The Madras High Court judgment delivered by Justice V. Dhanapalan that Mr. Arun Thiruvengadam discussed in his post (see below) is elaborated in a few key respects in some detail below. Brought against the government by various single and groups of private colleges in the state, the petitions challenged three provisions - Sections 2(c)(iii), 4(1) and 5(4) of the Tamil Nadu Admission in Professional Educational Institutions Act, 2006 which read as follows:
“ In this Act, unless the context otherwise requires:-
(c)"Government seats" mean-
(iii) 65% of seats in each branch in non-minority unaided professional educational institutions and 50% of the seats in each branch in minority unaided professional educational institutions, in accordance with the consensus arrived at between such professional educational institutions and the Government;
 Admission in unaided professional educational institutions
(1) Notwithstanding anything contained in any relevant law or any rules, regulations or by laws made there under, admission to seats, excluding the seats referred to in item (iii) of clause (c) of Section 2 in all unaided professional educational institutions shall be made by the consortium of unaided professional educational institutions approved by the Government or by any authority authorized by the Government, on the basis of the marks obtained by a student in the relevant subjects in the qualifying examination.
 Normalization of marks:
(4) The appropriate authority and the consortium of unaided professional educational institution shall prepare the rank lists for admission of students to the seats referred to in section 3 and section 4, respectively and allot students through centralized counseling.”
A brief background of events as relevant to the discussion below, as stated in the judgment itself, is as follows: “… a consensus was arrived at between the Government and the petitioner Consortium in the matter of admissions for the year 2006-2007. In view of the said consensus, an affidavit was filed before this Court whereby and whereunder the petitioner Consortium agreed for seat-sharing between the Government and the private self-financing institutions for the academic year 2006-2007. It was further agreed that in respect of non-minority colleges, 65% of the seats in their institutions could be filled by the Government while the remaining 35% could be filled by the respective colleges. It was also agreed that as for minority colleges, 50% of the seats could be filled by the Government while the remaining 50% could be filled by the respective Colleges and 15% of the seats within the Management quota was permitted to be filled up with non-resident Indians (NRIs). The admissions were agreed to be made based on the marks obtained in the Common Entrance Test conducted by the petitioner Consortium taken along with the marks scored in the qualifying examinations. The State Government also filed an affidavit consenting to follow the practice which was adopted for the previous academic year in the matter of admission of students by private colleges and making it clear that they do not insist that the self-financing colleges should follow the single window system. These agreements were taken on record and in terms of the settlement arrived at between the parties, the writ petitions were disposed of by this Court…The state has now enacted the Act to provide for admissions to professional degree courses such as engineering, medicine, dental, agriculture, etc. on the basis of marks scored in the qualifying examinations vide its judgment reported in 2006 (3) MLJ 648…
In the academic year 2006-2007, the private self-financing Engineering Colleges, both minority as well as non-minority, had agreed to share the seats with the Government only for the academic year 2006-2007 and accordingly, filled up the seats in terms of the consensus arrived at and this being the scenario, the State has now enacted the Act (passed by the Assembly in December 2006) to provide for admissions to professional degree courses such as engineering, medicine, dental, agriculture, etc. on the basis of marks scored in the qualifying examinations.”
The principal challenge was on the ground of the equity principle (which essentially stands for the notion that power possessed must equal responsibility shouldered, viz. since government makes no contribution to unaided colleges, it ought not to have a say in their administration) enunciated in Inamdar. The petitions here accordingly claimed inter alia that as per the judgment in that case, the Government, under either Art. 19(1)(g) or Art. 30(1), has no right either to appropriate any quota of seats or to compel the unaided professional institutions to give up a share of the available seats to the candidates chosen by the State as mentioned in section 2c(iii), or to prescribe the method of admission as in 4(1) requiring them to be made on the basis of marks in the qualifying examination, or to direct them to admit students through a centralized counseling system as stated in 5(4). Another important ground was contract violation, i.e. that the so-called consensus was limited to 2006-2007, and several provisions of the Act were never agreed to by the Consortium and represent a unilateral re-writing of it.
The court, in rejecting arguments against the first two provisions (2c(iii) and 4(1)), quoted portions of the Pai Foundation and Inamdar judgments in support of its position that the test of constitutionality of the impugned legislation is whether it is the outcome of a consensual arrangement between the private colleges and the state.
Para 68 from Pai Foundation states:
"It would, therefore, be permissible for the university or the Government, at the time of granting recognition, to require a private unaided institution to provide for merit-based selection while, at the same time, giving the management sufficient discretion in admitting students. This can be done through various methods. For instance, a certain percentage of the seats can be reserved for admission by the management out of those students who have passed 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 of counseling by the State agency. This will incidentally take care of poorer and backward sections of the society. The prescription of percentage for this purpose has to be done by the Government according to the local needs and different percentages can be fixed for minority unaided and non-minority unaided and professional colleges."
Para 126 from Inamdar ‘clarifying’ the above mentioned paragraph of the Pai Foundation reads:
". . .reading the whole judgment (in the light of previous judgments of this Court, which have been approved in Pai Foundation) in our considered opinion, observations in para 68 merely permit unaided private institutions to maintain merit as the criterion of admission by voluntarily agreeing for seat-sharing with the State or adopting selection based on common entrance test of the State. There are also observations saying that they may frame their own policy to give freeships and scholarships to the needy and poor students or adopt a policy in line with the reservation policy of the State to cater to the educational needs of the weaker and poorer sections of the society."
Again, para 128 of Inamdar reiterated thus:
"We make it clear that the observations in Pai Foundation in para 68 and other paragraphs mentioning fixation of percentage of quota are to be read and understood as possible consensual arrangements which can be reached between unaided private professional institutions and the State." Hence, the learned judge concluded, “… it was held that fixation of percentage of quota is to be read and understood as possible consensual arrangements which can be reached between unaided private professional institutions and the State…”
The court, also noting that the previously filed affidavits did not mention any limitation of the consensual arrangement to 2006-2007 and that the seat distribution pattern being very similar to what has been in vogue for nearly twenty years could not be termed a rewriting of the contract, concluded that “section 2(c)(iii) of the Act is not, in any way, in infringement of the constitutional rights guaranteed under Article 19(1)(g) or 30(1) of the Constitution and it is also not in violation of the rulings of the Supreme Court in Pai Foundation case and Inamdar case”.
The court, while dismissing other technical objections (not mentioned here) to section 4(1), without detailed elaboration, simply stated that “admissions to seats other than the seats mentioned in Section 2(c)(iii) are made by the consortium and approved by the Government or any authority authorized by the Government and this power of the State to allot seats to admission made by the consortium in respective Colleges is in conformity with the decision of the Pai Foundation case which is reiterated in Inamdar case and is also not in violation of Article 30 of the Constitution. In that view of the matter, this Court holds that there is no infringement of rights of the minorities or the non-minorities in admitting students in accordance with the provision of Section 4(1) which is unambiguous…”
In regard to section 5(4), the court quoted para 138 of the Pai Foundation judgment:
"It needs to be specifically stated that having regard to the larger interest and welfare of the student community to promote merit, achieve excellence and curb malpractices, it would be permissible to regulate admissions by providing a centralized and single window procedure. Such a procedure, to a large extent, can secure grant of merit-based admissions on a transparent basis..."
Also, para 136 from the Inamdar opinion maintained thus:
“Holding of such common entrance test followed by centralized counseling or, in other words, single-window system regulating admissions does not cause any dent in the right of minority unaided educational institutions to admit students of their choice. Such choice can be exercised from out of the list of successful candidates prepared at CET without altering the order of merit inter se of the students so chosen." It followed from this, the learned judge held, that section 5(4) was in accordance with the rulings of the Supreme Court and therefore not unconstitutional.
In summary, the court seems to have relied upon two grounds primarily for its decision: (1) that the Act represented a consensus between the colleges and the state and the petitioner Consortium’s grievances and claims notwithstanding, the ‘consensus’ represented the absence of coercion and hence, violation of the equity principle did not come into play (2) aspects of the impugned provisions, even if not part of the contractual arrangement, are nevertheless consistent with past rulings of the Supreme Court.
A few questions are relevant here. (1) Since when does the constitutionality of a statute depend on ‘consensus’? Are legislatures bound by such ‘consensual’ determinations in which they may not have much of a say? Finally, as a consequence of this, can constitutional principles be overridden by the State’s contractual obligations to private parties? By the same argument, if the union government were to claim in court, in the defense of an impugned legislation, that the statute was actually the outcome of a broad consensus amongst political parties and/or various lobbyists, would that suffice to meet the test of constitutionality? (2) The other question is the fate of this equity principle itself, so widely hailed in the press at the time Inamdar was decided. By allowing virtually the entire admission process to be choreographed and monitored by the government at every stage, the judgment while clearly not being the last word, in effect, seems to have given this principle a near-fatal blow if not a burial.
In fairness, the court did quote the key paragraph 125 from Inamdar which expounded this principle:
“. . . neither in the judgment of Pai Foundation nor in the Constitution Bench decision in Kerala Education Bill which was approved by Pai Foundation, is there anything which would allow the State to regulate or control admissions in the unaided professional educational institutions 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 the seats available to be filled up at its discretion in such private institutions. This would amount to nationalization of seats which has been specifically disapproved in Pai Foundation. 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. 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. Merely because the resources of the State in providing professional education are limited, private educational institutions, which intend to provide better professional education, cannot be forced by the State to make admissions available on the basis of reservation policy to less meritorious candidates. Unaided institutions, as they are not deriving any aid from State funds, can have their own admissions if fair, transparent, non-exploitative and based on merit.”
As can be seen from the above paragraph, the principle is not so categorically stated but qualified by the need for the procedure to be ‘fair, transparent, non-exploitative and based on merit’ – the key question of who decides and how whether those criteria are met without violating institutional autonomy is left unaddressed (this begs the very question to be answered). To be sure, Pai Foundation did not cite any such principle and the bench in Inamdar which was only ‘interpreting’ it, while stating thus, tried its best to explain away the contradictions that it created with the examples cited in the former opinion. If J. Dhanapalan’s view also holds up in the Supreme Court, it would at least indicate one thing, namely, that the equity principle is at the most a default position which the state is free to overturn by appropriate legislation. That being the case, the belief that this is really a constitutional principle and integral to the basic structure is unlikely to hold water; on this basis alone, it would appear, at least the first part of Art. 15(5) (excluding the minority exception), currently under challenge, should hold up in court.