ICON EDUCATION SOCIETYversusSTATE OF MADHYA PRADESH & OTHERS

728                      [2023]REPORTS
               SUPREME COURT    2 S.C.R. 728               [2023] 2 S.C.R.


A                       ICON EDUCATION SOCIETY
                                        v.
                STATE OF MADHYA PRADESH & OTHERS
                         (Civil Appeal No. 1760 of 2023)
B                              MARCH 17, 2023
         [DINESH MAHESHWARI AND SANJAY KUMAR, JJ.]
             Madhya Pradesh Niji Vyavsayik Shikshan Sanstha (Pravesh
      Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 – s.9 –
      Fee-fixation – Power of Admission and Fee Regulatory Committee
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      (AFRC) – Held: AFRC constituted under the 2007 Act exercises
      only the power of ‘regulation’ in respect of the fees proposed by the
      institution, conditioned by the parameters in s.9(1) of the 2007 Act
      – Liberty given to unaided institutions to propose the fees that they
      wish to charge, keeping in mind the factors set out in s.9(1) of the
D     2007 Act stands protected – 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 – Thus, in the present case, it is
      not open to the AFRC to unilaterally fix the fees to be charged by
      the appellant-society for the professional courses offered through
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      its educational institutions – At the same time, the appellant cannot
      claim complete immunity in undertaking this exercise and seek
      exemption from any interference by the AFRC – Appellant must
      necessarily submit the fees proposed by it in respect of the
      professional courses offered through its institutions to the AFRC
F     for the purpose of review and regulation, as per the provisions of
      s.9 of the 2007 Act and the principles laid down by Supreme Court
      in the decisions referred to herein – Constitution of India – Articles
      19(1)(g), (6), 30(1) – National Commission for Minority Educational
      Institutions Act, 2004 – s.2(g).
G           T.M.A. Pai Foundation and others Vs. State of
            Karnataka and others (2002) 8 SCC 481 : [2002] 3
            Suppl. SCR 587; P.A. Inamdar and others Vs. State of
            Maharashtra and others (2005) 6 SCC 537 : [2005] 2
            Suppl. SCR 603; Modern Dental College and Research
            Centre and others Vs. State of Madhya Pradesh and
H
                                       728
      ICON EDUCATION SOCIETY v. STATE OF MADHYA                              729
                 PRADESH & OTHERS

      others (2016) 7 SCC 353 : [2016] 3 SCR 579 –                           A
      followed.
      Sk. Md. Rafique Vs. Managing Committee, Contai
      Rahamania High Madrasah and others (2020) 1 SCT
      627(SC); Ahmedabad Saint Xaviers College Society and
      another Vs. State of Gujarat and another (1974) 1 SCC                  B
      717 : [1975] 1 SCR 173; Association of Private Dental
      and Medical Colleges Vs. State of MP (2009) SCC
      Online MP 760 – referred to.
                        Case Law Reference
                                                                             C
[2016] 3 SCR 579                  followed             Para 3, 7 & 13
[1975] 1 SCR 173                  referred to          Para 7
[2002] 3 Suppl. SCR 587           followed             Para 11, 12
[2005] 2 Suppl. SCR 603           followed             Para 12
                                                                             D
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1760
of 2023.
     From the Judgment and Order dated 19.11.2020 of the High Court
of Madhya Pradesh at Indore in WP No. 9690 of 2020.
                                                                             E
     Dama Seshadri Naidu, Sr. Adv., Pai Amit, Rohit R. Saboo, Ms.
Pankhuri Bhardwaj, Abhiyudaya Vats, Advs. for the Appellant.
      P. V. Yogeswaran, A.A.G., Ms. Rukhmini Bobde, Pashupathi Nath
Razdan, Ms. Soumya Priyadarshinee, Ankit Ambasta, Amit Kumar
Srivastava, Amlaan Kumar, Advs. for the Respondents.                         F
      The Judgment of the Court was delivered by
      SANJAY KUMAR, J.
         Leave granted.
       2. The short question that arises for consideration in this case is   G
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’)?
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730            SUPREME COURT REPORTS                           [2023] 2 S.C.R.


A             3. This issue is no longer res integra as the contours and import
      of the Act of 2007, including the question aforestated, were dealt with
      and decided by a Constitution Bench in Modern Dental College and
      Research Centre and others Vs. State of Madhya Pradesh and
      others[(2016) 7 SCC 353]. However, failure of the parties in properly
      understanding the ratio decidendi of the above decision led to the present
B
      litigation.
              4. Icon Education Society, the appellant herein, maintains and
      manages two unaided educational institutions at Indore, viz., Indore
      Institute of Law and Indore Nursing College. Both these institutions
      qualify as ‘minority educational institutions’ under Section 2(g) of the
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      National Commission for Minority Educational Institutions Act, 2004.
      While so, by letter dated 08.07.2019, the Admission and Fee Regulatory
      Committee (for short, ‘the AFRC’), constituted under Section 4 of the
      Act of 2007, called upon the Indore Institute of Law to submit its proposal
      for regulation of the fees pertaining to law courses offered by it. This
D     was followed up by a reminder on 24.07.2019, which was addressed to
      all private law colleges in the State of Madhya Pradesh. The appellant
      society addressed reply dated 31.07.2019, stating that the AFRC was
      not empowered to regulate the fees charged by minority educational
      institutions and requesting that the notices issued may be withdrawn or
      cancelled. The AFRC responded, vide letter dated 14.11.2019, stating
E
      that a decision had been taken in the meeting held on 08.11.2019 that the
      fees of minority institutions should be fixed by the AFRC. The appellant
      society was accordingly informed that its request for relaxation from
      getting the fees fixed by the AFRC was rejected.
             5. Aggrieved thereby, the appellant society preferred an appeal
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      under Section 10 of the Act of 2007 before the designated authority. The
      appeal was dismissed by the appellate authority, by order dated
      10.01.2020, holding that the procedure of regulating/fixing of fee was
      common to both minority and non-minority institutions. The review/recall
      petition preferred by the appellant society was dismissed with costs by
G     the appellate authority on 06.03.2020.
             6. Thereupon, the appellant society filed WP No. 9690 of 2020
      before the Indore Bench of the Madhya Pradesh High Court. Its prayer
      therein was to declare Sections 4 and 9 of the Act of 2007 ultra vires as
      these provisions did not distinguish between minority educational
H     institutions and other educational institutions and, in consequence, did
      ICON EDUCATION SOCIETY v. STATE OF MADHYA                                731
         PRADESH & OTHERS [SANJAY KUMAR, J.]

not exempt minority educational institutions from fee-fixation. A further      A
direction was sought to exempt the appellant society, being a minority
educational institution, from the application of Section 9 of the Act of
2007, thereby permitting it to fix its own fees.
       7. By order dated 19.11.2020, a Division Bench of the Madhya
Pradesh High Court at Indore dismissed the writ petition. The Division         B
Bench noted that the validity of the Act of 2007 had already been upheld
in Modern Dental College and Research Centre (supra). The High
Court then relied upon Sk. Md. Rafique Vs. Managing Committee,
Contai Rahamania High Madrasah and others [(2020) 1 SCT
627(SC)], wherein this Court referred to its earlier edict in Ahmedabad        C
Saint Xaviers College Society and another Vs. State of Gujarat and
another [(1974) 1 SCC 717] that the right under Article 30(1) of the
Constitution is not absolute or above other provisions of law and the
essence of Article 30(1) was to ensure equal treatment between majority
and minority institutions. It was further held that the laws of the land,
including rules and regulations, must apply equally to majority institutions   D
as well as minority institutions. In his concurring opinion, H.R.Khanna J
had held that a balance must be kept between the two objectives – one,
to ensure the standard of excellence of the institution and the other,
preserving the right of minorities to establish and administer educational
institutions. In the light of Modern Dental College and Research Centre        E
(supra) and Sk. Md. Rafique (supra), the High Court concluded that
no grounds were made out to interfere with the orders passed by the
AFRC.
      8. Heard Mr.Dama Seshadri Naidu, learned senior counsel,
appearing for the appellant society; and Mr.P.V.Yogeshwaran, learned           F
AAG, appearing for the State of Madhya Pradesh.
       9. Section 4 in Chapter 2 of the Act of 2007 deals with the
constitution and establishment of the AFRC. Section 4(1) provides that
the State Government shall, by notification in the official gazette,
constitute a committee to be called the ‘Admission and Fee Regulatory          G
Committee’, for the supervision and guidance of the admission process
and for the fixation of fees to be charged from candidates seeking
admission in a private professional educational institution. Section 4(8)
provides that the AFRC may require a private aided or unaided
professional educational institution or a deemed university to furnish,
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732            SUPREME COURT REPORTS                           [2023] 2 S.C.R.


A     by the prescribed date, information as may be necessary for enabling
      the AFRC to determine the fees that may be charged by the institution
      in respect of each professional course and the fees so determined
      shall be valid for such period as may be notified by the State
      Government.
B            10. Chapter 4 of the Act of 2007 deals with fixation of fees.
      Section 9(1) therein provides that, having regard to the location of the
      private unaided professional educational institution; the nature of the
      professional course; the cost of the land and building; the available
      infrastructure, teaching, non-teaching staff and equipment; the
      expenditure on administration and maintenance; the reasonable surplus
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      required for growth and development of the professional institution;
      and any other relevant factor, the AFRC shall determine, in the manner
      prescribed, the fees to be charged by the private unaided professional
      educational institution. Section 9(2) provides that the AFRC shall give
      the institution an opportunity of being heard before fixing any fees.
D     The proviso thereunder states that no such fees, as may be fixed by
      the AFRC, shall amount to profiteering or commercialization of
      education.
             11. Significantly, in the 11-Judges Bench decision of this Court
      in T.M.A. Pai Foundation and others Vs. State of Karnataka and
E     others [(2002) 8 SCC 481], the majority opinion voiced by B.N.Kirpal
      CJ, speaking for himself and five other learned Judges, answered the
      question as to whether statutory provisions regulating facets of
      administration of educational agencies, including regulation of fees,
      would interfere with the right of administration by minorities in the
      negative, but held that such regulatory measures should be minimal in
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      the case of unaided minority educational institutions. As regards the
      fees to be charged by unaided institutions, it was held that the same
      could not be regulated but no institution should charge capitation fee.
      It was emphasized that, inasmuch as the occupation of education is, in
      a sense, regarded as charitable, the Government can provide regulations
G     that will ensure excellence in education, while forbidding the charging
      of capitation fee and profiteering by the institution. Since the object of
      setting up an educational institution is by definition “charitable”, it was
      held to be clear that an educational institution cannot charge such a
      fee as is not required for the purpose of fulfilling that object. To put it
      differently, per the majority, in the establishment of an educational
H
      ICON EDUCATION SOCIETY v. STATE OF MADHYA                                  733
         PRADESH & OTHERS [SANJAY KUMAR, J.]

institution, the object should not be to make a profit inasmuch as               A
education is essentially charitable in nature, but there could, however,
be a reasonable revenue surplus, which may be generated by the
educational institution for the purpose of development of education
and expansion of the institution. The partly-concurring opinion of
S.N.Variava J, speaking for himself and Ashok Bhan J, was to the
                                                                                 B
effect that there could be an appropriate mechanism to ensure that no
capitation fee is charged and profiteering is not resorted to, but the
extent of regulation would not be the same for aided and unaided
institutions.
       12. Thereafter, in the 7-Judges Bench decision of this Court in
                                                                                 C
P.A. Inamdar and others Vs. State of Maharashtra and others
[(2005) 6 SCC 537], this Court unanimously held that, as per the law
declared in T.M.A. Pai Foundation (supra), 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         D
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 question whether guidelines could have
been issued in the matter of regulating the fee payable by students to
                                                                                 E
educational institutions was, therefore, answered in the affirmative by
holding that every institution is free to devise its own fee structure but
the same can be regulated in the interest of preventing profiteering
and capitation fees.
       13. As stated hereinbefore, the Act of 2007 fell for consideration
                                                                                 F
before a Constitution Bench in Modern Dental College and Research
Centre (supra) in the context of regulation of unaided educational
institutions in the State of Madhya Pradesh. Significantly, the validity/
vires of various provisions of the Act of 2007, including provisions
pertaining to fixation of fees, was also under attack. The issue was as to
whether provisions relating to fixation of fees were violative of Article        G
19(1)(g) or whether they were regulatory in nature and were permissible
under Article 19(6) of the Constitution. Keeping in mind the fact that the
State has the power to regulate fixation of fees in the interest of preventing
profiteering and such fixation of fees has to be regulated and controlled
at the initial stage itself, this Court observed that the parameters laid
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734             SUPREME COURT REPORTS                            [2023] 2 S.C.R.


A     down in Section 9(1) of the Act of 2007, which have to be kept in mind
      while fixing the fees were, in fact, the ones enunciated in earlier
      judgments of this Court. This Court, therefore, held that analysis of the
      provisions of the Act of 2007 by the Madhya Pradesh High Court in
      Association of Private Dental and Medical Colleges Vs. State of
B     MP[(2009) SCC Online MP 760], from which the appeal arose, was
      perfectly in order. Reference was made to the observations contained
      therein to the effect that each professional educational institution can
      furnish information with regard to the fees that it proposes to charge
      from the candidates, taking into account the cost of components, the
      reasonable surplus required for growth and development and other factors
C     relevant to impart professional education as mentioned in Section 9(1)
      of the Act of 2007, and that the function of the AFRC is only to find out,
      after giving due opportunity of hearing to the institution, whether the
      fees proposed by the institution is based on the factors mentioned in
      Section 9(1) of the Act of 2007 and did not amount to profiteering and
D     commercialization of education. The High Court had further observed
      that the AFRC, while determining the fees, only gives final approval to
      the proposed fees to be charged, after being satisfied that it was based
      on the factors mentioned in Section 9(1), and that there was no
      profiteering or commercialization of education. The High Court
      accordingly concluded that the provisions of Sections 4(1), 4(8) and 9 of
E
      the Act of 2007, in substance, empowered the AFRC to be only satisfied
      that the fee proposed by private professional educational institutions did
      not amount to profiteering or commercialization of education and was
      based on the factors mentioned in Section 9(1) of the Act of 2007 and
      held that the Act of 2007, therefore, did not violate the right of the private
F     professional educational institution to charge its own fee. Accepting the
      said interpretation, this Court observed that the AFRC which is set up
      for that purpose is discharging only a regulatory function, as the fee
      which a particular educational institution seeks to charge from its students
      has to be suggested by the said educational institution itself and the AFRC
G     is empowered to satisfy itself that the fee proposed by the educational
      institution did not amount to profiteering or commercialization of education
      and was based on the intelligible factors mentioned in Section 9(1) of the
      Act of 2007. This Court, therefore, concluded that it was only a regulatory
      measure and did not take away the power of the educational institutions
      to fix their own fees.
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      ICON EDUCATION SOCIETY v. STATE OF MADHYA                                 735
         PRADESH & OTHERS [SANJAY KUMAR, J.]

       14. The supplementing opinion of R. Banumathi J noted that, though       A
Section 9 of the Act of 2007 empowered the AFRC to determine the
fees, the High Court had read down Sections 4(1), 4(8) and 9 of Act of
2007, by holding that those provisions “in substance empower the
committee to be only satisfied that the fee proposed by a private
professional educational institution did not amount to profiteering
                                                                                B
or commercialization of education and was based on the factors
mentioned in Section 9(1) of the Act 2007...”. The learned Judge
accordingly held that the State had the legislative competence to enact
the Act of 2007 and regulation of fixation of the fees was to protect the
right of the students in having access to higher education without being
subjected to exploitation in the form of profiteering. The learned Judge        C
concurred with the majority view in upholding the validity of the impugned
legislation and affirmed the decision of the High Court.
       15. 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             D
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.
       16. Therefore, as matters stand, the Act of 2007 has been
interpreted to mean that the AFRC, constituted thereunder, exercises            E
only the power of ‘regulation’ in respect of the fees proposed by the
institution, conditioned by the parameters in Section 9(1) of the Act of
2007. In effect, the liberty given to unaided institutions to propose the
fees that they wish to charge, keeping in mind the factors set out in
Section 9(1) of the Act of 2007, stands protected and it is only by way
                                                                                F
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              G
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 appellant
society must necessarily submit the fees proposed by it in respect of
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736              SUPREME COURT REPORTS                          [2023] 2 S.C.R.


A     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
      decisions referred to hereinabove. Making this position clear, the appeal
      is disposed of accordingly.
B            Parties shall bear their own costs.

      Divya Pandey                                              Appeal disposed of.
      (Assisted by : Shivani Pundir and Shashwat Jain, LCRAs)


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