1. Fee enhancement for private medical colleges by State Government without recommendations from the Admission and Fee Regulatory Committee in violation of the Rules, 2006. (Para 2 )
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2022 Supreme(SC) 1132
SUPREME COURT OF INDIA
M.R. SHAH, SUDHANSHU DHULIA, JJ.
Narayana Medical College – Appellant
Versus
The State of Andhra Pradesh and Others – Respondents
Civil Appeal No. 8185-8186 of 2022, Special Leave Petition (Civil) Nos. 2969-2970 of 2021
Decided On : 07-11-2022
Important Points
Tuition fees for private professional institutions cannot be enhanced unilaterally by the State Government; such fixation must be based on the recommendations of the authorized regulatory committee (AFRC) following prescribed rules to prevent profiteering and ensure affordability in education.
Subject
Education Law - Fee Regulation
Act Referred
Andhra Pradesh Admission and Fee Regulatory Committee for Professional Courses offered in Private Un-Aided Professional Institutions Rules: R.4
Headnote
Tuition Fee - Andhra Pradesh Admission and Fee Regulatory Committee - Rules, 2006 - [Rule 4 of the Rules, 2006] - The court held that the State Government could not unilaterally enhance the tuition fee for private medical colleges without the recommendations of the AFRC, as per the relevant provisions of the Rules, 2006. The G.O. enhancing the fee was set aside as it was impermissible and arbitrary, favoring the private medical colleges. The court emphasized that any enhancement of the tuition fee without the recommendations of the AFRC would be contrary to the decision of the court in P.A. Inamdar (2005) 6 SCC 537 and the relevant provisions of the Rules, 2006.
Fact of the Case:
The State Government unilaterally enhanced the tuition fee for private medical colleges without waiting for the report/recommendations of the AFRC, leading to exorbitant fees. The High Court set aside the G.O. enhancing the fee and directed the colleges to refund the amount collected.
Finding of the Court:
The High Court's decision to quash the G.O. enhancing the tuition fee and to direct the refund of the collected amount was upheld by the Supreme Court. The State Government's action was deemed impermissible and arbitrary, favoring the private medical colleges.
Issues: Unilateral enhancement of tuition fee by the State Government without AFRC recommendations, legality of the refund of the collected amount by the colleges.
Ratio Decidendi: The State Government's action of unilaterally enhancing the tuition fee without AFRC recommendations was impermissible and arbitrary, contrary to the legal framework established in P.A. Inamdar (2005) 6 SCC 537 and the relevant provisions of the Rules, 2006. The colleges were directed to refund the collected amount as they were beneficiaries of the illegal G.O.
Final Decision: The appeals were dismissed, and the High Court's decision to quash the G.O. and direct the refund of the collected amount was upheld. The appellants and the State of Andhra Pradesh were directed to pay costs, to be deposited with the Registry of the Court and transferred to NALSA and MCPC.
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): Mr. Ramesh Allanki, Adv. Mr. Sidhant Buxy, Adv. Mr. Gajji Ramesh Babu, Adv. For M/s. Ramesh Allanki And Associates, AOR
For the Respondent(s):M/s. M. Rambabu And Co., AOR Mr. Mahfooz Ahsan Nazki, AOR Mr. Polanki Gowtham, Advocate Mr. Shaik Mohamad Haneef, Advocate Mr T. Vijaya Bhaskar Reddy, Advocate Mr. K.V.Girish Chowdary, Advocate Ms. Rajeswari Mukherjee, Advocate Ms. Niti Richhariya, Advocate Mr. Krishna Dev Jagarlamudi, AOR Ms. Aruna Gupta, AOR Mr. Syed Ahmad Naqvi, Adv. Inklee Barooah, Adv. Mr. Chinmay Deshpande, Adv. Mr. Anirudh Sanganeria, AOR Mr. Balaji Srinivasan, AOR Mrs. Lakshmi R. Rao, Adv. Mr. Shiva Krishnamurti, Adv. Ms. Aakriti Priya, Adv. Ms. Gauri Pasricha, Adv.
For the Petitioner(s): Mr. Ramesh Allanki, Adv. Mr. Sidhant Buxy, Adv. Mr. Gajji Ramesh Babu, Adv. For M/s. Ramesh Allanki And Associates, AOR
For the Respondent(s):M/s. M. Rambabu And Co., AOR Mr. Mahfooz Ahsan Nazki, AOR Mr. Polanki Gowtham, Advocate Mr. Shaik Mohamad Haneef, Advocate Mr T. Vijaya Bhaskar Reddy, Advocate Mr. K.V.Girish Chowdary, Advocate Ms. Rajeswari Mukherjee, Advocate Ms. Niti Richhariya, Advocate Mr. Krishna Dev Jagarlamudi, AOR Ms. Aruna Gupta, AOR Mr. Syed Ahmad Naqvi, Adv. Inklee Barooah, Adv. Mr. Chinmay Deshpande, Adv. Mr. Anirudh Sanganeria, AOR Mr. Balaji Srinivasan, AOR Mrs. Lakshmi R. Rao, Adv. Mr. Shiva Krishnamurti, Adv. Ms. Aakriti Priya, Adv. Ms. Gauri Pasricha, Adv.
Table of Contents
2. Medical colleges claim increased costs justify fee hikes and oppose refunds; students argue against retaining funds collected under an illegal government order. (Para 4 )
3. State Government cannot unilaterally enhance tuition fees without regulatory recommendations; education is not a profit-making business and fees must be affordable and based on prescribed parameters. (Para 3 , 5 )
4. Fee fixation in professional institutions must strictly follow statutory rules requiring recommendations from the regulatory committee to prevent profiteering and commercialization of education. (Para 5 )
5. Appeals dismissed; government order enhancing fees quashed; medical colleges directed to refund excess fees collected to students. (Para 6 , 7 )
6. Can the State Government unilaterally enhance tuition fees for private professional institutions?
No. If statutory rules mandate that fee fixation be based on the recommendations or report of a regulatory committee, the State cannot enhance fees unilaterally. Such action is considered arbitrary and contrary to the purpose of regulating admissions and prohibiting capitation fees. (Para 3 , 5 )
7. What factors must be considered when determining or reviewing tuition fees for professional institutions?
Fee fixation must be based on specific parameters, including the institution's location, nature of the course, infrastructure costs, administration and maintenance expenditure, reasonable surplus for growth, and revenue foregone due to fee waivers for reserved categories and economically weaker sections. (Para 5 )
8. Are institutions entitled to retain fees collected under a government order that is subsequently declared illegal?
No. Institutions cannot be permitted to retain amounts recovered under an illegal government order. While they may recover fees if a regulatory committee later determines a higher fee, they must refund amounts collected illegally in the interim. (Para 6 )
JUDGMENT :
M.R. SHAH, J.
Leave granted.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Andhra Pradesh at Amravati in Writ Petition Nos. 33656/2018 and 8210/2019 the medical college/institution has preferred the present appeals.
2. Pursuant to the judgment and order passed by this Court in the case of P.A. Inamdar and Others vs. State of Maharashtra and Others , (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 Un-Aided Professional Institutions) Rules, 2006 (hereinafter referred to as the Rules, 2006). Rule 4 of the Rules, 2006 is with respect to the fee fixation. Following the report of the Admission and Fee Regulatory Committee (hereinafter referred to as the AFRC), the State Government issued G.O. dated 18.06.2011 fixing and enhancing the fee for the academic years 2011-12 to 2013-14. However, for the subsequent years, more particularly, for the block years 2017 to 2020 (period in question) without waiting for the report from the AFRC and on the representations made by the private medical colleges, the State Government issued G.O. dated 06.09.2017 and enhanced the tuition fee payable by the MBBS students. At this stage, it is required to be noted that under the said G.O. the State Government enhanced the tuition fee at an exorbitant rate of Rs. 24 lakhs per annum i.e. almost seven times the tuition fee notified for the previous block period. The G.O. dated 06.09.2017 was the subject matter of writ petitions before the High Court. By the impugned common judgment and order the High Court has set aside the G.O. dated 06.09.2017 by observing and holding that considering the provisions of the Rules, 2006 the fee cannot be enhanced/fixed without the recommendations/report of the AFRC. Therefore, the High Court by the impugned common judgment and order has held that the recovery of enhanced tuition fee by the respective private medical colleges is bad in law. Consequently, the High Court has set aside the G.O. dated 06.09.2017 to the extent of enhancement of fee. The High Court has also directed that if any fee already fixed by the Government vide G.O. dated 06.09.2017 dehors the G.O. dated 18.06.2011, the same shall be refunded by the colleges to the students after adjusting the amounts payable under G.O. dated 18.06.2011.
2.1 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the High Court, the respective medical college/institution qua who now is required to refund the amount collected pursuant to G.O. dated 06.09.2017 has preferred the present appeals.
3. Having heard Shri K.V. Viswanathan, learned Senior Advocate appearing on behalf of the appellant, Shri Basava Prabhu S. Patil, learned Senior Advocate appearing on behalf of the original writ petitioners, learned counsel appearing on behalf of the State of Andhra Pradesh and Shri Krishna Dev Jagarlamudi, learned counsel appearing on behalf of A.P. Admission and Fee Regulatory Committee and on considering the impugned common judgment and order passed by the High Court, we are of the opinion that the High Court has not committed any error in quashing and setting aside the G.O. dated 06.09.2017 enhancing the tuition fee for the block years 2017-2020. Even Shri K.V. Viswanathan, learned Senior Advocate appearing on behalf of the appellant - medical college has fairly conceded that the tuition fee could not have been enhanced by the State Government unilaterally and without report/recommendations by the AFRC under the provisions of the Rules, 2006.
3.1 Even otherwise considering the relevant provisions of the Rules, 2006 the fixation could have been only on the recommendations/report by the AFRC and under Rule 4 of the Rules, 2006 a duty is cast upon the AFRC to recommend the fee fixation. Under the relevant provisions of the Rules, 2006, the AFRC while fixing the fee is req
