Paragraph numbers below are the court’s original numbering, recovered from the source text.
17. In State of Andhra Pradesh v. National Thermal Power Corporation Limited8, the perceived conflict between Entries 53 and 54 of List II of the Seventh Schedule to the Constitution was considered. Entry 53 (1969) 2 SCC 166 (2004) 10 SCC 201 (2002) 5 SCC 203 374 provided for tax on consumption of electricity while Entry 54 provided for tax on sale of goods. The conflict was argued, especially on the basis of the findings of this Court in Indian Aluminium Co. v. State of Kerala9 that electricity is goods since supply and consumption take place without any hiatus bringing it within the definition of a sale. Holding that even when there is perceived conflict between two entries, an effort should be made to harmonise it, it was found that several entries in the three lists of the Seventh Schedule are legislative heads or fields of legislation and not the source of legislative empowerment. “Competence to legislate has to be traced to the Constitution. The division of powers between Parliament and the State Legislatures to legislate by reference to territorial limits is defined by Article 245”(sic). Harmonising Entries 53 and 54, it was held that tax could be levied on sale of electricity under Entry 54 and even if there is no sale by the manufacturer, its consumption by the manufacturer itself could be taxed under Entry 53; both by a single piece of legislation. It was held that a legislation could fall within the scope of more than one Entry.
18. What can be clearly perceived from the afore cited decisions is that the source of power to legislate has to be traced to Article 245 read with 246, while the entries in the three lists under the Seventh Schedule of the Constitution are fields of legislation, demarcated as exclusively available to the Union, the State and concurrently; with the Parliament having overriding powers in matters enumerated as concurrent. When enacting a legislation, it is also permissible that the Parliament or the State Legislature may choose to occupy the various fields under the three lists but restricting to such demarcation of powers delineated under Article 246.
19. Importing the above dictum to the subject issue, the States’ power to legislate in the field of education as covered under Entry 25 of LIST III has all the same to be traced to Articles 245 & 246, especially when there is no Union legislation on the subject/field. The power enabled under the Presidential Order to make special provisions for equitable opportunities and facilities in the matter of education as conferred under Article 371D; being education, is covered under Entry 25, and has also to be traced to Articles 245 & 246. The Act of 1983, brought (1996) 7 SCC 637 [2025] 9 S.C.R. The State of Telangana & Ors. Etc. v. Kalluri Naga Narasimha Abhiram & Ors. Etc. out thus, consequentially confer the power on the State to bring out the rules in furtherance and in implementation of the Presidential Order. The Rules of 2017, hence, is sourced to the power conferred under the Presidential Order, at least, in so far as it determines the local areas and bring out a definition of local candidates who are enabled the privilege of admission to medical colleges by virtue of their status as a local candidate as per the definition.
20. A Constitution Bench of this Court in Tamil Nadu Medical Officers Association and Others v. Union of India and Others10, overruled an earlier decision of a Three Judge Bench which found the reservation given to in-service candidates for admission to post- graduate courses in medicine, unconstitutional. It was held that Entry 66 in List I has a very limited scope insofar as the power conferred being coordination and determination of standards which alone is in the exclusive domain of the Union. However, conduct of examination, admission of students, prescription of fee and reservation would be a power conferred on the State under Entry 25 of List III. The Rules of 2017 is one authorised by the statute, which in turn traces the source of its power to the Constitution and adopts the definition as available in the Presidential Order.
21. Insofar as the judgment in C. Surekha (supra) the decision in P.Sambamurthy v. State of A.P.11 was noticed, wherein it was held that Article 371D does not militate against the basic structure of the Constitution, except sub-article (5) of Article 371D; which led to denial of the benefit of judicial review. The other question with respect to reservation of 15% seats to the All-India Entrance Examination was kept open. We find ourselves to be in full agreement with only this finding of the High Court in the impugned judgment.
22. Now, we come to the question of the purported reading down carried out by the Division Bench of the High Court. Having found that C. Surekha (supra) did not interpret the Presidential Order of 1974, the impugned judgment looked first at whether the petitioners fall under the definition clauses at Clause 3 III (B) or (C). After extracting the definitions as available in the Presidential Order and the Rules of 2017; which are identical, it was found that none of the petitioners (2021) 6 SCC 568 (1987) 1 SCC 362 376 fall under the said definitions. The facts varied from case to case, but there were even students who studied from the first to tenth standard within the local area of the State of Telangana, under the Rules of 2017, but moved away for the secondary and higher secondary studies. The reasons were multifarious and included varied situations of life, including transfer of parents, better educational opportunities and so on and so forth. The categoric finding was that none of the petitioners fall under the two definitions of ‘study’ or ‘residence’; which is also just prior to the higher secondary qualifying examination, the appearance in which had to be undertaken in the State of Telangana.
23. Having found so, the Court went to the further question as to whether the rule defining a local candidate is arbitrary and violative of Article 14 of the Constitution of India. Relying upon the decisions in Ahmedabad Municipal Corpn. v. Nilaybhai R. Thakore12 and Meenakshi Malik v. University of Delhi & Ors.13 as also decisions of various High Courts, it was found to be violative of the mandate contained in Article 14 of the Constitution. Relying on the trite principle that when a harmonious construction is possible, no provision of a statute or legislation should be struck down, the Division Bench thus expanded the definition to include any student who produced his residence certificate issued by a competent authority of the Government of Telangana. At the outset, we have to state that without a definition of what constitutes residence or at least without reference to a statute or rule prescribing the issuance of a residence certificate, the directions issued by the High Court would only result in an anomalous situation, making the reservation unworkable and open to a series of litigation.
24. Yet again, as has been argued by the State and the University, similar provisions have been upheld by this Court in a number of decisions over very many years. D.P.Joshi v. State of Madhya Bharat and Ors.14 upheld the levy of capitation fee on those students residing outside Madhya Bharat. The object of the classification, found to be justified, was the State’s desire to help at least to some extent the students who are its residents, encouraging education of the (1999) 8 SCC 139 (1989) 3 SCC 112 (1955) 1 SCC 58 [2025] 9 S.C.R. The State of Telangana & Ors. Etc. v. Kalluri Naga Narasimha Abhiram & Ors. Etc. indigenous people, especially when the State spends money for the upkeep and running of the educational institutions; therein a medical college. The aforesaid decision was followed in Kumari N.Vasundara v. State of Mysore & Anr.15 which prescribed conditions of residence for ten years in the State of Mysore, at any time prior to the date of application for the purpose of admission. Therein also an argument was raised that, candidates whose parents, out of necessity or by compelling reasons of transfers, while remaining out of the Mysore State, cannot afford to arrange for the residence of their children inside the State. The argument was repelled by this Court on two grounds. It was held that mere likelihood of hardship cannot result in the striking down of a rule and in any event, hardship is likely to arise in the working of almost any rule, especially when applied to a selection of a limited number of candidates, which alone cannot render the rule unconstitutional. It was clearly held that, for relief against such hardship and reducing the wide gap between the number of available seats and the number of aspirants, the grievance would have to be addressed elsewhere; clearly indicating the policy formulation by the government/legislature. The exclusive domain for policy formulation was not liable to be interfered with, unless validly challenged on gross discrimination, clear arbitrariness, patent illegality, perversity or unconstitutionality.
25. Pradeep Jain v. Union of India16, considered the question whether admission to institutions of higher learning situated in a State can be confined to those having their domicile within their State or who are residents within the State for a specific number of years, irrespective of merit and whether this would be consistent with the constitutional values. Referring to the earlier decisions of this Court, it was held that at least in the scheme of admission to medical colleges, there can be a departure from the principle of selection based on merit to bring about real equality of opportunity between those who are unequal. It was famously observed that ‘equality must not remain mere idle incantation, but it must become a living reality for the large masses of people’ (sic). Such departure was held to be justified on two considerations; one the State interest and the other a region’s claim of backwardness. (1971) 2 SCC 22 1984 AIR 1420 378
26. Referring to D.P.Joshi (supra), it was found that therein the capitation fee for persons belonging to outside Madhya Bharat was justified on the assumption that those who are bona fide residents of Madhya Bharat would settle down and serve the needs of the people in the State, after they qualify; though, there was nothing observed in the judgment as to whether there was any such justification pleaded. It was held that despite intra-state discrimination between persons resident in different districts and regions of a State was frowned upon by this Court, institutional reservation effected through university- wise distribution was upheld. Referring also to D.P.Joshi (supra) and Kumari N. Vasundara (supra); while unreservedly condemning wholesale reservation on the basis of domicile or residential requirement, 70% reservation was prescribed as an outer limit with 30% being made available on an All-India basis. The percentage was subsequently increased to 85% in the case of Dinesh Kumar (Dr.) v. Motilal Nehru College17, with the prescription of an entrance examination on an all-India basis for the remaining 15% seats.
27. Anand Madaan v. State of Haryana18, provided for a reservation to those who are residents or domiciled in the State of Haryana with a further condition of having studied in the 10th, 10+1 and 10+2 classes as a regular candidate in recognised institutions in Haryana. An exception was carved out insofar as employees of the State Government/All India services borne in the Haryana cadre, employees of statutory bodies or Corporations established under an Act of the State of Haryana and the children/wards of the employees of Indian Defence Services and Paramilitary services belonging to the Haryana State. This Court specifically referred to Meenakshi Malik13 which was a lone case where a student’s parents in Government service were posted outside the country in the last two years of education, which was otherwise commenced and continued in Delhi, which was held to be condonable. Anand Madaan18 found, that was a singular grievance which similar contention was not available to any of the petitioners and upheld the rule in the State of Haryana.
28. We have to immediately notice that the learned Advocate General for the State of Telangana who appeared in the case has assured (1986) 3 SCC 727 (1995) 2 SCC 135 [2025] 9 S.C.R. The State of Telangana & Ors. Etc. v. Kalluri Naga Narasimha Abhiram & Ors. Etc. us that there would be mitigation insofar as such candidates; which we will refer to a little later.
29. Rajdeep Ghosh v. State of Assam and Others19 was another case in which reservation was made for local candidates who studied all the classes from Class 8 to 12 in the State of Assam, who have also passed the qualifying examination or its equivalent from the institutes situated in the State of Assam. Relying on the cited precedents, this Court held that the petitioners could not place any relevant data showing that there were no coaching facilities available in Assam and when some students can afford to obtain coaching in other States, they stand on a different footing, belonging to an affluent class who cannot be adjusted in the State quota, especially when they can seek admission in the All India quota, thus, making the Rule not totally exclusionary.
30. In the wake of the binding precedents, holding the field for three score and ten years; a lifetime, we are unable to accede to the claim of the students who did not fall under the definition that the rule is exclusionary, arbitrary and constitutionally invalid. We cannot but notice that in Ahmedabad Municipal Corpn. (supra), the rule providing reservation to those local students, qualifying from educational institutions situated within the municipal limits were merely expanded to include the Ahmedabad Urban Development Area (AUDA). The Rule was justified in the counter affidavit filed on behalf of the Ahmedabad Municipality, on the ground that the Medical College in question was established to cater to the needs of the students residing in Ahmedabad city and hence only those students who qualified from schools or colleges within the Ahmedabad Municipality were entitled to be treated as local students. The question posed by this Court was whether those who are residents of Ahmedabad city, who also contribute to the revenue of the Municipality, could be denied the status of local students, merely for reason that they study in schools outside the Municipality limits, but within the AUDA. The rule was held to include even the students of the institutions in the AUDA on the ground that otherwise it creates a differentia within the class of students of Ahmedabad on the basis of their acquiring qualifications from schools within the Municipal limit or within the 2018 INSC 718 380 limits of AUDA, which would be arbitrary and violative of Article 14. There is no such unintelligible differentia arising in this case.
31. For all the reasons noticed above, we are unable to uphold the impugned judgment dated 29.08.2023 of the High Court of Telangana.
32. Now, we come to the challenge against the amended Rules of 2023. As has been argued by the State and the University, the Reorganisation Act of Andhra Pradesh permitted continuance of the benefit under Article 371D in the newly formed States for a period of ten years and there was a requirement for a new legislation, after the expiry of that period. This prompted the State to amend the rule by G.O (MS) No.33 dated 19.07.2024, incorporating a fresh Rule 3 in the Rules of 2017. The said amendment provided for the ‘Competent Authority Quota’ in the State of Telangana, which on incorporation in the Rules of 2017 traces its power to legislate, to the Regulation Act of 1983, which we already found has been brought out under Entry 25 of List III, Seventh Schedule read with Article 371D and the Presidential Order of 1974 as also Articles 245 & 246. The new rule provided for reservation to an extent of 85% to those candidates who have either (i) studied in the educational institutions in the local area for a period of not less than four consecutive academic years ending with the academic year in which he qualified for admission or (ii) where during the whole or any part of the four consecutive years ending with the academic year in which he qualified for admission, resided in the local area but without studying in any educational institutions, which candidate also should have appeared for the qualifying examination in the State of Telangana. The Division Bench, considering the amended rule, noticed the decision in Pradeep Jain16, Anand Madaan18 and Rajdeep Ghosh19 having laid down that the requirement of residence/domicile for admission to MBBS/ BDS course is permissible, but without anything more proceeded to consider whether the amended rule has to be struck down or read down. After looking at the principle of reading down, again Meenakshi Malik13 and the earlier judgment dated 29.08.2023 were noticed to find that the amended rule will have to be read down to mean those petitioners having permanent residence or domicile in the State of Telangana, who will have to be considered as a local candidate. At this point, it was pointed out from the Bar that there are no guidelines/rules framed by the State Government to ascertain [2025] 9 S.C.R. The State of Telangana & Ors. Etc. v. Kalluri Naga Narasimha Abhiram & Ors. Etc. the domicile/permanent residence within the State of Telangana. The State Government was directed to frame guidelines to determine such domicile/residence and directed to consider writ petitioners as per the newly framed guidelines/rules.
33. We have already held that the pre-amended rule defining a local candidate was perfectly in order, which reasoning applies squarely to the amended rule also. There was no warrant for a reading down when the definition is clear, in consonance with the Presidential Order and similar rules having been upheld by this Court as coming out from the binding precedents. We find no reason to take a different view with respect to the amended rule also; 15% having been conceded to the All-India quota.
34. We also observe that the learned Advocate General has handed over a further amendment proposed, incorporating a proviso to Rule 3 as follows: – I. Provided that a candidate who studies outside Telangana for any period during the requisite four consecutive academic years ending with the academic year in which he appeared, or as the case may be, first appeared in the relevant qualifying examination will be eligible to be considered if they fall under any of the below categories: 1. Children of employees of the Telangana State Government who have served or are serving outside Telangana corresponding to the candidate’s year/s of study outside Telangana 2. Children of serving or retired employees belonging to the Telangana cadre of All India Services (IAS/ IFS/IPS) who have served or are serving outside Telangana corresponding to the candidate’s year/s of study outside Telangana 3. Children of defence personnel/ex-servicemen/ Central Armed Police Force service who at the time of joining service, have declared their hometown to be in the State of Telangana and who have served or are serving outside Telangana corresponding to the candidate’s year/s of study outside Telangana 382 4. Children of employees of a Corporation/Agency/ Instrumentality under Government of Telangana, liable to be transferred anywhere in India as per the terms and conditions of his/her employment, who have served or are serving outside Telangana corresponding to the candidate’s year/s of study outside Telangana II. Subject to the candidate submitting Certificate of employment from the competent authority for the candidate’s father/mother’s service outside the State for the period corresponding to the candidate’s year/s of study outside Telangana. 35. The said proviso should allay and mitigate the grievances of those who claim that they were taken out of the State by compulsion of the movement of their parents outside the State by reason of employment in Government/All-India Services/ Corporations or Public Sector Undertakings constituted as an instrumentality of the State of Telangana as also defence and paramilitary forces who trace their nativity to the State, subject to the conditions thereunder. With only the said reservation, we uphold the Rules of 2017 as it stood amended in 2024. We were told that in the previous academic year on concession made by the Government before this Court, students who did not fall strictly under the definition were granted admission to mitigate the grievance of the hardship alleged and argued. We make it clear that the admissions so made shall not be disturbed. 36. The appeals of the State and the University are allowed, setting aside both the impugned judgments in the Writ Petitions filed by the students. The Writ Petitions and the SLP filed by the students before this Court, as a consequence stand dismissed; however, with the reservation insofar as candidates who are covered by the proviso to Rule 3 as specified in paragraph 34 above. No order as to costs. 37. Pending applications, if any, shall stand disposed of. Result of the case: Matters disposed of. †Headnotes prepared by: Divya Pandey