"Education Is Not Business ; Tuition Fee Shall Always Be Affordable" : Supreme Court Quashes GO Enhancing Private Medical College Fees By 7 Times

"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 that enhanced the tuition fee of Private Medical Colleges by seven times, to Rs. 24 lakhs per annum.

The bench of Justices MR Shah and Sudhanshu Dhulia observed that the G.O. enhancing the tuition fee on the representations made by the private medical colleges was 'wholly impermissible and most arbitrary and only with a view to favour and/or oblige 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.

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.

Accepting the report of the Admission and Fee Regulatory Committeer (AFRC), the State Government issued G.O. dated 18.06.2011 fixing and enhancing the fee for the academic years 2011­-12 to 2013­1-4. However, later, for the block years 2017 to 2020, 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. Allowing writ petitions filed challenging this GO, the High Court held that the fee could not be enhanced/fixed without the recommendations/report of the AFRC.

In appeal, the bench referring to relevant provisions of the Rules of 2006, observed that the State could not have enhanced the fee during the review pending with the AFRC.

"Once the State Government enacted the Rules, 2006 which provides determination and fixation and the review of the tuition fees by the AFRC, the State Government was bound by the Rules, 2006 and could not have enhanced the fee during the review pending with the AFRC. To enhance the fee unilaterally would be contrary to the objects and purpose of Andhra Pradesh Educational Institutions (Regulation of Admissions and Prohibition of Capitation Fee) Act, 1983 as well as the Rules, 2006 and the decision of this Court in the case of P.A. Inamdar (supra). To enhance the fee to Rs. 24 lakhs per annum i.e., seven times more than the fee fixed earlier was not justifiable at all. The education is not the business to earn profit. The tuition fee shall always be affordable. 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.

The court also added that the medical colleges cannot be permitted to retain the amount collected illegally pursuant to G.O..

"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.

The bench further observed that that the determination of fee/review of fee has to be within the parameters of the fixation rules. It said:

The education is not the business to earn profit. The tuition fee shall always be affordable. 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. 

While dismissing the appeal, the bench imposed the cost of Rs. 5 lakhs to be equally paid by the appellant(s) as well as the State of Andhra Pradesh.

Case details

Narayana Medical College vs State of Andhra Pradesh | 2022 LiveLaw  (SC)  929 | SLP(C) 2969­2970 of 2021 | 7 November 2022 | Justices MR Shah and Sudhanshu Dhulia

For Petitioner(s) Mr. Ramesh Allanki, Adv. Mr. Sidhant Buxy, Adv. Mr. Gajji Ramesh Babu, Adv. For M/s. Ramesh Allanki And Associates, AOR

For 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.

Headnotes

Andhra Pradesh Educational Institutions (Regulation of Admissions and Prohibition of Capitation Fee) Act, 1983 - Andhra Pradesh Admission and Fee Regulatory Committee (for Professional Courses offered in Private Un­Aided Professional Institutions) Rules, 2006 ; Rule 4 - Government order issued by State of Andhra Pradesh that enhanced the tuition fee of Private Medical Colleges by seven times, to Rs. 24 lakhs per annum - State Governnment could not have enhanced the fee during the review pending with the AFRC. To enhance the fee unilaterally would be contrary to the objects and purpose of the 1983 Act as well as the 2006 Rules, 2006 and the decision in P.A. Inamdar and Ors. Vs. State of Maharashtra and Ors.; (2005) 6 SCC 537.  (Para 3.1,5)

Andhra Pradesh Admission and Fee Regulatory Committee (for Professional Courses offered in Private Un­Aided Professional Institutions) Rules, 2006 ; Rule 4 - The education is not the business to earn profit. The tuition fee shall always be affordable. 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. (Para 5)

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