selection which it has devised  for itself. Subject to the minimum  qualifications that may be prescribed and to some system of  computing the equivalence between different kinds of  qualifications like a common entrance test, it can evolve a  system of selection involving both written and oral tests based  on principle of fairness. Reference is made to paragraph 40 of  the judgment in Pai Foundation.  

       It is submitted that the State can prescribe minimum  qualifications and may prescribe systems of computing  equivalence in ascertaining merit; however, the right of rational  selection, which would necessarily  involve the right to decide  upon the method by which a particular institution computes such  equivalence, is protected by Article 19 and infringement of this  right constitutes an unreasonable encroachment upon the  constitutionally guaranteed autonomy of such institutions.  

It is further argued that where States take over the right  of the institution to grant admission and/or to fix the fees, it  constitutes nationalization of educational institutions. Such  nationalization of education is an unreasonable restriction on the  right conferred under Article 19. Reliance is placed on paragraph  38 of the judgment in Pai Foundation.  

Learned counsel further argues that schemes framed  relating to grant of admission and fixing of fees in Unni  Krishnan has been held to be unconstitutional by the 11-Judge  Bench in Pai Foundation. [Reference is made to paragraph 45  of the judgment in Pai Foundation] It is submitted that the  directions to set up committees for regulation of admission and  fee structure in  Islamic Academy virtually do the same  exercise as was done in Unni Krishnan  and disapproved in the  larger Bench decision in Pai Foundation. The submission in  substance made is that Unni Krishnan was disapproved in Pai  Foundation and has wrongly been re-introduced in Islamic  Academy.  

It is argued that State necessity cannot be a ground to  curtail the right of a citizen conferred under Article 19(1)(g) of  the Constitution. The Constitution casts a duty upon the States  to provide educational facilities. The State is obliged to carry out  this duty from revenue raised by the State. The shortfall in the  efforts of the State is met by the private enterprise, that  however, does not entitle the State to nationalize, whether in the  whole or in part, such private enterprise. This, it is submitted, is  the true ratio of the Pai Foundation in so far as Article 19 of  the Constitution is concerned.  

It is next argued that as held in St. Xavier’s and re- affirmed in Pai Foundation the right to establish and administer  educational institutions by minorities under Article 30 of the  Constitution is not an absolute right meaning thereby that it is   subject to such regulations that satisfy a dual test that is : the  test of ’reasonableness’ and ’any regulation regulating the  educational character of the institutions so that it is conducive to  making the institution an effective vehicle of education for the  minority community and for the others who resort to it’. Any  regulation which impinges upon the minority character of the  institutions is constitutionally impermissible. It is submitted that  between the right of minorities to establish and administer the  educational institutions and the right of the State to regulate  educational activities for maintaining standard of education, a  balance has to be struck. The regulation in relation to  recognition/affiliation operates in the area of standard of

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excellence and are unquestionable if they do not seriously curtail  or destroy the right of minorities to administer their educational  institutions. Only in  maintaining standards of education, State  can insist  by framing regulations that they be followed but in all  other areas the rights of minority must be protected. It is  conceded that mal-administration is not protected by Article 30  of the Constitution. Similarly, secular laws with secular object  that do not directly impinge upon the right of minority  institutions and operate generally upon all citizens  do not  impinge upon Article 30 of the Constitution. This has been the  constitutional interpretation of Article 30 not because Article 30  admits no exception like Article 19(6) but because the right  conferred under Article 30 does not extend to these areas. The  laws that serve national interest do not impinge upon Article 30.  

Learned counsel in elaborating his argument tried to make  a distinction between the rights of aided institutions and unaided  institutions. Article 29(2) places a limitation on the right of an  aided institution by providing that if State aid is obtained, ’no  citizen shall be denied admission on grounds only of religion,  race, caste, language or any of them’. It is submitted that as a  necessary corollary, no such limitation can be placed while  regulating admission in an unaided minority institution which  may prefer to admit students of minority community. So far as  unaided minority educational institutions are concerned, the  submission made is that government has no right or power,  much less duty, to decide as to which method of selection of  students is to be adopted by minority institutions. The role of the  government is confined to ensuring that there is  no mal- administration in the name of selection of students or in the  fixation of fees. No doubt, the State is under a duty to prevent   mal-administration,  that is to control charging of capitation fees  for the seats regardless of merit and commercializing education  resulting in exploitation of students, but to prevent mal- administration of the above nature or on the ground that there is  likelihood of such mal-administration, the State cannot take over  the administration of the institutions themselves into its own  hands. The likelihood of an abuse of a constitutional right cannot  ever furnish justification for a denial of that right. An  apprehension that a citizen may abuse his liberty does not  provide justification for imposing restraints on the liberty of  citizens. Similarly, the apprehension that the minorities may  abuse their educational rights under Article 30 of the  Constitution cannot constitute a valid basis for the State to take  over those rights.  

Learned senior counsel Shri Ashok Desai appearing on  behalf of unaided Karnataka Private Medical Colleges (through its  Association) of both categories of minority and non-minority has  questioned the correctness of the directions in the case of  Islamic Academy for setting up permanent committees for  fixation of quota and determination of fees. According to him, as  held in Pai Foundation, in the name of controlling capitation,  there cannot be indirect nationalization and complete State  control of unaided professional institutes. In the case of Islamic  Academy, the ratio of Pai Foundation that autonomy of  unaided non-minority institutions is an important facet of their  right under Article 19(1)(g) and in case of minority under Article  19(1)(g) read with Article 30 of the Constitution has been  ignored.  On behalf of unaided private professional colleges, learned  counsel further submitted that there are many private  educational institutes which have been set up by people  belonging to a region or a community or a class in order to  promote their own groups. As long as these groups form an

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unaided minority institution, they are entitled to have   transparent criteria to admit students belonging to their group.  For instance, scheduled castes and scheduled tribes have started  Ambedkar Medical College; Lingayaths have started KLE Medical  College in Belgaun and people belonging to Vokalliga community  have started Kempegowda Medical College. Similarly, Edava  community in Kerala has started its own colleges. Sugar  cooperatives in Maharashtra have started their own colleges.  Learned counsel also highlighted an instance of a college opened  in Tamil Nadu by State Transport Workers for the education of  their children on the engineering side. He submitted that if the  State is allowed to interfere in the admission procedure in these  private institutions set up with the object of providing  educational facilities to their own group, community or poorer  sections, the very purpose and object of setting up a private  medical college by a group or community for their own people  would be defeated.  

According to learned counsel, the State control in unaided  private professional colleges can only be to the extent of  monitoring or overseeing its working so that they do not indulge  in profiteering by charging capitation fees and sacrifice merit.  According to the learned counsel, in the directions contained in    Islamic Academy, the main ratio  of Pai Foundation that the  unaided institutions should have autonomy in the matter of  admission and fees structure has been totally forgotten. The  learned counsel raised very serious objections to the manner in  which the various permanent committees set up in several  States on the directions of Islamic Academy are conducting  themselves and forcing their decisions on private institutions.  The proposed fee structure is required to be placed before the  Committee in advance of the academic year by the institute. It is  the Committee which has to decide whether the fees proposed  by the institute are justified and do not amount to profiteering or  charging of capitation fees. The Committee has been given  liberty to approve the fee structure of the institute or to propose  a different fee structure. The fee fixed by the Committee is  binding for a period of three years and at the end of the said  period the institute would be at liberty to apply for revision.  Learned counsel gave in writing certain illustrations of decisions  of the Fee Committee in few unaided  colleges in the State of  Karnataka and pointed out that without proper financial  expertise and without studying the relevant documents and  accounts, the Committee determined the fee structure by only  taking into account the affordability of the parents of the  students with no regard whatsoever to the viability of the  institute on the basis of finances so generated. It is argued as to  why private professional institutes should not be allowed to  modernize its facilities and provide better professional education  than government institutes. It is pointed out that in the case of  non-minority unaided M.S. Ramaiaya Medical College, Bangalore,  the Fee Committee initially fixed annual fee at Rs.2.55 lacs for  MBBS course as against the justification shown by the institute  for demanding Rs. 3.90 lacs. The decision of the Fee Committee  led to the filing of writ petition by the institute in the High Court  of Karnataka and agitation and demonstrations by the students’  union. The Committee under the pressure of the student  community reduced the annual fee to Rs.1.6 lacs  which was re- affirmed after the High Court directed that the management of  the unaided college should be heard before reducing the annual  fee.  

Thus the learned counsel on behalf of the Karnataka  Private Medical College Association questioned the correctness of  the directions of the Bench in Islamic Academy. It is submitted

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that as decided in Pai Foundation by a larger Bench, the  essence of private educational institutions is the autonomy that  the institution must have in its management and administration.  The ’right to establish and administer’ particularly comprises the  right  a) to admit students and b) to set up reasonable fee  structure. The autonomy of the institution, therefore, predicates  that all seats would be filled by the management and there can  be no reservations or quotas in favour of the State. In Pai  Foundation, the only observations made were that some  colleges may be required to admit a small percentage of  students belonging to weaker sections of the society by granting  them freeships or scholarships. It is conceded that autonomy of  a private educational institution to admit students of its choice  does not mean that there can be no insistence on transparency  in the admission procedure and on merit being the criterion for  admission. It is submitted that autonomy of a private  educational institution could mean that they can, according to  the objects and purposes of their institutions, give preference to  a particular class or group of students like SC/ST in Ambedkar  Medical College, students from backward area in Bijapur college  and transport employees’ children in Madras State Corporation  Employees’ College or the children of employees of Larson &  Turbo Company in a college established by that company. The  right to charge fees so as to run the college and to generate  sufficient funds for its betterment and growth cannot be  controlled by the State.  That would seriously encroach upon the  autonomy of the private unaided institution. It is submitted, by  quoting Dr. S. Radhakrishnan, the then Chairman of the  University Education Commission, that interests of democracy lie  with the resistance of the trend towards governmental  domination of the educational process. In conclusion, learned  counsel representing Association of private unaided colleges in  Karnataka submits that the decision in  Islamic Academy and  the directions made therein go far beyond the law laid down by  the larger Bench in Pai Foundation. The Bench in Islamic  Academy virtually reviewed the larger Bench decision in Pai  Foundation in guise of implementation of the said decision and  on the basis of later developments. In Islamic Academy, the  Bench accepted that there could be no rigid fee structure fixed  by the government for private institutions. An institute should  have the freedom to fix its own  fee structure for day-to-day  running of the institute and to generate funds for its further  growth. Only capitation and diversion of profits and surplus of  the institute to any other business or enterprise was  prohibited.  It is submitted that Islamic Academy contrary to the legal  position explained in Pai Foundation, could not set up in each  State permanent committees headed by retired High Court  Judges with the power to decide on the justification of the fee  proposed by the institute and propose any other fees. It could  also not  make the fee fixed by the Committee binding for a  period of three years. Learned counsel submits that once the  college infrastructure and hospital facilities attached to the  medical college have been approved by the Medical Counsel of  India in accordance with its regulations, the total expenses of  college and hospital could be taken into account by the institute  to decide upon its own fee structure. Learned counsel, in  criticizing the directions in Islamic Academy, submitted that  although the scheme formulated in Unni Krishnan has been  expressly overruled in Pai Foundation on the ground that it  virtually nationalized education and resulted in surrendering total  process of selection to the State, the Bench in Islamic  Academy’s case, in an attempt to take up preventive measures  to ensure merit and check profiteering in private unaided  professional institutions, cannot re-introduce quota system for  the management and the State and thus infringe upon the

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autonomy of the institute. Such an attempt, learned counsel  contends, would be unconstitutional and violative of Article  19(1)(g) of the Constitution in the case of non-minority unaided  institutions and also violative of Article 30 in the case of minority  unaided professional institutions. Learned counsel argued that  constitutionally, as held in Pai Foundation, it is not permissible  for the State to impose a Government quota, its own reservation  policy, a lower scale of fees etc. on a private unaided non- minority and unaided minority professional institutions, only by  taking into consideration the interests of  students. In the State  of Karnataka 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 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.  

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. 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 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 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 criticized 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 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 permanent committees  for even unaided minority and non-minority institutions was not  at all envisaged in Pai Foundation. The 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.  

Learned senior counsel Shri R.F. Nariman in supporting the  argument advanced against the directions in Islamic Academy

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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 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 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  the question of deducing ratio in Pai Foundation, 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 question before a court has been decided which  is alone binding as a precedent. It is dangerous to take one or  two observations out of a long judgment and to treat them as if  they give the ratio decidendi of the case.  

       Dr. Rajiv 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  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 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, 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 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.   

       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 recognized 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

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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 would be a  minority institution in Karnataka.  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.   

       In short, the submission made by Sr. Counsel Dr. Rajiv  Dhawan is that there is nothing in Pai Foundation, which  permits fixation of quotas for 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 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.   

       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.

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

       (c)     Remaining 25% will be charged 1/4th of  the average fee.

       It is submitted that in the above proposed fee structure,  meritorious 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

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23.08.2003 prescribing uniform 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. 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, Karnataka, 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 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 of central 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 High Court of Karnataka 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 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 commercialization of professional  education.  It is on the line suggested by this court that the  Government of Kerala had made regulations both for the  purpose of 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 betterment of the institution.   

       The High Court of Kerala by its judgment of 23.08.2003  has fixed 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.  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.           It is submitted that if the scheme as evolved in Islamic  Academy of setting up of permanent Committees is not allowed,

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education which is already commercialized to some extent would  be wholly inaccessible to students coming from middle classes,  lower-middle classes and poor sections 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 11 framed by the State 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 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  11-Judge Bench judgment in Pai Foundation.  It is submitted  that if there are certain inherent 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 "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, indicated a reasonable and plausible  interpretation of the 11-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 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.   

       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

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       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 NRIs  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.   

       In paragraph 68 of the judgment in Pai Foundation the  use of the phrase ’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 education.  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 corner the seats.

       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 upon 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 of rich 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 based 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 forming part of the Government  quota and this would be a constitutionally permissible solution.

       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  

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may be of practical value to the Committees directed to be set  up by Islamic Academy:-

A.      ADMISSION:

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.

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 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.

3.      The result of following this procedure is that a  consortium 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. 4.      ............ 5.      ..............

B.      FEES:  

The Committee suggested by Islamic Academy and  the procedure 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.

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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 of fee 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 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 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 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. Andhyarujuna supported the judgment in Islamic  Academy of setting up permanent Committees for regulating  admission and fee structure.  Learned 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  combined 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 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

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be filled up by counseling by state agency, is held permissible.   

       With regard to the quota fixation, learned counsel submits  that paragraph 68 in Pai Foundation allows reservation of  quota for management and for 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.

       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 judgment 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 of fee 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 restriction 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 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 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 permit regulations to be framed for admission  in professional institutions by State agency to ensure admission  on merit.  In the absence of CET and centralized counseling,  private educational institutions would pick and choose candidates

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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.

       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.   

       Learned counsel pressed into service Article 51-A(j)  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 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  of Chhattisgarh (2005) 2 SCC 61 at 79 paragraph 90.

V A few concepts

       There are a few concepts which  should be very clear in  our minds at the very outset, as these are the concepts which  flow as undercurrents in the sea of issues surfacing for resolution  in all educational 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?  (iv) Would it make any difference if the  instructions imparted in such educational institutions relate to  professional or non-professional courses of study? Education         ’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

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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.I.T.,  (1976) 1 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.  It also connotes the  whole course of scholastic instruction which a person has  received\005. What education connotes is the process of training  and developing the knowledge, skill, mind and character of  students by formal schooling."

In ’India \026 Vision 2020’ published by Planning Commission  of India, 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 individual, provides new aspirations and develops new  values.  It strengthens competencies and develops commitment.    Education generates in an individual a critical outlook on social  and political realities and sharpens the ability to self- examination, self-monitoring and self-criticism."           "The term ’Knowledge Society’, ’Information Society’ and  ’Learning 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 clichi 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, p.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, he corroborated Bacon  and professed 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 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

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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 seeds of knowledge were germinated in the  minds of as many citizens as possible, with a view to enabling  them to perform their assigned roles on the stage of democracy.  [Dr. Zakir Hussain, as quoted by Justice A.M. Ahmadi, the then  Chief Justice of India, (1996) 2 SCC (J) 1, at 2-3.]

Under Article 41 of the Constitution, right to education,  amongst others, is obligated to be secured by the State by  making effective provision therefor. Fundamental duties  recognized by Article 51A include, amongst others,  (i) to  develop the scientific temper, humanism and the spirit of inquiry  and reform; and (ii) to strive towards excellence in all spheres of  individual and collective activity so that the nation constantly  rises to higher levels of endeavour and achievement.  None can  be achieved or ensured except by means of education. It is well  accepted by the thinkers, philosophers and academicians that if  JUSTICE, LIBERTY, EQUALITY and FRATERNITY, including social,  economic and political justice, the golden goals set out in the  Preamble to the Constitution of India are to be achieved, the  Indian polity has to be educated and educated with excellence.  Education is a national wealth which must be distributed equally  and widely, as far as possible, in the interest of creating an  egalitarian society, to enable the country   to rise high and face  global competition.  ’Tireless striving stretching its arms towards  perfection’ (to borrow the expression from Rabindranath Tagore)  would not be successful unless strengthened by education.

       Education is "\005continual growth of personality, steady  development of character, and the qualitative improvement of  life. A trained mind has the capacity to draw spiritual  nourishment from every experience, be it defeat or victory,  sorrow or joy.  Education is training the mind and not stuffing  the brain." (See Eternal Values for A Changing Society, Vol. III  Education for Human Excellence, published by Bharatiya Vidya  Bhavan, Bombay, at p. 19)    

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

       Education, accepted as a useful activity, whether for  charity or for profit, is an occupation.  Nevertheless, it does not  cease to be a service to 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(1)(g), 29(2) and 30(1): inter-relationship between  

       The right to establish 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

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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, is 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 institutions of their choice will enjoy  protection from such legislation. However, such institutions  cannot be discriminated 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.  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 mal-administer.   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 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 19(1)(g) and, therefore, subject  to control by clause (6) of Article 19.  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 linguistic, 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 19(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 choice’ 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 of non-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

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some amount of regulation as a condition of receiving grant or   recognition.  The  scope  of  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 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 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 107) ___ "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  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 117 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.   

’Minority’ And ’Minority Educational Institutions’ The term ’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 determining 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 determined  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, CJ.  According  to Khare, J., take the population of any State as a unit, find out  its demography and calculate if the persons speaking a particular  language or following a particular religion are less than 50% of  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  ’numerically less’.  However, she refused to take the State 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 determinable only by  reference 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

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rise to many a questions when it comes to defining ’minority  educational institution’.  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?

       In Kerala 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)  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 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.

       The learned Judges in Kerala 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 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 and culture of that minority.

       Chief Justice Hidayatullah, speaking for the Constitution  Bench in State of Kerala, Etc. v. Very Rev. Mother  Provincial, Etc., (1970) 2 SCC 417, has not used the  expression ’sprinkling’ but has explained the reason why that  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 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 se as also with other articles if only

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we understand that these two 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 operation of Article 30(1).  Pai Foundation has clearly  ruled in favour of the State (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 31 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 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, 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 students hailing from the  State in which the minority educational institution is established  should be present.  The management bodies of such institutions  cannot resort to the device of admitting 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 153).   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), 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 institution is  lost.  However, to borrow the words of Chief Justice S.R. Das (in  Kerala Education Bill) 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. Minority educational institutions:  classifiable in three          To establish an educational institution is a Fundamental  Right. Several educational institutions have come up. In Kerala  Education Bill, ’minority educational institutions’ came to be  classified into three categories, namely, (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

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restrictions.  The second category is most significant. Most of the  educational institutions would fall in that category as no  educational institution can, in modern times, afford to 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 followed as essential to  the grant of such aid or recognition. This Court clarified in  Kerala 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 of their choice’ must mean the right to  establish real institutions which will effectively serve the needs of  the community and scholars who resort to these educational  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 have  been dealt with meticulous precision coupled with brevity by S.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

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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, merit and excellence do not stand in need  of that degree thereof, 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(1).  However, a distinction is to be drawn between  unaided minority educational institution of the level of schools  and undergraduate colleges on one side and the institutions of  higher education, in particular, those imparting professional  education on the other side.  In the former, 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 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.

       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 instructions. Apart from other provisions, Article  19(6) is a clear indicator and so are clauses (h) and (j) of Article  51A.  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.  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

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accepted suggest that while recognition or affiliation may 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  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.

       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: "68.(I)  It would be unfair to apply the  same rules and regulations regulating  admission to both aided and unaided  professional institutions. It must be borne in  mind that unaided professional institutions are  entitled to autonomy in their administration  while, at the same time, they do not forego or  discard the principle of merit. It would,  therefore, be permissible for the university or  the Government, at the time of granting  recognition, to require a private unaided  institution to provide for merit-based selection  while, at the same time, giving the  management sufficient discretion in admitting  students. This can be done through various  methods.  

(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 of poorer and backward  sections of the society. The prescription of  percentage for this purpose has to be done by  the Government according to the local needs  and different percentages can be fixed for  minority unaided and non-minority unaided  and professional colleges. The same principles  may be applied to other non-professional but  unaided educational institutions viz. graduation  and postgraduation 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 adoption of a  rational procedure of selection. A rational fee  structure should be adopted by the  management, which would not be entitled to

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charge a capitation fee. Appropriate machinery  can be devised by the State or university to  ensure that no capitation fee is charged and  that there is no profiteering, though a  reasonable surplus for the furtherance of  education is permissible. Conditions granting  recognition or affiliation can broadly cover  academic and educational matters including  the welfare of students and teachers.

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 in 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 excellence 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.

       In Islamic 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 para 68 is law  laid down by the majority, 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

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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 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 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 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 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  conducted by the institution, or in the case of  professional colleges, by government  agencies."

(emphasis by us)

       In Islamic Academy, vide para 70, sub-para (2)(i)(a),  the abovesaid passage has been quoted as under:-         "Admission to professional colleges  should be based on merit by a common  entrance test conducted by the government  agencies".

(emphasis by us)

       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  colleges.   

While expressing their appreciation of the task performed

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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 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.

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  Kerala Education Bill and stated the three categories of  minority educational institutions as classified and dealt with  therein.  The 7-Judge Bench decision in Kerala Education Bill  still holds the field and has met the approval of 11-Judge Bench  in Pai Foundation.  We cull out and state what Pai Foundation  has to say about such category of institutions:-

(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(1) 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(1) "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.

       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

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

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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 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 ingredients 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  objectives, any regulation accompanying affiliation or recognition  must satisfy the triple tests: (i) the test of resonableness and  rationality, (ii) the test that the 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.           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 nor in the Constitution Bench decision in Kerala  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

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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.  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 19(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 opinion  in Pai 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 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 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 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 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

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scheme evolved in 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 minority and  non-minority categories.  That part of the judgment in  Islamic  Academy, in our considered opinion, does not lay down the  correct law and runs counter to Pai Foundation.

NRI seats Here itself we are inclined to deal with the question as to    seats allocated for Non-Resident Indians (’NRI’, for short) or NRI  seats.  It is common knowledge that some of the institutions  grant admissions to certain number of students under such  quota by charging a higher amount of fee.  In fact, 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  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 elsewhere on  education of their children should rather reach their own  motherland.  A limited reservation of such seats, not exceeding  15%, in our opinion, may be made available to NRIs 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 NRIs, 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 Islamic  Academy’s direction to regulate.

Our answer to the first question is that neither the policy  of reservation can be enforced by the State nor any quota or  percentage of admissions can be carved out to be appropriated  by the State in a minority or non-minority unaided educational  institution.  Minority institutions are free to admit students of  their own choice including students of non-minority community  as also members of their own community from other States,  both to a limited extent only and not in a manner and to such an  extent that their minority educational institution status is lost.  If  they do so, they lose the protection of Article 30(1). Q.2.  Admission procedure of unaided educational  institutions.             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.

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       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 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 level possessed by individuals  collectively constitutes national wealth.   

       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 admissions will be only to a limited extent that is like a  ’sprinkling’ of such admissions, the term we have used earlier  borrowing from Kerala 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 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.  If the same candidate is required to appear in  several tests, he would be subjected to unnecessary and  avoidable expenditure and inconvenience.  There is nothing  wrong in an entrance test being held for one group of institutions  imparting same or similar education.   Such institutions situated  in one State or in more than one State may join together and  hold a common entrance test or the State may itself or through  an agency arrange for holding of such test. Out of such common  merit list the successful candidates can be identified and chosen  for being allotted to different institutions depending on the  courses of study offered, the number of seats, the kind of  minority to which the institution belongs and other relevant  factors. Such an agency conducting 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.  Such choice can be exercised from out of list of  successful candidates prepared at the CET without 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

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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 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 admissions on a  transparent basis.   Till regulations are framed, the admission  committees can oversee admissions so as to ensure that merit is  not the casualty.  

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 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).

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 at 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 practices being adopted  by many institutions to earn large amounts for their private or  selfish ends. If capitation fee and profiteering is to be checked,  the method of admission has to be regulated so that the  admissions are based on merit and transparency and the  students are not exploited.  It is permissible to regulate  admission and fee structure for achieving the purpose just  stated.          

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.

Q.4.    Committees formed pursuant to Islamic Academy

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       Most vehement attack was laid by all 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 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 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 educational  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 questioned 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. 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 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 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.

       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

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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.

       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.  

       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.   

       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.

       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

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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.   

       We make it clear that in case of any individual institution,  if any of the Committees is found to have exceeded its powers  by unduly interfering in the administrative and financial matters  of the unaided private professional institutions, the decision of  the Committee being quasi-judicial in nature, would always be  subject to judicial review.  

       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.  

Epilogue

       We have answered the four questions formulated by us in  the manner indicated hereinabove.  All other issues which we  leave untouched, may be dealt with by the regular Benches  which will take up individual cases for decision.

       We have placed on record in the earlier part of this  judgment and, yet, before parting we would like to reiterate,  that certain recitals, certain observations and certain findings in  Pai Foundation are contradictory inter se and such conflict can  only be resolved by a Bench of a coram larger than Pai  Foundation.  There are several questions which have remained  unanswered and there are certain questions which have propped  up post Pai Foundation and Islamic Academy.  To the extent  the area is left open, the Benches hearing individual cases after  this judgment would find the answers. Issues referable to those  areas which are already covered by Pai Foundation and yet  open to question shall have to be answered by a Bench of a  larger coram than Pai Foundation. We leave those issues to be  taken care of by posterity.  

        We are also conscious of the fact that admission process in  several professional educational institutions has already  commenced.  Some admissions have been made or are in the  process of being made in consonance with the schemes and  procedures as approved by Committees and in some cases  pursuant to interim directions made by this Court or by the High  Courts.  This judgment shall not have the effect of disturbing the  admissions already made or with regard to which the process  has already commenced.  The law, as laid down in this  judgment, shall be given effect to from the academic year  commencing next after the pronouncement of this judgment.

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       It is for the Central Government, or for the State  Governments, in the absence of a Central legislation, to come  out with a detailed well thought out legislation on the subject.   Such a legislation is long awaited.  States must act towards this  direction.  Judicial wing of the State is called upon to act when  the other two wings, the Legislature and the Executive, do not  act. Earlier the Union of India and the State Governments act,  the better it would be.  The Committees regulating admission  procedure and fee structure shall continue to exist, but only as a  temporary measure and an inevitable passing phase until the  Central Government or the State Governments are able to  devise a suitable mechanism and appoint competent authority in  consonance with the observations made hereinabove.  Needless  to  say,  any  decision  taken  by  such  Committees  and  by the  

Central or the State Governments, shall be open to judicial review in  accordance with the settled parameters for the exercise of such jurisdiction.                     Before parting, we would like to place on record our appreciation of  the valuable assistance rendered by all the learned senior counsel and other  counsel appearing in the case and who have addressed us, highlighting very  many aspects of the ticklish issues in the field of professional education  which have propped up for decision in the light of the 11-Judge Bench  decision in Pai Foundation and Constitution Bench decision in Islamic  Academy. But for their assistance, the issues would have defied resolution.

       All the petitions, Civil Appeals and IAs shall now be listed before  appropriate Benches for hearing.