High Court of H.P. IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH SHIMLA

CWP No. 1235 of 2007 with CWP No. 384 of

2008.

Reserved on: 19.06.2013.

Pronounced on: 17.09.2013

___________________________________________________________________

1. CWP No. 1235 of 2007

Bhojia Dental College & Hospital & another …Petitioners.

Versus

State of Himachal Pradesh through Principal Secretary & another.

…Respondents.

2. CWP No. 384 of 2008

Bhojia Charitable Trust & another. ….Petitioners

Versus

State of Himachal Pradesh and others. ….Respondents.

______________________________________________________________

Coram:

The Hon’ble Mr. Justice A.M. Khanwilkar, Chief Justice

The Hon’ble Mr. Justice Kuldip Singh, Judge

Whether approved for reporting? Yes.

___________________________ ___________________________________

For the petitioner(s): Mr. Rajnish Maniktala, Advocate.

For the respondents: Mr. Shrawan Dogra, Advocate General with Mr.

Romesh Verma, Additional Advocate General and

Mr. J.K. Verma, Deputy Advocate General, for

respondents No. 1 & 2.

Mr. Ajay Mohan Goel, Advocate, for respondents

No. 4, 6, 8, 9, 11, 12, 14, 16, 17, 19 to 21, 23 &

24.

___________________________ __________________________________

Justice A.M.Khanwilkar, C.J.

Both these petitions are filed by the Management of Bhojia Dental

College and Hospital, Chandigarh-Nalagarh road at Bhud (Baddi). In the former

writ petition (CWP No. 1235 of 2007), the petitioners have challenged the validity

of the Himachal Pradesh Unaided Dental Colleges (Regulations of Admissions and

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Fixation of Fee for Academic Year 2003-04) Act, 2006, which has come into force

w.e.f. 15.9.2003 and in particular, Section 4 thereof. It is further prayed that the

tuition fees as was notified by the State and upheld by this Court in relation to

academic session 2003-04 be held to be applicable qua the petitioner-College.

Alternatively, the fees prescribed as per notification dated 15.9.2003, may be held

to be applicable in respect of both the categories of students. In the second

petition (CWP No. 384 of 2008), it is prayed that the order dated 8.12.2006

(Annexure P-9) issued under the signature of Additional Secretary (Health)

Government of Himachal Pradesh, as also the decision taken in the meeting of the

Review Committee held on 13.5.2008, notified under the signature of Additional

Secretary (Health)-cum- Principal Secretary, Review Committee, dated 2.6.2008

(Annexure P-11) and any other consequent order passed by the State of Himachal

Pradesh on the basis of the said recommendation, be quashed and set aside. It is

further prayed that the fee structure, as was fixed by the respondents, vide

communication dated 28.7.2005 (Annexure P-6) be restored.

2. To put it differently, the first pe tition is filed in relation to fees

determined for academic session 2003-04 under the Act of 2006, which in turn

validates the notification dated 15.9.2003, allowing the College to collect fees as

prescribed therein from its students admitted against merit seats. The second

petition, however, pertains to the fee structure determined by the Review

Committee, in relation to academic years 2004-05 and 2005-06 to be collected by

the College from its students pursuing BDS courses.

3. In the first petition, after ad verting to the exposition of the

Constitution Bench of the Apex Court in

TMA Pai Foundation and others versus

State of Karnataka and others

1

, and the subsequent Constitution Bench

1

(2002) 8 SCC 481

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decision in Islamic Academy of Education versus State of Karnataka

2

, it has

been asserted that the proposal regarding fee structure of the petitioner-Private

Dental College, which is un-aided and non-minority College, was placed before the

Fee Structure Committee alongwith all the relevant documents and books of

accounts. It is stated that prior to issuance of notification dated 13.2.2004

(Annexure P-1) constituting the Fee Structure Committee for Private Dental

Colleges and after the later judgment of the Supreme Court was delivered, the

State of Himachal Pradesh issued notification dated 15.9.2003, whereby the fee

structure for Private Dental Colleges for academic session 2003-04 was determined.

The relevant portion of the said notification reads thus:

“Government of Himachal Pradesh

Department of Medical Education

No.HFW-B(F)5-10/94-loose

Dated:Shimla-171002, the 15-9-2003

NOTIFICATION

In pursuance to the judgm ent delivered by the Hon’ble

Supreme Court of India in Writ Petition (Civil) No.350 of 1993 i.e.

Islamic Academy of Education and another Vs. State of Karnataka and

others on dated 14.8.2003, the Governor, Himachal Pradesh is

pleased to notify the Fee Structure/Admission Procedure for the

academic session 2003-2004 in respect of BDS Courses for Private

Dental Colleges in Himachal Pradesh as under:-

1. 50% seats for Government sponsored Rs.20,000/- per

student per annum

Candidates out of merit list.

Including all charges except

(Free Merit seats) refundable security.

2. 50% seats for management quota Rs.2.5 lacs

per student per annum

(payment seats) Including all charges except

refundable security.

……………….”

4. Later on, the Fee Structure Committee constituted in terms of

notification dated 13.2.2004, submitted its provisional fee structure for the

academic session 2004-05, which was notified under the signature of Additional

2

(2003) 6 SCC 697

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Secretary (Health) to the Government of Himachal Pradesh on 16.7.2004. The

same reads thus:

“No.HFW-B(A)3-4/2004

Government of Himachal Pradesh

Department of Medical Education

From

Secretary (Health) to the

Government of Himachal Pradesh

To

The Registrar,

HP University, Summer Hill,

Shimla-5.

Dated Shimla-2 the

Subject: Provisional Fee St ructure in r/o Private Un-

aided Dental Colleges in HP for the academic

session 2004-05.

Sir,

I am directed to inform you that a meeting of the Fee

Structure Committee constituted as per the directions of Hon’ble

Supreme Court of India in the IA of Education Vs State of Karnataka

was held on 13.7.2004 at 2:00 P.M. under the Chairmanship of

Hon’ble Mr.Justice V.P. Bhatnagar, (Retired) wherein the Fee

Structure Committee has adopted the following Provisional Fee

Structure in r/o Private Un-aided Dental Colleges in HP for the

academic session 2004-05.

Fee Structure

Name of the

Institution

Provisional Annual

Fee for the

academic session

2004-05

Remarks.

Bhojia Dental

College, Budh,

Nalagarh, HP

Rs.85,000/-

Himachal Dental

College,

Sundernagar HP

Rs.85,000/-

Himachal

Institute of

Dental Sciences,

Paonta Sahib, HP

Rs.90,000/-

MN DAV Dental

College, Tatul,

Solan

Rs.1,00,000/-

1. The provisional fees

will include all fee

payable by a student for

a year except hostel fees

and mess charges

(wherever applicable),

University registration fee

and examination fees.

2. the institution SHALL

NOT collect from

students any amount in

addition to this fee

including contribution to

funds and/or security

deposits

3. This fee structure will

be applicable to both the

State & Management

quotas.

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Note: This Provisional Fee Structure has been adopted subject to the

condition that these fees will be suitably adjusted when the

Committee gives its final decision.

Yours faithfully,

Addl.Secretary (Health) to the

Government of Himachal Pradesh.”

(emphasis supplied)

5. The said provisional fee structure was subject-matter of challenge in

Writ Petition No. 22 of 2004 and connected petitions. The Division Bench of this

Court disposed of the said Writ Petitions vide decision dated 22.12.2004. This

Court noted that consensus was reached amongst all the parties that the Fee

Structure Committee may be directed to re-assess, re-evaluate, re-examine and re-

consider the entire gamut of the fee structure and all issues relating thereto with a

view to find out, determine and ultimately prescribe a final fee structure, totally un-

influenced by the provisional fee structure already adopted/assessed by it. Based

on the said agreement, the Court issued direction to the Fee Structure Committee

to determine the final fee structure and submit its recommendation to the State

Government, who, in turn would notify the fee structure, to be made applicable

institution-wise for the relevant academic sessions. The Division Bench also noted

that the Fee Structure Committee must pass a speaking order while determining

the final fee structure. The aggrieved party was given liberty to take recourse to

appropriate legal proceedings. The Court also noted that the Committee while

determining the final fee structure shall also consider the cases of students who

were admitted prior to the academic session 2004-05 and in the light of law on the

subject including all the Supreme Court judgments, the Committee shall specifically

and categorically decide whether the students admitted before the academic

session 2004-05 would be liable to pay fee as was prevalent at the time of their

admission or they would be regulated by the fee structure as would be prescribed

by the Committee in the ultimate analysis. The Court disposed of the writ petitions

on the abovesaid basis.

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6. Consequent to the direction i ssued by the High Court, the Fee

Structure Committee submitted its recommendation to the State Government, who,

in turn, issued communication dated 28.7.2005 prescribing the fees for academic

sessions 2003-04, 2004-05 and 2005-06. As regards the petitioner-College, the

final fees fixed by the Fee Structure Committee, following the directions of the High

Court was made uniform at Rs.84,000/- for both the categories of students

admitted in the College i.e. free seats and management seats. The said fee

structure published vide communication dated 28.7.2005 was challenged by the

students pertaining to academic session 2003-04, by way of Civil Writ Petition No.

856 of 2005. According to them, the fees for free seats had already been

prescribed at Rs. 20,000/- per year and there was no justification to increase the

same to Rs. 84,000/-. They also asserted that as per the decision of the Apex

Court, the fee structure for State sponsored seats as well as the management seats

could not be different. The said Writ Petition was disposed of on 6.12.2005. The

Court rejected the said challenge and upheld the determination of fees by the

Committee enhancing it to Rs.84,000/- per session in respect of students admitted

against merit seats in academic session 2003-04. The Division Bench of this Court

held that the Committee had taken into account all aspects of the matter for

determining the fee structure and no judicial review of that decision was possible.

That decision attained finality.

7. The State Legislature then en acted the Act of 2006 (hereinafter

referred to as the First Act of 2006), which received the assent of the Governor on

7.3.2006. The said Act reads thus:

“THE HIMACHAL PRADESH PRIVATE UNAIDED DENTAL

COLLEGES (REGULATION OF ADMISSION AND FIXATION OF

FEE FOR ACADEMIC YEAR 2003-2004) ACT, 2006

ARRANGEMENT OF SECTIONS

Sections:

1. Short title and commencement.

2. Application.

3. Definitions.

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4. Fixation and regulation of fee.

5. Power to make rules.

---------------

THE HIMACHAL PRADESH PRIVATE UNAIDED DENTAL

COLLEGES (REGULATION OF ADMISSION AND FIXATION OF

FEE FOR ACADEMIC YEAR 2003-2004) ACT, 2006

(Act No. 4 of 2006)1

(Received the assent of the Governor on 7th March, 2006 and

published in Hindi and English in R.H.P. Extra., dated 8th March, 2006

at pages 7661-7663 and 7664-7666.)

An Act to provide for the regulation and fixation of fee in

Private Unaided Dental Colleges in the State of Himachal

Pradesh for the academic session 2003-2004 in respect of

students admitted against State Government Quota (merit

seats) and the matters connected therewith or incidental

thereto;

BE it enacted by the Legislative Assembly of Himachal Pradesh in the

Fifty-Seventh Year of the Republic of India, as follows:-

1. Short title and commencement.- (1) This Act may be called the

Himachal Pradesh Private Unaided Dental Colleges (Regulation of

Admission and Fixation of Fee for the academic year 2003-2004) Act,

2006.

(2) It shall be deemed to have come into force on the 15th day of

September, 2003.

2. Application.- This Act shall apply to the Private Unaided Dental

Colleges affiliated to Himachal Pradesh University established under

section 2(f) of the University Grants Commission Act, 1956.

3. Definitions.- In this Act, unless the context otherwise requires,- 1

Passed in Hindi by the Himachal Pradesh Vidhan Sabha. For Statement

of Objects and Reasons see R.H.P. Extra., dated 22-2-2006, P. 7111 &

7116.

2(a) “Official Gazette” means the Rajpatra of Himachal Pradesh;

(b) “Private Unaided Dental College” means a college or a school or an

institution by whatever name called, imparting professional education

in Dental Surgery approved by or recognized by the concerned

statutory body and affiliated to the Himachal Pradesh University and

not receiving financial aid or assistance in whole or in part from the

Central or State Government or from anybody, under the control of

Central or State Government;

(c) “State” means State of Himachal Pradesh; and

(d) “State Government” or “Government” means the Government of

Himachal Pradesh.

4. Fixation and regulation of fee.- Notwithstanding anything

contained in any order or judgment passed by any competent court or

any order, notification or instructions issued, the students admitted

against Government Quota (merit seats) during the academic year

2003-04 in Private Unaided Dental Colleges in the State shall continue

to pay fee for the academic year 2003-2004 according to the fee

structure issued vide Notification No. HFW-B(F)5-10/94-loose, dated

15-9-2003 for the entire academic course of Bachelor of Dental

Surgery.

5. Power to make rules.- (1) The State Government may, by

notification published in the Official Gazette, make rules for carrying

out the provisions of this Act.

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(2) Every rule made under this Act shall be laid, as soon as may be

after it is made, before the State Legislative Assembly while it is in

session, for a total period of ten days which may be comprised in one

session or in two or more successive sessions, and if, before the expiry

of session in which it is so laid or the successive sessions aforesaid,

the Legislative Assembly agrees in making any modification in the rule,

or agrees that the rule should not be made, the rule shall thereafter

have effect only in such modified form or be of no effect, as the case

may be, so however, that any such modification or annulment shall be

without prejudice to the validity of anything previously done under that

rule.”

8. The State Legislature enacted an other Act titled as the Himachal

Pradesh Private Medical Educational Institutions (Regulation of Admission and

Fixation of Fee) Act, 2006 (hereinafter referred to as the Second Act of 2006),

which received assent of the Governor on 27

th

September, 2006. This Act is to

provide for regulation of admission and fixation of fee in Private Medical

Educational Institutions in the State of Himachal Pradesh and for the matters

connected therewith or incidental thereto. Section 3 of this Act, no doubt, speaks

about “fix fee” in the Private Medical Institutions, which, however, will have to be

understood as “regulating the fees” determined by the Private Unaided Medical

Institutions on the touchstone of parameters specified in Section 7 of that Act. In

these petitions, however, we are not concerned with the efficacy of provisions of

that Act. For, the present set of petitions pertains to fees determined for academic

sessions 2003-04; 2004-05; and 2005-06.

9. Be that as it may, by virtue of the First Act of 2006, the decision

rendered by the Division Bench of this Court dated 6.12.2005 in CWP No. 856 of

2005, and including the communication dated 28.7.2005 prescribing the fees of

students admitted against the merit/free seats for academic year 2003-04 came to

be overturned. Instead, the notification dated 15.9.2003 was revived. In other

words, by virtue of this enactment, the students admitted against 50% free seats

during the academic year 2003-04 in BDS courses of the Private Dental Colleges in

Himachal Pradesh and including in the petitioner-College became liable to pay only

a sum of Rs.20,000/- per annum including all charges except refundable security;

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as against the fee of Rs.84,000/- per student per annum inclusive of all charges,

except refundable security to be paid by students admitted against 50% seats of

management quota (payment seats) in the same College as per Notification dated

28

th

July, 2005.

10. According to the petitioners, the First Act of 2006 does not refer to

the fees to be charged from the students admitted against the management quota.

As a result, the fees prescribed as per notification dated 15.9.2003 for management

quota being Rs.2.5 lacs per annum, per session, which stood modified to

Rs.84,000/- by virtue of notification dated 28.7.2005 (Annexure P-5) also stood

revived. In other words, the said Act explicitly deals with the students admitted

against free seats and is silent about fees to be charged from students admitted

against management quota. The petitioners being aggrieved by the consequences

flowing from the First Act of 2006, have filed the first writ petition on 6.8.2007 for

the reliefs, as referred to earlier. According to the petitioners, the First Act of 2006

is contrary to the exposition of the Apex Court in TMA Pai’s and Islamic Academy’s

case and including the decision of the Division Bench of this Court in CWP No. 856

of 2005 dated 6.12.2005. The petitioners contend that the fees prescribed by the

Fee Structure Committee was Rs. 84,000/- for all students, irrespective of their

category, for academic year 2003-04. The students who were admitted in the said

academic session would complete their course in the year 2006-07. Thus, the

petitioners would suffer huge financial loss which has been demonstrated in the

calculations provided in the tabular form as follows:

“Number of students taken as Amount in lacs of rupees.

per actual position.

Years 2003-04 2004-05 2005-06 2006-07 Total

i) Tuition fee

@ Rs.20,000/

%

Rs.2,50,000/-

as per Govt.

notification dt.

30x0.20=

6.00

26x2.50=

65.50

Total=

81.50

29x0.20=

5.80

25x2.50=

62.50

Total=

68.30

29x0.20=5.8

0

25x2.50=

62.50

Total= 68.30

29x0.20=

5.80

25x2.50=

62.50

Total=

63.40

286.40

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15.9.03

ii) Uniform

tuition fee @

Rs.84,000/-

fixed by the

Fee Structure

Committee

56x0.84=

47.04

54x0.84=

45.36

54x0.84=

45.36

54x0.84=

45.36

183.12

iii) Tuition fee

as per Act (vide

Bill No.2 of

2006) @

Rs.20,000/- for

Free Seats and

Rs.84,000/- for

payment seats

being claimed

by the

petitioners)

30x0.20=

6.00

26x0.84=

21.84

Total=

27.84

29x0.20=

5.80

25x0.84=

21.00

Total=

26.80

29x0.20=

5.80

25x0.84=

21.00

Total= 26.80

29x0.20=

5.80

25x0.84=

21.00

Total=

26.80

108.24

Less by way of difference (286.40-108.24 = 178.16)

Average loss per year = 178.16/4 = 44.54

178.16

44.54”

11. Relying on the figures reproduced above, the petitioners have

asserted that the fees fixed by the Fee Structure Committee at uniform rate of

Rs.84000/-, would generate only Rs.183.12 lacs. The Management of the College,

therefore, has no option but to incur that expenditure without any profits. If the

petitioners, however, were to charge Rs. 20,000/- from the students admitted

against free seats and Rs. 84,000/- from the students admitted against the

payment seats, in that case the total amount to be generated will be only

Rs.108.24 lacs. That amount will not be enough even to meet the actual expenses

incurred by the College to impart education to its students. The petitioners submit

that in the second situation emanating from the First Act of 2006, the petitioners

could charge only Rs.20,000/- from students admitted against free seats and Rs.

2.5 lacs from students admitted against payment seats, as per the fee structure

notified in terms of notification dated 15.9.2003 (Annexure P-2) - as Section 4 does

not advert to the students admitted against the payment seats. Any other view

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would render the legislation unreasonable and invalid. The petitioners assert that

the decisions of the Apex Court in TMA Pai and Islamic Academy (supra) have done

away with the distinction of fees between free seats and payment seats. The fee

structure in respect of both the categories must, therefore, be uniform. By virtue

of the First Act of 2006, the said distinction will be revived as the College will be

forced to collect different scale of fees from the students admitted against the

payment seats. The students admitted against the free seats, however, would end

up in paying only Rs. 20,000/- per annum. The petitioners assert that the

validating Act can be enacted by the Legislature only to remove the deficiencies

pointed out by the Court. Whereas, the First Act of 2006, is in excess of that power

as it virtually over rules the judgments of the Court. Even, for that reason, it is

invalid and illegal. Lastly, it is urged by the petitioners that as Section 4 refers only

to free seats, the petitioners must be free to collect fees from the students

admitted against the payment seats at least on the basis of the recommendation of

the Fee Structure Committee at Rs. 84,000/- per annum, per student.

12. Reverting to the second petition (CWP No.384 of 2008), it is filed on

29

th

June, 2008, initially, praying for quashing and setting aside of the

communication, dated 8

th

December, 2006, and for restoring the dispensation

specified in communication, dated 28

th

July, 2005. However, during the pendency

of this petition, the Review Committee constituted to review the fee structure of

Private Unaided Dental Colleges in the State for academic years 2004-05 and 2005-

06, determined the fee structure. Even this recommendation of the Review

Committee and the consequent order passed by the State has been challenged by

way of amendment. More or less, the factual position referred to in the first

petition has been reiterated even in the second petition. In this petition,

additionally, reference has been made to notification dated 8.12.2006, which reads

thus:

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“No.HFW-B(A)3-3/2006.

Government of Himachal Pradesh

Department of Medical Education &Research

From

The Principal Secretary (Health) to the

Govt. of Himachal Pradesh.

To

1. The Principal, MN DAV Dental College,

Tatul, Solan, HP.

2. The Principal, Bhojia Dental College, Budh Nalagarh, Distt. Solan, HP

3. The Principal, Himachal Institute of Dental Science, Paonta Sahib,

Distt.Sirmour, HP

4. The Principal, Himachal Dental College, Sundernagar, Distt.Mandi, HP.

Dated Shimla-171002, the 8

th

December, 2006.

Subject:- Review of fee structure fixed earlier for the academic year 2004-05

and 2005-06 in respect of Private Unaided Dental Colleges in HP.

Sir,

In continuation to this department notification of even number dated

24-11-2006, I am directed say that the matter regarding review of fee structure

fixed earlier for the academic year 2004-05 and 2005-06 is active consideration of

the Government and the meeting of the Review Committee so constituted,

scheduled to be very held shortly. Therefore, it has been decided that the fee from

the State Quota students admitted in the academic year 2004-05 and 2005-06 be

charged Rs.50,000/- till the final outcome of recommendation of the Review

Committee.

You are, therefore, requested to take necessary action in the matter

accordingly, under intimation to this department.

Yours faithfully,

Sd/-

Additional Secretary (Health)

to the Govt. of Himachal

Pradesh.”

13. This notification has been impugn ed in the second petition. According

to the petitioners, this notification was illegal and contrary to the exposition of the

Apex Court regarding determination of fees. This notification, however, specifies

provisional fees to be paid by the students admitted during the academic years

2004-05 and 2005-06 as Rs.50,000/- till the final outcome of the recommendation

of the Review Committee. This could not have been done because the amount

specified therein was much less than the amount actually spent by the College for

imparting education and, in particular, determined by the Fee Structure Committee.

If the petitioners were forced to accept fees as specified in the notification, dated

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8.12.2006, it would result in deficit recovery at least of Rs.34,000/- per student per

year. That would inevitably make the institution unviable and forced to be closed

down. According to the petitioners, no material has been adverted to by the

Review Committee as to why the amount should be reduced from Rs.84,000/- to

Rs.50,000/-. Thus, the impugned decision was the outcome of whims and fancies

of the Authorities. In other words, it was colourable exercise of power. Moreover,

the decision has been taken by the Review Committee without convening any

formal meeting and giving opportunity to the petitioners. Further, there was no

guarantee that the Review Committee would finalize the fee structure at an early

date. In the meantime, the students may pass out the degree course and it may

become impossible for the petitioners to recover the deficit amount.

14. As aforesaid, during the pendency of the second writ petition, as final

decision was taken by the Review Committee, the petitioners have challenged that

decision, dated 2

nd

June, 2008, (Annexure P-11), by amending the petition.

Annexure P-11 reads thus:

“Proceeding of the meeting of the Review Committee constituted to

review Fee fixed earlier in respect of Private Unaided Dental Colleges

in HP for the academic session 2004-05 and academic sessions 2005-

06 held on 13.05.2008 under the Chairmanship of Dr.J.R. Thakur,

Director Medical Education & Research, H.P. Shimla.

________________________ ________________________

1. Meeting of the Review Committee constitution by the Government

vide Notification No.HFW-B(A)3-3/2006, dated 24-11-2006, to review

the fee structure fixed in respect of Private Un-aided Dental Colleges

for the academic sessions of 2004-05 and 2005-06, was held under

the Chairmanship of Dr.J.R. Thakur, Director Medical Education &

Research, HP. The following attended the meeting:

i. Sh.Rakesh Kanwar, Additional Secretary (Health) to the

Govt. of HP, Shimla_________________Member

ii. Dr.(Mrs.) Ashu Bhardwaj, Principal, HP Govt. Dental

College, Shimla_____________Member

Apart from the above committee members, following officers were

also present with the approval of the Chair:

i. Dr.Surender Kashyap, Principal, IGMC, Shimla

ii. Sh.D.C. Negi, Additional Director (Admn) IGMC, Shimla.

iii. Sh.Narender Thakur, Assistant Accounts Officer (F&A), IGMC,

Shimla.

2. The Member Secretary apprised the members of the Committee

that

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a. Prior to commencement of Act namely The Himachal Pradesh

Private Medical Educational Institutions (Regulation of Admission and

Fixation of Fee) Act, 2006, there was a Fee Structure Committee

constituted under the Chairmanship of Mr.Justice V.P. Bhatnagar. This

Committee fixed uniform fee for both category of students in the

private unaided medical colleges of the state (i.e. for State Quota

Seats and Management Quota Seats) for the academic session 2003-

04, 2004-05 and 2005-06.

b. During the year 2006 State Government enacted two legislations to

regulate admission and fixation of fee in respect of private un-aided

medical education institutions. As per the provisions contained in one

of the Acts the State Government fixed a fee of Rs.20,000/- per

student/per annum in case of State Quota Students admitted during

the academic session 2003-04.

c. Further, the State Government acting under clause 4 of Section 7 of

The Himachal Pradesh Private Medical Educational Institutions

(Regulation of Admission and Fixation of Fee) Act, 2006, constituted

this Review Committee vide notification dated 24.11.2006. Also, the

State Government issued directions to charge Rs.50,000/- per annum

from the State Quota students admitted in the academic years 2004-

05 and 2005-06 till the final outcome of recommendation of the

Review Committee.

d. However the Review Committee could not meet and recommend

the fee structure earlier. Therefore, the meeting has now been

convened to review the fee fixed for the academic sessions of 2004-

05 and 2005-06.

e. The position regarding the fixed by the Justice Bhatnagar

Committee in respect of Private Unaided Dental Colleges in the State

for the academic year 2003-04, 2004-05 and 2005-06 (College-wise)

for both State Quota and Management Quota Students and the fee

that was ordered to be charged from the State Quota Students by the

government is as follows:

Name of College and

number of seats

Final fee fixed by

Justice Bhatnagar

Committee (in Rs.)

Fee fixed by the

Government (in Rs.)

M.N.D.A.V. Dental College Solan (60 seats)

84000/- 50,000/-

Bhojia Dental College &

Hospital Budh Nalagarh

(60 seats)

84000/- 50,000/-

Himachal Dental

College, Sundernagar

(60 seats)

63000/- 50,000/-

Himachal Institute of

Dental Sciences, Paonta

Sahib (100 seats)

65000/- 50,000/-

3. The Committee discussed the matter and it was decided

unanimously that it will not be proper to recommend any change in

the fee fixed for state quota students by the government (@ Rupees

50,000/- per student per annum) at this stage as the students who

were admitted in the academic years of 2004-05 and 2005-06 are

paying the fee of rupees 50,000/- per student per annum since their

admission which his 2.5 times more than the fee of rupees 20,000 per

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student per annum fixed by the government for the year 2003-04. In

view of this all members of the Committee unanimously decided to

recommend that no change in the fee Rs.50,000/- per student per

annum in case of students admitted against State Quota Seats during

the academic year 2004-05 and 2005-06 was required.

4. The meeting ended with a vote of thanks to the Chair.

Sd/-

Additional Secretary (Health)

-Cum-Member Secretary,

Review Committee.”

15. According to the petitioners, this decision taken by the Review

Committee was illegal and contrary to the exposition of the Apex Court in TMA Pai

and Islamic Academy cases (supra).

16. We have heard counsel for the parties.

17. Before we deal with the grie vance of the petitioners about the

validity of the First Act of 2006 and also about the modality followed by the

Authorities in determining the fee structure contrary to the aspirations of the

petitioners, we deem it apposite to advert to the legal exposition expounded by the

Constitution Bench of the Apex Court. In the case of TMA Pai (supra), the Court

considered the efficacy of the scheme, in particular regarding fee structure

enunciated in Unni Krishnan’s case, which was followed by the Governments, and

found that the same was not reasonable restriction under Article 19(6) of the

Constitution. The Apex Court went on to observe as follows:

“35…………………Normally, the reason for establishing an educational

institution is to impart education. The institution thus needs qualified

and experienced teachers and proper facilities and equipment, all of

which require capital investment. The teachers are required to be

paid properly. As pointed out above, the restrictions imposed by the

scheme, in Unni Krishnan's case, made it difficult, if not impossible,

for the educational institutions to run efficiently. Thus, such

restrictions cannot be said to be reasonable restrictions.

36. The private unaided educational institutions impart education,

and that cannot be the reason to take away their choice in matters,

inter alia, of selection of students and fixation of fees. Affiliation and

recognition has to be available to every institution that fulfills the

conditions for grant of such affiliation and recognition. The private

institutions are right in submitting that it is not open to the Court to

insist that statutory authorities should impose the terms of the

scheme as a condition for grant of affiliation or recognition; this

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completely destroys the institutional autonomy and the very objective

of establishment of the institution.

37. The Unni Krishnan judgment has created certain problems, and

raised thorny issues. In its anxiety to check the commercialization of

education, a scheme of "free" and "payment" seats was evolved on

the assumption that the economic capacity of the first 50% of

admitted students would be greater than the remaining 50%,

whereas the converse has proved to be the reality. In this scheme,

the "payment seat" student would not only pay for his own seat, but

also finance the cost of a "free seat" classmate. When one considers

the Constitution Bench's earlier statement that higher education is not

a fundamental right, it seems unreasonable to compel a citizen to pay

for the education of another, more so in the unrealistic world of

competitive examinations which assess the merit for the purpose of

admission solely on the basis of the marks obtained, where the urban

students always have an edge over the rural students. In practice, it

has been the case of the marginally less merited rural or poor student

bearing the burden of a rich and well-exposed urban student.

38. The scheme in Unni Krishnan's case has the effect of nationalizing

education in respect of important features, viz., the right of a private

unaided institution to give admission and to fix the fee. By framing

this scheme, which has led to the State Governments legislating in

conformity with the scheme, the private institutions are

indistinguishable from the government institutions; curtailing all the

essential features of the right of administration of a private unaided

educational institution can neither be called fair or reasonable. ……… .

…………….. ……………….. …………..

45. In view of the discussion hereinabove, we hold that the decision

in Unni Krishnan's case, insofar as it framed the scheme relating to

the grant of admission and the fixing of the fee, was not correct, and

to that extent, the said decision and the consequent directions given

to UGC, AICTE, Medical Council of India, Central and State

governments, etc., are overruled.

…………….. ……………….. …………..

56. …………………It has, therefore, to be left to the institution, if it

chooses not to seek any aid from the government, to determine the

scale of fee that it can charge from the students. One also cannot

lose sight of the fact that we live in a competitive world today, where

professional education is in demand. We have been given to

understand that a large number of professional and other institutions

have been started by private parties who do not seek any

governmental aid. In a sense, a prospective student has various

options open to him/her where, therefore, normally economic forces

have a role to play. The decision on the fee to be charged must

necessarily be left to the private educational institution that does not

seek or is not dependent upon any funds from the government.

57. We, however, wish to emphasize one point, and that is that

inasmuch as the occupation of education is, in a sense, regarded as

charitable, the government can provide regulations 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 is clear that

an educational institution cannot charge such a fee as is not required

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for the purpose of fulfilling that object. To put it differently, in the

establishment of an educational institution, the object should not be

to make a profit, inasmuch as education is essentially charitable in

nature. There can, 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.

…………….. ……………….. …………..

69. In such professional unaided institutions, the Management will

have the right to select teachers as per the qualifications and eligibility

conditions laid down by the State/University subject to adoption of a

rational procedure of selection. A rational fee structure should be

adopted by the Management, which would not be entitled to charge a

capitation fee. Appropriate machinery can be devised by the state or

university to ensure that no capitation fee is charged and that there is

no profiteering, though a reasonable surplus for the furtherance of

education is permissible. Conditions granting recognition or affiliation

can broadly cover academic and educational matters including the

welfare of students and teachers.”

(emphasis supplied)

18. In the subsequent decision in Islamic Academy of Education (supra),

the Apex Court once again examined the issue as to whether the educational

institutions are entitled to determine their own fee structure and answered the

same in favour of the educational institutions. In paragraph 7, while considering

that question, the Apex Court observed thus:

“7.…………………………………………………..The Committee will be at

liberty to approve the fee structure or to propose some other fee

which can be charged by the institute. The fee fixed by the

Committee shall be binding for a period of three years, at the end of

which period the institute would be a liberty to apply for revision.

Once fees are fixed by the Committee, the institute cannot charge

either directly or indirectly any other amount over and above the

amount fixed as fees. If any other amount is charged, under any

other head or guise e.g. donations the same would amount to

charging of capitation fee. The Governments/ appropriate authorities

should consider framing appropriate regulations, if not already

framed, whereunder if it is found that an institution is charging

capitation fees or profiteering that institution can be appropriately

penalised and also face the prospect of losing its

recognition/affiliation.”

(emphasis supplied)

19. It will be useful to refer to paragraph 155 of the same decision, to

which our attention was invited by the petitioners. The same read thus:

“155. While determining the fee structure, safeguard has to be

provided for so that professional institutions do not become auction

houses for the purpose of selling seats. Having regard to the

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statement of law laid down in para 56 of the judgment, it would have

been better, if sufficient guidelines could have been provided for.

Such a task which is a difficult one has to be left to the Committee.

While fixing the fee structure the Committee shall also take into

consideration, inter alia, the salary or remuneration paid to the

members of the faculty and other staff, the investment made by

them, the infrastructure provided and plan for future development of

the institution as also expansion of the educational institution. Future

planning or improvement of facilities may be provided for. An

institution may want to invest in an expensive device (for medical

colleges) or a powerful computer (for technical college). These factors

are also required to be taken care of. The State must evolve a

detailed procedure for constitution and smooth functioning of the

Committee.”

(emphasis supplied)

20. The other authority of the Consti tution Bench of the Apex Court on

the question of fee structure, is, the case of P.A. Inamdar and others vs. State

of Maharashtra and others

3

. The Apex Court restated the principle expounded

by it in the earlier decisions. While dealing with question Nos.3 and 4 posed in

paragraph 27 of the judgment, the Apex Court in paragraphs 139 to 151 observed

thus:

“Q.3. Fee; regulation of

139. To set 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, as per the law declared in Pai

Foundation. Every institution is free to devise its own fee structure

subject to the limitation that there can be no profiteering and no

capitation fee can be charged directly or indirectly, or in any form

(Paras 56 to 58 and 161 [Answer to Q.5(c)] of Pai Foundation are

relevant in this regard).

Capitation Fees

140. Capitation fee cannot be permitted to be charged and no seat

can be permitted to be appropriated by payment of capitation fee.

'Profession' has to be distinguished from 'business' or a mere

'occupation'. While in business, and to a certain extent in occupation,

there is a profit motive, profession is primarily a service to society

wherein earning is secondary or incidental. A student who gets a

professional degree by payment of capitation fee, once qualified as a

professional, is likely to aim more at earning rather than serving and

that becomes a bane to the society. The charging of capitation fee by

unaided minority and non-minority institutions for professional

courses is just not permissible. Similarly, profiteering is also not

3

(2005) 6 SCC 537

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permissible. Despite the legal position, this Court cannot shut its eyes

to the hard realities of commercialization of education and evil

practices being adopted by many institutions to earn large amounts

for their private or selfish ends. If capitation fee and profiteering is to

be checked, the method of admission has to be regulated so that the

admissions are based on merit and transparency and the students are

not exploited. It is permissible to regulate admission and fee structure

for achieving the purpose just stated.

141. Our answer to Question-3 is that every institution is free to

devise its own fee structure but the same can be regulated in the

interest of preventing profiteering. No capitation fee can be charged.

Q.4. Committees formed pursuant to Islamic Academy

142. Most vehement attack was laid by all the learned counsel

appearing for the petitioner-applicants on that part of Islamic

Academy which has directed the constitution of two committees

dealing with admissions and fee structure. Attention of the Court was

invited to paras 35,37, 38, 45 and 161 (answer to question 9) of Pai

Foundation wherein similar scheme framed in Unni Krishnan was

specifically struck down. Vide para 45, Chief Justice Kirpal has clearly

ruled that the decision in Unni Krishnan insofar as it framed the

scheme relating to the grant of admission and the fixing of the fee,

was not correct and to that extent the said decision and the

consequent directions given to UGC, AICTE, MCI, the Central and the

State Governments etc. are overruled. Vide para 161, Pai Foundation

upheld Unni Krishnan to the extent to which it holds the right to

primary education as a fundamental right, but the scheme was

overruled. However, the principle that there should not be capitation

fee or profiteering was upheld. Leverage was allowed to educational

institutions to generate reasonable surplus to meet cost of expansion

and augmentation of facilities which would not amount to

profiteering. It was submitted that Islamic Academy has once again

restored such Committees which were done away with by Pai

Foundation.

143. The learned senior counsel appearing for different private

professional institutions, who have questioned the scheme of

permanent Committees set up in the judgment of Islamic Academy,

very fairly do not dispute that even unaided minority institutions can

be subjected to regulatory measures with a view to curb

commercialization of education, profiteering in it and exploitation of

students. Policing is permissible but not nationalization or total take

over, submitted Shri Harish Salve, the learned senior counsel.

Regulatory measures to ensure fairness and transparency in

admission procedures to be based on merit have not been opposed as

objectionable though a mechanism other than formation of

Committees in terms of Islamic Academy was insisted on and pressed

for. Similarly, it was urged that regulatory measures, to the extent

permissible, may form part of conditions of recognition and affiliation

by the university concerned and/or MCI and AICTE for maintaining

standards of excellence in professional education. Such measures

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have also not been questioned as violative of the educational rights of

either minorities or non- minorities.

144. The two committees for monitoring admission procedure and

determining fee structure in the judgment of Islamic Academy, are in

our view, permissive as regulatory measures aimed at protecting the

interest of the student community as a whole as also the minorities

themselves, in maintaining required standards of professional

education on non-exploitative terms in their institutions. Legal

provisions made by the State Legislatures or the scheme evolved by

the Court for monitoring admission procedure and fee fixation do not

violate the right of minorities under Article 30(1) or the right of

minorities and non-minorities under Article 19(1)(g). They are

reasonable restrictions in the interest of minority institutions

permissible under Article 30(1) and in the interest of general public

under Article 19(6) of the Constitution.

145. The suggestion made on behalf of minorities and non-minorities

that the same purpose for which Committees have been set up can be

achieved by post-audit or checks after the institutions have adopted

their own admission procedure and fee structure, is unacceptable for

the reasons shown by experience of the educational authorities of

various States. Unless the admission procedure and fixation of fees is

regulated and controlled at the initial stage, the evil of unfair practice

of granting admission on available seats guided by the paying

capacity of the candidates would be impossible to curb.

146. Non-minority unaided institutions can also be subjected to similar

restrictions which are found reasonable and in the interest of student

community. Professional education should be made accessible on the

criterion of merit and on non-exploitative terms to all eligible students

on an uniform basis. Minorities or non-minorities, in exercise of their

educational rights in the field of professional education have an

obligation and a duty to maintain requisite standards of professional

education by giving admissions based on merit and making education

equally accessible to eligible students through a fair and transparent

admission procedure and on a reasonable fee-structure.

147. In our considered view, on the basis of judgment in Pai

Foundation and various previous judgments of this Court which have

been taken into consideration in that case, the scheme evolved of

setting up the two Committees for regulating admissions and

determining fee structure by the judgment in Islamic Academy cannot

be faulted either on the ground of alleged infringement of Article

19(1)(g) in case of unaided professional educational institutions of

both categories and Article 19(1)(g) read with Article 30 in case of

unaided professional institutions of minorities.

148. A fortiori, we do not see any impediment to the constitution of

the Committees as a stopgap or adhoc arrangement made in exercise

of the power conferred on this Court by Article 142 of the Constitution

until a suitable legislation or regulation framed by the State steps in.

Such Committees cannot be equated with Unni Krishnan Committees

which were supposed to be permanent in nature.

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149. However, we would like to sound a note of caution to such

Committees. The learned counsel appearing for the petitioners have

severely criticised the functioning of some of the Committees so

constituted. It was pointed out by citing concrete examples that some

of the Committees have indulged in assuming such powers and

performing such functions as were never given or intended to be

given to them by Islamic Academy. Certain decisions of some of the

Committees were subjected to serious criticism by pointing out that

the fee structure approved by them was abysmally low which has

rendered the functioning of the institutions almost impossible or made

the institutions run into losses. In some of the institutions, the

teachers have left their job and migrated to other institutions as it

was not possible for the management to retain talented and highly

qualified teachers against the salary permitted by the Committees.

Retired High Court Judges heading the Committees are assisted by

experts in accounts and management. They also have the benefit of

hearing the contending parties. We expect the Committees, so long as

they remain functional, to be more sensitive and to act rationally and

reasonably with due regard for realities. They should refrain from

generalizing fee structures and, where needed, should go into

accounts, schemes, plans and budgets of an individual institution for

the purpose of finding out what would be an ideal and reasonable fee

structure for that institution.

150. We make it clear that in case of any individual institution, if any

of the Committees is found to have exceeded its powers by unduly

interfering in the administrative and financial matters of the unaided

private professional institutions, the decision of the Committee being

quasi-judicial in nature, would always be subject to judicial review.

151. On Question-4, our conclusion, therefore, is that the judgment in

Islamic Academy, in so far as it evolves the scheme of two

Committees, one each for admission and fee structure, does not go

beyond the law laid down in Pai Foundation and earlier decisions of

this Court, which have been approved in that case. The challenge to

setting up of two Committees in accordance with the decision in

Islamic Academy, therefore, fails. However, the observation by way

clarification, contained in the later part of para 19 of Islamic Academy

which speaks of quota and fixation of percentage by State

Government is rendered redundant and must go in view of what has

been already held by us in the earlier part of this judgment while

dealing with Question No.1.”

(emphasis supplied)

21. From the extracted portion of th e aforesaid decisions, there is no

manner of doubt that it is the prerogative muchless right of the educational

institution to decide its own fee structure. The Review Committee has to evaluate

as to whether that fee structure does or does not result in profiteering,

commercialization or demanding capitation fee. The Review Committee is expected

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to examine the justification given by the educational institution and record its

satisfaction, one way or the other, by a speaking order and reasons to be recorded

therefor. That Committee has to bear in mind the broad contours delineated by the

Apex Court in paragraph 155 of the Islamic Academy and paragraph 149 of P.A.

Inamdar (supra).

22. Reverting to the challenge in the first petition, it is in relation to the

fees pertaining to the academic session 2003-04. The same were governed by

notification, dated 15

th

September, 2003. That, however, underwent change qua

the merit seats by virtue of the First Act of 2006. The petitioners have, therefore,

challenged the validity of the First Act of 2006. What has been argued by the

petitioners is that although the said Act is a validating Act, the effect thereof is to

disregard and overturn the decisions of the Court. That is plainly impermissible.

For, the Legislature has power to legislate only to remove the deficiencies pointed

out by the Court; whereas, the First Act of 2006 effaces the substratum of the

conclusion and the legal opinion on the basis of which the judgments are founded.

By virtue of the notification, which has been validated by the First Act of 2006, the

right of the educational institution to determine and charge rational fees from its

students has been clearly impinged upon, as has been expounded by the Apex

Court in the aforesaid decisions. The respondents, on the other hand, have relied

on the statement of objects and reasons for enacting the said Act of 2006. The

same reads thus:

“STATEMENT OF OBJECTS AND REASONS

The Supreme Court orders in Islamic Academic Education Vs. State of

Karnataka was pronounced on 14.08.2003 yet the Fee Structure

Committee could not be constituted till September, 2003, therefore,

as per directions of the Supreme Court of India the fees for private

Unaided Dental Colleges in Himachal Pradesh was to be fixed by the

Fee Structure Committee after 14.08.2003, therefore, the fee

structure for the year 2003-04 was fixed by the State Government

vide Notification No. HFW-B(F)-5-10/94-loose dated 15.09.2003 i.e.

Rs.20,000/- for 50% State Quota (merit seats) and Rs.2,50,000/- for

50% Management Seats (Payments seats) per student/per annum.

However, the fees fixed by the State Government was challenged in

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the Hon’ble High Court of Himachal Pradesh vide CWP No.763/03

titled as Trisha Sharma V/S State of HP and thereafter CWP No.22/04,

824/04 and 990/04, the Hon’ble High Court has directed that the fees

fixed by the State Government for the year 2003-04 will be provisional

and Fee Structure Committee will consider as to accept the same or

again fix the fees for the year 2003-04.

As per direction of the Hon’ble High Court of Himachal Pradesh,

the issue was considered by the Fee Structure Committee and has

fixed the final fee structure in respect of Private Unaided Dental

Colleges in Himachal Pradesh for the year 2003-04, i.e. Rs.84,000/-

each for Mathuram Nirmala Devi College, Solan and Bhojia Dental

College & Hospital, Budh Nalagarh, Rs.65,000/- for Himachal Institute

of Dental Science, Paonta Sahib and Rs.63,000/- for Himachal Dental

College, Sundernagar, per student/per annum.

Keeping in view of the judgment of Supreme Court in case

titled TMA Pai Vs. State of Karnataka (2002) 8 SCC 481, the Fee

Structure Committee has done away with the practice of charging less

fee from merit seats (State Quota candidates) and has brought at par

with categories of students of management seats by framing

same/uniform rate fees, which is much higher side for the students

admitted against State Quota (merit seats). Due to this reason the

purpose of Government to keep 50% seats as free merit seats (State

Quota) and charge subsidized fees from them got defeated and the

private colleges may get undue benefit.

The fee structure for 50% Government seats (merit seats) in

Private Unaided Dental Colleges for the year 2003-04 was fixed @

Rs.20,000/- per student/per annum by the Government after due

consideration of all aspects, whereas the Fee Structure Committee so

constituted later on fixed the fee ranging from Rs.63,000/- to

Rs.84,000/- per student/per annum with retrospective effect on

uniform pattern to all categories of students i.e. Merit/payment seats.

Since the students already admitted against merit seats opted

for admission in the above Private Unaided Dental Colleges keeping in

view of the fee amount of Rs.20,000/- per annum and if they were

aware of the fact that the fee against these seats will be fixed ranging

from 63,000/- to Rs.84,000/- per student/per annum, they would not

have opted for admission in these colleges. Therefore, the

enhancement of fee for the academic year 2003-04 retrospectively,

has adversely affected the students and there is widespread

resentment amongst the parents and students already admitted

against merit seats in Private Unaided Dental Colleges during the

academic sessions 2003-04. Thus, in order to protect the interest of

the students admitted against merit seats, during academic year

2003-04 in various private Unaided Dental Colleges and to save their

future, it has been decided to bring legislation which seeks to provide

for regularization and fixation of fee in respect of students admitted

against State Quota (merit seats) for academic year 2003-04 in the

private Unaided Dental Colleges in the State.

The Bill seeks to achieve the aforesaid objectives.

Shimla (VIRBHADRA SINGH)

The-------2006. CHIEF MINISTER.”

(emphasis supplied)

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23. According to the respondents, the First Act of 2006 has been enacted

in public interest because of the wide spread resentment amongst the parents and

students already admitted against merit seats in Private Unaided Dental Colleges

during the academic year 2003-04. The said Act purports to regularize and fix the

fees in respect of students admitted against the State quota (merit seats) for the

said academic year (2003-04) and it does not result in overturning the legal

position expounded by the Apex Court as such. Further, it was open to the State to

treat the students admitted to the course in the academic sessions 2003-04 as a

separate class of persons and legislate on the subject of fees to be paid by them to

the Unaided Private Educational Institutions. By enacting a statute, the Legislature

was free to give retrospective effect to such dispensation.

24. In support of these submissions, learned Advocate General relied on

the decision of the Apex Court in the case of State of H.P. and others vs. Yash

Pal Garg (dead) by LRs. and others

4

. The Apex Court, in paragraphs 24 and 25

of this decision, has observed thus:

“24. The High Court also held that 1991 Act was ultra vires the power

of the legislature as it has over-ruled the decision rendered in earlier

writ petition in case of M/s Yash Pal Garg. This reason also cannot be

sustained as it is settled law that the Legislature can change the basis

on which a decision is rendered invalidating the Act and there by

validating the legislation which has been declared to be null and void.

The cause for invalidating the Act can be removed and if such cause

is removed, it cannot be said that the Legislature had acted beyond

its competence.

25. The Legislature under the Constitution has within the prescribed

limits powers to make laws prospectively as well as retrospectively. By

exercise of its powers, the Legislature can remove the basis of a

decision rendered by a competent Court there by rendering that

decision ineffective. {Re. The Municipal Corporation of the City of

Ahmedabad and Another etc. etc. v. The New Shrock Spg. And Wvg.

Co. Ltd. etc. etc.

[(1970) 2 SCC 280]. In Cauvery Water Disputes

Tribunal

[(1993) Supp 1 SCC 96 (II)], same view is taken.”

(emphasis supplied)

4

(2003) 9 SCC 92

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25. Reliance has also been placed on the decision in the case of Tamil

Nadu Electricity Board and another Vs. Status Spinning Mills Limited and

another

5

. In paragraphs 42, 49, 51 and 52 of the said decision, the Court

observed thus:

“42. A statute, even a subordinate legislation, may have to be

construed reasonably. A subordinate legislation ordinarily would not

be given a retrospective effect. Retrospective effect can be granted

only if there exists any power in that behalf. There is nothing to show

that such a power has been conferred upon the State in terms of the

Act. While saying so, we are not oblivious of the situation that the

State has a statutory power to fix the tariff. It may also be true that

when a statutory power is conferred, the State would have power to

amend, alter, modify or rescind the same. The Court must also bear

in mind that it may not cause undue hardship. What we mean to say

that if construction of a statute is possible as a result of hardship is

avoided, vis-a-vis, an undue hardship would be created, the court will

prefer the former interpretation.

…………. ………….. ……………….

49. It is not a case where decisions were altered pursuant to any

representation made by the State. Concessions in tariff had been

granted by reason of a statutory provision. Such concessions could

also be withdrawn. If the appellants have not altered their position

pursuant to any promise, the doctrine of promissory estoppel would

not apply. If that be so, the question of any right being vested in the

appellants would also not apply. In any event, the reasonableness of

the statute was not the subject matter of the writ petition. The

provisions have not been sought to be declared ultra vires. Even

otherwise, the State while amending statute stated about the public

interest necessitated the same. When a statute is amended keeping in

view the public interest even the concession can be withdrawn with

retrospective effect.

…………. ………….. ……………….

51. A distinction must be made between a policy decision and a

statute. Whereas prima facie a policy decision may not have any

retroactive operation, a statute may have. Only because it affects a

past transaction the same, by itself, would not come in the way of the

legislature in enacting an enactment or the executive government to

exercise its power of subordinate legislation.

52. We have noticed hereinbefore that some of the industries had

even installed generators. They had to do it. They inevitably had to do

it because the Board would not supply power. Would it not be too

much to contend that even those industries have not been set up as

they have not become consumers? We think that for the said

purpose, the proviso has to be read down. It must be made applicable

5

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to them who not only had started commercial production before the

said date, namely, 14.02.1997 but also had applied and were

otherwise ready to take electrical connections having deposited the

amount asked for. Those hard cases, even according to Mr. Ganguli,

should be brought within the purview of the proviso. We, therefore,

hold:

1. As the concession had been granted by the State, it had the

power to withdraw the same.

2. It is not a case where in view of the doctrine of promissory

estoppel, the State could not have in law amended the

Schedule.

3. In view of existence of public interest the doctrine of

promissory estoppel would have no application.

4. Even otherwise the appellants having not preferred appeals

against the judgment of the Division bench of the High Court,

the said questions cannot be permitted to be raised before us.

5. Proviso appended to-the main provision should be read

down as stated in paragraphs 44 and 45 supra.

6. In view of our findings aforementioned, we have not gone

into the merit of the matter involved in each case separately.”

26. The question is: whether th e First Act of 2006 tantamounts to

changing the basis of the decision of the Court? Indeed, in the present case, the

decisions of the Apex Court are not in relation to any legislation or invalidating an

Act made by the Legislature as such. No legislation with regard to the subject of

fee structure was in force. It is also true that the intent behind the Act of 2006 is

to secure the interests of the students already admitted to the course for academic

session 2003-04 on the basis of representation made to them that the fees in

respect of admissions to merit seats in private unaided Colleges would be only

Rs.20,000/-. However, the decision of the Apex Court, being law declared under

Article 141 of the Constitution, the Authorities as well as the Private Unaided

Colleges were under obligation to charge uniform fees from both categories of

students – whether admitted against merit seats or paid seats, and the fee

structure does not result in profiteering, commercialization or collection of

capitation fees. The fact that there was wide spread resentment amongst the

parents and the students, by itself, could be no justification to enact a law which,

on the face of it, is against the spirit of the decisions of the Apex Court. As

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aforesaid, the Apex Court has explicitly held that it is the right of the educational

institution to determine the fee structure. The only limitation which can be said to

be reasonable restriction, is that, the fee structure should not result in profiteering,

commercialization or collection of capitation fee. That is the sole matter for

regulation. In other words, the State Authorities cannot determine the fee structure

of Private Un-aided Institutions. The Apex Court, therefore, directed constitution of

Review Committee to examine this limited aspect. That exercise is to be done on

case to case basis and not by a general fiat, as is the effect of enacting the first Act

of 2006. Further, the notification, dated 15

th

September, 2003 prescribes uniform

fee of Rs.20,000/- per student per annum in respect of free seats in all the private

Colleges in the State, whereas the fee structure approved by the Fee Structure

Committee in respect of academic year 2003-04 qua the petitioner-College is

Rs.84,000/- per seat per annum, irrespective of the category of seat – be it free

seat or paid seat – vide notification dated 28

th

July, 2005. As a matter of fact, that

notification was subject matter of challenge in Writ Petition No. 856 of 2005 at the

instance of students admitted to the course for academic session 2003-04, which

came to be rejected. In other words, the right of the petitioner-College to charge

uniform fees at Rs.84,000/- per seat per annum was not only affirmed by the

Committee but also upheld by this Court. The First Act of 2006, therefore, in effect,

attempts to overturn the decisions of the Court. The statement of objects and

reasons provide no indication that the said Act was necessitated to remove the

basis which led to the Court’s decision. It merely mentions that enhancement of

fees for the academic year 2003-04 retrospectively, has adversely affected the

students and there was wide spread resentment amongst the parents and the

students already admitted against merit seats in Private Unaided Dental Colleges

during the academic session 2003-04 and that seeks to provide for regularization

and fixation of fees in respect of those students. The decision of the Apex Court, in

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no uncertain terms, expound that determination of fees is the right of the Private

Unaided Educational Institutions. The State can only regulate the same and the

only restriction is that the fees should not result in profiteering, commercialization

or collection of capitation fee.

27. The Apex Court in Virender Singh Hooda and others vs. State of

Haryana and another

6

, has restated the legal position that though the

Legislature has no power to sit over Court's judgment or usurp judicial power, but,

it has, subject to the competence to make law, power to remove the basis which

led to the Court's decision. The Legislature, however, has no power to change a

judgment of Court of law either retrospectively or prospectively. In paragraphs 33

to 35, the Court observed thus:

“33. The legislative power to make law with retrospective effect is

well recognised. It is also well settled that though the Legislature has

no power to sit over Court's judgment or usurp judicial power, but, it

has, subject to the competence to make law, power to remove the

basis which led to the Court's decision. The Legislature has power to

enact laws with retrospective effect but has no power to change a

judgment of Court of law either retrospectively or prospectively. The

Constitution clearly defines the limits of legislative power and judicial

power. None can encroach upon the field covered by the other. The

laws made by the Legislature have to conform to the constitutional

provisions…………………

34. Every sovereign Legislature possesses the right to make

retrospective legislation. The power to make laws includes power to

give it retrospective effect. Craies on Statute Law (7th Edn.) at page

387 defines retrospective statutes in the following words.

"A statute is deemed to be retrospective which takes

away or impairs any vested right acquired under existing

laws, or creates a new obligation, or imposes a new

duty, or attaches a new disability in respect to trans-

actions or considerations already past".

Judicial Dictionary ; [13th Edition) K.J. Aiyar, Butterworth, pg. 857,

states that the word 'retrospective' when used with reference to an

enactment may mean (i) affecting an existing contract; or (ii) re-

opening up of past, closed and completed transaction; or (ill) affecting

accrued rights and remedies; or (iv) affecting procedure. Words and

Phrases; Permanent Edition; Vol. 37A pages 224/225, defines a

'retrospective' or 'retroactive law' as one which takes away or Impairs

vested or accrued rights acquired under existing laws. A retroactive

law takes away or impairs vested rights acquired under existing laws,

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or creates a new obligation, imposes a new duty, or attaches a new

disability, in respect to transactions or considerations already past.

35. In Harvard Law Review, Vol.73, p. 692 it was observed that

"it is necessary that the Legislature should be able to

cure inadvertent defects in statutes or their

administration by making what has been aptly called

'small repairs'. Moreover, the individual who claims that

a vested right has arisen from the defect is seeking a

windfall since had the Legislature's of administrators

action had the effect it was intended to and could have

had, no such right would have arisen. Thus, the interest

in the retroactive curing of such a defect in adminis-

tration of Government outweighs the individual's interest

in benefiting from the defect."

The above passage was quoted with approval by the Constitution

Bench of this Court m the case of The Assistant Commissioner of

Urban Land Tax and others v. The Buckingham and Carnatic Co. Ltd.

etc. (1969) 2 SCC 55). In considering the question as to whether the

legislative power to amend a provision with retrospective operation

has been reasonably exercised or not, various factors have to be

considered. It was observed in the case of Stott v. Stott Realty Co.,

284 NW 635, 640, 288 Mich 35, (as noted in Words and Phrases,

Permanent Edition, Volume 37A, page 225) that:

“The constitutional prohibition of the passage of

'retroactive laws' refers only to retroactive laws that

injuriously affect some substantial or vested right, and

does not refer to those remedies adopted by a

legislative body for the purpose of providing a rule to

secure for its citizen's the enjoyment of some natural

right, equitable and just in itself, but which they were

not able to enforce on account of defects in the law or

its omission to provide the relief necessary to secure

such right".

Craies on Statue Law (7th Edn.) at p. 396 observes that:

"if a statute is passed for the purpose of protecting the

public against some evil or abuse, it may be allowed to

operate retrospectively, although by such operation it

will deprive some person or persons of a vested right."

Thus public interest at large is one of the relevant considerations in

determining the constitutional validity of a retrospective legislation.”

28. It will be useful to refer to paragraphs 47 and 67 of the same

decision, to which our attention was invited. The same read thus:

“47. There is a distinction between encroachment on the judicial

power and nullification of the effect of a judicial decision by changing

the law retrospectively. The former is outside the competence of the

Legislature but the latter is within its permissible limits (M/s. Tirath

Ram Rajindra Nath, Lucknow v. State sc 405) of U.P.& Anr [(1973) 3

SCC 585]). The reason for this lies in the concept of separation of

powers adopted by our constitutional scheme. The adjudication of the

rights of the parties according to law is a judicial function. The

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Legislature has to lay down the law prescribing norms of conduct

which will govern parties and transactions and to require the Court

to give effect, to that law [I.N. Saksena's case].

67. The result of the aforesaid discussions is that retrospectivity in the

Act cannot be held to be ultra vires except to a limited extent which

we will presently indicate. It Is not a case of usurpation of judicial

power by the Legislature, The Legislature has removed the basis of

the decision in Hooda and Sandeep Singh's cases by repealing the

circulars. The Act is also not violative of Articles 14 and 16 of the

Constitution of India the candidates have right to posts that are

advertised and not the one which arise later for which a separate

advertisement is issued. A valid law, retrospective or prospective,

enacted by Legislature cannot be declared ultra vires on the ground

that it would nullify the benefit which otherwise would have been

available as a result of applicability and interpretation placed by a

superior Court, A mandamus issued can be nullified by the Legislature

so long as the law enacted by it does not contravene constitutional

provisions and usurp the judicial power and only removes the basis of

the issue of the mandamus.”

(emphasis supplied)

29. Counsel for the petitioners have re lied on the decision in the case of

Satchidananda Misra versus State of Orissa and others, (2004) 8 SCC

599.

The Apex Court considered the question about the validity of the Validating

Act. In paragraph 13, the Court observed thus:

“13. The question here is about the validity of the validating statute

seeking to regularise illegal appointments without either repealing the

1979 Rules or changing the definition of the Selection Board. Learned

counsel for the appellant has also placed reliance on the decision in

the case of Vijay Mills Co. Ltd. v. State of Gujarat. The Court referred

to various decisions which considered the law of validation generally

including the decision in the case of Prithvi Cotton Mills. The

conclusions have been set out in para 18 that there are different

modes of validating the provisions of the Act retrospectively,

depending upon the intention of the legislature in that behalf. Where

the legislature intends that the provisions of the Act themselves

should be deemed to have been in existence from a particular date in

the past and thus to validate the actions taken in the past as if the

provisions concerned were in existence from the earlier date, the

legislature makes the said intention clear by the specific language of

the Validating Act. It is open for the legislature to change the very

basis of the provisions retrospectively and to validate the actions on

the changed basis. In the said case, it was held that the legislature

had changed the very basis of the provisions retrospectively as was

apparent from the provisions of the amending Act. In the present

case as already noticed, the validating statute has done nothing of the

kind and only sought to regularise illegal appointments without

repealing the Rules that were applicable at the relevant time or

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amending the definition of the Selection Board with retrospective

effect.” (emphasis supplied)

30. Counsel for the petitioners have also relied on the decision in the case

of

Indra Sawhney versus Union of India and others, (2000) 1 SCC 168. In

paragraph 28 and 29, the Court observed thus:

“28. The question of validation arises in the context of S. 6 of the Act.

It is true that whenever legislative or executive action is declared as

being violative of the provisions of Part III of the Constitution, it will

be permissible for the Executive or Legislature to remove the defect

which is the cause for discrimination prospectively and which defect

has been pointed out by the Court. The defect can be removed

retrospectively too by legislative action and the previous actions can

also be validated. But where there is a mere validation with

retrospective effect, without the defect being legislatively removed

with retrospective effect, the legislative action will amount to

overruling the judgment of the Courts by way of legislative fiat and

will be invalid as being contrary to the doctrine of separation of

powers.

29. In the context of the law laid down in Indra Sawhney (1992 AIR

SCW 3682 : AIR 1993 SC 477 : 1993 Lab IC 129) and in Ashok Kumar

Thakur (1995 AIR SCW 3731 : AIR 1996 SC 75 : 1995 Lab IC 2475) if

the legislature of any State does not take steps to remove the defect

or to effectively and realistically remove the defect to exclude the

'creamy layer' from the Backward Classes then the benefits of

reservations which are invalidly continued in favour of the 'creamy

layer' cannot be declared retrospectively valid merely by a legislative

declaration that such creamy layer is absent as done by S. 3 of the

Kerala Act. Nor can it be done by means of the validating provision

contained in S. 6 of that Act. The creamy layer principle laid down in

Indra Sawhney, cannot be ignored as done by S. 6 of the said Act.

We shall elaborate these aspects later. If under the guise of

elimination of the 'creamy layer,' the legislature makes a law which is

not indeed a true elimination but is seen by the Court to be a mere

cloak, then the Court will necessarily strike down such a law as

violative of principle of separation of powers and of Arts. 14, 16(1)

and Art. 16(4).”

(emphasis supplied)

31. It will be useful also to advert to the exposition in paragraph 59 to 61

of the same decision, which reads thus:

59. The non obstante clause in S. 4 too cannot come to the rescue of

the State. As already stated, the said clause cannot override the

judgments of this Court based on Arts. 14, 16(1) and 16(4) if the

defect is not removed by the legislation. Neither Parliament nor the

State Legislature can make any law to continue reservation to the

creamy layer inasmuch as the above judgments of this Court are

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based on Arts. 14 and 16(1) of the Constitution of India, and no law

can obviously be made to override the provisions of Arts. 14 and

16(1).

60. Thus, for the aforesaid reasons, S. 4 of the Act along with the non

obstante clause is declared unconstitutional and violative of the

judgments of this Court and also violative of Arts. 14, 16(1) and 16(4)

of the Constitution of India.

(xi) Section 6 :

61. We then come to S. 6 of the Act which deals with retrospective

validation. This section again starts with a non obstante clause.

Obviously, the Kerala Legislature is having Indra Sawhney (1992 AIR

SCW 3682 : AIR 1993 SC 477 : 1993 Lab IC 129) and Ashok Kumar

Thakur (1995 AIR SCW 3731 : AIR 1996 SC 75 : 1995 Lab IC 2475) in

its mind, when it inserted, the non obstante clause. Once S. 3 of the

Act is held unconstitutional, the position is that the legislative

declaration as to non-existence of creamy layer goes and the

existence of creamy layer becomes a starting reality. That will mean

that under the Act of 1995, the Legislature has not eliminated the

defect. Nor can S. 4 in this connection be of any help because that

provision has also been declared as unconstitutional. Section 6 cannot

stand alone once Ss. 3 and 4 are declared unconstitutional. As long as

the creamy layer is not excluded and the defect continues, any

validation - without elimination of the defect which is the basic cause

of unconstitutionality - is, as already stated, ineffective and will be

invalid. Thus, S. 6 is also unconstitutional.”

(emphasis supplied)

32. Counsel for the petitioners have re lied on the decision in the case of

Delhi Cloth & General Mills Co. Ltd. & another versus State of Rajasthan

and others, (1996) 2 SCC 449.

The Apex Court after analysing the gamut of

case law opined that the relevant sections remained on the statute book un-

amended when the validating Act was passed. Their provisions were mandatory.

They had admittedly not been followed. The defect of not following these

mandatory provisions in the case was not cured by the validating Act. The curing

of the defect was an essential requirement for the passing of a valid validating

statute, as held by the Constitution Bench in the case of

Prithvi Cotton Mills Ltd.

On that basis the validating Act was struck down.

33. Counsel for the petitioners have further relied on yet another decision

of the Apex Court in the case of

D. Cawasji and Co., Mysore versus State of

Mysore and another, 1984(supp.) SCC 490.

The Apex Court opined that if a

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particular provision of the statute is for some lacunae or defect in the statute

declared un-constitutional or invalid, it is open to the legislature to pass a Validating

Act with retrospective effect so that State may not be saddled with liability of

refund or other consequences which may arise, as a result of the particular

provision being declared invalid. In paragraph 17, the Court noted that the object

of enacting the amended provision which it was considering was to nullify the effect

of the judgment which became conclusive and binding on the parties to enable the

State Government to retain the amount wrongfully and illegally collected as sales

tax. That was impermissible and for which reason, the Validating Act was declared

invalid and unconstitutional.

34. As noted earlier, it is well established position that the State cannot

determine fees of Private Unaided Educational Institutions. It can only regulate the

fees fixed by the Private Unaided Educational Institutions to ensure that it does not

result in profiteering and commercialization or collection of capitation. Further, the

fee structure of both categories of students – admitted against merit seats or paid

seats – must be uniform. The First Act of 2006, therefore, purports to do what is

not within the domain of the Legislation. In our opinion, while enacting Section 4

of the Act of 2006, attempt was not to remove the basis of the decisions of the

Apex Court or for that matter of this Court, referred to earlier. But, it was

singularly intended to nullify the effect of judicial decisions, which in a way were

inter parte by making the law retrospectively. Thus understood, Section 4 of the

Act of 2006 is invalid and null and void. This provision being the core of the

enactment, as a concomitant, the entire Act is rendered unenforceable and hence

redundant.

35. That takes us to the argument of the respondents that the students

admitted in the academic session 2003-04 are separate category of students, which

form one category. Further, the legislation is intended to secure the interests of

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those students, was a reasonable classification and, therefore, permissible. In

support of this contention, reliance was placed on the decision in the case of

Andhra Pradesh Dairy Development Corporation Federation vs.

B.Narasimha Reddy and others

7

. In paragraph 18 of this decision, the Court

observed thus:

“18. It is well settled law that Article 14 forbids class legislation,

however, it does not forbid reasonable classification for the purpose

of legislation. Therefore, it is permissible in law to have class

legislation provided the classification is founded on an intelligible

differentia which distinguishes persons or things that are grouped

together from others left out of the group and that differentia must

have a rational relation to the object sought to be achieved by the

statute in question. Law also permits a classification even if it relates

to a single individual, if, on account of some special circumstances or

reasons applicable to him, and not applicable to others, that single

individual may be treated as a class by himself. It should be

presumed that legislature has correctly appreciated the need of its

people and that its laws are directed to problems made manifest by

experience and that its discriminations are based on adequate

grounds. There is further presumption in favour of the legislature that

legislation had been brought with the knowledge of existing

conditions. The good faith on the legislature is to be presumed, but if

there is nothing on the face of the law or the surrounding

circumstances brought to the notice of the court on which the

classification may reasonably be regarded as based, the presumption

of constitutionality cannot be carried to the extent of always holding

that there must be some undisclosed and unknown reasons for

subjecting certain individuals or corporations to hostile or

discriminating legislation. The law should not be irrational, arbitrary

and unreasonable in as much as there must be nexus to the object

sought to be achieved by it. (Vide: Budhan Choudhry & Ors. v. State

of Bihar, AIR 1955 SC 191 ; and Ram Krishna Dalmia v. Justice S.R.

Tendolkar & Ors., AIR 1958 SC 538)”.

However, in view of the opinion recorded that the First Act of 2006 is invalid

as it purports to overturn the judicial decisions and not to remove the basis of

those decisions as such, it is unnecessary to dilate on the argument regarding

reasonable classification.

36. Having said this, it must necessa rily follow that the fee structure for

academic session 2003-04, as determined by the Fee Structure Committee in its

meeting held on 25

th

July, 2005 and notified on 28

th

July, 2005, (Annexure P-5),

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ought to prevail. We would deal with this question a little later. For, the same

reasons and logic will apply while considering the relief in respect of fees for

academic session 2004-05 and 2005-06.

37. Reverting to the second peti tion, the petitioners had initially

challenged the decision dated 8.12.2006 (Annexure P-9) determining the

provisional fees in respect of merit seats for the academic year 2004-05 and 2005-

06 at Rs. 50,000/- till the final outcome of recommendation of the Review

Committee. As regards this decision, the same was only a provisional decision until

the final determination of fee structure by the Review Committee. Thus, the

students as also the College management were put to notice that the amount

specified by the Review Committee was only provisional. The admission process

was taken forward on that understanding. In the first place, if the Review

Committee had power to determine the fee structure of the petitioner-College, it

had intrinsic power to prescribe provisional fees till the final determination was

done. Thus, it is not a case of want of authority of the Review Committee to

prescribe provisional fees. Further, in view of the final determination by the Review

Committee, vide decision dated 2.6.2008 (Annexure P-11), the latter ought to

operate and the challenge to the provisional fees prescribed by the Review

Committee would recede in the background. Whether the final determination is

legal, valid or otherwise, is a matter to be considered independently.

38. A priori, we may now examine the validity of the final decision of the

Review Committee dated 2.6.2008. Although, the Review Committee constituted

under Section 7 of the Second Act of 2006 took notice of the final fees fixed by the

Fee Committee of Justice Bhatnagar and the claim of the petitioners to allow them

to charge fees per student @ 84,000/- which claim was supported by documentary

evidence, evincing that the petitioner-College was incurring expenditure in excess

of the amount collected from the students by way of fees. However, the Review

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Committee in the first place determined the provisional fees @ Rs. 50,000/- and by

the impugned decision confirmed that amount merely because it may not be proper

to recommend any change in the fees fixed for State-quota students by the

Government at Rs. 50,000/- per student, per annum at such belated stage as the

admission process was concluded in the years 2004-05 and 2005-06. The

additional reason to be discerned from paragraph 3 of the impugned decision is

that the said amount was 2.5 times more than the fees of Rs. 20,000/- per student,

per annum fixed by the Government for the academic year 2003-04. Both these

reasons, in our opinion, are untenable. The Review Committee is not supposed to

act as a post office. It is its bounden duty to evaluate the factual basis about the

actual expenditure incurred by the concerned College for imparting education to its

students entitling it to charge commensurate fees and keeping in mind the dictum

of the Apex court in paragraph 155 of Islamic Academy and paragraph 149 of P.A.

Inamdar (supra). In other words, the Review Committee is expected to assess as

to whether the fees to be charged by the College would result in profiteering,

commercialization or collection of capitation fees. For arriving at that conclusion,

the Review Committee is not only expected to analyze the documents and books of

accounts; but is also obliged to give opportunity to the Management to explain its

stand-point to justify the fee structure claimed by it. The Review Committee has to

analyze that claim and juxtapose it with the documents and material produced by

the Management. It is also expected to answer the matter in issue, one way or the

other, by a speaking order, by recording reasons therefor.

39. In the present case, the Revi ew Committee has completely failed to

discharge its legal obligation. The Committee, however, was swayed by

considerations, which, to say the least, were extraneous. The fact that the

provisional fees was fixed at Rs. 50,000/- does not mean that the same was just

and proper and commensurate with the claim of the Management. Notably, the

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provisional fees was fixed without giving any opportunity to the petitioners.

According to the petitioners, the said decision was taken without having a formal

meeting. Moreover, the fact that the said fees was 2.5 times more than the fees

specified for academic year 2003-04 for students admitted against merit seats, by

itself, can be no basis to decide the matter. The duty of the Review Committee is

to ascertain whether the fees fixed and claimed by the Management would result in

profiteering, commercialization or collection of capitation fees. That satisfaction

has to be recorded in writing by the Review Committee. No other reason is

germane for exercising the power bestowed on the Review Committee. For, as

expounded by the Apex Court, it is the right of the Private Unaided Educational

Institutions guaranteed under Article 19(1)(g) to determine their own fees. The

only restriction is that the fees so fixed should not result in profiteering,

commercialization or collection of capitation fees. It is only this area which is open

to inquiry by the Review Committee. As a result, we have no hesitation in taking

the view that the basis on which the Review Committee has determined the final

fee structure for academic sessions 2004-05 and 2005-06, in respect of the

petitioner-College, is untenable and cannot be sustained in law. Accordingly, the

decision of the Review Committee Annexure P-11, qua the petitioner-College

deserves to be quashed and set aside.

40. Having said this, the next questi on is what must be the fee structure

of the petitioner-College for the relevant academic sessions 2003-04, 2004-05 and

2005-06 - should it be on the basis of the notifications, dated 15.9.2003 and

28.7.2005, as claimed by the petitioners? Indisputably, after notification dated

28.7.2005, the issue was required to be examined by the Review Committee

constituted under Section 7 of the Second Act of 2006. The Review Committee was

constituted under Section 7(4) of the said Act vide notification dated 24.11.2006, to

review the fee structure fixed earlier in respect of Private Unaided Dental Colleges

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in Himachal Pradesh. Neither this notification nor Section 7 of the Second Act of

2006 has been challenged by the petitioners before us. Whereas, the petitioners

participated in the proceedings before the Review Committee so constituted. This

Committee has determined the “final fee structure” for the relevant academic

sessions 2003-04, 2004-05 and 2005-06, vide decision dated 2.6.2008. It is a

different matter that we have set aside that decision in terms of this judgment.

That, however, does not follow that the communication dated 28.7.2005

prescribing the fee structure in respect of Private Unaided Dental Colleges in the

context of final fees fixed by the Fee Structure Committee can be taken forward.

Notably, the Review Committee was constituted in exercise of statutory powers

under section 7(4) of the Second Act of 2006 to review the fee structure for the

relevant academic sessions determined by the Fee Structure Committee. This

being a Statutory Committee and the notification to constitute the said Committee

having not been challenged, coupled with the fact that the petitioners participated

in the proceedings before the Review Committee, the petitioners cannot be

permitted to fall back upon the fees determined by the Fee Structure Committee for

academic sessions 2003-04, 2004-05 and 2005-06, and notified in terms of

communication dated 28.7.2005 or 15.9.2003. In other words, the Review

Committee (Statutory Committee) must first examine the issue of fee structure

keeping in mind the exposition of the Constitution Bench of the Apex Court in the

afore-noted decisions.

41. Having set aside the decision of the Review Committee, the only

logical direction that needs to be issued is to direct the Review Committee to re-

examine the entire matter afresh and pass appropriate directions as may be

advised, in accordance with law, expeditiously and preferably within 8 weeks from

today. If the Review Committee upholds the claim of the petitioners, the

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petitioners would become entitled to recover deficit amount from its students

admitted in the College for the concerned academic years 2003-04 to 2005-06.

42. In view of the above, we di spose of both the petitions on the

following basis:

i) Section 4 of the Himachal Pradesh Private Unaided Dental

Colleges (Regulations of Admissions and Fixation of Fee for Academic

Year 2003-04) Act, 2006 is declared illegal, invalid and null and void.

ii) The decision of the Review Committee in its meeting held on

13.5.2008 and notified vide notification dated 2.6.2008 (Annexure P-

11 in CWP No. 384 of 2008) is quashed and set aside. Instead, the

petitioners are relegated before the same Review Committee for re-

consideration of the entire matter afresh in accordance with law,

expeditiously and not later than 8 weeks from today after giving fair

opportunity to the petitioners.

iii) Until the Review Committee finally determines the fee structure

for the academic years 2003-04, 2004-05 and 2005-06, respectively,

the petitioners shall not recover any further amount from the students

admitted in the concerned academic years 2003-04, 2004-05 and

2005-06 save and except the fees already collected. However, in the

event the Review Committee determines the final fee structure for the

concerned academic years and if the same is in excess of the

prescribed amount already collected by the petitioners, the petitioners

would be free to recover such excess amount from its students, in

accordance with law.

43. Both the petitions are disposed of with the above observations, with

no orders as to costs.

(A.M. Khanwilkar)

Chief Justice

(Kuldip Singh)

Judge

September 17, 2013.

(tilak/karan)

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