P. A. Inamdar & Ors. v. State of Maharashtra & Ors.

The case of P. A. Inamdar & Ors. v. State of Maharashtra & Ors. is a landmark judgement by the Supreme Court of India that significantly clarified the rights and autonomy of unaided private professional educational institutions in matters relating to admissions and fee structures. The decision also balanced the powers of the State to regulate such institutions in the interest of the public and students. 

Background of P. A. Inamdar & Ors. v. State of Maharashtra & Ors.

Before the Inamdar judgement, the Supreme Court had laid down important principles concerning private educational institutions in two notable cases — T.M.A. Pai Foundation v. State of Karnataka (2003) and Islamic Academy of Education v. State of Karnataka (2003). The Pai Foundation case was a Constitution Bench decision that upheld the fundamental rights of unaided private institutions, especially their right to administer admissions and fees, subject to a “triple test” of fairness, transparency, and non-exploitation.

Following this, the Islamic Academy judgement dealt specifically with minority educational institutions and introduced the concept of two committees at the state level: one to regulate admissions and another to approve fee structures.

Despite these rulings, confusion and inconsistency in implementation persisted across different states and courts. The State of Maharashtra’s directive mandating 50% reservation in admissions for unaided private colleges and setting up regulatory committees led to multiple legal challenges. This ultimately culminated in the P. A. Inamdar case, which aimed to settle these issues comprehensively.

Issues Before the Court

The Supreme Court in Inamdar examined several important questions:

1. To what extent can the State regulate admissions in unaided private educational institutions, whether minority or non-minority?
2. Whether the State can enforce its reservation policy or appropriate any quota of seats in such institutions?
3. Are unaided (minority and non-minority) institutions free to devise their own admission procedures?
4. Do these institutions have the right to fix their own fee structures?
5. Does the setting up of two committees (for admission and fee regulation) as directed in the Islamic Academy judgement go beyond the law laid down in the Pai Foundation case?

Constitutional Provisions Relevant to P. A. Inamdar & Ors. v. State of Maharashtra & Ors. Case

Several constitutional provisions were central to the Court’s deliberations:

• Article 19(1)(g): Protects the right to practice any profession or carry on any occupation, trade, or business, which includes the right of private institutions to administer themselves.
• Article 19(6): Allows reasonable restrictions to be placed on Article 19(1)(g) in the interest of the general public.
• Article 30(1): Grants minorities the right to establish and administer educational institutions of their choice.

The Court’s task was to balance these fundamental rights with the State’s interest in regulating admissions and fees to ensure fairness, prevent exploitation, and promote access.

Arguments Presented in P. A. Inamdar & Ors. v. State of Maharashtra & Ors. Case

Petitioners’ Contentions

• The imposition of reservation quotas and the setting up of permanent committees infringed upon the autonomy guaranteed to minority institutions under Article 30 and to unaided non-minority institutions under Article 19(1)(g).
• Such State interference was not a ‘reasonable restriction’ within the meaning of Article 19(6) but rather a negation of the constitutional protections.
• The directive in Islamic Academy was contrary to the earlier ruling in Pai Foundation.
• The State’s interest could not justify curtailing the rights of educational institutions guaranteed under the Constitution.

Respondents’ Contentions

• Article 19(6) permits the State to impose regulations in the public interest.
• The Islamic Academy decision was consistent with Pai Foundation.
• No fundamental rights under Articles 19(1)(g) or 30 were violated by the State’s regulatory measures.

Supreme Court’s Analysis and Findings in P. A. Inamdar & Ors. v. State of Maharashtra & Ors. Case

The Supreme Court delivered the P. A. Inamdar & Ors. v. State of Maharashtra & Ors. Case judgement addressing each issue:

State’s Power to Enforce Reservation and Seat Quotas

• The Court held that neither the Pai Foundation judgement nor the Kerala Education Bill decision allowed the State to regulate admissions in unaided professional educational institutions to the extent of appropriating seats or enforcing reservations.
• Forcing private unaided institutions to allocate seats according to State quotas amounted to “nationalisation” of seats, which the Court expressly disapproved.
• Such State action was seen as a serious encroachment on institutional autonomy and did not qualify as a ‘reasonable restriction’ under Article 19(6) or a valid minority safeguard under Article 30.
• The Court emphasised that limited State resources in professional education could not justify compelling unaided private institutions to admit less meritorious candidates based on reservation policies.

Freedom to Devise Admission Procedures

• Both minority and non-minority unaided institutions were free to devise their own admission procedures, provided these passed the “triple test”:
  • Fairness: Admissions must be just and impartial.
  • Transparency: The admission process must be clear and open.
  • Non-exploitative: Students must not be subjected to exploitation through arbitrary or unfair means.
• Where multiple institutions offered similar courses, they could jointly conduct a common entrance test satisfying the triple test.
• If the admission procedure of an institution or group of institutions failed these standards, the State was permitted to intervene and substitute a fair and transparent procedure.

Right to Fix Fee Structure

• The Court reiterated that setting a reasonable fee structure was an essential part of the right to establish and administer an institution under Article 30.
• However, the charging of capitation fees—whether directly or indirectly—or profiteering was impermissible.
• Recognising the harsh realities of commercialisation in education, the Court permitted regulation of fee structures to prevent exploitation and profiteering.
• The right to fix fees was subject to the limitation that fees must be reasonable and not arbitrary.

Validity of Committees under Islamic Academy

• The Supreme Court upheld the setting up of two committees—one for regulating admissions and the other for determining fees—as valid regulatory measures in the public interest.
• These committees aimed to protect students from exploitation and maintain education standards without infringing on constitutional rights.
• The scheme was held to be consistent with the principles in Pai Foundation and did not violate Articles 19(1)(g) or 30.

Key Principles Laid Down in P. A. Inamdar & Ors. v. State of Maharashtra & Ors. Case

From the Inamdar judgement, several important principles emerge:

• Institutional Autonomy: Unaided private professional institutions, minority or non-minority, have significant autonomy over admissions and fee-setting.
• No State Reservation: The State cannot impose reservation quotas or appropriate any seats in unaided private institutions.
• Triple Test for Admission Procedures: Admission processes must be fair, transparent, and non-exploitative.
• Fee Fixation with Limitations: Institutions can fix fees but cannot charge capitation fees or engage in profiteering.
• Regulatory Oversight Permissible: State may regulate admissions and fees through appropriate mechanisms, such as committees, to prevent exploitation while respecting autonomy.

Conclusion

The Supreme Court in P. A. Inamdar & Ors. v. State of Maharashtra & Ors. laid down a clear and balanced framework that protects the autonomy of unaided private educational institutions while recognising the need for reasonable regulation in the interest of students and society.

The ruling clarified that the State cannot appropriate seats or impose reservation policies on private unaided institutions, but these institutions must follow admission procedures that are fair, transparent and non-exploitative. Fee fixation remains the prerogative of institutions, subject to restrictions against capitation fees and profiteering. Moreover, regulatory oversight through committees is constitutionally permissible as a reasonable restriction.