While outlining the role of the Supreme Court in shaping policy, I will only discuss the general

rights of private, unaided, non-minority institutions. The principles applicable in these

judgments apply with some additions to private, unaided, minority institutions because they are
more autonomous.
The terms aided and unaided refer to the government aid given to private educational
institutions. Inevitably, there is greater government control of institutions that receive such aid
but this essay will not discuss them.The growth, development, and quality of a nations
institutions of higher education are key indicators of its modernisation and development, India
needs to nearly double the number of seats it has now. The government is not optimally suited to
build and run educational facilities on such a large scale.Today, private institutions account for
nearly 59 per cent of all enrolment. The judgments of the Supreme Court since TMA Pai
Foundation in 2001 have protected their autonomy in administration and in respect of fees,
which has contributed to the increase in this number.
Prior to TMA Pai however, the Courts priority was to ensure that education was accessible to all.
The autonomy of private institutions was a lesser concern and the Court even held that there was
no fundamental right to set up educational institutions. In practice, this approach severely
affected the growth of private institutions and also ran contrary to the policy of the government,
which under Article 41 of the Constitution of India, has a duty, subject to economic capacity, to
make effective provision for securing the right to education.
The Indian states policy on private higher education
The approach of the independent Indian state to higher education differed significantly from the
British approach. In 1857, universities were established at Bombay, Madras, and Calcutta to
answer Thomas Babington Macaulays call to impart English-language education to Indians who
could then serve as intermediaries between the British and other Indians The first real
transformation in approach came in 1948 when, one year after Independence, the University
Education Commission was set up under the leadership of the philosopher and educationist
Sarvepalli Radhakrishnan. The commissions report emphasised ideas such as university
autonomy, the spirit of free inquiry, and the liberalisation of education. It especially underscored
the distinction between state recognition and state control, pointing out that universities in Great
Britain were held in high regard because of their freedom from governmental interference.
But it was not until the New Education Policy of 1986 that the role of private institutions was
officially recognised, paving the way for private and voluntary initiatives in higher education.
This policy recognised that state funds were not enough to promote higher education and the
need for the private sector to assist in providing universal higher education.
So while the state never discouraged private education, it has, since 1986, actively supported the
creation of private educational institutions. In doing so, however, it needed to devise a
framework to ensure that its key objectives were met; that is, (a) a high quality of education and
(b) access to education for all classes of society so as to prevent its monopolisation by the elite.
These objectives, however, conflicted with one of the core concepts of private education, that
is, autonomy. Private institutions strive to have as much control as they can in their

establishment, their structure and organisation, in the manner in which they admit students and,
most importantly, in the fees they charge. There was, therefore, a need to balance the interests of
private participants in higher education with the need to secure good-quality and accessible
education. This is where the Supreme Court stepped in and delivered a series of judgments
dealing with the rights of private educational institutions to set up, to admit students of their
choice, and to charge fees.
Not all these judgments have, as we have noted, supported the policy of the state and initially, the
Supreme Court was reluctant to deliver judgments that furthered the cause of private educational
institutions. The first of these judgments came from a division bench of the Court inMohini Jain
v. State of Karnataka, (1992) 3 SCC 666.
Mohini Jains deathblow to private education
Mohini Jain had approached the Court stating that she had gained admission into an MBBS
course at a private institution in Karnataka. A student from outside the state, she was asked to
pay a tuition fee of Rs. 60,000 for the first year and offer a bank guarantee for the remaining
years of the course. Her allegation that there was a demand for a further capitation fee of Rs.
4.5 lakhs was denied. She also argued that the charging of Rs. 60,000 itself amounted to a
capitation fee as students admitted against government seats in the same college were charged
only Rs. 2000 and other students from Karnataka were charged only Rs. 25,000.
The Court faced two questions first, whether there is a right to education and if so, whether
charging a capitation fee violated that right, and second, whether charging a capitation fee
violated Article 14 of the Constitution.
In answering the first question, the Court held, in a sweeping constitutional interpretation, that
there is a fundamental right to education at all levels (primary, secondary and higher)and that the
state was under a constitutional mandate to provide educational institutions at all those levels.
Extending that finding, the Court held that when the state government grants recognition to any
educational institution, it creates an agency to fulfill its obligation under the Constitution. The
charging of a capitation fee was consequently, a denial of a citizens right to education.
The final blow to private institutions came on the issue of fixation of the tuition fee. The Court
held that if government seats are filled by charging Rs. 2,000, it is the states responsibility to
ensure that all other institutions that are set up with government permission and have obtained
recognition from the government, also charge the same amount as fees.
Mohini Jain was a harsh decision. It failed to balance the viability of running private institutions
with the provision of quality, widely accessible education. The judgment viewed the imparting of
education in India as a duty and a charitable activity. Perhaps influenced by the idea that the
commercialisation of education was not desirable and ought to be curbed, the Court failed to
examine government policies that allowed private institutions to flourish and even removed the
incentives for setting up these institutions. The Court therefore did not consider the fact that
private educational institutions, unlike government institutions, had to sustain themselves
through fees charged from students and through donations.

Moreover, there was no discussion on the nature and extent of the fundamental right to
occupation guaranteed under Article 19(1)(g) of the Constitution and whether this right would
include the right to establish and run educational institutions. Through this judgment, education
was effectively nationalised. However, it did not hold the field for very long.
Unni Krishnans feeble attempt
In Unni Krishnan J.P. v. State of Andhra Pradesh, (1993) 1 SCC 645, a five-judge bench was
constituted for the specific purpose of reconsidering Mohini Jain. Private educational institutions
argued that if the principles in Mohini Jain were followed, all private educational institutions
would have to close down.
Before going into the questions raised about the rights of private educational institutions, it is
important to note that the first question decided in this judgment was whether there is a
fundamental right to education. (Mohini Jain had held that this right exists across all levels of
education.) The Court in Unni Krishnan found that this right only extends to children up to the
age of 14 years. This finding had a significant impact on private educational institutions as the
absence of a fundamental right automatically disentitles the state from enforcing such a right
through private educational institutions.
Private institutions, it was argued, had a right under Article 19(1)(g) that entitled them to
complete autonomy. Moreover, market forces should be allowed to determine fees because only
in allowing profits would private individuals be willing to set up institutions.
The Medical Council of India and the All India Council for Technical Education opposed these
arguments on the grounds that the commercialisation of education was prohibited.
The Court rejected the argument grounded in Article 19(1)(g). This finding arose from the
Courts understanding of the terms business, trade, profession and occupation in that
constitutional provision. A profit motive, the Court said, was essential to fall within these
categories. Establishing a college would fall within the ambit of the term occupation only if the
institution did not seek affiliation from the state. Therefore, although there was technically a
right under Article 19(1)(g), effectively, no private institution could claim the right, as the power
to award degrees vested with universities that were largely set up by government. A private
institution could award its own degrees, but, without any recognition, little value could be
attached to such a degree.
Despite the fact that this judgment rejected the plea of private institutions, the decision assumes
importance because, for the first time, the Court emphasised that it would be unrealistic and
unwise to discourage private initiative in providing educational facilities, particularly in higher
education. The Court held that the private sector should be involved and indeed encouraged to
augment the much-needed resources in the field of education, thereby making as much progress
as possible in achieving the constitutional goals in this respect.
The next step was to balance this need with the prohibition of commercialisation. The Court
appeared to be in a dilemma over the extent of interference by the government. The Court stated
that (a) regulatory controls have to be continued and strengthened in order to lay down minimum
standards; (b) the commercialisation of education and racketeering must be prevented there can

be an adequate fee to ensure that institutions are self-financing, but there can be no capitation
fee; (c) admission within all groups and categories should be based only on merit; and (d)
reservation of seats in favour of the weaker sections of society and other groups which deserve
special treatment is permitted.
In order to balance interests, the Court framed a scheme aimed at eliminating management
discretion. The salient features of the scheme were:
a. All private colleges must be affiliated to and award degrees granted by recognised
universities.
b. The establishment of a private college could only be through a society or a trust to ensure that
profit-making is not a relevant consideration.
c. The reservation of 50 per cent seats for government in all private professional colleges would
be referred to as free seats and admissions to these seats would be based on a common entrance
test. The remaining seats would be filled by the management on payment of the prescribed fees,
on the basis of inter se merit, on the same basis as admissions to the free seats.
d. Prior intimation of the fees to be charged by the college and a stipulation that the maximum
fees chargeable would be subject to a ceiling prescribed by a fee fixation committee constituted
by state governments.
In its quest to balance interests and prevent the commercialisation of education, the Court
imposed stringent conditions on private institutions, especially in relation to the fees chargeable.
It made fees subject to the decisions of an ad hoc fee fixation committee with absolute authority
over these institutions. Moreover, 50 per cent of the seats were to be reserved for government
students. This seriously affected the autonomy of private colleges to admit students of their
choice. Fees obtained from the 50 per cent payment seats were often not sufficient to recover
the cost of running the institution. In many cases, the free seats went to students from affluent
families because they had better access to preparatory training for the common entrance tests.

1993-2001 The dark years of private education

The scheme framed by the Supreme Court of India in Unni Krishnan was to be applicable from
the academic year 1993-94. Problems with its resulted in a number of petitions being filed year
after year challenging the fixation of fees by ad hoc bodies. Throughout the remaining decade,
the Supreme Court, every year, fixed the relevant conditions for admissions to professional
courses in the country. These conditions included the fees to be charged and the seat-sharing ratio
between the government and private institutions. Thus, the nationalisation of education was
substituted by the court control of education.
During this period, the issue of commercial viability of institutions, which was the main
argument against the fixation of fees, gave rise to a new concept in private education: NRI seats.
The under-recovery of the cost of education led to the creation by the Supreme Court of an NRI

quota to be carved out of the 50 per cent payment seats, allowing institutions to charge a higher
fee for them.
The fresh start in TMA Pai Foundation
The situation after Unni Krishnan led to the formation of an eleven-judge bench of the Supreme
Court (TMA Pai Foundation v. State of Karnataka, (2002) 8 SCC 481) to decide eleven questions
which included (a) the validity of the scheme framed by Unni Krishnan and (b) the rights of nonminorities to establish and administer educational institutions under Articles 19(1)(g) and 21.
The first step was to ascertain whether the establishment of an educational institution could be
considered a fundamental right under Article 19(1)(g). In answering this question in the
affirmative, there was importantly, consensus among counsel representing all sides that Article
19(1) (g) would cover the establishment of an educational institution and that the setting up of an
educational institution would be an occupation under Article 19(1)(g). The answer to this
question led to the conclusion that the scheme framed by Unni Krishnan was illegal and
unconstitutional.
The crucial question then was to define the contours of this particular right, keeping in mind that
(a) private educational institutions cannot be denied their choice in matters of selection of
students and fixation of fees; (b) affiliation and recognition had to be available to every
institution that fulfilled the required conditions; and (c) private institutions had to be given the
right to constitute their own governing body, appoint their teaching and non-teaching staff, and
take action if there was dereliction of duty by their employees.
Restrictions on the right were confined to the maintenance of proper academic standards,
atmosphere, and infrastructure, and the prevention of maladministration. The Court held that that
autonomy in admissions was subject to the condition that a small percentage of students
belonging to weaker sections would have to be admitted against freeships or scholarships and
that it was possible to reserve a certain percentage of seats for students who have passed the
common entrance test of the state (the prescription of the percentage was left to the government).
Profiteering was not acceptable to the Court, although the fee structure could take into account
the future expansion of the institution and the generation of a reasonable revenue surplus. The
Court permitted the state or the university to devise an appropriate machinery to ensure that no
capitation fee was charged.
The attempt to explain in Islamic Academy
Although TMA Pai sought to put to rest all questions surrounding higher education and its
regulation, there were still some ambiguities that arose from the judgment, especially in relation
to the fixation of fees, the eligibility of institutions to fill all the seats according to their choice,
and the admission procedure.
A 5-judge bench in Islamic Academy v. State of Karnataka, 2003 6 SCC 687, sought to iron out
these creases. In answering these questions, the Court found that (a) fee structure can be fixed
subject to the condition that there is no profiteering or capitation, (b) private institutions have full
autonomy in administration so long as admissions are merit-based and merit can be satisfied

through a common entrance test run by the state or by an association, and (c) the state can
provide reservation in favour of financially or socially backward sections of society. In order to
ensure transparency in admission and fee structure, the Court resorted to the setting up of two
committees, one to give effect to the judgment in TMA Pai and to approve the fee structure and
the other to oversee the tests conducted by associations of institutions.
This judgment in its implementation resulted in the violation of the rights of private institutions.
For instance, holding that the reservation policy of the state could be implemented through
private institutions meant that virtually, the management of these institutions had been
completely taken over by the state. Not only was this reservation policy implemented through the
government seats, the management seats were also subjected to various quotas.
Clarity in PA Inamdar
The setting up of the committees in Islamic Academy, the extent of quotas and state reservation
in private institutions, and the regulation of fees was once again challenged before the Supreme
Court and a larger bench of seven judges was set up in PA Inamdar v. State of
Maharashtra, (2005) 6 SCC 537, in order to clarify the ratio of the judgment in TMA Pai. Ten
years after this judgment was delivered, one can conclusively state that this was the last in a long
line of judgments that settled the questions surrounding private education and the rights of
institutions. The Court in Inamdar held:
a. The policy of reservation cannot be enforced by the state nor can a quota or percentage of
admissions be carved out to be appropriated by the state.
b. A common entrance test can be held by a group of similarly placed institutions provided that it
is fair, transparent, and non-exploitative. The state may itself or through an agency, arrange for
holding such tests and students can be admitted on the basis of merit out of these common
entrance tests. However, the state may only take over if the three criteria mentioned above are
not satisfied.
c. Every institution is free to devise its own fee 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. NRI
seats are permissible to the extent of 15 per cent in all institutions.
d. The two committees for monitoring admission procedure and determining fee structure under
the judgment of Islamic Academy are permissible as regulatory measures.
e. In the absence of any central legislation, it is for the central and state governments to come out
with a detailed, well-thought-out legislation on the subject.
It took the Supreme Court over two decades to come to terms with the policy of the government
recognising the need for private institutions. PA Inamdar has now held the field for ten years
now. The concepts of autonomy and liberalisation that were first stated in 1948 in the University
Education Committee report appear to have finally been incorporated into law through this
judgment.
Many states have implemented the judgment in Inamdar by enacting suitable legislation. For
instance, in Karnataka, consensual agreements are entered into under the Karnataka Professional

Educational Institutions (Regulation of Admissions and Fixation of Fee) (Special Provisions)

Act, 2006, which provide for seat sharing and fee fixation in medical and engineering colleges in
the state.
In my view, the law laid down by TMA Pai and PA Inamdar has balanced the interests of private
institutions with those of students and also filled gaps in policy. However, there are widespread
and increasingly entrenched problems in the implementation of these judgments. Ineffectual
regulation, official corruption, and inadequate state capacity to oversee the functioning of private
institutions has led to the proliferation of colleges that have been set up solely to earn a profit and
exploit the demand-supply gap by charging exorbitant capitation fees. This is particularly so in
medical education where thousands of students compete for a very limited number of seats.
The Court should also be careful that broadly stated rights do not become dogma and prevent any
regulation in the interest of students. For instance, the Medical Council of Indias attempt at
conducting a National Eligibility cum Entrance Test for admission to MBBS and BDS Courses
and also PG medical courses, which was aimed at streamlining and providing a single window
entrance procedure for all medical courses, was struck down by the Supreme Court in Christian
Medical College v. Union of India, (2014) 2 SCC 305 on the ground that holding such a test
violates the rights of private institutions under Article 19(1)(g) and under Article 30 of the
Constitution.
I do not think that the judgment in PA Inamdar intended to prohibit regulations for the benefit of
thousands of students. Such an interpretation of the judgment is contrary to the spirit of PA
Inamdar. In fact, private institutions objection to a single window test on the ground that their
right to admit is violated reflects perverse motivations and the abuse of the wide rights conferred
on them. Regulations aimed at greater transparency and merit in admissions would make it
harder for institutions to exercise discretion in ways designed primarily to augment profits. This
case is also proof that Indian educational institutions and the legal framework they are governed
by must evolve further before a culture of self-regulation, practiced in some developed nations,
can be adopted.