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

The Judgments of the Court were delivered by A.K. SIKRI, J. I. In all these appeals, validity and correctness of B the common judgment dated May 15, 2009 passed by the High Court of Madhya Pradesh, Principal Bench at Jabalpur, has been questioned. The appellants in these appeals had filed writ petitions challenging the validity/ vires of the provisions of the statute passed by the State Legislature, which is known as 'Niji Vyavasayik Shikshan Sanstha (Pravesh Ka c Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007' (hereinafter referred to as the 'Act, 2007'). The appellants also challenged vires of Admissions Rules, 2008 (for short, 'Rules, 2008') and the Madhya Pradesh Private. Medical and Dental Post Graduate Courses Entrance Examination Rules, 2009 (for short, 'Rules, 2009') which have been framed by the State Government in exercise of the power conferred upon it vi de Section 12 of the Act, 2007. The aforesaid Act and Rules regulate primarily the admission of students in post graduate courses in private professional educational institutions and the provisions are also made for fixation offee. In addition, the said Act and Rules also contain provisions for reservation of seats. Al I the appellants are private medical and dental colleges which are unaided, i.e. they are not receiving any Government aid and are self financing institutions running from their own funds.

2. It is evident from the reading of the impugned judgment that challenge was laid by the appellants to those provisions of the Act and F Rules on four grounds. The same are as under: (i) the challenge to the provisions relating to admission; (ii) the challenge to the provisions relating to fixation offee; (iii) the challenge to the provisions for reservation; and G (iv) the challenge to the provisions relating to eligibility for admission.

3. Insofar as provisions relating to admission, eligibility for admission and fixation offee are concerned, the main contention of the appellants was that these medical and dental colleges being private unaided colleges, H

608. SUPREME COURT REPORTS (2016) 3 S.C.R.

A it is their fundamental right under Article 19(1 )(g) of the Constitution of India to lay down the eligibility criteria for admission and admit the students as well as fix their fee. Relying upon the eleven Judge Bench decision of this Court in T.M.A. P"i Found"tion & Ors. v. St"te of K"rn"t"k" & Ors.', it was argued that right to administer educational institution is recognised as an 'occupation' and is, thus, a fundamental B right to carry on such an occupation as stipulated in Article 19( I )(g). According to the appellants, the provisions in the aforesaid Act and Rules impinge upon the fundamental right guaranteed to these institutions under the Constitution and, therefore, the said provisions are violative ofArticle 19( I )(g) of the Constitution. Insofar as provision relating to reservation c of seats to Scheduled Castes, Scheduled Tribes, etc. is concerned, the emphasis of the appellants was two fold: First, it was argued that private educational institutions cannot be foisted with the obligation to admit students of reserved class, which was the obligation of the State. Secondly, the provisions of the Act, 2007 made excessive reservations thereby leaving hardly any seats for unreserved categories, which is not permissible in view of the judgment of this Court in T. Dev"d"sm1 v. Union of Indi" & Anr. ~ and subsequent decisions reiterating the dicta in T. Dev"d"san. As would be noticed hereinafter, the basis of attack to the constitutional validity of the provisions of the Act and Rules remains the same. Additionally, however, the challenge to the said Act and Rules is laid before us also on the ground of the competence of the State Legislature as, according to the appellants, the subject matter falls in the domain that is exclusively reserved for the Parliament.

4. The High Court has repelled the challenge on first three counts holding that the judgment in T.M.A. Pai Fou11d"tio11, as explained in P.A. I11amdar & Ors. v. St"te of M"harashtm & Ors.;, permits the Government to regulate the admissions as well as fee, even ofth~e-private unaided educational institutions and that the impugned provisions are saved by Article 19(6) of the Constitution as they amount to 'reasonable restrictions' imposed on the right of admission and fixation offee, which otherwise vests with the appellants.

1 (2002) 8 sec 481 2 (1964) 4 SCR 680 H '(2005) 6 sec 537

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 609 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

5. Before we adve11 to the arguments of the appellants advanced before us in detail, it would be apposite to give the gist of the provisions of the Act, 2007 as well as Rules, 2008 and Rules, 2009 and also the manner in which the High Court has dealt with the issues at hand. THE ACT, 2007:

6. The Preamble of the Act mentions that it is to provide for regulation of admission and fixation of fee in private professional educational institutions in the State of Madhya Pradesh and to provide for reservation of seats to persons belonging to the Scheduled Castes, Scheduled Tribes and Other Backward Classes in professional educational institutions. Thus, insofar as the Preamble is concerned, it stipulates c that the provisions are made to provide for the 'regulation' of admission and fixation of fee. Further, the Act encompasses private professional educational institutions of all disciplines and is not confined to medical and dental professions. However, writ petitions were filed raising the grievance against the aforesaid enactment only by medical and dental educational institutions. Institutions imparting other kind of professional education have not felt aggrieved.

7. Be that as it may, for regulating the admission and fixation of fee under Section 4 of the Act, a committee known as 'Admission and Fee Regulatory Committee' (hereinafter referred to as the 'Committee') is constituted for the supervision and guidance of the admission process and for the fixation of fee to be charged from candidates seeking admission in a private professional educational institution. This Section further provides for composition, disqualification and functions of the Committee.

8. Chapter III which comprises of Sections 5 to 8 deals with F 'Admission'. As per Section 5, the eligibility for admission to such institutions shall be such as may be notified by the appropriate authority. These eligibility conditions are provided in Rules, 2008. Section 6 prescribes 'Common Entrance Test' (for short, 'CET') on the basis of which admissions would be made and the same reads as under: G "6. Common Entrance Test - In private unaided professional educational institution, admission to sanctioned intake shall be on the basis of the common entrance test in such manner as may be prescribed by the State Government." CET is defined in Section 3(d) of the Act, 2007 and reads as follows: H

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

A "(d) "Common entrance test" means an entrance test, conducted for determination of merit of the candidates followed by centralized counseling for the purpose of merit based admission to 'professional colleges or institutions through a single window procedure by the State Government or by any agency authorized by it;" B As per Section 7, any admission made contrary to the provisions of the Act or Rules is to be treated as void. Section 8 deals with 'reservation of seats'.

9. Insofar as fixation of fee is concerned, the facts which have to be taken into consideration while fixing the fee are provided in Section 9, c which is under Chapter IV of the Act, and reads as follows: "9. Factors - (I) Having regard to - (i) the location of the private unaided professional educational institution;

D (ii) the nature of the professional course; (iii) the cost of land and building; (iv) the available infrastructure, teaching, non-teaching staff and equipments; (v) the expenditure on administration and maintenance; E (vi) a reasonable surplus required for growth and development of the professional institution; and (vii) any other relevant fact, the committee shall determine, in the manner prescribed, the fee to be charged by a private unaided professional educational institution. (2) The Committee shall give the institution an opportunity of being heard before fixing any fee: Provided that no such fee, as may be fixed by the Committee, shall amount to profiteering or commercialization of education." G As pointed out above, the Government has framed Rules, 2009 creating detailed provisions for fixation of fee, to which we shall be i:eferring to at the appropriate stage. I 0. Another provision which needs to be mentioned at this stage is Section 10. This provision provides for appeal that can be filed by a H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 611 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

person or a professional institution aggrieved by an order of the A Committee. Such an appeal can be filed within 30 days before the Appellate Authority constituted under the said provision. Under Section 12, the State Government may, by notification, make Rules for carrying out the purpose of the Act. Section 13 empowers the State Government to make Regulations consistent with the Act and the Rules made B thereunder, inter alia, relating to the eligibility of admission, manner of admission and allocation of seats in a professional educational institution, including the reservation of seats, as well as the manner or criteria for determination offee to be charged by professional educational institutions from the students and the fee that is to be charged by the professional educational institutions. c 1 I . It may be mentioned that Circular/Notification dated February 28, 2009 and March 15, 2009 was issued by the State Government under Section 6 of the Act, 2007 appointing the Professional Examination Board, Bhopal (which is known as VYAPAM) as the agency to conduct the entrance examination for the Post-graduate Entrance Examination of D Private Medical and Dental universities and under-graduate examination respectively. THE IMPUGNED JUDGMENT I 2. As already mentioned above, the High Court classified the challenge to the provisions of the aforesaid Act and Rules into four heads E and then dealt with each head separately. Insofar as challenge to the provision relating to admission is concerned, the High Court has concluded thatthe provisions of Section 6 read with Section 3(d) of the Act, 2007, which provide that admissions to the sanctioned intake shall be on the basis ofCET followed by centralised counselling by the State Government F or by an agency authorised by the State Government, are in consonance with the judgment of this Court in T.M.A. Pai Foundation and P.A. bwmdar. The High Court reproduced paragraphs 58 and 59 of T.M.A. Pai Foundation wherein this Court emphasised that the admission is to be made on the basis of merit, which is usually determined either by marks that the student obtains at the qualifying examination or school G leaving certificate stage followed by the interview or by a CET conducted by the institution or in the case.of professional colleges, by Government agencies. From this, the High Court concluded that since merit has to be the prime consideration and one of the recognised mode of ascertaining the merit is through CET and insofar as professional colleges H

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

A are concerned, T.M.A. Pai Fou11datio11 itself permitted such CET to be conducted by the Government agencies, there was nothing wrong with the impugned provision. The High Court also held that in paragraphs 67 and 68 of T.M.A. Pai Foundation this Court had permitted framing of Regulations for unaided private professional educational institutions for conducting such admission tests. The contention of the educational B institutions/ writ petitioners to the effect that T.M.A. Pai Foundation never allowed the State to control admissions in private unaided professional educational institutions so as to compel them to give up a share of available seats to the candidates chosen by the State has been repelled by the High Court by holding that the admission procedure for c unaided professional educational institutions, both minority and non- minority, was spelled out in P.A. Inanu/ar in paragraphs 133 to 138 clearly holding that for achieving the objective of excellence in admission and maintenance of high standards, the State can, and rather must, in the national interest step in. This judgment, thereby, recognised the power of the State to hold such CETs in respect of private educational institutions as well. The High Court, in the process, painfully remarked that the admission procedure which was adopted by the private institutions had failed to satisfy the triple test of transparency, fairness and non- exploitativeness thereby compelling the State to substitute the same by its own procedure and sufficient material was produced by the respondents on record to show that prior to the enactment of the Act, 2007, there were number of complaints of malpractices in admissions in the private professional educational institutions which were found to be true. In nutshell, the High Court took the opinion that having regard to the larger interest of the welfare of the students community to promote merit, achieve excellence, curb malpractices and to secure grant of merit based admission in transparent manner, the Legislature in its wisdom had passed the Act in question, also keeping in mind the prevailing conditions reiating to admissions in such institutions in the State of Madhya Pradesh. It, thus, concluded on this aspect that Sections 3(d), 6 and 7 of the Act, 2007 do not impinge on the fundamental right to carry on the 'occupation' of establishing and administering professional educational institutions.

13Copy pinpoint13. Dealing with the challenge to the provisions relating to fixation of fees, viz. Sections 4(1), 4(8) and 9 of the Act in question, the High H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 613 STATE OF MADHYA PRADESH [A.K. SIKRI, J.] -· Court recognised the right of these educational institutions, as found in A T.M.A. Pai Foundation, that decision on the fee to be charged is to be left to private educational institutions. Notwithstanding, the same judgment gives power to the State to regulate the exercise of power of the educational institution to ensure that there is no 'profiteering' and Sections 4 and 9 of the Act, 2007 were aimed at achieving that purpose B only. In substance, these provisions empower the Committee to satisfy itself that the fee proposed by a private professional educational institution did not amount to profiteering or commercialisation of education and was based on the factors mentioned in Section 9(1) of the Act, 2007. The Court noted that these factors which were mentioned in Section 9(1) were the relevant factors for fixation of fee as they ensured fixation c of such fee which would take into consideration the nature of professional courses, the cost ofland and building, the available infrastructure, teaching, non-teaching staff and equipment, the expenditure on administration and maintenance, as well as a reasonable surplus required for growth and development of the professional institutions. This was precisely the mandate of T.M.A. Pai Foundation.

14Copy pinpoint14. While dealing with the provisions in the Act, 2007, which pertained to reservation, the High Court discussed the dictum laid down in M.R. Balaji & Ors. v. Tlte State of Mysore & Ors." wherein the Constitution Bench of this Court, while interpreting Article 15(4) of the Constitution, held that the said provision was made to subserve the interest of the society at large by promoting advancement of weaker sections of the society and, thus, it authorises the State to make special provision for such weaker sections. The only exception was that such a special provision to be made by the State should not completely exclude and ignore the rest of the society. Further, while making such a provision, the State was supposed to approach its task objectively and in a rationale manner and it has to take reasonable and even generous steps to help the advancement of weaker elements; the requirement of the community at large must be borne in mind and a formula must be evolved which should strike a reasonable balance between the several relevant considerations. Likewise, after the insertion of clause (5) to Article 15 G by the Constitution (Ninety-Third Amendment) Act, 2005, another enabling provision was introduced empowering the State to make any special provision by law for advancement ofany socially and educationally

' ( 1993) Supp. I SCR 439 H

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

A backward classes of citizens or for the Scheduled Tribes or the Scheduled Castes insofar as such special provision relates to admission to the educational institutions, including the private professional educational institutions, whether aided or unaided. Thus, in terms of Article 15(5) of the Constitution, the State was empowered to provide reservation to such weaker sections even in respect of unaided institutions, including 8 minority institutions. In that context, the High Court went into the arithmetic of the seats that have been earmarked under Rule 7 of Rules, 2009 for candidates belonging to different reserved categories in different disciplines or subjects and on that basis came to the conclusion that the distribution of seats to those categories clearly demonstrates that c sufficient number of seats have been allotted also for unreserved categories in different disciplines or subjects of post graduate medical and dental courses in Medical and Dental colleges in the State of Madhya Pradesh. In the process, the High Court dispelled the fear of the writ petitioners that the unreserved category candidates scoring high marks than the reserved category candidates will not get seats in the discipline D or subjects of their choice.

15Copy pinpoint15. Rule 10 of Rules, 2009 lays down the eligibility conditions for candidates for taking the CET for admission to post graduate medical and dental courses in private unaided medical and dental colleges in the State of Madhya Pradesh. One of the eligibility conditions specified in E Rule I 0(2)(iii) is that an eligible candidate must permanently be registered by Madhya Pradesh Medical/ Dental Council (and/or MCI/DC!) on or before April 30, 2009. The validity of this Rule was challenged by some of the writ petitioners on the ground that this Rule bars candidates who are permanently registered with other State Medical/Dental Councils F from taking the CET. This contention of the writ petitioners has been accepted declaring Rule 10(2)(iii) of the Rules, 2009 as ultra vires. The conclusion of the High Court on this aspect has become final as the State has not filed any appeal thereagainst.

16Copy pinpoint16. In nutshell, the decision of the High Court on the three crucial aspects is on the following premise: (i) Re.: Admissions - Reading Section 6 with Section 3( d) oft he Act, 2007, which deals with the CETs, it is held that provisions prescribing a CET for the purpose of admission to private unaided institutions are constitutional and valid since the same are in consonance with the dictum of the Constitution Bench judgment of this Court in the case of T.M.A.

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 615 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

Pai Foundation, as per the law specially laid down in paragraphs 58 A and 59 of the said judgment. The High Court has pointed out the manner in which the dictum of T.M.A. Pai Foundation is explained in the Constitution Bench judgment of this Court in the case ofP.A. /nanular, and applying the same the High Court had held that there is no violation of the fundamental rights of the writ petitioners since the provisions B constituted reasonable restriction as accepted by and, therefore, saved under Article 19(6) of the Constitution. Quoting paragraphs 136 and 137 of P.A. /namdar, the High Court held that the CET prescribed under Section 6 of the Act, 2007 will ensure that the merit is maintained. It is also concluded by the High Court that sufficient material that was placed on record to establish that prior to the enactment of the Act, 2007 c clearly exhibited that private unaided institutions were not able to ensure a fair, transparent and non-exploitative admission procedure. As such, the High Court upheld the provisions of the Act, 2007 and the Rules, 2008 read with notifications issued thereunder to be constitutionally valid. (ii) Re.: Fee Regulation - With regard to the challenge to Sections D 4(1),4(8) and 9 of the Act, 2007 read with Rule I 0 of the Rules, 2008, it is held that the power of the Fee Regulatory Committee under the provisions was only 'regulatory' and the purpose of which was to empower the Committee to be satisfied that the fee proposed by the private professional institutions did not amount to profiteering or commercialisation of education and was based on intelligible factors mentioned in Section 9( 1) ofAct, 2007 providing a canalised power which was not violative of the fundamental rights of the private professional institutions to charge their own fee. (iii) Re.: Reservation - The challenge to Section 8 of Act, 2007 and Rules 4 & 7 of Rules, 2008 relating to reservations were not seriously pressed by the appellants in view of the amendment to Article 15, whereby clause (5) was inserted, by the Constitution (Ninety-Third Amendment),

2005. In any case, the High Court has examined the said provisions and concluded that sufficient number of seats were allotted for the unreserved category in different disciplines and subjects, and that a reasonable balance had been struck between the rights of the unreserved category candidates and the reserved category candidates.

17Copy pinpoint17. The aforesaid background, as narrated by us, would make it clear that the attack to the constitutional validity of the Act, 2007 read with Rules, 2008 and Rules, 2009 primarily touches upon the following H

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

A three aspects: (i) The impugned provisions usurp the rights of educational institutions to conduct exam and admit the students. It is argued that this right has been specifically recognised in T.M.A. Pai Foundation, which 'legal position is reiterated in P.A. Immular. Therefore, right to admission B of students in unaided recognised educct,iunal institutions is to be exercised by these institutions. Even ifCET :o to be held forth is purpose, it is these institutions which can join together and hold such a test. The only obligation is that the selection process needs to be fair, transparent and non-exploitative. The State can step in and oversee/supervise the process ofadmission, which is to be essentially taken by the educational institution c to ensure that the aforesaid triple test of fair, transparent and non- exploitative selection process is followed. It is argued that the power given to the State would be only regulatory in nature and under the garb of this power the State cannot take away the right to admit the students which vests with the educational institutions. In nutshell, the submission is that holding ofCET by the State under the provisions of the Act, 2007 read with the Rules framed thereunder amounts to impinging upon the fundamental right of the appellants to establish and manage professional educational institutions, which is now brought at par with the rights of minority institutions to establish such institution given to them under Article 30 of the Constitution. It was further argued that whereas the power of supervision on the part of the State may amount to reasonable restriction and, therefore, that would satisfy the test laid down in Article 19(6) of the Constitution, but taking away the power of admission entirely by conducting CET and even counseling would fall foul of the fundamental right to carry on occupation guaranteed under Article 19(6) of the F Constitution and such provisions cannot be saved under Article 19(6) of the Constitution as well as they disturb the Doctrine of Proportionality. It was submitted that the State's intervention, if at all, can only be with consensual arrangement and not otherwise. (ii) Likewise, it is argued by the appellants that as a facet of Article G 19(1 )(g) of the Constitution, right to fix the fee is conferred upon these educational institutions which are unaided and, therefore, the State cannot assume that power to itself. Here again, the power of the State was limited to that of 'policing', viz., to ensure that the fee fixed by the educational institutions does not amount to 'profiteering' and that it does not result in 'commercialisation' of the education. According to H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 617 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

the appellants, to ensure this, the only mechanism that can be provided is A the 'Complaint Mechanism' whereunder after the fee is fixed by the educational institution and ifthere is grievance of the students or parents or even the authorities against the same there can be a scrutiny by the appropriate committee (to be set up for this purpose) to see that the fee fixed is not excessive and meets the parameters laid down in T.M.A. B Pai Foundation. It was conceded that while doing so the State can also, as a watchdog, ensure that no capitation fee is charged from the students by the educational institutions. It was submitted that contrary to the above, in the instant case, the provisions of Act, 2007, read with Rules thereunder, authorize the Committee set up by the Government to fix the fee thereby denuding the institutions of their right completely, c which is anathema to the right of the educational institution to carry on their 'occupation' of running the educational institutions, as a fundamental right. (iii) Third challenge is to the provision of Section 8 of Act, 2007 and Rules 4 and 7 of Rules, 2008 dealing with the reservations. D

18Copy pinpoint18. Mr. K.K. Venugopal, learned senior counsel appearing for some of the appellants, spearheaded the attack to the impugned judgment with his usual fervor, panache and dexterity. Dr. Rajeev Dhawan was the other senior counsel who made his own detailed submissions with a melange of legal acumen, coupled with passion, thereby exacerbating the attack. They were joined by Mr. Raval, Mr. Ajit Kumar Sinha and Mr. Rakesh Dwivedi, learned senior counsel, who supported them in great measure. Their forceful onslaught was bravely faced and defended by Ms. Vibha Dutta Makhija, learned senior counsel who appeared for the State of Madhya Pradesh. Others, who supported her in countering the submissions of the appellants, depicting in the process the other side with terse and astute aphorisms of the stark ground realities, were Ms. Pinky Anand, learned Additional Solicitor General, Mr. Vikas Singh, learned senior advocate and Mr. C.D. Singh, learned Additional Advocate General. Whether the defence has been able to blunt the attack of the appellants and has emerged successful in its endeavor would be known at the final stages of the judgment when the arguments of both sides are suitably dealt with by this Court.

19Copy pinpoint19. The central theme of the arguments of the learned counsel for the appellants was that by the impugned legislation the State seeks to wipe out the choice available with the appellants institutions to devise H

618 SUPREME COURT REPORTS r2o 16) 3 s.c.R.

A their own admission procedure and the provisions of Section 6 read with Section 3(d) necessitate that the admission be carried out only on the basis of a CET to be conducted by the State Government or any agency appointed by it. Section 7 of the Act provides that the admission in violation of the provisions of the Act (i.e. in a manner otherwise than by a CET conducted by the State Government.:::· t11e agency appointed by it) would B be void. In addition, Section 9 Jfthe Act provides for the Committee defo1ed under Section 3(c) of the Act to 'determine· and 'fix' the fees to be charged by the appellants and thereby completely trample the rights of the appellants to determine and charge the fee. The Committee is not an independent Committee but is manned by Government officials and, c therefore, effectively the State Government has devised the said mechanism to fix the fees of the private colleges. Section 8 provides for reservation in private institutions, including post-graduate courses, which the appellants submit is impermissible in light of the law laid down by this Court in the case of As/wk Kumar Thakur v. Union of ltulitt & Ors. 5 •

20Copy pinpoint20. It is their submission that right available to the appellants institutions is to devise their own admission procedure, subject to the condition that the procedure so devised ought to be 'fair', 'tramparent' and 'non-exploitative'. Thus, the rights available to the institutions under Article 19(1 )(g) includes a right to admit students on a fair basis and as such the appellants can choose to admit students on the basis of E the CET conducted by an association of institutions coming together (as has been provided in P.A. Immu/(lr) or one conducted by the State and the choice also includes to a right to admit students on the basis of the CET conducted by the Central Government. The right to choose is the right that is available to the individual institutions under Article 19( I )(g) F and the impugned legislation which abrogates the said right falls foul of Article 12 of the Constitution oflndia.

21Copy pinpoint21. The counsel for the appellants traced the history of judicial journey by referring to the judgment in in U1111i Kris/111an, J.P. & Ors. v. State <~fA1ul/1ra Pradesh & Ors. 6 In that case, this Court considered G the conditions and regulations, if any, which the State could impose in the running of private unaided/aided recognized or affiliated educational institutions conducting professional courses. The extent to which the fee could be charged by such institutions and the manner in which

' (2007) 4 sec 361 H "(1993) I SCC645

MODERN DENTAL COLLEGJ? AND RESEARCH CENTRE v. 619 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

admissions could be granted was also considered. The Court thereafter A devised a scheme of 'ji-ee seats · or the state quota seats and 'payment · ·- seats'. or the management quota seats, undt<r which a higher fee could be charged from ihe students taking admission against the 'payment· seats' and a lesser fee. would be charged from students occupying the free seats'. This Court held that a fee higher than that charged by the B Government institutions for similar courses for the 'payment seats' can be imposed, but that such fee could not exceed the maximum limit fixed by the State. With regard to private aided recognized/affiliated educational institutions, the Court upheld the power of the Government to frarrie rules and regulations in matters of admission and fees, as well as in matters such a recruitment and conditions of service of teachers and c staff. 22, The learned counsel emphasjs.ed that the aforesai~ control mechanism failed and the position was remedied by this Court in 'r.M.A. Pai Fou11datio11. It held that ifthe institutions are entirely self-financing, the State shall have minimal interference and the interference can be made only for the purposes of Maintaining Academic Standards. Besides this, it was held that the colleges enjoy the greatest autonomy · and the same ought to be protected. The Court has considered the scope of the 'reasonable restrictions ·that can be provided by the State under Article 19(6) of the Constitution and held that the said power does not confer upon the State to take over the control of the affairs of the institutions which have been held to be reasonable restrictions. The appellants-referred to the observations made in paragraph 54 with great emphasis: · "54. The right to establish an educational institutional can be regulated; but such regulatory measures must, in general, be to ensure the maintenance of proper academic standards, atmosphere and infrastructure (including qualified staff) and the prevention of mal-administration by those in charge of management. The fixing of a rigid fee structure, dictating the formation and composition of a governing body, compulsory nomination of teachers and staff for appoi11tment or nominating students for admissions woul_d be unacceptable restricti~ns." It was argued that this Court, by overruling U1111i Krislt11a11, has recognised the need and importance of private educational institutions and the necessity of giving them the requisite autonomy in their H

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

A functimiing, management and administration.

23Copy pinpoint23. The submission was that this Court in T.M.A. Pui Foundation laid do\\ n the following principles and the scope of the rights enjoyed by the private institutions imparting professional education: (a) that the institutions have a fundamental right to establish, run B and maintain professional institutions and the rights flow from Article 30( I) in respect of minority institutions and Article 19(1 )(g) in respect of minority as well as non-minority private unaided institution; (b) the private institutions that do not receive any aid out of State funds enjoy a greater autonomy in their day-to-day functioning and the c autonomy includes:- (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 D (iv) a right to take action if there is dereliction of duty on the part of any employees. and (c) the fixing of a rigid fee structure, dictating the formation and E composition of a governing body, compulsory nomination of teachers and staff for appointment or nominating students for admissions would be unacceptable restrictions which would not be protected under Article 19(6) of the Constitution.

24Copy pinpoint24. Continuing the nairntion ofjudicial pronouncement, the appellants' F counsel submitted that in spite of the said observations and the law laid down by this Court in T.Jlf.A. Pai Fomulation defining the scope of the right of the private institutions to run and manage the professional colleges, some States did not adhere to the same and issued Government Orders relying on the observations made by this Court in paragraph 68 of the said judgment. The said orders were challenged before this Court, which G came to be decided in the case of Islamic Academy or Education & Anr. v. State of Karnataka & Ors. 7, which laid down certain broad modalities and creation of Committees for 'regulating' the admission procedure and the fee structure. It was submitted that ce11ain States

H 1 (2003) 6 sec 697

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 621 ·STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

enacted laws which were again in violation of the fundamental rights and, therefore, the same were challenged before this Court. The matter was referred to a larger-Bench, which answered the reference in the case of P.A. l11a11ular, wherein it was held as under: "132. Our answer to the first question is that neither the policy of reservation. can be enforced by the State nor any quota or percentage of admissions can be carved out to be appropriated by the State in a minority or non-minority unaided educational institution. Minority institutions are free to admit students of their own choice including studr.;nts of non-minority community as also members of their own community from other States, both to a limited extent only and not in a manner and to such an extent that c their minority educational institution status is lost. If they do so, they lose the protection of Article 30( I). "There is nothing wrong in an entrance test being held for one group ofinstitution imparting same or similar education. Such institutions situated in one State or in more than one State may join together and hold a common entrance test.. .... •· xx xx xx

141. Our answer to Question 3 is that every institution is free to devise its own fee structure but the same can be regulated in the interest of preventing profiteering. No capitation fee can be charged. xx xx xx

144. The two Committees for monitoring admission procedure and determining fee structure in the judgment of ls/a111ic F Academy are in our view, permissible as regulatory measures aimed at protecting the interest of the student community as a whole as also the minorities themselves, in maintaining required standards of professional education on non-exploitative terms in their institutions. Legal provisions made by the State G Legislatures or the scheme evolved by the Court for monitoring admission procedure and fee fixation do not violate the right of minorities under Article 30( 1) or the right of minorities and non- minorities under Article 19( I )(g). They arc reasonable restrictions in the interest of minority institutions permissible under Article 30(1) and in the interest of general public under H

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

A Article 19(6) of the Constitution." Explaining their understanding of T.M.A. Pai Foundation and P.A. lmmular in their own way, a passionate plea was made not to allow such legislations to remain Oil statute books which were palpably unconstitutional.

25Copy pinpoint25. ln addition to the aforesaid issues, which are founded on Article 19( I )(g) of the Constitution. additional arguments niised in this Court touch upon the. power of the State to enact such a legislation inasmuch as it is argued that the matter of admission in higher educational institutional falls in Entry 66 of List I to the Seventh Schedule of the c Constitution (Union List) and is not covered by Entry.25 of List Ifl of Sev"enth Schedule (Concurrent List).

26Copy pinpoint26. Learned counsel appearing for the State of Madhya Pradesh pi1t stiff resistance to the aforesaid submissions of the learned counsel for the appellants and submitted with all vehemence at her command D that the impugned judgment of the High Court was without blemish, which had given due and adequate consideration to all the aforesaid submissions of the appellants which were advanced before the High Court as well and rightly negated these submissions by correctly reading the ratio of T.M.A. Pai F<~t11ulatio11 as explained in Islamic.Academy of Education and put beyond pale of controversy by P.A. Immular. E She 1·eferred to and relied upon the reasoning given in the impugned judgment by the High Cou1i and stibmitted that no interfere11ce therein was called for. In nutshell. her submission was that Act, 2007 as well as Rules framed thereunder were unconstitutional/violative offundamental rights of the appellants guaranteed under Article 19( I )(g) of the F Constitution of India. Her submission was that undoubtedly the Court recognised the right of the citizens to establish and manage educational instituti911s, as fundamental right, by regarding the same as an 'ucc11potio11' under Article 19( I )(g) of the Constitution in T.M.A. Pai Fo1111datio11 and also bringing them at pai" with the similar rights which were already conferred upon minorities to establish and manage G professional/technical institutions under Article 30( 1) of the Constitution. She, however, sought to highlight that analogously the Cou1t also made it clear that these were subject tci reasonable restrictions which can be ii11posed under A1iicle 19(6) of the Constitution. She argued that T.M.A. Pai Fou1idatio11, in this process, expounded on the nature and extent of control on the basis of levels of education which has to be kept in mind H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 623 · · STATE OF MADHYA PRADESH [AK. SIKRI, J.] . . . . . '

and cannot be glossed OV,er: This was explained in paragraph 61. of the· . A judgi11ent by observing that insofar as school level ''ducatio.n is concerned, .... unaided private schools must have rnaximum autonomy since at the school level it is not possible to assess the. merit of the students. Therefore, . admission at this.stage cannot be granted on the basis of sdectioo based only on merit. Likewise, private unaided undergraduate colleges which B are imparting non-technical edt1cation would also enjoy saihe kii1d of · maximun-i autonomy similar to schools. Ifowever, whenever it comes to the higher education. particu iarly in the field.of professional edu.cation. · private unaided.institutions imparting profess.1onal education wo4ld not be extended the principle of 1iiaximum autonomy. Here·, ·the Court. categorically stated that maximum regulations cou[d be framed with regard c tothese institutions since the·principle ofmai11taini11g merit was ii1violable. and primary. The Court was categorical in clarifying that in the field of professio;1al educati~n, the Qovernrr;ent could enforce a regulation fo r 0

ensuring a merit based selection. Proceedii\g fu1iher in this directton, she referred to certain ·paragraphs of T.M.A. Pai F(11111datio11 and more focused discussion on this aspecruf RA. Iuamdar and submitted that these judgments clearly empower the State to regulate the admission to· ensure that the triple test ensured in T.M.A .. Pai Foundation is adhered io and such regulation wou Id encompass with in its power of the State to ·hold CET coupled with counseling of the. students to be admitted i11 the professional institutions." She further submitted·that in P.A. 'inamdar the sevt'.n Judge Bench. rather exhort~d the States to come 'Ollt with legislations regulating adrrtissions and fee in private u1~aided/aided professional. or technical institutions. She pointed out that after the pronouncement ofjudgmei1t in P.A. Jmmida'r, many States have e,nacte.d laws reguiating admissions andfoe in su~h inst,itt1tions. She submitted . F that Ollce ~uch a law enacted by the Delhi State was consiqered by t!iis Court in the case ofl11dia11.Medica/Associatio11 v. ·Union of India & Ors.S, where the challenge was to the ACMS prescribing for granting admission tq only ward.s ()f army persom~el. in colleges 11ianaged by ACMS, while upholding the constitutional validity of the D'elhi P-rofessiona[ Colleges/Institutions (Prnhibition of Capitation Fee .. G Regulation of Administration, Fixation ofNon-Exploitative Fee&. Other Measures) Act, 2007, this Court struck down the ACMS notification holding that non-minority private unaided professional colleges do not. have a right to choose their own 'source· from a genera[ po.ol. It w~s '(WI I) 7 sec 179 H

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

A held that 'neither the minority 11or 11011-mi11ority i11stitutio11s could mal-administer their educational institutions, especially professional institutions, that affect the quality of education, and by choosing students arbitrarily from within the sources that they are entitled to choose from'. Insofar as provision regarding fee regulations are concerned, her submission was that the mechanism which was provided B did not take.away the power of the educational institutions to fix the fee. On the contrary, even as per the procedure laid down the fee which the appellants intend to charge had to be placed before the Committee constituted under the Rules and the Committee was to consider whether proposed fee is proper or not and on that basis fix the fee keeping in c view the parameters laid down in the Act and Rules which were in consonance with the principles enunciated in T.MA. J'([i Fou11d([fio11 and P.A. [n([111d([r as well as Modem School v. Union of llu/ia9 • She, thus, argued that this was only a regulatory mechanism. Ms. Makhija further submitted that principles ofnaturaljustice were duly incorporatyd In the procedure established by incorporation of sub-section (2) of Section D 9 of the, \ct, 2007 and even provision of appeal process was provided under Section ).0 of the said Act.

27Copy pinpoint27. Insofar as provision relatil1g to reservation is concerned, she ·submitted that the issue wl)ether provisions of Article 1.5(5) of the Constitution apply oi· not to the private unaided.institutions was no longer E Tes integra since the same has already been upheld in the Constitution Bench judgment rendered in Pra111i1ti Educational & Cultural Trust (Registered) & Ors; v. Union of India & Ors. 10 She also pointed out that challenge to the said provision relating to reservation had not been forcefully pressed by appellants before the High Court. F Other counsel made their submissions on same lines.

28Copy pinpoint28. The discussion of the case upto now fairly demonstrates that the two cases on which strong reliance is placed by the appellants are T.MA .. Pai Fo1111datio11 and P.A. lnanular. In the process, judgment in the case of Islamic Academy of Education is also referred to. G · Interestingly, even the respondents have taken sustenance·from the law laid down in the aforesaid judgments. Thus, interestingly, the stichomythia which went on resulting into intense arguments, coupled with emotional

"(2004) s·scc 583 11 · .'" (20i-l) x sec 1

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 625 STATE OF MADHYA PRADESH [A.K. SIKRl, J.]

exchange between the two sides, had its foundation on the bedrock of same case law. Therefore, in carrying out our analysis, while dealing with the arguments of the counsel on both sides, we would be adverting to the aforesaid judgments, as well as some other judgments which have a bearing on the issue; to arrive at the desirable and just conclu.sions based upon the foundation laid down therein. We may also observe that in pondering over these arguments and submissions, we have endeavoured to undertake the task sagaciously and with keen penetrative analysis using the periscope of sound legal principles and doing a di.agnostic of sorts. ANALYSIS, REASONING & CONCLUSIONS: c

29Copy pinpoint29. The history of the dispute regarding Government control over the functioning of private medical colleges is quite old now but th~ tug of war continues. There seems to be some conflict of interest between the State Gpvernment and the bodies that establish institutions and impart professional medical education to the youth of this country. While on the one hand the State Governments want to control the institutions for D socio-political considerations and 011 the other the people who invest, set up and es.tablish the institutions have a genuine desire.to rtm and exercise functional control over the institution in the best interests ofthe students, it cannot be disputed that the State does not enjoy monopoly in the field of imparting medical education and the private medical colleges play a E very significant role in this regard. -The State lacks funds that is imperative to provide best infrastructure and latest facilities to the students so that they emerge as the best in their respective fields. w. In the modern age, therefore, particularly after the policy of liberalization adopted by the State, educational institutions by private bodies are allowed to be established. There is a paradigm shift over from the era-ofcomplete Government control over education (like other economic.and commercial·activities) to a situation where private players . are allO\ved to mushroom. But at the same time, regulatory mechanism is provided thereby ensuring that such private institution.s work within such.regulato:Y regime. When it comes to education, it is expectecl'that unaided private ii1stitutions prnvide quality education~and 11t the same time they are given 'fi·eedom in joints' with 1:i1i"nimal Govenm1ent ii1terference, except what comes under regulatory regime. Though educa.tion is now. treated as an ·accupa1io11' and, thus, has become a fundarn~nt~I right guaranteed under Article 19( I)(g) of the CoJ1Stitution, H

626•. SUPREM~ COURT REPORTS [2016] 3 S.C.R.

A .. at the same time shackles are put \niofar as".this particul(lr occ.upaiion is . concerned which is terined as 'nokle '. ~ Therefore, profiteering and -. commercialisation are n9t permitted and no capitation fee can.be charged . . · The admission of students has to be on merit arid nofat the whims and . fancies of the ecfu~ational institutions. Merit can be tested by adopting · .· .. · some methodology and few such methods are· suggested in T.llf.A. Pai. . B Foundation, ·which includes holdingofCET.· It is to be ensured that this . admission process ·meets the triple test of transparen~y, fairness and · non-exploitativene~s, • ·· · · · · Wiih these introductory remarks", we advert to issue-\vise discussion c I. Re.: P~ovisions reJ;ting. to CET t~ be_:_condu.cted b; .the· State machinery tinder Act, ·i007 as well a.s Rules.·• ·· . : ., .

31Copy pinpoint31. The issue inv~lved, which is of seminal nature;requi;es three ·· · . tire_s of judici;il review. in the first instancei it is to be examined .; . i-hethfr~he.~ight claimed bytheappeliants is a fandamentalright ·.. ,'

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

"The Committee observes that the Medical Council of Jndia as the regulator of medical education in the country has repeatedly failed on all it mandates over the decades. The Committee in the earlier part of this Report has dealt with these failures in some details. In this section, the Committee before suggesting remedy to the problem, would like to briefly touch upon the following prominent failures of MCI in order to put things into proper perspective:- (i) failure to create a curriculum that produces doctors suited to working in Indi.an context especially in the rural health services and poor urban areas; this has created a disconnect between medical education system and health system; c (ii) failure to maintain uniform standards of medical education, both undergraduate and post-graduate; (iii) development of merit in admission, particularly in private medical institutions due to prevalence of capitation fees, which D make medical education available only to the rich and not necessarily to the most deserving; (iv) failure to produce a competent basic doctor; (v) non-involvement of the MCI in any standardized summative evaluation of the medical graduates and post-graduates; E (vi) failure to put in place a robust quality assurance mechanism when a fresh graduate enters the system and starts practicing; (vii) very little oversight to PG medical education leading to huge variations in standards; F (viii) heavy focus on nitty-gritty of infrastructure and human staff during inspections but no substantial evaluation of quality of teaching, training and imparting of skills; (ix) abysmal doctor-population ratio; (x) failure to create a transparent system of medical college G inspections and grant ofrecognition or de-recognition; (xi) failure to guide setting up of medical college in the country as per need, resulting in geographical mal-distribution of medical colleges with clustering in some states and absence in several H

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

A other states and the disparity in healthcare services across states; (xii) acute shortage of medical teachers; · (xiii) fai Iure to oversee and guide the Continuing Medical Education in the country, leaving this important task in the hands of the commercial private industry; B (xiv) failure to instill respect for a professional code of ethics in the medical professional and take disciplinary action against doctor$ found violating the code of Ethics, etc. (Para 13.1) The Committee simultaneously observes that the onus of failure c of medical education system cannot be laid exclusively on the Medical Council of India. The successive Govenunents have also their share in it. The fact that there is imbalance in the distribution of medical college across States is not so mucn MCI's fault; it is the fault of the successive Governments that they have not pushed the MCI in that direction. There is also failure on the D pa11 of the State Government. (Para 13.2) The need for radical reforms it1 the regulatory framework of the medical profession has been on the agenda for several years now. The National Commission for Human Resources. for Heal Bill, 2011 which was introduced in the Rajya Sabha on the 22"d E December, 2011 was reported upon by this Committee and the 6Qth Report thereon presented to Parliament on the 23'd November,

2012. In its 60'" Report, the Committee had recommended to the Ministry of Health and Family Welfare to re-examine the concerns expressed by it and bring forward a fresh Bill. Rather than seizing the opportunity to come up with a better Bill, the Ministry remained apathetic to the state of affairs and did nofrespond with vigorous corrective measures. (Para 13.3) Due to massive failures of the MCI and lack of initiatives on the part of the Government in unleashing reforms, there is total system failure due to which the medical education system is fast sliding downwards and quality has been hugely side-lined in the context of increasing commercialization of medical education and practice. The situation has gone far beyond the point where incremental tweaking of the existing system or piecemeal approach can give the contemplated dividends. That is why the Committee is H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 667 . STATE OF MADHYA PRADESH [A.K. Sil~RI, J.]

convinced that the MCI cannot be remedied according to the existing provisions of the Indian Medical Council Act, J956 which is certainly outdated. If we try to amend or modify the existing Act; ten years down the line we< will still be grappling with the same problems that we are facing today. Nowhere in the world is there an educational process oversight, especially, of medical education done by an elected body of the kind that· MCI is. Managing everything of more than 400 medical colleges is too humongous a task to be done by the MCI alone because the · chall~nges facing medical education of the :21 ''Century are truly gigantic and cannot be addressed -with an ossified and opaque body like MCI. Transformation will happen only if we change the . C. innards of the system. (Para 13.4) Game changer reforms of.transformational nature are therefor-e · the need of the hour and they need t~ be carried out urgently and immediately. Because, ifrevamping of the regulatory structure is delayed any further on any grounds including political expedfoncy, it will be too late as too much momentum will have·been built to offset ~tteQipts at reversing the direction later, with the result that ourmecJical education system will fall into a bottomless pit and the:country will have "to -s~ffer greatsocial, politi~al and financial costs. (Para 13 :5) '-E ' Keeping all these facts in mind, the Committee is ~onvinced that . . the -much needed refonns will have to be led by the Central ' Government. · The MCI can no longer be entrusted with that . responsibility in view of its massive failures. The people of!ndi~ will not be we.II-served by letting the rilo~us operandi" of MCI continue unaltered to' the detriment of medical ~dl!Cation and decay· F of health system. The Government must therefore fulfill its · commitment to preserve, protect and promote the h~alth of all Indians by leading the way, for a radical reform which cleanses the present ills anp elevates medical education to contemporary glob;tl pedagogy. and practices ~hile.n~taining focus on national. G relevance. (Para p.6) · · . .

The expert co~mittee led by (late) Pr-of. Ranit Roy Chaudhury constituted by the Government h~ Juiy, 2014 to suggest reforms i11-- the regulatory framework of riledi.cal profession has subl)litted i-ts· ·. report in February, 2015, a copy of which has been supplied to H

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

A this Parliamentary Committee. The expert committee has recommended major changes in the ethos of the regulatory body and. major structural reconfiguration of its.functions. The expert .committee has suggested the, formation of a National' Medical Commission (NMC) through a 1'i'ew Act. The NMC will have B. four verticals (i) UG Board of Medical Education and Training, '(ii) PG Board of Medical Education and Training (iii) National Assessment and Accreditation Board and (iv) NationarBoard for Medical Registration. Besides these vertical heads, the expert committee has also· recommended the formation fa National Advisory Council which will consist of members from the State c Governments, Union Territories, State Medical Councils, Medical Universities and members of NMC. The {;ommittee has been informed that the creation of National Medical Commission and the structure (at Appendix.) envisaged has been endorsed by a group of eminent medical educationists, experts and pubic health persons. (Para 13. 7) D- Th!: Committee has done a rigorous analysis of the suggested new regulatory structure and found that several of its concerns have been addressed in the suggested new model ofregulation of medical education and practice. The Committee is therefore in general agreement with the suggested regulatory structure, and recommends to the government to examine the structure proposed by the Ranjit Roy Chaudhury Committee subject to the recommendations made by this Committee in this report. (Para 13.8) - To sum up, the Committee observes, even at the risk of sounding repetitive, that t11e need for major institutional changes in the regulatory oversight of the n1edical profession in the country is so· urgent that it cannot be deferred any longer. The Committee is, however, aware that any attempt at overhauling the regulatory framework will face huge challenges from the deeply entrenched vested interests who will try to stall ad derail the entire exercise. But if the medical education system has to be saved from total collapse, the Government can no longer look the other way and has to exercise its constitutional authority and take decisive and exemplary action to restructure and revamp India's regulatory systein of medical education and practice. The Committee, H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 669 STATE OF MADHYA PRADESH [A.K. SIKRI, J.]

therefore, exhorts the Ministry of Health, and Family Welfare to implement the recommendations made by it in this report immediately and bring a new comprehensive Bill. in Parliament for this purpose at.the earliest. (Para 13.9)"

101. In view of the above, while-the Expert Committee Report mentioned above is yet to be ac~ed upon by the Government, we do not express any view on its contents. We direct the Central Government to consider and take furtlier appropriate action in the matter at the earliest. I 02. At the same time, we do feel that pending consideration at appropriate executive or legislature level, an Oversight Committee needs to be set in place in exercise of powersofthisCourt under Article 142 of c the Constitution to oversee the functioning of the MCI and all other matters considered by the Parliamentary Commi~tee. ..

103. In view of the above, while we do not find any error in the view taken by the High Court and dismiss these appeals, we direct the constitution of an Oversight Committee consisting of the following D members: I. Justice R.M. Lodha {former Chief Justice of India)

2. Prof. (Dr.) Shiv Sareen E (Director, Institute of Liver and Bil.iary Sciences)

3. Shri Vinod Rai (former Comptroller & Auditor General of india) F I 04. A Notification with respectto constitution.ofthe said Committee . · be issued within two weeks from today. The Committee be given all facilities to function. The remuneration o'fthe Members of the Committee may be fixed in consultation with them. ·

105. The said C. ommittee will have the authority to oversee all · G statutory functions under the MCI Act. All policy decisions of the MCI will require approval of the Oversight Committee, The Committee will be free to issue appropriate remedial directions. The Committee will function till the Central Government puts in place any other appropriate mechanism after due consideration of the Expert Committee Report. H

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

A Initially the Committee will function for a period of one year, unless · suitable mechanism is brought in place earlier which will substitute the said Committee. We do hope that within the said period the Central Goverriment will come out with an appropriate mechanism.

106. List the matter after one year for such further directions as B may become necessary.

R. BANUMATHI, J. 1. I have had the advantage of going through the draft judgment proposed by my esteemed brother Hon'ble Justice A.K. Sikri. I entirely agree with the conclusions which my erudite brother c has drawn, based on a remarkable process ofreasoning. I would all the same Iike to add some of my own reasonings, not because the judgment requires any further elaboration but because the substantial questions or' law that arise for determination are of considerable importance.

D 2.In compliance with the directions of this Court in T.MA. Pai Foundation and Ors. v. State of Karnataka and Ors. (2002) 8 SCC 481, Islamic Academy of Education and Am: v. State of Karnataka and Ors. (2003) 6 SCC 697 and P.A. lnamdar and Ors. v. State of Maharashtra and Ors. (2005) 6 SCC 537, the State of Madhya Pradesh has enacted MP. Niji Vyavasayik Shikshan Sanstha (Pravesh Ka E Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (MP. Act No.21 of 2007). Association of Private Dental and Medical Colleges of State of Madhya Pradesh has filed Writ Petition No.1975 of 2008 challenging the provisions of Act 2007 as unconstitutional beyond legislative competence of the State Legislature and therefore without jurisdiction. In W.P. No.9496 of2008, the association has also challenged F the Admission Rule 2008 framed under Act 2007 as ultra vires the Constitution and M.P. Act 2007. The State Government issued orders on 28.02.2009 that the State Government shall conduct the Common pntrance Test (CET) for admission to the post-graduate medical and dental courses for the academic session 2008-2009 through Madhya G · Prade~h Professional-Examination Board (VYAPAM). The Association has challenged the order dated 28.02.2009 authorizing VYAPAM to conduct the CET for admission to post~graduate medical and dental courses as arbitrary and contrary to the law laid down in T.MA. Pai Foundation and P.A. lnamdar cases in W.P. No.2764 of2009. Madhya H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 671. STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

Pradesh High Comt by the common impugned judgment upheld the A validity of the provisions of the Act and also the Rules and dismissed all the Writ Petitions. Rule 10(2)(iii) of2009 Rules which prescribed that. the candidate should have obtained permanent registration with the State Medical Council of Madhya Pradesh and not from State Medical Councils of other States for securjng admission to post-graduate medical courses. 8 in any of the medical institution in the State of Madhya Pradesh was ~held to be ultra ,;ires.

3. Contentions: Though in the pleadings and submissions, appellants . have raised various contentions, in essence, substance of their contentions are:- c Madhya Pradesh Act of2007 is not referable to entry 25 in the concurrent list·and common entrance· test for admission is an important facet of the standards of higher education falling within entry 66 of Union List and State Legislatu(e was not competent to legislate on the subject covered in the Union D List. ·. In para (50) of T.MA. Pai Folmdation it was held that the right to establish and administer the educational institution in- cludes iilteralia.the rights to (a) admit students; (b) to set up a reasonable fee structure; and (c) to constitute a governing E body ..... ; while so, Section 3(d) and Section 6 of the M.P. Act 2007 stipulating that admission shall be on the basis of common entrance test in sucl~ manner as may be prescribed by the State infringes the fundamental right of u~aided private . educational institutions and the rights.ofthe institutions as iaid .- down in T.MA. Pai Foundation case and the same would be F · an unreasonable restrictions as held in T.MA. Pai Founda- tion case.

Section 9 read with Section 4( I) of Act 2007 empowering the committee to determine the fee. structure to be charged by the unaided private educational institutions infringes the G autonomy of the institutions who have a right to determine their own fee· structure in terms of Article 19( I )(g) of the Constitution of India. In terms of Section 4 and Regulation 5 Committee is given unbridled power to determine the fees H

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

A that may be_ charged by the institution and the Committee can scrutinize the stipulated amounts in various heads which is not in ·accordance with the right of the unaided private educa- tional institutions as laid down in T.MA. Pai Foundation case.

Section 8 of the Act 2007 providing for reservation -in un- B aided private educational institutions is unknown to the constiutional scheme and it would be an unreasonable restrition which would run afoul of A11icle 19( I )(g) of the Constitution of India and such unreasonable restriction in effect violates A11icles 14 and 15(1) of the Constitution oflndia. c 4. Challenge to Section 8 providing for reservation: Section 8 -. of ACt 2007 provides Jor reservation of seats in admission in private unaided professional _educational institutions for the persons belonging to Scheduled Castes and Scheduled Tribes and other backward classes as may be prescribed by-the-state Government. This ~eservation is pursu- ant to the Ninety Third Constitution Amendment-insertingArticle.15(5) of the Constitution. In para ( 41) of the impugned judgment, it is ob- served that Ninety Third Constitution Amendment inserting Article I 5(5) _ of the Constitution has been challenged by some of the petitioners in separate writ petitions and therefore no arguments was advanced in the E writ petitions chaUenging the views of Act 2007. It is, therefore, not to necessary go into the vtr-es ofSection 8 of Act 2007.

5. Re-contention: Lack of legislative competence of the State ·to enµctAct 2007 as the field is occupied by entry 66 of Union List: It is to be pointed out that the issue of legislative competence was neither F, raised nor argued befort;i the High Court as is apparent from the lack of discussion on this issue of constitutional importance in the impugned judgment. Be that ash may, to appreciate the conten.tions, it would be - advantageous. to have a glimpse into the relevant constitutional provisions on the distribution oflegislative fields between the Centre and the States. The legislative powers of the Centi:.iit and State Governments are G governed by the relevant entries in tl)e three Lists given in Seventh Schedule-. Entry 66 in Union List provides for 'co-ordination and determination of standards in institutions for higher education or research and scientific and technical institutions'. Prior to Constitution Forty-Second Amendment, "education including universities subject H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE. v. 673 STATE OF MADHYA PRADESH [R. BANUMATHi, J.]

to the provisions of the entries 63, 64, 65, 66 of Union List and entry 25 qf Concurrent List" was shown in entry 11 of the State List..· By the Constitution (Forty-second Amendment) Act I976with effect from 03.01.1977, entry 11 was deleted from the State List and amalgamated with ent.ry 25 of the Concurrent List.,

Entry 66 of List I-Union List reads as under:- B

. .Entry 66~ Co-ordination and determination of standards ..in· institutions for higher education 'or. research and scientific and technical institutions. c Entry 25 of List III-Concurrent List is as under:-

Entry 25. Education; including technical education,.medical education and universities, ;~bje<!t''f0·' the provi§iOI~ of 'entries 63, 64, 65 and 66 of List /,"vocational and technical training of labour. D Under entry 66 of the Union List, Government oflndia is required to co-ordinate and maintain standards in institutions for higher education or research and scientific and technical institution, Upion oflndia·has the right to make policy decisions to maintain standards in higher education and these will be bind1ng upon State Governments. Entry 25 of the E Concurrent List is subject to the provisions of entries 63, 64, 65 and 66 of List I and the State cannot have a policy contrary to the Central Act. Under Article 257(1 ), the exe9utive power .ofthe State Go".ern.men.t_ . shall be so exer<:ised as not to"impe~e or prejudice the exercise of the .executive. power. of the Union. . · F

6. While 'education' is a concurrent subject under entry 25 of . concurrent list as substitut~d by Constitution (Forty-second Amendment). Act 1976, entries 65 and 66 of.Union List give ·union the power. to ensure that the standards. of research etc. - is not lowered at the hands of particular State or States to the detriment of national progress and that G .• , the P?Wer of the State Legislature must be so exereised as not to directly encroach upon the power of Union under the present entry. Though the field of legislation ava'ilable to the Parliament and the States has been definite. as stated. above, more often, a certain amount ofove~lapping · might become unavoidable; the legislation ·which tl)us . . overlaps would H ().. . ).

674 ~UPh·'"vfE COURT REPORTS [2016] 3 S.C.R.

A not however be rendered invalid, if, in 'pith and substance' th~ legislation _is on the subject reserved in favour of that Legislature. In order to enable smooth functioning offederal structure of our Constitution, 'incidental _encroachment' into or 'overlapping' of the field covered by one of the · entries in the other Lists is permissible so long as it does not transgress the limit oflegislation earmarked forthe legislature making the law, judged by the standards fixed by the doctrine of 'pith and substance'. . .

7. In Dr. Preeti Srivastava and Anr. v. State of MP. and Ors. ( 1999) 7 sec 120. it was held that the word •e_ducation. under entry 25 of Schedule VII List III.is of wide import. It would include in its fold the c taught, the teacher, the textbook and also training as practical training is : - required to be imparted to students pursuing_the course of post-graduate medical education. Curricula is also covered by the term 'education'. . -

8. While elaborating the concept of 'education' after referring to the dictionary meaning and '.India Vision~2020', in P.A. fnamdar case, in paras (88) to (90), it was held as urrder:-

"88.1E.ducation is:

" ... continual growth of personality, steady development of character, ~nd the qualitative improvement of Life; A trained mind has the capacity to draw spiritual n.ourishment from every experience,_be it defeat or victory, sorrow or joy. Education is training the mind and 11ot stuffing the brain,"·

(See Eternal Values for A Changing Society, Vol. III- F EducationforHwnan Excellence, published by Bharatiya Vidya Bhavan, Bombay, at p. 19.)

"We want that education by which cha'racter is formed, strength of mind is increased, the intellect is expanded, and by which one can stand on one's own feet. ... The end of all education, G all training, should be man·-making. 1he end and aim of all training is to ml\ke the man grow.' The. training by which the current and expression of will are brought under control and l:iecome fruitful is called education." (Swami Vivekanand as H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 675 STATE OF MADHYA PRADESH [R. BANUMATHI, J.)

quoted ibid., at p. 20.) A

89. Eoucation, accepted as a useful activity, whether for charity or for profit, is an occupation. Nevertheless, it does not cease to be a service to society. And even though an occupation, it cannot be equated to a trade or a business. B

90. In short, education is .national wealth essential for the nation's progress and prosperity."

9. By virtue of entry 66 of Union List "Co-ordination and determination of standards in institutions for higher education or c research, scientific and technical institutions" is reserved with Union of India. Power to co-ordinate is not merely power to evaluate but to · harmonise or secure relationship for concerted action.

Oxford Concise Dictionary (7 1h Edn.) defines 'co-ordinate' as:- D "make co-ordinate; bring {parts, movements etc.) into proper relation, cause to function together or in pi·oper order". Black's Law Dictionary (I 01h Edn.) defines 'determinate' as:- E "Having defined limits; fixed; definite" ai1d 'determination' is defined as; "The act of deciding something officially; esp.. a final decision by a court or administrative agency".

From these definitions, it flows that' determination' is the official characterization of an expression and 'co-ordinati~n ' means' · F through which detennined nonns or standards are kept in harmony with each other.

10, In Concise Oxford English Dictionary (Tenth Edition, Revised) the meaning ofthe·w<?rd 'standard' is given as:- G •·a level of quality or attailiment, a required or agreed level of q.uality or attai11111ei1t (in elementary schools) a grad'e ofproficiency tested by examination, something used as a measure, norm or rn.odel in comparative evaluations. "

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

A Black's Law Dictionary (IO'h Edn) defines 'standard' as:-

"a model accepted as correct by custom, consent, or authority; a criterion for measuring acceptability, quality or accuracy._ " B RamanathaAiyar's Law Lexicon 3rd E~n. also defines 'standard' as:-

"something that is established by authority, customs or general consent as a model or example to be followed [s.18(4), expln, Beedi and Cigar Workers (Conditions of c Employment) A.If (32 of 1966)} ' . .. Specifications approved and prescribed by a recognized body for repeated and continuous application. Standard usually prescribe a basic though higher than average level of quality." D

11. The legislative history of entry 66, Union List might lay down a better picture in this regard. Profitably, we may refer to the history of 'education' as a subject of legislation in the ltidian perspective must be ascertained. The Government oflndiaAct, 1935 laid down the legislative

E State List reads as under:- · · -' · .. lists in the Seventh Schedule. Entry 17 cifList II therein..,i.e. the Provincial

·"Education including universities otl]er than those. specified in paragraph 13' <>f List I" Paragraph 13 of List I i.e. the federal legislative list reads as under: F "The B~iaras Hindu University and the Aligarh Muslim University"· . Evidently, '.education' as a field oflegislation including universities was available to the Provinces except the two Universities i.e. the Benaras Hindu University andAligarl~ Muslim Univers·itywhich lay_ in the domain G of the federal legislative competence. 'Even when the constitution was being drafted, the idea of 'education' being a State subject and the role of Union to be limited only to co-ordinate educational institution was very firm in the minds of our cpnstitution framers.

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 677 STATE OF MADHYA PRADESH [R. BANUMATHI, J.)

12. Ifwe refer to volume IX of the Constituent Assembly Debates · A held on Wednesday, the 31st August 1949, it transpires that while introducing entry 66 of List I (as it stands in its·present form), Dr. B.R. Ambedkar proposed nothing more than empowering the Union to set mere standards for higher education and to co-ordinate oetween the institutions. Relevant excerpts from the debate is quoted below:- B

'"The Honourable Df. B.R. Ambedkar: Sir; I move:

'"That after entry 57 of List/, the following new entry be inserted:- c '57(A) Co-ordination and maintenance of standards in institutions for higher education, scientific and technical institutions and institutions for research'. "

This entry is merely complementary to the earlier entry No. 57. In D dealing.with institutions maintained by the provinces, entry 57 A proposes to give power to the Cei1tre to the limited extent of coordinating the research institutions and of maintaining the standards i1;those institutions to prevent their being lowered. E

13. Sir, °J also move:-

"That in amendment No. 28 of List I (Sixth Week) in the· proposed new entry 5 7A of List l, for the word 'maintenance' !}?..e ward 'determination be substituted. " F The said proposal. of Dr. Ambedkar was opposed by Shri V.S. Sarwate (Madhya Bharat).by sugges_ting that only "Promotion by . financial assistance or ot~erwise of standards in instit.utions for higher education, scientific and technical institutions and institutions.for research" be left i_n the domain of the Union, so as to G avoid unnecessary interference with the State's power to legislate.in relation to 'education'. While highlighting the import11nce of' education' a being State subject, Shri V.S. Sarw,ate observed as unde-r:-

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

A "The modern trend in education is that education should be adapted to each individual so that the personality of each individual might be developed to its fullest extent, of course consistently with the personalities of other individuals. If this is the desideratum in education, then there must be fit!! scope B for variety. There should not be any uniformity in education as un(for111ity ll'ould kill the growth of the individual. Nobody can say that there should be a standard of intellectual ll'eights and measures for human beings. Therefore I thi11k that education should be left e11tirely to the provinces." c Shri V.S. Sarwate went to oppose introduction of entry 66 of List I (in the present form) by observing that the Union would not be competent enough to lay down standards for technical education such as that ofrriedical education. His observation is quoted as under:- D "011e word 111ore, Sil; I think' that it will be difficult for Parlia111e11t or the Ce11tra/, Government to fix standards of higher education, for example in higher 111edical education. Would it be possible/or the Parliament to find out what are the sta11dards for medical education? " Jn order to answer the concern of other constitution framers, Dr. Ambedkar went Oil to clarify the limited scope of entry 66 of List,, _. (as in the present form), as proposed by him in the following words:- "Emry 57A merely deals with the 111aintenance of certain standards in certaii1 classes of institutions, namely, institutions imparting higher education, scientific and technical institutions, institutions for research, etc. You may ask, "why this entry?" I shall show why it is necessary. Take for instance the B.A. Degree examination which is co11ducted by the different universities in India. Now, most provinces and the Centre, when advertising for candidates, merely say that the candidate should be a graduate of a university. Now, suppose the Madras University says that a ca11didate at the B.A. H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 679 STATE OF MADHYA PRADESH [R. BANUMATHI, J.J

Examination, if he abtained 15 per cent of the total marks shall be deemed to have passed that examination; and suppose the Bjhar University says that a candidate who has obtained 20 per cent. of marks shall be deemed to have passed the B.A. Degree exa111ination; and so111e other university fixes some other standard, then it would be quite a chaotic condition, and the expression that is usually used, that the candidate should be a graduate, I think, would be meaningless. Similarly, there are certain research institutes, on the results of which so many activities of the Central and Provincial Governments depend. Obviously you cannot ·permit the results of these c technical and scientific institutes to deteriorate ji-0111 the normal standard and yet allow them to be recognized either for the Central purposes, for all-India purposes or the purposes of the State." D

14. The intent of our constitution framers while introducing entry 66 of the Union List was thus limited only to empowering the Union to lay down a uniform standard of higher education throughout the country". and not to bereft the State Legislature of its entire power to legislate in relation to 'education' and organizing its own common entrance examination. I 5. If we consider the ambit of the present entry 66 of the U11ion List; no doubt the field of legislation is of very wide import and determination of standards in institutions for higher education. In the federal structure of India, as there are many States, it is for the Un ion to co-ordinate between the States to cause them to work in the field of higher education in their respective States as per the standards determined by the Union. Entry 25 in the Concurrent List is available both to the Centre and the States. However, power of the State is subj~ct to the provisions of entries 63, 64, 65_, and 66 of Union List; while the State is competent to legislate on the education including technical education, medical education and universities, it should be as per the standards set by the Union. H

680 SUPREME COURT REPORTS r

A 16. The words 'co-ordination' and 'determination of the standards in higher education' are the preserve of the Parliament and are exclusively covered by entry 66 of Union List. The word '<:o- ordination' means harmonisation with a view to forge a uniform pattern for concerted action. The term 'fixing of standards of institutions for B higher education' is for the purpose ofharmonising co-ordination of the various institutions for higher education across the country. Looking at the present distribution oflegislative powers between the Union and the States with regard to the field of 'education ', that State's power to legislate in relation to "education, including technical education, c medical education and universities" is analogous to that of the Union. However, such power is subject to entries 63, 64, 65 and 66 of Union List, as laid down in entry 25 of Concurrent List. It is the responsibility of the Central Government to determine the standards of higher education and the same should not'be lowered at the hands of any particular State. D

17. Even the National Educational Policy recognised that the Union shall take the larger responsibility of setting.the standards. The Policy of.1986 states:- "3 .13 ... While the role and responsibility of.the States in regard to education will remain essentially unchanged, the Union·· Government would accept a larger responsibility to reinforce the national and integrative character of education, to maintain quality and standarcfs (including those of the teaching projession at all level5), to study and monitor the educational requirements of the country as a whole in regard to manpower for development, to cater to the needs of research and advanced study, to look after the international aspects of education, culture and Human Resource Development and, in general, to promote excellence at all levels of the educational pyramid th_roughout the country. Concurre1icy signifies a partnership, which is at once meaningful- and challenging; the Nationql Policy will, be oriented towards giving effect to it in letter and spirit . . H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 681 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

5.30 State level planning and co-ordination of higher A .education will be done through Councils of Higher .Education. The UGC qnd these Councils will develop coordinative methods to keep a watch on standards.

xxx B

10.4 State Government may establish State Advisory Boards of Education on the lines of CABE. Effectu'e measures should be taken to integrate mechanisms in the various State depar11i1e11ts concerned with Human Resource· Development. c

10. 5 Special attention will be paid to the training of educational planners, administrators and heads of institutions. bistitutional arrangements for this purpose should be set up in stages. " (mhrd.gov. inls itesluploadJileslmhrd/fi /es/ upload_ document/NPE86-mod92.pdf) D

The policy clearly recognised that the State would continue to fulfill its responsibilities. This is also discernible from the amendment to entry 25 of Concurrent List. Had the intention been to keep higher education solely in the hands of the Union, only the omission of entry 11 from State E ·List would have sufficed. The legislative intent was to allow the Union to set the standards through its organs, which the States would facilitate. 18 . .Thus, what emerges is that under List I, responsibility of the Union is with respect to formulation and co-ordination of standards for htgher education institutions. ""Determinaiion of Standard in Higher F Education" implies that the Parliament is empowered to prescribe such norms to maintain quality in the institutions for higher education. The expressiqn 'co-ordination and determination of standards in higher edu- cation' n1eans that it is for the Parliament to take concerted action to- wards maintaining the standards. The reason for empowering the Cen- G tral Legislature with entry 66 was to ensure that the standards of higher education were not lowere.d at the hands of a particular State to the detriment of the national progress and that the power exercised by the State did not directly encroach upon power of the Union entry 66.

682 SUPREME COURT REPORTS (20 I 6] 3 S.C.R.

A I9. An elucidation of the connotation, "co-ordination" as it appears in entry 66 of list (is contained in the discussion by Shah J., while expressing th~ majority view in The Gl{jarat University & Am: v. Shri Krishna Ranganath Mudholkar & Ors. .[I 963] Supp. I SCR I I 2. In this case, the Constitution Bench of this Court considered whether the State Legislature could impose Gujarati and/or Hindi in Devnagari script B as exclusive medium ofinstniction and examination in institutions affiliated to the university and constituent colleges. It was held that:- "if a legislation imposing a regional-language or Hindi as the exclusive medium of instruction is likely to result in lowering of standards, it must necessarily fall within Item 6.6 of List I and be c excluded to that extent from Item I I of List 11" Medium of instruction was held to have an imp01tant bearing on the effectiveness of instruction and resultant standards achieved thereby. It was further held as under:

D "If adequate textbooks are not available or competent instructors in the medium, through which instruction i~ directed to pe imparted,' are not available, or the students are not able to receiv~ or imbibe instructions througli the medium in which it is impa_rted, standards must of necessity fall, and legislation for coordination of standards . in such matters would include legislation reliiting to medium of . E instruction. If legislation relating to imposition of an exclusive medium of instruction in a regional language or in Hindi; having regard to the absence of textbooks and journals, compete'nt teachers and incapacity of the students to understand.the subjects, is likely to result in the lowering of standards, that legislation would, in our judgment, necessarily fall within Item 66 of List I and would be deemed to be excluded to· that extent froni the amplitude of the power.conferred by Item 11 of List II." . .

20. Subba Rao, J. in Gujarat University case, in his ·dissenting view stated thatno authority.had gone so far as to hold that even if the · pith and substance of an Act fell squarely within the ambit ofa particular entry, it should be struck down on the speculative and anticipatory ground that it might come into conflict with a la'". made by a co-ordinated legislafure by virtue of another entry; if the· impact of a State law on a H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 683 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

Central Legislation was so heavy and devastating as to wipe out or A appreciably abridge the central field, then it might be a ground for holding that the State law was a colourable exercise of power and in pith and substance it fell not under the State entry, but under the Union entry.

21. In R. Chitralekha & Am: v. State of Mysore & Ors. (1964) 6 B SCR 368, State Government informed the Director ofTechnical Education that it had been decided to fix 25% of the maximum 1:narks for the examination in optional subjects as interview marks and on that basis, selections were made for admission to Engineering and Medical Colleges. Considering the impact of State law providing for such standards it was c held that the State law prescribing a higher percentage of marks for extra-curricular activities in the matter ofadmission to colleges cannot be said to be encroaching on the field cove~ed by entry66 of Union List and that the State Government would be witliin its rights to prescribe qualifications for admission to colleges so long as its action does not D contravene aiiy other law.

22. lt was observed in the case of Government ofAndhra Pradesh & Am: v. Medll'in Educational Society & Ors. (2004) I SCC 86, that "keeping in view the practical difficulties faced by the Central Government E or the statutory bodies like MCI or UGC, some power is s~ught to be delegated to the State so as to make the Parliamentary statute workable. Such 'play in joint' is also desirable having regard to the federal structure of our Constitution".

23. In State of T.N. and Am: v. Adhiyaman Educational a11d F Research Institute and Ors., ( 1995) 4 SCC 104, the question involved was whether after coming into force of the Central Act, All h1dia Council, Technical Education Act, 1987, the State Government had the power to grant and withdraw permission to start educational institution. It was held thii.t to that extent after coming into operation of the Central Act G under entry·66 of Union List, to co-ordinate and determine the standards of technical institutions as in entry25 of Concurrent List; the provisions of the University Act will be deemed to have become unenforceable in

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

A case of technical colleges like engineering colleges. In para (41), this Court summarized the principles as under:-

"41. What emerges from the above discussion is as follows:

(i) The expression 'coordination' used in Entry 66 of the Union B List of the Seventh Schedule to the Constitution does not merely mean evaluation. It means harmonisation with a view to forge a uniform pattern for a concerted action according to a certain design, scheme or plan of development. It, therefore, includes action not only for removal of disparities in standards but also for preventing c the occurrence of such disparities. It would, therefore, also include power to do all things which are necessary to prevent what would make 'coordination' either impossible or difficult. This power is absolute and unconditional and in the absence of any valid compelling reasons, it must be given its full effect according to its plain and express intention.

(ii) To the extent that the State legislation is in conflict with the Central legislation though the former is purported to have been made under Entry 25 of the Concurrent List but in effect encroaches upon legislation including subordinate legislation made by the Centre under Entry 25 of the Concurrent List or to give effect to Entry 66 of the Union List, it would be void and inoperative.

F . (iii) If there is a conflict between the two legislations. unless the State legislation is saved by the provisions of the main part of clause (2) of Article 254, the State legislation being repugnant to the Central legislation, the same would be inoperative.

G (iv) Whether the State law encroaches upon Entty 66 of the Union List or is repugnant to the law made by the Centre under Entry 25 of the Concurrent List. will have to be determined by the examination of the two laws and will depend upon the facts of each case. H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 685 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

(r) When there are more applicants than the available situations/ A seats. the State authority is not prevented from laying down higher standards or qua Iifications than those laid down by the Centre or the Central authority to short-list the applicants. When the State authority does so, it does not encroach upon Entry 66 of the Union List or make a law which is repugnant to the Central law. B

(vi) However, when the situations/seats arc available and the State authorities deny an applicant the same 011 the ground that the applicant is not qualified according to its standards or qualifications, as the case may be, although the applicant satisfies the standards C or qualifications laid down by the Central law, they act unconstitutionally. So also when the State authorities de-recognise or disaffiliate an institution for not satisfying the standards or requirement laid down by them. although it satisfied the norms and requirements laid down by the Central authority, the State D authorities act illegally."

24.ln D1: Preeti Srivastava case, this Co11rt considered the question whether it was open to the State to prescribe different admission criteria, in the sense of prescribing different minimum qualifying marks, for special E categoty candidates seeking admission to the post-graduate medical courses under the reserved seats category as compared to the general category candidates. While considering the question whether norms for admission have any connection with the standards of education. nbs1:rving that norms for admission haw a nexus with standards of 1.:clucation or I'° rules of admission which ar1: cover1:d under entry 25 of concurrent 1ist. it was held that the minimum standards as laid clown by the Central Statute have to be complied with by the States. In paras (35) and (36) it was held as under:- G "35 ..... Both the Union as well as the States have the power to legislate on education including medical education, subject, inter alia, to Entry66 of List I which deals with laying down standards in institutions for higher education or research and scientific and 1-1

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

A technical institutions as also coordination of such standards. A State has, therefore, the rightto control education including medical education so long as the field is not occupied by any Union legislation. Secondly, the State cannot, while control Iing education in the State, impinge on standards in institutions for higher B education. Because this is exclusively within the purview of the Union Government. Therefore, while prescribing the criteria for admission to the institutions for higher education including higher medical education, the State cannot adversely affect the standards laid down by the Union oflndia under Entry 66 of List I. Secondly, c while considering the cases on the subject it is also necessary to remember that from 1977, education, including, inter alia, medical and university education, is now in the Concurrent List so that the Union can legislate on admission criteria also. If it does so, the State will not be able to legislate in this field, except as provided in D Article 254.

36~ It would not be correct to say that the norms for admission have no connection with the standard of education, or that the rules for admission are covered only by Entry 25 of List Ill. Norms E of admission can have a direct impact on the standards of education. Of course, there can be rules for admission which are consistent with or do not affect adversely the standards of education prescribed by the Union in exercise of powers under Entry 66 of List I. For example, a State may, for admission to the postgraduate medical courses, lay down qualifications in addition to those prescribed under Entry 66 of List I. This would be consistent with promoting higher standards for admission to the higher educational courses. But any lowering of the norms laid down can and does have an adverse effect on the standards of education in the institutes of higher education. Standards of education in an institution or college depend on various factors. Some of these are:

(1) the calibre of the teaching staff; H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 687 STATE Of MADHYA PRADESH [R. BANUMATHI, J.]

(2) a proper syllabus designed to achieve a high level of education in the given span of time;

( 3) the student-teacher ratio;

( ./) the ratio between the students and the hospital beds available to each student;

(5) the calibre of the students admitted to the institution;

( 6) equipment and laboratory facilities, or hospital facilities for training in the case of medical colleges; c ( 7) adequate accommodation for the college and the attached hospital; and

(8) the standard of examinations held including the manner in which the papers are set and examined and the clinical performance is judged."

25. As laid down in the decision in Preeti Srivastava, it is within the legislative competence of the State Legislature, in exercise of power under entry 25 of concurrent list to prescribe higher educational qualifications and higher marks for admission in addition to the one fixed by the Indian Medical Council in order to bring out the higher qualitative output from the students who pursue medical course. Following the above dictum, in paragraphs (13) and (14) of the decision of this Court in Visveswaraiah Technological University & Anr. v. Krishnendu Halder F & Ors., reported in (2011) 4 SCC 606, held as under:-

"13. The object of the State or University fixing eligibility criteria higher than those fixed by AICTE, is twofold. The first and foremost is to maintain excellence in higher education and ensure G thatthere is no deterioration in the quality ofcandidates participating in professional engineering courses. The second is to enable the State to shortlistthe applicants for admission in an effective manner, when there are more applicants than available seats. Once the H

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

A power of the State and the examining body, to fix higher qualifications is recognised, the rules and regulations made by them prescribing qualifications higherthan the minimum suggested by AICTE, will be binding and will be applicable in the respective State, unless AICTE itself subsequently modifies its norms by B increasing the eligibility criteria beyond those fixed by the University and the State. It should be noted that the eligibility criteria fixed by the State and the University increased the standards only marginally, that is, 5% over the percentage fixed by AICTE. It cannot be said that the higher standards fixed by c the State or University are abnormally high or unattainable by normal students, so as to require a downward revision, when there are unfilled seats. During the hearing it was mentioned thatAICTE itself has revised the eligibility criteria. Be that as it may.

14. The respondents (colleges and the students) submitted that in that particular year (2007-2008) nearly 5000 engineering seats remained unfilled. They contended that whenever a large number of seats remained unfilled, on account of non-availability of adequate candidates, paras 41 (r) and (vi) of Adh~i·aman (1995) E 4 sec 104 would come into play and automatically the lower minimum standards prescribed by AICTE alone would apply. This contention is liable to be rejected in view of the principles laid down in the Constitution Bench decision in Preeti Srivastava F (D1:)(1999) 7 SCC 120 and the decision of the larger Bench in S. V. Bratheep (2004) 4 SCC 513 which explains the observations in Adhiyaman (1995) 4 SCC 104 in the correct perspective. We summarise below the position, emerging from these decisions:

(i) While prescribing the eligibility criteria for admission to G institutions of higher education, the State/University cannot adversely affect the standards laid down by the central body/ f\ICTE. The term ··adversely affect the standards" refers to lowering of the norms laid down by the central body/ AICTE. H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 689 STATE OF MADHYA PRADESH [R. BANUMATHI, J.] • Prescribing higher standards for admission by laying down A qualifications in addition to or higher than those prescribed by AICTE, consistent with the object of promoting higher standards and excellence in higher education, will not be considered as adversely affecting the standards laid down by the central body/ AICTE. B

(ii) The observation in para 41 (vi) of Adhiyaman (1995) 4 SCC 104 to the effect that where seats remain unfilled, the State authorities cannot deny admission to any student satisfying the minimum standards laid down by AICTE, even though he is not c qualified according to its standards, is not good law.

(iii) The fact that.there are unfilled seats in a particular year, does not mean that in that year, the eligibility criteria fixed by the State/ University would cease to apply or that the minimum eligibility criteria suggested by AICTE alone would apply. Unless and until the State or the University chooses to modify the eligibility criteria fixed by them, they will continue to apply in spite of the fact that there are vacancies or unfilled seats in any year. The main object of prescribing eligibility criteria is not to ensure that all seats in colleges are filled, but to ensure that excellence in standards of higher education is maintained.

(iv) The State/University (as also AICTE) should periodically (at such intervals as they deem fit) review the prescription of eligibility criteria for admissions, keeping in balance, the need to maintain excellence and high standard in higher education on the one hand, and the need to maintain a healthy ratio between the total number of ~eats available in the State and the number of students seeking admission, on the other. If necessary, they may revise the eligibility criteria so as to continue excellence in education and at the same time being realistic about the attainable standards of marks in the qualifying examinations."

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

A It is clear from the above decision that the State legislation fixing higher qualification than the one prescribed by the AICTE is not outside the legislative competence of the State.

26. In Ambesh Kumar (Dr) v. Principal. L.L.R.M. Medical ColleKe. Me.erut and Ors:. (I 986) Supp SCC 543, the State prescribed B 55% as minimum marks for admission to post-graduate medical courses. The Court considered the questio_n whether the State can impose qualifications in addition to those laid down by the Medical Council of India and the regulations framed by the Central Government. This Court c held thatthe State Government laying down eligibility qualification, namely, obtaining ofcertain minimum marks in the examination by candidates is neither an encroachment upon regulation made under the Medical Council Act nor any infringement of Union's power provided in entry 66 of Union List. It was held as under:- D " ... The State Government by laying down the eligibility qualification namely the obtai11ing of certain minimum marks in the MBBS Examination by the candidates has not in any way encroached upon the regulations made under the Indian Medical Council Act nor does it infringe the Central power provided in E Entry 66 of List 1 0f the Seventh Schedule to the Constitution. The order merely provides an additional eligibility qualification."

27. Observing that the scope of the relevant entries in the Seventh Schedule of the Constitution has to be understood in the manner as stated in Dr. Pree ti Srivastava case, in State of T. N. and Am: v. S. V. Bratheep (minor) and Ors. (2004) 4 SCC 513, this Court held as under:-

9. Entry 25 of List Ill and Entry 66 of List I have to be read together and it cannot be read in such a manner as to form an exclusivity in the matter ofadmission but if certain prescription of standards have been made pursuant to Entry 66 of List I, then those standards will prevail over the standards fixed by the State in exercise of powers under Entry 25 of List III insofar as they adversely affect the standards laid down by the Union of India or .H any other authority functioning under it. Therefore, what is to be

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 691 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

seen in the present case is whether the prescription of the A standards made by the State Government is in any way adverse to, or lower than, the standards fixed by AICTE. It is no doubt true that AICTE prescribed two modes of admission - one is merely dependent on the qualifying examination and the other, dependent upon the marks obtained at the common entrance test. B The appellant in the present case prescribed the qualification of having secured certain percentage of marks in the related subjects which is higherthan the minimum in the qualifying examination in order to be eligible for admission. If higher minimum is prescribed by the State Government than what had been prescribed by c AICTE, can it be said that it is in any manner adverse to the standards fixed by AICTE or reduces the standard fixed by it? In our opinion, it does not. On the other hand, if we proceed on the basis that the norms fixed by AICTE would allow admission only on the basis of the marks obtained in the qualifying examination, the additional test made applicable is the common entrance test by the State. Government. If we proceed to take the standard fixed by AICTE to be the common entrance test then the prescription made by the State Government of having obtained certain marks higher than the minimum in the qualifying examination in order to be eligible to participate in the common entrance test is in addition to the common entrance test. In either event, the streams proposed by AICTE are not belittled in any manner. The manner in which the High Court has proceeded is that what has been prescribed by AICTE is inexorable and that that minimum alone should be taken into. consideration and no other standard could be fixed even the higher as stated by this Court in Dr Preeti Srivastal'a case (1999) 7 SCC 120. It is no doubt true, as noticed by this Court in Adhiyaman case ( 1995) 4 G SCC I 04 that there may be situations when a large number of seats may fall vacant on account of the higher standards fixed. The standards fixed should always be realistic which are attainable and are within the reach of the candidates. It cannot be said that H

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

A the prescriptions by the State Government in addition to those of A!CTE in the present case are such which are not attainable or which are not within the reach of the candidates who seek admission for engineering colleges. It is not a very high percentage of marks that has been prescribed as minimum of60% downwards, B but definitely higher than the mere pass marks. Excellence in higher education is always insisted upon by a series of decisions of this Court including Dr Preeti Srivastava case 0999) 7 SCC 120. If higher minimum marks have been prescribed, it would certainly add to the excellence in the matter of admission of the students in c higher education.

28. Another argument that has been putforth is that the power to enact laws laying down process of admission in universities etc. vests in both Central and State Governrnents under entry 25 of the concurrent D list only. Under entry 25 of concurrent list and erstwhile entry 11 of State List, the State Government has enacted various legislations that inter alia regulate admission process in various institutions. For instance, Jawaharlal Nehru Krishi Vishll'avidyalaya Adhiniyam, Raj iv Gandhi Prodyogiki Vishwavidyalaya Adhiniyam, Rashtriya Vidhi Sa11Satha11 E Vislnvavidyalaya Adhiniyam etc. were established by the State Government in exercise of power under entry 25 of concurrent list. Similarly, the Central Government has also enacted various legislations relating to higher education under entry 25 of concurrent list pertaining to centrally funded universities such as Babasaheb Bhimrao Ambedkar F University Act 1994, MaulanaAzad National Urdu University Act, 1996, Indira Gandhi National Tribal University Act, 2007 etc. Central Government may have the power to regulate the admission process for centrally funded institutions like I!Ts, NIT, J!PMER etc. but not in respect ofother institutions running in the State. G

29. In view of the above discussion, it can be clearly laid down power of Union under entry 66 of Union List is limited to prescribing standards of higher education to bring about uniformity in the level of education imparted throughout the country Thus, the scope of entry 66 H must be construed limited to its actual sense of 'determining the

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 693 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

standards of higher education' and not of laying down admission process. In no case is the State denuded of its power t6 legislate under Entry 25 of List Ill. More so, pertaining to the admission process in universities imparting higher education.

30. I have no hesitation in upholding the vires of the impugned legislation which empowers the state government to regulate admission process in institutions imparting higher education within the state. In fact, the State being responsible for welfare and development of the people of the State, ought to take necessary steps for welfare of its student community. The field of'higher education' being one such field c which directly affects the growth and development of the state, it becomes prerogative of the State to take such steps which further the welfare of the people and in particular pursuing higher education. In fact, the State Government should be the sole entity to lay down the procedure for admission and fee etc. governing the institutions running in that particular D state except the centrally funded institutions like llT, NIT etc. because no one can be a better judge of the requirements and inequalities-in- opportunity of the people of a particular state than that state itself. Only the State legislation can create equal level playing field for the students who are coming out from the State Board and other streams. E

31. Whether the i111pug11ed legislation imposes reasonable restriction under Article 19(6) of the Constitution of India on the fimdamental rights of the Unaided Private Educationai Institutions in its "'Right to Occupation" under Article 19(1) (g): In T.MA. Pai F case, eleven-Judge Bench in paras (20) and (25) held that running of an educational institution was an occupation within the meaning of Article 19(l)(g) and that the right to establish and administer an educational institution is guaranteed to all the citizens under Article 19( I )(g) of the Constitution oflndia and to minorities specifically under Aiiicles 26 and G 30 of the Constitution oflndia. These rights to establish an educational institution also stand affirmed in P.A. lnamdm:

32. Object of the Act 2007 is ·· ... to provide.for the regulation of admission and fixatio11 of.fee in private pr<1fessio11al educational H

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

A inslitutions in the Siale of Mudh)la p,., ides/I ... ". Section 6 of the Act 2007 provides that admission to sanctioned intake in private unaided professional educational institution shall be on the basis of common entrance test in such manner as may be prescribed by the State Government. In Section 3( d) 'co111111011 entrance test' has been defined B to mean an entrance test conducted for determination of the merit of the candidates followed by centralized counselling based on merit to professional colleges or institutions through a single window procedure by the State Government or by any agency authorized by it.

c 33. Contention of the appellants is that Section 6 read with Section 3( d) of the Act, 2007 creates a monopoly in favour of the State in the matter of conducting common entrance test and that it directly encroaches upon the fundamental right of private unaided educational institutions under A1ticle 19( 1)(g) of the Constitution oflndia. It is further submitted D that as held in para ( 13 7) of P.A. Inamdar case only if the admission procedure adopted by the private institutions or a group of institutions fails to satisfy the triple test of fairness, transparency and non- exploitativeness, can the State take over the admission procedure by sub,1 ituting its own procedure; but by the impugned provision in Section E 6 and Section 3(d) of the Act, 2007 even in the absence of any material to show that the entrance test conducted by the private unaided institution failed to satisfy the triple test, the State had taken over the admission procedure. Much emphasis was also laid upon para (65) of T.MA. Pai case to contend that private educational institutions have the right to select students and a common entrance test by the State decimates the right of autonomy of the private educational institutions which amounts to an unreasonable restriction and the same is liable to be struck down.

34. The claim of absolute 'right to occupation' which the appellants have raised on the basis of TMA. Pai, P.A. lnamdar cases is not sustainable. Jn T.MA. Pai and P.A. Inamdm: no unfettered right was granted to private unaided educational institutions to carry on trade and business without being restricted by statutory regulations enacted by the competent legislature. A fundamental right is not without measure of control and it will always be subject to reasonable restriction which the

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 695 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

State is duty bound to impose in the larger public interest. In Sree11ivasa A General Traders and Ors. v. State ofA11dhra Pradesh a11d Ors. ( 1983) 4 sec 353, it was held as under:-

"17. The fundamental right of al I citizens to practise any profession or to carry on any occupation or trade or business guaranteed B under Article 19( l )(g) has its own limitations. The liberty of an individual to do as he pleases is not absolute. It must yield to the common good. Absolute or unrestricted individual rights do not and cannot exist in any modern State. There is no protection of the rights themselves unless there is a measure of control and c regulation of the rights of each individual in the interests of all."

35. M.P. Act 2007 was enacted for "the reg11latio11 of ad111issio11 and fixation offee in private professional educational i11sti111tions in the State <~l A1adhya Pradesh and to provide for reservation iif seats to persons belonging to the Scheduled Casles. the Scheduled Tribes and Other Backward Classes". Act 2007 is thus in furtherance of the constitutional obligation imposed upon the State to ensure equality of opportunity in admission to meritorious candidates who seek to pursue the medical education. Act 2007 enables the State to conduct common entrance test in the interest of securing higher standards of medical education so that quality doctors are trained leading to advancement in health sector of the nation. Point to be considered is whether the common entrance test to be conducted by the State Government or any agency authorized by it amounts to a reasonable restriction. F

36. From time to time, it has been held that 'in the interests of the general public', the State would be justified in imposing reasonable restriction, even if it affects the interests of particular individuals, or even causes hardship to particular individuals owing to the peculiar conditions in which they are placed. Reference can be made to the G decision of this Court in Narendra Kumar & Ors. v. Union of India & Ors. AIR 1960 SC 430, wherein it was held as under:-

"15. It is clear that in the following three cases viz. Chintaman Rao ( 1950) I SCR 759, Cooverjee AIR 1954 SC 220 and Madhya H

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

A Bharat Association Ltd. AIR 1954 SC 634, the Cou11 considered the real question to be whether the interference with the funda111ental right was "reasonable'' or not in the interests of the general public and that if the answer to the question \\as in the affir111ative, the law would be valid and it would be invalid if the B test ofreasonableness was not passed. Prohibition was in all these cases treated as only a kind of"restriction".

18. In applying the test of reasonableness, the Court has to c consider the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to individual citizens by the proposed re111edy, to the beneficial effect reasonably expected to result to the general public. It will also be necessary to consider in that connection whether the restraint caused by the law is 111ore than was necessary in the interests of the general public."

37. While determining the reasonableness of the restrictions imposed by the State on the 'freedom of occupation' guaranteed by Article 19( I )(g), the principles which can be taken into account were summed up by this Court in MR. F. Ltd. v. lnspectm~ Kera/a Gover11111e11t and Ors .. (1998) 8 SCC 227, in the following relevant extraction:- "On a conspectus of various decisions of this Cou11, the following principles are clearly discernible: (1) While considering the reasonableness of the restrictions, the court has to keep in 111ind the Directive Principles of State Policy. G (2) Restrictions 111ust not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general pub Iic. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 697 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

down so as to be ofuniversal 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. B (./) A just balance has to be struck between the restrictions imposed and the social control envisaged by clause (6) of Article I9.

(5) Prevailing social values as ·also social needs which are intended to be satisfied by restrictions have to be borne in c mind. (See: State of U.P. v. Kaushailiya AIR I96./ SC 4I6.) ( 6) There must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object D 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 of the constitutionality of the Act will naturally arise. (See: Kavalappara Kottarathil Kochuni v. States of Madras and Kera/a AIR I 960 SC I 080; O.K. E Ghosh v. E.X .Joseph AIR 1963 SC 812.)" A similar view was also expressed in State of Madras v. V.G Row, AIR 1952 SC 196 and K.K. Kochuni v. Stale of Madras and Kera/a, AIR 1960 SC I 080. • F

38. In T.M.A. Pai, while this Court acknowledged 'right to occupation' of private educational institutions as guaranteed under Article 19( I )(g) of the Constitution of India, in para (54), this Court laid down general law pertaining to the authority of State Government to impose regulatory means in respect of private aided and unaided educational G institutions, which reads as under:-

"54. The right to establish an educational institution can be regulated; but such regulatory measures must, in general, be to ensure the maintenance of proper academic standards, H

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

A atmosphere and infrastructure (including qualified staff) and the prevention of maladministration by those in charge of management. The fixing of a rigid fee structure, dictating the formation and composition of a governing body, compulsory nomination of teachers and staff for appointment or nominating students for B admissions would be unacceptable restrictions."

39. In TMA. Pai, in paras (58) and (59), the Constitution Bench reiterated that for seeking admission into the professional educational institutions, merit plays an impo1tant role and held as under:- c ''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 coi11petent professional, it is necessary that meritorious candidates are not unfairly treat~d 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 merit of a student seeking admission. Appropriate regulations for this purpose may be made keeping in view the other observations made in this judgment in the context of admissions to unaided institutions.

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." .

G 40. In order to clarify the doubts/anomalies 1n TM.A. Pai, Constitution Bench was constituted in Islamic Academy of Educalion wherein this Court reiterated that admission to professional colleges should be based on merit by a common entrance test conducted by of government agencies. Furthermore, in exercise power under Article H 142, this Court directed setting up of two committees headed by a retired

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 699 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

High Court Judge nominated by the Chief Justice of the State to oversee the entrance test conducted by the association and also to approve.the fee structure proposed by the institute.· In paras ( 19) and (20) of the said judgment, it was held as under:- "19. we· now direct that the respective State Governments do appoint a permanent Committee which will ensure that the tests conducted by the association of colleges is fair and transparent. For each State a separate Committee shall be formed. The Committee would be headed by a retired Judge of the High Court. The Judge is to be nominated by the Chief Justice of that ~C State ..... The Committee shall have powers to oversee the tests to be conducted by the association. This would include the power to call for the proposed question paper(s), to know the names·of the paper-setters and examiners and to check the method adopted to ensure papers are not leaked. The Committee shall supervise D and ensure that the test is conducted in a fair and,transparent manner. The Committee shall have the power to permit an· institution, which has been established and which has been permitted to adopt its own admission procedu_re for the last, at least, 25 years, to adopt its own admission procedure and ifthe E Committee feels that the needs of such an institute are genuine, to admit, students of their community, in excess of the quota allotted . to them by the State Government .... .It is also clarified that no institute, which has not been established and which has not followed its own admission procedure for the last, at least, 25 years, shall F be permitted to apply for or be g_ranted exemption from admitting students in the manner set out hereinabove.

20. Our direction for setting up two sets of Committees in the States has been passed under Article 142 of the Constitution of G India which shall remain in force till appropriate legislation is enacted by Parliament. The expenses incurred .on the setting up of such Committees shall be borne by each State. The infrastru~tural needs and provision for allowance and remuneration of the Chairman and other members of the Committee shall also H·

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

A be borne by the respective State Government."

41. In P.A. Jnamdar; this Court observed that there has to be one common entrance examination to be conducted by the State Government or by the competent authority appointed by the State Government in B case more than one university exist in the State and tn para ( 136) of the judgment held as under:- "136. Whether minority or non-minority institutions, there may be more than one similarly situated institutions impl!rting education in · ·any one discipline, jn any State. The same aspirant seeking c admission to take education in any one discipline of education shall have topurchase admission forms from several institutions and appear at several admission tests conducted at different places on the same or different dates and there may be a clash of dates. If the same candidate is required to appear in several tests, he would be subjected to unnecessary and avoidable expenditure arid inconvenience. There is nothing wrong in an entrance test being held for one group of institutions imparting same or similar education. Such institutions situated in one State or in mori; t)lan one State may join together and hold a cominon entrance test or the State may itself or through an agency arrange for holdirig of such test. Out of such common merit list the successful candidates can be identified and chosen for being allotted to different institutions depending on the courses of study offered, the number of seats, the kind of minority to which the institution belongs and other relevant factors. Such an agency conducting the common entrance test ("CET" for short) must be one enjoying utmost credibility and expertise in the matter. Th_is would better ensure the fulfilment of twin objects of transparency and merit. CET is necessary in the interest of-achieving the said objectives and also for saving the- student comp1unity from harassment and exploitation. Holding of such common entrance test followed by centralised counselling or, in other words, single-window system regulating admissions does not cause any dent in the right of - H -mino~~ty unaided educational institutions to admit students of their

.. i. > MODERN DENTAL COLLEGE AND RESEARCH CENTRE v, 701 STATE OF. MADHYA PRADESH [R. BANUMATm, J.] . ./

/ '. choice. Such.choice can be exercised'from out of the list of. A .. successful candidates prepared at CET without altering the order·. of merit inter se of the students-so chosen." ' •.·. .'' 4°2; [n para"(138), lt was further held that having regard to the larger' interest 'and welfare of thestlldent co~muhity, it "would be . B. permissible to regula:te the admi~sions by providing centralized and .. ' . a : , single~window procedure. Pa;.a (l:iS)"read_s as under:~ • · '· · · · . -. , ' .··' " '· .. - ... ... ~ -

. "lJ8~1t needs to be specifically stated that hi\ving regardto the . l ... farge~ int~rest.aod We!fa~e Of th~ St~de.nt C~Jh~unity: to.pl'"Or:;,Oie · .•

merit: achih~' • e~cellence ..... ' . • - - ' . • • ' '~ _.-.--·' ~d curb'.malpractices, ~- . ·: '. _, ·.: _,_ - ·._ ·-' -· .>_... - _- ', "it would -, - ·. ' : -. . be . -~ ··.• penitis"sible _to regulate:adtnissions by"providing a centralised and· .single-wind~\~ pro~edu~. ·such' a proce~ure, to a l~rge extent, .. ' .·.' . .. - ,.._ . -· '·-. . '._~ __ . ', ., ·; - . - ,_ . .... - , - - .. . : . ·.: ·.• ' ·; l:- :· • - .· can "se,ctire •.•• -:. grant ofmedt,based ' . • -· • :·;."· . ' ,. _.. '· , .. .·:. . : . : admissions • ' ;. - on a. transparent ' basis. . . . ; •, :. - - .• -..• :· .

. " . Till regulations ilre framed,theAdmission Committees ~an qversee · . .. -:_~·>-:; ad~i~Si~~S ~~·a-~. to: ~~s~re th~t- itieiit. i~ :flot.ih~, cas~aiiy::~:.: -~; ~-~- 0 ·-.: ;:- · . · .. .· );j3 .i#i~i·~i the:vi1,~:iak~ni~·Isfam;cAcademy o~ ~~hst,iiution . · · ,; , .· • 1 ·. ·.· or!ivo ~6iridiiti~~s,Wiil i1ie ~esponsihiliii~s nfthe siate ciovernirierit~ '-<; , ;. < ·• .•-..·. 1 ·.· 'to ~orii~;;u!;ith 3,v~!i-t~o~ght ~u·; le~islatiori-0ri.thesubject,it ~~s >-·>;,11'<, :; .. ,:~ · hei~l"iri'Jii1~h,;1da/i;paras (i.i4) and(°ISS.)as~nd~r:- . ..·,. ·-. . - .. ' . , - - , , . . '· :. . . .- ' - ' -... '~ - i .... , -·-.· ,_;-_ .·.-· .· - . . _... ,·~- •. , .. -. - .·. __ ., . ._- .. :.-:::'4 ·. : ~'144. The two Committees-for monitoring ad1iiission procedure,: . · ':: a~d determi1iing fee; strziciu;e :in the judg~ent ofJ.;fm~i~ L. ·. , . · .,Academy (2003)'6 sec 697,"are in our.view, permissible as-~ - ·: .. · -. regulato~ r:ieasu~s aimed at pr.ot~~ti~~ '.he i~t.ef,estoft_h,e ~t~de~t =· F., · .. C community as a whole as also the mmoqt1es themselv.es, in. . . ·· • • . . m~intainlng requi;_ecl .sta~da~ds of pr~fessiori~I educatibni>n non" ·., '··· . - . , , e~ploitaiivet~~s iri their ihstitutio~s.Legalprovisions ;nade.by -~ - ' - ..... , .,_ '. . - ' ' . '"',•' '"' . -- - - . ·-.' . . - . . ',' - - -- . . ' -~ ' - ,. - .. - ' _, . . ,, . '".

the State. Legislatures or, the scheme evolved by the Court. for.··.· .: .. ~o~i.t_~ii_ng.ad.~ls~~~~ proc~d~r~ and fe(:fi~~.tion d6n5Jl viol~t~.: o· ·.·.,·the right ofminorities'under Articl.e 30(1) or the rightofminorities · .··.. : mid no~-nii11o;ities u~de'r Article 19(I)(g), Tb~y arer~a;o~able ·~. resi~ictkms.inlhel~te'~st ·..'>4-.:··,,,- '._,,_.-.,·.. -- bf~iil6rii; · , ,._.,,,_ ·-. - . institutforis - ._,· p~i-;;iis'~ible"·••u~d~r. .• , . . . . . . . • -- ~

Article 30(1) and in the.interest ofgeneral public imder Article »,19(6)ofth,eConstititi~li. ~- -. . . .:'·' :. >-'-°;:;.'. 'H': ...·_·;... :

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

A · 155. It is for the Central Government, or for the State "Governments, in the absence of a Central legislation, to come out with a detailed well-thought-out legislation on the subject. Such a ·legislation is long awahed. The States must act towards this direction. The judicial wing of the State is called upon to act when B the othe.r two wings, the legislature and the executive, do not act. The earlier the Union oflndia and the State Governments act, the , better it would be. The Committees regulating admission procedure .. and fee structure shall continue to exist, but only as a temporary ·- measure and an inevitab'le passing phase until the Central c Government or the State Governments are able to devise a suitable mechanism and appoint a competent authority in consonance with the observations made hereinabove. Needless to say, any decision taken by such Committees and by the Central or the State , Governments, shall be open to judicial review in accordance with · D the settled parameters for the exercise of su.ch jurisdiction."

44. In para ( 155) of P.A. Inamdar, as quoted above, State Governments have been directed to frame a detailed well-thought out legislation on the subject with a further observation that any decision taken by the Committees and by the Central or State Governments shall be open to judicial review in accordance with the settled parameters for the exercise of such jurisdiction. The impugned legislation-Act 2007 . has thus' been enacted in compliance with the directions issued by this Court in T.MA. Pai, Islamic Academy and P.A. lnamdar with a view to ensu_re fairness and transparency in the admissions process.

45. Common·entrance test-single window system which regulates admission to unaided private professional educational instituiions does not cause any dent in the fundamental rights of those institutions: In T.M.A. Pai and P.A. bwmdar. this Com1 categorically held that admission to professional courses must be on the basis of merit. The word 'merit' is word of Latin origin, deriving roots from meritum, meaning 'due reward' and mereri ·meaning 'earn, deserve'. Concise Oxfor<l English Dictionary ( 1Ph Edn) defines 'merit' as 'excel~ence: worth'. P. Ramanatha Aiyar's Advanced.Law Lexicon (3'a Edn.) on

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 703 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

the topic of merit makes mention of Gu111a11 Singh v. State ofRajasthan A (197,1) 2 sec 452, wherein it was observed as under:- " .. ,merit is a sum total of various qualities and attributes of an employee such as his academic qualifications, his distinction iri the university, his character, integrity, devotion to duty and the. B manner in which he discharges his official duties. Allied to this may be various other matters, or factors, such as his punctuality in work, the quality and -out-turn of work. done by him and the manner of his dealings with his superiors and subordinates officers and the general public, his rank it1 th·e service and annual c confidential report All these and other factors may have to be taken into account in assessing the merit." Additionally, in Dr. Pradeep Jain and Ors. v. Union of India and Ors., (1.984) 3 SCC 654, it was held as llllder:- D " ... Merit consists of a high degree of intelligence coupled with a keen an~ incisive mind, sound knowledge of the basic subjects and infinite capacity for hard work-and·alsp calls for a sense of social commitment and dedication to the cause of the poor."

46. It is well known that study o_f medicine is much sq,ught after by · E students in India. Due to the high demand for admission in Medi.cal Colleges and limited·number of seats, selection and/or screening methods have evolved to select the creme de la creme. Given the. surfeit of academically well-qualified applicants, the selection inethod ought to become highly competitive by placii1g exceptionally high academic thresholds. It is fn this context that 'merit' comes into play in determining the parameters for admissions in institutions ofhiglwr cducatio1\.

47. Merit is the cumulative assessment of worth of any individual based on different screening methods. Ideally, there should be one common entrance test .conducted by ~he State both for government colleges and for private unaided educatioiml institutions to ensure e(frcacy, fairness and pub! ic confidence, As rightly contended by Mr. Purushaindra Kaurav, Addi. Advocate General for the St~te of Madhya Pradesh . appearing for AFRC, a common entrance test conducted by the State is H

704. SUPREME COURT REPORTS . [2016] 3 S,C.R.

A more advantageous viz.:- (i) having adhered to the time schedule as laid down in Mridul Dhar case (2005) 2 SCC 65; (ii) multiple centres of examination and counselling throughout the State and a single window system for admission; (iii) standard question papers, preservation of ·.question pape.rs and a'.hswer books, prevention of leakage of question B paper8-and fair evaluation and (iv) minimal litigation. That apart, procedure for preparation of merit list, counselling and allotments to vatious colleges is subject to Right to. Information Act and thus ensures-fairness and transparency in the entire process. c 48.Having regard to the prev!liling conditions relating to admissions · ·in private professional educational ins!itutions in the State of Madhya .. Pradesh, the Legislature in· its wisdom has taken the view that merit .based admissions can be ensured only through a common entrance test .. followed bycentralizt:d counselling either by the Sta~e or by an agency authorized by the State. In order to ens.ure rights of the applicants aspiring for medical courses under Articles 14, IS and 16 of the Constitution of India, legislature by the impugned legislation introduced the system of Common Entrance Test (CET) to secure merit pased admission on a transparent basis. If private unaided educational institutions are given unfettered right to devise thei~ own admission procedure and fee structure, it would lead to situation where it would impinge upon the "right to equality" of the students who aspire to take admissions in such educational ·institutions. Common Entrance Test by State or its agency will ensure !XJUal opportunity to all meritorious and suitable candidates and meritorious candidates can be identified for being allotted to different institutions depending on the courses of study, the number of seats and other relevant factors .. .'.fhi~would ensl!re twin objects:- (i.) fairness and transparency and (ii) merit apart from preventing mal-administration. Thus, having regard to the larger _interest and welfare of the student ~ommun ity to promote merit.and achieve excellenci<..and curb mal-practices, it would be permissible for the State to regulate admissions by providing a centralized.and single window procedu~e . .Holding such CET followed ( .by centralized counselling or sit!gle window system reguJatingadmissi9.nS H does not cause any dent on the fundame~tal ti~ts ofthe. institutions in

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 705 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

tunning the institution. While private educational institutions have a 'right A ofoccupaiion' in running the educational institutions, equally they have the responsibility of selecting meritorious and suitable candidates, 'in order to bring out professionals with excellence. Rights of private educational institutions have to yield to the larger interest of the community. B

49. By holding common entrance test and identifying meritorious candidates, the State is merely providing the merit list of the candidates prepared on the basis of a fair common entrance test. If the screening test is conducted on merit basis, no loss will be caused to the private educational inst(tutions. There is neither restriction on the entry ofthe c students in the sanctioned intake of the institutions nor on the fr right to collect fees from the students. The freedom of private educational institutions to establish and run institution, impart education, recruit staff, take disciplinary action, .admit students, participate in fixation ?f fees is 'in noway being abridged by the impugned legislation; it remains intact. D SO. While considering the reasonableness of the restriction, the court has to keep in mind the Directive Principles a/State Policy: For deciding the constitutional validity of any statute or executive order or considering the reasonableness of a restriction cast by the law on the exercise of any fundamental right, the court has to keep in mind the Directive Principles of State Policy. A law or measure designed for promoting or having the effect ofadvancing directive principles is per se reasonable and in public interest. The State fias a duty to balance the direct impact_QJ1 the fundamental right of individuals as against the greater public or social interest. In State of Bombay and A.nr. v. F.N Balsara [195 I] SCR 682, a Constitution Bench of this Court held that in judging "the reasonableness of the restriction itnposed on the fundamental right, one has to bear in mind the Directive Principles of State Policy set forth in Part ·IV of the Constitution, while examining the challenge to the constitutional validity of law by reference to Article 19(1 )(g) of the Constitution. ~n Stale of Gujarat v. Mirzapur Moti Kurf!shiKassab Jamat and Ors. (2005) 8 SCC 534; this Couti held that banon slaughter .of cow p~ogeny is not a prohibition btit only a reasonable restriction. A · seven-Jticige Bench of this Court in para (41) held as under:- H

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

A : "41._The message of Kesavananda Bharati (1973) 4 SCC 225 is clear. The interest of a citizen ·or section of a co1nmunity, howsoever important, is secondary to the interest of the country or community as a whole. -For judging the reasonability of restrictions imposed 01.1 fundamental rights the relevant B considerations are not only those as stated in Article 19 itself or in Part Ill of the Constitution: the directive principles stated in Part IV are also relevant. Changing factuaLconditions and State policy, in~luding the one reflected in the impugned enactment, have to be considered and given weightage to by the courts while deciding c the constitutional validity oflegislative enactments. A restriction placed on any fundamental right, aimed at securing directive principles will be held as reasonable and hence intra vires subject to two limitations: first, that it does not run in clear conflict with D • the fundamental right, and secondly, that it has been enacted within the legislative competence of the enacting legislature under P~rt XI Chaptet I of the Constitution." 51: It is the obligation of the State under the Constitution to ensure the creation of conditions necessary for good health including provisions for.basic curative and preventive health services and assurance of healthy Jiving and working conditions. Under Articles 39( e), J9(f) and 42 of the Constitutia°n, obligations are cast on the State to ensure health and strength· of . workers,. men and- women; ensure children . are given opportunities . & facilities to devel9p in a healthy manner and to secure just & humane conditions of~ork arid for 111aternity relief, respectively. A11icle 47 of · the .Constitution makes improvement of public health a primary duty of the State. However, right to health is no longer in the sole domain of 'Part IV,of the ConstittJtion. In Kirloskar Brathers Ltd. v. Eluployees ' State 1n~u1'ance Corp. (1996) 2 SCC 682, it was held that right to health is a fundamental right 'of workers K and the maintenance . . of health . is most imperative constitutional goal whose realization requires interaction of many social and economic factors.· In Raiasthan Pradesh Vaidya . Samiti, Sardarshahar and another v. Union of lnqia qnd others (2010) 12 sec 609, this Court held that the citizens of this country have H

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 707 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

a right under Article 21 of the Constitution of India which includes the A protection and safeguarding the health and life of pub Iic from ma I-medical treatment. More recently in Centre for Public Interest Litigation v. l)nion of India (2013) 9 SCR 1103, again this Court has recognized that right to life under Article 21_ includes right to health.· 8 52.'Maintenance and improvement of public health and to provide health care and medical services is the constitutional obligation of the State. To discharge this constitutional obligation, the State must have the doctors with professional excellence an~ commitment who are ready_ to give medical advice and services to the public at large. State can c satisfactorily discharge its constitutional obligation only when the aspiring students enter into the profession based on merit. None of these lofty ideals can be achieved without having good and committed medical professionals. D ..-

53. Fundamental Rights ofprivate unaided professional colleges '

must yield to public interest and rights of the students at large: Right to be treated fairly and to get admission through a non-arbitrary; non- discriminatory, fair and transparent procedure is a fundamental right of the students under Article 14. Any law which creates an artificial classification between private unaided institutions and other institutions and creates a disparity in the matter of admission whereby a meritorious student could be denied admission to pursue higher education in a private unaided institution solely because such institution has an unfettered right to choose its own stude.nts without following a uniform and transparent admission procedure would be violative of the rights of the aspiring students guaranteed under Article 14, Right of the students to admission in private 3maided medical colleges is a right of equality in oppo11unity. On many occasions, this has led to a conflict between fundamental rights of private educational institutions ~[l the one hand and the rights of students and public at large on the other. However, the law is now settled. In such .. cases where there is a conflict between fundamental right of two parties, this Com1 in para (59) in Sharda v. Dharmpal (2003) 4 sec 493 held that only that right which would advance public morality or public interest would prevail. In para (39) in Kureshi Kassab case · H

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

A (supra), this Court held that when a fundamental right clashes with the ·larger interest of society, it must yield to the latter. The interest of citizens or section of community, howsoever important, is secondary to the interest of the nation public at large and of the right of the students to avail · · opportunity of merit-based admis~ion in professional unaided educational B institutions would advance the public interest and as such the rights of the students would prevail over the rights of the private unaided professional educational institutions.

54Copy pinpoint54. Re-contention: No material to show that the private unaided c professional educational institutions failed in triple test-fairness, transparency and non-exploitativeness: In para (137) of the judgment in P.A. Jnamda,r. this Court has observed that if the admission procedure adopted by private institutions fails to satisfy all or any of the triple test, then admission yrocedure can be taken over by the State substituting its own procedure and not otherwise. Contention of the appellants is that there is absolutely no material to· show that private educational institutions were not able to ensure a fair, transparent and non-exploitative admission procedure and that the impugned legislation empowering the State or agency nominated by i(to conduct common entrance test is in violation of the directions of this Court. In so far as this contention, High Court has observed thus:-

" ... Sufficient materials have been filed before us by the respondents to show that prior to the enactment of the Act 2007, F this Court as well .as the committee constituted as per the orders of the Supreme Court in Islamic Academy of Education (supra) had to enquire into complaints of mai-practice in admi.ssions in private professional educational institutions and after finding the complaints to be true, directed the institutions to give admission to G the aggrieved students in the next academic sessions and this would show that the private professional educational institutions were not able. to ensure a fair, transparent and non-exploitative admission procedure before Act, 2007 was enacted ...."

. 55. Our attention was drawn to the advertisement ofDMAT 2006 H ..

MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 709 STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

for admission in MBBS/BDS course in the private colleges in Madhya A Pradesh scheduled to be conducted on 16.07 .2006 and number of writ petitions fiJed by the students pertaining to DMAT 2006. l(was submitted that - in. W.P. (C) No. 1796 of2006, . High Court , stayed DMAT . 2006 and directed the State to a~p~int a committee as per Islamic Academy of Education and the committee managing DMAT cancelled DMAT 2006. 8 Having regard to the number of complaints and litigations, High Court was right in observing that sufficient materials had been placed before it to show that prior to enactment of Act 2007, the High_ Court as well as the committee had to enquire into the complaints of mal-practice. in · admissions. It is not a case of no materials, where state would not be c . justified in taking over the admission procedure.

56Copy pinpoint56. Learned Senior Counsel for the respondents submitted that the State Government had filed complaints before the AFRC against so.me of private colleges and criminal proceedings had also been initiated against • D unaided private professional .institutions at the behest Of the students a11eging irregularities and mal-practices. Our attention is orawn to the alleged violation of the order of this Court in Priya Gupta v. State of Chhattisgarh and Ors. (2012) 7 SCC 433, as per which it was made mandatory for each college and university to inform 'the State and the E competent authority of the seats which 'are lying vacant after each counselling and they shall furnish the complete details, list of seats fell vacant in the respective States immediately after each counselling. Ms. Vibha Dutta Makhija, learned Senior Counsel appearing for the State of F Madhya Pradesh and Mr. Purushaindra Kaurav learned AAG appearing for AFRG-have submitted that inspite of requests, the private colleges· deliberately did not report vacant seats under the State quota after each round of counselling even after the admission procedure was complete and in this context,have relied on a.number ofletters (Annexure A-14 to G I.A. 83/20 IS) addressed to the private colleges by Director of Medical Education, Madhya Pradesh. It was submitted that in the year 2013-

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

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

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-

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

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

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

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 \.