Policy Decisions of the State are not to be disturbed/interfered with unless
they are found to be grossly arbitrary or irrational; Supreme Court.
Policy Decisions of the State are not to be disturbed/interfered with unless
they are found to be grossly arbitrary or irrational; Supreme Court
Courts cannot usurp the jurisdiction of Decision Makers in the garb of
Judicial Review, held Supreme Court of India, while setting aside the
Telangana High Court's Orders fixing Fee Structure of Unaided Minority &
Non-minority Institutions for Engineering Courses for 2016-17 & 2018-19 academic
years in Civil Appeal Nos 5133-35 of 2019 (arising out of SLP (C) No. 30090 of
2018) titled Vasavi Engineering College Parents Association Vs State of
Telangana & Ors.
The Supreme Court of India in Islamic Academy of Education & Anr, Vs State of
Karnataka & Ors., (2003) 6 SCC 697, directed the establishment in each
State, of a Committee to regulate the Fee Structure in Unaided Minority &
Non-minority Educational Institutions. The Telangana Admission & Fee Regulatory
Committee (for Professional Courses offered in Private Unaided Professional
Institutions) Rules, 2006 were framed under Section 15 read with Sections 3 and
7 of the Telangana Educational Institutions (Regulation of Admission and
Prohibition of Capitation Fee) Act, 1983. Under Rule 4 (v), the Committee is
required to communicate the Fee Structure determined by it to the State
Government for notification.
The Fee Structure so notified, inter alia for the B. E. & B. Tech Courses, for
the block period 2016-2017 to 2018-2019, on a challenge made by the
institutions did not meet the approval of the Learned Single Judge. The matter
was remanded back to the Telangana Admission & Fee Regulatory Committee.
On a reconsideration, the Telangana Admission & Fee Regulatory Committee granted
some escalation, which was again challenged. Opining that the fixation was not
proper, the Learned Single Judge proceeded to fix the Fee Structure to his
Aggrieved, the State of Telangana & the Fee Regulatory Committee
assailed the same unsuccessfully before the Division Bench. The Parent’s
Association also assailed the impugned orders directly before the Supreme Court,
after having been granted leave to do so. Thus, the appeals.
Constitution of India is based on the basic principle of separation of powers,
though there is some overlapping. There are mainly three wings of the State,
namely, Legislature, Executive and Judiciary. Each wing of the State has the
power to act in its own sphere of activity. Legislature is to make laws.
Executive is to make policies (subject to law), implement them, and run the
administration. Judiciary is to apply laws, interpret laws, and to decide
disputes and deliver justice.
This is only a basic description of their activities. Therefore, making policies
and executing them comes within the sphere of activities of the Executive. It is
not within the power of the Judiciary. Moreover, the Judiciary does not have the
expertise and the domain knowledge to make policies or to amend them. On the
other hand, the Executive has experts, professionals, administrators, advisors,
etc., in a given field and has the expertise to make policies after taking into
consideration all aspects of a matter.
It is settled law that policy decisions of the State are not to be disturbed
unless they are found to be grossly arbitrary or irrational. In this context
reference may be had to the judgment of the Supreme Court in the case of
Federation of Railway Officers Association & Ors. Vs. Union of India, (2003)
4 SCC 289, where the court held as follows:
12. In examining a question of this nature where a policy is evolved by the
Government judicial review thereof is limited. When policy according to which or
the purpose for which discretion is to be exercised is clearly expressed in the
statute, it cannot be said to be an unrestricted discretion.
On matters affecting policy and requiring technical expertise the Court would
leave the matter for decision of those who are qualified to address the issues.
Unless the policy or action is inconsistent with the Constitution and the laws
or arbitrary or irrational or abuse of power, the Court will not interfere with
Reference may also be had to the judgment of the Supreme Court in the case of
Directorate of Film Festivals & Ors. Vs. Gaurav Ashwin Jain & Ors.,
(2007) 4 SCC 737, where the Court held as follows:
16. The scope of judicial review of governmental policy is now well defined.
Courts do not and cannot act as Appellate Authorities examining the correctness,
suitability and appropriateness of a policy nor are courts Advisors to the
executive on matters of policy which the executive is entitled to formulate.
The scope of judicial review when examining a policy of the government is to
check whether it violates the fundamental rights of the citizens or is opposed
to the provisions of the Constitution, or opposed to any statutory provision or
manifestly arbitrary. Courts cannot interfere with policy either on the ground
that it is erroneous or on the ground that a better, fairer or wiser alternative
is available. Legality of the policy, and not the wisdom or soundness of the
policy, is the subject of judicial review.
The scope of judicial review in policy matters is no longer res integra.
It is settled law that the Court would not ordinarily interfere with the policy
decision of the executive unless the same can be faulted on the grounds of
malafides, unreasonableness, arbitrariness or unfairness, in which case the
policy would render itself to be declared unconstitutional.
In State of Punjab & Ors. Vs Ram Lubhaya Bagga & Ors., (1998) 4 SCC 117,
it was held thus;
........When Government forms its policy, it is based on number of circumstances
on facts, law including constraints based on its resources. It is also based on
expert opinion. It would be dangerous if Court is asked to test the utility,
beneficial effect of the policy or its appraisal based on facts set out in
affidavits. The Court would dissuade itself from entering into this realm which
belongs to the executive. It is within this matrix that it is to be seen whether
the new policy violates Article 21when it restricts reimbursement on account of
its financial constraints.
On similar lines was the pronouncement of Apex Court in case of Ugar Sugar
Works Ltd. Vs Delhi Administration & Ors; (2001) 3 SCC 635, wherein the Apex
Court held as under:
The challenge, thus, in effect, it to the executive policy regulating trade in
liquor in Delhi. It is well settled that the Courts, in exercise of their power
of judicial review, do not ordinarily interfere with the policy decisions of the
executive, unless the policy can be faulted on grounds of mala fide,
unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness,
irrationality, perversity and mala fide will render the policy unconstitutional.
However, if the policy cannot be faulted on any of these grounds, the mere fact
that it would hurt business interests of a party, does not justify invalidating
the policy. In tax and economic regulation cases, there are good reasons for
judicial restraint, if not judicial deference to the judgment of the executive.
The Courts are not expected to express their opinion as to whether at a
particular point of time or in a particular situation any such policy should
have been adopted or not. It is best left to the discretion of the State,
In Balco Employees Union (Regd.) Vs Union of India & Ors;
(2002) 2 SCC 333, the Apex Court in Paragraph 92 & 98 held as under:
92. In a democracy, it is the prerogative of each elected Government to follow
its own policy. Often a change in Government may result in the shift in focus or
change in economic policies. Any such change may result in adversely affecting
some vested interests. Unless any illegality is committed in the execution of
the policy or the same is contrary to law or mala fide, a decision bringing
about change cannot per se be interfered with by the Court.
98. In the case of a policy decision on economic matters, the Courts should be
very circumspect in conducting any enquiry or investigation and must be most
reluctant to impugn the judgment of the experts who may have arrived at a
conclusion unless the Court is satisfied that there is illegality in the
This view has recently been reiterated by the Apex Court in Parisons Agrotech
Private Limited & Anr Vs Union of India & Ors; (2015) 9 SCC 657, the Supreme
Court observed as under:
14. No doubt, the Writ Court has adequate power of judicial review in respect of
such decisions. However, once it is found that there is sufficient material for
taking a particular policy decision, bringing it within the four corners of
Article 14 of the Constitution of India, power of Judicial Review would not
extend to determine the correctness of such a policy decision or to indulge into
the exercise of finding out whether there could br more appropriate or better
Once we find that parameters of Article 14 are satisfied; there was due
application of mind in arriving at the decision which is backed by cogent
material; the decision is not arbitrary or irrational and; it is taken in public
interest, the Court has to respect such a decision of the Executive as the
policy making is the domain of the Executive and the decision in question has
passed the test of the Judicial Review.
Supreme Court while allowing the Civil Appeal No 5133 of 2019 (arising out of
SLP (C) No.30090 of 2018) titled Vasavi Engineering College Parents
Association Vs State of Telangana & Ors. held that:
17. Judicial review, as is well known, lies against the decision making process
and not the merits of the decision itself. If the decision making process is
flawed inter alia by violation of the basic principles of natural justice, is
ultravires the powers of the decision maker, takes into consideration
irrelevant materials or excludes relevant materials, admits materials behind the
back of the person to be affected or is such that no reasonable person would
have taken such a decision in the circumstances, the court may step in to
correct the error by setting aside such decision and requiring the decision
maker to take a fresh decision in accordance with the law.
The Court in the garb of Judicial Review, cannot usurp the jurisdiction of the
decision maker and make the decision itself. Neither can it act as an Appellate
Authority of the Telangana Admission & Fee Regulatory Committee.
In Fertilizer Corporation Kamgar Union (Regd.), Sindri v Union of India,
(1981) 1 SCC 568, it was observed:
35. ….We certainly agree that judicial interference with the administration
cannot be meticulous in our Montesquien system of separation of powers. The
court cannot usurp or abdicate, and the parameters of judicial review must be
clearly defined and never exceeded. If the directorate of a government company
has acted fairly, even if it has faltered in its wisdom, the court cannot, as a
super auditor, take the Board of Directors to task.
This function is limited to testing whether the administrative action has been
fair and free from the taint of unreasonableness and has substantially complied
with the norms of procedure set for it by rules of public administration.
18. Judicial restraint in exercise of Judicial Review was considered in the
State of (NCT) of Delhi Vs Sanjeev, (2005) 5 SCC 181 as follows:
16.…One can conveniently classify under three heads the grounds on which
administrative action is subject to control by Judicial Review. The first ground
is illegality, the second irrationality, and the third procedural impropriety.
These principles were highlighted by Lord Diplock in Council of Civil Service
Unions v. Minister for the Civil Service (commonly known as CCSU case). If
the power has been exercised on a non-consideration or non-application of mind
to relevant factors, the exercise of power will be regarded as manifestly
erroneous. If a power (whether legislative or administrative) is exercised on
the basis of facts which do not exist and which are patently erroneous, such
exercise of power will stand vitiated.
19. It needs no emphasis that complex executive decisions in economic matters
are necessarily empiric and based on experimentation. Its validity cannot be
tested on any rigid principles or the application of any straitjacket formula.
The Court while adjudging the validity of an executive decision in economic
matters must grant a certain measure of freedom or play in the joints to the
executive. Not mere errors, but only palpably arbitrary decisions alone can be
interfered with in judicial review.
The recommendation made by a statutory body consisting of domain experts not
being to the satisfaction of the State Government is an entirely different
matter with which we were not concerned in the present discussion. The Court
should therefore be loath to interfere with such recommendation of an expert
body, and accepted by the Government, unless it suffers from the vice of
arbitrariness, irrationality, perversity or violates any provisions of the law
under which it is constituted.
The Court cannot sit as an appellate authority, entering the arena of disputed
facts and figures to opine with regard to manner in which the TAFRC ought to
have proceeded without any finding of any violation of rules or procedure. If a
statutory body has not exercised jurisdiction properly the only option is to
remand the matter for fresh consideration and not to usurp the powers of the
In Peerless General Finance & Investment Co. Ltd. Vs Reserve Bank of India,
(1992) 2 SCC 343. it was observed;
31. The function of the Court is to see that lawful authority is not abused but
not to appropriate to itself the task entrusted to that authority. It is well
settled that a public body invested with statutory powers must take care not to
exceed or abuse its power. It must keep within the limits of the authority
committed to it. It must act in good faith and it must act reasonably. Courts
are not to interfere with economic policy which is the function of experts.
It is not the function of the Courts to sit in judgment over matters of economic
policy and it must necessarily be left to the expert bodies. In such matters
even experts can seriously and doubtlessly differ. Courts cannot be expected to
decide them without even the aid of experts.
20. In the context of Indian jurisprudence, the Constitution is the supreme law.
All executive or legislative actions have to be tested on the anvil of the same.
Such actions will have to draw their sustenance as also their boundaries under
the same. Any action falling foul of the constitutional guarantees will call for
corrective action in Judicial Review to ensure adherence to the constitutional
ethos. But so long as the fabric of the constitutional ethos is not set asunder,
the Court will have to exercise restraint, more particularly in matters
concerning domain experts, else the risk of justice being based on individual
perceptions which may render myths as realities inconsistent with the
Courts often adjudicate disputes that raise the question of how strictly should
they scrutinise executive or legislative action. Therefore, Courts have
identified certain questions as being inappropriate for judicial resolution or
have refused on competency grounds to substitute their judgment for that of
another person on a particular matter.
23. Islamic Academy of Education (supra) was a sequel to T. M. A Pai Fountain
& Ors. Vs State of Karnataka & Ors., (2002) 8 SCC 481, which was being
understood in different perspectives leading to several litigations.
The fixation of fee by the TAFRC is not an adversarial exercise but is meant to
ensure balance in the fee structure between the competing interest of the
students, the institution and the requirement and desire of the society for
accessible quality education. It is but a part of the high concept of fairness
in opportunities and accessibility to education, which is an avowed
constitutional goal. But to equate it to the extent of a right to challenge and
interference only on basis of a different view being possible, cannot be a
justification to interfere with the recommendation of an expert committee.
It is nobody’s case that the TAFRC has acted contrary to principles of
accounting and economics or any fundamental precincts of the same. In this
context, the following observations in Modern School Vs Union of India,
(2004) 5 SCC 583, are considered relevant in the necessary extract. 20.
We do not find merit in the above arguments. Before analysing the rules herein,
it may be pointed out, that as of today, we have Generally Accepted Accounting
Principles (GAAP). As stated above, commercialisation of education has been a
problem area for the last several years. One of the methods of eradicating
commercialisation of education in schools is to insist on every school following
principles of accounting applicable to not for profit organisations/non
51. Indisputably, the standard of education, the curricular and co-curricular
activities available to the students and various other factors are matters which
are relevant for determining of the Fee Structure. The Courts of law having no
expertise in the matter and/or having regard to their own limitations keeping in
view the principles of Judicial Review always refrain from laying down precise
formulae in such matters. Furthermore, while undertaking such exercise the
respective cases of each institution, their plans and programmes for the future
expansion and several other factors are required to be taken into consideration.
The Constitution Bench in Islamic Academy of Education which as noticed
hereinbefore subject to making of an appropriate legislation directed setting up
of two Committees, one of which would be for determining fee structure. This
Court, both in T. M. A. Pai Foundation & Islamic Academy of Education had upheld
the rights of the minorities and unaided private institutions to generate a
reasonable surplus for future development of education.
24. Before concluding the discussion, in view of the reasons stated by the High
Court for fixation of the appropriate Fee Structure by itself, reference may
usefully be made to the observations in D. N. Jeevaraj Vs Chief Secretary,
Government of Karnataka, (2016) 2 SCC 653, as follows:
43. To this we may add that if a Court is of the opinion that a statutory
authority cannot take an independent or impartial decision due to some external
or internal pressure, it must give its reasons for coming to that conclusion.
The reasons given by the Court for disabling the statutory authority from taking
a decision can always be tested and if the reasons are found to be inadequate,
the decision of the Court to bypass the statutory authority can always be set
If the reasons are cogent, then in an exceptional case, the Court may take a
decision without leaving it to the statutory authority to do so. However, we
must caution that if the Court were to take over the decision taking power of
the statutory authority it must only be in exceptional circumstances and not as
The recommendations of the Telangana Admission & Fee Regulatory Committee being
the resultant of a quasi-judicial decision making process, it will undoubtedly
be amenable to the jurisdiction of the Court for scrutiny by Judicial Review, so
as to ensure adherence to the constitutional principles of reasonableness,
fairness and adherence to the law under Article 14 of the Constitution, the
The Court, in the garb of Judicial Review, cannot usurp the jurisdiction of
the decision maker and make the decision itself. Neither can it act as an
Appellate Authority of the Telangana Admission & Fee Regulatory Committee,
held the Bench comprising of Justices Arun Mishra & Naveen Sinha.
We, therefore, hold that the High Court exceeded its jurisdiction in interfering
with the recommendation of the Telangana Admission & Fee Regulatory Committee
for reasons discussed. The Orders/Judgments of the High Court are set aside. The
recommendation of the TAFRC dated February 04, 2017 for the block period
2016-2017 & 2018-2019 is restored, the Supreme Court said.
It said that not mere errors, but only palpably arbitrary decisions alone can be
interfered with in Judicial Review. The Court should therefore be loath to
interfere with such recommendation of an expert body, and accepted by the
Government, unless it suffers from the vice of arbitrariness, irrationality,
perversity or violates any provisions of the law under which it is constituted,
the Bench said.
Written By: Dinesh Singh Chauhan, Advocate
J&K High Court of Judicature, Jammu.
Email: [email protected], [email protected]