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Constitutionality and Legality of Foreign National/NRI/NRI-sponsored Reservation Quotas

Chirayu Jain (chirayujain94@gmail.com) is a practising advocate at the Delhi High Court. 

The issue of deciding fees and reservation policies has been long contested between the state, and the minority and private institutions before the courts. Most educational institutions reserve seats for foreign nationals/non-resident Indians/NRI-sponsored applicants based on their ability to pay the higher fees charged, and the privilege of either possessing a foreign passport, or just knowing someone who lives on foreign shores. The constitutionality and legality of this quota, and the form and the manner in which it is being implemented in the national law universities is examined.

There has always been a huge outcry against caste-based reservation policies with fervent arguments of how they reflect the death of meritocracy. At the same time, the fact that most educational institutions, including the national law universities (NLUs), reserve seats for foreign nationals/non-resident Indians (NRIs)/NRI-sponsored applicants is ignored. The only necessary qualification to enter these institutions through the said quotas is the ability to pay the higher fees charged, and the privilege of either posses­sing a foreign passport, or just knowing someone who lives on foreign shores. Yet, this quota is never publicly decried. 

Table 1 gives details of the number and percentage of seats reserved for foreign nationals and NRI/NRI-sponsored applicants in all the NLUs. Only two universities do not provide for such reservations, but the overwhelming majority reserves at least 10% of the seats for these groups. The West Bengal National University of Juridical Sciences (WBNUJS), Kolkata and Maharashtra National Law University (MNLU), Mumbai, in fact, violate the only regulation in the area—laid down by the Supreme Court in P A Inamdar v State of Maharashtra (2005)that not more than 15% of the seats ought to be reserved for NRIs. In this controversial decision, where the crux of the matter was whether the state could impose a reservation policy on private institutions, the Court also dealt with the question of the NRI quota, and found it justifiable based on the premise that “the emigrated NRIs had a desire to bring their children back to their country, not just for education but also so that their children could get reunited with Indian cultural ethos.”

The only two points for consideration that the Supreme Court laid down for colleges were: one, such seats should be utilised by bona fide NRIs only and for their children or wards; and second, within this quota, merit should not be given a complete go-by. Before looking into the issue of fees, legality and constitutionality of the quota, these conditions require an examination of how the NLUs understand who an NRI is, and how they select students for this quota.

Who Is an NRI?

There are no uniform definitions or criteria applied by the NLUs when admitting students under these quotas; these vary considerably. For instance, as per the information available regarding admissions under the quota, the National Law School of India University (NLSIU), Benga­luru requires only production of a foreign passport, but no proof of residence or any requirement for having completed schooling from outside India. As a consequence, 17 out of 21 foreign national students (from the 2016–20 batches) were found to have completed their schooling within India (Jain et al 2016).

The university has a policy of preferring applicants of South Asian Association for Regional Cooperation (SAARC) nations and other developing nations over others. The single requirement of a foreign passport is the same for many other NLUs, including the NALSAR University of Law, Hyderabad, WBNUJS-Kolkata, etc, yet none define who a “foreign national” is according to them. Others, like the Dr Ram Manohar Lohiya National Law University (RMLNLU), Lucknow and MNLU-Mumbai, do not make a distinction between an NRI and a foreign national. So, is a foreign national a foreig­ner residing/visiting/studying/employed within India? Or, is a ward of a NRI also a foreign national even if they hold an Indian passport, but have a permanent address abroad and have been studying in India?

It is even more ambiguous and uneven in the case of the NRI quota. While certain NLUs adopt the criteria for an NRI as laid out in the Income Tax Act, such as MNLU-Mumbai, others like the National Law Insti­tute University (NLIU), Bhopal consider any Overseas Citizen of India (OCI)/Person of Indian Origin (PIO) cardholder to be eligible for the NRI/NRI-sponsored category as well. The arbitrariness is even more pronounced in deciding on who qualifies for the NRI-sponsored category. For instance, NLIU-Bhopal requires candidates to be sponsored either by first degree or second degree NRIs or OCI/PIO cardholders, while, on the other hand, MNLU-Mumbai does not require the sponsor to be related to the candidate.

For the Rajiv Gandhi National University of Law (RGNUL), Patiala, the definition of NRI itself is broader; it includes the spouse/progeny (natural or adopted) of an NRI and considers them eligible for the quota. Uniquely, the Tamil Nadu National Law School (TNNLS), Tiruchirappalli creates a hierarchy within the NRI-sponsored category: those with NRI parents are to be preferred over those with NRI guardians, and both are to be preferred over those with NRI sponsors. Even though the regulations stipulate that only merit is to be given consideration within these categories, it implies that an adopted child with NRI guardians would be overlooked for one with living NRI parents.

Selection Process

The second condition laid down in the P A Inamdar judgment was that, within this category, merit should not be given a complete go-by. TNNLS-Tiruchirappalli’s process of categorisation of NRI-sponsored candidates and NLSIU-Bengaluru’s practice of giving preference to candidates from SAARC and developing countries could be questioned. Almost all NLUs consider only the marks/grades obtained in school-leaving examinations while determining merit of foreign national/NRI applicants. But, that is not a standardised norm. TNNLS-Tiruchirappalli, for instance, does not take into account marks obtained in language courses in school-leaving examinations. MNLU-Mumbai and the Hidayatullah National Law University (HNLU), Raipur consider Common Law Admission Test (CLAT) (entrance examination for all the discussed NLUs, except for the NLU, Delhi) ranks of NRI applicants and RMLNLU-Lucknow considers CLAT ranks for NRI as well as foreign national applicants, but other NLUs such as NLSIU-Bengaluru, NALSAR-Hyderabad and WBNUJS-Kolkata do not take the ranks into account. The Chanakya National Law University (CNLU), Patna considers CLAT ranks only for the third group: the NRI-sponsored category. How its administration compares CLAT ranks obtained by students of this category with marks obtained in final examinations by NRI applicants for determining inter se merit for the joint category is not known.

A lot is written and argued about how reserving seats for Scheduled Castes (SCs)/Scheduled Tribes (STs) means the death of meritocracy because these reservations allow students having lower merit (entrance examination rank) get admission at the cost of higher-ranked general category students. But, that is exactly what happens in the case of this quota too. WBNUJS-Kolkata, a highly ranked NLU, gets its all-India general seats filled at all-India rank (AIR) 221, but, through the NRI/NRI-sponsored quota, a 5,829 AIR-holder is also able to get into the WBNUJS in the first list itself. And, to compare with the SC/ST quota, seats reserved for the all-India SC quota at the WBNUJS get exhausted at a higher rank of 4,737, and all-India ST seats get exhausted at 6,057. The National Law University Odisha (NLUO), Cuttack, whose all-India general seats get exhausted at rank 1,038 in the first allotment, has candidates with ranks as low as 9,438 getting admission under the NRI/NRI-sponsored quota. An AIR-holder with a rank as low as 23,892 is still 63rd amongst all NRIs eligible for admissions to NLUs.

Justification for Quota

Reservations for SCs/STs are based on the need for integrating communities that were pariah for millennia into mainstream society. Reservations for Other Backward Classes (OBCs) are based on the need felt to provide a leg up for the communities that were not able to reap benefits in the post-independence era due to their social and educational backwardness, and thus have to fulfil an economic criterion as well before qualifying for reservations. For foreign national/NRI/NRI-sponsored categories, the justification is rather peculiar.

The seven-judge Supreme Court bench hearing the contentions on the matter of NRI quotas in P A Inamdar v State of Maha­rashtra (2005: para 128) noted in the judgment that, by and large, students admitted under this quota are not NRIs, nor are their parents. The Court noted that admissions were being granted to less meritorious students just because they could afford to pay the higher fees sought. It called the “NRI quota” a misnomer. Yet, in the same paragraph, after noting these objections, the Court accepted the submission that this quota was essential since it brought in money required for these institutions to strengthen and enlarge their educational activities. And, since the NRIs who have emigrated, in the opinion of the Court, had a strong desire to bring their children back to their own country not just for education, but also so the children can be reunited with the “Indian cultural ethos,” the Court concluded by finding the NRI quota justified despite the above-discussed conditions.

Notably, once having found NRI quotas to be permissible, the Court specified that the said surplus fees collected from NRIs should be utilised for benefiting students from economically weaker sections, who may be admitted on subsidised fees. The judgment, having declared the imposition of reservation policies on private institutions as unconstitutional, was condemned by the political class and led to the insertion of Article 15(5) into the Constitution (Venkatesan 2006). The issue of the NRI quota was overlooked.

Differential Fees Structures

Table 2 details the fees structure as applicable for academic year 2016–17 for incoming students at various NLUs. The fee structure is inconsistent for NLUs, for both the general category and the foreign national/NRI/NRI-sponsored quota. The variation in the difference of fee charged by NLUs from general category students and the students from the said quota ought to be particularly noted. The fees charged from students belonging to the said quota ranges from 156% of the fees applicable for general category students at the Damodaram Sanjivayya National Law University (DSNLU), Visakhapatnam, to more than five times of the fees charged from general category students at RMLNLU-Lucknow.

In absolute figures, the fees applicable range from ₹ 2,77,000 in the case of DSNLU-Visakhapatnam, to ₹ 11,75,000 being charged by MNLU-Mumbai. To contextualise, the most-widely known private five-year law college, the Jindal Global Law School, Sonipat, which is also said to be the most expensive law college in India, charged ₹ 7,25,000 for the academic year 2015–16 (Legally India 2015). Charging astronomically high fees is one factor, arbitrariness in raising the applicable fee over the course of the degree is another. The NLUO-Cuttack, for instance, explicitly mentions in its brochure that for the foreign national/NRI students the “Fee schedule is subject to revision without prior notice.”

The common pattern which exists is that the NLUs charge students from the said quota higher fees if they belong to a country outside SAARC countries. However, this variation is actually made only by three NLUs. This differentiation seems benign and reasonable, given that the SAARC region comprises mostly countries that fall in the low-income group. However, as is noticeable in the case of NALSAR-Hyderabad, it creates an incentive for the institutions to sub-reserve seats on the basis of region. NALSAR-Hyderabad, within the 15 seats reserved for foreign nationals, allocates seven for the SAARC region and eight for the non-SAARC region, and in case of a vacancy in one region makes the vacant seat available to the other region. The institution does not specify any cut-off for either category. What this implies is that a candidate holding a non-SAARC passport with lower marks in the school-leaving examination would be able to secure admission over a candidate having scored more marks but possessing a SAARC passport.

The other form of differentiation, charging different fee amounts from foreign nationals and NRI/NRI-sponsored candidates, is made by two NLUs, the National University of Advanced Legal Studies (NUALS), Kochi and HNLU-Raipur. Both charge foreign nationals more than what they charge NRI/NRI-sponsored students (both reserve three to four times more seats for the NRI/NRI-sponsored category than for foreign nationals).

Meritocracy at NLSIU-Bengaluru

As per a study of student demographics and performance conducted at the NLSIU-Bengaluru in 2015, the average annual family income of the students then studying there was ₹ 19.6 lakh. Amongst them, foreign national students (21 in number) skewed the overall average, as their average family income was recorded to be ₹ 26.9 lakh per annum. Of them, most are Hindus (16), with none belonging to an SC/ST/OBC background (Jain et al 2016: 71, 85).

Like their backgrounds, their performance was found to be starkly different from the rest. The overall average Cumulative Grade Point Average (CGPA) was recorded to be 4.70/7.00. Yet, while those from the general category have an average CGPA of 4.96, foreign nationals were found to have an average CGPA of only 3.97. While ST students (20) had a lower average CGPA of 3.9, SC students (44) had an average CGPA of 4.06 (Jain et al 2016: 95–98).But, foreign nationals do perform better in student committees. Only two foreign nationals (9.5%) reported that they had applied to these student-run committees but were rejected, much below the overall rejection rate of 13.6%. In comparison, SC students have a rejection rate of 23.7%, and the rejection rate is 16.1% in the case of ST students (Jain et al 2016: 116).

So, perhaps, taking both factors into account and given the only marginally better performance of SC students in academics, it could be said conclusively that foreign nationals at the NLSIU-Bengaluru are performing better than their SC/ST peers. But, what gets overlooked in this comparison of performance metrics is the stark difference in backgrounds. While foreign nationals have an average annual income of ₹ 26.9 lakh, SC/ST students reported having an average family income of ₹ 16.3 lakh per annum (Jain et al 2016: 105). Only one foreign national (4.8%) assessed themselves to be not fluent in English, while 11.9% of SC and 19.4% of ST students assessed themselves as being poor in English language (Jain et al 2016: 75). This affirms the findings of the Chief Justice of India R C Lahoti in the P A Inamdar case, “that admissions were being granted to less meritorious students just because they could afford to pay the higher fees sought.”

But, still, it is only the SC/ST reservations that are repeatedly blamed for causing the death of meritocracy. This certainly raises the question: Do SCs/STs face the ire because they cause the death of meritocracy, or is it because they cause the death of exclusivity?

Subsidising Education

The P A Inamdar judgment, apart from laying down two conditions (hardly followed, as evident from previous sections of this article) for selection of candidates for the quota, also did state,

The amount of money, in whatever form collected from such NRIs, should be utilized for benefiting students such as from economically weaker sections of the society, whom, on well defined criteria, the educational institution may admit on subsidized payment of their fee. To prevent misutilisation of such quota or any malpractice referable to NRI quota seats, suitable legislation or regulation needs to be framed. So long as the State does not do it, it will be for the Committees constituted pursuant to the Islamic Academy’s direction to regulate. (P A Inamdar v State of Maharashtra 2005: para 70)

While not a binding direction, the apex court’s suggestions are usually revered. The issue of deciding fees and reservation policies has been long contested between the state, and the minority and private institutions before the courts. Notable cases include Unni Krishnan J P v State of Andhra Pradesh (1993), T M A Pai Foundation v State of Karnataka (2002), Islamic Academy of Education v State of Karnataka (2003) and Ashoka Kumar Thakur v Union of India (2008). In 1993, the Court in the Unni Krishnan case had given strict directions to regulate the fees that were being charged from students belonging to the NRI quota. But, a decade later, the central government sided with the institutions and contended in the T M A Pai Foundation case that the scheme laid down in the Unni Krishnan case was unfair and the regulated fee structure was hampering education as “sufficient funds were not available for development of those educational institutions” (T M A Pai Foundation v State of Karnataka 2002: para 30).

Thus, the Court, by interpreting the right to impart education by private institutions as a fundamental right under Article 19(1)(g), also read in it their right to take decisions on the process for selection of students and fixation of fees. Giving them undisputable discretion, the Court also justified the charging of higher fees from NRI quota students:

Normally, the reason for establishing an educational institution is to impart education. The institution thus needs qualified and experienced teachers and proper facilities and equipment, all of which require capital investment. The teachers are required to be paid properly. (T M A Pai Foundation v State of Karnataka 2002: para 35)

Subsequent judgments did not look deeply into the question of the NRI quota, except for in the P A Inamdar case, but have retained the principle established in 2002.

The T M A Pai Foundation judgment had given the discretion to institutions to utilise these additional funds, but later the Court in the P A Inamdar case had qualified that such utilisation ought to be only to subsidise the fees for students from economically backward strata. It appears that most NLUs prefer to follow the directions given in the earlier judgment in the T M A Pai Foundation case over the one given later in the P A Inamdar case. As Table 3 exhibits, only a few NLUs provide fee subsidies. However, these subsidies are barely a fraction of the fees collected from NRIs/foreign nationals.

Constitutionality of the Quota

The apex court has repeatedly sought that the government enact the necessary statutes or regulations for the said quota. While the Medical Council of India and the All India Council for Technical Education have enacted the regulations for medical and engineering colleges, respectively, the Bar Council of India—the body entrusted to regulate the affairs of NLUs and legal education—has not done the same. In the absence of statutes and regulations, the apex court accords the power to the institution’s committees (academic council, executive council, etc) to frame the rules and regulations. Thus, in the case of NLUs, the foreign national/NRI/NRI-sponsored quota does exist legally, as it could be presumed that the respective councils would have discussed and decreed upon the matter. Yet, that does not clarify whether the quota is constitutional.

The question of constitutionality was heard by the Calcutta High Court in Chayan Kr Roy v Chairperson, Central Selection Committee (2005). The Bengal government used to conduct separate examinations for foreign/NRI/NRI-sponsored/management seats in medical colleges. The court noted disparagingly the special treatment given to these categories. It noted how the foreign/NRI/NRI-sponsored applicants did not even need to remit their hefty fees in foreign currency. Amongst other issues, the court considered the validity of the said quota at length. The separate entrance examinations conducted for separate demarcated seats was questioned. The court relied on several judgments of the Supreme Court where it had said that the reservations policy should be based not just on constitutionality, but also reasonability (for removing regional, class disadvantages) and should never be excessive.

The state government tried to justify the classification by arguing that the foreign/NRI/NRI-sponsored candidates brought in the much-needed funds that the institutions require in order to subsidise other students. That it had to expend ₹ 1 lakh per student per annum was not considered as grounds reasonable enough for the classification. It questioned, assuming there was a real necessity for finance, why only foreign/NRI/NRI-sponsored candidates have been favoured, whereas there must be resident Indians as well who would be willing to pay.

The court did, however, conclude that reserving a few seats for foreign/NRI students may be justifiable on grounds of diplomacy, generation of foreign exchange, etc. But, at the same time, it took note that the foreign/NRI candidates were in fact paying their fees in Indian rupees. It did not agree that there was a rationale strong enough for extending reservations to NRI-sponsored candidates at the behest of those who were not able to obtain the sponsorship certificates. Thus, finding such classification to be patently ultra vires and violative of Article 14 of the Constitution, with no statute ever enacted to even try to legitimise the quota, it declared the quota to be illegal and unconstitutional, and issued directions accordingly. A year later, the Supreme Court decided the P A Inamdar case. Without looking at the Calcutta High Court judgment, it declared the NRI quota to be justified (it did not subject it to the constitutional validity test), on grounds that were the flimsiest possible at best.

NLUs do not have a common understanding of who is a foreign national, an NRI and NRI-sponsored candidate. Nor is the mode of admission or idea of merit common. In several cases, as demonstrated previously, both the definitions of foreign national/NRI/NRI-sponsored candidate and the eligibility criteria are questionable. The other peculiarity apart from those discussed thus far is that the eligibility criterion for the CLAT is simply that the candidate should have secured the requisite percentage of marks in the 10+2 examination or its equivalent. It does not specify any particular board nor does it require the schooling to be completed within India. It does not bar candidates from foreign national/NRI/NRI-sponsored categories from appearing, as in most cases their CLAT scores are not required by NLUs.

As a result, the CLAT’s eligibility allows even these candidates to appear for the examination. Later, they could completely disregard their CLAT score, and secure eligibility based on their 10+2 marks or the other equivalent condition as required by NLUs. Or, they could neglect their 10+2 marks if they manage to score decently in CLAT and secure admission to a good NLU based on their rank. Apart from unreasonable classification, unreasonable and non-uniform requirement of merit, and high fees, these candidates enjoy the ability to make two attempts in a single year to secure a seat in NLUs. The only difference between them and the majority, who do not have this right to two attempts, is being lucky enough to possess a foreign passport, an NRI status, or being able to secure a sponsorship certificate, not to mention the ability to pay twice or thrice the normal amount of fees. In the matter decided by the Calcutta High Court, candidates were found to be lucky enough to enjoy all the above and thus the quota was deemed as unreasonable classification, except that in the case of the NLUs, they enjoy an additional privilege of even appearing for the entrance examination, thus giving them two chances at securing admission.

Conclusions

Thus, it is evident that the said foreign national/NRI/NRI-sponsored quota is unconstitutional. At the very least, the Bar Council of India, which has the mandate to regulate the legal education imparted in the country, ought to ensure that a uniform definition of these categories is adopted and there is uniformity in the merit sought by the individual NLUs. At the individual level, noting the observations made by then Chief Justice of India R C Lahoti regarding performance levels of students admitted under the NRI quota, and the figure being corroborated by students’ performance data from NLSIU-Bengaluru, the institutions should either increase their advertisement expenditure in foreign countries so that they can attract the best minds, or reduce the fees charged, or both. There is much variation in the fees charged and this also needs to be regulated. The CLAT’s eligibility criteria could perhaps be modified so that the said candidates no longer enjoy the undue and illegal privilege of two chances at securing admission during the same academic year.

The issue of constitutionality of this quota, not just in the above-discussed case of NLUs, but across educational institutions needs to be settled at the earliest by the Supreme Court.

References

Ashoka Kumar Thakur v Union of India (2008): SCC, SC, 6, p 1.

Chayan Kr Roy v Chairperson, Central Selection Committee (2005): CHN, Cal, 2, p 165.

Islamic Academy of Education v State of Karnataka (2003): AIR, SC, p 3724.

Jain, Chirayu, Spadika Jayaraj, Sanjana Muralee­dharan, Harjas Singh and Marc Galanter (2016): “The Elusive Island of Excellence—A Study on Student Demographies, Accessibility and Inclusivity at National Law School 2015–16,” 30 May, https://ssrn.com/abstract=2788311.

Legally India (2015): “A Student’s Open Letter Explains 3 Problems with Jindal Global Law School and Admin’s Rebuttal,” viewed on 9 July 2016, http://www.legallyindia.com/Law-schools/jgls-sonepat-open-letter.

P A Inamdar v State of Maharashtra (2005): AIR, SC p 3226.

T M A Pai Foundation v State of Karnataka (2002): SCC, SC, 8, p 481.

Unni Krishnan J P v State of Andhra Pradesh (1993): SCR, SC, 1, p 594.

Venkatesan, V (2006): “Legal Backing,” Frontline, Vol 23, No 8, viewed on 24 April 2016, http://www.frontline.in/static/html/fl2308/stories/20060505004401500.htm.

Updated On : 7th Feb, 2018

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