2016 Supreme(SC) 334

SUPREME COURT OF INDIA
ANIL R. DAVE, A.K. SIKRI, R.K. AGRAWAL, ADARSH KUMAR GOEL, R. BANUMATHI, JJ.
Modern Dental College & Research Centre & Ors. – Appellants
Versus
State of Madhya Pradesh & Ors. – Respondents
Civil Appeal Nos. 4060, 4061, 4062, 4063, 4064 & 4065 of 2009
Decided On : 02-05-2016

IMPORTANT POINTS
Establishment and running of an educational institution recognised as occupation and a fundamental right under Article 19(1)(g).
Rights under Article 19(1)(g) are not absolute. They are subject to reasonable restrictions under clause (6).
Government has a right to issue directions to an institution to reduce the fee, if found excessive.
State Legislature is competent to enact provisions regarding fixation or determination of fees.
Act, 2007 is not invalid for lack of legislative competence.

Headnote:Per A.K. Sikri, J. (Majority view)

       (a) Constitution of India – Article 19(1)(g) – Establishment and running of an educational institution recognised as occupation and a fundamental right under Article 19(1)(g) – Right to admit the students and a right to set up a reasonable fee structure are facets of the said ‘occupation’. (Para 32, 33)

       (2002) 8 SCC 481 – Relied upon

       (1993) 1 SCC 645 – Referred

       1957 SCR 874 – Cited with approval

       (b) Higher Education – Professional institutions – Admission and fee structure – Occupation of imparting education quite apart and different than other occupations or professions – To work on ‘no profit no loss’ basis – Admissions to be strictly on merits – T.M.A. Pai Foundation expounding on nature and extent of control of this occupation on the basis of level of education – Thus admission must be fair, transparent and non-exploitative – Emphasis on CET – Government empowered to frame Regulations for CET to be fair and transparent. (Para 34, 36, 37)

       (2002) 8 SCC 481 – Relied upon

       (c) Higher Education – CET – Contention that CET is to be conducted by educational institutions themselves and Government could only frame regulations for conducting CET; it could not conduct CET itself – Rejected – Neither merit could be compromised in admissions nor capitation fee could be permitted – State entitled to introduce regulatory measures – Post-audit measures would not meet the regulatory requirements – Control is required at the initial stage itself. (Para 39, 43)

       (2005) 6 SCC 537 – Relied upon

       (d) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Section 6 r/w section 3 (d) and 7 – CET by State or Agency authorised by State – Do not interfere with the autonomy of private unaided professional educational institutions including minority institutions – Right of private unaided professional educational institutions to admit students of their choice not taken out – Only made subject to determination of merit by CET followed by centralised counseling – Not violative of Article 19(1)(g) in any way – a (Para 47, 48)

       (2002) 8 SCC 364; (2005) 6 SCC 535 – Relied upon

       (1992) 1 SCC 558 – Distinguished

       (e) Constitution of India – Article 19(1)(g) – Rights under Article 19(1)(g) – Not absolute – Subject to reasonable restrictions under clause (6) – Fundamental rights should be balanced against larger interest of the society – 'Doctrine of Proportionality' – 'Reasonable restriction' seeks to strike a balance between the freedom guaranteed by any of the sub-clauses of clause (1) and the social control permitted by any of the clauses (2) to (6) – Factors to be kept in mind while examining reasonableness of a statutory provision/restrictions restated. (Para 50, 55, 58)

       (1982) 2 SCC 33; 1959 SCR 629; (1998) 8 SCC 227 – Relied upon

       (1986) 1 SCR 103(Canada) – Referred

       (f) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Section 6 r/w section 3 (d) and 7 – Madhya Pradesh Private Medical and Dental Post Graduate Courses Entrance Examination Rules, 2009 – Admissions Rules, 2008 – Providing a procedure of holding a CET in the interest of securing fair and merit based admissions and preventing maladministration – Such measure warranted in the larger public interest – Provisions, held, are 'reasonable' and satisfied the test of proportionality – Provisions relating to admission as contained in the Act and the Rules are not offensive of Article 19(1)(g) of the Constitution. (Para 60, 61, 63)

       (g) Higher education – Fee structure – Right to establish and manage educational institution recognised as a right to carry on 'occupation' – Fundamental right under Article 19(1)(g) – Fee can be fixed by the institution and it may vary from institution to institution depending upon the quality of education provided by each of such institution – Nevertheless profiteering and commercialisation not permissible – Government has a right to issue directions to an institution to reduce the fee, if found excessive. (Para 64, 68)

       (2002) 8 SCC 481 – Relied upon

       (h) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Section 4(1) and (8) r/w Section 9(1) – Fee structure – Considerations for fixing fee structure – Fee should meet all cost components as also generate a reasonable surplus required for growth – Taken care of by section 9(1) – Constitution of Committee – Provisions do not violate right of private professional educational institution to charge its own fee. (Para 70, 74)

       (2002) 8 SCC 481; (2003) 6 SCC 697; (2005) 6 SCC 537; (2004) 5 SCC 583 – Relied upon

       (i) Constitution of India – Seventh Schedule, Entry 66 of List I (Union List) and Entry 25 of List III of Seventh Schedule (Concurrent List) – No regulations regarding fixation or determination of fees available when Act, 2007 was enacted – State Legislature competent to enact provisions regarding fixation or determination of fees. (Para 75)

       (j) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Sections 4 and 9 – Constitution of India – Article 19(1)(g) – Higher education – Regulatory mechanism – Law being dynamic has to change with time – Right to admission or right to fix the fee enjoyed by institutions not taken away but regulated – Merely by State assuming the power to hold CET, fundamental right of the appellants to admit the students is not taken away – Likewise, right of the institutions to fix the fee is not taken away, only it is being ensured that the educational institution does not have the element of profiteering and also that no capitation fee etc. is charged. (Para 84)

       (k) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Act, 2007 – Section 8 r/w Rules 4(2), 7 and 15, Admission Rules, 2008 – Reservation of seats for SC/ST and OBC etc. – These provisions not challenged in P.A. Inamdar – Validity of Article 15(5) upheld in Pramati Educational and Cultural Trust – Held, reservation of seats in consonance with Article 15(5) and hence valid. (Para 87)

       (2005) 6 SCC 537; (2014) 8 SCC 1 – Relied upon

       (l) Constitution of India – Seventh Schedule, Entry 66, List I and Entry 25, List III – Words 'co-ordination and determination of standards' in Entry 66 – Achieved by Parliamentary legislation Medical Council of India Act, 1956 and creating Medical Council of India – Entry 66 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. – Regulation of education prescribed in Entry 25, List III – Both Entries one in List I and the other in List III concern education – Should be read harmoniously – So read, co-ordination and laying down of standards in higher education or research and scientific and technical institutions, power rests with the Union/Parliament to the exclusion of the State Legislatures – For other facets of education, including technical and medical education, as well as governance of universities even State Legislatures are given power – Field covered by Entry 25, List III only subject to Entries 63, 64, 65 and 66 of List I – Held, Act, 2007 not invalid for lack of legislative competence. (Para 93)

       1964 (Supp.) 1 SCR 112; (1999) 7 SCC 120; (1964) 6 SCR 368; (1995) 4 SCC 104; (2006) 9 SCC 1; (1981) 4 SCC 296; (1994) 4 SCC 401 – Relied upon

       (2004) 11 SCC 755 – Overruled

       (m) Higher education – Right of Autonomy of unaided private institutions – Not violated by CET being Conducting by State or State nominated agency; or in fixing fee – Once the notifications for CET called NEET become operative, it will be matter between the State and the Union. (Para 98)

       (n) Medical Council of India Act, 1956 – Functioning of MCI – Dr. Ranjit Roy Chaudhury committee constituted by Central Government finding functioning of MCI quite unsatisfactory – Recommending large scale review and remedial measures – Executive and legislature required to take action – In the meantime Supreme Court constituting Oversight Committee. (Para 100, 103)

       Per R. Banumathi, J. (Concurring)

       (o) Constitution of India – Seventh Schedule – Entry 66, List I and Entry 25, List III – Both relating to education – May cause overlapping – Determination – Doctrine of ‘pith and substance’ – ‘Incidental encroachment’ into or ‘overlapping’ of the field covered by one of the entries in the other Lists is permissible – Legislation thus overlaping would not be rendered invalid, if, in ‘pith and substance’ the legislation is on the subject reserved in favour of that Legislature. (Para 6)

       (p) Constitution of India – Seventh Schedule – Entry 66, List I and Entry 25, List III – Coordination and determination of standards exclusive to Union – Education under Entry 25 available both to Union and States – However, power of the State subject to Entries 63, 64, 65, and 66 of Union List – Thus State is competent to legislate on the education including technical education, medical education and universities, but it should be as per the standards set by the Union – State can set higher standards than those fixed by Union. (Para 15, 25)

       (1999) 7 SCC 120; (2005) 6 SCC 537; 1964 (Supp.) 1 SCR 112; (1964) 6 SCR 368; (2004) 1 SCC 86; (1995) 4 SCC 104; (2011) 4 SCC 606; (1986) Supp SCC 543; (2004) 4 SCC 513 – Relied upon

       (q) Constitution of India – Seventh Schedule – Entry 66, List I and Entry 25, List III – Scope of Entry 66 limited to ‘determining the standards of higher education’ and not laying down admission process – State not denuded of its power to legislate under Entry 25 of List III, more so, pertaining to the admission process in universities imparting higher education – Act, 2007 held intra vires. (Para 29)

       (r) Higher education – Right to occupation of establishing and running educational institutions – Guaranteed under Articles 19(1)(g), 26 and 30 of Constitution of India – Right to occupation not absolute – Subject to reasonable restrictions – a (Para 31, 34, 38)

       (2002) 8 SCC 481; (2005) 6 SCC 537; (1983) 4 SCC 353; AIR 1960 SC 430 – Relied upon

       (s) Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – Act, 2007 – Section 3(d), 6 – Admission through CET followed by merit based counseling – Act 2007 enacted in compliance with the directions in T.M.A. Pai, Islamic Academy and P.A. Inamdar for ensuring fairness and transparency in admissions process – Private educational institutions have a ‘right of occupation’ – At the same time they have the responsibility of selecting meritorious and suitable candidates – Rights of private educational institutions have to yield to the larger interest of the community – Merit based CET – Not unreasonable restriction. (Para 44, 49)

       (1998) 8 SCC 227; AIR 1952 SC 196; AIR 1960 SC 1080; (1971) 2 SCC 452; (1984) 3 SCC 654; (2005) 8 SCC 534 – Relied upon

       (t) Constitution of India – Articles 39(e), 39(f), 42 and 21 – Right to life under Article 21 includes right to good health – State is obliged to ensure quality of medical education for protecting right of citizen to good health – CET is in fulfillment of that responsibility. (Para 52, 53, 54)

       (1996) 2 SCC 682; (2010) 12 SCC 609; (2013) 9 SCR 1103; (2003) 4 SCC 493 – Relied upon

       (u) Higher education – Widespread complaints of malpractices by unaided private institutions – State justified in enacting Act, 2007. (Para 56)

       (2012) 7 SCC 433 – Relied upon

       (v) Act, 2007 – Sections 4 and 9 r/w Object – To “provide for the 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 Scheduled Castes, the Scheduled Tribes and Other Backward Classes in professional educational institutions and the matters connected therewith or incidental thereto” – Section 9 deals with factors to be taken into consideration by the Committee for determination of fee – These include generation of reasonable surplus – That apart, sections 4(8) and 9(2) provide affording of opportunity to the institutions before finalizing the fee – Private institutions, in exercise of their “right to occupation”, cannot transgress the rights of the students. (Para 57, 58, 59, 69)

       (2004) 5 SCC 583 – Relied upon

       Facts of the case:

       The appellants had filed writ petitions challenging the validity/vires of the provisions of the statute passed by the State Legislature, known as 'Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007'.

       The appellants also challenged vires of Admissions Rules, 2008 and the Madhya Pradesh Private Medical and Dental Post Graduate Courses Entrance Examination Rules, 2009 which have been framed by the State Government in exercise of the power conferred upon it vide 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 of fee. In addition, the said Act and Rules also contain provisions for reservation of seats.

       All the appellants are private medical and dental colleges which are unaided.

       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 relating 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.

       Finding of the Court:

       Establishment and running of an educational institution recognised as occupation and a fundamental right under Article 19(1)(g).

       Rights under Article 19(1)(g) are not absolute. They are subject to reasonable restrictions under clause (6).

       Government has a right to issue directions to an institution to reduce the fee, if found excessive.

       State Legislature is competent to enact provisions regarding fixation or determination of fees.

       Act, 2007 is not invalid for lack of legislative competence.

       State has the legislative competence to enact the impugned legislation-Act 2007 to hold common entrance test for admission to professional educational institutions and to determine the fee.

       Result: Appeals dismissed.