5-7-11 Justice

Establishing and administering educational institutions is protected by Article 19(1)g and in case of non-profit organizations, Article 26(a). In addition, minorities are given protection under article 30. But what would the freedom to establish and administer educational institutions mean if unaided institutions did not have the right to take two basic decisions: who to educate and what to charge them? For decades these two rights were not given to institutions. This judgment is part of a trend that is gradually restoring these rights to institutions.

The state can no longer regulate admissions made by unaided institutions; it can no longer enforce reservations or appropriate a quota for itself. The Court still does not treat them as absolute rights. While institutions can finally design their own admission procedures, these must now be fair and transparent. The Court will now give more leeway in the setting of fees, but these should not amount to profiteering and certainly prohibit capitation fees.

Apart from restoring greater autonomy, the Court has also been, in a roundabout way, trying to narrow the gap between the liberties enjoyed by minority institutions and the freedoms enjoyed by non-minority unaided institutions. Inamdar is premised on a simple thought: if an institution does not take state aid, it should have the maximum freedom possible, whether it is a minority or a non-minority institution. Article 30 on this view simply gives minorities additional protection. It ensures that minority institutions are not subject to take-over by non-minorities; and it allows that minority institutions can retain their minority character even when aided by the state.

But even the latter aspiration is slightly attenuated. There is an inner tension within our Constitution between Article 29(2) which enjoins that the state shall not discriminate on the basis of religion etc, and Article 30(1) which protects the rights of minority institutions. Does a state-aided institution run afoul of the non-discrimination provisions of our Constitution, if it is allowed to give members of certain communities preferences in admission?

This inner tension within our Constitution produced a interestingly sustained arguments in the opinions of Justice Ruma Pal and Justice Variava in the Pai case. Their respective opinions are as good an introduction to two different conceptions of secularism at work as any. But in the end the Court, as it often does, did not settle the matter on first principles, but opted for something like a modus vivendi. Aided minority institutions should be allowed to retain their minority character. But to prevent these institutions from falling afoul of the non-discrimination provisions, they should admit a sprinkling of non-minority students.

The general trends established in Inamdar towards greater autonomy should be welcomed. No other sector as been as hampered by self-defeating regulatory control as higher education. This ruling also contains some helpful incidental sidelines: it allows for the possibility of cross-subsidies in the setting of fees. But while the statement of principle in Inamdar is more emphatic, its practical operations still look vague.

This particular set of cases arose in part because the Islamic Academy case had made provisions for states to set up committees to regulate institutions to prevent profiteering and capitation fees. But the line between preventing profiteering and unduly regulating fees is a very thin one. Invariably these committees impinged upon the freedom of institutions to set their own fees.

For the time being the Court has let these committees stand. It enjoins states to come up with a suitable regulatory mechanism to prevent profiteering. As the Court acknowledges, higher education is not easy to price. Suppose an institution wants to attract back extraordinary talent, or provide unrivalled infrastructure in terms of libraries, or invest greatly in research etc.These objectives can potentially absorb as many resources as you feed them. Would an institution be legitimate in charging higher to meet these objectives? In other countries, the non-profit status is determined not by looking at quantum of fees, but by the legal and governance structure of the institution. A trust, where no private individuals can take home profits in a conventional sense, is given great leeway in making its decisions. But in the absence of a clear account of non-profiteering ambiguity is likely to remain.

Some questions will also be raised by the manner in which the Court arrived at its conclusions. While I am broadly sympathetic to the Court’s substantive conclusions, I am not sure you can get some of them simply by a reading of Pai as the Court claims. And here again we have another feat of numerology. There is a famous para 68 in Pai that was riddled with tensions. The paragraph began helpfully by saying that it would be unfair to apply the same rules to aided and unaided institutions. But it then went on to blunt its own point by suggesting that the state might, as a condition of recognition, allot a certain percentage of seats to fulfill its objectives according to local needs.

According the Court, Justice Sinha, in Islamic Academy, ‘‘read the same para 68 by paraphrasing it in five parts. However we have reproduced para 68 by dividing it into two parts.’’ And the conclusion: the second para of para 68 merely suggests possible mechanisms to take care of backward sections. It cannot be read as law.

Whether a two-part reading or a five-part paraphrase of a single paragraph produces more clarity will doubtless be debated. I am sympathetic to the Court’s overall line of argument. But it was a little disingenuous of the Court to settle the question of reservations in unaided institutions by resorting to breaks in paragraphs.

A more detailed discussion of the principles at stake would have brought much greater clarity and certainty to law. Government will enact legislation reaffirming state control and regulation over admissions. Would it be constitutionally permissible for the state to appropriate seats in unaided institutions through legislation? It is not clear the Court has answered this question. The real politics will begin now.

The writer is President, Centre for Policy Research