SC constitutes committee comprising RM Lodha J. to oversee functioning of MCI [Read judgment]

Even as the Supreme Court refused to modify its order in the NEET matter, a five-judge bench today upheld the law regulating fees and other admission criteria to private unaided medical colleges prescribed by the Madhya Pradesh government.

. The Constitution Bench of Anil R Dave, AK Sikri, RK Agrawal, AK Goel and R Banumathi also constituted a committee headed by retired Supreme Court judge Justice RM Lodha to supervise the functioning of the Medical Council of India.

. The committee will have the power to oversee all statutory functions of the Medical Council of India and policy decisions of the MCI for one year.

. Senior Advocates KK Venugopal , Rajeevn Dhavan, Rakesh Dwivedi, Harin Raval and Ajit Kumar Sinha appeared for various medical colleges. Senior Advocate Vibha Dutta Makhija appeared for the State of Madhya Pradesh while ASG Pinky Anand and Senior Advocate Vikas Singh also supported Makhija’s arguments.

. The petitioners had challenged the ‘Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 (Act) and the Admissions Rules, 2008.

. The Act constitutes a committee called Admission and Fee Committee for regulating the fees and admission to private unaided professional colleges. The Act prescribes that the admission to these colleges shall be on the basis of a Common Entrance Test (CET) conducted by the State government. The Act also lays down that the fees to be charged by the colleges shall be determined by the Committee.

. The Act was challenged on the ground that the same is violative of Article 19 (1)(g) of the Constitution.

. The Court dealt with various aspect of the challenge.

. Managing of Education is “occupation”, but a noble one

. The Supreme Court held that while the managing of an educational institution is an “occupation” under Article 19(1) (g), it is a noble one and hence to be carried out on a “no profit no loss” basis.

. “This right to carry on the occupation that the education is, the same is not put at par with other occupations or business activities or even other professions. It is a category apart which was carved out by this Court in TMA Pai Foundation. There was a specific purpose for not doing so. Education is treated as a noble ‘occupation’ on ‘no profit no loss’ basis.”

. Hence, reasonable restrictions can be imposed on anybody engaged in managing and administering educational institutions.

. “Thus, those who establish and are managing the educational institutions are not expected to indulge in profiteering or commercialise this noble activity. Keeping this objective in mind, the Court did not give complete freedom to the educational institutions in respect of right to admit the students and also with regard to fixation of fee. As far as admission of students is concerned, the Court was categorical that such admissions have to be on the basis of merit when it comes to higher education, particularly in professional institutions.

. Thus, the contention raised on behalf of the appellants that the private medical colleges had absolute right to make admissions or to fix fee is not consistent with the earlier decisions of this Court. Neither merit could be compromised in admissions to professional institutions nor capitation fee could be permitted. To achieve these objects it is open to the State to introduce regulatory measures. We are unable to accept the submissions that the State could intervene only after proving that merit was compromised or capitation fee was being charged. As observed in the earlier decisions of this Court, post-audit measures would not meet the regulatory requirements. Control was required at the initial stage itself.”

. State conducting CET a “reasonable restriction

. Relying on TMA Pai Foundation , the Court held that, State government can conduct CET and it would be protected as a “reasonable restriction”.

. “….right to establish and administer educational institutions is treated as a fundamental right as it is termed ‘occupation’, which is one of the freedoms guaranteed under Article 19(1)(g). It was so recognised for the first time in T.M.A. Pai Foundation. Even while doing so, this right came with certain clutches and shackles. The Court made it clear that it is a noble occupation which would not permit commercialisation or profiteering and, therefore, such educational institutions are to be run on ‘no profit no loss basis’. While explaining the scope of this right, right to admit students and right to fix fee was accepted as facets of this right, the Court again added caution thereto by mandating that admissions to the educational institutions imparting higher education, and in particular professional education, have to admit the students based on merit. For judging the merit, the Court indicated that there can be a CET. While doing so, it also specifically stated that in case of admission to professional courses such a CET can be conducted by the State. If such a power is exercised by the State assuming the function of CET, this was so recognised in T.M.A. Pai Foundation itself, as a measure of ‘reasonable restriction on the said right’.”

. Doctrine of proportionality

. The Court discussed in detail the ‘doctrine of proportionality’ which provides for balancing fundamental rights and reasonable restrictions.

. “Thus, while examining as to whether the impugned provisions of the statute and Rules amount to reasonable restrictions and are brought out in the interest of the general public, the exercise that is required to be undertaken is the balancing of fundamental right to carry on occupation on the one hand and the restrictions imposed on the other hand. This is what is known as ‘Doctrine of Proportionality’.

. We may unhesitatingly remark that this Doctrine of Proportionality, explained hereinabove in brief, is enshrined in Article 19 itself when we read clause (1) along with clause (6) thereof. While defining as to what constitutes a reasonable restriction, this Court in plethora of judgments has held that the expression ‘reasonable restriction’ seeks to strike a balance between the freedom guaranteed by any of the sub-clauses of clause (1) of Article 19 and the social control permitted by any of the clauses (2) to (6).”

. There can be regulatory mechanism even in a liberal economy

. The court also explained the rationale behind regulation of educational institutions which is alleged as anti-free market.

. “With the advent of globalization and liberalization, though the market economy is restored, at the same time, it is also felt that market economies should not exist in pure form. Some regulation of the various industries is required rather than allowing self-regulation by market forces. This intervention through regulatory bodies, particularly in pricing, is considered necessary for the welfare of the society and the economists point out that such regulatory economy does not rob the character of a market economy which still remains a market economy. Justification for regulatory bodies even in such industries managed by private sector lies in the welfare of people. Regulatory measures are felt necessary to promote basic well-being for individuals in need. It is because of this reason that we find Regulatory bodies in all vital industries like, Insurance, Electricity and Power, Telecommunications, etc.”

. It, therefore, held that,

. “…. in any welfare economy, even for private industries, there is a need for regulatory body and such a regulatory framework for education sector becomes all the more necessary. It would be more so when, unlike other industries, commercialisation of education is not permitted as mandated by the Constitution of India, backed by various judgments of this Court to the effect that profiteering in the education is to be avoided.”

. Another Lodha Committee, this time to supervise MCI

. The Court did not leave things there. In what is could be considered a clear case of judicial activism, the Court has now appointed a committee comprising former Chief Justice of India, RM Lodha , former Comptroller and Auditor General, Vinod Rai and Director of Institute of Liver and Biliary Sciences, Shiv Sareen to supervise the functioning of Medical Council of India for a year.

. The court resorted to this step after considering the report submitted by a Committee of experts headed by Dr. Ranjit Roy Chaudhury to the Central government.

. “The Committee examined the existing architecture of the regulatory oversight of the medical profession, that is the MCI. It was observed that the MCI was repeatedly found short of fulfilling its mandated responsibilities. Quality of medical education was at its lowest ebb, the right type of health professionals were not able to meet the basic health need of the country. Products coming out of medical colleges are ill-prepared to serve in poor resource settings like Primary Health Centre and even at the district level. The medical graduates lacked competence in performing basic health care tasks. Instances of unethical practices continued to grow. The MCI was not able to spearhead any serious reforms in medical education. The MCI neither represented the professional excellence nor its ethos. Nominees of Central Government and State Governments were also from corporate private hospitals which are highly commercialized. They were also found to be violating value framework and indulging in unethical practices such as carrying out unnecessary diagnostics tests and surgical procedures in order to extract money from hapless patients. The electoral processes brought about a lot of compromises and tend to attract professionals who may not be best fitted for the regulatory body.”

. CET subject to central law; NEET could render CET moot

. All this exercise could be futile as the judgment has clarified that the right of the State to conduct CET is subject to central law. Thus, if NEET becomes operative (as it has), the matter will have to be resolved between the States and the Centre.

. “The right of a State to do so is subject to a central law. Once the notifications under the Central statutes for conducting the CET called ‘NEET’ become operative, it will be a matter between the States and the Union, which will have to be sorted out on the touchstone of Article 254 of the Constitution. We need not dilate on this aspect any further.”

. Read the full judgment below.

SC constitutes committee comprising RM Lodha J. to oversee functioning of MCI [Read judgment]

Murali Krishnan

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