Courts cannot usurp jurisdiction of decision makers in the garb of Judicial Review, Supreme Court

The Supreme Court on Monday set aside a decision of the Telangana High Court modifying the fee structure notified by the Telangana Admission and Fee Regulatory Committee (TAFRC). A Bench of Justices Arun Mishra and Navin Sinha, while setting aside the judgment of the High Court said that the Courts can exercise the power of judicial review against the process of decision making but not against the decision itself.

The Court said,

“The court, in the garb of judicial review, cannot usurp the jurisdiction of the decision maker and make the decision itself.”

The appeal was filed before the Supreme Court by the State of Telangana and the TAFRC after a Division Bench of the High Court had upheld the decision of a Single Judge Bench.

In 2003, by way of the Supreme Court’s decision in the case Islamic Academy of Education and another vs. State of Karnataka, each State was directed to set up a committee to regulate the fee structure of unaided minority and non-minority educational institutes. The TAFRC is a statutory body which was established in conformity with this judgment.

The TAFRC, entrusted with the power to regulate fee structure for institutes, had notified a fee structure for various courses like B.Tech, BE etc. for the period between academic years 2016-17 and 2018-19. Certain institutes challenged this notification before the High Court. A Single Judge of the High Court remanded the issue to the Committee for revision of the fee structure.

Post revision, the committee had escalated the fee structure but the same was challenged again and this time the High Court took it upon itself to modify the fee structure. This decision of the Single Judge was appealed against before the Division Bench unsuccessfully, bringing the controversy before the Supreme Court.

The Supreme Court identified the issue in the case as follows:

“The crux of the controversy is the jurisdiction and the extent to which the court can examine the determination of the fee structure by the TAFRC and approved by the State government, in exercise of the powers of judicial review.”

As regards the Court’s power of judicial review, the Supreme Court noted that the TAFRC is a statutory quasi-judicial body which comprises a retired judge of the High Court as well as domain experts and has one member from the government. A decision taken by the TAFRC would be amenable to judicial review, the Court said. However, it added that judicial review in such cases would lie against the decision-making process and not the merits of the decision itself.

“Judicial review, as is well known, lies against the decisionmaking 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. ”

Expanding further on the issue, the Court laid down that the validity of complex economic decisions taken by the executive cannot be tested against a rigid or straightjacket formula and ought to be allowed some wiggle room. Only “palpably arbitrary decisions” can be interfered with by the Court through judicial review and the Courts cannot sit as appellate bodies in such issues, the judgment asserts.

“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 thus, set aside the decision of the High Court noting that it exceeded its jurisdiction and restored the recommendations made by the TAFRC.

Senior Counsel K Radhakrishnan had represented the State of Telangana in the case while Senior Counsel Fali Nariman argued for the Respondent Institutes.

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