In Rev. Sidhajbhai Sabhai and others v. State of Bombay and another,  3 SCR 837 the Court summarised the decision in the' reference in regard to the Kerala Education Bill and proceeded to observe:
"The right established by Art. 30(1) is a fundamental right declared in terms absolute. Unlike the fundamental freedoms guaranteed by Art. 19, it is not subject to reasonable restrictions. It is intended to be a real right for the protection of the minorities in the matter of setting up of educational insti- tutions of their own choice. The right is intended to be effective and is not to be whittled down by so-called regulative measures conceived in the interest not of the minority educational institution, but of the public or the nation as a whole. If every order Which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable because it is in the public or national interest, though not in its interest as 256 an educational institution, the right guaran- teed by Art. 30(1) will be but a "teasing illusion", a promise of unreality. Regulations which may lawfully be imposed either by legis- lative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institu- tion effective as an educational institution. Such regulation must satisfy a dual test--the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it."
It is, in my opinion, permissible to make regulations for ensuring the regular payment of salaries before a particular date of the month. Regulations may well provide that the funds of the institution should be spent for the purposes of education or for the betterment of the institution and not for extraneous purposes. Regulations may also contain provisions to prevent the diversion of funds of institutions to the pockets of those incharge of management or their embezzlement in any other manner. Provisions for audit of the accounts of the institution would be permissible regulation. Likewise, regulations may provide that no antinational activity would be permitted in the educational institu- tions and that those employed as members of the staff should not have been guilty of any activities against the national interest. Minorities are as much part of the nation as the majority, and anything that impinges upon national interest must necessarily in its ultimate operation affect the interests of all those who inhibit this vast land irrespective of the fact whether they belong to the majori- ty or minority sections of the population. It is, therefore, as much in the interest of minorities as that of the majority to ensure that the protection afforded to minority institutions is not used as a cloak for doing something which is subversive of national interests. Regulations to prevent antinational activities in educational institutions can, therefore, be considered to be reasonable. A regulation which is designed to prevent maladministration of an educational institution cannot be said to offend clause (1) of article 30. At the same time it has to be ensured that under the power of making regulations nothing is done as would detract from the character of the institution as a minority educational institution or which would impinge upon the rights of the minori- ties to establish and administer educational institutions of their choice. The right con- ferred by article 30(1) is intended to be real and effective and not a mere pious and ab- stract sentiment; it is a promise of reality and not a teasing illusion. Such a right cannot be allowed to be whittled down by any measure masquerading as a regulation. As observed by this Court in the case of Rev. Sidhajbhai Singh (supra, regulations which may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition 261 must be directed to making the institution while retaining its character as minority institution effective as an educational insti- tution. Such regulation must satisfy a dual test-the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or Other persons who resort to it."
"A reading of the decisions referred to above makes it clear that while the right to estab- lish and administer a minority institution cannot be interferred with restrictions by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed. For maintaining the educational standard of the institution as a whole it is necessary to ensure that it is properly staffed. Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature have been held to be valid. In the case of institu- tions that receive aid it is the duty of the Government who grants aid to see that the funds are properly utilised. As the Government pays for the staff it is their bounden duty to see that well-qualified persons are selected, their pay and other emoluments are guaranteed and service conditions secured. So far as the institutions receiving aid are concerned if the regulations are made for the purpose of safeguarding the rights of the staff the validity cannot be questioned as long as the regulations do not discriminate the minority institution on the ground of religion or language."
priate authority". The submission on behalf of the respond- ents was that the right to appoint members of staff being an undoubted right of the management and the right to stipulate their salaries and allowances etc. being part of their right to appoint, such right could not be taken away from the management of a minority institution. The learned Solicitor-General very fairly stated before us that there was no case in which it had been held that the right to pay whatever salaries and allowances they liked and stipulate whatever conditions they liked was part of the right to administer the minority institutions under Article 30(1) of the Constitution. On the other hand as we shall immediately point out there are observations to the contrary. In the Nine Judge Bench case, Ray, CJ. and Palekar, J. as we have already seen, expressed the view that the condi- tions of employment of teachers was a regulatory measure conducive to uniformity, efficiency and excellence in educa- tional courses and did not violate the fundamental right of the minority institutions under Article 30. Jaganmohan Reddy, J. and Alagiriswami, J. who agreed with the conclu- sions of Ray, C.J. did not say anything expressly about salary, allowances and other conditions of employment of teachers. Khanna, J. expressed the view that to a certain extent the State may also regulate the conditions of employ- ment of teachers and added that it would be permissible to make regulations for ensuring the regular payment of sal- aries before a particular date of the month. The latter statement of Khanna, J., it was a contended for the respond- ents, limited the extent of the right of the State. to regulate the conditions of employment of teachers. We cannot agree with this contention. The statement that the State may make regulations for ensuring the regular payment of sal- aries before a particular date of the month was in addition to what was said earlier that to a certain extent the State may also regulate the conditions of employment of teachers. In fact, while dealing with the question of disciplinary control, Khanna, J., also said that provisions calculated to safeguard the interest of teachers would result in security of the tenure and that would inevitably attract competent persons for the posts of teachers. The same thing may be said about better scales of pay and decent conditions of service. Mathew, J. with whom Chandrachud, J. agreed also indicated that economic regulations, social welfare legisla- tion, wage and hour legislation and similar measures, where the burden was the same as that borne by others would not be considered an abridgement of the right guaranteed by Article 30(1). Thus, we see that most of the learned Judges who constituted the Nine Judge Bench were inclined to the view that prescription of conditions of service which would. have the effect of attracting better 269 and competent teachers would not be considered violative of the fundamental right guaranteed by Article 30(1) of the Constitution. That would rightly be so because the mere prescription of scales of pay and other conditions of serv- ice would not jeopardise the right of the management of minority institutions to appoint teachers of their choice. The excellence of the instruction provided by an insti- tution would depend directly on the excellence of the teach- ing staff, and in turn, that would depend on the quality and the contentment of the teachers. Conditions of service pertaining to minimum qualifications of teachers, their salaries, allowances and other conditions of service which ensure security, contentment and decent living standards to teachers and which will consequently enable them to render better service to the institution and the pupils cannot surely be said to be violative of the fundamental right guaranteed by Art. 30(1) of the Constitution- The management of a minority Educational institution cannot be permitted under the guise of the fundamental right guaranteed by Art. 30(1) of the Constitution, to oppress or exploit its employ- ees any more than any other private employee. Oppression or exploitation of the teaching staff of an educational insti- tution is bound to lead, inevitably, to discontent and deterioration of the standard of instruction imparted in the institution affecting adversely the object of making the institution an effective vehicle of education for the minor- ity community or other persons who resort to it. The manage- ment of minority institution cannot complain of invasion of the fundamental right to administer the institution when it denies the members of its staff the opportunity to achieve the very object of Art. 30(1) which is to make the institu- tion an effective vehicle of education.