Full Judgment Text
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PETITIONER:
INSTITUTE OF HUMAN RESOURCESDEVELOPMENT & ORS. ETC. ETC.
Vs.
RESPONDENT:
T.R.RAMESHKUMAR & ORS. ETC.
DATE OF JUDGMENT12/05/1995
BENCH:
MANOHAR SUJATA V. (J)
BENCH:
MANOHAR SUJATA V. (J)
AGRAWAL, S.C. (J)
CITATION:
1995 AIR 1587 1995 SCC (4) 211
JT 1995 (5) 181 1995 SCALE (3)619
ACT:
HEADNOTE:
JUDGMENT:
THE 12TH DAY OF MAY, 1995
Present:
Hon’ble Mr. Justice S.C.Agrawal
Hon’ble Mrs. Justice Sujata V. Manohar
Mr. Altaf Ahmed and Mr. V.R. Reddy, Additional Solicitor
Generals, Mr.V.K.Beeran, Advocate General, Mr.Soli
J.Sorabjee, Mr.F.S.Nariman, Mr.Jitender Sharma, Mr.P.S.Poti,
Sr. Advs., Mr.M.A.Firoz, Mr.M.T.George, Mr.G.Prakash,
Ms.Baby Krishnan, Mr.E.M.S.Anam, Ms. Gunwant Dara,
Mr.J.P.Varghees, Mr.P.Guar, Mr.K.M.K.Nair and Ms.Malini
Poduval, S.P.Sharma, Advs. with them for the appearing
parties.
J U D G M E N T
The following Judgment of the Court was delivered:
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.45-50 OF 1995
Institute of Human Resources
Development and Ors. etc. etc. ...
Appellants
versus
T.R.Rameshkumar and Ors. etc. ...
Respondents
(With C.A.Nos.51-56, 57-62, 63-68 and 69-74 of 1995)
J U D G M E N T
Mrs. Sujata V.Manohar.J.
Applications for intervention are allowed.
These appeals relate to two colleges set up in the
State of Kerala -- one started by the Institute of Human
Resources Development for Electronics (hereinafter referred
to as IHRDE) located at chengannur and the other started by
Lal Bahadur Sastri Engineering Research and Consultancy
Centre (hereinafter referred to as LBS Centre) located at
Kasargod, a backward area in the State of Kerala in the
erstwhile Malabar District. These two colleges have been
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set up as self-financing institutions by the above two
Societies under the control of the Government of Kerala.
Does the scheme framed by this Court in the case of Unni
Krishnan. J.P. and Ors. V. State of Andhra Pradesh and Ors.
(1993 (1) SCC 645) apply to these colleges ?
The State of Kerala has an enviable record in the field
of education. The financial position of the State, however,
is not strong enough for it to make an investment in the two
new Engineering Colleges -- so the State claims. It is
submitted on behalf of the State that the decision to start
these two self-financing colleges was arrived at in view of
the growing demand in the State for highly qualified
technical personnel in the areas of Electronics and Computer
Science. At present, the higher educational facilities in
technical subjects including Engineering available within
the State are hardly sufficient to absorb even those who
secure a high first class in the school leaving
examinations. The State has only nine Engineering Colleges,
six are Government Colleges and three are aided colleges. In
contrast, the neighbouring States of Maharashtra, Karnataka,
Tamil Nadu and Andhra Pradesh have 62, 55, 42 and 31
Engineering Colleges respectively. In the absence of
facilities for higher technical education within the State a
large number of students from Kerala are required to migrate
to neighbouring State to seek admission in Engineering
Colleges there, incurring heavy expenses. Many seek
admission to private Engineering Colleges outside the State
spending large amounts in terms of fees, donations etc.
It is claimed by the appellants that the Government of
Kerala spends 85% of its education budget on higher
education. Nevertheless, this outlay is inadequate to
provide modern equipment, qualified faculty members and
training facilities even in the existing Government
Engineering, Medical and other Technical Colleges and
Institutions. The State is not, therefore, in a position to
provide for setting up of new Engineering Colleges. In view
of this position, the Government of Kerala by
G.O.(MS)191/92/H.Edn. dated 24.12.1992 decided to start two
self-financing Engineering Colleges from academic year 1993-
94. A detailed report from the Institute of Human Resources
Development for Electronics and the Lal Bahadur Sastri
Engineering Research and Consultancy Centre was called for
in this connection.
On the basis of the reports submitted by these two
institutions the Government issued G.O.(MS)68/93/H.Edn.
dated 25.5.1993 fixing the guidelines for establishment of
two self-financing Engineering Colleges and for admission of
students to these two colleges. It was decided that the
college to be established by IHRDE will impart instructions
for B.Tech. Course in Computer Engineering and Electronic
Engineering with an intake of 120 students in each branch.
The college established by the Lal Bahadur Sastri Centre
would impart instructions for B.Tech. Course in Computer
Science and Engineering, Electronics and Communication
Engineering, Electrical and Electronics Engineering and
Mechanical Engineering with an intake of 60 students in each
branch. As per the scheme being operated at present, 75% of
seats in these colleges are to be filled up on the basis of
open merit applying the existing reservation principles
prevailing in the State of Kerala. 10% of the seats are to
be filled up by Scheduled Caste and Scheduled Tribe
candidates and the remaining 15% of the seats are to be
filled up by children of non-resident Indians. Open merit
seats and seats reserved for Scheduled Caste/Scheduled Tribe
Candidates are to be filled up on the basis of marks
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obtained at the common entrance examination which is being
conducted by the Commissioner for Entrance Examinations,
Trivendrum. The seats for the NRI quota are also to be
filled up on the basis of merit. Since the two colleges do
not receive any financial help in the form of any grant from
the Government and are self-financing institutions, tution
fee has been fixed for all students at Rs.12,500/- per year.
However, in the case of Scheduled Castes and Scheduled
Tribes the tution fee is fixed at half the above amount i.e.
Rs. 6,250/- per year. The students who are selected for
admission are also required to give an interest free deposit
of rupees one lakh refundable on completion of four years
from the date of deposit or on completion of four years from
the date of deposit or on completion of the course to which
the student is admitted, whichever is later. Candidates
belonging to Scheduled Castes and Scheduled Tribes, however,
are exempt from payment of this deposit. Candidates selected
against the NRI quota are required to pay US Dollars 5,000
as development charges which are non-refundable.
The college run by IHRDE is affiliated to Cochin
University of Science and Technology while the college run
by Lal Bahadur Sastri Centre is affiliated to the University
of Calicut. Both these institutions are societies registered
under the Travancore-Cochin Literary, Scientific and
Charitable Societies Registration Act, XII of 1955. Both the
societies are established by the Government of Kerala and
are fully controlled by the Government of Kerala. The two
colleges can, therefore, be considered as self-financing
colleges started by the Government of Kerala. This position
has been clarified by G.O.MS.91/94/H.Edn. dated 8.6.1994
which states that IHRDE and LBS Centre for Science and
Technology are autonomous bodies fully owned by the State
Government. The Government is, therefore, pleased to order
that these two self-financing Engineering Colleges set up by
these bodies at Chengannur and Kasargod respectively will be
treated as Government colleges and the Government undertakes
to give them financial support in future if the necessity
arises.
The appellants have sought to justify a departure from
the scheme set up in Unni Krishnan by pointing out that the
scheme in Unni Krishnan is designed for private colleges.
These two colleges, however, are not private educational
institutions set up for the purpose of profit-making. The
State has been compelled to go in for self-financing
institutions in view of financial stringency. The appellants
have also submitted that the State already runs (as of now)
six Government and three aided Engineering Colleges which
provide 2391 seats which are "free seats" available to all
candidates on merit. The tution fees charged in these nine
institutions is Rs. 495/- per annum. As against these 2391
seats available in nine colleges, two new colleges will
provide an additional 480 seats on payment basis. Since the
Government already runs or aids a number of institutions
where all the seats are "free" seats, they should be
permitted to start two colleges with "paid" seats. The ratio
between "free" and "paid" seats is far more favourable to
"free" seats than the 50:50 ratio laid down in Unni
Krishnan. Hence it is urged that the appellants should be
permitted to make a departure from the scheme in Unni
Krishnan which requires a self-financing institution to
provide 50% free seats and 50% seats on payment basis. It is
also pointed out that while students occupying payments
seats in Engineering Colleges are charged Rs.46,800/- as
fees, at present, under the scheme as propounded here the
fees per head come to only Rs. 12,500/-. The other plus
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point of the scheme as propounded is that the State, in
discharge of its obligation to make special provisions for
backward classes under Article 15(4) of the Constitution,
has also provided for reservation of 10% of these seats in
favour of Scheduled Caste and Scheduled Tribe candidates who
will only pay half the prescribed fees and will not have to
pay any deposit. This is done looking to their socio-
economic backwardness. In the open merits seats also the
reservation policy of the State in respect of such seats
will operate. Such a provision does not find a place in the
scheme under Unni Krishnan.
In the course of hearing the appellants have agreed to
modify their scheme by reducing the NRI quota to 10%, and
increasing the open merit seats to 80%. The appellants have
also agreed to institute freeships or scholarships to be
made available to 10% of the students admitted in these two
colleges which will be awarded on the basis of merit-cum-
means. For this purpose a scholarship fund shall be
instituted with a corpus of Rs. 10 lakhs by each institution
every year for four years. This will be introduced from
1995-1996. Loan facilities will be made available from
nationalised banks to the needy students for getting amounts
to meet their educational expenses including the payment of
deposit. It is further stated that the capital revenue loss
to the extent of Rs. 6 lakhs each year arising from the
reduction of the NRI quota will be made good by generating
additional revenue by the college through consultancy,
conduct of short-term courses etc. by using the available
infrastructure.
Can such a departure from Unni Krishnan be permitted?
The basic difference between institutions governed by the
scheme in Unni Krishnan and the present institutions is that
these institutions are controlled by the State and,
therefore, their working and utilisation of funds are under
the control of the State. The essence of Unni Krishnan on
the other hand, can be summed up in one sentence: There
should be no commercialisation or profit taking by private
educational institutions. This Court was very concerned
about the high fees charged by private technical educational
institutions. They earned large profits which were not
utilised in providing adequate infrastructure or teaching
facilities in these institutions. Most private colleges
provided sub-standard training, making no improvements in
their equipment, teaching staff or teaching aids. They
simply pocketed large profits made from heavy fees charged
to students. It was to stop this exploitation of students
that the scheme was framed. In terms, the Unni Krishnan
scheme provides that it will not be applied to Government
Institutions. It is true that Unni Krishnan did not
contemplate self-financing institutions set up by or
sponsored by the Government. But looking to the confidence
reposed by Unni Krishnan in the Government in fixing proper
fees even for private self-financing educational
institutions, it is clear that the scheme of Unni Krishnan
applies only to purely private educational institutions
which are self-finacing. It is designed to ensure that they
do not make undue profits or exploit students. Unni
Krishnan, however, is not against self-financing educational
institutions. On the contrary, it has recognised the need
for self-financing educational institutions to augment the
efforts made by the State in setting up educational
institutions in the field of technical education. It has
observed (in paragraphs 193, 194 and 196) :
"193: Notwithstanding the fact that
education is the second highest sector
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of budgeted expenditure after defence,
the outlay on education is woefully
inadequate to meet the needs of the
people. Whereas many other countries
spend six to eight per cent of their
Gross National Product on education, our
expenditure on education is only three
per cent of the Gross National Product.
Seventy-five to eighty per cent of the
expenditure goes in paying the salaries
of the teachers and other connected
staff. These are the statements made in
the Government of India publication
Challenge of Education -- A Policy
Perspective referred to hereinbefore.
Even so, on account of lack of proper
supervision, lack of self-discipline and
commitment, the quality and standard of
instruction in most of the Government
schools and colleges - except the
professional colleges - is woeful. This
has provided an occasion and an
opportunity to private educational
institutions to fill the void, both in
terms of meeting the need and more
particularly in the matter of quality of
instruction. Because, the State is in no
position to devote more resources and
also because the need is constantly
growing, it is not possible to do
without private educational
institutions.................
194. The hard reality that emerges is
that private educational institutions
are a necessity in the present day
context. It is not possible to do
without them because the Governments are
in no position to meet the demand -
particularly in the sector of medical
and technical education which call for
substantial outlays. While education is
one of the most important functions of
the Indian State it has no monopoly
therein. Private educational
institutions - including minority
educational institutions - too have a
role to play.
196. So far as unaided institutions are
concerned, it is obvious that they
cannot be compelled to charge the same
fee as is charged in Governmental
institutions. If they do so voluntarily,
it is perfectly welcome but they cannot
be compelled to do so, for the simple
reason that they have to meet the cost
of imparting education from their own
resources - and the main source, apart
from donations/charities, if any, can
only be the fees collected from the
students. It is here that the concepts
of ’self-financing educational
institutions’ and ’cost-based
educational institutions’ come in. This
situation presents several difficult
problems. How does one determine the
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’cost of education’ and how and by whom
can it be regulated ? The cost of
education may vary, even within the same
faculty, from institution to
institution. The facilities provided,
equipment, infrastructure, standard and
quality of education obtaining may vary
from institution to institution. The
court cannot certainly do this. It must
be done by Government or University or
such other authority as may be
designated in that behalf.............
The entire scheme in Unni Krishnan is designed for
private educational institutions. The contention of the
respondent that the two colleges in question should also be
considered as private Engineering Colleges because they are
run by two societies registered under the Travancore-Cochin
Literary, Scientific and Charitable Societies Registration
Act, 1955, cannot be accepted in view of the Government
Order dated 8.6.1994. The material which is produced before
us clearly shows that these two societies are fully
controlled by the State of Kerala. The fees which have been
fixed in the present case are also fixed by the State
Government which has given budget details relating to these
two colleges. The appellants have sought exemption from
providing 50% free seats in the light of the fact that the
State already runs or aids nine Engineering Colleges which
are financed by it and which provide 2391 free seats. What
is more important, it is pointed out that if the financing
of the colleges is spread over all the available seats, the
fees required to be charged would be much lower than if the
expenses have to be covered by the fees from only 50% of the
seats. In consequence, the fees charges are substantially
lower than fees charged for payments seats in other
Engineering Colleges -- thus benefiting a large number of
students who may not be in a position to pay the higher fees
charged by private engineering colleges, but may be in a
position to pay the substantially lower fees charged in
these two colleges.
We find considerable merit in this submission. In the
first place, the question of desirability or otherwise of
the Government starting self-financing educational
institutions will depend on many circumstances including the
financial capacity of the State. Looking to the
circumstances which have been pointed out in the present
case, the appellants have made out a good case for being
permitted to start two self-financing engineering colleges
controlled by the State. In fact, control by the State
should be considered as a plus point in the light of the
considerations which moved this Court in Unni Krishnan’s
case because it would be a safeguard against
commercialisation and exploitation. To ensure this we direct
that the State fixes the fees of these two colleges every
year after taking into account the financial needs of the
colleges and the accounts of these two Societies and
Colleges which should be audited in the same manner as other
State-run institutions.
The appellants have provided for an interest free
deposit of rupees one lakh from each Student (with
exceptions set out earlier) to meet the costs of
infrastructural and other permanent facilities. This kind of
a deposit cannot be accepted as a permanent feature of the
scheme. One can understand the need for such a deposit in
the initial stages when proper infrastructure has to be set
up and equipment purchased for technical colleges. The
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initial capital costs have to be met. But to accept that the
students taking education in these institutions should bear
for ever the burden of the entire cost of long-term capital
expenditure would not be fair. It is, therefore, necessary
and desirable that other funding should be sought in the
form of grants, loans or voluntary donations from
foundations or organisations that may benefit from the
trained personnel produced by these colleges in order to
finance the capital outlays in these institutions. Until,
however, such finances become available, there may not be
any option but to take a deposit from the students as
proposed. We direct, however, that the funds which become
available as a result of these deposits should be
specifically earmarked for ascertained requirements and
projects and should be utilised only against those. The
quantum of deposit shall be reviewed by the State every year
looking to the requirements of the two colleges and it shall
be refixed every year, though on no account shall it exceed
the proposed amount of rupees one lakh. The State shall also
frame a scheme to eliminate the taking of such a deposit
over a period of time.
The NRI quota has already been reduced to 10%. The
future NRI quota, however, shall be in accordance with the
directions of this Court as may be given from time to time
under Unni Krishnan. The additional features of the scheme
which relate to reservation and fee concession are in
accordance with the obligation cast on the State under
Article 15(4) of the Constitutions of India. Hence with the
above modifications and observations, we approve of the
scheme.
It has been strongly urged before us by the respondents
that such a departure from the scheme in Unni Krishnan
cannot and should not be permitted. In the first place, the
scheme in Unni Krishnan does not strictly apply to the case
which is before us. Nevertheless, we have applied the
underlying principles of the scheme in Unni Krishnan to the
scheme which is before us and have found that this scheme
broadly meets the aims and objectives propounded in Unni
Krishnan. This Court has itself not considered the scheme in
Unni Krishnan as sacrosanct. It was required to be modified
in a number of cases. Thus, for example, in T.M.A. Pai
Foundation & Ors. v. State of Karnataka & Ors. (1994 (2) SCC
734) and T.M.A. Pai Foundation & Ors. (II) v. State of
Karnataka & Ors. (1993 (4) SCC 286). the minority
educational institutions applied for and obtained a
substantial modification of the scheme in view of their
right to reserve 50% of the seats for the minority
community. In Unni Krishnan. P.J. and Ors. v. State of
Andhra Pradesh and Ors. (1993 (4) SCC 111) and T.M.A. Pai
Foundation & Ors. (I) v. State of Karnataka & Ors. (1993 (4)
SCC 276), the NRI quota was varied looking to the exigencies
of the situation. A special quota for NRIs was permitted
during the period of transition. Looking to the very
different background and the financial constraints of the
State which has impelled the State to formulate the present
scheme of the self-financing Engineering Colleges under the
control of the Government, we do not see any reason to
withhold sanction to the scheme subject to the modifications
set out earlier.
It is also urged by the respondent that the two
colleges do not admit students entirely on merit because a
meritorious student who is higher on the merit list may not
be able to secure admission if he is not in a position to
pay the higher fees. This argument is fallacious. Admission
to the open merit seats in these colleges is available
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entirely on merit. Undoubtedly, financial capacity to bear
the higher fees will be a consideration which may compel an
individual student to either accept or decline the offer of
a seat. But this would be so even in a case where the fees
are lower. There may be meritorious students who are so poor
that they cannot afford even the low fees which are charged.
But that is not a ground for saying that the admission is
not available on merit. For those who are financially
handicapped, special facilities in the form of merit
scholarships or freeships should be made available. We are
happy that at least for 10% of such seats, a meritorious
student who would have otherwise got admission, but for his
inability to pay the fees, is going to be granted a freeship
under the present scheme. We hope that such seats will
increase in future as more funding becomes available. The
difficulties of such students, however, should not come in
the way of other meritorious students who would like to
avail of technical education in these colleges and who,
apart from being meritorious, are also in a position to pay
somewhat higher fees in return for obtaining the facility of
higher technical education in their home State. Undoubtedly,
in a State which has a high record of educational
achievements, where people have enjoyed good educational
facilities for higher education at low cost, this kind of a
departure may cause some resentment. But the choice is
between not having the colleges or having them on a self-
financing basis. It is necessary in national interest that
we have a sufficient number of technically trained personnel
of the requisite calibre to work for the nation. In cases
where merit and means combine there is no reason why self-
financing educational institutions should not step in to
meet the national requirement for such qualified personnel
of good calibre.
The appeals are, therefore, entitled to succeed. The
scheme as propounded by the appellants with the
modifications we have set out earlier is sanctioned. The All
India Council of Technical Education has accorded
conditional approval to these two colleges by their letter
dated 31st of March, 1994. The conditions so specified in
the letter of 31st of March, 1994 shall be complied with by
these two institutions. However, the conditions that the
approval granted by the All India Council of Technical
Education is subject to full compliance with the scheme as
prescribed by this Court in the case of Unni Krishnan is set
aside in view of what we have said hereinabove. The appeals
are accordingly allowed. There will, however, be no order as
to costs.