State can't enforce quota in private institutes: SC

Freeing them from the burden of reservation and the government quota, the Supreme Court today ruled that in unaided private institutions, including engineering and medical colleges, the state can neither impose the reservation policy nor carve out its quota from the total number of seats.

"Neither the policy of reservation can be enforced by the state nor any quota or percentage of admissions can be carved out to be appropriated by the state in a minority or non-minority unaided educational institution," a seven-judge Bench headed by Chief Justice RC Lahoti said.

The Bench comprising Justice YK Sabharwal, Justice DM Dharmadhikari, Justice Arun Kumar, Justice GP Mathur, Justice Tarun Chattarjee and Justice PK Balasubramanyan gave this ruling while deciding on a bunch of petitions, including one by the All-India Medical and Engineering Colleges Association.

The chief justice made it clear at the outset before pronouncing the judgment that the Bench dealt with the issues only from the point of view of cases relating to both minority and non-minority educational institutions, which did not receive any aid from the state.

For the first time, the court also carved out a15 per cent quota for NRI students in private colleges allowing them to charge higher fees but put a rider that "the amount of money collected against such seats should be used for benefiting students from economically weaker sections of the society".

Abolishing the state quota and reservations in private colleges, justice Lahoti said, "The state cannot insist on private education institutions, which receive no aid from the state to implement state's policy on reservation for granting admissions on lesser percentage of marks that is on any criterion except merit".

On the admission procedure to be adopted by private colleges, the chief justice, writing the unanimous judgment, said unaided institutions, whether minority or non-minority, "have unfettered fundamental right to choose the students and the procedure" as long as it was fair, transparent and non-exploitative.

"Unaided institutions, as they are not deriving any aid from the state funds, can have their own admissions, if fair, transparent, non-exploitative and based on merit," the court said in its 124-page judgment.

But addressing the larger interest and welfare of students and to promote merit, achieve excellence and curb malpractices, the Bench recommended that the admissions be regulated by a centralised and single-window procedure.

Holding that capitation fees and profiteering by colleges was a strict no, the Bench said though every institution was free to devise its own fee structure, it could be regulated in the interest of preventing profiteering and capitation fee.

The matter regarding admissions to the private aided and unaided colleges as well as minority institutions was dealt in detail by an 11-judge Bench in the TMA Pai case.

As few doubts remained, a five-judge Bench had attempted to answer them. Now, a seven-judge Bench went into it to clear the confusion over the admission process.

The five-judge Bench had set up committees in each state headed by a retired high court judge to monitor admission procedure and determine the fee structure.

The seven-judge Bench upheld the constitution of committee saying the regulatory mechanism put in place was permissible as it was aimed at protecting the interest of the student community as a whole as also the minorities.

Such regulations do not violate the right of the minorities under Article 30(1) of the Constitution or the right of the minorities and non-minorities under Article 1991)(g) to establish and administer educational institutions of their choice, Justice Lahoti said.

However, it said that the setting up of the committees was a stopgap or ad hoc arrangement which would remain in force till a suitable legislation or regulation was framed by the state to cover the aspect of protecting the student community.

The court took note of the grievances raised against the committees regarding the arbitrary manner of its functioning and advised them to be more sensitive and to act more rationally and reasonably with due regard to the realities.

"They should refrain from generalising the fee structure and, wherever needed, should go into accounts, schemes, plans and budgets of an individual institution for the purpose of finding out what would be an ideal and reasonable fee structure for that institution," it said.