Narayana Medical College Versus The State of Andhra Pradesh & Ors.

Narayana Medical College Versus The State of Andhra Pradesh & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
    CIVIL APPEAL NOS.                       OF 2022
(@ Special Leave Petition (Civil) Nos. 2969­2970 of 2021)
Narayana Medical College               ...Appellant(s)
Versus
The State of Andhra Pradesh & Ors.         …Respondent(s)
J U D G M E N T
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   Ors.   Vs.   State   of
Maharashtra  and  Ors.;   (2005)  6  SCC  537, the State of
Andhra Pradesh framed Rules called the Andhra Pradesh
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Admission and Fee Regulatory Committee (for Professional
Courses   offered   in   Private   Un­Aided   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 2011­12 to 2013­14. 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
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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
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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 2017­2020. 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
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of   the   Rules,   2006,   the   AFRC   while   fixing   the   fee   is
required to undertake detailed enquiry as provided in Rule
4 of the Rules, 2006. Rule 4 of the Rules, 2006 reads as
under: ­  
“4.  Fee  Fixation. ­ (i) The AFRC shall call for, from
each   Institution,   its   proposed   fee   structure   well   in
advance   before   the  date   of   issue   of   notification   for
admission for the academic year along with all the
relevant   documents   and   books   of   accounts   for
security,
(ii) The AFRC shall decide whether the fees proposed
by the Institution is justified and does not amount to
profiteering or charging of capitation fee.
(iii) The AFRC shall be at liberty to approve or alter the
proposed fee for each course to be charged by the
Institution. Provided that it shall give the Institution
an Opportunity of being heard before fixing any fee or
fees.
(iv)   The   AFRC   shall   take   into   consideration   the
following   factors   while   prescribing   the   fee:   (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   Schedule   Caste,   Schedule   Tribes   and   wherever
applicable to the Socially and Educationally Backward
Classes and other Economically Weaker Sections of
the society, to such extent as shall be notified by the
Government from time to time. (g) Any other relevant
factor. Provided that, no such fees, as may be fixed by
the   AFRC,   shall   amount   to   profiteering   or
commercialization of education, 
(v) The AFRC shall communicate the fee structure as
determined by it, to the Government, for notification.
(vi) The fee or scale of fee determined by the AFRC 
shall be valid for a period of three years. 
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(vii) The fee so determined shall be applicable to a
candidate who is admitted to an institution in that
academic   year   and   shall   not   be   altered   till   the
completion of his course in the Institution in which he
was originally admitted. No Professional Educational
Institution shall collect at a time a fee which is more
than one year's fee from a candidate.”
Therefore, the G.O. issued by the State Government
enhancing the tuition fee for the private medical colleges
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. The same is rightly set aside by the High
Court. The State could not have issued the G.O. enhancing
the   tuition   fee   for   private   medical   colleges   dehors   the
recommendations of the AFRC. Any enhancement of the
tuition fee without the recommendations of the AFRC shall
be contrary to the decision of this Court in the case of P.A.
Inamdar  (supra) and even the relevant provisions of the
Rules,   2006.   Therefore,   the   High   Court   has   rightly
quashed and set aside G.O. dated 06.09.2017.        
4. Now so far as the directions issued by the High Court to
refund the amount collected under G.O. dated 06.09.2017
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after adjusting the fee fixed by the Government vide G.O.
dated   18.06.2011   by   the   colleges   to   the   students   is
concerned,   Shri   K.V.   Viswanathan,   learned   Senior
Advocate appearing on behalf of the appellant – private
medical college has submitted that it is true that the State
Government   could   not   have   enhanced   the   tuition   fee
without recommendations/report of the AFRC. It is true
that in the present case the tuition fee was lastly fixed in
the   year   2011   and   thereafter   the   process   for
determination/fixation of tuition fee for the block period
2017 to 2020 was in progress by the AFRC. It is submitted
that between 2011 and 2017 the costs/expenses of the
colleges   had   increased   and   the   requirement   of   paying
stipend to students has been introduced in the year 2016
and therefore, the fee fixed in the year 2011 would cause
significant loss to the colleges and the tuition fee is bound
to   be   increased   and   therefore,   the   increase   which   the
respective college is entitled to recover (enhanced fee).   It
is,   therefore,   prayed   that   at   this   stage   the   respective
colleges may not be directed to refund the amount i.e.,
tuition fee collected pursuant to G.O. dated 06.09.2017
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after adjusting the amount of tuition fee to be paid as per
G.O. dated 18.06.2011. Shri K.V. Viswanathan, learned
Senior   Advocate   has   pointed   out   that   in   many   cases
students have adjusted the difference in the subsequent
fees. 
4.1 The prayer on behalf of the medical college not to refund
the amount at this stage is vehemently opposed by Shri
Basava Prabhu S. Patil, learned Senior Advocate appearing
on behalf of the students. It is submitted that with respect
to the similar G.O. issued by the State of Telangana the
same has been set aside by the High Court and the High
Court has directed to refund the amount paid in excess,
paid   pursuant   to   illegal   G.O.   issued   by   the   State
Government. It is vehemently submitted that the private
medical colleges who are the beneficiaries of illegal G.O.
which   was   issued   on   the   representations   made   by   the
private medical colleges cannot be permitted to retain the
amount which they have recovered illegally on the basis of
the illegal G.O. 
4.2 It is submitted that under G.O. dated 06.09.2017 there
was an exorbitant increase of tuition fee of Rs. 24 lakhs
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i.e., seven times the tuition fixed earlier by the AFRC and
many students/their parents were required to avail the
bank   loan   to   pay   the   exorbitant   tuition   fee   and   were
required to pay the higher rate of interest. Therefore, it is
prayed   not   to   interfere   with   the   impugned   common
judgment and order passed by the High Court including
the order of refund passed by the High Court.  
4.3 Learned   counsel   appearing   on   behalf   of   the   AFRC   has
submitted   that   during   the   enquiry/proceedings   to
determine the tuition fee for the block period 2017­2020,
the State Government unilaterally and without waiting for
the report/recommendations by the AFRC increased the
tuition   fee.   It   is   submitted   that   in   fact   the   AFRC   vide
notification   dated   08.12.2016   proposed   to   review   and
determine   the   fees’   structure   and   call   for   relevant
materials from the medical colleges and the students and
the   review   and   determination   of   fees   was   pending,   the
association   of   the   colleges   addressed   a   letter   to   the
Government seeking revision which the State Government
granted/permitted in clandestine manner.   
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5. As observed hereinabove no error has been committed by
the High Court in quashing and setting aside G.O. dated
06.09.2017   enhancing   the   tuition   fee   for   the   private
medical colleges. The Government of Andhra Pradesh on
the representations made by the private medical colleges
enhanced   the   tuition   fee   for   private   medical   colleges
though the revision of fees was pending consideration with
the AFRC. The State Government enhanced the tuition fee
exorbitantly to Rs. 24 lakhs per annum which was seven
times the  fee  fixed  earlier. 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
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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. 
6. Now so far as the directions issued by the High Court to
refund   the   amount   of   tuition   fee   collected   under   G.O.
dated 06.09.2017 and to refund the balance amount after
11
adjusting   the   fee   paid   pursuant   to   the   earlier
determination as per G.O. dated 18.06.2011 is concerned,
we   are   of   the   opinion   that   the   High   Court   has   not
committed   any   error   in   issuing   such   directions.   The
management cannot be permitted to retain the amount
recovered/collected   pursuant   to   the   illegal   G.O.   dated
06.09.2017. The medical colleges are the beneficiaries of
the illegal G.O. dated 06.09.2017 which is rightly set aside
by the High Court. 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.
Therefore, even the directions issued by the High Court to
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refund the amount of tuition fee collected pursuant to G.O.
dated 06.09.2017 after adjusting the amount payable as
per   the   earlier   determination   is   not   required   to   be
interfered with. 
7. In view of the above and for the reasons stated above both
the appeals fail and the same deserve to dismissed and are
accordingly   dismissed,   however,   with   cost   which   is
quantified   at   Rs.   5   lakhs   to   be   equally   paid   by   the
appellant(s) as well as the State of Andhra Pradesh (i.e.,
Rs. 2.5 lakh by the appellant(s) and Rs. 2.5 lakh by the
State of Andhra Pradesh) to be deposited with the Registry
of this Court within a period of six weeks from today and
on such deposit the same be transferred to National Legal
Services Authority (NALSA) and Mediation and Conciliation
Project   Committee,   Supreme   Court   of   India   (MCPC)
equally.  
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
NOVEMBER 07, 2022 [SUDHANSHU DHULIA]
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