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

2014. there .were about 300 irregular admissions. in MBBS . course by · private medical colleges on the State quota and on the:alleged violation, . ' . AFRC imp~sed a fine ofRs.13.10 crores on various private colleges. H

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A This was later affirmed by the appellate authority (Annexure A-17 to I.A. 83/2015). The order affirming the fine is the subject matter of writ petitions pending befor~ the High Court and I do not propose to go into - .the merits of this aspect. Suffice it to note that there are prima facie materials to indicate that the private unaided professional educational B institutions have not passed triple test as laid down in P.A. lnamdar. In this factual background, it does not seem inappropriate on the part of the State to come up with the Act 2007 which lays down a mechanism for co11ducting common entrance test in order to ensure merit based admission in the private institutions. c

57Copy pinpoint57. Whether the provisions ofAct 2007 regarding determination of fees are violative of 'right to occipation ' of private educational institutions: As. stated earlier, the object ofMadhya Prades~ Act 2007 is to "provide for the regulation of admission and fixation of fee in D private professional educational-institutions in the State of Madhya Pradesh and to provide for reservation of seats to persons belonging to Scheduled Castes, the Scheduled Tribes and Other Backward Classes in professional educational institutions and the mwters connected therewith or incidei1tal thereto". The Act authorizes the E State to fix the fees to be charged by the private educational institutions, while taking relevant factors into consideration and also after ensuring an opportunity of being heard to the private educational institutions.

58Copy pinpoint58. As per Section 3(e); 'fee' means all fees including tuition fee F and development charges. Section 4 of the Act deals with constitution and functions of the Committee. As per Section 4( I), Committee is constituted for supervision and guidance of the admission process and for the fixation of the fees to be charged by private educational institutions. Section 9 deals with factors to be taken into consideration by the G Committee for determination of fee that may be charged by private educational institutions. Section 9 reads as under:-

9. Factors:

(I) Having regard to: H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 711 . STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

(i) the location of the private unai,ded professional educational institution; (ii) the nature of the professional course; (iii) the cost of land and building; B (iv) the ayailable infrastructure, teaching, non-teaching staff and equipment; (v) the expenditure on administration and maintenance;

(vi) a reasonable surplus required for growth and development of the professional institution; c (vii) any other relevant factor, the committee shall determine, in the manner prescribed, the fee to be charged by a private unaided professional educational institution. D

(2) The Committee shat I give the institution an opp0rtunity of being heard before fixing any fee: · Provided that no such fees, as may be fixed by the Committee, shall amount to-profiteering or comercialisation of education." E

59Copy pinpoint59. Various factors indicated in Section 9 including reasonable · surplus required for growth and development of the institution and other relevant factors for imparting professional education have to be considered by'the committee. _Furthermore, in terms of Sections 4(8) and 9(2), F before fixing the fee, the committee ought to afford an opportunity of being heard to the institutions which may furnish the necessary information. This ensures that private unaided educational institutions · can putforth their legitimate claims pertainin~to fees which is to be _charged from the students admitted in these institutions. Though Section G 9 empowers the committee to determine the fee, the High Court read down Sections 4(1 ), 4(8) and Section 9 of Act 2007 holding that those provisions "in substance e111power the co111111i1tee to be only satisfied that the fee proposed by a private professional educational H-

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A institutions did not amount to profiteering or commercialization of education and was based on the factors mentioned in Section 9(1) of the Act 2007_... ". . ·

60Copy pinpoint60. Contention of the appellants is that Sections 4(1 ), 4(8) and Section 9 relating to fixation offees in the Act 2007 are violative of their right to occupation" g·uaranteed under Article 19( I )(g) of the Constitution oflndia. It is submitted that when eleven-Judge Bench of this Court in T.MA. Pai held that. ·· ... The decision on the fe.e to be charged must necessarily be left to the private educational c institutio,n. that dpes not seek or is not dependent upon any funds from the Government. ", then private institutions have an indefeasible right to fix their own fee structure and there is no occasion for the Government to. enact such legislation empowering the committee to determine the fees to be charged. D

61Copy pinpoint61. Drawing our attention to para (39) of T.MA. Pai, it has also been contended that T.MA. Pai recognizes the :importance of private . -·~·

unaided educational institutions by citing figures as to how numl!ers of government colleges have remained stagnant whereas numbers ofpdvate educational institutions have increased . .It was submitted that as the E eleven-Judge Bench recog11Jsed the right of private educational institutions to admit students and determine their own fee structure, the right of private unaided institutions· to charge their own fees cannot be curtailed by the impugned legislation and therefore Sections 4( I), 4(8) and Section · F 9 of Act 2007 are liable to be struck.down.

62Copy pinpoint62. Per contra, learned counsel for the respondents submitted that relevant provisions of the Act empowering the committee to determine the fee that are only to ensure that the fees charged are not exorbitant and such regulation are not an impediment to the exercise of"right to G occupation" of the private unaided educational institutions. It was submitted that the High Court has read down Sections 4( I), 4(8) am;l 9 of the Act 2007 by holding that the committee need only be satisfied that the fee proposed by a ptofessional educational institution did not amount to profiteering by keeping in view the factors laid down in Section 9 of H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v.· 713 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

the Act. The question falling for consideration is whether and to what A extent the State can impose restrictions vis-a-vis the fee structure of private unaided professional educational institutions.

63Copy pinpoint63. Article 41 of the.Constitution contemplates that "The State shall, within the limits of _its economic capacity and development, make 8 effective provisions for securing the right to work, to education ... ... " ArticJe 41 does not prescribe an age group forwhich this right is to be secured. Primary objective of the State as laid down in Article 41 is to ensure that quality higher education is imparted by educational inst~tutions and to ensure excellence in it. Act 2007- is iQ furtherance of the c constitutional obligation imposed upon the State in the form of Directive Principles of State Policy.

64Copy pinpoint64. The words "the state shall within the limits of its economic capacity ... " in Article 41 empowers the State to permit private educational institutions to be established and administer themselves. The· · D hard reality is that private educational institutions are a necessity in the present day context and T.MA. Pai, in para (39) has recognized this · · importance of private unaided .educational institutions. Para (39) reads as under:- · E "39. That private educational institutions are a necessity becomes evident from the fact that the number of government-maiptained professional colleges has more or less remained stationary, while more private institutions have been established. For example, in the State ofKarnataka there are 19 medical colleges out of which there are only 4 government-maintained medical colleges. Similarly, out of 14 dental colleges in Karnataka, only one has been established by the Government, while in the same State, out of51 engineering colleges, only 12 have been established by the Government. The aforesaid figures clearly indicate the important role played by private unaided educational institutions, both minority and non-minority, which cater to the needs of students seeking •.I•' professional education."

65Copy pinpoint65. Observing that education has been a bu~iness for a long time, in H

714 SUPREME COURT REPORTS- . [2016) 3 S.C.R.

A Modern School v. Union ol India and Ors. (2004) 5 SCC 583, in paras (3) to (5), this Court has held as under:- "3. In modern times, all over the world, education is big business. On 18-6-1996, Professor G. Roberts, Chairman of tire Committee of Vice-Chancellors and Principals commented:' B "The annual turnover of the higher education sector has now passed the £ I 0 billion mark. The massive increase in participation that has led to this figure, and the need to prepare for further increases, now demands that we make revolutionary c advances, in the way we structure, manage and fund higher education."

4. In the book titled Higher Education Lall' (2nd Edn.) by David Palfreyman and David Warner, it is stated that in modern times, al I over the world, education is big business. On account of consumerism, students all over the world are restless. That schools in private sector which charge fees may be charitable provided they are not run as profit-making ventures. That educational charity must be established for the benefit of the public rather than for the benefit of the individuals. That while individuals may derive benefits from an educational charity, the main purpose of the charity must be for the benefit of the public.

5. At the outset, we hasten to clarify that although we are in agreement with the authors, quoted above, we do not wish to generalise and in the Indian context we may state that there are good schools which even today run keeping in mind laudable charitable objects."

66Copy pinpoint66. Furthermore, in para (61) of T.MA. Pai, this Court inter alia was of the view that the standards maintained by the private _educational. G institutions are higher and it is in the interest of general public that more quality education institutions are established and such educational institutions shall have the right to admission of the students and fee to be charged. - However, para (69) of T.MA. Pai held private educational i11stitutions were not entitled to charge capitation fee. Para (69) reads as under:-

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 715 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

"69. In such professional unaided institutions, the management wi II have the right to select teachers as per the qualifications and eligibility conditions laid down by the State/university subject to adoption of a rational procedure of selection. A rational fee structure should be adopted by the management, which would not be entitled to charge a capitation fee. Appropriate machinery can be devised by the State or university to ensure that no capitation fee is charged and that there is no profiteering, though a reasonable surplus forthe furtherance of education is permissible. Conditions . granting recognition or affiliation can broadly cover academic and educational matters including the welfare of students and c teachers."

67Copy pinpoint67. In order to expound the aforesaid position, in Islamic Academy of Education, the first question that came up for consideration was whether private unaided educational institutions are entitled to fix their D own fee structure. This Court in order to harmonize the plea of private educational institutions to earn a reasonable surplus and with the aim of preventing commercialization of education, directed the State to set up a committee headed by a retired High Court Judge to approve the fee structure or propose some other fee which can be charged by the institUte. E In para (7) of Islamic Academy of Education this Court directed as under:-

"7. . ... we direct that in order to give effect to the ju.dgment in T.MA. Pai case the respective State Governments/concerned F ~uthority shall set up, in each State, a committee headed by a retired High Court Judge who shall be nominated by the Chief Justice of that State ...... The Committee shall then decide whether the fees proposed by that institute are justified and are not profiteering or charging capitation fee. The Committee will be at G liberty to approve the fee structure or to propose some other fee which can be charged by the institute. The fee fixed by the Committee shall be binding for a period of three years, at the end of which period the institute would be at liberty. to apply for revision ..." H

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68Copy pinpoint68. Referring to paras (69) and (70) of T.MA. Pai and reiterating · that fee charged by private educational institutions should not amount to profiteering, in P.A. lnamdar case, it was held as under:- "129. In Pai Foundation. it has been very clearly held at several places that unaided professional institutions should be given greater autonomy in determination of admission procedure and fee structure. State regulation should be minimal and only with a view to maintain . fairness and transparency in admission procedure and to check exploitation of the students by charging exorbitant money or capitation fees.

139. To set up a reasonable fee structure is also a component of "the right to establish and administer an institution" within the ineaning of Article 30( 1) of the Constitution, as per the law declared "in Pai Foundation. Every institution is free to devise its own fee structure subject to the limitation that there can be no profiteering and no capitation fee can be charged directly or indirectly, or in any form (paras 56 to 58 and 161 [answer to Question 5(c)] of Pai Foundation are relevant in this regard). E Capitation fees

140. Capitation fee cannot be permitted to be charged and no seat can be permitted to be appropriated by payment of capitation fee. "Profession" has to be distinguished from "business" or a mere "occupation". While in business, and to a certain extent in occupation, there is a profit motive, profession is primarily a service to society wherein earning is secondary or incidental. A student who gets a professional degree by payment of capitation fee, once qualified as a professional, is likely to aim !Tiore at earning rather .than serving and that becomes a bane to society. The charging of capitation fee by unaided minority and non-minority institutions for professional courses is just not permissible. Similarly, profiteering is also not permissible. Despite the legal position, this Court cannot . shut its eyes to the hard realities of commercialisation of education and evil practices being adopted by many institutions to earn large H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 717 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

amounts for their private or selfish ends. If capitation fee and A . profiteering is to be checked, the method of admission has to be regulated so that the admissions are based on merit and transparency and the students are not exploited. It is permissible to regulate admission and fee structure for achieving the purpose just stated." B

69Copy pinpoint69. From the above discussion, it clearly emerges that in exercise of their "right to occupation", private institutions cannot transgress the rights of the students. Discernibly, the Act does not give unbridled power to the authority to determine the fee. Determination of fee has to be c based on the factors stipulated in Section 9 of the Act. Further, an opportunity of appeal is also provided for in the Act 2007 to the aggrieved. Fundamental rights of colleges to run their administration, includes fixation · offee. However, such right in turn has to be balanced with the rights of the students, so that they are not subjected to exploitation in the form of profiteering.

70Copy pinpoint70. For the foregoing discussion, I hold that the State has the legislative competence to enact the impugned legislation-Act 2007io hold common entranc.e test for admission to professional educational institutions and to determine the fee and the High Court has rightly upheld the validity of the impugned legislation. Regulations sought to be imposed by the impugned legislation on admission by cominon .entrance test ·conducted by the State and determination of fee. art'. in c'ompliance .of the directions and observations in T.MA. Pai, 'Islamic Academy of F Education and P.A. lnamdar. Regulations on admission .process are necessary in the larger public interest and welfare of the student . ·community to ensure fairness and transparency in.theadmission and to promote merit and excellence .. Regulation on fixation offee is to protect the rights of the students in having access to higher edlication without G being subjected to exploitation in the form of profiteering. With the above reasonings, I concur with the majority view in upholding the validity of the impugned legislation and affirm the well merited decision of the '. High Court. · Nidhi Jain A~peals dismisse~. H \.