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Summary of the Karnataka High Court Judgement on UGC Deemed Universities Regulations

June 8th, 2014, Updated: 1:42 pm
Background:

University Grants Commission in exercise of power conferred under Clauses (f) and (g) of Sub-section (1) of Section 26 of the UGC Act, 1956 had framed and notified the UGC (Institutions Deemed to be Universities) Regulations, 2010 (Hereinafter referred to as the “2010 Regulations”). These Regulations as prescribed in Regulation 1.2 was intended to apply on all the Deemed Universities in India.

Further, UGC also communicated to all the Deemed to be Universities, including the Petitioners before the Hon’ble Court to make necessary modifications to the Memorandum of Association and Rules & Regulations in accordance with UGC (Institutions Deemed to be Universities) Regulations, 2010 and report compliance.

Some of the Deemed Universities, being aggrieved and prejudiced by such direction, having their Campus in Karnataka challenged the UGC (Institutions Deemed to be Universities) Regulations, 2010.

Principal Prayer before the Hon’ble Court:

The Writ Petitions were filed under Articles 226 and 227 of the Constitution of India praying to quash the University Grants Commission [Institutions deemed to be Universities] Regulations 2010 dated 21.5.2010 to be unconstitutional and ultravirus to the provisions of University Grants Commission Act, 1956.

Consequently, it was also prayed that the communication of UGC / MHRD asking the Deemed Universities to change the Memorandum of Association & Rules and Regulations, in accordance with UGC (Institutions Deemed to be Universities) Regulations, 2010 be quashed and set aside.

Points of Determination framed by the Hon’ble Court:

The Hon’ble Court framed following points of determination for adjudicating upon the issues involved in the Petition:

1]         Whether the UGC (Institutions Deemed to be Universities) Regulations 2010 are invalid and unconstitutional in the light of the TMA Pai, PA Inamdar and related decisions of the Apex Court?

2]         Whether the 2010 Regulations are ultra vires Section 26 (2) of the UGC Act on account of the UGC having abdicated its discretion to frame the Regulations as the same are dictated by the Central Government?

3]         Whether it could be said that the said Regulations are prospective in application and would not adversely affect the interest of an existing University?

4]         Whether the directions issued by the UGC, seeking to enforce the said Regulations are to be struck down?

 Arguments advanced by the Deemed Universities:

1]         It was pointed out that the seeming prospective application of the Regulations to existing Deemed University is in direct conflict with the safeguard provided under Sub-section (3) of Section 26 of the UGC Act, as compliance with 2010 Regulations, would directly and adversely affect existing rights Deemed Universities. Therefore, the impugned Regulations cannot be given retrospective effect so as to prejudicially affect the interests of Institutions.

2]         It was contended that Regulations 5 concerning Governance, particularly prohibiting President of the Sponsoring Society to be Chancellor of the University, restricting the representation of Sponsoring Society on authorities of the University including Board of Management have the effect of divesting the Institutions of Management and is in violation of dicta laid down in TMA Pai’s Case.

3]         It was pointed out that the Apex court has held that private unaided educational institutions cannot be deprived of their choice in matters of selection of students and fixation of fees, if the selection is subject to the minimum qualification that may be prescribed and the procedure is fair, transparent and non-exploitative.

4]         It was further contended that Regulation 22 containing provision of forfeiture of property are confiscatory and are violative of Article 300A of the Constitution of India.

5]         It was also contended that the Regulation prescribing Reservation in Deemed Universities is clearly opposed to the law as declared by the Apex Court in P.A Inamdar v. State of Maharashtra.

6]         It was submitted that the 2010 Regulations are ultra vires Section 26(2) of the UGC Act given the brazen abdication of power by the UGC. In terms of Section 26 (2) of the UGC Act, the Commission did not require the prior approval of the Central Government in making the 2010 Regulations, which are contemplated under Clause (f) and (g) of Section 26(1) of the Act. However, it is evident that the UGC had abdicated its power to the Central Government, which dictated the content of the Regulations, thereby violating the UGC Act, 1956.

In the face of the above circumstances and the state of the law, the petition ought to be allowed as prayed for.

Arguments advanced by Central Government / UGC:

1]         It is stated that prior to the 2010 Regulations, there were guidelines framed by the UGC to implement the provisions of the UGC Act. Over a period of time the said guidelines were found to be woefully inadequate in statutory force and character, to regulate and maintain the standards of Institutions deemed to be Universities, warranting the framing of the 2010 Regulations.

2]         Regulation 5.0 relating to Governance manifests to effect changes in order to usher in transparency and accountability in the functioning of the institutions. It would be highly reprehensible if Institutions are reduced to a fiefdom and management by private family groups as invariably the Board of Management in most institutions was tightly controlled by members of the sponsoring Trust or Society and further the head of the founding Trust or Society was the ex officio Chancellor, irrespective of his eligibility or qualification.

3]         It is asserted that regulation of admission and fees contribute to the maintenance of academic standards, removal of hardship to students and in prevention of commercialization of higher education.

4]         The Regulation is in the nature of a reasonable restriction which is essential in the larger public interest.

5]         It is hence contended that the various provisions of the Regulations are aimed at achieving excellence in the field of Education by putting the Board of Management of the Institution with full Autonomy to perform its academic and administrative responsibilities free from the influence of the Trustees or Sponsors, who in most of the cases, are not either Educationalists or Academicians.

6]         Reliance was also placed upon decision of the Madras High Court in WP No.16015/2010 and connected cases – SRM University and others vs. University Grants Commission, decided on 30.8.2011, whereby a learned Single judge of that court having negated a challenge brought to the 2010 Regulations, by several Deemed Universities situate in Tamil Nadu.

Observation / Findings of the Hon’ble Court:

1]         On perusal of the various provisions of the Regulations, it is clear that it would require the petitioners to change their management structure, the fixation of fees would be out of their hands, student selection and admissions would no longer be under their control, apart from bringing into play several other restrictions not to speak of obligations that would arise.

2]         Regulation 5.0 dealing with governance is said to be aimed at preventing private and family controlled management of Universities. This presumption as to all Institutions being so managed and controlled may not be tenable, as the Supreme Court has clearly held that a private institution will have the right to constitute its own governing body.

3]         Regulation 5.5 and 5.7 would clearly alienate the sponsoring body from the management. It would be unfair and unreasonable if the sponsoring body is capable of supplying equally highly qualified and eminent persons as contemplated by the Regulations.

4]         In the matter of admissions the Regulation would run completely contrary to the dictum of the Apex Court in P A Inamdar Case that an unaided professional institutions should be given greater autonomy in determination of admission procedure and fee structure. State regulation should be minimal and only with a view to maintain fairness and transparency in admission procedure and to check exploitation of the students by charging exorbitant money or capitation fees.

5]         The Hon’ble Court also relied on Pai Foundation Case to hold that unaided institutions can legitimately claim unfettered fundamental right to choose the students to be allowed admission and the procedure therefore subject to its being fair, transparent and non-exploitative.

6]         In so far as the fee structure is concerned, the measures contemplated under the Regulations clearly undermine and overlook the reasoning and the opinion expressed by the Apex Court that 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. However, the Government can provide regulations that will ensure excellence in education, while forbidding the charging of capitation fee and profiteering by the institution. 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.

7]         In so far as the contention that there has been abdication of the discretionary power vested in the Commission in framing the Regulations is concerned, as already pointed out, the Central Government and UGC have violated the mandatory provisions of the UGC Act, 1956.

8]         It is inexplicable therefore that the UGC appears to have been completely sidelined and ignored in the action taken by the Central Government in appointing a Review Committee to address the working of the deemed to be Universities and thereafter to have appointed a Task Force to implement the report, said to have been filed by the Review Committee and further to seek the advice of the Task Force on certain draft Regulations.

9]         It is not at all in dispute that the Review Committee and the Task Force have been given a free hand to modify and alter the draft Regulations.

10]        The UGC is conferred with the power to make regulations under Section 26 of the UGC Act. The Commission is not required to obtain the previous approval of the Central government in making the impugned regulations, but the impugned Regulations was framed and notified at the direction of the Central Government.

11]        The framing of the same is clearly in violation of the procedure contemplated under Section 26(2) of the UGC Act.

12]        Hence, it can be said that the 2010 Regulations are ultra vires Section 26 (2) of the UGC Act.

13]        It will be in the fitness of things to strike down the directions issued by the UGC, seeking to enforce the 2010 Regulations.

Observation / Findings of the Hon’ble Court on Judgement of Madras High Court on validity of UGC Regulations, 2010:

Further, in so far as the reference to a decision of a learned Single Judge of the Madras High Court in the case of SRM University and connected matters, supra, a glaring feature of that decision is that there is no reference to any of the authorities that are cited and referred to in these proceedings. Hence, it loses any persuasive value and is hence not followed.

It is informed that earlier, Madras High Court had dismissed the Petitions challenging the validity of UGC Regulations, 2010 and had upheld the Regulations to be constitutional and valid. The Judgement was challenged before Division Bench and the Court was pleased to main STATUS QUO.

 Operative Order of the Hon’ble Court:

The 2010 Regulations are held to be unconstitutional and invalid. The directions issued to the petitioners by the UGC to implement the said Regulations are therefore quashed.

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