MODERN DENTAL COLLEGE AND RESEARCH CENTRE & ORS. v. STATE OF MADHYA PRADESH & ORS.

guaranteed u~der Article 19(1)(g) of the Consiitution, and if so, what .. _·. are the features it encompasses? The second stage would be to find otit •.. • - whether the statuie,.\Xhich is impugned, iniposes'any restrictions on .- . ..,..the right given to the appellants?, Ifthere 11re restrictions, the third p~ser ' would be ~whether such restr~ctions are '.reasonable '.and, therefore: . protecied under. clause ( 6) of Article 19 of.the Constitution? ·•.· · ... · · · · E -<. - as . 32. Insofar the fir~t part of the question is concerned, it doei not · .- '.pose any ~roplem and the atJS\~er·goes in fav9ur of the appellant$; We . may7 recapitulate . .. here. .ihat • Article . 26.oft!te . . .. Constitlltiori . . . . gives . freedom . . 'to eve·ry_ religious denomination or any section. thereof by conferring • . certain rights which-include right to.establish and maintain institutions - F . ·for religious and charitable purposes•. Thus;1 in~ofar as religious denominations or,any section. thereof are concerned, they were given · right to-establish and maintain instituiionsfor religious.and charitable purposes making it a fundam~ntai right. Likewi~e,Article 30 confers . upon minorities func!amental .ri°ght to.establish and adm"fnister educationaL G ihstitutions., lnsofa!,asArticle 26 isconc~~ed, it comes under the caption 'Right to Freeefom ofReligi01t'-. As far.as Anicle 30 is concerned, it is UDder.the heading 'Cultl1rqla'ndEducaiio11al Rights_'. Thus, rights \if . the ininorities'to.estaolish and adniinister educational- institutions was ~· as .always recognised fu~damental rights: Further, the right of private. '· unaided picifessioilal institutions tO .establish and manage educational , ~ . . --·: • • :· .. ._ • ' I;•·~-, ·:·:· ._·_, ·:·' .,_~···'·;·;··:· H f ·•__ • ·, .- ,

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 627 STATE OF MADHYA PRADESH (A.K. SIKRI, J.]

institutions was not clearly recognised as a fu11damei1tal right covered under A1iicle 19( 1)(g) and categorically 1·ejected by the Constitution Bench ·of this Court comprising of five Judges in the case of Unni ·Krishnan. It was held in paragraph 198 of the judgment that ''(11•)e are. therefoi·e. of the opinion adopting the line of reasoning in State of Bombay v. RMD C/u1111arba11~wa/a & Anr. 11 that imparting education cannot be treated as trade or business. Educatioi1 ct111110t be al/011•ed to be converted into commerce nor cun petitioner:1· seek to obtain the said result by relying 011 the wider 111ea11i11g (If "occupation'". In that case, this Court also rejected the argument that the said activity could be classified as a 'profession·. However, the right of professional institutions 'to establish and manage educational institutions was finally c regarded as an 'occupation' befitting the re.cognition of this right as a fundamental right under Article 19( 1)(g) in 1:M.A. Pai Foundation in - the following words: · ''25. The est~blishment aod running of an educational institution where a large nu111be1: of persons are employed as teachers or D administrative staff, and an activity is carried on that results in the imparting of knowledge to the students, must necessarily be regarded as an occupation, even if there is no. element of profit generation. It is difficult to comprehend that education, per se, will not fall under any of the four expressions in A1iicle 19( I )(g). E ·'Occupation" would be an activity of a person undertaken as a means of livelihood or a mission in life. The above-quoted observations in Sadan Singh case. ( 1989) 4 SCC 155, correctly interpret the expression ''occupation" in Aiiicle.19( I )<g).''

33Copy pinpoint33. Having recognised it as an :occupation' and giving the status of a fundamental right, the Court delineated four specific rights which F encompass . right to.occupation, namely, ·r (i) a right to admit students; . (ii) a right to set up a reasonable fee structure; (iii) a right.to appoint staff (teaching and non-teaching); and (iv) a right io fake action if there is dereliction ofduty on the pa1i ofl!-ny employees. In view of the aforesaid recognition of the right to admit the students and a right to set up a G reaso.nable fee strncture treating as part of occtipation which is recognised as fundamental right under A1iicle 19(1 )(g) of the Constitution, the appellants have easily crossed the initial hurdle. Here comes the second facet of this issue, viz. -what is the scope of this right of occupation? 11 1957 SCR 874 H

628 SUPREME COURT REPORTS [2016) 3 S.C.R.

34Copy pinpoint34. It becomes necessary to point out that, whil~ treating the managing of educational institution as an 'occupation', the Court was categorical that this activity could nflt..,be treated as 'business' or profession'. This right to carry on the occupation that the education is, the same is no~. put at p11r with other occupations or business activities or even other professions. It is a category apart which was carved out by B this Court in T.M.A. Pai Fou11tlatio11. There.was a specific purpose for not doing so. Education is treated as a noble 'occupation' on '110 profil no loss' basis. Thus, those who establish and are managing the educational institutions are not expected to indulge in profiteering or commercialise this noble activity. Keeping this objective in mind, the c Court diq not give complete freedom to the educational institutions in respect of right to admit the students and also with regard to fixation of fee. As far as admission of students is concerned, the Court was . c.ategorical that such admissions have to be on the basis of merit when it comes to higher education, particularly in professional institutions.

35Copy pinpoint35. Ms. Vibha Datta Makhija is right in her submission that the significant feature of T.M.A. Pai Fou11tlatio11 is that it expounded on the nature and extent of its control on the basis of level of education. When it comes to higher education, tln1t too in professional institutions, merit has to be the sole criteria. This is so explained in paragraph 58 of the judgment which reads as under: · E "58. For admission into any professional institution, merit must play an important role. While it may not be normally possible to . judge the merit of the applicant who seeks admission into a school, while seeking admission to a professional institution and to become a competent professional, it is necessary that meritorious candidates are not unfairly treated or put at a disadvantage by preferences shown to less meritorious but more influential applicants. Excellence in professional education would ·require that greater emphasis be laid on the l!lerit of a student seekilig admission. Appropriate regulations for this purpose may be made keeping in view the other obser.vations made in this judgment in the context of admissi011s.to unaided institutions." : · · ·

36Copy pinpoint36. In order to see that 1~crit.is adjudged suita~ly and appropriateiy, · the Court candidly laid down that procedure for admission shoul9 be so . devised which satisfies the triple test of being fair, transparent and non- H . exploitati,ve. The ne:-t question was·as to how tl.1e aforesaid objective

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 629 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

could be achieved? For determining such merit, the Court showed the A path in paragraph 59 by observing that such merit should be determined either by the marks that students obtained at qualifying examination or at the CET conducted by the institutions or in the case of professional colleges, by Government agencies. Paragraph 59 suggesting these modes reads as under: B "'59. Merit is usually determined, for admission to professional and higher education colleges, by either the marks that the student obtains at the qualifying examination or school-leaving certificate stage followed by the interview, or by a common entrance test conducted by the institution, or in the case of professional colleges, by government agencies." c This paragraph very specifically authorises CET to be conducted by Government agencies in the case of professional colleges. 3 7. In order to ensure that the said CET is fair, transparent and merit based, T.M.A. Pai Fo.mulatio11 also permitted the Government to D frame Regulations for unaided private professional educational institutions. Paragraphs 67 and 68 which permit framing of such regulations are reproduced below: :'67. We now come to the regulations that can bi: framed relating to private.unaided professional institutions. E

68. It would be unfair to apply the same rules and regulations regulating admission to both aided and unaided professional institutions. It must be borne in mind that unaided professional institutions are entitled to autonomy in their administration while, at the same time, they do not forego or discard the principle of F It merit. would, therefore, be permis~ible forthe university or the Government, at the time of granting recognition, to require a private unaided institution to provide for merit-based selection while, at the same time, giving the management sufficient discretion in admitting students. This can be done through various methods. For instance, a certain percentage of the seats can lie reserved G 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 (he college concerned for.admission, while the rest of the seats mt1y be filled up gn the basis of counselling by the State agency. This will incidentally take care of H

630 SUPREME COURT REPORTS (2016] 3 S.C.R.

A poorer and backward sections of the society.The prescription of percentilge for this ptfrpose has to be done by the Government according to the local needs and different percentages can be fixed for minority unaided aild non-minority unaided and professional colleges. The samcprinciples may be applied to other non-professional but unaided educational institutious viz. graduation B and post-graduation non-professional colleges or institutes."'

38Copy pinpoint38. A plea was raised by the appellants that by exercising the power to frame Regulations, the State could not usurp the very function of conducting this admission test by the educational institutions. It was argued that it only meant that such a CET is to be conducted by the c educational institutions themselves and the Government could only frame the Regulations to regulate such admission tests to be conducted by the educational institutions and could not take away the function of holding the CET.

39Copy pinpoint39. This argument has to be rejected in vi~w of the ui1ambiguous D al]d categorical 'interpretation given by the Snpreme Court. in P.A. lndmdllr ~vith respect to certain observations. particular!) in paragrapl! 68 in 1:M.A. Pai Fo1111dation. In this behalf, \Ve w-0uld like to recapitulate that in T.M.A. Plli Fo1111datio11, a Bench of eleven Judges. dealt with the issues of scope of right to set up educatio1rn I institutions by private aided or unaided, minority or non-minority· institutions _and the extel)t of Government regulation of the said right. _It was held that the ·right to establish and administer an institution included the right to admit students and to set up a reasonable fee structure. But thf! said right could be regulated to ensure maintenance of proper academic. standards, atmosphere and infrastructure. Fixing of rigid fee -structure, dictating the formation and composition of a governing body, compulsory nomination of teachers and staff for appointment or no111inating students for admissions would be unacceptable restrictions. However, occupation of education was not business but profession involving charitable activity. The State cai1 forbid charging of capitation foe and profiteering. The G object of setting up educational institution is not to make profit. There could, however, be a reasonable rt:venue surplus for development of education. For admission, merit must play an important role. The State or the University could require private unaided institution to provide for merit based selection while giving sufficient discretion in admitting student.s. Certain percentage of scats could b':_n:servcd for admission H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v: 631 STATE OF MADHYA PRADESH [A.K. SIKRl, J.)

by management out of students who have passed CET held by the institution or by the State/University Interpretation of ce1tain observations in paragraph 68 of the judgment in T.llf.A. Pai Fo1111tlatio11 has been a matter of debate to which we advert to in detail hereinafter.

40Copy pinpoint40. As pointed out above. immediately after the judgment in.T.M.A. Pai Fo1111datio11, a gro,up of writ petitions were filed in this Court, which were dealt with by· a Bench or' five judges in Is/({111ic Ac({t/emy of Ed11c({fio11. Four of the Judges were the same who were party to the judgment in 1:M.A. Pai Fou11t/({fio11. The issue considered was the extent of autonomy in fixing the fee structure and ma~•n·g·admissioris. This Court held that while there was autonomy with the institutions to fix fee structm~e, there could be no profiteering and no capitation foe could c be charged as imparting of education was essentially charitable in nature. This required setting up of a Committee by each of the States to decide whether fee structure proposed by an institute was justified and did not amount to profiteering or charging of capitation fee. The fee so fixed shall be binding for three years at the end of which a revision could be sought.

41Copy pinpoint41. With regard to the autonomy in admission, it was noted that the earlier judgment kept in mind the 'the sad reality that there are a large number of professional colleges which indulge i11 projiteering and/ or charging capitation fees'. For this reason. it was provided that admission must be based on merit. It was impossible to control profiteering/charging ofcapitation fee unless admission was on merit. It was further observed that requiring a student to appear at more thai1 one entrance test led to great hardship as the students had to pay application fee for each institute, arrange for and pay for the transport to appear in the individual tests. Thus, management could select students either on the basis of CET conducted by the State or association of all colle.ges for a particular type, for example, medical, engineering or technical etc. Some of the institutions have their own admission procedure since long against which no finger had ever been raised and no complaint . made regarding fairness and transparency - which claim was disputed. G Such institutions as had been established for 25 years could apply for exemption to the Comn1ittee directed by the Cot1rt to be constituted. This Court directed the State Governments to appoint permanent Committees to ensure that the test conducted by association of colleges was fair and transparent. H

632 SUPREME COURT REPORTS [2016] 3 S.C.R.

42Copy pinpoint42. The matter was then considered by a larger Bench of seven judges in P.A. ltwnular. It was held that the two Committees for monitoring admission procedure and determining fee structure as per the judgment in Islamic Academy of Education were permissible as regulatory_ measures aimed at protecting the students community as a whole as also theminority themselves in maintaining required standards B of prqfessional education on non-exploitative tenns. This did not violate Article 30( I) or Article 19( l )(g). It was observed that unless the admission procedure and fixation offees is regulated and controlled at the initial stage, the evil of W(/i.lir practice of granting admission on available seats guided by the paying capacity of the candidates c would be impossible to curb (emphasis added). On this ground, suggestion of the institutions to achieve the purpose for which Committees had been set up by post-audit checks after the institutions adopted their own admission procedure and fee structure were rejected. The Committees were, thus, allowed to continue for regulating the admissions and the fee structure until a suitable legislation or regulations framed by the States: It was left to the Central Governments and the State Governments to come out with a detailed well thought out legislation setting up a suitable mechanism for regulating admission procedure and fee structure. Paragraph 68 in T.M.A. Pai Fo111u/atio11 case was explained by stating that observations permitting the management to reserve certain seats was meant for poorer and backward sections as per local needs. It did not mean to ignore the merit. It was also held that CET coulrl be held, otherwise merit becomes casualty. There is, thus, no bar to CET being held by a State agency when law so provides.

43Copy pinpoint43. Thus, the contention raised on behalf of the appellants that the private medical colleges had absolute right to make admissions or to fix fee is not consistent with the earlier decisions of this Court. Neither merit could be compromised in admissions to professional institutions nor capitation fee could be permitted. To achieve these objects it is open to the State to introduce regulatory measures. We are unable to accept the submissions that the State could intervene only after proving that merit was compromised or capitation fee was being charged. As observed in the earlier decisions of this Court. post-audit measures would not meet the regulatory requirements. Control was required at the initial stage itself. Therefore, our answer to the first question is that though H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 633 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

'occupation' is a fundamental right, which gives right to the educational A ·institutions to admit the students and also fix the fee, at the same time, scope of such rights has been discussed and limitations imposed thereupon by the aforesaid judgments themselves explaining the nature of i imitations on thes_e rights.

44Copy pinpoint44. Insofar as the second question is concerned, it again can be B easily answered by accepting-that the impugned legislation·and Rules impose certain restrictions. Question is, whether these are in consonance with the law laid down in the aforesaid judgments? This disc~1ssion relates to the third stage ofjudicial review where we are called upon to decide as to whether these restrictions are ·,:easonable '. c

45Copy pinpoint45. We may note that while upholding the regulatory provision for admissions, the High Court has observed: "27. We are of the considered opinion that Section 6 read with Section 3 (d) of the Act, 2007, which provide that admissions to sanctioned intake shall be on the basis of common entrance test followed by centralised counselling by the State Government or by any agency authorised by the State Government are in consonance with the judgments of the Supreme Court in T.M.A. Pai Roundation v. Stale of Karnataka (2002) 8 SCC 364 and PA. lnamdar and Ors. v. State of Maharashtra and Ors. (2005) 6 SCC 535. Section 2 of the Act, 2007 makes it clear that it only applies to private unaided educational institutions which impart professional education. Hence, V:e will have to examine the judgments in T.M.A. Pai Foundation and PA. Inamdar (supra), to find out whether these judgments permit admission to professional educational institutions on the basis of merit as determined in a F common entrance test followed by centralised counselling by the State Government or its agencies. xx xx 28 ...... It is thus clear from Para 58 of the judgment that in TMA Pai Foundation (supra), quoted above that the Supreme Court has G held that the applicant who seeks admission to a professional educational institution in order to become a competent professional must be a meritorious candidate and he cannot be put at a disadvantage by preferences shown to less meritorious but more influential applicants and, therefore, excellence in professional H

634 SUPREME COURT REPORTS [2016] 3 S.C.R.

A education would require that greater emphasis be laid oi1 the merit of the students seeking admission. It will be further clear from · Para 59 of the judgment in TMA Pai Foundation (supra). quoted above, that merit is usually determined for admission to a professional educational institution either by the marks that the students obtain at qualifying examination or at a common entrance B test conductec:I by t)1e institution or 'in the case of professional . colleges, by Government agencies". In TMA Pai Foundarion (supra), therefore, the Supreme Court was of the view that merit for admission to a professional institution could be determined by common entrance test conducted by the Government agencies." c 46. Referring to paragraphs 67 and 68 in T.M.A. Pai Fin11u/atio11, it was observed: "29 ...... It \viii be clear from the aforesaid portio1i of the judgment in TMA Pai Foundation (supra), that unaided professional educational institutions are entitled to autonomy in admissions but they cannot forego or discard the principle of merit and it would therefore be permissible for the Government to require the private a unaided educational 1nstituti9ns to provide for merit based admission while at the same time giving the inanagement sufficient discretion in admissions. In the aforesaid portion of the judgment in TMA Pai Foundation (supra), the Supreme Court has further held that this can be ensured through various methods and one method is by providing that certain percentage of seats can be reserved for admission by the management out of those students who have passed the· common entrance test held by itself or by the State and have applied to the college concerned for admission, while the rest of the seats may be filled up on the basis of counselling by the State agency. Here also, the judgment of the Supre'me Co[1rt in TMA Pai Foundation (supra), is clear that in the seats reserved for admissions by the management, only those students who have passed the common entrance test held by the management or by the State can be admitted. xx xx xx

31. We are unable to accept the aforesaid submission of Mr. Verma and Mr. Tankha. In PA. lnamdar (supra), the Supreme Court dealt with the admission proced_ure of unaided professional H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 635 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

educational institutions, both minority and non-minority, in A Paragraphs 133 to 138 at Pages 603,604 and 605 of the SCC. In Paragraph 134 in P.A. lnamdar (supra), the Supreme Court has held that for professional educational institutions, excellence in admission and maintenance of high standard are a must and to fulfil these objectives, the State can and rather must in the national B interest step in because the education, knowledge and learning possessed by individuals collectively constitute national wealth and in Paragraph 135 of the judgment in PA. lnamdar (supra), the Supreme Court has further held that in minority professional educational institutions also, aided or unaided, admission should be at the State Level and transparency and merit have to be assured c in admissions. In Paragraphs 136 and 137 in PA. lnamdar (supra), the Supreme Court has observed that admissions in professional educational institutions can be made on the basis of a common entrance test either conducted by the institutions joined together or by the State itself or an agency for holding such test." D

47Copy pinpoint47. After referring to paragraphs 136 and 137 in P.A. bumular, it was observed: "It will be thus clear from the Paragraphs 136 and 137 of the judgment in PA. lnamdar (supra), quoted above, that admissions to private unaided professional educational institutions can be made on the basis of merit of candidates determined in the common entrance test followed by centralised counseling by the institutions imparting same or similar professional education together or by the State or by an agency which must enjoy utmost credibility and expertise and that the common entrance test followed by centralised counselling must satisfy the triple test of being fair, transparent and non-exploitative. Thus, the judgments of the Supreme Court in TMA Pai Foundation and PA. lnamdar (supra), permit holding of a common entrance test for determination of merit for admission to private unaided professional educational institutions by the State as well as any agency which enjoy utmost · G credibility and expertise in the matter and which should ensure transparency in merit.

34. Sections 3(d), 6 and 7 of the Act, 2007 by providing that the common entrance test for determining merit for admissions in the private unaided professional educational institutions by a common H

636 SUPREME COURT REPORTS [2016] 3 S.C.R.

A entrance test to be conducted by the State or by an agency authorised by the State do not interfere with the autonomy of private unaided professional educational institutions, as such private professional educational institutions are entitled to collect the fees from the students admitted to the institutions on the basis of merit, appoint their own staff (teaching and non-teaching), discipline and 8 remove the staff, provide infrastructure and other facilities for students and do all such other things as are necessary to impart professional education to the students. Sections 3 (d), 6 and 7 of the Act, 2007, therefore, do not impinge on the fundamental right to carry on the occupation of establishing and administering c professional educational institutions as an occupation. The only purpose of Sections 3 (d), 6 and 7 of the Act, 2007 is to ensure that students of excellence are selected on the basis of a common entrance test conducted by the State or an agency authorised by the State and that students without excellence and merit do not make entry into these professional educational institutions through malpractices and influence. As has been held both in the judgments in T.M.A. Pai Foundation and PA. .lnamdar (supra), the right of private unaided professional educational institutions to admit students of their choice is subject to selection of students on the basis of their merit through a transparent, fair and non-exploitative procedure. In our considered opinion therefore, Sections 3 (d), 6 and 7 of the Act, 2007 do not in any way violate the fundamental right of citizens guaranteed under Article 19( I )(g) of the Constitution. In view of this conclusion, it is not necessary for us to decide whether the provisions of Sections 3 (d), 6 and 7 of the Act, 2007 are saved by Article _l2ill of the Constitution or by the second limb of Article l2{fil of the Constitution relating to the power of the State to make a law for creation of monopoly in its favour in respect of any service." We are broadly in agreement with the approach adopted by the High Court having gone through the relied upon judgments which are discussed by us as well as in the earlier part.

48Copy pinpoint48. It would be necessary to clarify the position in respect of educational institutions run by minorities.Having regard to the pronouncement in T.M.A. Pai Fo11mlatio11, with lucid clarifications to the said judgment given by this Cout1 in P.A. /11a111dar, it becomes clear H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 637 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

that insofar as such regulatory measures are concerned, the same can be adopted by the State in respect of minority run institutions as well. Reliance placed by the appellants in the case of St. Stephen's College v. University of Delhi" may not be of much help as that case did not concern with professional educational institutions.

49Copy pinpoint49. At this juncture, we would like to deal with the arguments of the appellants that the provisions contained in the Act and the Rules have the effect of completely taking away the rights of these educational institutions to admit the students.

50Copy pinpoint50. It is well settled that the right under Article 19( I )(g) is not absolute in terms but is subject to reasonable restrictions under clause c (6). Reasonableness has to be determined having regard to the nature of right alleged to be infringed, purpose of the restriction, extent ofrestriction and other relevant factors. In applying these factors, one cannot lose sight of the Directive Principles of State Policy. The Court has to try to strike a just balance between the fundamental rights and the larger interest of the society. Court interferes with a statute if it clearly violates the D fundamental rights. The Court proceeds on the footing that the Legislature understands the needs of the people. The Constitution is primarily for the common man. Larger interest and welfare of student community to promote merit, achieve excellence and curb malpractices, fee and admissions can certainly be regulated. E

51Copy pinpoint51. Let us carry out this discussion in some more detail as this is the central issue raised by the appellants. DOCTRINE OF PROPORTIONALITY EXPLAINED & APPLIED: F

52Copy pinpoint52. Undoubtedly, the right to establish and manage the educational institutions is a fundamental right recognised under Article 19( I )(g) of the Act. It also cannot be denied that this right is not 'absolute' and is subject to limitations i.e. 'reasonable restrictions· that can be imposed by law on the exercise of the rights that are conferred under clause (I) of Article 19. Those restrictions, however, have to be reasonable. G Further, such restrictions should be 'in the interest of general public'. which conditions are stipulated in clause (6) of Article 19, as under: "(6) Nothing in sub clause (g) of the said clause shall affect the

" ( t 992) 1 sec sss H

638 SUPREME COURT REPORTS [2016] 3 S.C.R.

A operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law B relating to, (i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business, or

c (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."

53Copy pinpoint53. Another significant feature which can be noticed from the reading of the aforesaid clause is that the State is empowered to make any law relating to the professional or technical qualifications necessary for practicing any profession or carrying on any occupation or trade or business. Thus, while examining as to whether the impugned provisions of the statute and Rules amount to reasonable restrictions and are brought out in the interest of the general public, the exercise that is required to be undertaken is the balancing of fundamental right to carry on occupation on the one hand and the restrictions imposed on the other hand. This is what is known as 'Doctrine of Proportionality'. Jurisprudentially, 'proportionality' can be defined as the set of rules determining the necessary and sufficient conditions for limitation of a constitutionally protected right by a law to be constitutionally permissible. According to Aharon Barak (former Chief Justice, Supreme Court of Israel), there are four sub-components of proportionality which need to be satisfied 13 , a limitation ofa constitutional right will be constitutionally permissible if: (i) it is designated for a proper purpose; (ii) the measures undertaken to effectuate such a limitation are rationally connected to the fulfillment of that purpose; (iii) the measures undertaken are necessary in that there are no alternative measures that may similarly achieve that same purpose with a lesser degree of limitation; and finally (iv) there needs to be a

13 Proportionality: Constitutional Rights and Their Limitation by A haron Barak,

Cambridge University Press 2012. H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 639 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

proper relation ('proportionality stricto sensu 'or 'balancing') between the importance of achieving the proper purpose and the social importance of preventing the limitation on the constitutional right. S4. Modern theory of constitutional rights draws a fundamental distinction between the scope of the constitutional rights, and the extent of its protection. Insofar as the scope of constitutional rights is concerned, it marks the outer boundaries of the said rights and defines its contents. The extent of its protection prescribes the limitations on the exercises of the rights within its scope. In that sense, it defines the justification for limitations that can be imposed on such a right. SS. It is now almost accepted thatthere are no absolute constitutional c rights'.i and all such rights are related. As per the analysis of Aharon Barak 15 , two key elements in developing the modern constitutional theory ofrecognising positive constitutional rights along with its limitations are the notions of democracy and the rule of law. Thus, the requirement of proportional limitations of constitutional rights by a sub-constitutional law, i.e. the statute, is derived from an interpretation of the notion of democracy itself. Insofar as Indian Constitution is concerned, democracy is treated as the basic feature of the Constitution and is specifically accorded a constitutional status that is recognised in the Preamble of the Constitution itself. It is also unerringly accepted that this notion of democracy includes human rights which is the corner stone of Indian democracy. Once we accept the aforesaid theory (and there cannot be any denial thereof), as a fortiori, it has also to be accepted that democracy is based on a balance between constitutional rights and the public interests. In fact, such a provision in Article 19 itself on the one hand guarantees some certain freedoms in clause (I) of Article 19 and at the same time empowers the F " Though. debate on this vexed issue still continues and some constitutional experts claim that there are certain rights, albeit very few, which can still be treated as 'absolute'. Exaryiple~given are:

(a) Right to human dignity which is inviolable, (b) Right not to be subjected to torture or to be inhuman or degrading treatment or G punishment. Even in respect of such rights, there is a thinking that in larger public interest, the extent of their protection can be diminished. However, so far such attempts of the States have been thwarted by the judiciary. " Supra, note H

640 SUPREME COURT REPORTS [2016] 3 S.C.R.

A State to impose reasonable restrictions on those freedoms in public interest. This notion accepts the modern constitutional theory that the constitutional rights are related. This relativity means that a constitutional license to limit those rights is granted where such a limitation will be justified to protect public interest or the rights of other. Th is phenomenon -of both the ri.ght and its limitation in the Constitution - exemplifies the B inherent tension between democracy's two fundamental elements. On the one hand is the right's element, which constitutes a fundamental component of substantive democracy; on the other hand is the people element, limiting those very rights through their representatives. These twci constitute a fundamental component of the notion of democracy, c though this time in its formal aspect. How can this tension be resolved? The answer is that this tension is not resolved by eliminating the 'losi11g' facet from the Constitutioi1. Rather, the tension is resolved by way of a proper balancing of the competing principles. This is one of the expressions of the multi-faceted nature of democracy. Indeed, the inherent tension between democracy's different facets is a 'co11struc1ire 1e11siu11 ·. It D enables each facet to develop while harmoniously co-existing with the others. The best way to achieve this peaceful co-existence is through balancing between the competing interests. Such balancing enables each facet to develop alongside the other facets, not in their place. This tension between the two fundamental aspects - rights on the one hand and its limitation on the other hand - is to be resolved by balancing the two so that they harmoniously co-exist with each other. This balancing is to be done keeping in mind the relative social values of each competitive aspects when considered in proper context.

56. In this direction, the next question that arises is as to what criteria is to be adopted for a proper balance between the two facets viz. the rights and 1imitations imposed upon it by a statute. Here comes the concept of 'proporlio11ality ·. which is a proper criterion. To put it pithily, when a law limits a constitutional right, such a limitation is constitutional if it is proportional. The law imposing restrictions will be treated as proportional if it is meant to achieve a proper purpose, and if the measures taken to achieve such a purpose are rationally connected to the purpose, and such measures are necessary. This essence of Doctrine of Proportionality is beautifully captured by Chief Justice Dickson of Canada in R. v. Oakes 1b, in the following H "' (1986) I SCR 103

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 641 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

words (at page 138): A "To establish that a limit is reasonable and demonstrably justified in a free and democratic society, two central criteria must be satisfied. First, the objective, which the measures, responsible for a limit on a Charter riglil or freedom are designed to serve, must be "of' sufficient importance to warrant overriding a B constitutional protected right or freedom ... Second ... the party invoking Section l must show that the means chosen are reasonable and demonstrably justified. This involves "a fonn ofproportionaiity test..." Although the nature of the proportionality test will vary depending on the circumstances, in each case courts will be required to balance the interests of society with those of individuals c and groups. There are, in my view, three important components of a proportionality test. First the measures adopted must be ; '".S.rationallyconnected to the.objective. Second, the means ... should impair "as little as possible" the right or freedom in question ...Third, there must be a proportionality between the effects of the measures D which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of "sufficient importance". The more severe the deleterious effects of a measure, the more important the objective must be ifthe measure is to be reasonable and demonstrably justified in a free and democratic society." E

57. The exercise which, therefore, to be taken is to find out as to 'whether the limitation of constitutional rights is for a purpose that is reasonable and necessary in a democratic society and such an exercise involves the weighing up of competitive values, and ultimately an assessment based on proportionality i.e. balancing of different interests. F

58. We may unhesitatingly remark that this Doctrine of Proportionality, explained hereinabove in brief, is enshrined in Article 19 itself when we read clause (1) along with clause (6) thereof. While defining as to what constitutes a reasonable restriction, this Court in plethora of judgments has held that the expression 'reasonable G restriction' seeks to strike a balance between the freedom guaranteed by any of the sub-clauses of clause ( l) of Article 19 and the social control permitted by any of the clauses (2) to (6). It is held that the expression 'reasonable' connotes that the limitation imposed on a person in the enjoyment of the right should not be arbitrary or of an excessive H

642 SUPREME COURT REPORTS [2016] 3 S.C.R.

A nature beyond what is required in the interests of public. Further, in order to be reasonable, the restriction must have a reasonable relation to the object which the legislation seeks to achieve, and must not go in excess of that object {See P.P. Enterprises & Ors. v. Union of India & Ors. ' 7 }. At the same time, reasonableness of a restriction has to be determined in an objective manner and from the standpoint of the interests B of the general public and not from the point of view of the persons upon whom the restrictions are imposed or upon abstract considerations {See Hanif Quareshi Mo/ul. v. State ofBilwr' 8 ). In M.R.F. Ltd. v. Inspector Kera/a Govt. 19 , this Cou11 held that in examining the reasonableness of a statutory provision one has to keep in mind the following factors: c (I) The Directive Principles of State Policy. (2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no D abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. E (4) A just balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). (5) Prevailing social values as also social needs which are intended to be satisfied by the restrictions. (6) There must be a direct and proximate nexus or reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions, and the object of the Act, then a strong presumption in favour the constitutionality of the Act wi II naturally arise.

59. Keeping in mind the aforesaid principles, we have adjudged the issue in our detailed discussion undertaken above. We may summarise the said discussion as follows:

11 (1982)2 sec 33 " 1959 SCR 629 H '"(1998) s sec 221

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 643 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

60. Undoubtedly, right to establish and administer educational institutions is treated as a fundamental right as it is termed 'occupation ·. which is one of the freedoms guaranteed under Article 19( I )(g). It was so recognised for the first time in T.M.A. Pai Fo1111datio11. Even while doing so, this right came with certain clutches and shackles. The Court made it clear that it is a noble occupation which would not permit commercialisation or profiteering and, therefore, such educational institutions are to be run on 'no profit no loss basis'. While explaining the scope of this right, right to admit students and right to fix fee was accepted as facets of this right, the 'court again added caution thereto by mandating that admissions to the educational institutions imparting higher education, and in particular professional education, have to admit c the students based on merit. For judging the merit, the Court indicated that there can be a CET. While doing so, it also specifically stated that in case of admission to professional courses such a CET can be conducted by the State. If such a power is exercised by the State assuming the function of CET, this was so recognised in T.M.A. Pai D Fo1111datio11 itself, as a measure of 'reasonable restriction on the said right'. Islamic Academy of Education further clarified the contour of such function of the State while interpreting T.M.A. Pai Fo1111datio11 itself wherein it was held that there can be Committees constituted to supervise conducting of such CET. This process of interpretative balancing and constitutional balancing was remarkably achieved in P.A. E l11amdar by not only giving its premature to deholding of CET but it went further to hold that agency conducted the CET must be the one which enjoys the utmost credibility and expertise in the matter to achieve fulfillment of twin objectives of transparency and merit and for that purpose it permitted the State to provide a procedure of holding a CET F in the interest of securing fair and merit based admissions and preventing maladministration.

61. We are of the view that the larger public interest warrants such a measure. Having regard to the malpractices which are noticed in the CET conducted by such private institutions themselves, for which plethora of material is produced, it is, undoubtedly, in the larger interest and welfare G of the students community to promote merit, add excellence and curb malpractices. The extent of restriction has to be viewed keeping in view all these factors and, therefore, we feel that the impugned provisions which may amount to 'restrictions' on the right of the appellants to carry on their 'occupation', are clearly 'reasonable' and satisfied the H

644 SUPREME COURT REPORTS [2016) 3 S.C.R.

A test of proportionality.

62. Apart from the material placed before the High Court, our attention has also been drawn to a recent report of the Parliamentary Committee to which we will refer in later part of this judgment. The report notes the dismal picture of exploitation in making admissions by B charging huge capitation fee and compromising merit. This may not apply to all institutions but if the Legislature which represents the people has come out with a legislation to curb the menace which is generally prevalent, it cannot be held that there is no need for any regulatory measure. "'An enactment is an organism in its environment "'0• It is rightly said that the law is not an Eden of concepts but rather an everyday c life ofneeds, interests and the values that a given society seeks to realise in a given time. The law is a tool which is intended to provide solutions for the problems of human being in a society.

63. The High Court in its judgment has analysed the provisions of the Act and found that provisions for merit based admissions and D procedure for fee fixation did not violate fundamental right of the private institutions to conduct admissions and to fix fee. We are in agreement with the said view and hold that provisions relating to admission as contained in the Act and the Rules are not offensive of Article 19( 1)(g) of the Constitution. E II.Re.: Provisions in the Act Rules relating to fixation of fee are unconstitutional being violative of Article 19(l)(g) of the Constitution?

64. We may again remind ourselves that though right to establish and manage educational institution is treated as a right to carry on F 'occupation', which is the fundamental right under A11icle 19( I )(g), the Court in T.M.A. Pai Fou11datio11 had also cautioned such educational institution not to indulge in profiteering or commercialisation. That judgment also completely bars these educational institutions from charging capitation fee. This is considered by the appellants themselves that G commercialisation and exploitation is not permissible and the educational institutions are supposed to run on 'no profit, no loss basis'. No doubt, it was also recognised that cost of education may vary from institution to institution and in this respect many variable factors may have to be taken

Justice Frankfutcr: 'A S).,,,posium of Stat11to1}' Construction: For1rard ', 3, I and L. 20

Rev. 365, 367 (1950) H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 645 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

into account while fixing the fee. It is also recognized that the educational A institutions may charge the fee that would take care of various expenses incurred by these educational institutions plus provision for the expansion of education for future generation. At the same time, unreasonable demand cannot be made from the present students and their parents. For this purpose, only a 'reasonable surplus' can be generated. B

65. Thus, in T.M.A. Pai Fou11datio11, P.A. Jnamdar and U1111i Kris/111a11, profiteering and commercialisation of education has been abhorred. The basic thread ofreasoning in the above judgments is that educational activity is essentially charitable in nature and that commercialisation or profiteering through it is impermissible. The said activity subserves the looming larger public interest of ensuring that the c nation develops and progresses on the strength of its highly educated citizenry. As such, this Court has been of the view that while balancing the fundamental rights of both minority and non-minority institutions, it is imperative that high standard of education is available to all meritorious candidates. It has also been felt that the only way to achieve this goal, D recognising the private participation in this welfare goal, is to ensure that there is no commercialisation or profiteering by educational institutions.

66. Jn view of the said objectives, this Cou1i had devised the means of setting up regulatory committees to oversee the process of admissions and fee regulations in the case of Islamic Academy of Education. E However, while indirectly approving the concept of regulatory bodies, this Court in P.A. lnanular was of the view that the scheme should not be directed by this Court exercising its powers under Article 142 of the Constitution, but must be statutorily regulated by the Center or the State laws. F

67. The principles enunciated in T.111.A. Pai Fo111ulatio11 and RA. Immular were applied in the case of Islamic Academy <!f Ed11catio11 where a challenge was mounted against the directions issued by the Director of Education to the recognised unaided schools under Section 24(3) read with Section 18(4) and 18(5) of the Delhi School Education Act, 1973 iuter alia directing that no fees/funds collected from parents/ G students would be transferred from the Recognised Unaided School Fund to a Society or Trust or any. other institution. After examining the directions and the accounting principles in detail, this Court upheld the said directions on the ground that it was open to the State to regulate the fee in such a manner so as to ensure that no profiteering or H

646 SUPREME COURT REPORTS [2016] 3 S.C.R.

A commercialisation of education takes place.

68. To put it in nutshell, though the fee can be fixed by the educational institutions and it may vary from institution to institution depending upon the quality of education provided by each of such institution, commercialisation is not permissible. In order to see that the educational B institutions are not indulging in commercialisation and exploitation, the Government is equipped with necessary powers to take regulatory measures and to ensure that these educational institutions keep playing vital and pivotal role to spread education and not to make money. So much so, the Court was categorical in holding that when it comes to the notice of the Government that a particular institution was charging fee c or other charges which are excessive, it has a right to issue directions to such an institution to reduce the same.

69. The next question that arises is as to how such a regulatory framework that ensures no excessive fee is charged by the educational institutions can be put in place. In the case of Modem School, this D Court upheld the direction of the Delhi High Com1 for setting up of a committee to examine as to whether fee charged by the schools (that was a case of fixation offee by schools in Delhi which are governed by the Delhi School Education Act, 1973) is excessive or not. The ratio of judgments in T.M.A. Pai Fo1111datio11 and Islamic Academy of E Education was discussed in the following manner: "16. The judgment in T.MA. Pai Foundation case was delivered on 31-10-2002. The Union of India, State Governments and educational institutions understood the majority judgment in that case in different perspectives. It led to litigations in several courts. F Under the circumstances, a Bench of five Judges was constituted in the case of Islamic Academy of Education v. State of Karnataka so that doubts/anomalies, if any, could be clarified. One of the issues which arose for determination concerned determination of the fee structure in private unaided professional educational institutions. It was submitted on behalf of the G managements that such institutions had been given complete autonomy not only as regards admission of students but also as regards determination of their own fee structure. It was submitted that these institutions were entitled to fix their own fee structure which could include a reasonable revenue surplus for the purpose of development of education and expansion of the institution. It H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v, 647 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

was submitted that so long as there was no profiteering, there could be no interference by the Government. As against this, on behalf of the Union oflndia, State Governments and some of the students, it was submitted, that the right to set up and administer an educational institution is not an absolute right and it is subject to reasonable restrictions. It was submitted that such a right is subject to public and national interests. It was contended that imparting education was a State function but due to resource crunch, the States were not in a position to establish sufficient number of educational institutions and consequently the States were permitting private educational institutions to perform State functions. It was submitted that the Government had a statutory c right to fix the fees to ensure that there was no profiteering. Both sides relied upon various passages from the majority judgment in T.M.A. Pai Foundation case. In view of rivlll submissions, four questions were formulllted. We lire concerned with the first question, 1wmely, whether the eduClltionlll institutions lire entitled to fix their own fee structure. It wlls lteld tlwt tltere could be 110 rigid fee structure. Ellc/1 institute must lwve freedom to fix its own fee structure, "fter !liking into llccount tlte need to ge11erllte funds to rw1 the institution llnd to provide fllcilities necessllry for the benefit of tlte students. Tiley must be llbfe to generllte surplus which must be used/or betterment mu/ growth of tlwt educlltionlll i11stitutio11. The fee structure must be fixed keeping in mind the i11fmstruct11re mu/fllcilities llVllifllble, investment 11wde, sllfllries pllid to tellcl1ers llnd Stllff,future pfllns for expl111sio11 llnd/or betterment ofinstitution subject to two restrictions, 1wmely, 11on-pro_fiteering mid no11- F cflargi11g of capitation fees. It was held that surplus/profit can be generated but they shall be used for the benefit of that educational institution. It was held that profits/surplus cannot be diverted for any other use or purposes and cannot be used for personal gains or for other business or enterprise. The Court noticed that there were various statutes/regulations which G governed the fixation of fee and, therefore, this Court directed the respective State Governments to set up a committee headed by a retired High Court Judge to be nominated by the Chief Justice of that State to approve the fee structure or to propose some other fee which could be charged by the institute. H

648 SUPREME COURT REPORTS [2016] 3 S.C.R.

A (emphasis supplied)"

70. This Court also held that for fixing the fee structure, following considerations are to be kept in mind: (a) the infrastructure and facilities available; B (b) investment made, salaries pa;J to teachers and staff; ( c) future plans for expansion and/or betterment of institution subject to two restrictions, viz. non-profiteering and non- charging of capitation fees." We may hasten to add here itself that Section 9 of the Act, 2007 c takes care of the aforesaid parameter in abundance.

71. As can be seen in T.M.A. Pai Fo1111datio11 case itself, this Court has observed thatthe Government can provide regulations to control the charging of capitation fee and profiteering. Question No.3 before the Court was as to whether there can be Government regulations, and if so, to what extent in case of private institutions? What the Court has observed in paragraph 57 of the judgment is instructive for our purposes and the same is reproduced below: "57. We, however, wish to emphasize one point, and that is that inasmuch as the occupation of education is, in a sense, regarded as charitable, the Government can provide regulations that will ensure excellence in education, while forbidding the charging of capitation fee and profiteering by the institution. Since the object of setting up an educational institution is by definition "charitable", it is clear that an educational institution cannot charge such a fee as is not required for the purpose of fulfilling that object. To put it differently, in the establishment of an educational institution, the object should not be to make a profit, inasmuch as education is essentially charitable in nature. There can, however, be a reasonable revenue surplus, which may be generated by the educational institution for the purpose of development of education and expansion of the institution." In paragraph 69 of the judgment, while dealing with this issue, this Court again observed that an appropriate machinery can be devised by the State or University to ensure that no capitation fee is charged and that there is no profiteering, though a reasonable surplus for the 1-1 furtherance of education is permissible. Although the Court overruled

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 649 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

the earlier judgment in U1111i Kris/man, which was to the extent of the A scheme framed therein and the directions to impose the same, part of the judgment holding that primary education is a fundamental right was held to be valid. Similarly, the principle thatthere should not be capitation fee or profiteering was also held to be correct.

72. When we come to the judgment in Islamic Acudemy of B Education, the first question framed by this Court was whether the educational institutions are entitled to fix their own fee structure. It is pertinent to note that this judgment brought in a Committee to regulate the fee structure which was to operate until the Government/appropriate authorities consider framing of appropriate Regulations. It is also material to note that in paragraph 20 the Comt has held that the direction to set c up Committees in the States was passed under Article 142 of the Constitution and was to remain in force till appropriate legislation was enacted by the Parliament.

73. The judgment in P.A. lmmular, though sought to review the judgment in Islamic Academy of Education, left the mechanism of having the Committees undisturbed. In paragraph 129 of the judgment in P.A. l11r111ular, th is Court observed that the State regulation shou Id be minimal and only to maintain fairness in admission procedure and to check exploitation by charging exorbitant money or capitation fees. In paragraph 140, it has been held that the charge of capital fee by unaided minority and non-minority institutions for professional courses is just not permissible. Similarly, profiteering is also not permissible. This Court went on to observe that it cannot shut its eyes to the hard realities of commercialisation of education and evil practices being adopted by many institutions to earn large amounts for their private or selfish ends. In respect of Question No.3 framed thereunder, which was with respect to the Government regulation in the case of private institutions, this Court, in paragraph 141 of the judgment, answered that every instittition is free to device its own fee structure, but the same can be regulated in the interest of preventing profiteering and no capitation fee can be charged. In paragraph 145, the suggestion for post-audit or checks is rejected if the institutions adopt their own admission procedure and fee structure since this Court was of the view that fixation of fees should be regulated and controlled at the initial stage itself.

74. It is in the aforesaid context that we have to determine the question as to whether the provisions relating to fixation of fee are violative H

650 SUPREME COURT REPORTS [2016] 3 S.C.R.

A of Article 19(1 )(g) of the Constitution or they are regulatory in nature, which is permissible in view of clause (6) of Article 19 of the Constitution, keeping in mind that the Government has the power to regulate the fixation of fee in the interest of preventing profiteering and further that fixation of fee has to be regulated and controlled at the initial stage itself. When we scan through Section 9 of the Act, :>fid7 from the aforesaid angle, we B find that the parameters which a'° !aid down therein that has to be kept in mind while fixing the fee are in fact the one which have been enunciated in the judgments of this Court referred to above. It is also significant to note that the Committee which is set up for this purpose, namely, Ad111ission and Fee Regulatory Co111111ittee, is discharging only c regulatory function. The fee which a particular educational institution seeks to charge from its students has to be suggested by the said educational institution itself. The Committee is empowered with a purpose to satisfy itself that the fee proposed by the educational institution did not amount to profiteering or commercialisation of education and was based on intelligible factors mentioned in Section 9(1) of the Act, 2007. D In our view, therefore, it is only a regulatory measure and does not take away the powers of the educational institution to fix their own fee. We, thus, find that the analysis of these provisions by the High Court in the impugned judgment, contained in paragraph 39, is perfectly in order, wherein it is observed as under: E "39. We are of the view that Sections 4 (I) and 4 (8) of the Act, 2007 have to be read with Section 9 (I) of the Act, 2007, which deals with factors which have to be taken into consideration by the Committee while determining the fee to be charged by a private unaided professional educational institution. A reading of Sub- F section (I) of Section 9 of the Act, 2007 would show that the location of private unaided professional educational institution, the nature of the professional course, the cost of land and building, the available infrastructure, teaching, non-teaching staff and equipment, the expenditure on administration and maintenance, a reasonable surplus required for growth and development of the professional institution and any other relevant factor, have to be taken into consideration by the Committee while determining the fees to be charged by a private unaided professional educational institution. Thus, all the cost components of the particular private unaided professional educational institution as well as the reasonable surplus required for growth and development of the

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 651 STATE OF MADHYA PRADESH [A.K. SIKRI, J.)

institution and all otherfactors relevant for imparting professional education have to be considered by the Committee while determining the fee_. Section 4 (8) of the Act, 2007 further provides that the Committee may require a private aided or unaided professional educational institution to furnish information that may be necessary for enabling the Committee to detern:iine the fees that may be charged by the institution in respect of each professional course. Each professional educational institution, therefore, ca~ furnish information with regard to the fees that it proposes to charge from the candidates seeking admission taking into account all the cost components, the reasonable surplus required for growth and development and other factors relevant c to impart professional education as mentioned in Section 9 (I) of th.e Act, 2007 and the function of the Committee is only to find out, after giving due opportunity of being heard to the institution as provided in Section 9 (2) of the Act, 2007 whether the fees proposed by the institution to be charged to the student are based . D on the factors mentioned in Section 9 (I) of the Act, 2007 and did not amount to profiteering and co.mmercialisation of the education. The word "determination" has been defined in Black's Law Dictionary, Eighth Edition, to mean a final decision by the Court or an administrative agency. The Committee, therefore, while· determining the fee.only gives the final approval to the proposed fee to be charged after being satisfied, t.hat it was based on the factors mentioned in Section 9 (I) of the Act, 2007 and there was .no profiteering or commercialisation pf education. The exp~essi9n 'fixation offees' in Section 4 (.I) of the Act, 2007 means that the fee to be charged from candidates seeking admission in the private professional educafional institution did not vary from student to student and also remained fixed for a certain period as mentioned in Section 4(8) of the Act, 2007.As has been held by the Supreme Court in Peerless Ge.neral Finance v. Reserve Bank of India (supra), the Court has to examine the substance of the provisions of the law to find out whether provisions of the law impose reasonable re.strictions in the interest of the general pub fie-. The provisions in Sections 4 (I ),4 (8) and9 of the Act, 2007 in substance empower the Committee to be only satisfied that the fee proposed by a private professional educational institutioi1 did not amount to profiteering or commercialisation of education and was based on H

652 SUPREME COURT REPORTS [2016] 3 S.C.R.

A the factors mentioned in Section 9 (I) of the Act, 2007. The provisions of the Act, 2007 do not therefore, violate the right of private professional educational institution to charge its own fee." Further reasons in support oflssue Nos. 1 & 2 which are common to both 'Issues: B Provisions relating to admission of students through Government test to be conducted by the State and the provision relating to fixation of fee by setting up a Committee to oversee that institutions are not charging a fee which amounts to capitation or profiteering are reasonable restrictions and do not suffer from any constitutional vice. c 75. The provision of the Act and the Rules are, therefore, in tune with the sentiments and directions contained in P.A. bwnular. The enactment in question does not run foul of any of the existing central laws. As far as the introduction of a CET at a national level is concerned, the same was not enforced during the period of operation of the State D statute. In any event,. there being no regulations regarding fixation or determination of fees of these institutions to ensure that the same does not allow commercialisation or profiteering, the State Legislature was well competent to enact provisions regarding the same.

76. At the time when the impugned legislations were enacted, the E Association of Private Colleges was already conducting its CET from the year 2005 till 2007. The private universities, however, had failed to comply the triple test laid down in T.M.A. Pai Fou11datio11 and a large number of complaints were received by the State authorities with regard to denial of admissions to meritorious students. In paragraphs 32 to 39 of the Reply filed by the State Government in the High Court of Madhya F Pradesh, it was duly mentioned that numerous complaints were being received with regard to the CET being conducted by the Association of the Private Colleges. It is worthwhile to note that even for the period after the coming in force of the State laws, under the interim order dated May 27, 2009 11 passed by this Court where the private colleges were G allowed to continue holding their examinations for 50% seats, excluding the NRI seats, a large number of complaints were received by the State. If a particular law is necessitated to curb malpractices and/or ills that have prevailed in a system, Legislature is fully competent to enact such laws, provided it meets the test of constitutionality, which it does in the

H ' 1 (2009J 7 sec 75 I

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 653 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

instant case. A

77. No doubt, we have entered into an era of liberalization of economy, famously termed as 'globalization' as well. In such an economy, private players are undoubtedly given much more freedom In economic activities, as the recognition has drawn to the realities that the economic activities, including profession, business, occupation etc. are B not normal forte of the State and the State should have minimal role therein. It is for this reason, many sectors which were hitherto State monopolies, like telecom, power, insurance, civil aviation etc. have now opened up for private enterprise. Even in the field of education State/ Government was playing a dominant role inasmuch as it was thought desirable that in a welfare State it is the fundamental duty, as a component c of Directive Principles, to impart education to the masses and commoners as well as weaker sections of the society, at affordable rates; Tt was almost tr~ated as solemn duty of the Government to establish adequate number of educational institutions at all levels, i.e., from primary level to higher education and in all fields including technical, scientific and professional, to cater to the va.ried sections of the society, particularly, when one-third of the population of the country is pov~rty stricken with large percentage as illiterate. With liberalization, Governme12t has encouraged establishments of privately managed institutions. It is done with 'the hope that the private sector will play vital role in the field of education with philanthropic approach/ideals in mind as this· activity is not to be taken for the purpose of profiteering, but more as a societal welfare.

78. It is, therefo~e, to be borne in mind is that the occupation of education cannot be treated at par with other economi.c activities. In this field, State cannot remain a mute spectator and has to necessarily step . F in in order to prevent exploitation, privatization and commercialisation.by the private sector. It would be pertinent to mentio)i that even in respect of those economic activities which are undertaken by the private sector essentially with the objective of profit making (and there is nothing bad about it), while throwing open such kind of business activities in the G hands of private secto.r, the State has introduced regulatory regime as well by providing Regulations under the relevant statutes .. NEED FOR REGULATORY MECHANISM:

79. Regulatory mechaµism, or what is called regulatory economics,

654 SUPREME COURT REPORTS [2016] 3 S.C.R.

A is the order of the day. hi the last 60-70 years, economic policy of this country has travelled from laissez faire to mixed econqmy to the present era of Iiberal economy with regulatory regime. With the advent of mixed economy, there was mushroom of public sector and some of the key industries like Aviation, Insurance, Railways, Elt!ctricity/Power, Telecommunication, etc. were monopolized by the State. License/permit B raj prevailed during this period with strict control of the Government even in respect of those industries where private sectors were allowed to operate. However, Indian economy experienced major policy changes i.n early 90s on LPG Model, i.e., Liberalization, Privatization and Globalization. With the onset of reforms to liberalize the Indian economy, c in July 1991, a new chapter has dawned for India. This period ofoconomi.c transition has had a tremendous impact on the overall economic development of almost all major sectors of the economy.

80. When we have liberal economy which is regulated by the market forces (that is why it is also tenned as market economy), prices of goods and services in such an economy are determined in a free price system set up by supply and demand. This is often contrasted with a planned economy in which a Central Government determines the price of goods and services using a fixed price system. Market economies .are also contrasted with mixed economy where the price system is not entirely free, but under some Government control or heavily regµ lated, which is sometimes combined with State led economic planning that is not extensive enough to constitute a planned economy.

81. With the advent of globalization and liberalization, though the market economy is restored, at the same time, it is also felt that market economies should not exist in pure form. Some regulation of the various,. F industries is required rather than allowing self-regulation by market forces. This intervention through regulatory bodies, particularly in pricing, is considered necessary for the welfare of the society and the economists point out that such regulatory economy does not rob the character of a market economy which still remains a market economy. Justification for G regulatory bodies even in such industries managed by private sector lies in the welfare of people. Regulatory measures are felt necessary to promote basic well-being for individuals iri need. It is because of this reason that we find Regulatory bodies in all vital industries like, Insurance, Electricity and Power, Telecommunications, etc.

82. Thus, it is felt that in any welfare economy, even for private H

. . MODERN DENTAL COLLEGE _~ND RESEARCH CENTRE v: 655 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

industries, there is a need for regulatory body and such a regulatory A framework for education sector becomes all the m<:>re necessary. It would be more so when, unlike other industries, ·commercialisation of education is not permitted as mandated by the Constitution of India, backed by various judgments of this Court to the effect that profiteering in the education is to be avoided. B

83. Thus, when there can be Regulators which can fix the charges fortelecom companies in respect of various services that such companies provide to the consumers; when Regulators can fix the premium and . 0th.er charges which the insurance companies are supposed to receive from the persons who are insured, when Regulators can fix the rates at which the producer' of electricity is to supply the. electricity to the c distributors, we fail to understand as to why there cannot be a regulatory mechanism when it comes to education whi.ch is not treated as purely economic activity but welfare activit)'. aimed at achieving more egalitarian. and prosperous society by empowering the people of this country by educating them. In the field of the education, therefore, this constitutional D goal remains pivotal which makes it distinct and special in contradistinction with other economic activities as the purpose of education is to bring about social transforma_tion and thereby a better society as it aims at creating better human resource which would contribute to the socie- economic and-political upliftment of the nation. The concept of welfare of the society \vould apply more vigorously in the field of education. E Even otherwise, for economist, .education as an economic activity, favourably compared to those of other economic concerns like agricult!;ire and industry, has its own inputs and outputs; and is thus analyzed in terms of the l!?sic economic tools like the laws of return, principle .of equimarginal utility and the public finance. Guided by these principles, the State is supposed to invest in education up to a point where the · -, socio-ec.onomic returns to .educat.ipn equal to those from other State expenditures, whereas the individual is guided in his decision to pay for a type of education by the possibility ofreturns accruable to him. All these considerations make out a case for setting up of a stable Regulatory mechanism. G

84. In this sense, when imparting of quality educatfon to cross" section of the society, particular)y, the weaker section and when such . private educational institutions are to rub shoulders with the state managed educational institl!tion to meet the challenge of the implementing ambitious · H

656 SUPREME COURT REPORTS [2016] 3 S.C.R.

A constitutional promises, the matter is to be examined in a different hue. It is this spirit which we have kept in mind while balancing the right of these educational institutions given to them under Article 19( I )(g) on the one hand and reasonableness of the restrictions which have been imposed by the impugned legislation. The right to admission or right to fix the fee guaranteed to these appellants is not taken away completely, as feared. B T.M.A. Pai Foundation gives autonomy to such institutions which remain intact. Holding ofCET under the control of the State does not impinge this autonomy. Admission is still in the hands of these institutions. Once iris even conceded by tbe appellants that in admission of students 'triple test' is to be met, the impugned legislation aims at that. After all, the sole c purpose of.holding CET is to adjudge merit and to ensure that admissions which are done by the educational institutions, are strictly on merit. This is again to ensure larger public interest. It is beyond comprehension that merely by assuming the power to hold CET, fundamental right of the appellants to admit the students is taken away. Likewise, when it comes to fixation of fee, as already dealt with in detail, the main purpose is that D State acts as a regulator and satisfies itself that the fee which is proposed by the educationl!I institution does not have the element of profiteering and also that no capitation fee etc. is charged. In fact, this dual function ofregulatory nature is going to advance the public interest inasmuch as those students who are otherwise meritorious but are not in a position to E ·meet unreasonable de1nands of capit11tion fee etc. are not deprived of getting admissions. The impugned provisions, therefore, are aimed at seek.ing laudable objectives in larger public interest. Law is not static, it has to change with changing times and changing social/societal conditions. Ill. Re.: Reservation of seats for Scheduled Castes, F Scheduled Tribes and Other Backward Classes

85. The' main arguments of the appellants, on th is issue, is that reservation in private sector is unknown to the constitutional scheme and the same has been held to be by this Court in the case of P.A. lnamdar. It is their submissions that to overrule the ratio of the judgment of this Court in P.A. l11anular, the Parliament amended the Constitution and introduced Article 15(5) . The said Article 15(5) reads as under: "15(5) Nothing in this article or in subcclause (g)of clause (1) of Article I 9 shall prevent the state from making any special provision, by law, for the adva11cement of any socially and educationally backward classes of citizens or for the Scheduled Castes or the H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 657 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

Scheduled Tribes in so far as such special provisions relate to their admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions referred to in clause( I) of Article30.

86. It is submitted that the caste based reservation policy or a social engineering policy of the State Government cannot be run on the shoulders of the private institutions which enjoy fundamental rights under Part III of the Constitution. It is submitted that the extent and the manner in which the right can be regulated has been set out under Article 19(6) of the Constitution. It is submitted that in P.A. In<mular, this Court has held that the provision for reservation in private institutions would be an c 'unreasonable' restriction and, therefore, wou Id fall fou I of 19( 1)(g) and would not be protected by 19(6) of the Constitution of India. It is, thus, submitted that the reasoning on the basis of which reservations in private institutions have been rejected is that this Court found that such restrictions would be 'unreasonable' restrictions and, therefore, D effectively violate Articles 14 and 15( I) of the Constitution oflndia. It is submitted that the provisions of Article 15(5) are not an exception to Article 14 and, therefore, when the Court has held that the said reservations in private institutions are unreasonable, the impugned provisions would be in violation ofArticle 14 of the Constitution oflndia. E

87. In any case, since this Court in P.A. l11anular has held that there cannot be any fixation of Quota or appropriation of seats by the State; reservation which inheres setting aside Quotas, would not be permissible. It is, thus, argued that the provisions seek to bring back the Unni Krishnan system of setting up State Quotas which has been expressly held by this Court to be impermissible. This argument is to be F noted to be rejected. In fact, as can be seen from the impugned judgment having regard to the provisions of Clause (5) of Article 15 of the Constitution, there was no serious challenge laid to Section 8 read with Rules 4(2), 7 and 15 of the Rules, 2008. In fact, counsel forthe appellants conceded that they had not challenged 93'd Constitutional Amendment G vide which Article 15(5) was inse1ted into the Constitution. In any case, there is hardly any ground to challenge the said constitutional amendment, which has already been upheld by a Constitution Benchjudgrnentin the case of Pranwti Educational and Cultural Trust. The only other argument raised was that a reading of the reservation provisions in Rule H

658 SUPREME COURT REPORTS [2016] 3 S.C.R.

A 7 of Rules, 2009 would show that it w'o~ld be difficult to work out said · percentage having regard to the fact that number of seats in the post- graduate dental and medical courses in differentspecialized disciplines are few. The High Court has successfully dealt with this argument by appropriately demonstrating, by means of charges, that.not only it was possible to work ouf extent of reservation provided for different B categories, sufficient number of seats were available for· general categories as well. We, thus, do not find any merit in the challenge to the reservation of seats for SC/ST and OBC etc. which is in consonance with Article 15(5) of the Constitution.

88. As i~ e_videni from the facts m~ntionea by the State of Madhya c Pradesh in its reply filed in IA No. 83 of2015, the Associatjon of Private Colleges has failed to hold theirCETs in a fair, transparent and rational 'manner. The accountability a!ld transparency in State actions is much higher than in private actions. It is needless to say that the incidents of .corruption in the State m·achinery were brought in the public eye D, .immediately and have been addressed expeditiously. The same could never have been .. done in case of private actions._ Even on a keel of comparative effici_ency, it is more than evident that the St.ate process is far more transparent and fair than one that is devised by the private colleges which have nd mechanism of any checks and balances. The State agencies are subject to the Right to Information Act, Audit, State E Legislature, Anti-Corruption agenc'ies, Lokayukta, etc.

89. The very object of setting up institutimis for the State is a welfare function, for the purpose of excelling in educational standards, On the otherhand, the primary motivation for'private parties is profit motive or philanthropy. When the primaiy motivation for institutions is profit motive, it is natural that many means to achieve the same shall be adopted by ·. the private institutions which leads to a large degree of secrecy and corruption. As such, the mechanism of regulations as envisaged under the impugne'd laws is legal, constitutional, fair, transparent and uphold the primary .criteria of merit. The same does not infringe on the fundamental rights of either the minorities or the non-minorities to establish and administer educational institutions and must as such be upheld as ~~- .

IV. Whether the impugned legislation is beyond the legis1~$ive !!Ompetence of the State of Madhya Pradesh? .

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 659 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

90. Th.e next issue to be considered is whether the subject matter .A of admissions was covered exci'usively by Entry 66 of List I, thereby the States having no legislative competence whatsoever to deal with the 'subject ofadmissions or determination of fee to be charged by professional educational institutions.

91. Main reliance placed on behalf of the appellants is on Blwrti B Vidyapeetli (Deemed University) & Ors. v. State of Maltaraslttra & Anr. '' Heavy reliance was also placed ·by the appellants on Gujt1rat "University & Anr. v. Shri Krisll!Ul Ru11gmu1tlt Mud/10/kar & Ors.' 3 and the judgment of the Constitution Bench in the ca.se of Dr. Preeti Srivastava & Anr. v. State of M.P. & Ors,'• · · c

92. The competing Entries are: List 1, Entcy 66 and List lll, Entry 25 ~ In the process, List II, Entry 32 also needs a glance. Thus, for proper. analys!J,, . we reproduce . . these Entries_ below: "Li5t I · 66. Co-ordination and determination of standards in institutions for higher education or research and scientific and technical institutions. List II

32. Incorporation, regulation and winding up of corporation, other than those specified in List I, and .universities; unincorporated trading, literacy, scientific, religious and other societies and associations; cocoperative societies. List III

25. Education, includingtechnical education, medical education F ~·and universities,subject to the provisions of entries 6J, 64, 65 and· 66 of List I; vocational and technical training oflabour."

93. To our mtnd, Entry 66 in List I is a specifi,c E;ntry having a very specific and limited scope. It deals with co-ordination and determination of standards in institution of higher education or research as well as G scientific and technicai institutions. The words _'co-ordination and determination qfstandards' would mean laying down the said standards. 2 i (2Q04) 11 sec 755 231964 (Supp,) I SCR 112 "(1999) 1 sec 120 H

660 SUPREME COURT REPORTS [2016) 3 S.C.R.

A Thus, when it comes to prescribing the standards for such institutions of higher learning, exclusive domain is given to the Union. However, that would not include conducting of examination, etc. and admission of students to such institutions or prescribing the fee in these institutions of higher education, etc. In fact, such co-ordination and determination of standards, insofar as medical education is concerned, is achieved by B Parliamentary legislation in the form of Medical Council of India Act, 1956 and by creating the statutory body Iike Medical Council oflndia (for short, 'MCI') therein. The functions that are assigned to MCI include within its sweep detern1ination of standards in a medical institution as well as co-ordination of standards and that of educational institutions. c When it comes to regulating 'education' as such, which includes even medical education as well as universities (which are imparting higher education), that is prescribed in Ent1y 25 of List Ill, thereby giving concurrent powers to both Union as well as States. It is significant to note that earlier education, including universities, was the subject matter of Entry 11 in List IP. Thus, power to this extent was given to the State D Legislatures. However, this Entry was omitted by the Constitution (Forty- Second Amendment) Act, 1976 with effect from July 03, 1977 and at the same time Entry 25 in List II was amended 26 • Education, including university education, was thus transfened to Concurrent List and in the process technical and medical education was also added. Thus, if the argument of the appellants is accepted, it may render Entry 25 completely otiose. When two Entries relating to education, one in the Union List and the other in the Concurrent List, co-exist, they have to be read harmoniously. Reading in this manner, it would become manifest that when it comes to co-ordination and laying down of standards in the higher education or research and scientific and technical institutions, power rests with the Union/Parliament to the exclusion of the State Legislatures. However, other facets of education, including technical and medical education, as well as governance of universities is concerned, even State Legislatures are given power by virtue ofEntiy 25. _The field covered by Entry 25 of List Ill is wide enough and as circumscribed to the limited extent of it being subject to Entries 63, 64, 65 and 66 of List I.

94. Most educational activities, including admissions, have two "Entry 11: Education· including uni\ crsities. subject to pro,·isions of Entries 63. 64. 65 and 66 of List I and Entry 25 of List III "' Unamended Entry 25 in List Ill read as: 'Occasional and Technical Training of H Labour'

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 661 STATE OF MADHYA PRADESH [A.K. SIKRL J.]

aspects: The first deals with the adoption and setting up the minimum A standards of education. The objective in prescribing minimum standards is to provide a benchmark of the caliber and quality of education being imparted by various educational institutions in the entire country. Additionally, the coordination of the standards of education determined nationwide is ancillary to the very determination of standards. Realising B the vast diversity of the nation wherein levels of education fluctuated from lack of even basic primary education, to institutions of high excellence, it was though desirable to determine and prescribe basic minimum standards of education at various levels, particularly at the level of research institutions, higher education and technical education institutions. As such, while balancing the needs of States to impart c education as per the needs and requirements oflocal and regional levels, it was essential to lay down a uniform minimum standard for the nation. Consequently, the Constitution makers provided for Entry 66 in List I with the objective of maintaining uniform standards of education in fields ofresearch, higher education and technical education. D

95. The second/other aspect of Education is with regard to the implementation of the standards of education determined by the Parliament, and the regulation of the complete activity of Education. This activity necessarily entails the application of the standards determined by the Parliament in all educational institutions in accordance with the · 1ocal and regional needs. Thus, while Entry 66 List I dealt with E determination and coordination of standards, on the other hand, the original Entry 11 of List' II granted the States the exclusive power to legislate with respect to all other aspects of education, except the determination of minimum standards and coordination which was in national interest. Subsequently, vi de the Constitution (Forty-second Amendment) Act, 1976, F the exclusive legislative field of the State Legislature with regard to Education was removed and deleted, and the same was replaced by amending Entry 25, List Ill, granting concurrent powers to both Parliament and State Legislature the power to legislate with respect to all other aspects of Education, except that which was specifically covered by Entry 63 to 66 of the List I. G

96. No doubt, in Bharti Vidyapeeth it has been observed that the entire gamut of admission falls under Entry 66 of List I. The said judgment by a Bench of two Judges is, however, contrary to law laid down in earlier larger Bench decisions. In Gujarat University, a Bench H

662 SUPREME COURT REPORTS [2016) 3 S.C.R.

A of five Judges examined the scope of Entry 2 of List II (which is now Entry 25 of List III) with reference to Entry 66 of List I. ·It was held that the poyver of the State to legislate in respect of education to the extent it is entrusted to the Parliament, is deemed to be restricted. Coordination and determination of standards was in the purview of List I and power of the State was subject to power of the Union on the said B subject. It was held that the two entries overlapped to some extent and to the extent of overlapping the power conferred by Entry 66 of List I must prevail over power of the State. Validity of a state legislation depends upon whether it prejudicially affects 'coordi11atio11 or determination of standards', even in absence of a union legislation. In c R. Cltitra/eklw v. State of Mysorec'· the same issue was again considered. It was observed that if the impact of State law is heavy or · devastating as to wipe out or abridge the central field, it may be struck down. In State of T.N. & A11r. v. Atlhiyamtm Etlucatio11a/ & Research !11Stitute & Ors. cs, it was observed that to the extent that State legislation is in conflict with the Centi-al legislation under Entry 25, it wou Id be void and inoperative. To the same effect is the view taken in Dr. Preeti Srivastava and State of Malwrashtra v. Sant D11ya11esl11var Shikslum Sltastra Mahavidalaya & Ors. ~0 Though the view taken in State· of Matlltya Pradesh v. Kumari Nivetlita Jain & Ors. 30 and Ajay Kumar Singh & Ors. v. State of Bilwr & Ors." to the effect that admission standards covered by En fry 66 of List I could apply only post admissions was overruled in Dr. Preeti Srivastava, it was not held that the entire gamut of admissions was covered by List I as wrongly assumed in Bharti Vitlyapeeth. ~7. We do not find any ground for holding that Dr. Preeti Srivastava F excludes the role of states altogether from admissions. Thus, observations · in Biwrti Vidyapeeth that entire gamut of admissions was covered by · Entry 66 of List I cannot be upheld and overruled to that e:i>tent. No doubt, Entry 25 ofList Il.J is subject to Entry 66List1, it is not possible to exclude the· entire gamut of admissions from Entry 25· of List III. However, exercise of any power under Entry 25 of List III has to be G subject to a central law referable to Entry 25. 27

(1964) 6 SCR 368

;• (1995) 4 sec 104 "(2006) 9 sec 1 '" (1981)"4 sec 296 H "(1994) 4 sec 40J

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 663 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

98) In view of the above, there was no violation ofright ofautonomy A of the educational institutions in the CETbeing conducted by the State or an agency nominated by the State or in fixing fee. The right of a . State to do so is subject to a central law. Once the notifications under the Central statutes for conducting the CET called 'NF:ET' become operative, it will be a matter between the States and the Union, which B ~ill have to be sorted out on the touchstone of Article 254 artof the Constitution. We need·not dilate on this aspect any further. EPILOGUE:

99. Before parting with the matter, we may observe that we have decided the /is between the parties, but that by itself does not cure all c the. ills with which the system suffers and something more needs to be done on that front as well. It would be necessary to refer to the grievance voiced on behalf of the appellants that admissions conducted even by an agency nominated by the State, under a state law or a central law may lack credibility. This concern has also been noticed by this Court in P.A. lnamdar. An astute and segacious approach is also necessary to deal with the ground realities. This Court had earlier appointed committees headed by the retired High Court Judges in all the States to regulate the admissions and fee structure. This was a stopgap arrangement till suitable legislation was framed and once the admission process under a statutory law becomes operative, the grievance of all concerned on the subject of proper functioning of the regulatory mechanism will need to be properly addressed. It was brought to our notice that the Central Government ~ itself had appointed a group of t<xperts headed by Dr. Ranjit Roy Chaudhury vide notification dated July 07, 2014 to study the Indian Medical Council Act, 1956 and to make recommendations. The said Committee gave its report on September 25, 2014 suggesting reforms in the regulatory oversight of the medical profession by the Medical Council. The recommendations covered the subject of overseeing under graduate and post graduate medical education as well as other related is.sues. It was also pointed out that even the Parliamentary Standing Committee on Health and Family Welfare in its 92nd report on 'The functioning of G Medical Council of India' presented to the Rajya Sabha and the Lok Sabha on March 08, 2016 has gone into the matter. There is perhaps urgent need to review the regulatory mechanism for other service oriented professions also. We do hope this issue will receive attention of concerned authorities, including the Law Commission, in due course. H

664 SUPREME COURT REPORTS [2016] 3 S.C.R.

A 100. The .Committee examined the existing architecture .of the regulatory oversight of the medical profession, that is the MCI. It was observed that the MCI was repeatedly found short of fulfilling its mandated responsibilities. Qualify of medical education was at its lowest ebb, the right type of health professionals were not able to meet the basic health need of the country. Products coming out of medical colleges B are ill-prepared to serve in poor resource settings like Primary Health Centre and even at the district level. The medical graduates lacked competence in performing basic health care tasks. Instances ofunethicaJ practices continued to grow. The MCI was not able to spearhead any serious reforms in medical education. The MCI neitherrepresented the c professional excellence nor its ethos. Nominees of Central Government and State Governments were also from corporate private hospitals which are highly commercialized. They were also found to be violating value framework and indulging in unethical practices such as carrying out unnecessary diagnostics tests and surgical procedures in order to extract money from hapless patients. The electoral processes brought about a D lot of compromises and tend to attract professionals who may not be best fitted for the regulatory body. Regulators of highest standards of professional integrity and excellence could be appointed through an independent selection process. The Committee concurred with recomme11dation of the Ranjit Roy Chaudhury Committee Report that regutatory structure should be run by persons selected through transparent mecha1rism ratherthan by election or nomination. The Central . Government had no power to disagree with the MCI though the Government was the main stakeholder in shaping the health schemes. The Government should have power to give policy directives to the regulatory body. The existing system of graduate medical education was required to be re-invented. The admission process was not satisfactory as majority of seats in private medical colleges were being allotted for capitation fee. The system keeps out most meritorious and underprivileged students. The unitary CET will tackle the capitation fee and bring about transparency. The post graduate seats were being sold in absence oftransparei1t and streamlined process of admission. It also noted deficiency in the teaching faculty and in regulation of professional conduct of doctors. Taking note of corruption in the MCI it was recommended that expeditious action should be taken to amend the statute and enact a new legislation. Current system ofinspections was found to be unsatisfactory. The conclusions of the Committee are: H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 665 STATE OF MADHYA PRADESH [A.K. SIKRI. J.j