A^.^- HIGH COURT OF CHHATTISGARH AT BILASPUR 7^y -/y PETITIONER RESPONDENTS Writ Petition (C) N0. 2112 of2010 Disha Education Society VERSUS State of Chhattisgarh and another and Writ Petition (C) N0. 2388 of 2010 PETITIONER : Association of Private Professional Institution of Chhattisgarh VERSUS RESPONDENTS : State of Chhattisgarh and two others ORDER FORCONSIDERATION HON'BLE SHRI R.N. CHANDRAKAR, J 3 c^^A-c-e- Sd/- DhirendraMtebra Judge Sd/- R.N. Chandrakar Judge -^ POST FOR ORDER ON II DECEMBER, 2010 Sd/- JUDGE ^.12.2010 HIGH COURT OF CHHATTISGARH AT BILASPUR Division Bench : Hon'ble Shri Dhirendra Mishra, & Hon'ble Shri R.N. Chandrakar, JJ Writ Petition (C) N0. 2112 of2010 PETITIONER RESPONDENTS VERSUS 1. 2. Disha Education Society A society registered under M.P. Societies Registration Act, 1973, Through its Secretary and CEO Mr. Jayanendra Narang, having office at Disha Towers, New Shanti Nagar, Raipur (CG) 492007 State of Chhattisgarh, Through Secretary, Department of Technical Education, Manpower Planning, Science & Technology, DKS Bhavan, Raipur (CG) The Admission and Fee Regulatory Committee through its Chairman, A statutory body having its office at Byron Bazar, Raipur (CG) Through its Chairman. and Writ Petition (C) N0. 2388 of 2010 PETITIONER RESPONDENTS VERSUS 1. 3. Association of Private Professional Institution of Chhattisgarh, Through its Secretary, C-15, Shailendra Nagar, Raipur, Chhattisgarh. StateofChhattisgarh, Through its Secretary, Technical Education Department, Mantralaya, DKS Bhavan, Raipur Chhattisgarh Admission and Fee Regulatory Committee through its Chairperson, A statutory body established under Chhattisgarh Niji Vyavasyik Shikshan Sanstha (Pravesh Ka Viniyaman Evam Shulk Ka Nirdharan Act, 2008), Having its office at Govt. Women's Polytechnic Campus, Bayron Bazar, Raipur, Chhattisgarh. Chhattisgarh Swami Vivekanand Technical University, Through its Registrar, North Park Avenue, Sector-8, Bhilai, Chhattisgarh. Present: Mr. K.T.S. Tulsi, Sr. Advocate with Ms. Hamida Siddiqui, Advocate, for the petitioner in W.P.(c) No.2112/2010. Mr. Ankit Singhai, Advocate for the petitioner in W.P.(c) No.2388/2010. Mr. Y.S. Thakur, Dy. Advocate General for the State. O RD E R (Passed onlj'becember, 2010) P^rDhirendra hflLshra, J The above writ petitions are being disposed of by this common order as in both these petitions common questions of fact and law are involved for adjudication. 02. In W.P.(c) No. 2112/2010, Disha Education Society (for short "Disha"), which runs colleges approved by the All India Council for Technical Education (AICTE) affiliated to the Chhattisgarh Swami Vivekanand Technical University, Bhilai, has prayed for striking down the vires of Section 4(1), 4(8), 9, 12 and 13 of the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Evam Shulk Ka Nirdharan) Act, 2008 (in short "the Act, 2008") as being unconstitutional; to quash/set aside the order dated 19.3.2010 (Annexure P/2) passed by the State and recommendation dated 10.3.2010 made by respondent No.2/Admission and Fee Regulatory Committee to the extent it relates to the petitioner; and in the alternative, to direct the respondents to re-look into the fee structure fixed for the private professional unaided institutions run by the petitioner and accept the same in accordance with the principles of law laid down in T.M.A. Pai and Islamic Academy cases. Whereas in W.P.(c) No.2388/2010 filed by the Association of Private Professional Institutions of Chhattisgarh, the petitioner has also prayed for quashing of the report dated 10.3.2010 submitted by the Admission and Fee Regulatory Committee and setting aside the order dated 19.3.2010 passed bythe State. Submission of Mr. K.T.S. Tulsi, Sr. Advocate and Ms. Hamida Siddiqui, Advocate for the petitioner-Disha: 03. That Section 4(1) of the Act takes supervision and guidance of the admission process, fixation of fee in private professional educational .^e' '% 1 ^^/ institutions within the ambit ofthe Committee, whereas sub-section (9) of Section 4 empowers the Committee to hear complaints with respect to collection of fee in excess of fee determined by the Committee or which may amount to capitation fee. Sub-section (10) of Section 4 provides that if the college or institution has violated any provisions of the Act, it may recommend to the University or appropriate authority for withdrawal of affiliation or recognition of such institution. The above stipulation of the Act runs contrary to the decision of the eleven-Judges Bench of the Hon'ble Supreme Court in T.M.A. Pai Foundation and others Vs. State of Karnataka and others , wherein it has been held that the State cannot take away the right of unaided educational institutions in the matter of fixation of fee nor it can provide for taking away the recognition of the institution as that may destroy the autonomy of the institutions. Referring to the observations of the Supreme Court in the case of Unni Krishnan, J.P. and others Vs. State of Andhra Pradesh and others , it was argued that the State has no monopoly in the field of higher education and the private educational institution has also a role to play. The State by virtually taking over the power to fix the fee of unaided institutions has violated the fundamental rights of the petitioner granted under Articles 19(1)(g) and 30 ofthe Constitution. 04. It was further submitted that the judgment in JM/\ Pai's case continues to hold the field and the subsequentjudgments in the cases of Islamic Academy of Education and another Vs. State of Karnataka and others and P.A. Inamdar and others Vs. State of Maharashtra and others cannot have the effect of overruling the law laid down by the eleven-Judge Bench in TMA Pai's case. 05. Placing reliance on the judgments in the matters of P/4 Inamdar and Cochin University of Science and Technology and another Vs. Thomas P. John and others it was argued that the role of the competent authority is limited to ensure that while the private institutions are given full autonomy in fixing their fee structure, there should not be '(2002) 8 SCC 481 21993(1)SCC645 3 (2003) 6 SCC 697 "(2005)6SCC537 5AIR2008SC2931 .A.^., i '^*% J < /''- 'l'- i> •./ !<».>-^..^.^' ""-•:f:''r'~ ~ any profiteering or capitation fee. They could be surplus to the tune of 6% to 15% for future development. On the basis of aforesaid judgments, it was argued that private unaided professional institutions have a right to a larger degree of autonomy as compared to the Government or aided institutes, whereas Sections 4 & 9 of the Act completely disallow the right of administration of private unaided professional institutions by not only curtailing, but also by virtually taking over the fixation of fees. The impugned provisions in the Statute would result in drying up of investment in the field of education by private sector and result in monopoly of the State. 06. Relying upon the decision of the Orissa High Court in the matters of Orissa Management Colleges Association Vs. State of Orissa , it was argued that similar legislations for regulating and fixing of fee in Orissa has been struck down as inoperative and invalid and not binding on the petitioners. Learned counsel for the petitioner has also placed reliance on certain observations made by the Supreme Court in the matters of Modern Dental College and Research Center and others Vs. State of Madhya Pradesh and others , whereby certain interim orders have been passed in a civil appeal preferred against the order of the MP High Court in Association of Private Dental and Medical Colleges and others Vs. State ofMP and otherss 07. Challenging the recommendations of the Committee vide Annexure P/3, it was vehemently argued that the Committee arrived at a decision without adverting to any discussion. The Committee has reduced the operation and administration expenditure from Rs. 337.07 lacs to Rs. 75 lacs without assigning any reasons and without considering the balance sheet and other parameters. Though the Committee has categorized the petitioner as "very good", however, the proposal of increase of fee has been arbitrarily reduced by half per student. The petitioner's proposal for expenditure on NSS has been reduced from 46.62 lacs to Rs. 5 lacs. The Committee has failed to 'AIR 2007 ORISSA 120 7 (2009) 7 SCC 751 8200.9(3)MPHT418 consider that to provide good amenities to the students in the form of good teaching faculty and other infrastructure, expenditure on operation and administration head was required to be enhanced. However, a sum of Rs. 75 lacs has been allowed under this Act, which is 1/5 of the actual expenditure estimated by the petitioner. 08. In TMA Pai's case, the regulation is contemplated only against charging of capitation fee and profiteering by the institutions, and it has been clearly held that the Government should not interfere with the decision making power of the institution qua fixation of fee. The Committee failed to appreciate the submissions made by the petitioner regarding status of its fixed assets and expenses provided in Form B and the documents submitted along with the said Form, which clearly demonstrate that the petitioner is running in huge losses. The Committee has also ignored that the petitioner has incurred substantial loans to the tune of Rs. 3,734.94 lacs as term loan from Nationalized Bank and Rs. 1590.06 lacs as unsecured loans in prder to maintain the high standards and quality of infrastructure. The petitioner proposed fee of Rs. 64,500/- per student, whereas it should have been Rs.89,000/- if the expenses of the petitioner-institute are to be met and surplus amount for further development and growth of the institution are also be earned. However, respondent No.2 has recommended fee of Rs. 47.300/- per student, which is abysmally low, irrational and without anyjustification. Submission of Mr. Ankit Singhal, Advocate appearing for the petitioner - Association of Private Professional Institution of Chhattisgarh: 9. The petitioner herein has also challenged the report of the Committee on the ground that the report is arbitrary, discriminatory, unjustifiable and unreasonable and contrary to the principles enunciated in JM/\ Pai1, Islamic Academ/, and PA Inamdar4. There could be no fixing of rigid fee structure by the Committee and each institution has freedom to fix its own fee structure, keeping in mind the infrastructure and facilities available, investment made, salaries paid to the teachers and staff, future plans for expansion and betterment and growth of the institution, and only profiteering and capitation fee are prohibited. The Fee Fixation Committee could not generalize the fee structure and it is to s^, "'y / '^IV^'^f' ^••oX.,^' be fixed by keeping in view the accounts, schemes, plans and budget of individual institution. The petitioner's association has submitted a proposal keeping in mind these essential factors and parameters laid down by the Supreme Court in the above cited judgments. The Committee could interfere with such proposal only if it was in a position to record a finding that the institution is charging capitation fee or making a profit. No such finding has been recorded by the Committee and therefore, the impugned order is contrary to the judgments of the Apex Court. 10. Learned counsel stressed upon the cases where students withdraw from courses and leave the institution in midstream and the institution is made to suffer huge monetary losses as the seat remains vacant for the rest of the period. However, the Committee, in para 35 of the report, has issued certain directions in the case of students withdrawing from the courses in midstream, which run contrary to the directions of the Supreme Court contained in para-8 of Islamic Academ/ case. 11. Itwas further argued that the Committee ought to have fixed the fee structure on yearly basis and not on semester basis. While deciding the fee structure, the Committee has failed to take into account the rate of inflation, increase in average salary, and increase in development fee etc. The Committee has also not considered that the institutions offering diversified courses, such as Chemical Engineering, Bio Technology Branches, E-learning System etc. would require additional expenditure for procuring equipment, tools and machineries. The depreciation has been calculated at 10% of the reasonable expenditure incurred by the institution under the permanent heads, whereas the calculation of depreciation @ 10% is arbitrary, unreasonable and the same should have been calculated on the total investment by the institution instead of calculating it on the basis of expenditure. Even the incentive allowed to the institutions categorywise is also inadequate; the methodology is arbitrary, discriminatory and irrational. Even allowing a sum of Rs. 1,000/- per annum as additional fee for the institution older than five years towards weightage is meager. Similarly, a sum of Rs.3,000/- per annum towards growth and development charges is also inadequate and a sum of Rs.5,000/- ought to have been allowed under this head. The Committee was also not justified in fixing the upper cap for the hostel, transport and other facilities provided by the institutions. The prices of goods have gone high and therefore, it would be very difficult for the instjtution to provide facilities on such fee fixed by the Committee. 12. It was finally argued that Section 10 of the Act, 2008, which provides for appeal against the order of the Committee, has been omitted vide Amendment Act, 2010, which has come into force from the date of its publication in the Chhattisgarh Rajpatra (Aasadharan) on 17 June, 2010. Thus, the petitioners have no remedy except to challenge the report ofthe Committee by filing ofwrit petition. Submission of Mr. Y.S. Thakur, learned Dy. Advocate General for the State: 13. The State has enacted theAct, 2008 by strictly following the directions of the Hon'ble Supreme Court in Islamic Academy^ case. In para-7 of the Islamic Academy^, the Supreme Court, referring to para-56 of the TMA Pai'g case, directed that the respective State Governments/concerned authorities shall set up a Committee headed by a retired High Court Judge nominated by the Chief Justice of that State and also detailed the composition of the Committee. The educational institutions were directed to place the proposed fee structure along with relevant documents and books of accounts before the Committee well in advance and thereafter, the Committee was to decide whether the fees proposed by the that institution are justified. It was further observed that the Committee will be at liberty to approve any fee structure or to propose some other fee, which can be charged by the institution and the fee, so fixed by the Committee, shall be binding for a period of three years and the institution would not charge other amount over and above the amount fixed as fees by the Committee. In para-20 of the this judgment, it has been categorically observed that the direction for setting up two sets of Committees in the States has been passed under Article 142 ofthe Constitution of India which shall remain in force till appropriate legislation is enacted by the Parliament. 14. In P-4 Inamdar judgment, directions were given to enact legislation by the State Government and to form a Committee to stop profiteering and capitation fee. Thus, the Act of 2008 has been enacted in compliance of the directions of the Supreme Court in the aforesaid judgments and the same cannot be held to be ultra vires on the grounds raised by the petitioners in these petitions. 15. Before fixing fee, the institutions were given opportunity to submit their accounts and details of their infrastructure along with proposed fee structure by the Committee. Each and every institution was given an opportunity to be heard personally. After scrutinizing the proposals and after physical verification of the facilities, it was found that the proposed fee by the petitioner is exorbitant and arbitrary and therefore, it was regulated as per the provisions of the Act, 2008, and suitable and just fee structure was recommended by the Committee to the State Government. The Committee visited each and every institution to take firsthand account and physically verified the infrastructure, other facilities and educational environment created by the different institutions and thereafter, an opportunity of hearing to each and every institution was provided before giving recommendations. The categorization of the institutions in three categories is based on infrastructure and facilities created by each institution. The purpose of categorization was for giving incentives to such institutions, which have comparatively better infrastructure and facilities. The Committee was constituted under the Chairmanship of the retired High Court Judge, comprising of four other members. The methodology employed by the Committee was to avoid arbitrariness and bias towards any institution. Each institution has been given reasonable amount as incentive for better infrastructure. The fee structure fixed by the Committee is in close proximity to the fee structure proposed by the institutions themselves, the same has been done after examining the entire balance sheet of the institutions with regard to BE course. The students cannot be saddled with the higher fee to meet the expenditure on luxuries, erection of new buildings, advertisements, expenses on members of Managing Committee and unreasonable excess amount on the pretext of administration expenses ete. by the Management ofthe Institution. 16. We have heard learned counsel for the parties. 17. Challenges to the provisions of the Act, 2008 and determination of fee by the Committee can be classified as under: (i) Sections 4(1), 4(8), 9, 12 and 13 of the Act, 2008 are unconstitutional as the same interferes with the petitioners' fundamental right to establish and administer an educational institution in the matters of fixation of fee to be charged from the students, which is violative ofArticles 14, 19 (1)(g) and 21 ofthe Constitution of India. (ii) The Committee's report (Annexure P/3) is irrational and arbitrary and the same is in complete derogation of the guideFines of the Supreme Court and has been prepared without considering the accounts, schemes, plans and budgets of individual institution. I. Sections 4(1), 4(8), 9, 12 and 13 of the Act, 2008 are unconstitutional -——- —- ——- ——— violative of Articles 14, 19 (1)(g) and 21 ofthe Constitution oflndia. 18. The State of Chhattisgarh enacted the Act, 2008 for the regulation of admission and fixation of fee in private professional educational institutions in the State to provide for reservation of seats to persons belonging to Scheduled Castes, Scheduled Tribes and Other Backward Classes in professional educational institutions and the matters connected therewith and incidental thereto. Section 2 of the Act provides that the Act applies to institutions deemed to be universities or constitute units thereto imparting professional education as also to the private unaided professional educational institutions affiliated to a university established under the Central or Chhattisgarh Act. "Capitation fee" has been defined under Section 3(b) as any amount by whatever name called whether in cash or in kind paid or collected or received directly or indirectly in addition to the fees determined under the Act, whereas under Section 3(c), "committee" has been defined as the Admission and Fee Regulatory Committee constituted under Section 4. _,ses"!f-y, ^-»yN. 10 Chapter II deals with Admission and Fee Regulatory Committee. Sub-section (1) of Section 4 deals with constitution, composition, disqualification and function of the Committee. Section 4 reads as under: l.^'i. "4. Constitution, composition, disqualification and function of Committee. - (1) The State Government shall, by notification in the official Gazette, constitute a Committee to be called the Admission and Fee Regulatory Committee, for the supervision and guidance of the admission process and for the fixation of fee to be charged from candidates seeking admission in a private professional educational institution: Provided that Notwithstanding anything contained in any Act the fees once fixed shall be revisable every year or in a gap of there years as may be necessary, by the Fee Regulatory Committee. (2) The Committee shall be presided by a Chairperson who has been a Vice-Chancellor of a Central University or a State University or an institution deemed to be University or a judicial officer not below the rank of Supertime scale or senior administrative officer not below the rank of Principal Secretary to the State Government or Joint Secretary to the Government of India and shall include four other members having expertise in matters of finance, administration or law, technical education and medical education. (Financial expenses will be met separately by the departments of technical education/medical education. Budget to meet out the expenses incurred in functioning of the committee will be allocated by the State Government separately every year.) (3) The term of the Committee shall be three years from the date of its notification and in case of any vacancy arising earlier, for any reason, the State Government shall fill such vacancy for the remainder of the term. (4) No act or proceedings of the Committee shall be deemed to be invalid by reason merely of any vacancy or any defect in the constitution of the Committee. (5) No person who is associated with a private aided or unaided educational institution shall be eligible for being a member ofthe Committee. (6) The Chairperson or any member of the Committee shall cease to be so, if he performs any act, which in the f 1 : J";. sk.fs y \^.^/' 11 opinion of the State Government is unbecoming of Chairperson or a member ofthe Committee. (7) The Committee may frame its own procedure in accordance with the regulations notified by the State Government in this regard. (8) The Committee may require a private aided or unaided professional educational institution, or a deemed university to furnish, by a prescribed date, information as may be necessary for enabling the Committee to determine the fee that may be charged by the institution in respect of each professional course, and the fee so determined shall be valid for such period as notified by the State Government. (9) The Committee may hear complaints with regard to admission in contravention of the provisions contained herein, collecting of capitation fee or fee in excess of fee determined or profiteering by any institution, and if the Committee after enquiry finds that there has been any violation of the provisions for admission on the part of the unaided professional college or institution, it shall make appropriate recommendation for returning any excess amount collected to the person concerned, and also recommend to the Government for imposing a fine upto rupees ten lakhs, and Government may on receipt of such recommendation, fix the fine and collect the same in the case of each such violation or decide any other course of action as it deem fit and the amount so fixed together with interest thereon shall be recovered as if it is an arrear of land revenue, and the committee may also declare admission made in respect of any or all seats in a particular college or institution to be dehor merit and therefore invalid and communicate the same to the concerned university, and on the receipt of such communication, the University shall debar such candidates from appearing in the examination and cancel the results of examination already appeared for. (10) The Committee may, if satisfied that any unaided professional college or institution has violated any of the provision of this Act and after approval of the State Government recommend to the University or appropriate authority for withdrawal of the affiliation or recognition of such college or institution or decide any other course of action as itdeemsfit. (11) The Committee shall have the power to regulate its own procedure in all matters arising out of the discharge of its functions and shall for the purpose of making any enquiry under this Act have all the powers of a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect ofthe following matters, namely 12 ^ (a) summoning and enforcing the attendance of any witness and examining him on oath; (b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) issuing commissions for the examinations ofwitnesses. (12) The Committee shall ensure that the admission in an institution is done in a fair and transparent manner." Chapter III deals with admissions and Chapter IV deals with fixation of fee. Section 9 under Chapter IV provides for the factors that are to be taken into consideration by the Committee for fixation of fee. Section 9 reads as under: "9. Factors. - (1) Having regard to, - (i) the location of the private unaided professional educational institution;