Article 30 - Minority Educational Institution Cannot Claim Exemption From Admission & Fee Regulatory Committee : Supreme Court

The Supreme Court has held that a minority educational institution cannot claim complete immunity from the exercise undertaken by the Admission and Fee Regulatory Committee by claiming protection under Article 30(1) of the Constitution of India.

The Court was deciding the issue whether a minority educational institution in the State of Madhya Pradesh is required to get the fees charged by it fixed by the Admission and Fee Regulatory Committee under the provisions of the Madhya Pradesh Niji Vyavsayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (for short, the Act of 2007').

The constitutional validity of the Act was upheld by a Constitution Bench of the Supreme Court in Modern Dental College and Research Centre and others Vs. State of Madhya Pradesh and others [(2016) 7 SCC 353].

The appellant Icon Education Society, in the present proceedings, raised a challenge to the provisions of the 2007 Act which empower the AFRC to scrutinize the fees proposed by a minority educational institution.

To decide the issue, the bench comprising Justices Dinesh Maheshwari and PV Sanjay Kumar referred to the TMA Pai and PM Inamdar cases.,

The bench noted that it was held that while an institution was free to devise its own fee structure, the State can regulate the same to ensure that there is no profiteering or charing of capitation fee.

"setting up a reasonable fee structure is also a component of the right to establish and administer an institution, within the meaning of Article 30(1) of the Constitution, and 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. It was further held that it is permissible to regulate admission and fee structure for achieving that purpose", the bench observed after discussing the precedents.

The bench also held that the very same Act was upheld by the Supreme Court in Modern Dental College as a reasonable restriction and some provisions were read down.

"It is, therefore, too late in the day for the appellant society to again seek to challenge the validity of the Act of 2007, as the provisions of this enactment have already been read down by this Court to mean that the AFRC would have the power only to regulate the fee once the same is proposed by the educational institution itself, keeping in mind the parameters encapsulated in Section 9(1) thereof".

At the same time, the Court stated that the role of the AFRC was to review the fees proposed by the society and not to unilaterally fix the fee.

"it is only by way of regulating the fees so proposed that the AFRC would exercise the power of reviewing the proposed fees, after giving due opportunity of hearing to the educational institution concerned. The contrary stand taken by the AFRC, as is evident from its communications to the appellant society, therefore cannot be countenanced. It is not open to the AFRC to seek to unilaterally fix the fees to be charged by the appellant society for the professional courses offered through its educational institutions. At the same time, it is not open to the appellant society to claim complete immunity in undertaking this exercise and seek exemption from any interference by the AFRC", the bench observed.

The Court held that the  appellant society must necessarily submit the fees proposed by it in respect of the professional courses offered through its institutions to the AFRC for the purpose of review and regulation, as per the provisions of Section 9 of the Act of 2007 and the principles laid down by this Court in the precedents.

Mr.Dama Seshadri Naidu, senior counsel, appeared for the appellant society; and Mr.P.V.Yogeshwaran, AAG, appeared for the State of Madhya Pradesh.

Case Title : Icon Education Society vs State of Madhya Pradesh

Citation : 2023 LiveLaw (SC) 202

Constitution of India - Article 30(1) - setting up a reasonable fee structure is also a component of the right to establish and administer an institution, within the meaning of Article 30(1) of the Constitution, and 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- it is permissible to regulate admission and fee structure for achieving that purpose- followed P.A. Inamdar and others Vs. State of Maharashtra and others [(2005) 6 SCC 537 - Para 12.

Constitution of India - Article 30(1) -It is not open to the appellant society to claim complete immunity in undertaking this exercise and seek exemption from any interference by the Admission and Fee Regulatory Committee-Followed Modern Dental College and Research Centre and others Vs. State of Madhya Pradesh and others [(2016) 7 SCC 353]- Para 16

Madhya Pradesh Niji Vyavsayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 - Section 9(1)- It is only by way of regulating the fees so proposed that the AFRC would exercise the power of reviewing the proposed fees, after giving due opportunity of hearing to the educational institution concerned. The contrary stand taken by the AFRC, as is evident from its communications to the appellant society, therefore cannot be countenanced. It is not open to the AFRC to seek to unilaterally fix the fees to be charged by the appellant society for the professional courses offered through its educational institutions - Para 16

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