Policy Decision Interdicting Self-Financing Institutions From Commencing New Courses In State Legally Unsustainable: Kerala High Court

The Kerala High Court recently established that a policy decision taken by the State to interdict self-financing institutions from commencing new courses in the State cannot stand legal scrutiny and cannot be sustained

Justice Raja Vijayaraghavan held so while directing the Directorate of Technical Education (DTE) to reconsider the request for a No Objection Certificate (NOC) submitted by a self financing Engineering college to start new diploma courses in its campus.  

Factual Background:

The petitioner is an Engineering College since 2009, having obtained affiliation from the APJ Abdul Kalam Technological University. 

While so, the All India Council for Technical Education (AICTE) invited applications for granting additional Diploma courses in Engineering College premises. After an inspection, the AICTE granted approval to the petitioner to conduct certain courses for the academic year 2021-2022.

As per the Approval Process Handbook issued by the AICTE, the applicant institution is required to obtain NOC from the State. 

In the said circumstances, the petitioner submitted a request for an NOC, which was rejected by a letter on the ground that the Government policy is not to grant NOC to Private Self-financing Institutions to start new courses in the academic year 2021- 2022.

The impugned letter relied on another document released by the State which placed an interdiction in granting NOC to private self-financing institutions and limits the same to Government controlled institutions run by CAPE, where admissions are purely on merit.

Aggrieved by these letters, the petitioner moved the Court alleging that the stand taken by the State was clearly arbitrary and violative of the rights guaranteed under the Constitution.

Contentions Raised:

- Petitioner:

The petitioner argued that once AICTE has granted approval, the respondents are bereft of any powers to refuse the grant of sanction for the Diploma courses.

It was submitted that a policy decision by the State not to grant sanction for new courses would clearly be in the teeth of the provisions of the Central Act, with reliance placed on State of Kerala and Ors. v. KMCT Polytechnic College, Mampara [MANU/KE/1255/2017] to fortify its stand. 

The Counsel added that before issuing such an order, the DTE ought to have heard the petitioner after conducting a physical inspection of the infrastructure and ascertain whether there is any sharing of resources.

- Respondents

The State submitted that pursuant to an order from a Division bench, the University had conducted an inspection and forwarded the report to the DTE, wherein it is reflected that there is sharing of infrastructure at the petitioner college.

The affiliating University argued that sanctioning of diploma courses is within the exclusive domain of the Government and the DTE, and that the University has nothing to do with the same.

However, it was added that if the intention of the petitioner is to use the facilities earmarked for the students pursuing the engineering Course for the proposed new courses, then permission of the University needs to be obtained. 

Observations of the Court:

1. Whether the State can have a policy decision not to permit private self-financing institutions from starting diploma courses.

The Court referred to the decision in State of Kerala v. M.G.M. College of Arts and Science [2017 (3) KLT 779] whereby it was held that the fundamental rights of parties to receive education and to impart education cannot be restricted by a policy decision, but only by a law enacted by a competent legislature and not by executive fiat. 

In the same decision, it was unequivocally held that such policy restricting future discretion is arbitrary and cannot withstand the test of reasonableness.

Relying on State of Kerala v KMCT Polytechnic College Mampara [MANU/KE/1255/2017], the Court reiterated that the right to establish an educational institution like the polytechnic is no more the prerogative of the State nor a privilege to be conferred by the statute, for this matter has been settled in TMA Pai Foundation and Ors. v. State of Karnataka. 

Therefore the Single Bench opined:

"In that view of the matter, I am of the considered opinion that the policy decision taken by the State to interdict self-financing institutions from commencing new courses in the State cannot stand legal scrutiny and cannot be sustained."

2. Whether an institution affiliated with the APJ Abdul Kalam Technological University is required to obtain approval/NOC from the Director of Technical Education before commencing new courses and whether the DTE is required to obtain the views of the University while considering the said request.

Upon perusing the Approval Process Handbook, 2021-22, the Court noted that AICTE had not prohibited the sharing of laboratory resources.

In fact, it was found that AICTE encourages the institution to maximize the utilization of existing resources.

The Court found that sanctioning of Diploma courses falls within the exclusive domain of the Government and that it is the Director of Technical Education, who acts as the affiliating Board. The affiliating University cannot claim that they have anything to do with the grant of approval for Diploma courses.

However, the University has contended that they need to be satisfied that the conduct of new courses would not be detrimental to the interest of the students pursuing the Engineering course. They relied on the A.P.J. Abdul Kalam Technological University Act, 2015 to advance their argument.

Clause (5) of Chapter VI of the said Act specifically interdicts the institution from commencing new courses in the affiliated college without the permission of the affiliating University. 

However, the Court noted that the DTE had rejected the NOC on the adverse report submitted by the University, although the University had not completed inspecting the entire blocks.

Moreover, it was clear that the DTE had not heard the petitioner before passing its order, which is clearly in violation of the principles of natural justice. 

As such, it was held that the DTE was bound to recorder the petitioner's request and to take a decision. 

The following directions were thereby issued by the Court:

a) If the petitioner is in possession of the necessary infrastructure in the form of separate buildings, workshops, labs, libraries and other amenities to provide good quality education to the students pursuing the degree level as well as diploma level courses, then neither the University nor the DTE can stand in the way of the petitioner conducting the said courses.

b) On the other hand, if the petitioner is not in possession of the necessary infrastructure mentioned above and the faculty to pursue both the courses simultaneously without causing a strain on the resources of the Engineering students, the affiliating University will be well justified in refusing the grant of assent to the DTE.

c) It is for the DTE to consider the matter in all its perspectives and take a decision with the interest and welfare of the students in mind and without affecting the right of the petitioner to impart education and in strict compliance with the relevant rules and regulations. Before taking a decision the DTE shall also inspect the institution and its premises.

Advocates S. Krishnamoorthy and Sneha Rose appeared for the petitioner while Standing Counsel for AICTE V. Sajith Kumar, Standing Counsel for University Elvin Peter and Special Government Pleader Ramanand K.B. represented the respondents in the matter. 

Case Title: Sreepathy Institute of Management and Technology v. State of Kerala & Ors.

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