Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

IA Nos. 57 & 59

IN

CIVIL APPEAL NO. 4060 OF 2009

Modern Dental College and Research

Centre and others …. Applicants

Versus

State of Madhya Pradesh & Ors. ….

Respondents

O R D E R

K.S. Radhakrishnan, J.

1.We are in these applications called upon to

decide the question as to whether the unfilled NRI

seats are to be transferred to general pool and be

shared equally to be filled up on the basis of the

Page 2 Common Entrance Test conducted by the State level

Committee – Vyavsayik Pariksha Mandal (VYAPAM) or

by the Common Entrance Test conducted by the

Association of Private Dental and Medical Colleges

(APDMC), so far as the private unaided medical/dental

colleges in the State of Madhya Pradesh are

concerned.

2.Applicants, herein had filed Writ Petition No.

2732 of 2009 before the High Court of Madhya

Pradesh (Jabalpur) challenging the constitutional

validity of Madhya Pradesh Niji Vyavsayik Shikshan

Sanstha (Pravesh Ka Viniyaman Avam Shulk ka

Nirdharan) Adhiniyam, 2007 (in short ‘the Act’) and

the Rules framed thereunder. The High Court vide its

judgment dated 15.5.2009 repelled the challenge to

the Act and the Rules but declared that the provisions

of Rule 10(2)(iii) of 2009 as ultra vires. The High

Court also held that the Judgment would not affect the

Common Entrance Test already conducted by VYAPAM

Page 3 for the year 2009-10. The above-mentioned Writ

Petition was disposed of along with other similar

matters and a common Judgment was delivered by

the High Court.

3.Aggrieved by the judgment in Writ Petition No.

2732 of 2009, Civil Appeal No. 4060 of 2009 was filed

by the applicants herein. While admitting the appeal,

a Bench of this Court had prima facie found that the

provisions of the Act handing over the entire selection

process to the State Government or the agencies

appointed by the State Government for

undergraduate, graduate and postgraduate

medical/dental colleges and fee fixation was contrary

to and inconsistent with the principles laid down by

the eleven-Judges Bench Judgment in TMA Pai

Foundation and Others v. State of Karnataka and

Others [(2002) 8 SCC 481] (for short ‘Pai

Foundation’) and the Judgment in P.A. Inamdar

and others v. State of Karnataka and others

Page 4 [(2005) 6 SCC 537] (in short ‘Inamdar’). The Court

also observed that 2007 Act would become

unconstitutional, if read literally, but an interim

arrangement was made with regard to the admissions

in the private unaided medical/dental colleges in the

State of Madhya Pradesh for the year 2009-10; the

operative portion of that order reads as follows:

“We, therefore, direct that the admissions

in the private unaided medical/dental

colleges in the State of Madhya Pradesh will

be done by first excluding 15% NRI seats

(which can be filled up by the private

institutions as per para 131 of Inamdar

case), and allotting half of the 85% seats

for admission to the undergraduate and post

graduate courses to be filled in by an open

competitive examination by the State

Government, and the remaining half by the

Association of the Private Medical and

Dental Colleges. Both the State

Government as well as the Association of

Private Medical and Dental Colleges will hold

their own separate entrance examination for

this purpose. As regards “the NRI seats”,

they will be filled as provided under the Act

and the Rules, in the manner they were

done earlier.”

Page 5 4.The Court also observed that the solution arrived

at might not be perfect, but it had only tried to find

out a best via media for admissions for the academic

year 2009-10. However, it was recommended that

the same might also be considered for future sessions.

The order passed by the Court is reported in Modern

Dental College and Research Centre and Ors. v.

State of Madhya Pradesh and Ors. [(2009) 7 SCC

751]. (in short Modern Dental College)

5.The above arrangement indicates that 15% of

the total sanctioned intake in the unaided Private

Medical and Dental Colleges was set apart for giving

admission to NRI students and the remaining 85%

seats would be filled up equally through the

examination conducted by the State and the Common

Entrance Test conducted by the Colleges.

Controversy now is only with regard to unfilled NRI

seats due to lack of sufficient NRI students, and in

what manner those seats have to be filled up. State,

Page 6 has maintained the stand that those unfilled seats

would also go to the general pool and be shared by

both the State and the Colleges equally. Such a stand

was taken by the State on the basis of the

interpretation placed by this Court in filling up the

unfilled NRI seats in its judgment dated 30.9.2010 in

R.D. Gardi Medical College and Anr. etc. v. State

of M.P. and Ors. (2010) 10 SCC 225 (in short Gardi

Medical College), wherein, while interpreting Rule 8

of the M.P. Admission Rules, 2008 the two-Judges

Bench of this Court observed as follows:

“A plain reading of the above leaves no

manner of doubt that unfilled NRI seats had

to be transferred to the general pool to be

filled up on the basis of the merit of the

candidates in the State-level common

entrance test conducted by the Madhya

Pradesh Vyavsayik Pariksha Mandal or by

any other agency authorised by the State

Government for that purpose. The unfilled

seats in the NRI quota were, therefore, to

be treated as a part of the general pool and

once that was done the share of the college

in terms of the order passed by this Court

would be 50% out of the said seats. The

Page 7 High Court has, in that view, rightly held

that while the management was justified in

filling up 5 unfilled seats in NRI quota, the

remaining 5 could not have been filled up

otherwise than on the basis of the entrance

test referred to in Rule 8.”

Court, in the above case, was dealing with the

admissions for the academic year 2010-11.

6.The State Government while framing the Madhya

Pradesh Private Medical and Dental Under Graduate

Course Entrance Examination Rules, 2011

incorporated Rule 5 with regard to unfilled NRI seats

with specific reference to the above-mentioned

judgment dated 30.9.2010. The Rule reads as

follows:

“RESERVATION: Every Institution shall be

allowed to fill up to 15% of the sanctioned

seats by NRI candidates only, in the

manner prescribed by the admission and

Fee Regulatory Committee. These NRI

seats shall be filled up through a separate

counselling. NRI seats remaining vacant

shall be merged into the counselling of Non

NRI Candidates, as per Hon’ble Supreme

Court Order in Civil Appeal No. 8429-

8430/2010 dated 30.9.2010.”

Page 8 7.The applicants, noticing that the judgment dated

30.9.2010 in Gardi Medical College would seriously

affect the rights of unaided educational institutions in

the matter of filling up of unfilled NRI seats, filed IA

Nos. 51-52 of 2011 in Civil Appeal No. 4060 of 2009

for appropriate modification / clarification of the

orders passed by two-Judges Bench in Modern

Dental College as well as R.D. Gardi Medical

College. The applications came up for hearing before

two-Judges Bench of this Court on 1.8.2011 and this

Court passed the following order:

“We are of the opinion that there appears

to be some conflict between the

observations made in para 28 of the

judgment of the two-Judges Bench

rendered in the case of R.D. Gardi

Medical College and Another. etc. v.

State of M.P. and Ors. [(2010) 10 SCC

225], quoted below:

28. A plain reading of the above leaves

no manner of doubt that unfilled NRI

seats had to be transferred to the

general pool to be filled up on the basis

of the merit of the candidates in the

State-level common entrance test

Page 9 conducted by the Madhya Pradesh

Vyavsayik Pariksha Mandal or by any

other agency authorised by the State

Government for that purpose. The

unfilled seats in the NRI quota were,

therefore, to be treated as a part of

the general pool and once that was

done the share of the College in terms

of the order passed by this Court would

be 50% out of the said seats. The High

Court has, in that view, rightly held

that while the management was

justified in filling up 5 unfilled seats in

NRI quota, the remaining 5 could not

have been filled up otherwise than on

the basis of the entrance test referred

to in Rule 8.

and the observations made in para 27(1),

quoted below, of T.M.A. Pai Foundation

and others v. State of Karnataka and

others [(1995) 5 SCC 220] which is a

three Judge Bench decision:

“27(1) So far as NRI quota is

concerned, it is fixed at fifteen per cent

for the current academic year. It shall

be open to the management to admit

NRI students and foreign students up

to the aforesaid specified percentage,

it shall be open to them to admit

students on their own, in the order of

merit, within the said quota. This

direction shall be a general direction

and shall operate in the case of all the

States where admissions have not

been finalized. It is, however, made

clear that by virtue of this direction, no

student who has already been

Page 10 admitted shall be disturbed or

removed.”

The Court, therefore, referred the matter to a larger

Bench. However, by the time year 2011-2012 came

to a close hence, the larger Bench could not resolve

the apparent conflict and hence, a two Judges Bench

of this Court disposed of both IA Nos.51 and 52 vide

its order dated 23.9.2011.

8.The same issue, has again been cropped up, now

for the academic year 2012-13, hence, it is necessary

to clarify the order dated 27.5.2009 in Modern

Dental College and the judgment of this Court dated

30.9.2010 in R.D. Gardi Medical College as to how

the unfilled NRI seats be filled up. For the said

purpose, the applicants have filed IA Nos.57-59 of

2011, which came up for hearing before two-Judges

Bench of this Court on 9.12.2011 and the Court

Page 11 ordered that the applications be placed before the

Constitution Bench.

9.Since main issue referred to Constitution Bench

is not likely to come up for hearing shortly and the

issue projected in I.As with regard to unfilled seats is

of urgent nature, thus, they have been considered by

us. Hence, these applications have come up before us

for consideration vide order passed by Hon’ble the

Chief Justice of India.

10.We have heard learned senior counsel - Shri C.A.

Sundaram and Dr. Rajeev Dhawan and learned

counsel for the State of Madhya Pradesh - Shri B.S.

Banthia. We may at the outset point out that in the

instant applications, we are concerned only with the

question as to how and in what manner the unfilled

NRI seats be filled up for the year 2012-13 till the

appeal is finally disposed of, which issue, in our view,

Page 12 is no more res integra. This Court had earlier in

various judgments dealt with the purpose and object

of creating NRI quota and the manner in which those

quota had to be filled up. A three-Judges Bench of

this Court in TMA Pai Foundation and Others v.

State of Karnataka and Others (1994) 4 SCC 728

had an occasion to consider how, the vacant seats, in

the NRI quota be filled up and ordered as follows:

“So far as NRI quota is concerned, we

fixed the same as 15% last year. We fixed

NRI quota in respect of minorities’

institutions as 5%. Although the NRI

quota should not, normally, be more than

5% but keeping in view the reduction in

the fee structure, we fix the same as 10%

(of the total seats) for this year. We

further make it clear that in case any in

the NRI quota remains unfilled, the same

can be filled by the Management at its

discretion.”

Later another three-Judges Bench of this Court in

TMA Pai Foundation and Others v. State of

Karnataka and Others (1995) 5 SCC 220 had also

endorsed the same view holding that it would be open

Page 13 to the Management to admit NRI students and foreign

students within that quota and in case they were not

able to get the NRI or foreign students upto the

aforesaid specified percentage, it would be open to

them to admit students on their own, in the order of

merit, within the said quota. The operative portion of

the order with regard to NRI quota for the year 1995-

96 was as follows:

(1) So far as NRI quota is

concerned, it is fixed at fifteen per cent

for the current academic year. It shall be

open to the management to admit NRI

students and foreign students within this

quota and in case they are not able to get

the NRI or foreign students upto the

aforesaid specified percentage, it shall be

open to them to admit students on their

own, in the order of merit, within the said

quota. This direction shall be a general

direction and shall operate in the case of

all the States where admissions have not

been finalized . It is, however, made clear

that by virtue of this direction, no student

who has already been admitted shall be

disturbed or removed.”

Page 14 Similar order was also passed by this Court in AP (P)

Engg. College Management Assn. v. Govt. of A.P.

(2000) 10 SCC 565. The operative portion of the

order of the two-Judges Bench reads as follows:

“4. After hearing learned counsel for the

parties, we direct that the State of Andhra

Pradesh shall allow the 5% NRI quota in

the private engineering colleges in the

State of Andhra Pradesh to be filled up in

the manner earlier directed by this Court

and to permit the management of the

private engineering colleges to fill up the

unfilled NRI quota, at its own discretion,

subject, however, to the criteria of merit,

qualification and fee structure – as

prescribed by the Government not only for

the current academic year but also for

successive academic years, till the main

matter is decided by this Court in the

pending cases.”

11.We may also in this connection refer to the

judgment of the seven-Judges Bench in P.A.

Inamdar v. State of Maharashtra [(2005) 6 SCC

537], wherein this Court had dealt with the rights of

unaided minority and non-minority educational

institutions and held that the State cannot regulate or

Page 15 control admissions, so as to compel them to give up a

share of the available seats to the candidates chosen

by the State, as if it was filling up, the seats

available, to be filled up at its discretion in such

private institutions. Court held that would amount to

nationalization of seats, such imposition of quota of

State seats or enforcing reservation policy of the

State on available seats in unaided professional

institutions are acts constituting serious encroachment

on the right and autonomy of private professional

educational institutions. It was also ordered that such

appropriation of seats can also not be held to be a

regulatory measure in the interest of the minority

within the meaning of Article 30(1) or a reasonable

restriction within the meaning of Article 19(6) of the

Constitution.

Inamdar having said so dealt with NRI seats

as well. In Para 131 of judgment, the Court had only

dealt with the question as to how NRI seats had to be

Page 16 filled up: First, it was ordered that the seats should

be utilized bona fide by NRIs only and for their

children or wards. Further, it was ordered that within

quota, merit should not be given a complete go-bye.

Further, it was also ordered that the amount of

money, in whatever form collected from such NRIs,

should be utilized for benefiting students such as from

economically weaker sections of the society, whom,

on well defined criteria, the educational institution

might admit on subsidized payment of their fee.

Further, In para 132 of the Inamdar, it had

also been clearly held that the policy of reservation

should not be enforced by the State nor any quota or

percentage of admissions could be carved out to be

appropriated by the State in a minority or non-

minority unaided educational institution.

Page 17 12.We are of the considered view that the above

principles laid down by a larger Benches of this Court,

in the matter of filling up of NRI seats were not

correctly understood or applied by this Court in R.D.

Gardi Medical College while interpreting Rule 8 of

the M.P. Admission Rules, 2008. The finding

recorded in R.D. Gardi Medical College that the

unfilled seats in NRI quota in unaided professional

colleges should be treated as a part of the general

pool and be shared equally by the State and the

unaided professional colleges goes contrary to the

principles laid down by the eleven-Judges Bench in

Pai Foundation, Inamdar as well as the Judgments

rendered by the three Judges Bench in Pai

Foundation referred to earlier. The wrong

interpretation given by in R.D. Gardi Medical

College is seen incorporated in Rule 5 of the Madhya

Pradesh Private Medical and Dental Under Graduate

Course Entrance Examination Rules 2011 as well,

which in our view cannot be legally sustained.

Page 18 13. We are, therefore, inclined to allow both the

applications and over rule the direction given by the

two learned Judges of this Court in R.D. Gardi

Medical College and hold that it is open to the

unaided professional educational institutions to fill up

unfilled NRI seats for the year 2012-13 and for the

succeeding years through the entrance test conducted

by them till the disposal of the appeal subject to the

conditions laid down in Inamdar strictly on the basis

of merits.

14.IA Nos. 57 and 59 of 2011 in Civil Appeal No.

4060 of 2009 are allowed to the extent mentioned

above and disposed of on the basis of the above

modifications and clarifications.

..…………………………………………… J

(Deepak Verma)

Page 19 …………………………………………… J.

(B.S. Chauhan)

………………………………………… ...J.

(K.S. Radhakrishnan)

New Delhi,

April 3, 2012