Akshaya Centres Are For Public Service Not Profit, Entrepreneurs Can't Dictate Service Charges: Kerala High Court - 2025-09-10

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Akshaya Centres Are For Public Service, Not Profit; Can't Dictate Fees, Says Kerala High Court

Ernakulam: The Kerala High Court, in a significant ruling, has dismissed petitions filed by associations of Akshaya Centre Entrepreneurs challenging a government order that fixed service charges for K-smart services. Justice N. Nagresh affirmed that the entrepreneurs, operating under a contract with the government, have no statutory right to demand or dictate the fees charged to the public for essential services.

The court underscored that Akshaya Centres are fundamentally public service-oriented and not commercial ventures driven solely by a profit motive.

Case Background

The case was brought forward by the Forum of Akshaya Centre Entrepreneurs and the All Kerala Akshaya Entrepreneurs Confederation. They challenged a Government Order (GO(Rt) No.185/2025/ITD dated 06.08.2025) which set new, uniform service charges for services provided through the K-smart portal. The petitioners argued that these new rates were arbitrary and unviable.

Arguments from Both Sides

Petitioners' Arguments: - The entrepreneurs contended that the service charges had not been revised since 2018, despite rising inflation and operational costs. - They highlighted the significant personal investment, ranging from ₹10 lakhs to ₹15 lakhs, required to set up the centres without any financial aid from the government. - The new order arbitrarily fixed a flat fee of ₹40-₹60, revoking a previous order that allowed charges of ₹10 per page for data entry and ₹5 per page for scanning, thereby disregarding the volume of work involved. - The petitioners claimed the government had issued the order without consulting them, contrary to a previous understanding that a committee with their representation would be formed to discuss rate revisions.

State's Position: - The Government Pleader argued that Akshaya Centre Entrepreneurs operate based on a contract with the State. - As franchisees, they are bound by the terms and rates fixed by the government. The relationship is purely contractual, giving the entrepreneurs the option to accept the terms or exit the agreement.

Court's Rationale and Key Observations

Justice N. Nagresh, in a clear and decisive judgment, sided with the State, emphasizing the core purpose of the Akshaya project. The court's reasoning was built on several key principles.

Public Service over Profit: The court firmly stated that Akshaya Centres are not to be treated as typical businesses. The judgment noted, "The Akshaya Centres are service centres. Akshaya Centres cannot be treated as business centres, enabling the franchisees to run the centre with profit motive alone. The Akshaya Centres are intended to serve the common man."

Bridging the Digital Divide: The court highlighted the foundational objective of the centres: to connect the general public with government services and address issues of digital illiteracy. "The Centres intended to connect the general public with government services, which otherwise are to be provided by the Government to citizens without levying service charges. The Centres are intended to make good the issue of digital illiteracy and digital divide among the general public."

No Right to Dictate Terms: The High Court unequivocally rejected the petitioners' claim that they must be consulted before fixing service rates. The judgment clarified the nature of their legal relationship with the government: "The relationship between the petitioners and the Government is purely contractual. The petitioners have the right to accept the terms of the contract or quit. The petitioners have no statutory or other right to demand or dictate service to be levied from the general public for availing essential services."

Final Verdict

Finding no merit in the arguments presented by the entrepreneurs' forums, the High Court dismissed both writ petitions. The decision reinforces the government's authority to set service charges for its public welfare schemes, prioritizing public access and affordability over the commercial interests of its contractual partners.