Between two judgments

WHEN an 11-member Bench of the Supreme Court delivered on October 31, 2002 its verdict in the T.M.A. Pai Foundation and Others vs State of Karnataka and Others case, it elicited a mixed response. In that judgment, the Court held that the rights of linguistic and religious minorities (as well as the majority community) to set up educational institutions of their choice are unfettered but the right to administer them is not absolute. The judgment had led to legitimate fears that unaided educational institutions, whether minority- or majority-run, would fleece students if they were left to fix their own fee structures.

The judgment had imposed a limitation on the managements of these institutions by ruling that the government could introduce regulations to ensure excellence in education; it also forbade them from charging capitation fee and profiteering from fees. However, in the absence of clarity on what constitutes capitation fee and profiteering, the judgment may have opened the floodgates of market forces. Private educational institutions that are not dependent on government funds can therefore charge fees as they like.

The Bench justified the fee hike in professional education by saying that the number of seats available in government and government-aided colleges is very small compared with the number of students seeking admission to private medical and engineering colleges and who may otherwise be eligible and deserving. As the void in the fields of medical and technical education has been filled by many private institutions established with the help of donations from and active participation by public-minded individuals, the judgment suggested that there was no harm if those who sought professional education in such institutions also paid for it. The judgment defended the fee hike in private unaided professional educational institutions by suggesting that they may be allowed to charge reasonable surplus to make their functions sustainable and to allow for augmentation and improvement.

The result was that the judgment declared unconstitutional the scheme evolved in the Unnikrishnan case in 1993. Under that scheme, private professional colleges could fill up only 15 per cent of the seats with their candidates for any quantum of fee. Of the remaining 85 per cent, 50 per cent were free seats while 35 per cent were available for a fee fixed by the government.

In the T.M.A. Pai judgment, the Bench gave the discretion to each State to reserve a certain percentage of the seats for admission by the managements from among those students who have passed the common entrance test held by the college or by the State/university, and have applied to the college concerned for admission, while the rest of the seats may be filled on the basis of counselling by the State agency. "This will incidentally take care of poorer and backward sections of the society. The prescription of percentage for this purpose has to be done by the government according to the local needs, and different percentages can be fixed for minority unaided and non-minority unaided and professional colleges," the judgment stated.

This has understandably led to sharp diversity among the States on the size of the management quota, to be fixed by the State government. Counsel for the private unaided colleges contended before the Supreme Court that the judgment had given them the freedom to evolve their own admission procedures and that the State should not interfere in them. But counsel for the State governments argued that the judgment had given the States powers to regulate admissions in order to ensure excellence in standards and to prevent capitation fees being charged by the private unaided medical and engineering institutions.

Hearing a batch of petitions on the subject, a Supreme Court Bench comprising Chief Justice V.N. Khare and Justice S.B. Sinha issued on July 10 notice to all the States and directed that the questions arising out of the T.M.A. Pai judgment be heard by a five-member Constitution Bench on July 22. The Constitution Bench would examine two questions - to what extent the States can regulate admissions to private unaided colleges and to what extent they can regulate the capitation fee charged by such colleges. Answers to these questions will add clarity to the October 2002 judgment.