Holding

The Madhya Pradesh Act, 2007 and the related admission and fee fixation rules are constitutionally valid; they constitute reasonable restrictions under Art.19(6), are within the State's legislative competence, and the reservation provisions are upheld under Art.15(5).

Summary

The appellants, a group of private unaided medical and dental colleges, challenged the Madhya Pradesh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Vinimayan Avam Shulk Ka Nirdharan) Act, 2007 and the accompanying admission and fee fixation rules, alleging that the provisions on common entrance test (CET), fee regulation, reservation and eligibility violated their fundamental right to carry on an occupation under Art.19(1)(g) and were beyond the State's legislative competence. The Court examined whether the State could impose reasonable restrictions on the right to admission and fee fixing, whether the reservation provisions were permissible under Art.15(5), and whether the State had authority under the Constitution’s entry 25 (Concurrent List) despite the overlapping entry 66 (Union List). Applying the doctrine of proportionality and the test of reasonableness under Art.19(6), the Court held that the Act and Rules are valid regulatory measures aimed at ensuring merit‑based admission, preventing profiteering, and promoting public welfare. It further held that the State has the competence to legislate in this field and that the reservation provisions are constitutionally valid. Consequently, the Court dismissed the appeals and upheld the High Court’s decision.

Issues considered

The provisions of the MP Act, 2007 and Rules on admission, fee fixation, reservation and eligibility violate Art.19(1)(g) and Art.19(6).
Whether the State legislature has competence to enact the Act and Rules given the overlap between Union List entry 66 and Concurrent List entry 25.
Whether reservation of seats for SC/ST/OBC in private unaided professional institutions is permissible under Art.15(5).
Whether the fee fixation provisions amount to an unreasonable restriction on the right to occupation.
Whether the conduct of a common entrance test by the State infringes the autonomy of private professional colleges.

Legislation cited

Madhya Pradesh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Vinimayan Avam Shulk Ka Nirdharan) Adhiniyams. 10, s. 12, s. 13, s. 3(d), s. 4, s. 5, s. 6, s. 7, s. 8, s. 9
Madhya Pradesh Private Medical and Dental Post Graduate Courses Entrance Examination Ruless. 10, s. 9
Medical Council of India Act

Subjects

Article 19(1)(g)Article 19(6)Article 15(5)private unaided professional collegescommon entrance testfee fixationreservationlegislative competencedoctrine of proportionalitymerit based admissionregulatory mechanism

Judgment

[2016] 3 S.C.R. 579

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

(Civil Appeal No. 4060,of2009)
B
MAY02,2016

[ANIL R. DAVE, A.K. SIKRI, R.K. AGRAWAL, ADARSH
KUMAR GOEL AND R. BANUMATHI, JJ.]
Madhya Pradesh Niji Vyavasayik Shikshan Sanstha (Pravesh
Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 - ss. c
3(d), 4, 5, 6, 7, 8, 9, 12, 13 - Madhya Pradesh Private Medical and
Dental Post Graduate Courses Entrance Examination Rules, 2009
- r. 9 - Constitution of India -Art. J9{J)(g) and 19(6):
Validitylvires of the provisions of the Act and the Rules -
Challenged to, by appellants-private unaided 111edical and dental D
colleges - Challenge made to the provisions relating to admission
of students in post graduate courses, .fixation of fee, reservation of
seats, provisions relating to eligibility for admission on the ground
of being violative of Art. l 9(l){g) as also on the ground of
competence of the State legislature since the subject matter was E
exclusively reserved for Parliament - Held: Right claimed by the
appellants is a .fundamental right guaranteed u/Art. 19(l}(g) - Act
imposes reasonable restrictions on the right given to the appellants,
thus. protected u/Art. 19(6) - Provisions in the Act and the Rules
relating to fixation ojfee 110t violative ofAri. 19(l){g) - Reservations
of seats for SC/ST and OBC in private educational insti1U1io11s in F
consonance with Art. 15(5) - Holding of co111111011 en/ranee test for
admission under the control of State does not impinge the autonomy
of such institutions - Further, impugned legislation is not beyond
the legislative competence of the State - Thus, the Act and the Rules
are constitutionally valid - High Court rightly upheld the validity_ G
of the provisions of the Act and the Rules.
Provisions in the Act and Rules relat)ng to fixation of.fee -
Challenge to - Held: Parameters laid down in s. 9 have to be kept
in mind while fixing the fee - Fee to be charged hus to be suggested
H
579
580 SUPREME COURT REPORTS [2016) 3 S.C.R.

A by the said educational inslitution itself - Committee is to satisfY
itself that the fee charge"'d did not a111ount to profiteering or
com111ercialisation of education and was based on intelligible factors
mentioned in s. 9(1) - It is only a regulatO!y measure and does not
take away the poll'ers of the educational institution to fix their own
fee - Thus, the provision relating to .fixation of fee by selling up a
B
Co111111it1ee to oversee that institutions are not charging a fee which
amounts to capitation or profiteering are reasonable restrictions
and do no/ suffer from any constitutional vice.
Power of State io conduct Common entrance test (CET) -
Challenge to - Held: CET is in larger interest and we(fare of the
c students to promote merit, add excellence and curb malpractices -
Holding of CET zmder the control of the State does not impinge this
autonomy - Admission is still in the hands of these institutions -
Sole pwpose of holding CET is to ensure that ad111issions done by
the educational institutions are strictly on merit.
D Regulatory mechanism - Regulations under Adhiniya111 of 2007
- Need for - Held: Provisions of Adhiniya111 of 2007 are aimed at
seeking laudable objectives in larger public interest - Object of
setting zip institutions for the State is a welfare function for the
purpose of excelling in educational standards - Profit motive
E adopted by the private institutions leads to a large degree of secrecy
and corruption - As such, 111echa11ism of regulations under the
impugned laws is legal, constitutional, fair, /ramparel1l and upholds
the primary criteria of merit - Regulations do not i11ji·i11ge on the
fundamental rights of either the minorities or non-minorities to
establish and administer educational institutions and must as such
F be upheld as ralid.
Constitution of India;,_
Art. 19(lj(g) and 19(6) - Right of private unaided professional
institutions to establish and manage educational institutions - Held:
G Right of professional institutions to establish and manage
educational institutions is regarded as a11 'occupation' befitting the
recognition of this right as a fundamental right u/Art. 19(1 ){g) -
Four specific rights which encompass right to occupation are, right
to admit students; right to set up a reasonable fee structure; right to
appoint staff (teaching and non-teaching); and right to take action
H if there is dereliction of duty on the part of any employees - Since,
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 581
STATE OF MADHYA PRADESH

education is treated as a noble 'occupation' on 'no profit no loss' A
basis, those who establish and are managing the educational
institutions are llOt expected to illdulge ill profiTeering or
commercialisation this noble activity - Thus. complete fi"eedom is
not given to the fijiucational .institutions in respect of right to admit
the students and fixation offee - It is subject to certain restrictiollS
B
- These are regulatory measures which can be adopted by the State
in respect of such institutions.
Art. 15(5), 19(JJ(g). 19(6), 30 - Chaflellge made to the
reservatioll of seats for Scheduled Castes, Scheduled Tribes alld
Other Backward Classes - Held: Since this Court ill P.A. lnamdar
held that there callnot be any fixation of quota or appropriation of
c
seats by the State, reservation which inheres setting aside quotas,
would not be permissible - It cannot be said that the provisions
seek to bring back the Unni Krishnan system o.f settillg up State quotas
- Thus, reservation of seats for SC/ST alld OBC in consonallce
with Article 15(5). D
Art. 254 - List I Entry 66, List 111 Entry 25 - Legislative
competence of the State to enact Adhiniyam of 2007 - Held: Entry
66 List I dealt with determination and coordination 1~[ standards,
alld original Entry 11 of List II granted the States the exclusive
power to legislate with respect to all other aspects of education, E
which was subsequently deleted, and replaced by amending Entry
25, List III, granting concurrent powers to both Parliament and
State Legislature to legislate with respect to all other aspects of
Education, except that which was specifically covered by Ent1:v 63
to 66 of the List I - When two Entries relating to education, one in
the Union List and the other in the Concurrent List, co-exist, they F
have to be read harmoniously - Reading in this manne1; it would
becoille manifest that when it comes to co-ordinatioll and laying
down of standarcl1· in the higher educati011 or research and scientific
and technical institutions, power rests with the Union/Parliament to
the exclusion ofthe State Legislatures -Howeve1; as regards technical G
and medical education, as ll'e!I as governance o.f universities, even
State Legislatures are given power by virtue of Entry 25 - Thus,
there was no violation of right of autonomy of the educational
instillltions in the CET being conducted by the State or an agency
nominated by the State or in fixing fee - Right 1~f a Stale to do so is
H
582 SUPREME COURT REPORTS [2016] 3 S.C.R.

A subject Jo a central law - MP Niji Vyavasayik Shikshan Sanstha
(Pravesh Ka Vinzvuman Avam Shulk Ka Nirdharan) Adhiniyam, 2007
- Madhya Pradesh Private Medical and Denial Post Graduate
Courses Entrance Examination Rules, 2009.
Doctrines: Doctrine of Proportionality ~ Expla11ation and
B application of - Held: While examini11g whether the impugned
pro'visions of the statute and Rules amounl to reasonable restrictions.
and are in the interest of general public, "doctri11e ofproporlionality'
is applied - it is the balancing of fundamental right to cm;ry on
occupation on the one hand and the restrictions imposed on the
other hand - it is the set of rules determining the necessary and
c sufficient conditions for limitation of a constitutionally protected
right by a lp11;'to be constitutionally permissible - For a proper
ba/a11ce between the two facts-rights and limitations imposed upo11
it by a statute, concept of 'proportionality', is a proper criterion -
Impugned provisions which may amount to 'restrictio11s 'on the right
D of the institution to carry on their 'occupation'. are clearly
'reaso11able' and sati~fy the lest of proportionality.
Dismissing the appeals, the Court
HELD: Per Sikri, J. (for ltimself, Dave J., Agrawal J., Goel
J., mu/ Ba1111111athi .J.)
E
Re.: Provisions relating to CET to be conducted by the State
machinery under Act; 2007 as well as Rules.
1.1 The right of professional institutions to establish and
manage educational institutions was finally regarded as an 'occu-
pation' befitting the recognition of this right as a fundamental
F
right under Article 19(1 )(g) in T.M.A. Pai Fo1111datio11. The Court
delineated four specific rights which encompass right to occupa-
tion, namely, (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 to take action if there is der-
G eliction of duty on the part of any employees. In viell\Of the said
recognition of the right to admit the students and a right to set
up a reasonable fee structure treating as part of occupation is
recognised as fundamental right under Article 19(1 )(g) of the
Constitution. !Paras 32, 331 1627-C, F-GI
H 1.2 While treating the managing of educational institution as
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 583
STATE OF MADHYA PRADESH

an 'occupation', the Court was categorical that this activity could A
not be treated as 'business' or 'profen·io11 '.This right to carry on
the occupation that the education is, the same is not put at par
with other occupations or business activities or even other pro-
fessions. It is a category apart which was carved out by this Court
in T.M.A. Pai Foundation. There was a specific purpose for not
B
doing so. Education is treated as a noble 'occupation' on '110 profit
110 loss' basis. Thus, those who establish ·and are managing the
educational institutions are not expected to indulge in profiteer-
ing or commercialise this noble activity. Keeping this objective
in mind, the Court did not give complete freedom to the educa-
tional institutions in respect of right to admit the students and c
also with regard to fixation of fee. As far as admission of students
is concerned, the Court was categorical that such admissions have
to be on the basis of merit when it comes to higher education,
particularly in professional institutions. [Para 34] [628-A-D]
1.3 Jn order to see that merit is adjudged suitably and ap- D
propriately, the Court candidly laid clown that procedure for ad-
mission should be so devised which satisfies the triple test of
being fair, transparent and non-exploitative. Such merit should
be determined either by the marks that students obtained at quali-
fying examination or at the CET conducted by the institutions or
in the case of professional colleges, by Government agencies. E
[Para 36] (628-H; 629-A-B)
1.4 The submission that by exercising the power to frame
Regulations, the State could not usurp the very function of con-
ducting this admission test by the educational institutions; and
that it only meant that such a CET is to be conducted by the F
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 cannot be accepted in view
of the unambiguous and categorical interpretation given by the G
Supreme Court in P.A. lmmular with respect to certain observa-
tions in T.M.A. Pai Foundation case. [Paras 38, 39) (630-C-D)
1.5 It cannot be said that the State could intervene only after
proving that merit was compromised or capitation fee was being
charged. Post-audit measures would not meet the regulatory re- H
584 SUPREME COURT REPORTS [2016] 3 S.C.R.

A quirements. Control was required at the initial stage itself. There-
fore, though 'occupation' is a fundamental right, which gives right
to the educational institutions to admit the students and also fix
the fee, at the same time, scope of such rights has been dis-
cussed and limitations imposed thereupon by the said .iudgments
themselves expiaining the nature of limitations on these rights.
B
[Para 43] [632-G-H; 633-A]
1.6 The impugned legislation and Rules impose certain re-
strictions. Having regard to the pronouncement in T.NJ.A. Pai
Fou11datio11, with lucid clarifications to the said judgment given
by this Court in RA. bwmdar, it becomes clear that insofar as
c such regulatory measures arc concerned, the same can be adopted
by the State in respect of minority run institutions as well. [Paras
44, 48] (633-B; 636-H; 637-A)
1.7 It is well settled that the right under Article 19(l)(g) is
not absolute in terms but is subject to reasonable restrictions
D under clause (6). Reasonableness has to be determined having
regard to the nature of right alleged to be infringed, purpose of
the restriction, extent of restriction 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
E balance between the fundamental rights and the larger interest
of the society. Court interferes with a Statute if it clearly violates
the fundamental rights. The Court proceeds on the footing that
the Legislature understands the needs of the people. The Con-
stitution is primarily for the common man. Larger interest and
welfare of student community to promote merit, achieve excel-
F lence and curb malpractices, fee and admissions can certainly be
regulated. [Para 50] [637-C-EJ
T.MA. Pai Foundation & Ors. v. State of Kamataka &
Ors. 2002 (3) Suppl. SCR 587 : (2002) 8 SCC 481 -
explained and relied on.
G P.A. /namdar & Ors. v. State of Maharashtra & Ors.
2005 (2 ) Suppl. SCR 603 : (2005) 6 SCC 537 - relied
on.
St. Stephens College v. University of Delhi 1991 (3)
Suppl. SCR 121 : (1992) 1 sec 558 - distinguished.
H Unni Krishnan, J.P. & Ors. v. State of AJ1dhra Pradesh
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 585
STATE OF MADHYA PRADESH

& Ors. 1993 (1) SCR 594:(1993) 1 SCC 645; State of A
Bombay v. RMD Chamarbaugwala & Am: 1957 SCR
874; Islamic Academy or Education & Anr. v. State of
Karnataka & Ors. 2003 (2) Suppl. SCR 474 : (2003) 6
sec 697 - referred to.
Doctrine of Proportionality: B
2.1 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 busi-
ness. Thus, while examining as to whether the impugned provi-
sions of the Statute and Rules amount to reasonable restrictions c
and are brought out in the interest of the general public, the ex-
ercise that is required to be undertaken is the balancing of fun-
damental right to carry on occupation on the one hand and the
restrictions imposed on the other hand. This is what is known as
'Doctrine ofProportionality'. Jurisprudentially, 'proportionality' can
be defined as the set of rules determining the necessary and suf- D
ficient conditions for limitation of a constitutionally protected right
by a law to be constitutionally permissible. [Para 53) [638-D-F]
2.2 For a proper balance between the two facts viz. the rights
and limitations imposed upon it by a statute the concept of
'proportionality', which is a proper criterion. To put it pithily, when E
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. The F
. 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. [Para 56, 57) [640-F-G; 641-F] G
2.3 The doctrine of proportionality, is enshrined in Article
_19 itself in clause (1) along with ciause (6) thereof. While defining
as to what constitutes a reasonable restriction, it has been held
that the expression 'reas'o11able restriction' seeks to strike a
balance between the freedom guaranteed by any of the sub- H
586 SUPREME COURT REPORTS [2016] 3 S.C.R.

A clauses of cl (1) 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 nature beyond what is required in the interests of public.
Further, in order to be reasonable, the restriction must have a
B
i:easonable relation to the object which the legislation seeks to
achieve, and must not go in excess of that object. At the same
time, reasonableness of a restriction has to be determined in an
objective manner and from the standpoint of the interests of the
general public and not from the point of view of the persons upon
c whom the restrictions arc imposed or ·upon abstract
considerations. [Para 58] [641-G-H; 642-A-BJ
2.4 It was held in T.M.A. Pai Fo1111datio11 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. Jmmular by not only
D
giving its premature to dcholding 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
E holding a CET in the interest of securing fair and merit based
admissions and preventing maladministration. [Para 60] [643-E-
F]
2.5 The larger public interest warrants such a measure.
Having regard to the malpractices which are noticed in the CET
F conducted by such private institutions themselves, for which
plethora of material is produced, it is, undoubtedly, in the larger
interest and welfare 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,
the impugned provisions which may amount to 'restrictions' on
G the right of the appellants to carry on their 'occupation', are clearly
'reasonable' and satisfy the test of proportionality. [Para 61) [643-
G-H; 644-A]
2.6 The Parliamentary Committee Report notes the dismal
picture of exploitation in making admissions by charging huge
H capitation fee and compromising merit. This may not apply to all
MODERN DENTAL COLLEGE AND. RESEARCH CENTRE v. 587
STATE OF MADHYA PRADESH

institutions but if the Legislature which represents the people A
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 'm organism in its
environment". The law is not an Eden of concepts but rather ah ·
everyday life of needs, interests and the values that a given society
B·
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.
[Para 62) (644-B-C] "
2.7 The High Court in its judgment has analysed the
provisions of the Act and found that provisions for merit based
admissions and procedure for fee fixation did not violate c
fundamental right of th~ private institutions to conduct admissions
and to fix fee. The said view is accepted and it is held that
provisions relating to admission as contained in the Act and the
Rules are not offensive of Article 19(1)(g) of the Constitution.
[Para 63) [644-D-E] D
R. v. Oakes (1986) 1 SCR 103; P.P. Enterprises & Ors.
v. Union of India & Ors. 1982 (3) SCR 510:(1982) 2
SCC 33i Hanij Quareshi Mohd. v. State of Bihar 1959
SCR 629; MR.F Ltd. v, Inspector Kera/a Govt. 1998
(2) Suppl. SCR 632 : (1998) 8 sec 227; T.MA. Pai E
Foundation & Ors. v. State ~f.Karnataka & Ors. 2002
(3) Suppl. SCR 587 : (2002) 8 SCC 481; Islamic
Academy or Education & Am: v. State of Karnataka &
Ors. 2003 (2) Suppl. SCR 474:(2003) 6 SCC 697; P.A.
]namdar & Ors. v.State of Maharashtra & Ors. 2005
(2) Suppl. SCR 603 : (2005) 6 SCC 537;- referred to. F
Proportionality: ConstitutiOnal Rights and Their
Limitation by Aharon Barak Cambridge University Press
2012; Justice Frankfuter: 'A Symposium of Statutory
Construction: Forward', 3, Vand L. Rev. 365, 367 ( 1950)
- referred to. G

Provisions in the Act Rules relating to fixation of fee are
unconstitutional being violative of Article 19(l)(g) of the
Constitution?
3.1 On going through Section 9 of the Act, 2007 it is fou_nd
H
588 SUPREME COURT REPORTS [2016] 3 S.C.R.

A that the parameters which are laid 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. It is also
significant to note that the Committee which is set up for this
purpose, !Ulmely, Admission and Fee Regulatory Committee, is
discharging only regulatory function. The fee which a particular
B
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 ilot amount to
profiteering or commercialisation of education and was based on
c intelligible factors mentioned in Section 9(1) of the Act, 2007.
Therefore, it is only a regulatory measure and docs not take away
the powers of the educational institution to fix their own fee. [Para
74] [650-B-D)
3.2 The provisions relating to admission of students through
D 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 arc reasonable restrictions and do not suffer from
any constitutional vice. The provision of the Act and the Rules
arc, therefore, in tune with the sentiments and directions contained
E in P.A. bumular. 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 Statute. In any event,
th.~re being no regulations regarding fixation or determination of

F 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. [Para 74, 75]
652-B-D)
3.3 When imparting of quality education to cross-section of
the society, particularly, the weaker section and when such private
G educational institutions arc to rub shoulders with the State
managed ed.ucational institution to meet the challenge of the
implementing ambitious constitutional promises, the matter is
to be examined in a different hue. It is this spirit which is kept in
mind while balancing the right of these educational institutions
H given to them under Article 19(1)(g) on the one hand and
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 589
STATE OF MADHYA PRADESH

reasonableness of the restrictions which have been imposed by A
the impugned legislation. The right to admission or right to fix
the fee guaranteed to these appellants is not taken away
completely, as feared. T.M.A. Pai Foundation ~ives autonomy to
such institutions which remain intact. Holding of CET under the
control of the State does not impinge this auto.:ioniy. Admission
B
is still in the hands of these institutions. Once it is even conceded
by the appellants that in admission of students 'triple test' is to be
met, the impugned legislation aims at that. After all, the sole
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 c
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, the main purpose is that State acts as a regulator and satisfies
itself that the fee which is proposed by the educational institution
D
does not have the element of profiteering and also that no
capitation fee etc. is charged. In fact, this dual function of
regulatory nature is going to advance the public interest inasmucli
as those students who are otherwise meritorious but are not in a
position to meet unreasonable demands of capitation fee etc. are
not deprived of getting admissions. The impugned provisions, E
therefore, are aimed at seeking laudable objectives in larger public
interest. Law is not static, it has to change with changing times
and changing social/societal conditions. [Para 84] [655-H; 656-
A-E]
T.MA. Pai Foundation & Ors. v. State of Karnataka &
F
Ors. 2002 (3) Suppl. SCR 587 : (2002) 8 SCC 481;
P.A. Inamdar & Ors. v. State of Maharashtra & Ors.
2005 (2 ) Suppl. SCR 603 : (2005) 6 SCC 537; Unni
Krishnan, JP. & Ors. v. State of Andhra-Pradesh & , ~-

Ors. 1993 (1) SCR 594 : (1993) 1 SCC 645' Islamic
Academy or Education & Am: v. State. of Karnataka & G
Ors. 2003 (2) Suppl. SCR 474 : (2003) 6 SCC 697;
Modern School v. Union o/India 2004 (1) Suppl. SCR
668 : (2004) 5 sec 583 - referred to.
Need for regulatory mechanism:
4.1 In the field of the education, therefore, this constitutional H
590 . SUPREME COURT REPORTS [2016] 3 S.C.R.

A goal remains pivotal which mak~s it distinct and special in
contradistinction with other economic activities as the purpose
of education is to bring about social transformation 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 would apply
B
more vigorously in the field of education. Even otherwise, for
economist, education as an economic activity, favourably
compared to those of other economic concerns like agriculture
and industry, has its own inputs and outputs; and is thus analyzed
in terms of the basic economic tools like the laws of return,
c principle of equimarginal utility and the public finance. Guided by
these principles, the State is supposed to invest in education up
to a point w.here- the socio-economic returns to education equal
to those from other.State expenditur~s, whereas the individual is
guided in his decision to pay for a type of education by the
possibility of returns accruable to him. All these considerations
D
make out a case for setting up of a stable Regulatory mechanism.
f~ara 83] f655-D-GJ

4.2 The Association of Private Colleges failed to hold their
CETs in a fair, transparent and rational manner. The accountability
and transparency in State actions is much higher than in private
E actions. It is needless to say that the incidents of corruption in
the State machinery were brought in the public eye immediately
and have been addressed expeditiously. The same could never
have been done in case of private actions. Even on a keel of
comparative efficiency, it is more than evident that the State
F process is far more transparent and fair than one that is devised
by the private colleges which have no mechanism of any checks
and balances. The State agencies are subject to the Right to
.Information Act, Audit, State Legislature, Anti-Corruption
agencies, Lokayukta, etc. [Para 88] [658-C-E]
G 4.3 The very object of setting up institutions for the State is
a welfare function, for the purpose of excelling in educational
standards. On the other hand, the primary motivation for private
parties is profit motive or philanthropy. When the primary
motivation for institutions is profit motive, it is natural that many
means to achieve th~ same shall be adopted by the private
,H
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 591
STATE OF MADHYA PRADESH

institutions which leads to a large degree of secrecy and A
corruption. As such, the mechanism of regulations as envisaged
under the impugned 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
B
institutions and must as such be upheld as valid. [Para 89] [658-
F-G]
4.4 The occupation of education cannot be treated at par
with other economic activities. In this field, State cannot remain
· a mute spectator and has to necessarily step in in order to prevent
exploitation, privatization and commercialisation by the private c
sector. 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 hands of private sector,
the State has introduced regulatory regime as well by providing D
Regulations under the relevant statutes. [Para 78] [653-F-G]
IMA. Pai Foundation & Ors. v. State of Karnataka &
Ors. 2002 (3) Suppl. SCR 587 : (2002) 8 SCC 481 ..:
relied on.
III. Re.: Reservation of seats for Scheduled Castes, E
Scheduled Tribes and Other Backward Classes
5. Since this Court in P.A. Inamdar has held that there can-
not be any fixation of Quuta or appropriation of seats by the State,
reservation which inheres setting aside Quotas, would not be
permissible. The submission that the provisions .seek to bring - F
back the Unni Krishnan system of setting up State Quotas which
has been expressly held by this Court to be impermissible, can-
not be accepted. In (act, as can be seen from the impugned judg-
ment having regard to the provisions of Clause (5) of Article 15
of the Constitution, there was no serious challenge laid to Sec- G
tion 8 read with Rules 4(2), 7 and 15 of the Rules, 2008. In fact,
·counsel for the appellants .conceded that they had not challenged
93rd Constitutional Amendment vide which Article 15(5) was in-
serted 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 Bench judgment in H
592 SUPREME COURT REPORTS [2016] 3 S.C.R.

A the case of Pramati Educational and Cultural Trust. The other
submission that a reading of the reservation provisions in Rule 7
would show that it would be difficult to work out said percentage
having regard to·-the fact that number of seats in the post-gradu-
ate dental and medical ·courses in different specialized disciplines
are few. The High Court successfully dealt with the argument by
B
appropriately demonstrating, by means of charges, that not only
it was possible to work out extent of reservation provided for
different categories, sufficient number of seats were available
for general categories as well. Thus, there is no merit in the chal-
lenge to the reservation of seats for SC/ST and OBC etc. which
c is in consonance with Article 15(5). [Para 87) [657-F-H; 658-A-
B]
Pramati Educational & Cultural Trust (Registered) &
Ors. v. Union of India & Ors. 2014 (11) SCR 712 :
(2014) 8 sec 1 - followed.
D P.A. lnamdar & Ors. v. State of Maharashtra & Ors.
2005 (2 ) Suppl. SCR 603 : (2005) 6 SCC 537; Unni
Krishnan, J.P. & Ors. v. State of Andhra Pradesh &
Ors. 1993 (1) SCR 594: (1993) 1 SCC 645- referred
to.
E Whether the impugned legislation is beyond the legislative
competence of the State of Madhya Pradesh?
6.1 Entry 66 in List I is a specific Entry having a very specific
and limited scope. It deals with co-ordination and determination
of standa1·ds,in institution of higher education or research as well
F as scientific and technical institutions. The words 'co-ordi11alion
amt delerminalio11 of standards' would mean laying down the said
standards. 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 ins.titutions
G
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
Parliamentary legislation in the form of Medical Council of India
Act, 1956 and by creating the statutory body like Medical Council
H of India. The functions that are assigned to MCI include within
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 593
STATE OF MADHYA PRADESH

its sweep determination of standards in a medical institution' as A
well as co-ordination of standards and that of educational
institutions. 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 Entry 25 of
List Ill, thereby giving concurrent powers to both Union as well
B
as States. It is significant to note that earlier education, including
universities, was the subject matter of Entry 11 in List II. Thus,
power to this extent was given to the State 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. Education, including c
university education, was thus transferred to Concurrent List
and in the process technical and medical education was also added.
Thus, i(the submission 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
D
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 E
technical and medical education, as well as governance of
universities is concerned, even State Legislatures are given
power by virtue of Entry 25. The field covered by Entry 25 of
List III is wide enough and as circumscribed to the limited extent
of it being subject to Entries 63, 64, 65 and 66 of List I. [Para 93]
[659-G; 660-A-G] F

6.2 There was no violation of right of autonomy of the
educational institutions in the CET being 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 'NEET' G
become operative, would be a matter between the States and the
Union, to be sorted out on the touchstone of Article 254 ofthe
Constitution. [Para 98] [663-A-B]
Bharti Vidyapeeth (Deemed University) & Ors. v. State
of Maharashtra & Am: 2004 (2 ) SCR 775:(2004) 11 H
594 SUPREME COURT REPORTS [2016] 3 S.C.R.

A sec 755 - partly overruled.
Gujarat University & Anr. v. Shri Krishna Ranf(anath
Muqholkar & Ors. 1964 (Supp.) 1 SCR 112; Dr. Preeti
Srivastava & Am: v. State of MP. & Ors. 1999 (1) Suppl.
SCR 249 : (1999) 7 SCC 120; R. Chttralekha v. State
B of Mysore (1964) 6 SCR 368; State of T.N. & Anr. v.
Adhiyaman Educational & Research Institute & Ors.
1995 (2) SCR 1075 : (19.95) 4 sec 104; State of
Maharashtra v. Sant Dnyaneshwar Shikshan Shastra
Mahavidalaya & Ors. 2006 (3) SCR 638: (2006) 9 SCC
1; State of Madhya Pradesh v. Kumari Nivedita Jain &
c Ors. 1982 (1) SCR 759: (1981) 4 SCC 296; Ajay Kumar
Singh & Ors. v. State of Bihar & Ors. (1994) 4 SCC
401 - referred to.
7.1 This Court had earlier appointed committees headed by
. the retired High Court Judges in all the States to regulate the
D 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. The Central
E Government itself had appointed a group of experts to study th_e
Medical Council Act, 1956 and to make recommendations. The
said Committee gave its report suggesting reforms in the
regulatory oversight of the medical profession by the Medical
Council. The Committee examined the MCI. It was observed
that the MCI was repeatedly found short of fulfilling its mandated
F responsibilities. 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 of
inspections was found to be unsatisfactory. [Paras 99, 100] [663-
E-F; 664-A, HJ
G 7 .2 Pending consideration at appropriate executive or
legislature level, an Oversight .Committee needs to be set in
place in exercise of powers of this Court under Article 142 of the
Constitution to oversee the functioning of the MCI and all other
matters considered by the Parliamentary Committee. There is
H no error in the view taken by the High Court. The directions are
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 595
STATE OF MADHYA PRADESH

issued for the constitution of an Oversight Committee. The said A
Committee will have the authority to oversee all 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
B
appropriate mechanism after due consideration of the Expert
Committee Report. [Paras 102, 103-, 105] [669-C-D, G-H]
T. Devadasan v. Union of India & Anr: (1964) 4 SCR
680; P.A. Inamdar & Ors. v. State of Maharashtra &
Ors. 2005 (2 ) Suppl. SCR 603: (2005) 6 SCC 537;
MR. Balaji & Ors. v. The State of Mysore & Ors. (1993) c
Supp. 1 SCR 439; Ashok Kumar Thakur v. Union of
India & Ors. 2007 (4) SCR 493: (2007) 4 SCC 361;
Indian Medical Association v. Union of India & Ors.
2011 (6) SCR 599:(2011) 7 SCC 179; State of Bombay
v. RMD Chamarbaugwala & Am: 1957 SCR 874; R. v. D
Oakes (1986) 1 SCR 103; P.P. Enterprises & Ors. v.
Union of India & Ors. 1982 ( 3 ) SCR 510:(1982) 2
SCC 33; Hanif Quareshi Mohd. v. State of Bihar 1959
SCR 629; MR.F. Ltd. v. Inspector Kera/a Govt. 1998
(2) Suppl. SCR 632:(1998) 8 SCC 227 - referred to.
E
Per Banumathi, J. (Supplementing):
Lack of legislative competence of tlte State to enact Act 2007
as tliefie/d is occupied by Entry 66 of Union List:
1.1 The words 'co-ordination' and 'determination of the
standards in liif(lier education', in Entry 66 of the Union List is F
preserve of the Parliament. The word 'co-ordination' means
harmonisation with a view to forge a uniform pattern for concerted
action. The term 'fixing of standards of institutions for higher
- education' is for the purpose of harmonising co-ordination of the
various institutions for higher education across the country.
G
Looking at the present distribution of legislative 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
teclinical education, medical education and universities". is
analogous to that of the Union. However, such power is subject
H
596 SUPREME COURT REPORTS [2016] 3 S.C.R.

A ·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. (Para 16) (680-D-F)
B 1.2 Under List I, responsibility of the Union is with respect
to formulation and co-ordination of standards for higher education
institutions. "Determbwtio11 'of Stam/art! i11 Higher Etl11catio11"
implies that the Pl!rliament is empowered to prescribe such norms
to maintain quality in the institutions for higher educatio.n. The
expression 'co-ordination and determination of standards in
c higher education' means that it is for the Parliament to take
concerted action towards maintaining the standards. The reason
for empowering the Central Legislature with Entry 66 was to C-,··
ensure that the standards of higher education were not lowered
at the hands of a particular State to the detriment of the national
D progress and that the power exercised by the State did not directly·
encroach upon power of the Union Entry 66. [Para 18) (682-A-C)
1.3 The 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 must be construed limited
E to its actual sense of 'tletermilli11g the .sta11tlartls of higher
ed11catio11' and not of laying down admission process. In no case
. is the State denuded of its power to legislate under Entry 25 of
List III. More so, pertaining to the admission process in
universities imparting higher education. [Para 29) [692-H; 693-
F AJ
1.4 The vires of the impugned legislation which empowers
the State Government to regulate admission process in
institutions imparting higher education within the State is upheld.
In fact, the State being responsible for welfare and development
of the people of the State, ought to take necessary steps for
G
welfare of its student community. The field of 'higher education'
being one such field 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
H Government should be the sole entity to Jay down the procedure
. .
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 597
STATE OF MADHYA PRADESH

for admission and fee etc. governing the institutions running in A
that particular State except the centrally funded institutions like
IIT, 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
B
out from the State Board and other streams. (Para 30) (693-B-E]
Dr. Preeti Srivastava & Anr. v. State of MP. & Ors. 1999
(1) Suppl .. SCR 249:(1999) 7 SCC 120; The Gujarat
University & Anr. v. Shri Krishna Ranganath Mudholkar
& Ors. 1963 (Supp.) 1 SCR 112; R Chitralekha & Anr.
v. State of Mysore & Ors. (1964) 6 SCR 368; c
Government of Andhra Pradesh & Anr. v~ Med~vin
Educational Society & Ors. 2003 (5) Suppl. SCR 408 :
(2004) 1 SCC 86; State of T.N. and Anr. v. Adhiyaman
Educational and Research Institute and Ors. 1995 (2)
SCR 1075 : (1995) 4 SCC 104; Visveswaraiah D
Technological University & Anr. v. Krishnendu Halder
& Ors. 2011 (2) SCR1007:(2011) 4 SCC 606; Ambesh
Kumar (Dr) v. Principal, L.L.R.M. Medical College,
Meerut and Ors. 1987 SCR 661:(1986) Supp SCC 543;
State of T.N. and Anr. v. S. V. Bratheep (minor) and Ors.
2004 (2) SCR 1218:(2004) 4 SCC 513 - referred to, E

Oxford Concise.Dictionary 7'h Edn.; Black's Law
Dictionary I O'h Edn.; Concise Oxford English Dictionary
10th Edn, Revised; Law Lexicon by Ramanatha Aiyar 3"
Edn. - referred to.
F
JV!tet!ter t/le impugned legislation imposes reasonable
restriction under Article 19(6) on t!te fwulamental rig/Its oft/le
Unaided Private Educational Institutions in its "Rigllt to
.occupation" under Article 19(l)(g):
2.1 The claim of absolute 'right to occupation' which the G
appellants have raised on the basis of T.M.A. Pai, P.A. lnamdar
cases is not sustainable. In T.M.A. Pai and P.A. fn(lmt/(lr, 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
H
598 SUPREME COURT REPORTS [2016) 3 S.C.R.

A fundamental right is not without measure of control and it will
always be subject to reasonable restriction which the State is duty
bound to impose in the larger public interest. [Para 34J (694-G-
H; 695-A]
2.2 M.P. Act 2007 was enacted for "the rexulatio11 of admission
B and fixation of fee in private professional educational institutions
in t/le State of Madhya Pradesh and to provide for reservation of
sellfs to persons belonging to the SC, ST amt OBC". 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
c 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. [Para 35] [695-D-E]
2.3 In P.A. Inamdar, the State Governments have been di-
D rected to frame a detailed well-thought out legislation on the sub-
ject 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-
E Act 2007 has thus been enacted in compliance with the direc-
tions issued by this Court in T.M.A. Pai, Islamic Academy and
P.A. Inamdar with a view to ensure fairness and transparency in
the admissions process. [Para 44] [702-E-F]
Sreenivasa General Traders and Ors. v, State of Andhra
F Pradesh and Ors. 1983 (3) SCR 843:(1983) 4 SCC
353; Narendra Kumar & Ors. v. Union of India & Ors.
AIR 1960 SC 430 :1960 SCR 375; MR.F. Ltd. v.
Inspector, Kera/a Government and Ors. 1998 (2) Suppl.
SCR 632:(1998) 8 SCC 227; State of Madras v. V.G
Row AIR 1952 SC 196 :1952 SCR 597; K.K. Kochuni
G v. State of Madras mid Kera/a AIR 1960 SC 1080-
referred to.
Common entrance test-single window system wltich regulates
admission to unaided private professional educational institutions
does not cause any dent in the fundamental rights of those
H institutions:
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 599
STATE OF MADHYA PRADESH

3.1 Having regard to the prevailing conditions relating to A
admissions in private professional educational institutions in th~
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 by centralized counselling either
by the State or by an agency authorized by the State. In order to
B
ensure rights of the applicants aspiring for medical courses under
Articles 14, 15 and 16 of the Constitution of India, legislature by
the impugned legislation introduced the system of Common
Entrance Test (CET) to secure merit based admission on a
transparent basis. If private unaided educational institutions are
given unfettered right to. devise their own admission procedure c
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 equal opportunity to all
meritorious and suitable candidates and meritorious candidates
D
can be identified for being allotted to different institutions
depending on the courses of study, the number of seats and other
relevant factors. This would ensure 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 community to promote merit and achieve E
excellence and curb mat-practices, it would be permissible for
the State to regulate admissions by providing a centralized and
·.single window procedure. Holding such CET followed by
centralized counselling or single window system regulating
admissions does not cause any dent on the fundamental rights of
the institufions in running the institution. While private
F
educational institutions have a 'right of occupation' 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 yiel,d to the larger interest of the community. G
[Para 48) [704-C-H; 705-A-B)
3.2 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, H
600 SUPREME COURT REPORTS [2016] 3 S.C.R.

A no loss will be caused to the private educational institutions.
There is neither restriction on the entry of the students in the
sanctioned intake of the institutions nor on their 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
B
in fixation of fees is in no way being abridged by the impugned ·
legislation; it remains intact. (Para 49) [705-Jl-DJ
Gu11!a11 Singh 1~ State of Rajasthan (1971) 2 SCC 452;
D1: Pradeep Jain and Ors. v. Union of India and Ors.,
1984 (3) SCR 942 : (1984) 3 SCC 654; Mridul Dhar
c case 2005 (1) SCR 380 : (2005) 2 sec 65 - referred
to.
Concise Oxford English Dictionary J J•h Edn; Advanced
Law Lexicon by P. Ramanatha Aiyar )'d Edn. - referred
to.
D
Wltile considering tile reasonableness of tlte restriction, tile
court ltas to keep in mind tile Directive Principles of State Policy:
4.1 For deciding the constitutional validity of any Statute or
executive order or considering the reasonableness of a restriction
E cast by the law on the exercise of any fundamcmtal right, the cou·rt
has to keep in mind the Directive Principles of State Policy. A law
or measure designed for promoting or having the effect of
advancing directive principles is per se reasonable and in public
· interest. The State bas a duty to balance the direct impact on the
fundamental right of individuals as against the greater public or
F social interest. [Para 50) [705-E-FJ

4.2 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 living and working conditions.
G Under Articles 39(e), 39(f) and 42 of the Constitution, obligations
arc cast on the State to ensure health and strength of workers,
men and women; ensure children are given opportunities &
facilities to develop in a healthy manner and to secure just &
humane conditions of work and for maternity relief, respectively.
H Article 47 of the Constitution makes improvement of public health
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 601
STATE OF MADHYA PRADESH

a primary duty of the State. However, right to health is no longer A
in the sole domain of Part IV of the Constitution. 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 and commitment who are
B
ready to give medical advice and services to the public at large.
State can 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. [Paras 51, 52) [706-
E-G; 707-B-C] c
State of Bonibay and Am: v. F.N. Balsara (1951) SCR
682; State of Gujarat v. Mirzapur Moti Kureshi Kassab
, Jamat and Ors. 2005 (4) Suppl. SCR 582:(2005) 8 SCC
534; Kirloskar Brothers Ltd. v. Employees• State
Insurance Corp.1996 (1) SCR 884: (1996) 2 SCC 682; D
Rajasthan Pradesh Vaidya Samiti, Sardarshahar and
another v. Union of India and others 2010 (7) SCR
252:(2010) 12 SCC 609; Centre for Public Interest
Litigation v. Union of India (2013) 9 SCR 1103 -
referred to.
E
Fundamental Rights of private unaided professiom1I colleges
must yield to public interest and rights of tlte students al large:
5. 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 F
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 G
to choose its own students 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 unaided medical colleges is
a right of equality in opportunity. On many occasions, this has led
H
602 SUPREME COURT REPORTS (2016] 3 S.C.R.

A to a conflict between fundamental rights of private educational
institutions on the one hand and the rights of students and public
at large on the other; In such cases where there is a conflict
between fundamental right of two parties, only that right which
would advance public morality or public interest would prevail.
When a fundamental right clashes with the larger interest of
B
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 admission in professional
unaided educational institutions would advance the public interest
c and as such the rights of the students would prevail over the
rights of the private unaided professional educational institutions.
[Para 53J [707-D-H; 708-A-B)
Sharda v. Dharmpal 2003 ( 3 ) SCR 106: (2003) 4 SCC
493; Kiireshi Kassab Jamal and Ors. 2005 (4) Suppl.
D SCR 582:(2005) 8 sec 534 - referred to ..
No material to show that lite private unaided professional
educational institutions failed in triple test-fairness, transparency
and non-exploitativeness:
6. Having regard to the number of complaints and litigations,
E 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 mat-practice in admissions. It is not a case of no
materials, where State would not be justified in taking over the
F admission procedure. There are primafacie materials to indicate
that the pr-ivate u(\aided professional educational institutions have
not passed triple test as laid down in P.A. lnamdar. It does not
seem inappropriate on the part of the State to come up with the
2007 Act which lays down a mechanism for conducting common
entrance test in order to ensure merit based admission in the
G private institutions. [Paras 55, 56) [709-B-C; 710-B-C]
Priya Gupta v. State qf Chhattisgarh and Ors. 2012 (5)
SCR 768:(2012) 7 SCC 433 - referred to.
Whether tlte provisions of Act 2007 regarding determination
of fees are violative of 'rig/ti to occupation' of private educational
H
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 603
STATE OF MADHYA PRADESH

institutions: A
7.1 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 based on the factors stipulated in Section 9 of the Act. Further, B
an opportunity of appeal is also provided for in the Act to the
aggrieved. Fundamental rights of colleges to run their
administration, includes fixation of fee. However, such right in
turn has to be balanced with the rights of the students, so thar
they are not subjected to exploitation in the form of profiteering.
[Para 69J [717-C-DJ
c
7.2 The State has the legislative competence to enact the
impugned legislation- 2007 Act to hold common entrance 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 D
imposed by the impugned legislation on admission by common
entrance test conducted by the State and determination of fee
are in compliance of the directions and observations in T.M.A.
Pai, Islamic Academy of Education and P.A. Inamdar. Regulations
on admission process are necessary in the larger public interest E
and welfare of the student community to ensure fairness and
transparency in the admission and to promote merit and
excellence. Regulation on fixation of fee is to protect the rights
of the students in having access to higher education without being
subjected to exploitation in the form of profiteering. The validity
of the impugned legislation is upheld and well merited decision F
of the High Court is affirmed. [Para 70] {717-E-Gf
T.MA. Pai Foundation & Ors. v. State of Karnataka &
Ors. 2002 (3) Suppl. SCR 587:(2002) 8 SCC 481;
Islamic Academy or Education & Anr. v. State of
Karnataka & Ors. 2003 (2) Suppl. SCR 474:(2003) 6
SCC 697; P.A. Inam.7.1r & Ors. v. State of Maharashtra
& Ors. 2005 (2) Suppl. SCR 603: (2005) 6 SCC 537 -
relied on.
Modern School v. Union of India 2004 (1) Suppl. SCR
H
604 SUPREME COURT REPORTS [2016] 3 S.C.R.

A 668:(2004) 5 sec 583 - referred to.
Case Law Reference
Judgment of Sikri, J.
(1964) 4 SCR 680 referred to Para3
B (1993) Supp. 1 SCR 439 referred to Para 14
2007 (4) SCR 493 referred to Para 19
1993 (1) SCR 594 referred to Para 21
2003 (2) Suppl. SCR 474 referred to Para 24
c 2011 (6) SCR 599 referred to Para 26
2004 (1) Suppl. SCR 668 referred to Para 26
1957 SCR 874 referred to Para 32
2002 (3) Suppl. SCR 587 relied on Paras 32,
D
and explained 33, 34, 37,
39, 48, 60,
64, 65, 67,
84.
2005 (2) Suppl. SCR 603 relied on Paras 39,48,
E
60, 65, 75,
87.
1991 (3) Suppl. SCR 121 distinguished Para 48
(1986) 1 SCR 103 referred to Para 56
F 1982 (3) SCR 510 relied on Para 58
1959 SCR 629 relied on Para 58
1998 (2) Suppl. SCR 632 referred to Para 58
2014 (11) SCR 712 followed Para 87
G
1964 (Supp.) 1 SCR 112 referred to Para 91
1999 (1) Suppl. SCR 249 referred to Para 91
(1964) 6 SCR 368 referred to Para 96
1995 (2) SCR 1075 referred to Para 96
H
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 605
STATE OF MADHYA PRADESH

2006 (3) SCR 638 referred to Para 96 A
1982 (1) SCR 759 referred to Para 96
(1994) 4 sec 401 referred to Para 96
2004 (2 ) SCR 775 partly overruled Para 97
Judgment of Banumathi, J. B

1999 (1) Suppl. SCR 249 referred to Para 7
1963 (Supp.) 1 SCR 112 referred to Para 19
(1964) 6 SCR 368 referred to Para 21
2003 (5) Suppl. SCR 408 referred to Para 22 c
1995 (2) SCR 1075 referred to Para 23
2011 (2) SCR 1007 referred to Para 25
1987 SCR 661 referred to Para 26
D
2004 (2) SCR 1218 referred to Para 27
1983 (3) SCR 843 referred to Para34
1960 SCR 375 referred to Para 36
1998 (2) Suppl. SCR 632 referred to Para37
E
1952 SCR 597 referred to Para 37
AIR 1960 SC 1080 referred to Para37
(1971) 2 sec 452 referred to Para 45
1984 (3) SCR 942 referred to Para 45 F
(2005) 2 SCR 380 referred to Para 47
(1951) SCR 682 referred to Para 50
2005 (4) Suppl. SCR 582 referred to Para 50
1996 (1) SCR 884 referred to Para 51 G
2.010 (7) SCR 252 referred to Para 51
(2013) 9 SCR 1103 referred to Para 51
2.003 (3) SCR 106 referred to Para 53
H
606 SUPREME COURT REPORTS [2016] 3 S.C.R.

A 201~ _(5) SCR 768 referred to Para 56
2004 (1) Suppl. SCR 668 referred to Para 65
2002 (3) Suppl. SCR 587 relied on Para 70
2003 (2) Suppl. SCR 474 relied on Para 70
B 2005 (2) Suppl. SCR 603 relied on Para 70
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4060 of ·
2009.
From the Judgment and Order dated 15.05.2009 of the High Court
of Madhya Pradesh, at Jabalpur in Writ Petition No. 2732 of2009
c
WITH
C. A. Nos. 4061, 4062, 4063, 4064, & 4065 of2009.
K.K. Venugopal, Dr. Rajeev Dhawan Sr. Advs., Puneet Jain, Manu
Maheshwari, Ms. Ankita Gupta, Chaya Kirti, Apurv Taran Jain, Kabir
D Ghosh (For Ms. Pratibha Jain), Ms. Pragati Neekhra, Amalpushp Shroti,
Rohit Bhat, R. Prabhakaran, S. Beno Bencigar, Ms. Maya Krishnan
(For Ms. Manju Jetley), Jasbir Singh Malik (for Ms. Usha Nandini V.),
B. K. Satija, Puneet Jain (For Ms. Pratibha Jain), M/s. AP & J Chambers,
Advs. for the Appellants.
E Ms. Pinky Anand,ASG, Vikas Singh, Ms. Vibha Datta Makhija,
P.N. Misra, Rakesh Dwivedi, Sr. Ad vs. C.D. Singh (AAG), Ajay Sharma,
R.S. Nagar, Ms. Rekha Pandey, Ms. Sunita Sharma, Amit Sharma, R.K.
Rathore, S.S. Rawat, Ajay Kumar Singh, M.P. Gupta, Karan Seth, Sanchit
Kumar, Rishabh Jain, R.R. Rajesh (For D.S. Mahra), Gaurav Sharma,
F Ms. Deepika Kalia,. Dhawal Mohan, Prateek Bhatia, Ms. Amandeep
Kaur, Kapeesh Seth, Vara Gaur, Mishra Saurabh, Ankit Kumar Lal, Ms.
Disha Yaish, R.C. Kohli, Ms. Sharmila Upadhyay, Abhishek Kumar
Singh, Abhisth Kumar, Ms. Sakshi Kakkar, Ms. Sy Iona Mohapatra, S.S.
Shamshery, Amit Sharma (for Ms. Ruchi Kohli), V.G. Pragasam, Prabu
Ramasubramanian, Ms. Neelam Sharma, Rajeev Sharma (for Tara
G Chandra Sharma), Krishna Srinivasan, E.R. Kumar, Ms. Geethi Aara,
Ms. S. Lakshmi Iyer, Anurag Tripathi (For Mis. P.H. Parekh), L.R.
Singh, Rakesh K. Sharma, Nishant Ramakantrao Katneshwarkar, Arp it
Rai, Sanjay K. Agrawal, Dharmendra Kumar Sinha, Sun ii Kumar Jain,
Abhinav Mukerji, Harish Pandey, Amit Kumar, Pawanshree Agrawal,
H
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 607
STATE OF MADHYA PRADESH

Ms. Punam Kumari, Prem Sunder Jha, C.K. Sucharita, Ms. Charu A
Mathur, Rajiv Ranjan Dwivedi, Suresh Chandra Tripathy, Dr. Sushil
Balwada, Anil Kumar Mishra-I, K.K. Mani, Ramesh Babu M.R.,
Ravindra Keshavrao Adsure, Advs. for the Respondents.
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 D
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 E
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
D
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
E 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
F 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
G 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 A
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 B
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 D
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 E
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
F 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
D
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
E 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
F 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
G the Act, 2007 do not impinge on the fundamental right to carry on the
'occupation' of establishing and administering professional educational
institutions.
13. 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
D
mandate of T.M.A. Pai Foundation.
14. 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 E
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, F
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.
15. 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.
16. In nutshell, the decision of the High Court on the three crucial
G 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
H 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 E
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 F
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 G
balance had been struck between the rights of the unreserved category
candidates and the reserved category candidates.
17. 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
D 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
E 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
18. 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 E
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 F
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 G
at the final stages of the judgment when the arguments of both sides are
suitably dealt with by this Court.
19. 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 •
D 20. 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.
21. 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 D
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 E
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 F
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 G
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.
23. 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.
24. 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 A
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 B
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 D
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 E
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.
B 25. 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).
26. 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
D
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 E
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.
27. 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.
28. 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 A
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
B
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
29. 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 F
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 G
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.·• ·· .
: ., .
31. 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 A
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
B
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).''
33. 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.

A 34. 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.

D 35. 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
F 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
G other obser.vations made in this judgment in the context of
admissi011s.to unaided institutions." : · · ·
36. 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."'
38. 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.
39. 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
E 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
F 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 A
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.
40. 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 B
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 D
sought.
41. 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 E
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 F
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.

A 42. 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
D
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
E 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.
43. Thus, the contention raised on behalf of the appellants that the
F 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
G 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.
44. 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
45. 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 D
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 E
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
D 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
E 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,
F 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
G 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
47. 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 E
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, F
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
D 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
E 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
F 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
G are discussed by us as well as in the earlier part.
48. 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 A
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.
49. At this juncture, we would like to deal with the arguments of B
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.
50. 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
51. 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
52. 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."
53. Another significant feature which can be noticed from the
D 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
E 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
F 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
G 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 A
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, B
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 D
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 E
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
E 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
F 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
G 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
F 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
G 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 A
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
B
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 A
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
B
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
D
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 E
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
D 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
E 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
F
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
G 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 D
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 E
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 F
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 G
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
G 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
H 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 A
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
B
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 E
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
F
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 G
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 D
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 E
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
D 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
E 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, F
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
G 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 A
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 B
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,
F 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
G 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 D
for higher education or research and scientific and technical
institutions.
List II
32. Incorporation, regulation and winding up of corporation, other
E
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) 11sec 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
E 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,
F
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
G 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
D
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
E 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 D
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 E
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 F
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
E 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
F
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
G 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 A
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
B
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
F
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
G
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 A
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
B
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, D
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
E 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
F 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
G 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 A
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 B
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 A
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
B
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,
D 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
E 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. "

H
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.

H
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:-

H
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
E 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
F
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
G 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 A
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, B
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 E
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 F
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 G
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
E
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
F 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,
G 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.

H
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
F 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
G 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

H,
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
D 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
E
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
F
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
G 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 A
education in the given span of time;

( 3) the student-teacher ratio;

( ./) the ratio between the students and the hospital beds
B
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 D
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 E
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.

D
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 D
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 E
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 F
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 G
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."

H
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
F 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
G 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
D
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 E
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 F
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 A
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
B
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
F
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
G 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
H 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
D
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
E
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
D 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
E 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
F
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
H 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 A
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
D
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
E
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
F 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 A
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
B
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
D
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
E
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
F 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
G 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
E 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
F 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
G 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:
H 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
F
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 G
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
D 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
E 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
F
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
E
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 F
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 G
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
E 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
F 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
G
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
E
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 F
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 G
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.
54. 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
D 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
E 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.

56. 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
57. 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.
58. 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 A
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

59. 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_... ". . ·
60. 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
B
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
61. 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.
62. 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.
63. 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.
64. 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 F
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 G
role played by private unaided educational institutions, both minority
and non-minority, which cater to the needs of students seeking
•.I•'
professional education."
65. 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
D 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
E 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
F
good schools which even today run keeping in mind laudable
charitable objects."
66. 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
H under:-
MODERN DENTAL COLLEGE AND RESEARCH CENTRE v. 715
STATE OF MADHYA PRADESH [R. BANUMATHI, J.]

"69. In such professional unaided institutions, the management A
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."

67. 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.

A 68. 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
B
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
C 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
D
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
F 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
G
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

69. 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 D
profiteering.
70. 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
E
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
\.