Has AICTE lost its regulatory oversight over Management Education?

NEW DELHI, AUGUST 12: The Supreme Court of India vide an order passed on July 24, 2019, seems to have divested the powers of the All India Council for Technical Education (AICTE) over ‘Management Education’, thus giving a degree of finality to its earlier orders of 2013. As per the SC ruling, any technical institution, affiliated to a University are now eligible to start a technical course without any approval from AICTE.

The apex court has been seized on matters relating to the powers of AICTE for many years now. However, the two important questions considered by the apex court were:
Whether the powers of AICTE were of approving/regulatory in nature in so far as all courses offered by Universities and colleges affiliated to Universities are concerned, or were they merely of advisory/recommendatory in nature?
Whether Management Education is ‘Technical’ as defined in Sec 2(g) of the AICTE act?
Bharthidasan University & Anr Vs. AICTE & Ors: The defining case was in 2001 when the Apex Court in its order in the case of Bharthidasan University & Anr Vs. AICTE & Ors [2001 (8) SCC 676] held that a “university” does not require the approval of AICTE and thus ensured that universities have only the UGC as their regulating and approving body.

Association of Management of Private Colleges vs. AICTE & Ors: In 2013, a major review of the powers of AICTE were considered by the Hon'ble Supreme Court of India vide its judgment dated 25.04.2013 passed in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271] and the apex court held:
-That AICTE only “has advisory, recommendatory and one of providing guidance and has no authority empowering it to issue or enforce any sanctions by itself.”
-The court further went on to remove all colleges affiliated to a university from the regulatory oversight of AICTE.
-The court held that MCA is technical in nature and thus gave advisory powers to AICTE
-The definition of “technical education” under Section 2(g) of the AICTE Act was discussed and the court held “that MBA course is not a technical course within the definition of the AICTE Act” and “the approval from AICTE is not required for obtaining permission and running MBA course by the appellant Colleges.”

Thus, in 2013, AICTE lost its powers to regulate MBA as it was deemed non-technical as defined under Sec 2(g) of the AICTE Act. Subsequently, AICTE filed two review petitions which were also dismissed by the apex court.

Orissa Technical Colleges Association Vs. AICTE & Anr: Subsequently, on an Interlocutory Application (IA) filed by AICTE in SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr, the Hon'ble Supreme Court of India passed an interim order dated 09.05.2014 clarifying as follows: “It is directed that prior approval of the All India Council for Technical Education (AICTE) is compulsory and mandatory for conduct of a technical course including the MBA/Management Course by an existing affiliated Technical College and also new Technical College which will require affiliation by a University for conduct of its Technical Courses/Programmes for the academic year 2014-15.” This order continued through various interim orders. Subsequently, a three-judge bench of the Hon'ble Supreme Court of India on 02.04.2019 dismissed the appeals filed by AICTE. Resulting in the interim orders passed in the said matters, from time to time, also came to an end.

AICTE vs Prince Shivaji Marathe Boarding Houses College of Architecture: On 24th July, 2019, when Civil Appeal 364/2005 between AICTE and Prince Shivaji Marathe Boarding Houses College of Architecture came up for consideration before the Apex Court along with a batch of petitions challenging the powers of AICTE, the court reserved its ruling mainly on the issue of whether ‘Architecture’ is technical in nature. However, it passed orders on the other batch of petitions pending before it.

AICTE Vs. IIPM: In a batch of SLPs, filed by AICTE against IIPM i.e. SLP (C) No.17764/2014 & 17765/2014, the Hon'ble Supreme Court of India while dismissing the said SLPs vide its order dated 24.07.2019, has held as under:
“The question as to whether the MBA course comes within the expression “technical education” under Section 2(g) of the All India Council for Technical Education Act, has been answered in the negative in Association of Management of Private Colleges vs. All India Council for Technical Education and Others (2013) 8 SCC 271. We, therefore, will have no ground to interfere with the orders impugned in the special leave petitions. The same are, accordingly, dismissed.”
What it would mean to Management Education:

The Court has clearly taken a view that Management Education is not technical in nature as defined in Sec 2(g) of the AICTE Act. It would mean that every institution offering a diploma in Management are at a crossroad. They may have to convert the same into an MBA by affiliating themselves into a university. What was a case filed by the Association of Management of Private Colleges to challenge the powers of AICTE has come back to bite them? In the absence of a regulatory body and forcing them to affiliate them to a university, the PGDM courses lose the sheen while exposing them to fees regulation committees of various states and universities. The IIM Bill which granted degree-granting status to IIMs clearly laid out the writing on the wall. This judgement divesting any role to AICTE in the conduct of Management Education is the final nail in the coffin.
This judgement has been passed by a 3 Judge bench headed by the Chief Justice of India. The options left before the management institutions are limited. The first step would be a review which will be considered by the same bench that passed the order. Unless the arguments are compelling, a review petition in such cases falls apart. An appeal to this order is also difficult as the court will have to constitute a 5 Judge Bench which on such matters seems distinctly impossible.
In the circumstances, What would AICTE do to reclaim its territory?

PGDM Institutions have done far better work on management education than the traditional MBA institutions. However, they find themselves at a cross roads now. What will they do?
In the meanwhile, the fate of lacs of students hangs in the balance.
Where does IIPM stand Now?
IIPM has claimed a victory as AICTE powers were divested. It must be remembered that the said case and the order came on a case filed by the Association of Management Colleges. Besides, IIPM is in the dock for making misleading claims, lying and cheating students. IIPM has always been claiming to offer an MBA and the court has restrained the use of those words. Even if the powers of the AICTE were divested, an institution claiming to offer MBA has to be affiliated to a university, which IIPM isn’t. Besides, AICTE was never the sole repository of Management education as we have many institutions including ISB which were never under the purview of AICTE. A perusal of the order by Delhi High Court against IIPM in 2014 says the following:

Chronology: Regulatory Status of AICTE
By Prof S S Mantha, Former Chairman AICTE

Interpreting the provisions of section 2 (g) (definition of technical education), section 2 (h) (definition of technical institution) and section 2 (i) (definition of university for the purposes of AICTE Act and section 10 (k) providing for grant of approval to technical institutions of AICTE Act 1987, the Hon'ble Supreme Court of India vide its Judgment and Order dated 24.09.2001 passed Bharthidasan University & Anr Vs. AICTE & Ors [2001 (8) SCC 676] held that a “university” does not require approval of AICTE and AICTE cannot frame any regulation so as to apply such regulation to a university. However, the Hon'ble Supreme Court of India held that the universities are required to maintain norms and standards laid down by the AICTE.

Subsequently, the Hon'ble Supreme Court of India vide its judgment dated 25.04.2013 passed in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271] held in para 53 of the judgment that to the following effect:

“53. A cumulative reading of the aforesaid paragraphs of Bharathidasan University case which are extracted above makes it very clear that this Court has exempted universities, its colleges, constituent institutions and units from seeking prior approval from AICTE. Also, from the reading of paras 19 and 20 of Parshvanath Charitable Trust case3 it is made clear after careful scanning of the provisions of the AICTE Act and the University Grants Commission Act, 1956 that the role of AICTE vis-à-vis universities is only advisory, recommendatory and one of providing guidance and has no authority empowering it to issue or enforce any sanctions by itself.”

Further, in para 55 of the said judgment, the Hon'ble Supreme Court further held to the following effect:

“…A careful reading of sub-sections (2)(c), (3), (4) and (5) of Section 12-A of the UGC Act makes it abundantly clear about colleges which are required to be affiliated to run the courses for which sanction/approval will be accorded by the university or under the control and supervision of such universities. Therefore, affiliated colleges to the university/ universities are part of them and the exclusion of university in the definition of “technical institution” as defined in Section 2(h) of the AICTE Act must be extended to the colleges affiliated to the university also, otherwise, the object and purpose of the UGC Act enacted by Parliament will be defeated. The enactment of the UGC Act is also traceable to List I Entry 66. The aforesaid provisions of the UGC Act have been examined by this Court with reference to the provisions of the AICTE Act in Bharathidasan University case. Therefore, it has clearly laid down the principle that the role of the AICTE Act is only advisory in nature and is confined to submitting report or giving suggestions to UGC for the purpose of implementing its suggestions to maintain good standards in technical education in terms of definition under Section 2(h) of the AICTE Act and to see that there shall be uniform education standard throughout the country to be maintained which is the laudable object of the AICTE Act for which it is enacted by Parliament. The provisions of the AICTE Act shall be implemented through UGC as the universities and its affiliated colleges are all governed by the provisions of the said Act under Section 12-A of the UGC Act read with the Rules and Regulations that will be framed by UGC in exercise of its power under Sections 25 and 26 of the said Act….”

Further, the Hon'ble Supreme Court of India also held in Para 63 & 65 to the following effect:

“63. The above meanings of the words “technology” and “engineering” as per the dictionaries referred to supra would clearly go to show that MCA also comes within the definition of “technology”. Therefore, the contention that technical education includes MCA as raised by the learned Senior Counsel on behalf of AICTE stands to its reasoning and logic in view of the nature of MCA course which is being imparted to the students at postgraduation level which is being conducted by the institutions, constituent colleges and affiliated colleges to the universities. The same is a technical education and therefore, it comes within the definition of “technical education” but for its proper conduct of courses and regulation the role of AICTE must be advisory and for the same, a note shall be given to UGC for its implementation by it but not AICTE.

65. As per the definition of “technical education” under Section 2(g) of the AICTE Act and non-production of any material by AICTE to show that MBA course is a technical education, we hold that MBA course is not a technical course within the definition of the AICTE Act and insofar as reasons assigned for MCA course being “technical education” are concerned, the same does not hold for MBA course. Therefore, for the reasons assigned while answering the points which are framed insofar as the MCA course is concerned, the approval from AICTE is not required for obtaining permission and running MBA course by the appellant Colleges.”

As a consequence of the aforesaid judgment of Hon'ble Supreme Court of India in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271], AICTE lost its power to compel the affiliated colleges to seek prior approval of AICTE to run technical programmes and MBA was held to be a non-technical programme and consequently excluded from the regulatory purview of AICTE.

Being aggrieved by the aforesaid judgment in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271], the AICTE filed two Review Petitions being Review Petition (C) No.1441 of 2013 and Review Petition (C) No.1442-1451/2013 before the Hon'ble Supreme Court of India and the Hon'ble Supreme Court of India vide its order dated 23.07.2013 dismissed both the aforesaid Review Petitions and thus, the judgment in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271], attained finality.

Subsequently, the issue pertaining to regulatory power of AICTE as considered in Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271], came up for consideration before the Hon'ble Supreme Court of India in Writ Petition (C) No.895/2013 titled Army Welfare Education Society and Ors vs. Union of India & Ors and the Hon'ble Supreme Court of India, having regard to the important issue involved in the Writ Petition, passed an order dated 25.03.2014 directing the above matter to be heard by a Bench of three judges.

Subsequently, the Hon'ble Supreme Court of India passed an interim order dated 17.04.2014 in SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr whereby the Hon'ble Supreme Court of India directed AICTE to publish the Approval Process Handbook for academic year 2014-15 in relation to the Members of Orissa Technical Colleges Association and all colleges and institutions situated similarly and to issue necessary orders.

Subsequently, on an Interlocutory Application (IA) filed by AICTE in SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr, the Hon'ble Supreme Court of India passed an interim order dated 09.05.2014 clarifying as under:

“The order dated 17.4.2014 passed by this Court is clarified and it is directed that prior approval of 2 All India Council for Technical Education (AICTE) is compulsory and mandatory for conduct of a technical course including the MBA/Management Course by an existing affiliated Technical College and also new Technical College which will require affiliation by a University for conduct of its Technical Courses/Programmes for the academic year 2014-15.”

Subsequently, the aforesaid SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr was tagged alongwith Writ Petition (C) No.895/2013 titled Army Welfare Education Society and Ors vs. Union of India & Ors, so as to be heard by a larger bench of three judges.

Subsequently, the Hon'ble Supreme Court of India vide its order dated 15.12.2014 passed in SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr permitting the AICTE to invite applications and grant approval to affiliated colleges for various technical programmes including MBA for the academic session 2015-16. Similar interim order dated 27.04.2015 was passed by the Hon'ble Supreme Court of India in the said SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr for the academic session 2016-17.

Subsequently, the said SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr was admitted and converted into Civil Appeal No.6938/2015 and thereafter, the Hon'ble Supreme Court of India passed another interim order dated 06.01.2016 in the said matter whereby it was directed that AICTE will be free to publish Approval Process Handbook for the academic session 2016-17 and for subsequent academic sessions and regulate the subject matter relating to technical education including MBA / management courses as per handbook.

Subsequently, the aforesaid Writ Petition (C) No.895/2013 titled Army Welfare Education Society and Ors vs. Union of India & Ors was listed before the Hon'ble Supreme Court of India on 08.03.2016 when despite the representation on behalf of AICTE, the said Writ Petition (C) No.895/2013 titled Army Welfare Education Society and Ors vs. Union of India & Ors was allowed to be dismissed as infructuous.

Subsequently, Civil Appeal No.6938/2015 (arising out of SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr) was listed before the Hon'ble Supreme Court of India on 02.04.2019 before a bench of three judges, when the said Appeal was dismissed by the Hon'ble Supreme Court of India. Consequently, the interim orders passed in the said matters, from time to time, also came to an end.

Consequently, on or after 02.04.2019, in the light of the judgment of the Hon'ble Supreme Court of India in the matter of Association of Management of Private Colleges vs. AICTE & Ors [2013 (8) SCC 271] and in view of the dismissal of Civil Appeal No.6938/2015 (arising out of SLP (C) No.7277/2014 titled Orissa Technical Colleges Association Vs. AICTE & Anr) on 02.04.2019, the power of AICTE to grant approval to technical institutions requiring affiliation from a university and to regulate management programmes i.e. MBA has seized to exist. Consequently, further the technical institutions can now, start a technical programme without any approval of the AICTE with only requirement of having affiliation from the University.

Not only that, subsequently, in another batch of SLPs, filed by AICTE against IIPM i.e. SLP (C) No.17764/2014 & 17765/2014, the Hon'ble Supreme Court of India while dismissing the said SLPs vide its order dated 24.07.2019, has held as under:

“Heard learned counsel for the petitioners and perused the relevant material.
Having perused the orders of the High Court, we find no infirmity in the same. The question as to whether the MBA course comes within the expression “technical education” under Section 2(g) of the All India Council for Technical Education Act, has been answered in the negative in Association of Management of Private Colleges vs. All India Council for Technical Education and Others (2013) 8 SCC 271. We, therefore, will have no ground to interfere with the orders impugned in the special leave petitions. The same are, accordingly, dismissed.”