Holding

The 2007 Act must be read down; the State may regulate admissions only to the extent of a balanced scheme, not the entire process, preserving the autonomy of private unaided medical and dental colleges.

Summary

The Supreme Court examined the Madhya Pradesh Niji Vyavsayik Shikshan Sansthan (Admission Regulation and Fee Determination) Act, 2007, which appeared to vest the State with complete control over admissions and fee fixation in private unaided medical and dental colleges. Relying on earlier judgments (T.M.A. Pai Foundation, Islamic Academy, P.A. Inamdar, Unni Krishnan) the Court held that such a literal reading would be unconstitutional under Article 19(1)(g) and the reasonable‑restriction test of Article 19(6). Consequently, the Court read down the 2007 Act to preserve the autonomy of private institutions while allowing a limited State role. It directed that 15% NRI seats be excluded, and the remaining 85% seats be split equally between a State‑conducted competitive exam and an exam held by the Association of Private Medical and Dental Colleges, with any fractional seat rounded in favour of the private association. The order also prohibited capitation fees and was made applicable only for the academic year 2009‑10, pending further consideration. The interim applications were allowed and leave was granted.

Issues considered

The extent to which a State may control and regulate admission and fee fixation in private unaided professional educational institutions under the Constitution.
Whether the Madhya Pradesh Niji Vyavsayik Shikshan Sansthan Act, 2007, as worded, violates Article 19(1)(g) and the reasonable‑restriction test of Article 19(6).
Appropriate scheme for admission and fee regulation that balances State interest with institutional autonomy.

Legislation cited

Constitution of Indias. Article 19(1)(g), s. Article 19(6)

Subjects

private unaided professional institutionsadmission regulationfee fixationconstitutional lawArticle 19reading downNRI seatscapitation feeMadhya Pradesh

Judgment

[2009]..9 S.C.R. 845
~ I

MODERN DENTAL COLLEGE & RESEARCH CENTRE & A
ORS.
v.
STATE OF MADHYA PRADESH & ORS.
(Civil Appeal No. 4060 of 2009)
MAY 27, 2009 B

~
[MARKANDEY KATJU AND DEEPAK VERMA, JJ.]

Madhya Pradesh Niji Vyavsayik Shikshan Sansthan
(Pravesh Ka Viniyaman Evam Shulk Ka Nirdharan) c
Adhiniyam, 2007:

Admissions in private unaided Medical/Dental Colleges
- Extent of control and regulation by State - Held: Prima f~cie
the 2007 Act appears to handover the entire admission
process for under-graduate, graduate and post-graduate D
medical/dental colleges and fee fixation to the State
Government or the agencies appointed by it - This, prima
facie, appears to be contrary to, and inconsistent with the
observations made by the 11 Judge Bench decision of this
Court in T.M.A. Pai's case, and, thus the 2007 Act would E
become unconstitutional if it is read literally - Therefore, the
2007 Act and Rules will have to be read down to make them
' constitutional - A balance has to be struck between the interest
of State Government and ~'rivate unaided institutions who
have to generate their own resources and funds and F
4 consequently they must have a larger degree of autonomy
as compared to the aided or Government institutions, besides
keeping the interest of the students in mind - It is, therefore,
directed that admissions in the private unaided madicall
.. dental colleges in the State of Madhya Pradesh will be done G
by first excluding 15% N.R.I. seats (which can be filled up by
the private institutions as per para 131 of lnamdar's case), and
allotting half of the 85% seates for admission to the under-
graduate and post-graduate course to be filled in by an open
845 H
846 SUPREME COURT REPORTS
,,,. [2009) 9 S.C.R.

j._

A competitive examination by the State Government, and the
remaining half by the Association of the Private Medical and
Dental Colleges - Both th(,;] State Government as well as the
Association of Private Medical and Dental colleges will hold
their own separate entrance examination for this purpose. As
B regards the 'NRI Seats', they will be filled as provided under
the Act and Rules, in the manner they were done earlier - It
is made clear that these directions will for the time being only
·~
be applicable.for the academic year 2009-10- It is also made
clear that if there are odd number of seats then it will be
c rounded off in favour of the private institutions -: In Specialities
in P. G. courses also half the seats will be filled in by the State
Government and half by the Association of Private Medical/
Dental Colleges and any fraction will be rounded off in favour
of the Association - Capitation fee is prohibited, both t0- the
State Government as well as the private institutions. by
D
lnamdar's case - Both the State Government and the
Association of Private Medical/Dental Colleges will
separately hold single window examinations for the whole
State - Although this order is only for the academic year
2009-10, it is recommended that it may also be considered ;
E for future sessions - Interpretation of Statutes - Principle of
reading down - Constitution of India, 1950 - Article 19(1)(g)
- Interim Order - Educational Institutions - Admissions to.

T.M.A. Pai Foundation vs. State of Kamataka (2002) 8
F SCC 481; Islamic Academy of Education vs. State of
Kamataka (2003) 6 SCC 697; P.A. lnamdar & Ors. vs. State
of Maharashtra & Ors. (2005) 6 SCC 537; Unni Krishnan vs. ..
State of A.P. (1993) 1 sec 645 and Kedamath vs. State of
Bihar AIR 1962 SC 1995, referred to. }
G 'Principles.of Statutory Interpretation' (Ninth Edn. P. 496) +
by G.P. Singh, referred to.

Case Law Referetice:

c2002) a sec 481 referred to Para 9
H
MODERN DENTAL COLLEGE & RESEARCH CENTRE & 84 7
ORS. v. STATE OF MADHYA PRADESH & ORS.
~
(2003) 6 sec 697 referred to Para 10 A
(2005) s sec 537 referred to Para 11

(1993) 1 sec 645 referred to Para 18

AIR 1962 SC 1955 referred to Para 28
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4060 of 2009.

From the Judgment & Order dated 15.05.2009 of the High
Court of Madhya Pradesh at Jabalpur in Writ Petition No. 2732 c
of 2009.

WITH

C.A. Nos. 4061, 4062, 4063, 4064, 4065 of 2009.
D
Abhishek Manu Singhvi, Vivek K. Tankha, Ravi Shankar
1- Prasad, S.K. Dubey, lndu Malhotra, Sushil Kumar Jain (NP),
Pratibha Jain (NP), B.K. Satija, Siddharth Gupta, Ratna Kaul,
Anubha Singh, Prashant Kumar, Ratna Kaul (for Ap & J
Chambers), Pragati Neekhra, Suryanarayana Singh, S.S.
E
Banthia, Prachi Mishra, Nishakant Pandey, Kavita Wadia and
Sanjay K. Agrawal for the appearing parties.

The following Order of the Court was delivered

ORDER F
The lmpleadment and Intervention applications are
allowed.

Leave granted.
G
·Heard learned counsel for the parties.

Since this is a batch of several appeals involving common
questions, we are taking the facts from Civil Appeal arising from
Special Leave Petition No. 13111 of 2009.
H

~
848 SUPREME COURT REPORTS [2009] 9 S.C.R.

A This Appeal has been filed against the impugned judgment .
and order dated 15.05.2009 of the High Court of Madhya__
· Pradesh at Jabalpur in Writ Petition No.2732 of 2009.

In this case, we had earlier passed an order dated 21st
May, 2009 but we are substituting that interim order by this
B interim order which we are passing now.

The appellants in these appeals are Private Unaided
Medical and Dental Colleges or Association of such Colleges ·-'·
in the State of Madhya Pradesh.
c
The common question arises for consideration in this
batch of appeals is "How far is it permissible under the
Constitution for the State to control and regulate admission and
fee in Private Unaided Professional Educational Institutions in
D the State of Madhya Pradesh".

The matter was first considered by an Eleven Judge Bench
of this Court in T.M.A. Pai Foundation vs. State of Karnataka
c2002) a sec 481.

E Since, there were some doubts or some questions
remained unanswered in the aforesaid judgment, the matter
was referred to a Five Judge Bench of this Court which
decided it in Islamic Academy of Education vs. State of
Karnataka (2003) 6 SCC 697.
F Despite the judgment in Islamic Academy of Education's
case (supra), still there were some doubts and the matter was
again referred to a Seven Judge Bench of this Court which
decided it in P.A.lnamdar & Others vs. State of Maharashtra
& Others (2005) 6 sec 537.
G
In paragraph 153 of P.A. lnamdar's case (supra), it has
been stated:

" .... There are several questions which have remained
unanswered and there are certain questions which have
H
MODERN DENTAL COLLEGE & RESEARCH CENTRE & 849
ORS. v. STATE OF MADHYA PRADESH & ORS.

cropped up post Pai Foundation and Islamic Academy. To A
the extent the area is left open, the Benches hearing
individual cases after this judgment would find the
answers."

Thus, it is evident that even in lnamdar's case (supra), it B
has been observed that there are still some doubts or grey
areas in relation to the question of extent of State control over
the Private Unaided Institutions imparting professional
education.

We have gone through the aforesaid decisions with great C
care.

In para 91 of /namdar's' case (supra), it has been
observed:
D
"The right to establish an educational institution, for charity
or for profit, being an occupation, is protected by Article
19(1)(g) of the Constitution ... "

Thus, it is clear that the right to establish and run an
educational institution is a fundamental right guaranteed under E
Article 19(1 )(g) of the Constitution. Of course, under Article
19(6) of the Constitution, reasonable restrictions can be placed
on such a fundamental right, and hence we have to examine
whether such restrictions are reasonable or not.
F
Before dealing with this issue we may refer to some
observations made in the decision of this Court in the TMA Pai
Foundation case (supra).

In paragraphs 37-45 of the aforesaid decision this Court
held that the decision of this Court in Unni Krishnan vs. State G
of A.P. (1993) 1 sec 645 in so far as it relates to the schemes
of admission and fee were not correct.

Paragraphs 35-41 of the aforesaid decision in the TMA
Pai Foundation case (supra) reads as follows: H
850 SUPREME COURT REPORTS [2009] 9 S.C.R.

A "35. It appears to us that the scheme framed by this Court
and thereafter followed by the governments was one that
cannot be called a reasonable restriction under Article
19(6) of the Constitution. Normally, the reason for
establishing an educational institution is to impart
8 education. The institution thus needs qualified and
experienced teachers and proper facilities and equipment,
all of which require capital investment. The teachers are
required to be paid properly. As pointed out above, the
restrictions imposed by the scheme, in Unni Krishnan's
c case, made it difficult, if not impossible, for the educational
institutions to run efficiently. Thus, such restrictions cannot
be said to be reasonable restrictions.

36. The private unaided educational institutions impart
education, and that cannot be the reason to take away their
D choice in matters, inter alia, of selection of students and
fixation of fees. Affiliation and recognition has to be
available to every institution that fulfills the conditions for
grant of such affiliation and recognition. The private
institutions are right in submitting that it is not open to the
E Court to insist that statutory authorities should impose the
terms of the scheme as a condition for grant of affiliation
or recognition; this completely destroys· the institutional
autonomy and the very objective of establishment of the
institution.
F
37. Unni Krishnan judgment has created certain problems,
and raised thorny issues. In its anxiety to check the
commercialization of education, a scheme of "free" and
"payment" seats was evolved on the assumption that the
economic capacity of the first 50% of admitted students
G
would be greater than the remaining 50%, whereas the
converse has proved to be the reality. In this scheme, the
"payment seat" student would not only pay for his own seat,
but also finance the cost of a "free seat" classmate. When
one considers the Constitution Bench's earlier statement
H
MODERN DENTAL COLLEGE & RESEARCH CENTRE & 851
ORS. v. STATE OF MADHYA PRADESH & ORS.

that higher education is not a fundamental right, it seems A
unreasonable to compel a citizen to pay for the education
of another, more so in the unrealistic ·world of competitive
examinations which assess the merit for the purpose of
admission solely on the basis of the marks obtained,
where the urban students always have an edge over the B
rural students. In practice, it has been the case of the
marginally less merited rural or poor student bearing the
burden of a rich and well-exposed urban student.

38. The scheme in Unni Krishnan's case has the effect of
nationalizing education in respect of important features, C
viz., the right of a private unaided institution to give
admission and to fix the fee. By framing this scheme, which
has led to the State Governments legislating in conformity
with the scheme, the private institutions are
indistinguishable from the government institutions; D
curtailing all the essential features of the right of
administration of a private unaided educational institution
can neither be called fair or reasonable. Even in the
decision in Unni Krishnan's case, it has been observed
by Jeevan Reddy, J., at page 749, para 194, as follows: E

"The hard reality that emerges is that private educational
institutions are a necessity in the present day context. It
is not possible to do without them because the
Governments are in no position to meet the demand - F
particularly in the sector of medical and technical
education which call for substantial outlays. While
education is one of the most important functions of the
Indian State it has no monopoly therein. Private
educational institutions - including minority educational
institutions - too have a role to play." G

39. That private educational institutiol'ls are a necessity
becomes evident from the fact that the number of
government-maintained professional has more or less
remained stationary, while more private institutions have H
852 SUPREME COURT REPORTS [2009] 9 S.C.R. -
.:

A been established. For example, in the State of Karnataka
there are 19 medical colleges out of which there are only
4 government-maintained medical colleges. Similarly, out
of,14 Dental Colleges in Karnataka, only one has been
established by the government, while in the same State,
B out of 51 Engineering Colleges, only 12 have been
established by the government. The aforesaid figures
clearly indicate the important. role played by private
unaided educational institutions, both minority and non- -~

minority, which cater to the needs of students seeking
professional education.
c
40. Any system of student selection would· be
unreasonable if it deprives the private unaided institution
of the right of rational s~lection, which it devised for itself,
subject to the minimum qualification that may be
D prescribed and to some system of computing the
equivalence between different kinds of qualifications, like i
a common entrance test. Such a system of selection can
·involve both written and oral tests for selection, based on
principle of fairness.
E
41. Surrendering the total process of selection to the state
is unreasonable; as was sought to be done in the Unni
Krishnan scheme. Apart from the decision in St.
Stephen's College vs. University of Delhi [(1992) 1 S,,CC
.
558], which recognized and upheld the right of a minority
F
aided institution to have a rational admission procedure
of its own, earlier Constitution Bench decisions of this
Court have, in effect, upheld such a right of an institution
devising a rational manner of selecting and admitting
students."
G
From the above observations it is clear that surrendering
the total process of selection in private unaided professional
institutions to the State is unreasonable and illegal. The private
unaided institutions have a right to devise a rational manner of
H selecting and admitting students.

.,
~
-"MODERN DENTAL COLLEGE & RESEARCH CENTRE & 853
ORS. v. STATE OF MADHYA PRADESH & ORS.

The aforesaid decision of the Eleven Judge Bench of this A
Court in TMA Pai Foundation (supra) was no doubt considered
in /."'/amic Academy case (supra) and lnamdar's case (supra),
but those latter two decisions were of smaller Benches and
hence cannot be deemed to have overruled or laid down
anything contrary to the Eleven Judge Bench decision in TMA B
Pai Foundation (supra). It is well-settled that a larger Bench
decision prevails over the decision of a smaller Bench.

We may now examine some observations in lnamdar's
case (supra).
c
In para 109 of lnamdar's case (supra), it has been
observed that "it would be unfair to apply the same rules and
regulations regulating admission to both aided and unaided
professional institutions". It was also observed, following the
decision in TMA Pai Foundation (supra) that greater autonomy D
must be granted to private .maided institutions as compared
r
to private aided institutions. The reason for this is obvious. The
unaided institutions have to generate their own funds and hence
they must be given more autonomy as compared to aided
institutions, so that they can generate these funds. E

However, this does not mean that the private unaided
professional institutions have absolute autonomy in the matter.
There can validly be a certain degree of State control over the
private unaided professional institutions for the reason that
F
recognition has to be granted by the State authorities and it is
also the duty of the State to see that high standards of education
are maintained in all professional institutions. However, to what
degree the State can interfere with respect to private unaided
institutions is a matter deserving careful consideration.
G
'I
In paragraph 137 of lnamdar's case (supra), it has been
observed:

" ......The admission procedure so adopted by a private
institution or group of institutions, if it fails to satisfy all or
H
854 SUPREME COURT REPORTS [2009] 9 S.C.R.

A any of the triple tests, indicated hereinabove, can be taken
over by the State substituting its own procedure."

Thus, it has been held in lnamdar's case (supra) that while
ordinarily admissions in private unaided professional
B institutions could be done by those institution or association of
such unaided professional institutions, the State can interfere
if the admission procedure fails to satisfy certain tests. The
reason for this is obviously that the State has an interest in ,,
maintaining high standards in professional institutions.

c The question, however, arises as to which is the body
which can decide whether the private unaided institutions have
failed to satisfy the triple tests, referred to in /namdar's case
(supra). In /namdar's case (supra), there is no mention as to
which is the body which will decide whether the prviate
D instituions have satisfied or not satisfied the triple tests, referred
to in para 137 of the lnamdar's .;ase (supra). Thus, there is a
i
lacuna in lnamda(s case (supra).

In our view, it cannot be left to the unilateral decision of the
State Government to say that the private institutions have failed
~
E
to meet with the triple tests mentioned in lnamdar's case
. (supra), because that will be giving unbridled, absolute and
unchecked power to the State Government. In our prima facie
opinion, the M.P. Niji Vyavsayik Shikshan Sanstha (Pravesh Ka '!

Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (for
F short 'the Act of 2007'), appears to handover the entire selection
process to the State Government or the agencies appointed
by the State Government for under-graduate, graduate and
post-graduate medical/dental colleges and fee fixation. This, in
our prima facie opinion, is contrary to, and inconsistent with the
G observations (quoted above) made by the 11 Judge Bench
+-
decision of this Court in T.M.A. Pai's case (supra), and hence
the 2007 Act would become unconstitutional if it is read literally .. ·-. -
We have therefore to read down the 2007 Act and Rules to
make them constitutional. Such reading down of a statute is
H permissible, since it is well settled that the Court should make
MODERN DENTAL COLLEGE & RESEARCH CENTRE & 855
ORS. v. STATE OF MADHYA PRADESH & ORS.
-.+
all efforts to sustain the validity of a statute, even if that involves A
reading its language down vide G. P -Singh's 'Principles of
Statutory Interpretation' Ninth Edition, 2004 pp. 496-503. Thus,
while considering the validity of the Hindu Women's Right to
Property Act, 1937, the Federal Court construed the word
'property' as meaning 'property, other than agricultural land', B
vide In re Hindu Women's Right to Property Act AIR 1941 F.C.
72 (75), otherwise the Act would have become unconstitutional.

Similarly, in Kedarnath vs. State of Bihar, AIR 1962 SC
1955, this Court while interpreting Section 124A l.P.C read
down the words "by words, either spoken or written or by signs
c
or visible representations, or otherwise, brings or attempts to
bring into hatred or contempt, or excites or attempts to excite
disaffection towards the Government established by law". This
Court held that to avoid violation of Articles 19 (1 )(a) and 19(2)
of the Constitution, Section 124A must be limited in its D
application "to acts involving intention or tendency to create
disorder or disturbance of law and order or incitement to
violence".

In our view, a balance has hence to be struck because E
while on the one hand, the State Government does have an
element of interest in the private unaided professional

,._ ,. institutions, this does not mean that there will be no autonomy
to the private unaided institutions. After all, the private unaided
institutions have to generate their own resources and funds and F
consequently they must have a larger degree of autonomy as
compared to the aided institutions or the State Governments
institutions.

In this situation, we are of the opinion that this Court must
G
- use its creativity and find out a workable, balanced, via media
to safeguard the interest of both parties, namely State
Government on the one hand, and private unaided institutions
on the other, and also to keep the interest of the students in
mind.
H
856 SUPREME COURT REPORTS [2009] 9 S.C.R.
~

A We, therefore, direct that the admissions in the private
unaided medical/dental colleges in the State of Madhya
Pradesh will be done by first excluding 15% N.R.I. seats (which
can be filled up by the private institutions as per para 131 of
lnamdar's case), and allotting half of the 85% seats for
B admission to the under-graduate and post-graduate courses to
be filled in by an open competitive examination by the State
Government, and the remaining half by the Association of the
Private Medical and Dental Colleges. Both the State
Government as well as the Association of Private Medical and
c Dental colleges will hold their own separate entrance
examination for this purpose. As regards the 'NRI Seats', they
will be filled as provided under the Act and Rules, in the manner
-..,
they were done earlier.

We make it clear that the aforesaid directions will for the
D time being only be applicable for this academic year i.e. 2009-
10. We also make it clear that if there are an odd number of
seats then it will be rounded off in favour of the private institutions.
For example, if there are 25 seats, 12 will be filled up by the
State Government and 13 will be filled up by the Association
E of Private Medical/Dental Colleges. In Specialities in P.G.
courses also half the seats will be filled in by the State
Government and and half by the '--- Association
/
of Private Medical/
Dental Colleges and any fraction will be rounded off in favour '"I
of the Association. In other words if in any discipline there are.._ """"
F say, 9 seats, then 5 will be filled in by the Association and
remaining 4 will by the State Government. Capitation fee is
prohibited, both to the State Government as well as the private
institutions, vide para 140 of lnamdar's case (supra). Both the
State Government and the Association of Private Medical/
Dental Colleges will separately hold single window
G
examinations for the whole· State (vide para 136 of lnamdar'
case (supra)_
4

-
We make it clear that the solution we have arrived at may
not be perfect, but we have tried to do our best to find out the
H
MODERN DENTAL COLLEGE & RESEARCH CENTRE & 857
ORS. v. STATE OF MADHYA PRADESH & ORS.

,._ best via media. Although this order is only for the academic year A
2009-10, we recommend that it may a!so be considered for
future sessions.

Six weeks' time is allowed for filing counter affidavit and
four weeks thereafter for filing rejoinder.
8
List these appeals for final hearing in September, 2009.
In the meantime, pleadings may be completed by the parties.

R.P. Appeals adjourned.

-