2005 (8) TMI 614 - SC - Indian Laws

Education, accepted as a useful activity, whether for charity or for profit, is an occupation. Nevertheless, it does not cease to be a service to the society. And even though an occupation, it cannot be equated to a trade or a business. In short, education is national wealth essential for the nation s progress and prosperity.

Summary

Issues Involved:
1. Regulation of admissions and reservation policy in unaided minority and non-minority educational institutions.
2. Admission procedures for unaided educational institutions.
3. Regulation of fee structures in unaided educational institutions.
4. Validity and functioning of committees formed pursuant to the Islamic Academy judgment.

Detailed Analysis:

1. Regulation of Admissions and Reservation Policy in Unaided Minority and Non-Minority Educational Institutions:
- Minority Unaided Institutions: They have the right to establish and administer institutions, including the right to admit students, set up fee structures, and appoint staff. They can choose not to take aid or seek recognition, enjoying full autonomy except for regulations in the national interest (paras 122-124).
- Affiliation or Recognition: Brings regulation to ensure merit and excellence without interfering in day-to-day administration. Regulations must be reasonable, rational, and conducive to making the institution effective for the minority community (paras 125-126).
- State Aid: Conditions for aid must relate to proper utilization without diluting minority status (para 127).
- Quota and Reservation: The State cannot enforce seat-sharing or reservation policies in unaided institutions. Such impositions are not justified by Pai Foundation and amount to nationalization of seats, infringing on the autonomy of private institutions (paras 128-134).

2. Admission Procedures for Unaided Educational Institutions:
- Minority Institutions: Have full freedom up to undergraduate level. For higher education, the State can step in to ensure transparency and merit (paras 137-138).
- Common Entrance Test (CET): Recommended for institutions offering similar education to avoid multiple tests for students. It ensures transparency and merit without infringing on the right to admit students (paras 139-140).
- Centralized Counseling: Permissible to regulate admissions and ensure merit-based, transparent procedures (para 141).

3. Regulation of Fee Structures in Unaided Educational Institutions:
- Fee Structure: Institutions can devise their own fee structures but cannot charge capitation fees or profiteer. Fee structures can be regulated to prevent exploitation (paras 142-143).

4. Validity and Functioning of Committees Formed Pursuant to Islamic Academy Judgment:
- Committees: Established to regulate admissions and fee structures are permissible as regulatory measures to ensure fairness, transparency, and prevent exploitation. They do not infringe on the rights under Articles 19(1)(g) and 30 (paras 144-145).
- Post-Audit Checks: Not acceptable as they are ineffective in preventing initial exploitation. Committees are necessary for initial regulation (paras 146-147).
- Judicial Review: Decisions of the Committees are subject to judicial review to ensure they do not exceed their powers (paras 150-151).
- Temporary Measure: Committees are a stopgap arrangement until suitable legislation is enacted (paras 149, 156).

Conclusion:
- Admissions and Reservations: States cannot enforce reservation policies or appropriate quotas in unaided institutions. Minority institutions can admit students of their choice, maintaining their minority status (para 136).
- Admission Procedures: CET and centralized counseling are permissible to ensure merit-based admissions (paras 137-141).
- Fee Regulation: Institutions can set their own fees but cannot charge capitation fees. Fee structures can be regulated to prevent profiteering (paras 142-143).
- Committees: The scheme of Committees for admissions and fee regulation is upheld as a temporary measure, subject to judicial review (paras 144-151, 156).

Epilogue:
- Future Legislation: Urges Central and State Governments to enact detailed legislation on the subject. Current Committees will continue as a temporary measure (paras 156-157).
- Judicial Review: Any decisions by Committees or Governments are open to judicial review (para 157).
- Appreciation: Acknowledges the assistance of senior counsel in resolving the issues (para 157).