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Supreme Court: Education not business to earn profit, tuition fee must be affordable

SC Upholds lower court’s decision quashing seven-fold increase of tuition fee in private medical colleges

Sabrangindia 09 Nov 2022

Supreme court

On November 7, the Supreme Court of India upheld the stance that education is not a for-profit enterprise, and declared that tuition fee must always be reasonable and affordable.  A bench led by Justice MR Shah upheld the Andhra Pradesh High Court order quashing the state government’s decision to enhance the tuition fee in medical colleges to Rs 24 lakh per annum.

“Education is not the business to earn profit. The tuition fee shall always be affordable", the Supreme Court remarked while setting aside a Government order issued by State of Andhra Pradesh. (Para 5)

The G.O. boosting the tuition cost on the grounds of the private medical colleges' representations, according to the justices MR Shah and Sudhanshu Dhulia's bench, was "wholly impermissible and most arbitrary and purely with a view to favor and/or coerce the private medical colleges."

Dismissing an appeal filed by a medical college, the court upheld the Andhra Pradesh High Court judgment that had quashed the Government Order.

“To enhance the fee to Rs 24 lakh per annum i.e. seven times more than the fee fixed earlier is not justifiable at all,” the Bench stated while dismissing Narayana Medical College’s petition challenging the Andhra Pradesh High Court’s order setting aside the government’s decision to enhance the tuition fee of MBBS students. (Para 5)

Excess charges to be refunded

The top court confirmed the High Court's instruction to restore the remaining tuition fee amount received pursuant to a government order dated September 6, 2017, after modifying the charge paid in accordance with the earlier determination as per an order dated June 18, 2011. The Bench ruled that the college administration could not be allowed to keep the money that was recovered or collected as a result of the unlawful government order and maintained that the High Court had acted correctly in giving such instructions.

"The respective medical colleges have used/utilized the amount recovered under G.O. dated 06.09.2017 for a number years and kept with them for a number of years on the other hand students paid the exorbitant tuition fee after obtaining loan from the financial institutions/banks and paid the higher rate of interest. If at all the AFRC determines/fixes the tuition fee which is higher than the tuition fee fixed earlier it will be always open for the medical colleges to recover the same from the concerned students, however, the respective medical colleges cannot be permitted to retain the amount collected illegally pursuant to G.O. dated 06.09.2017.", the court said in its judgment. (Para 6)

Rs 2.5 Lakhs costs slapped on Medical Institute

Additionally, it ordered the petitioner college and the Andhra Pradesh Government to pay costs in the amount of Rs 2.5 lakh each within six weeks at the court's registry. The Supreme Court agreed with the High Court that the fee cannot be increased or fixed without the recommendations of the committee in light of the provisions of the Andhra Pradesh Admission and Fee Regulatory Committee (AFRC) for Professional Courses offered in Private Unaided Professional Institutions Rules, 2006.

The court noted that following the judgment in Inamdar and Ors. Vs. State of Maharashtra and Ors.; [(2005) 6 SCC 537], the State of Andhra Pradesh framed Rules called the Andhra Pradesh Admission and Fee Regulatory Committee (for Professional Courses offered in Private UnAided Professional Institutions) Rules, 2006. Rule 4 of the Rules, 2006 is with respect to the fee fixation.

With reference to determination of fee or review of fee, the bench said that the same shall be within the parameters of the fixation rules and shall have direct nexus on the factors mentioned in Rule 4 of the Rules, 2006. Location of the professional institution; nature of the professional course; cost of available infrastructure; expenditure on administration and maintenance; a reasonable surplus required for growth and development of the institution; and the revenue foregone on account of waiver of fee, if any, in respect of students belonging to the reserved category and other economically weaker sections of the society had to be taken into account, it said.

Noting that all these factors were required to be considered by the AFRC while determining or reviewing the tuition fees, the Bench said the High Court was “absolutely justified” in quashing and setting aside the government order dated September 6, 2017.

“Determination of fee/review of fee shall be within the parameters of the fixation rules and shall have direct nexus on the factors mentioned in Rule 4 of the Rules, 2006, namely, (a) the location of the professional institution; (b) the nature of the professional course; (c) the cost of available infrastructure; (d) the expenditure on administration and maintenance; (e) a reasonable surplus required for growth and development of the professional Institution; (f) the revenue foregone on account of waiver of fee, if any, in respect of students belonging to the reserved category and other Economically Weaker Sections of the society. All the aforesaid factors are required to be considered by the AFRC while determining/reviewing the tuition fees. Therefore, the High Court is absolutely justified in quashing and setting aside G.O. dated 06.09.2017.", the court observed in its judgment. (Para 5)

The order can be read here.

 

Related:

It's Welfare & Social Justice under the Indian Constitution, not "freebies"

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Supreme Court: Education not business to earn profit, tuition fee must be affordable

SC Upholds lower court’s decision quashing seven-fold increase of tuition fee in private medical colleges

Supreme court

On November 7, the Supreme Court of India upheld the stance that education is not a for-profit enterprise, and declared that tuition fee must always be reasonable and affordable.  A bench led by Justice MR Shah upheld the Andhra Pradesh High Court order quashing the state government’s decision to enhance the tuition fee in medical colleges to Rs 24 lakh per annum.

“Education is not the business to earn profit. The tuition fee shall always be affordable", the Supreme Court remarked while setting aside a Government order issued by State of Andhra Pradesh. (Para 5)

The G.O. boosting the tuition cost on the grounds of the private medical colleges' representations, according to the justices MR Shah and Sudhanshu Dhulia's bench, was "wholly impermissible and most arbitrary and purely with a view to favor and/or coerce the private medical colleges."

Dismissing an appeal filed by a medical college, the court upheld the Andhra Pradesh High Court judgment that had quashed the Government Order.

“To enhance the fee to Rs 24 lakh per annum i.e. seven times more than the fee fixed earlier is not justifiable at all,” the Bench stated while dismissing Narayana Medical College’s petition challenging the Andhra Pradesh High Court’s order setting aside the government’s decision to enhance the tuition fee of MBBS students. (Para 5)

Excess charges to be refunded

The top court confirmed the High Court's instruction to restore the remaining tuition fee amount received pursuant to a government order dated September 6, 2017, after modifying the charge paid in accordance with the earlier determination as per an order dated June 18, 2011. The Bench ruled that the college administration could not be allowed to keep the money that was recovered or collected as a result of the unlawful government order and maintained that the High Court had acted correctly in giving such instructions.

"The respective medical colleges have used/utilized the amount recovered under G.O. dated 06.09.2017 for a number years and kept with them for a number of years on the other hand students paid the exorbitant tuition fee after obtaining loan from the financial institutions/banks and paid the higher rate of interest. If at all the AFRC determines/fixes the tuition fee which is higher than the tuition fee fixed earlier it will be always open for the medical colleges to recover the same from the concerned students, however, the respective medical colleges cannot be permitted to retain the amount collected illegally pursuant to G.O. dated 06.09.2017.", the court said in its judgment. (Para 6)

Rs 2.5 Lakhs costs slapped on Medical Institute

Additionally, it ordered the petitioner college and the Andhra Pradesh Government to pay costs in the amount of Rs 2.5 lakh each within six weeks at the court's registry. The Supreme Court agreed with the High Court that the fee cannot be increased or fixed without the recommendations of the committee in light of the provisions of the Andhra Pradesh Admission and Fee Regulatory Committee (AFRC) for Professional Courses offered in Private Unaided Professional Institutions Rules, 2006.

The court noted that following the judgment in Inamdar and Ors. Vs. State of Maharashtra and Ors.; [(2005) 6 SCC 537], the State of Andhra Pradesh framed Rules called the Andhra Pradesh Admission and Fee Regulatory Committee (for Professional Courses offered in Private UnAided Professional Institutions) Rules, 2006. Rule 4 of the Rules, 2006 is with respect to the fee fixation.

With reference to determination of fee or review of fee, the bench said that the same shall be within the parameters of the fixation rules and shall have direct nexus on the factors mentioned in Rule 4 of the Rules, 2006. Location of the professional institution; nature of the professional course; cost of available infrastructure; expenditure on administration and maintenance; a reasonable surplus required for growth and development of the institution; and the revenue foregone on account of waiver of fee, if any, in respect of students belonging to the reserved category and other economically weaker sections of the society had to be taken into account, it said.

Noting that all these factors were required to be considered by the AFRC while determining or reviewing the tuition fees, the Bench said the High Court was “absolutely justified” in quashing and setting aside the government order dated September 6, 2017.

“Determination of fee/review of fee shall be within the parameters of the fixation rules and shall have direct nexus on the factors mentioned in Rule 4 of the Rules, 2006, namely, (a) the location of the professional institution; (b) the nature of the professional course; (c) the cost of available infrastructure; (d) the expenditure on administration and maintenance; (e) a reasonable surplus required for growth and development of the professional Institution; (f) the revenue foregone on account of waiver of fee, if any, in respect of students belonging to the reserved category and other Economically Weaker Sections of the society. All the aforesaid factors are required to be considered by the AFRC while determining/reviewing the tuition fees. Therefore, the High Court is absolutely justified in quashing and setting aside G.O. dated 06.09.2017.", the court observed in its judgment. (Para 5)

The order can be read here.

 

Related:

It's Welfare & Social Justice under the Indian Constitution, not "freebies"

Right to Education under attack: Are the Courts misguided in treating the hijab ban case as simply a religious issue?

Karnataka: Minority PhD Scholars Stare at Bleak Future as Govt Slashes Fellowship Amount

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