Education is not business to earn profit: SC
The top court dismissed the petition with cost of ₹5 lakh to be borne equally by the petitioner college and the Andhra Pradesh government and deposited in court within six weeks.
Education is not a business to earn profit, the Supreme Court has noted as it set aside a 2017 Andhra Pradesh government’s order prescribing a seven-fold increase in the medical course fee, taking it to ₹24 lakh annually, in the state.
Directing the private colleges to refund the amount collected in excess of the fee last fixed by the state government in 2011, a bench of justices MR Shah and Sudhanshu Dhulia on Monday said, “Education is not the business to earn profit. The tuition fee shall always be affordable.”
The apex court was hearing a petition filed by Narayana Medical College in Andhra Pradesh challenging a September 2019 decision of the Andhra Pradesh high court striking down the MBBS (Bachelor of Medicine and Bachelor of Surgery) fee hike and ordering refund to students admitted in the college since the academic year 2017-18.
The top court dismissed the petition with cost of ₹5 lakh to be borne equally by the petitioner college and the state government and deposited in court within six weeks. The amount was directed for use in legal services by the Supreme Court Mediation and Conciliation Committee and the National Legal Services Authority.
“To enhance the fee to ₹24 lakh per annum, i.e., seven times more than the fee fixed earlier was not justifiable at all,” the bench said, agreeing with the high court’s conclusion.
The aggrieved medical students who had to pay through their nose had submitted before the court that the September 6, 2017 government order raising the fee was done without awaiting the recommendation of the Admission and Fee Regulatory Committee (AFRC).
The bench held the order passed by the state government to be “wholly impermissible and most arbitrary”. It even went to the extent of saying that the hike was done “only with a view to favour or oblige the private medical colleges”.
“Any enhancement of the tuition fee without the recommendation of the AFRC shall be contrary to the decision of this court in the case of PA Inamdar in 2005 and the relevant provisions of the 2006 AFRC Rules (prevailing in the state),” the bench said. “The high court has rightly quashed and set aside the GO dated September 6, 2017.”
The students pointed out that in 2011, the tuition fee hike was introduced by the state after consulting AFRC. In 2017, however, the state acted solely on representations received from private medical colleges. Rule 4 of the Admission and Fee Regulatory Committee (for Professional Courses offered in Private, Unaided Professional Institutions) Rules, 2006 mandated the state to seek a prior report from the panel before altering the fee.
This rule required the AFRC to factor in the location of the institution, nature of professional course, cost of available infrastructure, expenditure on administration and maintenance, reasonable surplus required for growth and development of the institution, revenue foregone on account of waiver of fees in respect of students from reserved category or economically weaker sections (EWS) of the society.
“Determination of fee/review of fee shall be within the parameters of the fixation rules and shall have the direct nexus on the factors mentioned in Rule 4 of the 2006 Rules...the state government enhanced the tuition fee at an exorbitant rate of ₹24 lakh per annum, almost seven times the tuition fee notified for the previous block period,” the court observed.
The next question before the apex court was regarding refund as ordered on September 24, 2019, by the high court, which had said that colleges cannot take benefit of the unjust enrichment in fees that was wrongly increased. Accordingly, it asked the colleges to refund the students after adjusting the amounts payable under the earlier fee structure recommended by AFRC and issued in June 2011.
Upholding the high court’s observation, the apex court said, “The medical colleges are the beneficiaries of the illegal GO which is rightly set aside by the high court.”
The bench was conscious of the hardships faced by students who arranged to pay the amount by obtaining loan from banks and financial institutions at high rate of interest. “The management cannot be permitted to retain the amount recovered or collected pursuant to the illegal GO,” it held.
The college told the Supreme Court that between 2011 and 2017, they incurred added expenses due to the requirement introduced in 2016 to pay stipend to students even as the fee remained unchanged since 2011. The bench told the college that this component would be compensated as and when the higher tuition fees is fixed by AFRC. However, the court did not permit the college to retain the illegally collected amount.