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2002 Supreme(SC) 1084

SUPREME COURT OF INDIA
B.N. Kirpal, CJI., with G.B. Pattanaik, V.N. Khare, S. Rajendra Babu, Syed Shah Mohammed Quadri, Ruma Pal, S.N. Variava, K.G. Balakrishnan, P. Venkatarama Reddi, Ashok Bhan and Arijit Pasayat, JJ.
T.M.A. Pai Foundation and Ors. – Petitioners
Versus
State of Karnataka and Ors. – Respondents
Writ Petition (C) No. 317 of 1993 with W.P. (C) Nos. 252/79, 54-57, 2228/81, 2460, 2582, 2583-84, 3362, 3517, 3602, 3603, 3634, 3635, 3636, 8398, 8391, 5621, 5035, 3701, 3702, 3703, 3704, 3715, 3728, 4648, 4649, 2479, 2480, 2547, 3475/82, 7610, 4810, 9839, 9683-84/83, 12622-24/84, 119, 133/87, 620/89, 133/92, 746, 327, 350, 613, 597, 536, 626, 444, 417, 523, 474, 485, 484, 355, 525, 469, 392, 629, 399, 531, 603, 702, 628, 663, 284, 555, 343, 596, 407, 737, 738, 747, 479, 610, 627, 685, 706, 726, 598, 482, 571/93, 295 and 764, D.No. 1741/94, W.P. Nos. 331, 446, 447/95, 364, 435/96, 456, 454, 447, 485/97, 356, 357, 328/98, 199, 294,279, 35, 181, 373, 487, 23/99, 561/2000, 6, 132/2002, C.A. Nos. 1236-1241, 2392/77, 687/76, 3179, 3180, 3181, 3182,1521-56, 3042-91/79, 2929-31, 1464/80, 2271, 2443-46/81, 4020, 290, 10766/83, 5042, 5043/89, 6147, 5381/90, 71, 72, 73/91, 1890-91, 2414, 2625/92, 4695-4746, 4754-4866/93, 5543-5544/94, 8098-8100, 11321/95, 4654-4658/97, 608, 3543, 3584-3585/98, 5053-5054/2000, 5647, 5648-5649, 5650, 5651, 5652, 5653-5654, 5655, 5656/2001, 2334/2002, S.L.P.(C) Nos. 9950, 9951/79, 11526, 863/80, 12408/85, 8884/86, 12320/87, 14437, 18061-62/93, 904-05, 11620/94, 23421/95, 4372/96, 10360, 10664/97, 1216, 9779-9786, 6472-6474, 9793/98, 5101, 4480, 4486/2002, T.C. (C) Nos. 26/90 and T.P.(C) Nos. 1013 - 14 of 1993)
Decided On : 31-10-2002

Advocates Appeared:
For the Appearing Parties :- Harish N. Salve, Solicitor General, K.N. Raval, Additional Solicitor General, K.K. Venugopal, B. Sen, H.W. Dhabe, Soli J. Sorabjee, P.P. Rao, Mahinder Anad, Anoop G. Choudhary, Rakesh K. Dwivedi, Dinesh Dwivedi, Ms. K. Amareswari, F.S. Nariman, Dr. Rajeev Dhavan, Kapil Sibal, Sushil Kumar, Ms. Indira Jaisingh, Ashok Grover, Anil B. Divan, G.L. Sanghi, K. Parasaran, K. Rajendra Choudhury, Habibulla Basha, Dipankar P. Gupta, V.A. Mohta, T.R. Andhyarujina, Shanti Bhushan, Salman Khurshid, Sr. Advocates, K.C. Kaushik, Preetesh Kapur, Ms. Aparjita Singh, Ms. Meenakashi Sakhardande, Ms. Gayatri Goswami, Siddhartha Chowdhary, R.N. Poddar, B.K. Prasad, C. Radhakrishna, B.V. Balram Das, K.V. Vishwanathan, Ms. Revathy Raghavan, Ms. Seema Bengani, Ajeet, Ms. Haripriya Padmanabhan, Ms. Diviya Kapur, S.C. Mishra, Adv. Genl. U.P., Ajay K. Agarwal, Ravi P. Mehrotra, Arivind Verma, C. Siddharth, Mahesh Chandra, Ms. Alka Agrawal, Ms. Anamika Agrawal, Rajeev Sharma, Aarohi Bhalla, Ganesh Kabra, A.N. Jayaram Adv. Genl., Karnataka, Sanjay R. Hegde, Satya Mitra, R. Anand Padmanabhan, K.R. Sasiprabhu, John Mahtew, R.B. Madoodkar, V.N. Raghupathy, S.S. Shinde, A. Mariarputham, Ms. Aruna Mathur, G. Balaji, Ashok Kumar Pandey, Lokesh Kumar, R.S. Suri, Jai Prakash Dhanda, Ms. Raj Rani Dhanda, K.P. Singh, Sunder Khatri, Satish K. Agnihotri, Sakesh Kumar, Prakash Shrivastava, R.M. Sharma, Ranji Thomas, Ms. Bharati Upadhyaya, Javed M. Rao, Ms. Niranjana Singh, Abhishek Chaudhary, Saket Singh, B.B. Singh, Ajay K. Agrawal, Jatinder Kumar Bhatia, Ms. K. Madhavi Latha, A. Raghuvir, K. Subbarao, T.V. Ratnam, Rajesh Pathak, Ashok Mathur, K.C. Kaushik, D.S. Mahra, Manish Singhvi, S.C. Sharma, Dr. Roxna Swamy, A. Lobo, B. Subbayya Shetty, Bharat Sangal, R.N. Keswani, Amitesh Kumar, Lakshmi Raman Singh, Vivek Singh, Mohd. Taiyab Khan, Imran Qaisar, L.P. Singh, Ms. Pratibha Jain, D.K. Jain, Bhagchand Jain, A.P. Jain, Sanjay Kr. Pathak, Ms. Deepti Jain, Hemant S. Jain, R.C. Papriwal, J.M. Khanna, T.N. Bhat, Ms. Shefali Khanna, B.K Punj, Subhash Chandra Jain, Ms. Anu Mehta, S.K. Mehta, Ms. Annapoorani, V.G. Pragasam, Ms. Chandan Ramamurthi, Ms. Lalit Mohini Bhat, Sudarsh Menon, Ambrish Kumar, Ugra Shankar Prasad, D.N. Gupta, Rakesh K. Sharma, Ms. Janaki Ramachandran, S.C. Sharma, Dr. M.P. Raju, Issac Mohanlal, Pravir Choudhary, Senthil Jagadeesan, V. Ramasubramanian, Ms. Madhu Sikri, K.R. Nambiar, Subhash C. Sharma, S.W. Kanagaraj, T.M. Reddy, Sudarsh Menon, R. Nedumaran, K.K. Mani, R. Ayyam Perumal, S. Srinivasan, S.R. Setia, S. John Chandraraj, Dr. A. Francis Julian, Sumit Kumar, M.A. Chinnasamy, Pradeep Tiwary, K. Swami, K. Ilias Ali, Suren Kumar Uppal, Dr. R. Praskah, R.N. Keshwani, Ram Lal Roy, Dr. M.P. Raju, Dr. D.K. Jain, Zaki Ahmad Khan, Imtiaz Ahmed, Ms. Naghma Imtiaz, Anis Suhrawardy, Dr. Nafis A. Siddiqui, Anis Ahmed Khan, M. Qamaruddin, Mrs. M. Qamaruddin, jAmbar Qamaruddin, Manish Goswami, Pratap C. Mahapatra, J.M. Khanna, Shakil Ahmed Syed, Ms. A. Subhashini, S.K. Puri, Rajesh Srivastava, Ujjwal Banerjee, Ms. Anandita Gupta, Vivek Gambhir, P.N. Jha, B.K. Pal, A.K. Sanghi, Sardar Ajit Singh, Badar D. Ahmad, Ms. Sunanda Roy, Jayant Tripathi, Vivek N. Sharma Pramod Swarup, Parveen Swarup, Ms. Pareena Swarup, Amit Singh Rathi, Vishal Gupta, Er. Anil Kumar Mittal, Prashant Bhushan, Bijan Kumar Ghosh, Ms. Purnima Bhat, M.M. Kashyap, U.A. Rana, M.J.S. Rupal, Lakshman, R.B. Masoodkar, Uday Gupta, M.N. Shroff, N. Ganapathy, Ashok K. Mahajan, Ms. Meenakshi Arora, G. Umapathy, S. Jayakumar, Shailendra Bhardwaj, Rakesh K. Sharma, Ms. Anupama Grover, and Mrs. Nanita Sharma, Advocates.

VERY IMPORTANT POINTS
1. Secularism is the Constitutions basic feature. The essence of secularism in India is the recognition and preservation of the different types of people, with diverse languages and different beliefs, and placing them together so as to form a whole and United India. Articles 29 and 30 do not more than seek to preserve the differences that exist, and at the same time, unite the people to form one strong nation.
2. All citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26, but this right is subject to the provisions of Articles 19(6) and 26(a). However, minority institutions will have a right to admit students belonging to the minority group, in the manner as discussed in this judgment by Majority.

Headnote:(i) Constitution of India, 1950-Articles 19(1)(g) read with 19(6), 26(a) read with 29(1) and 30(1) and 30-Minority s or non-minority s right to set up educational institutions-Is there such a fundamental right? (Yes)-If, so, under what provisions? (Articles 19(1)(g), 26(a) and 30) words and phrases-Meaning of expressions "education" and "educational institutions" in various provisions of the Constitution-Whether the non-minorities have the right to establish and administer educational institutions, under Articles 21 and 29(1) read with Articles 14 and 15(1), in the same manner and to the same extent as minority institution?

       Held Per Majority (B.N. Kirpal, CJI, G.B. Pattanaik, S. Rajendra Babu, K.G. Balakrishnan, P. Venkatarama Reddi & Arijit Pasayat, JJ.) : The expression "educational institutions" means institutions that impart education, where "education" is as understood hereinabove. The right to establish and administer educational institutions is guaranteed under the Constitution to all citizens under Articles 19(1)(g) and 26, and to minorities specifically under Article 30. All citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26, but this right is subject to the provisions of Articles 19(6) and 26(a). However, minority institutions will have a right to admit students belonging to the minority group, in the manner as discussed in this judgment. (Para 162)

       Held : Per Quadri, J. : I would answer that all the citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26. The minorities have an additional right to establish and administer educational institution "of their choice under Article 30(1). The extent of these rights are, therefore, different. A comparison of Articles "19, 26 and 30 would show that whereas the educational institutions established and run by the citizens under Article 19(1)(g) and Article 26(a) are subject to the discipline of Articles 19(6) and 26 there are no such limitations in Article 30 of the Constitution, so in that the right conferred thereunder is absolute. However, the educational institutions established by the minorities under Article 30(1) will be subject only to the regulatory measures which should be consistent with Article 30(1) of the Constitution. (Para 250)

       Held : Per S.N. Variava & Ashok Bhan, JJ. : The expression "educational institutions" means institutions that impart education, where "education" is as understood hereinabove. The right to establish and administer educational institutions is guaranteed under the Constitution to all citizens under Article 19(1)(g) and 26, and to minorities specifically under Article 30. All citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26, but this right will be subject to the provisions of Articles 19(6) and 26(a). However, minority institutions will have a right to admit students belonging to the minority group, in the manner as discussed in this judgment. (Para 60)

       (ii) Does Unni Krishnan, J.P. and Ors. v. State of Andhra Pradesh & Ors., (1993) 1 SCC 645 require reconsideration? [Yes, the scheme framed thereunder require reconsideration or modification (except where it holds that primary education is a fundamental right)].

       Held : Per majority (B.N. Kirpal CJI, G.B. Pattanaik, S. Rajendra Babu, K.G. Balakrishnan, P. Venkatarama Reddi, Arijit Pasayat, JJ.) : The scheme framed by this Court in Unni Krishnan s case and the direction to impose the same, except where it holds that primary education is a fundamental right, is unconstitutional. However, the principle that there should not be capitation fee or profiteering is correct. Reasonable surplus to meet cost of expansion and augmentation of facilities does not, however, amount to profiteering. (Para 162)

       In view of the discussion hereinabove, we hold that the decision in Unni Krishnan s case, insofar as it framed the scheme relating to the grant of admission and the fixing of the fee, was not correct, and to that extent, the said decision and the consequent directions given to UGC, AICTE, Medical Council of India, Central and State governments, etc., are overruled. (Para 45)

       Held, Per S.N. Variava & Ashok Bhan, JJ. : The scheme framed by this Court in Unni Krishnan s case and the direction to impose the same, except where it holds that primary education is a fundamental right, is unconstitutional. However, the principle that there should not be capitation fee or profiteering is correct. Reasonable surplus to meet cost of expansion and augmentation of facilities does not, however, amount to profiteering. (Para 60)

       (iii) Constitution of India, 1950-Articles 29 and 30-Fundamental rights-Right with regard to education-Right of minorities to establish and administer educational institutions-In case of Private Institutions (unaided and aided), can there be Government regulations, and if so, to what extent?-Whether the admission of students to minority educational institutions, whether aided or unaided, can be regulated by the State Government or by the University to which it is affiliated? Whether the minority s rights to establish and administer educational institutions of their choice will include procedure and method of admissions and selection of students? (Yes)-Whether the minorities right of admission of students and to lay down procedure and method of admissions, if any, would be affected in any way by the receipt of state aid?

       Held Per majority (B.N. Kirpal, CJI, G.B. Pattanaik, S. Rajendra Babu, K.G. Balakrishnan, P. Venkatarama Reddi and Arijit Pasayat, JJ.) : Admission of students to unaided minority educational institutions, viz., schools and undergraduate colleges where the scope for merit-based selection is practically nil, cannot be regulated by the concerned State or University, except for providing the qualifications and minimum conditions of eligibility in the interest of academic standards. The right to admit students being an essential facet of the right to administer educational institutions of their choice, as contemplated under Article 30 of the Constitution, the state government or the university may not be entitled to interfere with that right, so long as the admission to the unaided educational institutions is on a transparent basis and the merit is adequately taken care of. The right to administer, not being absolute, there could be regulatory measures for ensuring educational standards and maintaining excellence thereof, and it is more so in the matter of admissions to professional institutions. A minority institution does not cease to be so, the moment grant-in-aid is received by the institution. An aided minority educational institution, therefore, would be entitled to have the right of admission of students belonging to the minority group and at the same time, would be required to admit a reasonable extent of non-minority students, so that the rights under Article 30(1) are not substantially impaired and further the citizens rights under Article 29(2) are not infringed. What would be a reasonable extent, would vary from the types of institution, the courses of education for which admission is being sought and other factors like educational needs. The concerned State Government has to notify the percentage of the non-minority students to be admitted in the light of the above observations. Observance of inter se merit amongst the applicants belonging to the minority group could be ensured. In the case of aided professional institutions, it can also be stipulated that passing of the common entrance test held by the state agency is necessary to seek admission. As regards non-minority students who are eligible to seek admission for the remaining seats, admission should normally be on the basis of the common entrance test held by the state agency followed by counselling wherever it exists. (Para 162)

       Held also : A minority institution may have its own procedure and method of admission as well as selection of students, but such a procedure must be fair and transparent, and the selection of students in professional and higher education colleges should be on the basis of merit. The procedure adopted or selection made should not be tantamount to mal-administration. Even an unaided minority institution ought not to ignore the merit of the students for admission, while exercising its right to admit students to the colleges aforesaid, as in that event, the institution will fail to achieve excellence. (Para 162)

       Held further : While giving aid to professional institutions, it would be permissible for the authority giving aid to prescribe by-rules or regulations, the conditions on the basis of which admission will be granted to different aided colleges by virtue of merit, coupled with the reservation policy of the state qua non-minority students. The merit may be determined either through a common entrance test conducted by the concerned University or the Government followed by counselling, or on the basis of an entrance test conducted by individual institutions - the method to be followed is for the university or the government to decide. The authority may also devise other means to ensure that admission is granted to an aided professional institution on the basis of merit. In the case of such institutions, it will be permissible for the government or the university to provide that consideration should be shown to the weaker sections of the society. (Para 162)

       Per Khare, J. : For these reasons, it must be held that even if there are no qualifying expressions "subject to other provisions of this part" and "notwithstanding anything" either in Article 30(1) or Article 29(2), Article 30( 1) is subject to Article 29(2) of the Constitution. (Para 222)

        Thus, while maintaining the rule of non-discrimination envisaged by Art. 29(2), the minorities should have also right to give preference to the students of their own community in the matter of admission in their own institution. Otherwise, there would be no meaningful purpose of Art. 30(1) in the Constitution. True, the receipt of State aid makes it obligatory on the minority educational institution to keep the institution open to non-minority students without discrimination on the specified grounds. But, to hold that the receipt of State aid completely disentitles the management of minority educational institutions from admitting students of their community to any extent will be to denude the essence of Art. 30 of the Constitution. It is, therefore, necessary that minority be given preferential rights to admit students of their own community in their own institutions in a reasonable measure otherwise there would be no meaningful purpose of Art. 30 in the Constitution. (Para 230)

       Held : Per Ruma Pal, J. : I would, therefore, respectfully agree with the conclusion expressed in the majority opinion that grant of aid under Article 30(2) cannot be used as a lever to take away the rights of the minorities under Article 30(1). (Para 299)

       Held, however : For the reasons already stated I have held the right to admit minority students to a minority educational institutions is an intrinsic part of Article 30(1). To say that Article 29(2) prevails over Article 30(1) would be to infringe and to a large extent wipe out this right. There would be no distinction between a minority educational institution and other institutions and the rights under Article 30(1) would be rendered wholly inoperational. It is no answer to say that the rights of unaided minority institutions would remain untouched because Article 29(2) does not relate to unaided institutions at all. Whereas if one reads Article 29(2) as subject to Article 30(1) then effect can be given to both. And it is the latter approach which is to be followed in the interpretation of constitutional provisions. [Sri Venkataramanan Dev Aru v. State of Mysore, 1958 SCR 895]. In other words, as long as the minority educational institution is being run for the benefit of and catering to the needs of the members of that community under Article 30(1). Article 29(2) would not apply. But once the minority educational institution travels beyond the needs in the sense of requirements of its own community, at that stage it is no longer exercising rights of admission guaranteed under Article 30(1). To put it differently, when the right of admission is exercised not to meet the need of the minorities, the rights of admission given under Article 30(1) is to that extent removed and the institution is bound to admit students for the balance in keeping with the provisions of Article 29(2). (Para 311)

       Held consequently : I would, therefore, not subscribe to the view that Article 29(2) operates to deprive aided minority institutions the right to admit members of their community to educational institutions established and administered by them either on any principle of interpretation or on any concept of equality or secularism. (Para 313)

       Per S.N. Variava & Ashok Bhan, JJ. : Admission of students to unaided minority educational institutions, viz., Schools where scope for merit based selection is practically nil, cannot be regulated by the State or the University (except for providing the qualifications and minimum conditions of eligibility in the interest of academic standards). Right to admit students being an essential facet of right to administer educational institutions of their choice, as contemplated under Article 30 of the Constitution, the State Government or the University may not be entitled to interfere with that right in respect of unaided minority institutions provided however that the admission to the unaided educational institutions is on transparent basis and the merit is the criteria. The right to administer, not being an absolute one, there could be regulatory measures for ensuring educational standards and maintaining excellence thereof and it is more so, in the matter of admissions to undergraduate Colleges and professional institutions. The moment aid is received or taken by a minority educational institution it would be governed by Article 29(2) and would then not be able to refuse admission on grounds of religion, race, caste, language or any of them. In other words it cannot then give preference to students of its own community. Observance of inter se merit amongst the applicants must be ensured. In the case of aided professional institutions, it can also be stipulated that passing of common entrance test held by the State agency is necessary to seek admission. (Para 60)

        A minority institution may have its own procedure and method of admission as well as selection of students, but such procedure must be fair and transparent and selection of students in professional and higher educational colleges should be on the basis of merit. The procedure adopted or selection made should not tantamount to mal-administration. Even an unaided minority institution, ought not to ignore merit of the students for admission, while exercising its right to admit students to the colleges aforesaid, as in that event, the institution will fail to achieve excellence. (Para 60)

       Further to what is stated in answer to question No. 4, it must be stated that whilst giving aid to professional institutions, it would be permissible for the authority giving aid to prescribe by-rules or regulations, the conditions on the basis of which admission will be granted to different aided colleges by virtue of merit, coupled with the reservation policy of the state. The merit may be determined either through a common entrance test conducted by the University or the Government followed by counselling, or on the basis of an entrance test conducted by individual institutions - the method to be followed is for the university or the government to decide. The authority may also devise other means to ensure that admission is granted to an aided professional institution on the basis of merit. In the case of such institutions, it will be permissible for the government or the university to provide that consideration should be shown to the weaker sections of the society. (Para 60)

       (iv) Constitution of India, 1950-Article 30-Meaning of expression "minorities"-In order to determine the existence of a religious or a linguistic minority in relation to Article 30, what is to be the unit, the State or the country as a whole? (the State) whether professional education also falls under Article 30?

       Held per majority (B.N. Kirpal CJI, G.P. Pattanaik, S. Rajendra Babu, K.G. Balakrishnan, P. Venkatarama Reddi and Arijit Pasayat, JJ.) :

       Linguistic and religious minorities are covered by the expression "minority" under Article 30 of the Constitution. Since reorganization of the States in India has been on linguistic lines, therefore, for the purpose of determining the minority, the unit will be the State and not the whole of India. Thus, religious and linguistic minorities, who have been put at par in Article 30, have to be considered State-wise. (Para 162)

       Held further : Article 30(1) gives religious and linguistic minorities the right to establish and administer educational institutions of their choice. The use of the words "of their choice" indicates that even professional educational institutions would be covered by Article 30. (Para 162)

       Held Per Khare, J. : In view of what has been stated above, my conclusion on the question who are minorities either religious or linguistic within the meaning of Article 30 is as follows: The person or persons establishing an educational institution who belong to either religious or linguistic group who are less than fifty per cent of total population of the state in which educational institutional is established would be linguistic or religious minorities. (Para 185)

       Held Per S.N. Variava & Ashok Bhan, JJ. : Linguistic and religious minorities are covered by the expression "minority" under Article 30 of the Constitution. Since reorganization of the States in India has been on linguistic lines, therefore, for the purpose of determining the minority, the unit will be the State and not the whole of India. Thus, religious and linguistic minorities, who have been put at par in Article 30, have to be considered State-wise. (Para 60)

       Article 30(1) gives religious and linguistic minorities the right to establish and administer educational institutions of their choice. The use of the words "of their choice" indicates that even professional educational institutions would be covered by Article 30. (Para 60)

       (v) Constitution of India, 1950-Article 30-To what extent can the rights of aided private minority institutions to administer be regulated? Whether the statutory provisions which regulate the facets of administration like control over educational institutions etc. would interfere with the right of administration of the minorities? Whether ratio of St. Stephens case (1992) 1 SCC 588 in this connection is correct? If so, what order?

        Held Per Majority (B.N. Kirpal CJI, G.B. Pattanaik, S. Rajendra Babu, K.G. Balakrishnan, P. Venkatarama Reddi & Arijit Pasayat, JJ.) : So far as the statutory provisions regulating the facets of administration are concerned, in case of an unaided minority educational institution, the regulatory measure of control should be minimal and the conditions of recognition as well as the conditions of affiliation to an university or board have to be complied with, but in the matter of day-to-day management, like the appointment of staff, teaching and non-teaching, and administrative control over them, the management should have the freedom and there should not be any external controlling agency. However, a rational procedure for the selection of teaching staff and for taking disciplinary action has to be evolved by the management itself. For redressing the grievances of employees of aided and unaided institutions who are subjected to punishment or termination from service, a mechanism will have to be evolved, and in our opinion, appropriate tribunals could be constituted, and till then, such tribunals could be presided over by a Judicial Officer of the rank of District Judge. The State or other controlling authorities, however, can always prescribe the minimum qualification, experience and other conditions bearing on the merit of an individual for being appointed as a teacher or a principal of any educational institution. Regulations can be framed governing service conditions for teaching and other staff for whom aid is provided by the State, without interfering with the overall administrative control of the management over the staff. Fees to be charged by unaided institutions cannot be regulated but no institution should charge capitation fee. (Para 162)

       Held further :The basic ratio laid down by this Court in the St. Stephen s College case is correct, as indicated in this judgment. However, rigid percentage cannot be stipulated. It has to be left to authorities to prescribe a reasonable percentage having regard to the type of institution, population and educational needs of minorities. (Para 162)

       Held Per S.N. Variava & Ashok Bhan, JJ. : So far as the statutory provisions regulating the facets of administration is concerned, in case of an unaided minority educational institution, the regulatory measure of control should be minimal and the conditions of recognition as well as conditions of affiliation to an University or Board have to be complied with, but in the matter of day-to-day Management, like appointment of staff, teaching and non-teaching and administrative control over them, the Management should have the freedom and there should not be any external controlling agency. However, a rational procedure for selection of teaching staff and for taking disciplinary action has to be evolved by the Management itself. For redressing the grievances of such employees who are subjected to punishment or termination from service, a mechanism will have to be evolved and in our opinion, appropriate tribunals could be constituted, and till then, such tribunal could be presided over by a Judicial Officer of the rank of District Judge. The State or other controlling authorities, however, can always prescribe the minimum qualifications, salaries, experience and other conditions bearing on the merit of an individual for being appointed as a teacher of an educational institution. (Para 60)

       The ratio laid down in St. Stephen s College case is not correct. Once State aid is taken and Article 29(2) comes into play, then no question arises of trying to balance Articles 29(2) and 31. Article 29(2) must be given its full effect. (Para 60)

Judgement Key Points

Fixation of Fees in Educational Institutions

The right to establish and administer educational institutions, whether by non-minorities under Articles 19(1)(g) and 26 or by minorities under Article 30, includes the autonomy to determine a reasonable fee structure, subject to certain principles and distinctions based on whether the institution is aided or unaided. The overarching goal is to ensure that fees support the institution's operations, expansion, and maintenance of educational standards without allowing profiteering or exploitation through capitation fees. Below is a breakdown based on the type of institution.

Unaided Private Educational Institutions (Non-Minority and Minority)

For unaided institutions, including those established by minorities under Article 30, the fixation of fees is largely left to the management to determine the scale of fees that can be charged from students. This autonomy stems from the recognition that such institutions rely on self-generated funds, including fees, to cover costs like qualified staff, infrastructure, and facilities. However, this freedom is not absolute and must adhere to the following:

  • Fees must be reasonable and take into account the need to generate funds for the betterment, growth, and development of the educational institution, as well as to provide necessary facilities for students (!) (!) .
  • No institution can charge capitation fees, which are impermissible as they amount to exploitation and commercialization of education (!) (!) .
  • There should be no profiteering; education is viewed as a charitable activity, so fees cannot exceed what is required to fulfill the institution's objectives, though a reasonable surplus for expansion and augmentation of facilities is permissible and does not constitute profiteering (!) (!) (!) .
  • Regulatory measures by the state or university are minimal and cannot directly control fee fixation, but they can ensure transparency and prevent malpractices like capitation fees through oversight mechanisms (!) (!) .

This approach ensures institutional autonomy while preventing abuse, allowing unaided institutions to operate efficiently without undue state interference in day-to-day financial decisions.

Aided Private Educational Institutions (Non-Minority and Minority)

For aided institutions, where the state provides financial support (e.g., for salaries or infrastructure), the state has greater latitude to regulate fees as a condition of granting aid. This is to ensure accountability for public funds and alignment with broader educational policies, while still respecting the institution's autonomy under Articles 19(1)(g), 26, or 30.

  • The state or affiliating authority can prescribe conditions related to fee structures by rules or regulations, particularly for professional institutions, to ensure merit-based admissions and prevent exploitation (!) (!) .
  • Fees must remain reasonable, avoiding capitation fees or profiteering, with any surplus limited to educational development (!) (!) .
  • In aided professional institutions, fee fixation can be tied to merit determination (e.g., via common entrance tests) and reservation policies for non-minority students, ensuring that fees support equitable access (!) (!) .
  • For minority aided institutions, regulations on fees must not impair the rights under Article 30(1), but they can include audits or guidelines for proper utilization of aid without diluting the minority character (!) .

The extent of regulation depends on the level of aid provided; more aid allows for stricter oversight to protect public interest, but it cannot extend to complete control over the institution's financial autonomy.

General Principles Applicable to All Institutions

  • Across both aided and unaided categories, the prohibition on capitation fees and profiteering is a core principle to uphold the charitable nature of education (!) (!) (!) (!) .
  • Fee structures should promote accessibility, especially for weaker sections, through mechanisms like scholarships or freeships, without compromising institutional viability (!) (!) .
  • Any state intervention in fee fixation must be reasonable, transparent, and aimed at maintaining academic excellence, not at micromanaging the institution (!) (!) .

In summary, unaided institutions enjoy significant freedom in fee fixation to sustain operations, while aided ones are subject to regulatory conditions tied to public funding. All must prioritize educational quality and equity over commercial gain.


JUDGMENT

       B.N. Kirpal, C.J.I.

India is a land of diversity - of different castes, peoples, communities, languages, religions and culture. Although these people enjoy complete political freedom, a vast part of the multitude is illiterate and lives below the poverty line. The single most powerful tool for the upliftment and progress of such diverse communities is education. The state, with its limited resources and slow-moving machinery, is unable to fully develop the genius of the Indian people. Very often, the impersonal education that is imparted by the state, devoid of adequate material content that will make the students self-reliant, only succeeds in producing potential pen- pushers, as a result of which sufficient jobs are not available.

2. It is in this scenario where there is a lack of quality education and adequate number of schools and colleges that private educational institutions have been established by educationists, philanthropists and religious and linguistic minorities. Their grievance is that the unnecessary and unproductive load on their back in the form of Government control by way of rules and regulations, has thwarted the progress of quality education. It is their contention that the Government must get off their back, and that they should be allowed to provide quality education uninterrupted by unnecessary rules and regulations, laid down by the bureaucracy for its own self- importance. The private educational institutions, both aided and unaided, established by minorities and non-minorities, in their desire to break free of the unnecessary shackles put on their functioning as modern educational institutions and seeking to impart quality education for the benefit of the community for whom they were established, and others, have filed the present writ petitions and appeals asserting their right to establish and administer educational institutions of their choice unhampered by rules and regulations that unnecessarily impinge upon their autonomy.

3. The hearing of these cases has had a chequered history. Writ Petition No. 350 of 1993 filed by the Islamic Academy of Education and connected petitions were placed before a Bench of 5 Judges. As the Bench was prima facie of the opinion that Article 30 did not clothe a minority educational institution with the power to adopt its own method of selection and the correctness of the decision of this Court in St. Stephen's College v. University of Delhi [(1992) 1 SCC 558] was doubted, it was directed that the question that arose should be authoritatively answered by a larger Bench. These cases were then placed before a Bench of 7 Judges. The questions framed were recast and on 6th February, 1997, the Court directed that the matter be placed before a Bench of at least 11 Judges, as it was felt that in view of the Forty-Second Amendment to the Constitution, whereby "education" had been included in Entry 25 of List III of the Seventh Schedule, the question of who would be regarded as a "minority" was required to be considered because the earlier case laws related to the pre-amendment era, when education was only in the State List. When the cases came up for hearing before an eleven Judge Bench, during the course of hearing on 19th March, 1997, the following order was passed :-

"Since a doubt has arisen during the course of our arguments as to whether this Bench would feel itself bound by the ratio propounded in - In Re Kerala Education Bill, 1957 (1959 SCR 955) and the Ahmedabad St. Xaviers College Society v. State of Gujarat, 1975(1) SCR 173, it is clarified that this sized Bench would not feel itself inhibited by the views expressed in those cases since the present endeavour is to discern the true scope and interpretation of Article 30(1) of the Constitution, which being the dominant question would require examination in its pristine purity. The factum is recorded."

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