INDEX MEDICAL COLLEGE, HOSPITAL AND RESEARCH CENTRE versus THE STATE OF MADHYA PRADESH & ORS. on 3 February 2021

ORDER

Leave granted.

1. We had heard the above set of Appeals and passed an order on03.02.2021 as follows:

“After hearing the learned counsel for the parties, we declareRule 12 (8) (a) of the Madhya Pradesh Chikitsa ShikshaPravesh Niyam, 2018 as violative of Article 14 of theConstitution of India.

We direct the State of Madhya Pradesh to initiate the processof filling up the 7 unfilled seats of 1st year MBBS course inthe mop-up round for the year 2020-21 by college levelcounselling within a period of 7 days from today.

Reasons to follow.”

2. Reasons for the order dated 03.02.2021 are given hereinunder:-

3. The Appellants-Private Medical Colleges filed Writ Petitions inthe High Court of Madhya Pradesh, Bench at Indore, challenging theConstitutional validity of Sub-Rule 8 (a) of Rule 12 of the AdmissionRules (Madhya Pradesh Chikitsa Shiksha Pravesh Niyam), 2018(hereinafter, ‘the Rules’). Aggrieved by the dismissal of the Writ Petitions,the Appellants are before this Court.

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A4. The Madhya Pradesh Niji Vyavasayik (Pravesh Ka ViniyamanEvam Shulk Ka Nirdharan) Adhiniyam, 2007 (hereinafter, ‘the Act’)was promulgated to provide for regulation of admission, fixation of feeand for reservation of seats to persons belonging to Scheduled Castes,Scheduled Tribes and Other Backward Classes in private unaidedprofessional educational institutions and matters connected therewith.BAdmission to private unaided professional educational institutions is dealtwith in Chapter III of the Act. Every admission to a private unaidedprofessional educational institution shall be made only in accordancewith the provisions of the Act or Rules made thereunder. The StateGovernment constituted the Admission and Fee Regulatory CommitteeCfor supervision and management of the admission process and for fixingthe fee to be charged from the candidates seeking admission in theseinstitutions.

5. Rules were framed by the State Government in exercise of thepowers conferred under Section 12 of the Act. Rule 10 prescribes theDprocess of admission to be on the basis of allotment of students whoparticipated in the first round of counselling. The procedure for admissionin second round of counselling is dealt with in Rule 11 and that of in lastround (mop-up round) is found in Rule 12. The allotment of admissionafter completion of final round of counselling is governed by Rule 13.Amendments to the Rules were notified on 19.06.2019. The relevantEamendment which is subject matter of challenge in these Appeals isRule 12 (8) (a) which reads as follows: - “(8) (a) The vacant seats as a result of allotted candidates fromMOP-UP round not taking admission or candidates resigning fromadmitted seat shall not be included in the college level counselingF(CLC) being conducted after MOP-UP round”.

6. Writ Petitions filed by Index Medical College, Hospital andResearch Centre and Arushi Mahant and Others challenging Rule 12(8) (a) as being violative of Articles 14 and 19 (1)(g) were dismissed bya Division Bench of the High Court of Madhya Pradesh, Bench at IndoreGby a judgment dated 15.12.2020. Index Medical College, Hospital andResearch Centre and others have filed the Appeal arising out of SLP(C) No.179 of 2021, assailing the validity of the judgment dated 15.12.2020.L.N. Medical College, Hospital and Research Centre has also challengedthe said judgment of the High Court by seeking permission to file SLP.HPeople’s College of Medical Sciences and Research Centre filed a Writ

Petition questioning the vires of Rule 12 (8) (a) as well. It was disposedof by the High Court of Madhya Pradesh giving liberty to the Petitionertherein to file an appropriate representation before the Directorate ofMedical Education for redressal of its grievances. People’s College ofMedical Sciences and Research Centre and Another are questioningthe order dated 13.01.2021 in one of the Appeals. As the point thatarises in all these Appeals pertains to the validity of Rule 12 (8) (a), theywere heard together.

7. We have heard Mr. Neeraj Kishan Kaul, learned Senior Counsel,Mr. Siddharth R. Gupta and Mr. Amalpushp Shroti, learned counsel forthe Appellants, Mr. Saurabh Mishra, learned Additional Advocate Generalfor the State of Madhya Pradesh assisted by Mr. Sunny Chaudhary,Advocate for the Respondents. It was contended on behalf of theAppellants that Rule 12 (8) (a) is an affront to their right of occupationwhich is protected under Article 19 (1) (g) of the Constitution of India.Proscribing medical institutions from filling up seats which fall vacantdue to candidates in the mop-up round not taking admission or candidatessubmitting resignation after taking admission amounts to an unreasonablerestriction. It was asserted on behalf of the Appellants that admissionsmade by them are on the basis of allotment of students from commoncounselling pool. After two rounds of counselling, unfilled seats are takenup in mop-up round. Such of those seats which are not filled up in mop-up round are filled through college level counselling as provided in Rule13. It was further argued that the pronounced object with which Rule 12(8) (a) has been introduced is to avoid manipulations in admission processand to prevent non-meritorious students from getting seats in bettercolleges. As the measures adopted have no nexus with theobject, according to the Appellants, Rule 12 (8) (a) is violative of Article14 of the Constitution of India. It was submitted on behalf of theAppellants that Rule 12 (8) (a) results in some seats going vacant, whichis not only a national waste of resources but also a huge financial burdento educational institutions.

8. On the other hand, the State of Madhya Pradesh defended thejudgment of the High Court. The State contended that it has becomenecessary to make amendment to Rule 12 and insert Sub-Rule 8 as itwas found that students with lesser merit were getting admission tobetter colleges in stray vacancies which arose due to non-joining orresignation of candidates after mop-up round. Further, Rule 12 (8) was AB

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Aalso brought to prevent manipulation by those candidates who wereblocking seats in collusion with less meritorious candidates. As the entireexercise of admission to medical colleges has been laid to ensuretransparency, Rule 12 (8) was made with the objective that less meritoriouscandidates do not steal a march over those who have higher merit. TheState relied upon a judgment passed by the High Court of MadhyaBPradesh in Writ Petition No.8097 of 2017 wherein the High Court haddirected the Government to prevent manipulation of admission processand stop the filling up of prime postgraduate seats by non-meritoriouscandidates in mop-up round. Seven seats were identified as those whichbecame vacant due to students participating in mop-up round ofCcounselling but not joining. Therefore, those seats have not been allottedfor college level counselling.

9. Admission to private unaided medical institutions in the State ofMadhya Pradesh are made on the basis of allotment through commoncounselling conducted by the State. There are two rounds of counsellingDconducted as per the procedure laid down in Rules 10 and 11. Studentswho are eligible for admission in first round are given an option to seekupgradation or change in second round along with those candidates whodid not get admission in first round. Those who have sought for betteroption under Rule 10 are also considered in the second round ofcounselling which is conducted in accordance with Rule 11. Rule 11 (7)Eprovides that admission in second round of counselling is final andcandidates who are admitted shall not be given the facility of a betterchoice. Rule 12 (2) makes it clear that candidates to whom allotmentorders were issued in the previous rounds of counselling shall not beeligible for consideration in last round (mop-up round). The process ofFadmission in last round shall be according to Rule 10. However, candidatesparticipating in last round shall not be given the benefit of choosing abetter option. In case, candidates do not take admission after the allotmentorder in last round of counselling, the amount of Rs. 2 lakhs depositedunder Rule 12 (2) would automatically be forfeited.

G10. Mr. Saket Bansal filed a Writ Petition No.8079 of 2017 beforethe High Court complaining of injustice caused to him by a lessermeritorious candidate getting a better subject/seat in the postgraduatemedical course. He alleged that he accepted his fourth choice of subjectin second round of counselling for admission to postgraduate course. Inview of the Rules, he was not allowed to participate in the mop-up round.H

His first choice of subject came up for consideration in mop-up roundand was filled up by a lesser meritorious candidate. He further allegedthat certain candidates are indulging in manipulation of blocking seatsand thereafter not joining which gives an opportunity to lesser meritoriouscandidates to get better subject/college in later rounds of counselling.The High Court by an order dated 24.04.2019 expressed its anguishregarding the inaction of the State Government in the matter ofmanipulations in admissions to medical courses. The High Court wasconcerned that directions issued by this Court in Dar-us-SlamEducational Trust & Ors. v. Medical Council of India and Ors.[1],are not being followed by the State of Madhya Pradesh. The High Courtrecorded the statement made on behalf of the Government that such ofthose candidates who block seats and not join later shall be met withpenal consequence of being debarred from taking admission in any othercollege for the current academic year. The High Court was also informedthat admissions after mop-up round are confined to only such seats thatremained vacant after the counselling, excluding those which are vacatedby candidates who were allotted admissions.

11. Rule 12 (8) (a) provides that vacant seats which arise due tocandidates in mop-up round not taking admission or submitting resignationafter taking admission shall not be included in college level counselling.Rule 12 (8) (b) disqualifies these candidates who are allotted seats in the mop-up round and do not take up admissions or resign. They willautomictically be declared ineligible and a list of such candidates shall bedisplayed on the portal and on the website of the Directorate. In addition,the list shall be sent to the Directorate of Medical Education of otherStates, Medical Council of India, Dental Council of India and D.G.H.S.,Government of India, for not giving admission to such candidates in anyother Medical or Dental colleges.

12. The right to establish and manage educational institutions asan occupation is protected under Article 19 (1)(g) of the Constitution ofIndia. It is recognized by this Court in T.M.A. Pai Foundation & Ors.v. State of Karnataka & Ors.[2]. The right includes:

(a) The right to admit students.

(b) Right to set up of reasonable fee structure.

1 (2017) 8 SCC 627

2 (2002) 8 SCC 481

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A(c)Right to appoint staff.

(d) Right to take action, if there is a dereliction of duty on thepart of an employee.

13. However, to ensure that admissions in educational institutions are made in a fair and transparent manner on the basis of merit, theBGovernment is empowered to frame regulations. In T.M.A. PaiFoundation & Ors. v. State of Karnataka & Ors. (supra) it was heldas under:

67. We now come to the regulations that can be framed relatingto private unaided professional institutions.

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68. It would be unfair to apply the same rules and regulationsregulating admission to both aided and unaided professionalinstitutions. It must be borne in mind that unaided professionalinstitutions are entitled to autonomy in their administration while,at the same time, they do not forego or discard the principle ofDmerit. It would, therefore, be permissible for the university or theGovernment, at the time of granting recognition, to require a privateunaided institution to provide for merit-based selection while, atthe same time, giving the management sufficient discretion inadmitting students. This can be done through various methods.EFor instance, a certain percentage of the seats can be reservedfor admission by the management out of those students who havepassed the common entrance test held by itself or by the State/university and have applied to the college concerned for admission,while the rest of the seats may be filled up on the basis ofcounselling by the State agency. This will incidentally take care ofFpoorer and backward sections of the society. The prescription ofpercentage for this purpose has to be done by the Governmentaccording to the local needs and different percentages can befixed for minority unaided and non-minority unaided andprofessional colleges. The same principles may be applied to otherGnon-professional but unaided educational institutions viz. graduationand postgraduation non-professional colleges or institutes.

14. There is no controversy relating to provisions of the Act andRules where procedure for admission to professional colleges isprescribed. The only dispute that arises for our consideration is validityHof Rule 12 (8) (a) which was introduced on 19.06.2019. The object of

Rule 12 (8) (a) is to ensure that all admissions to medical institutions arebased on merit and to bar students of lesser merit from getting admissionto better colleges. The notice issued by the Director General of HealthServices, Ministry of Health and Family Welfare, Government of Indiadated 11.04.2018 has been referred to by the High Court in its orderdated 24.04.2019. The said letter highlights the active participation of agroup of students who were blocking all India quota seats in secondround of counselling deliberately for financial gratification without intentionto join. During the said period in the letter nearly 1,000 identified studentsdid not join after first round. They were being monitored to find outwhether they were taking admission at least in second round. DGHSproposed severe penal action against those indulging in such activities.Having been informed of this menace, this Court passed an order dated09.05.2017 in Dar-us-Slam Educational Trust & Ors. v. MedicalCouncil of India and Ors. (supra), barring students who take admissionin all India quota seats from being allowed to vacate seats after secondround of counselling. All vacant seats after last round of counselling weredirected to be filled up from a list that is forwarded to the institutions inthe ratio of ten times to the number of vacancies to ensure that all strayvacancies are filled. The contention of the Appellants is that being askedto keep seats unfilled amounts to an unreasonable restriction on theirright to carry on their occupation guaranteed under Article 19 (1) (g) ofthe Constitution of India. Even assuming the object of the Rule is toensure that lesser meritorious candidates do not get admission to bettercolleges, the measure adopted by the Government in keeping seats vacantis disproportionate.

15. This Court in State of T.N. & Anr. v. P. Krishnamurthy &Ors.[3] held that a subordinate legislation can be challenged on the followinggrounds:

a)Lack of legislative competence to make the sub-ordinatelegislation.

b)Violation of Fundamental Rights guaranteed under theConstitution of India.

c)Violation of any provision of the Constitution of India.

d)Failure to conform to the Statute under which it is made orexceeding the limits of authority conferred by the enablingAct.

3 (2006) 4 SCC 517

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Ae)Repugnancy to the laws of the land, that is, any enactment.

f)Manifest arbitrariness/unreasonableness (to an extent wherecourt might well say that Legislature never intended to giveauthority to make such Rules).

16. It is relevant to examine whether a subordinate legislation canBbe declared as unconstitutional on the principle of proportionality. ThisCourt in Kerala State Beverages (M&M) Corpn. Ltd. v. P.P. Suresh[4]held as under: -

C. Judicial Review and Proportionality

C26. The challenge to the Order dated 7-8-2004 by which therespondents were deprived of an opportunity of being consideredfor employment is on the ground of violation of Articles 14, 19 and21 of the Constitution of India. Lord Diplock in Council of CivilService Unions v. Minister for the Civil Service [Council ofCivil Service Unions v. Minister for the Civil Service, 1985DAC 374 : (1984) 3 WLR 1174 : (1984) 3 All ER 935 (HL)] heldthat the interference with an administrative action could be on thegrounds of “illegality”, “irrationality” and “procedural impropriety”.He was of the opinion that “proportionality” could be an additionalground of review in the future. Interference with an administrativeEdecision by applying the Wednesbury [Associated ProvincialPicture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223(CA)] principles is restricted only to decisions which are outrageousin their defiance of logic or of accepted moral standards that nosensible person who applied his mind to the question to be decidedcould have arrived at it.F

17. In Om Kumar and Ors. v. Union of India[5], this Courtobserved that the principle of proportionality was being applied tolegislative action in India since 1950. Any challenge to restrictions imposedby the Government under Articles 19 (2) to 19 (6) are tested by Courtson the principle of proportionality.Whether restrictions placed areGreasonable or not is adjudicated on the basis of appropriate balancebetween rights guaranteed and the control permissible under Article 19(2) to 19 (6). When legislation is challenged on the ground that restrictionsplaced on the fundamental right is disproportionate, the Court conducts 4 (2019) 9 SCC 710H5 (2001) 2 SCC 386

a primary review where the State has to justify the necessity of restrictingthe fundamental rights. Proportionality involves balancing test andnecessity test. The “balancing test” relates to scrutiny of excessiveonerous penalties or infringement of rights or interest and a manifestimbalance of relevant considerations. Whereas, the “necessity test”requires infringement of human rights in question to be by the leastrestrictive alternative.6

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18. According to Aharon Barak[7 ]proportionality in the broad senseis based on two principal components. The first is legality, which requiresthat the limitation be “prescribed by law”; the second is legitimacy, whichis fulfilled by compliance with the requirements of proportionality in theregular sense. Its concern is with the conditions that justify the limitationof a constitutional right by a law. There are two main justificatoryconditions: an appropriate goal and proportionate means. An appropriategoal is a threshold requirement and in determining it no consideration isgiven to the means utilized by the law for attaining the goal. A goal isappropriate even if the means of attaining it is or not. The proportionatemeans must comply with three secondary criteria: (a) a rational connectionbetween the appropriate goal and the means utilized by the law to attainit, (b) the goal cannot be achieved by means that are less restrictive ofthe constitutional right; (c) there must be a proportionate balance betweenthe social benefit of realizing the appropriate goal, and the harm causedto the right (proportionality stricto sensu or the proportionate effect).

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19. The three tests of proportionality propounded by Dickson, C.J. of Canada in R. v. Oakes[8] are:

(a) The measures adopted must be rationally connected to theobjective.F

(b) The means should impair “as little as possible” the right orfreedom in question.

(c) There must be a proportionality between the effects of themeasures which are responsible for limiting the right orfreedom, and the objective which has been identified as ofG“sufficient importance”.

6 District Central Co-operative Bank V. Coimbatore District Central Co-operativeBank Employees Association and another’ – (2007) 4 SCC 669

7 Aharon Barak, Proportionality and Principled Balancing, 4 Law & Ethics HumanRights, 1

8 R. v. Oakes, (1986) 1 SCR 103 (Can. SC)]

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A20. A. K. Sikri, J. in Modern Dental College and ResearchCentre & Others v. State of Madhya Pradesh[9]remarked that thedoctrine of proportionality is enshrined in Article 19 itself. He explainedthat the expression “reasonable restrictions’’ seeks to strike a balancebetween the freedom guaranteed in Article 19 (1) and social controlpermitted by Article 19 (2) to 19 (6). It was further held in ModernBDental College and Research Centre & others v. State of MadhyaPradesh (supra) that limitations imposed on the enjoyment of a rightguaranteed under the Constitution should not be arbitrary or excessiveto what is required in the interest of public. It is also relevant to refer tothe following factors which have to be kept in mind for examining theCreasonableness of a statutory provision as laid down in M.R.F. Ltd. v.Inspector Kerala Govt.[10]:

13. On a conspectus of various decisions of this Court, thefollowing principles are clearly discernible:

(1) While considering the reasonableness of the restrictions, theDcourt has to keep in mind the Directive Principles of State Policy.

(2) Restrictions must not be arbitrary or of an excessive natureso as to go beyond the requirement of the interest of the generalpublic.

E(3) In order to judge the reasonableness of the restrictions, noabstract or general pattern or a fixed principle can be laid downso as to be of universal application and the same will vary fromcase to case as also with regard to changing conditions, values ofhuman life, social philosophy of the Constitution, prevailingconditions and the surrounding circumstances.F(4) A just balance has to be struck between the restrictions imposedand the social control envisaged by clause (6) of Article 19.

(5) Prevailing social values as also social needs which are intendedto be satisfied by restrictions have to be borne in mind. (See: Stateof U.P. v. Kaushailiya [AIR 1964 SC 416 : (1964) 4 SCR 1002].)G

(6) There must be a direct and proximate nexus or a reasonableconnection between the restrictions imposed and the object soughtto be achieved. If there is a direct nexus between the restrictions 9 (2016) 7 SCC 353H10 (1998) 8 SCC 227

and the object of the Act, then a strong presumption in favour ofthe constitutionality of the Act will naturally arise.(See: Kavalappara Kottarathil Kochuni v. States of Madrasand Kerala [AIR 1960 SC 1080 : (1960) 3 SCR 887] ; O.K.Ghosh v. E.X. Joseph [AIR 1963 SC 812 : 1963 Supp (1) SCR789 : (1962) 2 LLJ 615] .)

21. It is pertinent to refer to the observations made by Justice M.Jagannadha Rao in Om Kumar and Ors. v. Union of India(supra)regarding proportionality in connection with Article 14 of theConstitution of India which are as under: -

“32. So far as Article 14 is concerned, the courts in India examinedwhether the classification was based on intelligible differentia andwhether the differentia had a reasonable nexus with the object ofthe legislation. Obviously, when the courts considered the questionwhether the classification was based on intelligible differentia,the courts were examining the validity of the differences and theadequacy of the differences. This is again nothing but the principleof proportionality. There are also cases where legislation or ruleshave been struck down as being arbitrary in the sense of beingunreasonable [see Air India v. Nergesh Meerza [(1981) 4 SCC335: 1981 SCC (L&S) 599] (SCC at pp. 372-373)]”.

22. The Rules govern admission to both undergraduate andpostgraduate medical courses. The practice of students vacating allottedseats in All India Quota to help lesser meritorious candidates wasidentified and suitable steps were directed to be taken to prevent it.Large number of seats in All India Quota were being sent for counsellingto State Quota. It was found that certain unscrupulous elements weremaking meritorious students vacate their seats so that the said seatswould be filled up by candidates having lower merit in the next rounds ofcounselling. In the counter affidavit filed in these Appeals, the StateGovernment referred to the observations made by the High Court in theWrit Petition filed by Mr. Saket Bansal relating to postgraduateadmissions. The complaint of the Writ Petitioner therein was that a lessermeritorious candidate got a better subject due to the filling of the seat inmop-up round and the student who was allotted the seat in the earlierround not joining. In the background of the said facts, the High Courtdirected the State Government to find a solution to put an end to the AB

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Apernicious practice of students who were allotted to a medical seat notjoining to favour lesser meritorious candidates.

23. The professed object of the amendment to the Rules byinsertion of Rule 12 (8) (a) is to ensure that admission to medicalinstitutions are made strictly in accordance to merit as the GovernmentBnoticed that lesser meritorious candidates were getting better colleges/subjects. Therefore, seats that fall vacant due to non-joining or resignationof students who were allotted seats in mop-up round of counselling willnot be included in the college level counselling. The result is such seatswill remain unfilled.C24. There is no doubt that the object with which Rule 12 (8) (a) ismade is appropriate as malpractice by students in the admission processshould be curtailed. Rule 12 (7) (c) provides that students who do nottake admission after issuance of an allotment letter will not be entitled toseek refund of the advance admission fee of Rs. 2 lakhs which wouldstand forfeited automatically. According to Rule 12 (8) (b), those studentsDwho do not join after being allotted a seat through mop-up round willautomatically be declared ineligible for the next round of counselling.They will not be entitled for admission to any other medical/dentalcolleges. Suitable steps are taken to prevent such students fromparticipating in the next round of counselling, forfeiting the advanceEadmission fee and making them ineligible for admission in any medicalcollege. However, the medical colleges who have no part to play in themanipulation as detailed above are penalised by not being permitted tofill up all the seats. The measure taken by the Government of proscribingthe managements from filling up those seats that fall vacant due to non-joining of the candidates in mop-up round is an excessive andFunreasonable restriction.

25. The right to admit students which is a part of the management’sright to occupation under Article 19 (1) (g) of the Constitution of Indiastands defeated by Rule 12 (8) (a) as it prevents them from filling up allthe seats in medical courses. Upgradation and selection of subject ofGstudy is pertinent only to postgraduate medical course. In so far asundergraduate medical course is concerned, the upgradation is restrictedonly to a better college. Not filling up all the medical seats is not a solutionto the problem. Moreover, seats being kept vacant results in huge financialloss to the management of the educational institutions apart from being aHnational waste of resources. Interest of the general public is not subserved by seats being kept vacant. On the other hand, seats in recognised medicalcolleges not being filled up is detrimental to public interest. We areconstrained to observe that the policy of not permitting the managementsfrom filling up all the seats does not have any nexus with the objectsought to be achieved by Rule 12 (8) (a). The classification of seatsremaining vacant due to non-joining may be based on intelligible differentiabut it does not have any rational connection with the object sought to beachieved by Rule 12 (8) (a). Applying the test of proportionality, we areof the opinion that the restriction imposed by the Rule is unreasonable.Ergo, Rule 12 (8)(a) is violative of Articles 14 and 19 (1) (g) of theConstitution.

26. For the aforementioned reasons, the judgment of the HighCourt is set aside and the Appeals are allowed accordingly.

Nidhi Jain

Appeals allowed.

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