Rajasthan High Court - Jodhpur
Deepesh Singh Beniwal vs Union Of India on 31 May, 2021
Bench: Sangeet Lodha, Rameshwar Vyas
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 13535/2020
Deepesh Singh Beniwal S/o Late Shri Yashpal Singh Choudhary,
aged about 42 Years, Resident of 31, Guru Pratap, Air Force
Road, Bhagat Ki Kothi, Jodhpur.
----Petitioner
Versus
1. Union of India, through its Secretary, Ministry of Health
and Family Welfare, Government of India, Nirman
Bhawan, Near Udyog Bhawan Metro Station, Maulana
Azad Road, New Delhi - 110011.
2. National Medical Commission, Through its Secretary,
Pocket 14, Sector 8, Dwarka Phase I, New Delhi -
110077.
3. State of Rajasthan, Through The Principal Secretary,
Department of Medical Education (Group-I), Government
of Rajasthan, Jaipur.
4. Chairman, Neet UG Medical and Dental
Admission/counselling-2020, Principal, Government
Dental College, Subhash Nagar, Behind T.B. Hospital,
Jaipur, Rajasthan.
5. Fee Regulatory Committee, Through its Member
Secretary, Department of Medical Education (Group-I),
Government of Rajasthan, Jaipur.
6. American Institute of Medical Sciences, Near Transport
Nagar, Airport Road, Bedwas, Udaipur- 313001 through
its Director/Principal.
7. Ananta Institute of Medical Sciences, NH-8, Village
Kaliwas, Tehsil Nathdwara, District Rajsamand
(Rajasthan) Through Its Director/Principal.
8. Geetanjali Medical Colllege, NH 8, Near Eklingpura
Chouraha, Manwakhera, Udaipur Through its
Director/Principal.
9. JNU Institute For Medical Sciences and Research Centre,
Jaipur/ Jaipur National University, Institute for Medical
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Sciences and Research Centre for Medical Sciences and
Research Centre, JNU Main Campus, Jagatpura, Jaipur
through its Director/principal.
10. Mahatama Gandhi Medical College, RIICO Institutional
Area, Tonk Road, Sitapura, Jaipur - 302022 through its
Director/Principal.
11. National Institute of Medical Sciences, Jaipur Delhi
Highway, NH- 11C, Jaipur- 303121 (Rajasthan) through
its Director/Principal.
12. Pacific Institute of Medical Sciences, Ambua Road Umarda
Udaipur (Rajasthan)- 313015 through its
Director/Principal.
13. Pacific Medical College and Hospital, Billo Ka Bedla,
Amberi, NH-76, Udaipur - 313001, Rajasthan through its
Director/Principal.
----Respondents
For Petitioner(s) : Mr. Deepesh Singh Beniwal, petitioner
present in person
For Respondent(s) : Mr. Mukesh Rajpurohit, ASG with
Mr. Navneet Singh Birkh for
respondent no.1
Mr. R.S. Saluja, for respondent no.2
Mr. Manish Vyas, AAG with Mr. Kailash
Choudhary, for respondent nos.3 & 5
Mr.Vikas Balia with Mr. Kunal Bishnoi,
for respondent nos.6, 12 & 13
Mr. Hemant Dutt with Mr. Keshar
Singh, for respondent no.7
Mr. Akhilesh Rajpurohit with Mr. Milap
Chopra, for respondent no.8
Mr. Kamlakar Sharma, Sr. Advocate
with Ms Alankrita Sharma, for
respondent no.9
None present for the respondents
No.10 & 11 despite service
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HON'BLE MR. JUSTICE SANGEET LODHA
HON'BLE MR. JUSTICE RAMESHWAR VYAS
Order
31st May, 2021
Per Hon'ble Mr. Sangeet Lodha,J.
Reportable
1. This writ petition (PIL) has been filed by the petitioner, an
advocate by profession, challenging the condition imposed by the
respondents private medical institutions that the students seeking
admission to MBBS Course to submit bank guarantee against the
annual fees for next 3½ years of course duration in addition to
deposit of annual fee for the first year of the course, at the time of
admission.
2. The relief clause contained in the writ petition reads as
under:
"(i) the respondent private medical colleges be directed to
accept bond (in place of bank guarantee) and that too only
from such students with regard to whom the institutions feel
that any student/students might leave the Institutes
midterm.
(ii) the State and the private medical colleges be directed
not to seek submission of bond/bank guarantee as a matter
of course on the pretext of Judgment of Hon'ble Apex Court
in the case of Islamic Academy of Education as no such
directions have been given by the Hon'ble Apex Court.
(iii) that the action of the respondents in calling upon the
students to submit bond/bank guarantee at the time of
admission against the tution fee for remaining course
duration of three and half years be declared arbitrary, illegal
and bad in the eyes of law.
(iv) by an appropriate, writ or direction the respondent
private medical colleges be directed to submit a chart as to
in past five academic years how many students have
submitted bonds or bank guarantees or advance fees for one
or more years.
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(v) by an appropriate, writ or direction the respondent
number 5 be called upon to submit as to whether charging of
advance tution fee as is being done by private medical
colleges in the State of Rajasthan is approved by it and if
not, then what action has it taken against such private
medical colleges till today.
(vi) pass any other appropriate order or direction, which
this Hon'ble Court considers just and proper in the interest of
justice."
3. On 17.12.2020, while issuing notices to the respondents, an
interim order was passed by this Court in the following terms:
"In the meanwhile and until the next date, the
respondents no.6 to 13 are restrained for insisting
upon furnishing of the bank guarantee by the
respondents, who are granted admission to MBBS
Course pursuant to NEET UG (Medical/Dental)
Admission/Counselling 2020 (MBBS, BDS). However,
the institutions shall be at liberty to direct the
students admitted to furnish bond towards the fee of
3½ years in lieu of the bank guarantee.
It is made clear that the students admitted to
the course shall be under an obligation to deposit the
full fee of first year as stipulated but shall be
provisionally exempted from furnishing the bank
guarantee for remaining 3½ years, subject to
outcome of present writ petition/stay petition."
4. Aggrieved by the interim order passed by this Court as
aforesaid, the respondent Nos.6, 7, 9 & 13 preferred a Special
Leave Petition ('SLP') (Civil) No. 15950/2020, wherein, the Hon'ble
Supreme Court, on 24.12.2020, while issuing notices passed the
interim order in the following terms:
"In the meanwhile, there will be a stay of the operation of
the interim order dated 17.12.2020 passed by the High
Court."
5. Later, vide order dated 4.1.2021, the SLP preferred was
disposed of by the Hon'ble Supreme Court with the observations/
directions as under:
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"We are inclined to request the High Court to
decide the writ petition finally within a period of one
week from today in view of the admission process
being at the final stage for the current academic year.
The interim order passed by this Court on 24.12.2020
shall continue to operate till the disposal of the writ
petition by the High Court.
The parties are directed to appear before the
High Court on 07.01.2020.
The application for impleadment is allowed.
The special leave petition is disposed of
accordingly. Pending application (s), if any, shall also
stand disposed of."
6. Pursuant to the directions of the Supreme Court, the matter
was listed before this Court on 8.1.2021. It was noticed that the
service of notices on respondents No. 1 to 6, 7, 8, 9 & 13 was still
awaited. On behalf of respondents No. 1 to 6, 7, 8, 9 & 13,
learned counsel put in appearance, however, as per office report,
the notices of respondents No. 10, 11 & 13 were not received duly
served. Besides, none of the respondents had filed reply to the
writ petition. In this view of the matter, the matter could not be
taken up for hearing immediately.
7. After service of the notices upon the remaining respondents
and reply/counter to the petition being filed on behalf of the
respondents appearing, the matter was finally heard.
8. Precisely, the grievance raised in the petition is that all the
private medical institutions in the State of Rajasthan at the time of
admission in MBBS Course, are insisting upon the students and/or
their parents to submit bank guarantee against the fees for next
3½ years of the course duration. The submission of the
bond/undertaking does not stand on the same footing as
submission of the bank guarantee inasmuch as, generally, no bank
guarantee is provided by the banks unless the adequate amount is
deposited with the banks and thus, the students belonging to
middle class families/low income groups are facing grave hardship
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at the hands of private medical institutions. According to the
petitioner, since the banks require cash margin for issuance of
bank guarantee, the parents are required to manage the cash
amount of the fees for entire period of MBBS Course in one go.
That apart, the banks are charging upfront commission/fee which
ranges between 2.5% to 3% per annum.
9. It is averred in the petition that eight private medical
institutions in the State of Rajasthan with an intake capacity of
1290 students are charging Rs.15 lacs per annum as minimum
annual tution fee and thus, the parents are required to submit a
minimum bank guarantee Rs.52.50 lacs for a period of 3½ years.
The upfront commission which the bank would be charging on the
said amount would come to Rs.4,59,375/- (calculated @ 2.5% of
the bank guarantee amount). The total amount of bank guarantee
would be Rs.6,77,25,00,000 and upfront commission to be paid by
the parents would come to Rs.59,25,93,750. It is further averred
that in view of the impossibility of the parents arranging the bank
guarantee equivalent to the fees for 3½ years, the private medical
institutions taking advantage of this position, are forcing them to
deposit advance fee of 1½ years or at least 1 year in addition to
the annual fee deposited for the first year and thus, according to
the petitioner, the private medical institutions, which cannot
charge any capitation fee or book profit, are creating a situation
where the students/parents are left with no option but to deposit
an advance fee of minimum period of 1 year. Relying upon the
decisions of the Hon'ble Apex Court in T.M.A. Pai Foundation &
Ors. vs. State of Karnataka & Ors.: (2002) 8 SCC 481 and Islamic
Academy of Education vs. State of Karnataka: (2003) 6 SCC 697,
it is submitted that the educational institution can only charge
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prescribed fees for one semester/year and even if an institution
feels that any particular student may leave in midstream, then at
the highest, it may require to give a bond/bank guarantee with
the balance fees for the whole course would be received by the
Institute even if the student left in the midstream. The grievance
of the petitioner is that out of these two modes i.e. bond and bank
guarantee provided for as aforesaid, the respondents are
invariably insisting for furnishing of bank guarantee only, which is
arbitrary and unfair.
10. A reply to the writ petition has been filed on behalf of the
State of Rajasthan taking the stand that charging of bank
guarantee/advance fee by the private medical institutions in the
State of Rajasthan is not approved by the State. The Fee
Regulatory Committee constituted has taken a decision that no
private institution shall demand or take any kind of formal or
informal fee from the students except the fee determined by the
Committee and in case, any institution collect any kind of fee
other than fixed by the Committee then the same will come under
the definition of 'capitation fee' and accordingly, punitive action
shall be taken. It is submitted that fee for Government medical
colleges and two private medical institutions, American
International Institute of Medical Sciences & Research Centre,
Udaipur and Ananta Institute of Medical Sciences & Research
Centre, Rajsamand, the respondent no.6 & 7 herein, is regulated
by the respondent no.5-Fee Regulatory Committee and rest of the
private medical institutions, the respondent nos. 8 to 13 are
having their own fee structure as per the Fee Regulatory
Committee constituted by themselves.
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11. It is submitted that the action of the private medical
institutions deciding their own fee was challenged in D.B.Civil Writ
Petition (PIL) No.10632/12 (Sachin Mehta vs. State of Rajasthan
& Ors.), wherein, the Division Bench vide order dated 25.10.13
allowed the petition and quashed the notification dated 13.7.12
issued by the private medical college-Mahatama Gandhi Medical
College, the respondent no.10 herein. The said judgment dated
25.10.13 was challenged before the Hon'ble Supreme Court in SLP
No.35001/13 (Mahatma Gandhi University Medical Sciences &
Tech. vs. Sachin Mehta & Ors.) wherein, the Hon'ble Supreme
Court passed an interim order dated 25.11.13 as under:
"In the meanwhile, the petitioner may not refund any
amount to the students pursuant to the impugned judgment
passed by the High Court."
Further vide order dated 16.2.15, the university was
permitted to fix the fee structure for three academic sessions.
Thereafter, D.B.C.Writ Petition No.13414/16 (Dr. Sharwan Ram
vs. State of Rajasthan & Ors.) was disposed of by this Court in
terms of the order dated 16.2.15 passed by the Hon'ble Supreme
Court in SLP No.35001/13. The respondents no. 8 to 13 being the
Universities established and incorporated under the statute, are
deciding their fee as per the Fee Regulatory Committee
constituted under the relevant statute as per the order dated
16.2.15 and are not governed by the respondent no.5.
12. By way of an additional affidavit, it is brought on record by
the State of Rajasthan that in Government Dental College i.e.
RUHS College of Dental Sciences, Jaipur, the State has prescribed
a bond of Rs.4 lacs and bank guarantee of Rs.1 lac from the
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students admitted to BDS Course. The said condition of bank
guarantee is implemented due to the fact that the students
started to drop a course in the second year after securing seat in
MBBS Course in medical college. It is averred that in 2011-12,
complete batch left the college after first year whereas, in
academic session 2012-13, only 5 students continued the course
after first year. Further, the fee charged by RUHS College of Dental
Science is too meagre as compared to private dental colleges and
thus, would face great difficulties in a situation students left it
after first year.
13. The private colleges, the respondents no.6, 7, 8, 9 & 13 have
filed their separate reply/counter to the writ petition.
14. A preliminary objection has been raised on behalf of the
private medical institutions that no public interest is involved in
the present petition so as to permit the petitioner to invoke the
extra ordinary jurisdiction of this Court under Article 226 of the
Constitution of India. The writ petition is conspicuously silent as to
whether the students or their parents have ever raised any
grievance regarding the condition of bank guarantee before the
private medical institutions or the state instrumentalities.
According to the respondents, the writ petition filed by the
petitioner without approaching the concerned authorities for
redressal of the grievance deserves to be dismissed on this count
alone.
15. The respondent no.6-American Institute of Medical Sciences
and respondent no.13-Pacific Medical College and Hospital, in their
separate reply filed, have taken the stand that the respondent
institution is functioning in accordance with the directions and
instructions issued by the Director, vide Information Booklet
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(Annexure 2) and as per the instructions, the respondents are free
to either call for a bank guarantee or a bond from the students
and thus, the institutions are acting merely in accordance with the
directions and in strict compliance of the established rules and
regulations and also the judgment rendered in Islamic
Academy(supra). The Hon'ble Supreme Court has held in number
of cases that the admissions in medical institutions are to be done
by the State Authorities and the role of private players should be
minimised. Thus, the private colleges have no other recourse
except to seek bank guarantee from the students desiring
admission. It is submitted that the respondent no.6 being a
private self financed institution is not aided by the Government
and thus, the fee structure in the college is based on amount
spent substantially on the provision of infrastructure, employment
of faculty, clinical material and other facilities for span of the
whole course. That apart, the institute is charging the fee as fixed
by the Fee Regulatory Committee appointed by the State, headed
by a retired Hon'ble Judge.
16. The respondent no.7-Ananta Institute of Medical Sciences, in
its counter to the writ petition submitted that the levy of fee by
the respondent college is governed by Fee Regulatory Committee,
Department of Medical Education, Government of Rajasthan.
According to the respondent institution, in light of the law laid
down by Supreme Court in Islamic Academy(supra), the
institutions are permitted to receive the bank guarantee from the
students for the balance fees for the whole course to secure the
institution in the event the students leave in midstream. It is
averred that the respondent medical college is a self financed
institution and is receiving no aid from the Government authorities
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and the fees charged from the students is the only amount utilized
for the benefit/use of that educational institution and the institute
is not charging either directly or indirectly any other amount
except the amount fixed as fees. It is submitted that as already
recognized by the Court that all medical admissions to institutions
across the nation shall be done by the State Authorities, wherein
the private institutions will have minimalistic roles, thus, disabling
the institutions from receiving their fees from the students will
affect the students community at large as well as the quality of
education, in light of the fact that MBBS Course is for 4½ years
and if students leave the course midstream, the college has to still
sustain the expenses for that academic seat. It is submitted that
many students after taking admission in a medical college and
blocking their seats again appear in NEET Exams. in the next
academic session and after securing admission in another college,
leave their studies in midstream, wherein the medical colleges
have to suffer the loss for the vacant seats. It is contended that
the Dental Colleges run by the State Government are also insisting
upon submission of the bond and bank guarantee, however, the
petitioner has filed the petition only against the private medical
institutions whereas he is conspicuously silent regarding the
condition imposed by the medical college run by the State
Government and thus, the PIL lacks bona fides.
17. The respondent no.8-Geetanjali Medical Colllege & Hospital
questioning the declaration made by the petitioner in the writ
petition that he is personally filing the present petition since the
parents of the students does not want to prejudice the education
prospects of their children, submitted that the contention raised
by the petitioner is thoroughly misconceived and deserves to be
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rejected for the reason that the parents of the students had filed
an interlocutory application before the Hon'ble Supreme Court.
The petition has been filed in a hasty manner without following the
due process of law or ventilating any grievance before the State
instrumentalities by way of representation. It is submitted that the
Central Government enacted the National Medical Commission Act,
2019 with an intent to provide for a medical education system that
improves access to quality and affordable medical education and
the National Medical Commission constituted under the above
referred Act, is required to undertake National Eligibility-cum-
Entrance Test (NEET) for admission of students to the under
graduate and post graduate courses in all the medical colleges
across the India (including private medical colleges in the State of
Rajasthan). Therefore, acting in furtherance to the directions
issued by the National Medical Commission, detailed instructions
were issued by the office of the Chairman, NEET 2020 in the State
of Rajasthan. According to the respondent, in the instructions
issued, it is clearly laid down that at the time of reporting, the
selected candidates will have to submit a bond/bank guarantee as
applicable and thus, the controversy alleged does not warrant any
interference by this Court.
18. The respondent no.9-JNU Institute of Medical Sciences and
Research Centre, while justifying that condition of bank guarantee
relying upon the decision of the Hon'ble Supreme Court in case of
Islamic Academy, contended that the prayer of the petitioner that
the condition for requiring submission of bond will be insisted only
from such student with regard to whom the institution feels that
any student or students might leave the institution in the
midstream is absolutely irrational and without any basis as at the
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time of taking admission in MBBS Course, the private colleges
have no means to comprehend and determine as to which student
may or may not leave the MBBS Course midstream. It is
submitted that UG Medical and Dental Admission Counseling Board
has published an Information Booklet containing information
regarding the eligibility criteria, application fees, procedure of
allotment of seats, schedule of dates etc. Under the said
Information Booklet, the condition applicable for the private
colleges have been mentioned that 'the candidates have to submit
a bond/bank guarantee as applicable'. According to the respondent
institution, the words 'as applicable', suggest that both the bond
as well as bank guarantee are to be submitted by the student at
the time of admission wherever required. It is submitted that the
bond has been provided in the said Information Booklet under
Proforma-9, which is to be executed in the name of State
Government to ensure the due compliance of the conditions
mentioned therein. The bank guarantee on the other hand cannot
be treated to similar to be bond for which the proforma has been
provided. It is submitted that the private medical colleges are
within their right to demand submission of bank guarantee and
the said right has already been recognised and the rational behind
the same has been upheld by the Hon'ble Supreme Court as well
as various High Courts and thus, it cannot be said that the private
medical colleges are indulged in mischievous practice. It is
submitted that in case of submission of the bond where a student
commits any default, the medical college will have no option but
to undertake a long drawn process of releasing the money from
the student through civil remedy before the Court of law and even
thereafter, it would be difficult to recover the money from such
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student and therefore, instead of bond, the private medical
colleges demand bank guarantee which duly ensures that no
revenue loss would be caused to the medical college in case any
student commits default.
19. The petitioner in his rejoinder to the reply filed on behalf of
Respondent Nos. 3 to 5 submitted that Counseling Brochure and
fee details notified by the counseling board had given leeway to
the private medical colleges to insist on submission of bank
guarantee only which resulted in a situation wherein the
students/parents were forced to deposit advance fee in lieu of
bank guarantee. It is submitted that the State has taken aid of
counseling brochure to substantiate its contention but it has failed
to note that how a well thought out illegal mechanism has been
put to use by private medical colleges to force the parents to
submit bank guarantee and if not possible then to snatch money
from them as advance fees in lieu of bank guarantee. This is
manifest from the official website of the Counseling Board where
the option of submission of bond does not find mention. It is
further submitted that the official representatives of the college at
the time of counseling categorically directs parents/students to
submit bank guarantee only and do not approve bond as a
security to secure the fees of MBBS Course. According to the
petitioner, the charging of advance fees is in the cognizance of
State authorities as the payment of advance fee is accepted
through bank accounts only and moreso the private medical
colleges are required to submit their account to the Fee
Determination Committee in order to seek revision of fees. Thus if
genuine account books are submitted the fact of acceptance of
advance fee is well within the knowledge of the State. According
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to the petitioner all the private medical colleges in the State of
Rajasthan fall within the domain of State only (or for that matter
Fee Determination Committee) and not merely the state run
medical colleges and respondent no. 6 & 7 as contended by the
respondent. The interlocutory order of Apex court cannot be
equated with final order and it cannot be considered as precedent
by the State or for that matter by private medical colleges so as to
allow them to raise a baseless plea that respondents nos. 8 to 13
do not fall within the domain. According to the petitioner, even in
case of the universities established under the statute, the State
Fee Determination Committee shall be the final authority.
20. The petitioner has also preferred an application seeking
directions to the respondents to submit their bank records.
21. Mr. Deepesh Singh Beniwal, the petitioner, contended that a
constitutional Bench of the Hon'ble Supreme Court in Islamic
Academy(supra), while dealing with the question 'whether the
educational institutions are entitled to fix their own fee structure',
categorically held that in educational institutions, there can be no
profiteering motive and capitation fee cannot be charged. The
institution cannot charge either directly or indirectly any other
amount over and above the amount fixed as fees and if any
amount is charged under any other head or guise e.g. donations,
the same would amount to charging capitation fees. The Court
further held that if an institution feels that any particular student
may leave in midstream then, at the highest, it may require that
student to give a bond/bank guarantee that the balance fees for
the whole course would be received by the institute even if the
student left in midstream. The petitioner would submit that in
terms of the directions issued by the Hon'ble Supreme Court, in no
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manner, the private medical institutions can demand bond/bank
guarantee from each and every student admitted to the course.
That apart, the respondent institutions cannot insist upon
furnishing of bank guarantee only and not the bond. The petitioner
submitted that where the parents of the students are not in
position to furnish the bank guarantee, the respondent institutions
in addition to the annual tuition fee for the first year of the MBBS
Course, are charging advance fee from the students for one more
year, which is apparently, violative of the directions issued by the
Supreme Court. The petitioner submitted that the advance fee
charged is also not kept in a separate account and the interest
accrued thereon is neither adjusted against the annual fee payable
by the students for the subsequent years nor returned to them at
the end of the course and thus, the respondent institutions are
apparently indulged in profiteering and charging capitation fee in
defiance of the directions issued by the Hon'ble Supreme Court.
Reiterating the submissions made in the writ petition, the
petitioner contended that submission of bond/undertaking does
not stand on the same footing as submission of bank guarantee
inasmuch as, generally, no bank guarantee is provided by the
bank unless adequate amount is deposited in the bank and thus,
on account of insistence of the respondent private medical
institutions to furnish the bank guarantee compulsorily, grave
hardship is caused to the students belonging to middle class
families/low income groups. The petitioner contended that the writ
petition preferred deserves to be allowed in light of the decision of
the Supreme Court in Islamic Academy(supra) alone.
22. Relying upon paras 154 & 155 of decision of the Supreme
Court in Islamic Academy(supra), it is submitted that though the
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fee structure in relation to each and every college must be
determined separately keeping in view several factors, including
facilities available, infrastructure made available, the age of the
institution, investment made, future plan of expansion and
betterment of the educational standard etc., the management of
the institution would not be entitled to charge anything more than
the fee determined by an appropriate committee and thus, the
contention sought to be raised by the State that except the
colleges run by the State and the respondent nos.6 & 7 herein,
the fee structure in remaining institutions is open to be
determined by the committee constituted by the private
institutions and they are free to ask for bond/bank guarantee as
applicable from the students towards 3½ years of the course
duration, is apparently in violation of the directions issued by the
Supreme Court. According to the petitioner, the issue that no
private University/Medical Institutions can charge the fee more
than as may be finally determined by the Fee Regulatory
Committee constituted by the State, stands settled by a Bench of
this Court vide decision dated 25.10.13 rendered in Sachin
Mehta's case (supra), against which SLP preferred by the
respondent no.10 herein is pending consideration before the
Hon'ble Supreme Court. It is submitted that as laid down by the
Supreme Court in Islamic Academy(supra), charging of the fee by
any institution other than the fee prescribed by the appropriate
committee entails a penalty 10 to 15 times of the amount so
collected and such institution may also lose its recognition or
affiliation. The petitioner submitted that ordinarily, the
management should insist for a bond from the concerned student
and not the bank guarantee. In this regard, the attention of the
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Court is drawn to para 163 of the decision in Islamic Academy
(supra). It is submitted that if the bank accounts of the
respondent institutions are requisitioned, it will make abundantly
clear that they are charging huge amount from the students
towards the advance fee in addition to the amount of fee to be
deposited for first year of MBBS Course.
23. On the other hand, Mr. Manish Vyas, Additional Advocate
General, reiterating the stand taken by the State in reply to the
writ petition, submitted that charging of the bank
guarantee/advance fee is not approved by the State. However, it is
submitted that for Government medical colleges and two private
medical institutions, the respondents no.6 & 7 herein, the fee
payable by the students admitted to the course is determined by
the Fee Regulatory Committee constituted by the State pursuant
to the directions of the Supreme Court, but in the institutions run
by the universities established under the statute, fee structure is
determined through the committees constituted in conformity with
the relevant provisions of the statute. Learned AAG submitted that
if any institution is collecting any amount other than the annual
fee determined by the concerned committee then the same will
come under the definition of 'capitation fee' and accordingly,
punitive action shall be taken. Drawing the attention of the Court
to the factual position summarised in additional affidavit filed,
learned AAG submitted that taking into consideration the fact that
the students started to drop the course in second year of BDS, the
answering respondents have imposed a condition upon the
students admitted to the course of furnishing bank guarantee of
Rs.1 lac and bond of Rs.4 lacs, which cannot be said to be
capricious.
(19 of 49) [CW-13535/2020]
24. Mr. R.S.Saluja, learned counsel appearing for respondent
no.2-National Medical Commission submitted that in T.M.A. Pai
Foundation's case (supra), the Supreme Court categorically held
that there should be no commercialisation or profiteering by the
educational institutions, which was reiterated in P.A.Inamdar vs.
State of Maharashtra: (2005) 6 SCC 537 and thus, keeping in
view the said objective in Islamic Academy(supra), the Supreme
Court mandated setting up of regulatory committees to oversee
the process of admissions and fee regulations and thus, none of
the institutions can claim that the fee structure in the medical
colleges run by them shall not be governed by the Fee Regulatory
Committee constituted by the State pursuant to the directions
issued by the Supreme Court. Learned counsel submitted that the
law laid down in T.M.A. Pai Foundation's case, Islamic Academy
case and T.A.Inamdar's case has been further affirmed by a
constitution Bench of Supreme Court in Modern Dental College
and Research Centre & Ors. vs. State of Madhya Pradesh & Ors.:
(2016) 7 SCC 353. Learned counsel submitted that relying upon
the aforesaid decisions of the Supreme Court, a Bench of this
Court has upheld the provisions incorporated by the State
Legislature in Rajasthan Schools (Regulation of Fee) Act, 2016,
holding that the provisions incorporated being regulatory in nature
with the solemn object of preventing profiteering and
commercialisation in school education are intra vires of the
Constitution not being in violation of Article 13 (2) and 19(1)(g) of
the Constitution of India. Accordingly, learned counsel submitted
that the respondent institutions cannot be permitted to collect
advance fee and insist for bank guarantee towards the amount of
fee for entire course duration.
(20 of 49) [CW-13535/2020]
25. Mr. Vikas Balia, learned counsel appearing for the
respondents no.6, 12 & 13 raising objections regarding
maintainability of the PIL, submitted that the petitioner being not
an aggrieved party, the petition filed is not maintainable. It is
submitted that if the petitioner intended to espouse the common
cause by way of PIL, it should have been filed on behalf of the
persons aggrieved. Learned counsel submitted that the stand
sought to be taken by the petitioner that the parents of the
students have not approached the court inasmuch as, they do not
want to prejudice the education prospects of their children, is
absolutely false inasmuch as, at least, three parents had made
application before the Supreme Court for intervention in the SLP
filed arising out of the interim order passed by this Court in the
present writ petition. Regarding the application preferred by the
petitioner seeking directions to the respondent institutions to
produce their bank accounts, learned counsel submitted that in
the present petition, the petitioner has only questioned the
insistence for bank guarantee/advance fee and thus, the question
of this Court entering into a roving and fishing inquiry at the
instance of the petitioner, does not arise. Reliance in this regard is
placed on decisions of the Supreme Court in the matters of Ashok
Kumar Pandey vs. State of W.B.: (2004) 3 SCC 349 and
Purushottam Kumar Jha vs. State of Jharkhand & Anr.: (2006) 9
SCC 458. Learned counsel submitted that the petition filed lacks
bona fide inasmuch as, while questioning the action of the
respondent institutions in insisting for furnishing bank guarantee
towards the fees for 3½ years, the petitioner has not chosen to
implead the dental colleges run by the Government and other
private institutions, which are similarly situated qua the
(21 of 49) [CW-13535/2020]
respondent private medical institutions. Learned counsel
submitted that the respondent institutions are functioning in
accordance with the directions and instructions issued by the
Director vide Information Booklet. As per instructions issued, the
respondent medical institutions are free to either call for a bank
guarantee or a bond from the students and thus, in no manner, it
can be said that while insisting upon to furnish the bank
guarantee, the respondent institutions have violated the directions
issued by the Supreme Court in Islamic Academy (supra). Learned
counsel submitted that the advance fee for one year in lieu of
bank guarantee is accepted by the respondent institutions only in
cases where the students or their parents are not in position to
furnish the bank guarantee. No institution is receiving the advance
fee for entire course duration. However, learned counsel fairly
submitted that the advance fee if any, deposited by the students,
is neither kept in separate account nor the interest accrued
thereon is refunded to the students at the end of the course or
adjusted against the fee payable for the final year. According to
the learned counsel in case of advance fee being deposited, some
concession is given to the students. It is submitted that in case
the students furnishing the bond commit default, the respondent
institutions will have to undertake the long process for realization
of the money through remedy under the civil law and thus, the
action of the respondent institutions in demanding bank guarantee
to save themselves from loss of money, cannot be faulted with.
Learned counsel submitted that admittedly, the State Government
is also insisting for furnishing of bank guarantee of Rs. 1 lac and
bond for Rs. 4 lacs in case of admission to BDS Course and thus,
the respondent institutions cannot be compelled to accept the
(22 of 49) [CW-13535/2020]
bonds and not to ask for bank guarantee. Learned counsel
submitted that as a matter of fact, the demand of bank guarantee
by the private medical institutions in light of the decisions of the
Supreme Court, has been upheld by the learned Single Judge of
this Court at Jaipur Bench in Harshvardhan Singh Vs. Coordinator,
PCPMT & Ors. decided on 24.11.15. Drawing the attention of the
Court towards the decision in Islamic Academy (supra), learned
counsel urged that the Supreme Court has nowhere laid down that
the private institutions has no autonomy in the matter of
determination of the fee and there should not be any profiteering
involved. Learned counsel urged that as a matter of fact, the
Supreme Court has categorically laid down that in the matter of
determination of the fee structure, unaided institutions exercise
greater autonomy and they are like other citizen carrying on an
occupation, must be held to be entitled for reasonable surplus for
development of education and expansion of institution. Drawing
the attention of the Court to para 8 of the decision in Islamic
Academy (supra), learned counsel submitted that the institution
has been given option that if an institution feels that any particular
student may leave in midstream, then it may require that student
to give bond/bank guarantee towards the balance fee for the
whole course and thus, the respondent institutions are free to ask
the students to furnish either bond or bank guarantee. Learned
counsel submitted that when even the bank would not issue the
bank guarantee without collateral security, then why, the
respondent institutions should take financial risk by accepting
bond and not the bank guarantee. Learned counsel submitted that
the condition of furnishing bank guarantee in no manner amounts
to profiteering and thus, the contention sought to be raised by the
(23 of 49) [CW-13535/2020]
petitioner that the action of the respondents is in violation of the
directions issued by the Supreme Court in Islamic Academy
(supra), is absolutely devoid of any merit. Learned counsel urged
that as per the institutions issued by the State Government, the
respondent institutions are entitled to ask for bond/bank
guarantee as applicable, which is not under challenge in the
instant petition and thus, the petition filed by the petitioner
without setting out the relevant facts in regard to each of the
institutions, just on the basis of imaginary facts, deserves to be
dismissed on this count alone.
26. Mr. K.K.Sharma, learned Senior Advocate appearing for the
respondent no.9-JNU Institute of Medical Sciences & Research
Centre, Jaipur, contended that a lawyer cannot be permitted to
espouse the cause of their clients by filing a petition in their behalf
and thus, the petitioner who is not an aggrieved person, cannot
maintain the petition invoking PIL jurisdiction of this Court. It is
submitted that the petition filed is absolutely laconic and vague
inasmuch as, the petitioner without setting out the necessary facts
and figures pertaining to individual institution. Thus, the abstract
issues raised without foundation of facts, cannot be entertained by
this Court. Learned counsel submitted that in Islamic Academy,
Hon'ble Supreme Court has permitted the unaided institutions to
ask for bond/bank guarantee and therefore, the institutions are
free to decide as to which mode should be adopted to ensure the
realisation of the fee for entire course duration. Learned senior
counsel submitted that the private colleges have no means to
comprehend and determine as to which student may or may not
leave the MBBS Course in the midstream. Relying on the condition
incorporated in the Information Booklet, learned counsel
(24 of 49) [CW-13535/2020]
submitted that even as per the instructions of the Government,
the candidates have to submit a bond/bank guarantee as
applicable, which suggest that students are required to submit the
bond/bank guarantee as required. Thus, the private colleges are
well within their right to demand bank guarantee which has
already been recognized by the various High Courts and the
Hon'ble Supreme Court. Relying upon the decisions in T.M.A.Pai
Foundation's case (supra) and State of Bihar vs. Project Uchha
Vidhya Shishak Sangh: (2006)2 SCC 545, learned counsel
submitted that right to manage an institution is also a right to
property and has been held to be a part of fundamental right
being a right of occupation envisaged under Article 19(1)(g) of the
Constitution of India and therefore, the conditions imposed by the
private institutions while entering into contract with the students
cannot be said to be invalid and no restriction can be imposed
except by way of appropriate legislation. Learned counsel
submitted that regarding the capitation fee, the petitioner has
only levelled general allegations and therefore, no adjudication
can be made on the issue by this Court on the basis of such
pleadings. Learned counsel submitted that no case has been set
out by the petitioner against any institution collecting excess
money or diverting the same to other use. It is submitted that the
bank guarantee is called when a student is admitted and the
decisions of the Supreme Court in this regard has to be read
keeping in view the practical aspects pointed out by the private
institutions. Reiterating the contention raised by the learned
counsel Mr. Vikas Balia, learned counsel submitted that even the
candidates selected in Government Dental College (RUHS) College
of Dental Sciences are required to submit a bond of Rs.4 lacs in
(25 of 49) [CW-13535/2020]
favour of the Principal of the said college alongwith bank
guarantee of Rs.1 lac, which are liable to be forfeited if the
candidate leaves the course after second round of counseling and
thus, the petition preferred by the petitioner challenging the
condition of bank guarantee only qua the private institutions,
apparently lacks bonafides. Learned counsel submitted that as per
the college fee details for Medical UG Admissions notified, the
respondent institutions are asking to the candidates admitted to
the course for bank guarantee equivalent to 2 years' fees
alongwith post dated cheques of remaining 1.5 years' fee. It is
submitted that bank guarantee cannot be treated similar to bond
for which the proforma has been provided by the State
Government in Information Booklet. According to the learned
counsel in case of submission of the bank guarantee, if the
candidate commits default, the private medical college will have
no option but to undertake long drawn process for releasing the
money to civil remedy before the Court and even thereafter, it
would be difficult to realise the money and thus, the insistence of
the private medical colleges for submission of bank guarantee to
ensure the realisation of the fee for entire duration of course
cannot be faulted with. Regarding the fee structure, learned
counsel submitted that in the respondent institutions, the fee
structure is determined by the University which is approved by the
committee constituted for the purpose as per the provisions of
Section 33 of Jaipur National University, Jaipur Act, 2008 and
thus, the contention raised by the petitioner without any
foundation of facts regarding the fee structure is absolutely
baseless.
(26 of 49) [CW-13535/2020]
27. Learned counsel appearing for other private institutions have
adopted the arguments advanced by learned counsel Mr. Vikas
Balia and Senior Advocate Mr. K.K.Sharma.
28. Replying the arguments of the learned counsel appearing for
the respondents, the petitioner Mr.Deepesh Beniwal submitted
that it is absolutely incorrect to state that the petitioner has
claimed relief only against the private medical institutions.
Drawing the attention of the Court to the relief clause in the
petition, it is submitted that the prayer is made against the
colleges run by the State as well. According to the petitioner, the
strict rule of locus standi is not applicable in PIL. It is submitted
that the material facts are not even disputed by the respondent
institutions and it is only the matter with regard the
implementation of the directions issued by the Supreme Court in
Islamic Academy (supra) and other subsequent decisions of this
Court and the Supreme Court and thus, there is no reason as to
why the issues raised by the petitioner out of public spirit
espousing the cause of the students admitted to MBBS Course
should not be entertained and adjudicated upon by this Court.
Reliance is placed in this regard on the decisions of the Supreme
Court in Shivajirao Nilangekar Patil vs. Dr. Mahesh Madhav Gosavi
& Ors.: (1987) 1 SCC 227 and Guruvayoor Devaswom Managing
Committee & Anr. vs. C.K.Rajan & Ors.: (2003) 7 SCC 546. It is
submitted that in Kerala, the condition regarding furnishing of
bank guarantee for payment of the fees for entire course was
deleted by the State Government which has been upheld by a
Bench of Kerala High Court in Kerala Private Medical College
Managements Association & Ors. vs. State of Kerala & Ors.: AIR
(27 of 49) [CW-13535/2020]
2019 Kerala 96, though the SLP against the said judgment is
pending before the Supreme Court.
29. We have considered the rival submissions and gone through
the decisions cited at the bar.
30. At the outset, it would be appropriate to deal with the
preliminary objection raised on behalf of the respondents against
the maintainability of this PIL filed by the petitioner, an advocate
by profession, espousing the cause of students who intend to
pursue medical course.
31. Indubitably, the strict rule of locus standi does not apply to
PILs. As a matter of fact, in appropriate case even where the
petitioner might have moved a Court in private interest, if such
litigation assumes the character of the Public Interest Litigation,
the inquiry into the state of affairs of the subject of litigation by
the Court, necessary and essential for the administration of
justice, cannot be avoided. [vide Shivajirao Nilangekar Patil's case
(supra)]. Wherever injustice is meted out to a large number of
people, the Court cannot hesitate in stepping in. When the Court
is prima facie satisfied about the violation of any constitutional
right of a disadvantaged group of the people, it may not allow the
respondents from raising the question as to maintainability of the
petition. [vide Guruvayoor Devaswom Managing Committee's case
(supra) and Bandhua Mukti Morcha v. Union of India: (1984) 3
SCC 161].
32. There cannot be any quarrel with the proposition that the
Court will not enter into a roving and fishing inquiry into the
question of facts where the information given by the petitioner
regarding subject matter of PIL is inadequate, vague or indefinite.
(28 of 49) [CW-13535/2020]
33. It is noticed that in the instant case, the petitioner has
challenged the action of the State and the private medical
institutions in insisting for submission of the bank guarantee or
advance fee against the annual fees for 3½ years of course
duration in addition to deposit of annual fee for the first year of
the course from the students seeking admission to MBBS Course,
alleging it to be in violation of the directions issued by the Hon'ble
Supreme Court in Islamic Academy (supra). There is nothing on
record suggesting that the petitioner, an advocate by profession,
has filed the present petition identifying himself with the interest
of his clients. Merely because, the petitioner is an advocate by
profession, it cannot be assumed that he must have filed the
present petition espousing the cause of his clients and not for the
protection of larger interest of students intending to pursue the
studies of medical courses. As noticed above, in the petition filed,
essentially, the petitioner has only sought implementation of the
directions issued by the Hon'ble Supreme Court. The respondents
must appreciate the tangible binding force embodied in directions
issued by the Hon'ble Supreme Court and it goes without saying
that if the action of the respondents in demanding bank guarantee
or the advance fees, is found to be in violation of the directions
issued by the Hon'ble Supreme Court, the same has to be set at
naught. Thus, on the facts and in the circumstances of the case,
we are not inclined to non suit the petitioner on the ground of
locus standi to maintain the PIL petition espousing the cause of
student community intending to pursue the medical courses in the
State of Rajasthan. Accordingly, the preliminary objection raised
on behalf of the respondents questioning the maintainability of the
writ petition is rejected.
(29 of 49) [CW-13535/2020]
34. The issues raised by the petitioner essentially rolls around
the decision of the Hon'ble Supreme Court in Islamic Academy
(supra) but, so as to appreciate the controversy raised in correct
perspective, it would be appropriate to travel through the history
of the judicial pronouncements of the Hon'ble Supreme Court
germane to the issues raised.
35. In the first instance, the issue regarding charging of
capitation fee in consideration of admission to educational
institutions came up for consideration before the Hon'ble Supreme
Court of India in the matter of Mohini Jain (Miss) vs. State of
Karnataka & Ors.: (1992) 3 SCC 666. The petitioner therein
challenged the notification issued by the State of Karnataka, in
exercise of the power conferred under Section 5(1) of the
Karnataka Educational Institution (Prohibition of Capitation Fee)
Act, 1984, permitting the Private Medical Colleges in the State of
Karnataka to charge exorbitant tution fee from the students other
than those admitted to the 'Government seat'. After due
consideration of the constitutional scheme, the Court held therein
that the 'right to education' is concomitant to the fundamental
rights enshrined under Part III of the Constitution and it flows
directly from 'Right to life' enshrined under Article 21 of the
Constitution. Emphasizing the constitutional obligation of the State
to establish educational institutions to enable the citizens to enjoy
the right to education, the Court held :
"17. We hold that every citizen has a "right to education"
under the Constitution. The State is under an obligation to
establish educational institutions to enable the citizens to
enjoy the said right. The State may discharge its obligation
through state-owned or state-recognised educational
institutions. When the State Government grants recognition
to the private educational institutions it creates an agency to
(30 of 49) [CW-13535/2020]
fulfil its obligation under the Constitution. The students are
given admission to the educational institutions-whether
state-owned or state-recognised- in recognition of their
"right to education" under the Constitution. Charging
capitation fee in consideration of admission to educational
institutions, is a patent denial of a citizen's right to education
under the Constitution." (emphasis supplied)
36. Accordingly, the Court declared that charging of capitation
fee by the private educational institutions as a consideration for
admission wholly illegal and not permissible.
37. In Unni Krishnan J.P. & Ors. vs. State of Andhra Pradesh &
Ors.:(1993) 1 SCC 645, a Constitution Bench of Hon'ble Supreme
Court while upholding the declaration made in Mohini Jain's case
(supra) that "the right to education flows directly from right to life
guaranteed under Article 21", held that it must be construed in
light of directive principles enshrined under Part IV of the
Constitution. The Court held that a child (citizen) has a
fundamental right to free education upto the age of 14 years.
Thereafter, the obligation of the State to provide education is
subject to limits of its economic capacity and development of the
State. The Court rejected the argument that right to establish an
educational institution is an activity which could be classified as
'profession' and deemed fit to treat the same equivalent to an
'occupation'. Regarding the capitation fee, the Court observed that
Mohini Jain's case was not right in saying that the charging of any
amount, by whatever name it is called, over and above the fee
charged by the Government in its colleges, must be described as
capitation fee. Regarding the capitation fee, the Court observed
that the 'Capitation fee' means charging or collecting amount
beyond what is permitted by law. The Court observed that "We
must strive to bring about a situation where there is no room or
(31 of 49) [CW-13535/2020]
occasion for the management or anyone on its behalf to demand
or collect any amount beyond what is permitted. We must clarify
that charging the permitted fees by the private educational
institutions - which is bound to be higher than the fee charged in
similar governmental institutions by itself cannot be characterised
as capitation fees." The Court evolved a scheme in the nature of
guidelines wherein while emphasizing that 50% seats in every
professional college shall be filled by the nominees of the
Government or University, as the case may be, which were
referred to as 'free seats' to be filled in from amongst the students
selected on the basis of the merit determined on the basis of a
common entrance examination where it is held or in the absence
of an entrance examination by such criteria as may be determined
by the competent authority or the appropriate authority, it
permitted filling of remaining 50% seats referred to as 'payment
seats' by those candidates who are prepared to pay fee
prescribed therefor and who have complied with the instructions
regarding deposit and furnishing of cash security/bank guarantee
for the balance of the amount. It was further laid down that the
fee chargeable in each professional college shall be subject to the
ceiling prescribed by the appropriate authority or by a competent
court.
38. The decision in Unni Krishnan's case (supra) was
reconsidered by eleven-Judge Bench of Hon'ble Supreme Court in
T.M.A. Pai Foundation's case (supra). The Court held :
"20. Article 19(1)(g) employs four expressions viz.
Profession, occupation, trade and business. Their fields may
overlap, but each of them does have a content of its own.
Education is per se regarded as an activity that is charitable
in nature (see State of Bombay v. R.M.D. Chamarbaugwala).
(32 of 49) [CW-13535/2020]
Education has so far not been regarded as a trade or
business where profit is the motive. Even if there is any
doubt about whether education is a profession or not, it does
appear that education will fall within the meaning of the
expression "occupation". Article 19(1)(g) uses the four
expressions so as to cover all activities of a citizen in respect
of which income or profit is generated, and which can
consequently be regulated under Article 19(6). In Webster's
Third New International Dictionary, at p.1650, "occupation"
is, inter alia, defined as "an activity in which one engages"
or "a craft, trade, profession or other means of earning a
living."
........xxxxxx......
54. The right to establish an educational institution can be
regulated; but such regulatory measures must, in general,
be to ensure the maintenance of proper academic standards,
atmosphere and infrastructure (including qualified staff) and
the prevention of maladministration by those in charge of
management. The fixing of a rigid fee structure, dictating the
formation and composition of a governing body, compulsory
nomination of teachers and staff for appointment of
nominating students for admissions would be unacceptable
restrictions.
...........xxxx................
57. We, however, wish to emphasize one point, and that is
that inasmuch as the occupation of education is, in a sense,
regarded as charitable, the Government can provide
regulations that will ensure excellence in education, while
forbidding the charging of capitation fee and profiteering by
the institution. Since the object of setting up an educational
institution is by definition "charitable", it is clear that an
education institution cannot charge such a fee as is not
required for the purpose of fulfilling that object. To put it
differently, in the establishment of an education institution,
the object should not be to make a profit, inasmuch as
education is essentially charitable in nature. There can,
however, be a reasonable revenue surplus, which may be
generated by the educational institution for the purpose of
development of education and expansion of the institution.
......xxxxxxx...........
68. It would be unfair to apply the same rules and
regulations regulating on to both aided and unaided
professional institutions. It must be borne in mind that
unaided professional institutions are entitled to autonomy in
their administration while, at the same time, they do not
forego or discard the principle of merit. It would, therefore,
be permissible for the university or the Government, at the
time of granting recognition, to require a private unaided
institution to provide for merit-based selection while, at the
(33 of 49) [CW-13535/2020]
same time, giving the management sufficient discretion in
admitting students. This can be done through various
methods. For instance, a certain percentage of the seats can
be reserved for admission by the management out of those
students who have passed the common entrance test held by
itself or by the State/university and have applied to the
college concerned for admission, while the rest of the seats
may be filled up on the basis of counselling by the State
agency. This will incidentally take care of poorer and
backward sections of the society. The prescription of
percentage for this purpose has to be done by the
Government according to the local needs and different
percentages can be fixed for minority unaided and non-
minority unaided and professional colleges. The same
principles may be applied to other non-professional but
unaided educational institutions viz. graduation and
postgraduation non-professional colleges or institutes.
69. In such professional unaided institutions, the
management will have the right to select teachers as per the
qualifications and eligibility conditions laid down by the
State/university subject to adoption of a rational procedure
of selection. A rational fee structure should be adopted by
the management, which would not be entitled to charge a
capitation fee. Appropriate machinery can be devised by the
State or university to ensure that no capitation fee is
charged and that there is no profiteering, though a
reasonable surplus for the furtherance of education is
permissible. Conditions granting recognition or affiliation can
broadly cover academic and educational matters including
the welfare of students and teachers." (emphasis supplied)
The scheme framed by the Supreme Court in Unni Krishnan's
case (supra) and the directions to impose the same except where
it holds that the primary education is a fundamental right was
declared unconstitutional. However, principle that there should not
be capitation or profiteering was upheld. It was observed that
reasonable surplus to meet cost of expansion and augmentation of
facilities does not amount to profiteering.
39. After the decision in T.M.A. Pai Foundation's case (supra),
the issue inter alia regarding the extent of autonomy in fixing the
fee structure, came up for consideration before the Hon'ble
Supreme Court in Islamic Academy (supra), wherein the Court
while noticing the fact that some of the educational institutions
(34 of 49) [CW-13535/2020]
are collecting in advance the fees for the entire course i.e. for all
the years, observed:
"8. It must be mentioned that during arguments it was
pointed out to us that some educational institutions are
collecting, in advance, the fees for the entire course i.e. for
all the years. It was submitted that this was done because
the institute was not sure whether the student would leave
the institute midstream. It was submitted that if the student
left the course in midstream then for the remaining years the
seat would lie vacant and the institute would suffer. In our
view an educational institution can only charge prescribed
fees for one semester/year. If an institution feels that any
particular student may leave in midstream then, at the
highest, it may require that student to give a bond/bank
guarantee that the balance fees for the whole course would
be received by the institute even if the student left in
midstream. If any educational institution has collected fees
in advance, only the fees of that semester/year can be used
by the institution. The balance fees must be kept invested in
fixed deposits in a nationalised bank. As and when fees fall
due for a semester/year only the fees falling due for that
semester/year can be withdrawn by the institution. The rest
must continue to remain deposited till such time that they
fall due. At the end of the course the interest earned on
these deposits must be paid to the student from whom the
fees were collected in advance. (emphasis supplied)
...xxxx.....xxxxxx
147. On a bare reading of the relevant paragraphs of the
judgment, some of which are referred to hereinbefore, it is
beyond any doubt that in the matter of determination of the
fee structure the unaided institutions exercise a greater
autonomy. They, like any other citizen carrying on an
occupation, must be held to be entitled to a reasonable
surplus for development of education and expansion of the
institution. Reasonable surplus doctrine can be given effect
to only if the institutions make profits out of their
investment. As stated in paragraph 56, economic forces have
a role to play. They, thus, indisputably have no plan their
investment and expenditure in such a manner that they may
generate some amount of profit. What is forbidden is : (a)
capitation fee, and (b) profiteering.
.............xxxxx..........
154. The fee structure, thus, in relation to each and every
college must be determined separately keeping in view
several factors, including facilities available, infrastructure
made available, the age of the institution, investment made,
future plan for expansion and betterment of the educational
standard etc. The case of each institution in this behalf is
required to be considered by an appropriate Committee. For
(35 of 49) [CW-13535/2020]
the said purpose, even the books of accounts maintained by
the institution may have to be looked into. Whatever is
determined by the Committee by way of a fee structure
having regard to relevant factors, some of which are
enumerated hereinbefore, the management of the institution
would not be entitled to charge anything more.
155. While determining the fee structure, safeguard has to
be provided for so that professional institutions do not
become auction houses for the purpose of selling seats.
Having regard to the statement of law laid down in
paragraph 56 of the judgment, it would have been better, if
sufficient guidelines could have been provided for. Such a
task which is a difficult one has to be left to the Committee.
While fixing the fee structure the Committee shall also take
into consideration, inter alia, the salary or remuneration paid
to the members of the faculty and other staff, the
investment made by them, the infrastructure provided and
plan for future development of the institution as also
expansion of the educational institutions. Future planning or
improvement of facilities may be provided for. An institution
may want to invest in an expensive device (for medical
colleges) or a powerful computer (for technical college).
These factors are also required to be taken care of. The
State must evolve a detailed procedure for constitution and
smooth functioning of the Committee.
156. While this Court has not laid down any fixed guidelines
as regards fee structure, in my opinion, reasonable surplus
should ordinarily vary from 6% to 15%, as such surplus
would be utilized for expansion of the system and
development of education.
157. The institutions shall charge fee only for one year in
accordance with the rules and shall not charge the fees for
the entire course.
158. Profiteering has been defined in Black's Law Dictionary,
5th Edn., as:
"Taking advantage of unusual or exceptional
circumstances to make excessive profits."
159. With a view to ensure that an educational institution is
kept within its bound and does not indulge in profiteering or
otherwise exploiting its students financially, it will be open to
the statutory authorities and in their absence by the State to
constitute an appropriate body, till appropriate statutory
regulations are made in that behalf.
(36 of 49) [CW-13535/2020]
160. The respective institutions, however, for the
aforementioned purpose must file an appropriate application
before the Committee and place before it all documents and
books of accounts in support of its case.
161. Fees once fixed should not ordinarily be changed for a
period of three years, unless there exists an extraordinary
reason. The proposed fees, before indication in the
prospectus issued for admission, have to be approved by the
concerned authority/body set up. For this purpose the
application should not be filed later than April of the
preceding year of the relevant education session. The
authority/body shall take the decision as regards fees
chargeable latest by October of the year concerned, so that
it can form part of the prospectus. No institution should
charge any fee beyond the amount fixed and the fee
charged shall be deposited in a nationalized bank. In other
words, no employee or any other person employed by the
management shall be entitled to take fees in cash from the
students concerned directly. The statutory authority may
consider the desirability of framing an appropriate regulation
inter alia to the effect that in the event it is found that the
management of a private unaided professional institution has
accepted any amount other than the fees prescribed by the
Committee, it may have to pay a penalty ten to fifteen times
of the amount so collected and in a suitable case it may also
lose its recognition or affiliation.
162. However, there cannot be any doubt that before any
such order is passed, the institutions concerned shall be
entitled to an opportunity of being heard. For the
aforementioned purpose, the State shall set up a machinery
to detect cases where amounts in excess of the permitted
limit are collected as it is the general experience that
students pay a huge amount.
163. However, if for some reason, fees have already been
collected for a longer period the amount so collected shall be
kept in a fixed deposit in a nationalized bank against which
no loan or advance may be granted so that the interest
accrued thereupon may enure to the benefit of the students
concerned. Ordinarily, however, the management should
insist for a bond from the concerned students." (emphasis
supplied)
40. Thus, in Islamic Academy (supra), the Supreme Court held
that there is autonomy with the institution in fixing the fee
structure but there cannot be any profiteering motive and no
advance fee could be charged. The Court required setting up of
(37 of 49) [CW-13535/2020]
the Committee by each of the State to decide whether fee
structure proposed by the institution was justified. In respect of
any particular student which may leave the course in the
mainstream, the Court observed that such student may be
required to give a bond/bank guarantee that the balance fees for
the whole course would be received by the institute. However, it
was emphasized that in such cases, ordinarily, the management
would insist for a bond from the concerned student.
41. In P.A.Inamdar's case (supra), a larger Bench of seven-
Judges of Hon'ble Supreme Court, after due consideration of the
earlier decision in T.M.A. Foundation, while dealing with the issue
of capitation fee, held:
"140. Capitation fee cannot be permitted to be charged and
no seat can be permitted to be appropriated by payment of
capitation fee. "Profession" has to be distinguished from
"business" or a mere "occupation". While in business, and to
a certain extent in occupation, there is a profit motive,
profession is primarily a service to society wherein earning
is secondary or incidental. A student who gets a professional
degree by payment of capitation fee, once qualified as a
professional, is likely to aim more at earning rather than
serving and that becomes a bane to society. The charging of
capitation fee by unaided minority and non-minority
institutions for professional courses is just not permissible.
Similarly, profiteering is also not permissible. Despite the
legal position, this Court cannot shut its eyes to the hard
realities of commercialisation of education and evil practices
being adopted by many institutions to earn large amounts
for their private or selfish ends. If capitation fee and
profiteering is to be checked, the method of admission has to
be regulated so that the admissions are based on merit and
transparency and the students are not exploited. It is
permissible to regulate admission and fee structure for
achieving the purpose just stated.
141. Our answer to Question 3 is that every institution is fee
to devise its own fee structure but the same can be regulated
in the interest of preventing profiteering. No capitation fee
can be charged." (emphasis supplied)
(38 of 49) [CW-13535/2020]
42. The Court categorically held that on the basis of judgment in
T.M.A. Pai Foundation and various previous judgments, the
scheme evolved out of setting up of two Committees for regulating
admission and determining fee structure by the judgment in
Islamic Academy (supra), cannot be faulted either on the ground
of alleged infringement of Article 19(1)(g) in case of unaided
professional educational institutions of both categories and Article
19(1)(g) read with Article 30 in case of unaided professional
institution of minorities. The Court further observed that there is
no impediment in constitution of the Committees as stop-gap or
adhoc arrangement made in exercise of the power conferred under
Article 142 of the Constitution until suitable legislation or
regulation framed by the State steps in. However, while dealing
with the criticism to the decisions of the Committees, the Court
cautioned the Committees with observations as under:
"149. However, we would like to sound a note of caution to
such Committees. The learned counsel appearing for the
petitioners have severely criticised the functioning of some of
the Committees so constituted. It was pointed out by citing
concrete examples that some of the Committees have
indulged in assuming such powers and performing such
functions as were never given or intended to be given to
them by Islamic Academy. Certain decisions of some of the
Committees were subject to serious criticism by pointing out
that the fee structure approved by them was abysmally low
which has rendered the functioning of the institutions almost
impossible or made the institutions run into losses. In some
of the institutions, the teachers have left their jobs and
migrated to other institutions as it was not possible for the
management to retain talented and highly qualified teachers
against the salary permitted by the Committees. Retired
High Court Judges heading the Committees are assisted by
experts in accounts and management. They also have the
benefit of hearing the contending parties. We expect the
Committees, so long as they remain functional, to be more
sensitive and to act rationally and reasonably with due
regard for realities. They should refrain from generalising fee
structures and, where needed, should go into accounts,
schemes, plans and budgets of an individual institution for
(39 of 49) [CW-13535/2020]
the purpose of finding out what would be an ideal and
reasonable fee structure for that institution.
150. We make it clear that in case of any individual
institution, if any of the Committees is found to have
exceeded its powers by unduly interfering in the
administrative and financial matters of the unaided private
professional institutions, the decision of the Committee being
quasi-judicial in nature, would always be subject to judicial
review." (emphasis supplied)
43. In Modern Dental College's case (supra), arising out of
decision of the High Court of Madhya Pradesh, repelling the
challenge to Niji Vyavasayik Shikshan Sanstha (Pravesh Ka
Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007 and
Admissions Rules, 2008 and the Madhya Pradesh Private Medical
and Dental Postgraduate Course Entrance Examination Rules,
2009, the Hon'ble Supreme Court while discussing the law laid
down in the matters of Unni Krishnan, T.M.A. Pai Foundation,
Islamic Academy and P.A.Inamdar, rejected the contention of the
private medical colleges that they had absolute right to make
admission or fix fee. The Court observed:
"49. Thus, the contention raised on behalf of the appellants
that the private medical colleges had absolute right to make
admissions or to fix fee is not consistent with the earlier
decisions of this Court. Neither merit could be compromised
in admissions to professional institutions nor capitation fee
could be permitted. To achieve these objects it is open to the
State to introduce regulatory measures. We are unable to
accept the submission that the State could intervene only
after proving that merit was compromised or capitation fee
was being charged. As observed in the earlier decisions of
this Court, post-audit measures would not meet the
regulatory requirements. Control was required at the initial
stage itself. Therefore, our answer to the first question is
that though "occupation" is a fundamental right, which gives
right to the educational institutions to admit the students
and also fix the fee, at the same time, scope of such rights
has been discussed and limitations imposed thereupon by
the aforesaid judgments themselves explaining the nature of
limitations on these rights.
....xxxxx......
(40 of 49) [CW-13535/2020]
74. The principles enunciated in T.M.A. Pai Foundation and
P.A. Inamdar were applied in Islamic Academy of Education
where a challenge was mounted against the directions issued
by the Director of Education to the recognised unaided
schools under Section 24(3) read with Sections 18(4) and
18(5) of the Delhi School Education Act, 1973, inter alia
directing that no fee/funds collected from parent/students
would be transferred from the recognised unaided school
fund to a society or trust or any other institution. After
examining the directions and the accounting principles in
detail, this Court upheld the said directions on the ground
that it was open for the State to regulate the fee in such a
manner so as to ensure that no profiteering or
commercialisation of education takes place.
75. To put it in a nutshell, though the fee can be fixed by
the educational institutions and it may vary from institution
to institution depending upon the quality of education
provided by each of such institutions, commercialisation is
not permissible. In order to see that the educational
institutions are not indulging in commercialisation and
exploitation, the Government is equipped with necessary
powers to take regulatory measures and to ensure that these
educational institutions keep playing vital and pivotal role to
spread education and not to make money. So much so, the
Court was categorical in holding that when it comes to the
notice of the Government that a particular institution was
charging fee or other charges which are excessive, it has a
right to issue directions to such an institution to reduce the
same." (emphasis supplied)
44. Keeping in view the discussion above, the settled legal
position emerging from various decisions of the Supreme Court,
may be summarised thus: The education is essentially a charitable
activity, which cannot be regarded as profession, trade or business
rather, it will fall within the meaning of expression "occupation"
under Article 19(1)(g) of the Constitution of India. The right to
establish an educational institution can be regulated; but such
regulatory measures must, in general, be to ensure the
maintenance of proper academic standards, atmosphere and
infrastructure (including qualified staff) and the prevention of
maladministration by those in charge of management. In
establishment of the education institutions, there cannot be a
(41 of 49) [CW-13535/2020]
profiteering motive but it is permissible for such institution to
generate a reasonable revenue surplus for the purpose of
development of education and expansion of the institution. Each
and every educational institution is free to determine fee structure
keeping in view several factors including facilities available,
investment made, future plan for expansion and betterment of
educational standard etc. There is autonomy with the institution in
fixing the fee structure but it has to be rational and there cannot
be any profiteering motive and no capitation fee could be charged.
Until the suitable legislation or regulation framed by the State, the
fee structure in various institutions shall be determined by the
Committee separately having regard to relevant factor and the
management is not entitled to charge anything more. It is
permissible for the institutions to charge fee only for one year in
accordance with the rules and not the fee for the entire course. As
laid down in Islamic Academy (supra), if an educational institution
feels that any particular student may leave in midstream then at
the highest it may require that student to give bond/bank
guarantee that the balance fee for the whole course would be
received by the institution if the student left in midstream,
however, in such situation, ordinarily, the management should
insist a bond from the concerned student and thus, the
management of the educational institution cannot insist upon each
and every student to furnish a bank guarantee as a matter of
course and the advance fee cannot be charged in addition to
annual fee for more than one year.
45. In the backdrop of legal position settled as above, adverting
to the facts of the present case, it is pertinent to note that the
(42 of 49) [CW-13535/2020]
factum of the respondent private medical institutions insisting
upon each and every student admitted to the professional course
to deposit the fee for one year and to furnish bank guarantee
towards the fee for remaining duration of the course, is not even
disputed before this Court. Rather, some of the institutions have
even admitted that in addition to the fee for one year, the advance
fee is being accepted generally for one more year, which is not
kept in separate account and the interest accrued thereon is also
not credited to the fee account of the concerned student or
refunded to him at the time of completion of the course.
46. The respondent private educational institutions imparting
medical education, inherently with a charitable purpose, must
always take care of the students belonging to lower echelons of
the society or to a middle income group admitted to the medical
courses on being found meritorious and must ensure that they are
not deprived from pursuing the medical course merely on account
of their inability to deposit advance fee in addition to the annual
fee for one year or the bank guarantee for remaining 3½ years
duration of the medical course.
47. As noticed above, the charging of advance fee for more than
one year is apparently in defiance of the directions issued by the
Hon'ble Supreme Court in Islamic Academy (supra) in terms that
the institution shall charge fee only for one year in accordance
with the rules and shall not charge the fee for the entire course
and thus, the attempt of the respondent institutions in justifying
the levy of advance fee in addition to the annual fee for one year
on the pretext that it is being charged only where the
students/parents are not in position to give the bank guarantee,
(43 of 49) [CW-13535/2020]
cannot be countenanced by this Court. It is common knowledge
that unsecured bank guarantee at the instance of an individual is
not extended by the banks and the bank guarantee could be
obtained only on furnishing collateral security or fixed deposits. As
a matter of fact, as a rule, banks are discouraged from giving
unsecured guarantee even by the Reserve Bank of India. Thus,
insisting upon the students who are otherwise eligible to be
admitted to the course being meritorious but are not in position to
arrange the requisite funds to procure a bank guarantee towards
the fees for entire course duration would be absolutely unjustified.
As discussed hereinabove, the directions issued by the Hon'ble
Supreme Court in Islamic Academy are quite unequivocal that if
an institution feels that any particular student may leave in
midstream then, at the highest, it may require that student to
give a bond/bank guarantee that the balance fees for the whole
course would be received by the institute even if the student left
in midstream. Further, ordinarily, the management should insist
for a bond from the concerned student. (Vide para 163 - Islamic
Academy). In this view of the matter, as a rule the respondent
institutions including the medical/dental colleges run by the State
Government must ordinarily accept the bond towards the fee for
the 3½ years duration of the course in addition to fee for one year
and a bank guarantee from a particular student should only be
insisted upon for specific reason as an exception.
48. In view of the discussion above, the view taken by the
learned Single Judge of this Court in Harshvardhan Singh's case
(supra) laying down in general that the demand of the bank
guarantee by the private medical institutions is not illegal as it has
(44 of 49) [CW-13535/2020]
been recognised as valid condition by the Apex Court, without
referring to the law laid down in Islamic Academy's case (supra)
discussed above, is not correct.
49. Coming to the incorporation in the Information Booklet
issued by the State Government laying down that at the time of of
reporting, the selected candidates will have to submit a bond/bank
guarantee as applicable, suffice it to say that the same has to be
construed in light of the directions issued by the Hon'ble Supreme
Court in Islamic Academy (supra) and in no manner it could be
inferred therefrom that the private institution has the absolute
choice to ask for either bond or the bank guarantee. The reason
assigned by the private medical institutions for insistence of the
bank guarantee instead of bond that for enforcement of the
liability under the bond executed, they will have to enter into
litigation in the realm of civil law also cannot be accepted as valid
reason by this Court.
50. There is yet another aspect of the matter. Ordinarily, no
student who has already deposited the huge fee for one year and
pursued the studies would leave the course in midstream. Besides
the fact that no bank guarantee is generally issued by the bank
without collateral security or fixed deposits, the banks are
charging huge commission for issuing bank guarantee in favour of
the individuals which according to the petitioner may vary from
2.5% to 3% of the guarantee amount per annum and thus, the
insistence for furnishing bank guarantee towards the fee for entire
duration of the course upon each and every student, merely
because some of the students may leave the course in midstream,
appears to be unreasonable and unfair for this reason also.
(45 of 49) [CW-13535/2020]
51. Coming to the ancillary issue raised regarding the authority
of the University established by the enactment of the State
legislation to constitute the 'Fee Fixation Committee' and not to be
governed by the 'Fee Regulatory Committee' constituted by the
State Government pursuant to the directions issued by the Hon'ble
Supreme Court in Islamic Academy (supra), the said issue already
stand settled by a Bench decision of this Court in Sachin Mehta's
case (supra). The petitioner therein had challenged the action of
Mahatma Gandhi University of Medical Sciences & Technology, the
respondent no.10 herein, in notifying fee structure decided by the
'Fee Fixation Committee' of the said University for the students
admitted to MBBS and BDS Courses. Precisely, it was contended
that the University having been established under the provisions
of the Mahatma Gandhi University of Medical Sciences &
Technology, Jaipur Act, 2011 ('the Act of 2011') passed by the
Legislative Assembly of State of Rajasthan, it is entitled to fix its
own fee structure, which is approved by 'Fee Fixation Committee'
constituted under the provisions of the Act of 2011. The Court
categorically held that the University could not have put in place a
'Fee Fixation Committee' to prepare its own fee structure in
exercise of the power conferred under Section 28 and/or 33 of the
Act of 2011. Referring to the decisions of the Supreme Court in
T.M.A. Pai Foundation and Islamic Academy, the Court held:
"26. In order to give effect to the directions issued in the
judgment of TMA PAI's case (surpa), the Honourable
Supreme Court, directed the respective State
Governments/concerned authority to set up, in each State, a
committee headed by a retired High Court judge, nominated
by the Chief Justice of that State. The directions further
stipulated that the other members, who shall be nominated
by the Judge so nominated by the Chief Justice of that State,
(46 of 49) [CW-13535/2020]
must include a Chartered Accountant of repute and further a
representative of the Medical Council of India or the All India
Council for Technical Education, depending on the type of
private educational institution involved with reference to
determination of the fee structure . Further, the Secretary of
the State Government in charge of Medical Education or
Technical Education, as the case may be, shall be a member
and Secretary of the Committee. The Committee so formed
has been also vested with the discretion to nominate/co-opt
another independent members of repute. Each educational
institute is obliged place before this Committee, well in
advance of the academic year, its proposed fee structure,
along with the proposed fee structure all relevant documents
and books of accounts must also be produced before the
committee for their scrutiny. The Committee shall then
decide whether the fees proposed by that institute are
justified and are not profiteering or charging capitation fee.
27. It has been left to the discretion of the Committee to
approve the fee structure or to propose some other fee
which can be charged by the private educational institute. It
hardly needs to be emphasised that the fee fixed by the
committee shall be binding for a period of three years and
thereafter the institute would be at liberty to apply for a
revision. Once fees are fixed by the Committee, the institute
cannot charge either directly or indirectly any other amount
over and above the amount fixed as fees. If any other
amount is charged, under any other head or guise i.e.
donations the same would amount to charging of capitation
fee. The Government/appropriate authorities should consider
framing appropriate regulations, if not already, framed, and
if an institution is found of charging capitation fees or
profiteering that institution can be appropriately penalised
and also face loss of recognition/affiliation. Thus, from a bare
perusal of the nature of directions issued by the honourable
Supreme Court, as aforesaid, it is apparent on the face of
record that the matter for determination of fee structure is
within the exclusive domain of the 'Fee Regulatory
Committee' to be put in place by the concerned State.
....xxxxxxxxx....
29. There cannot be two views on the established
proposition of law that even the non-minority unaided
professional educational institutions can be subject to similar
restrictions which are found reasonable and in the interest of
the public at large and student community in particular. In
our considered view, on the basis of the judgment in Pai
Foundation (supra), and various other judgments of the
Hon'ble Supreme Court, the scheme evolved for setting up
the Committees for regulatory admissions as well as for
determination of fee structure by the judgment in the case of
(47 of 49) [CW-13535/2020]
Islamic Academy (supra), cannot be faulted on the ground
of alleged infringement of Article 19 (1) (g) in case of
unaided professional educational institutions. As has been
observed by the Hon'ble Supreme Court the 'Fee Regulation
Committee' is headed by Retired High Court Judge, who is
assisted by experts in accounts and management fields and
the committee have also the advantage of hearing the
contending parties while determining the fee structure.
Therefore, in our considered conclusion the judgment
delivered by the Hon'ble Supreme Court in the case of
Islamic Academy, as regards setting up of committee with
reference to and fee structure, is not in any way beyond
the law declared by the Hon'ble Supreme Court in Pai
Foundation(supra), as projected on behalf of the
respondent-University. The contentions of the learned senior
counsel, on those counts do not have much substance and
are, therefore, rejected.
.............xxxxxx.............
32. It is not in dispute that the Hon'ble Supreme Court with
reference to the issue of fixation of fee structure to various
professional courses in the country including MBBS and BDS
Course, directed all the States to the fix fee structure
through a Committee as per the directions issued in the case
of Islamic Academic of Education (supra). It is also not in
dispute that 'Fee Regulatory Committee' was constituted by
the Government of Rajasthan, in the backdrop of the verdict
of the Hon'ble Supreme Court and directions issued in case
of Vipul Garg (supra). Further, from the material available on
record, it is also evident that the fee structure is determined
by the Fee Regulatory Committee of Rajasthan, is the
criterion for payment to the Private Medical College(s), as
pointed out by the learned Additional Advocate General in
the light of the specific condition stipulated while allotting
127 students consequent to RAJASTHAN PRE-MEDICAL TEST-
2012 to Mahatma Gandhi Medical College (a constituent
professional education institution of the respondent-
University).
33. From the facts, circumstances and material brought on
record in the writ applications, it is evident the respondent-
University had no jurisdiction and/or authority to alter the
conditions relating to fee structure once the process of
admission to the MBPS and/or BDS Courses commenced
which indicated the fee to be charged from the students as
one determined by the Fee Regulatory Committee of the
State, once the RAJASTHAN PRE-MEDICAL TEST-2012 for
admission to MBBS had been conducted and the results had
been declared and a selected list had also been prepared on
that basis and students allotted to the institutes including
the medical college of the respondent-University. In other
(48 of 49) [CW-13535/2020]
words, once the process of selection had started on the basis
of the terms and conditions spelt out in the INFORMATION
BOOKLET and further detailed out while allotting the
students to the concerned colleges, including the constant
medical College of the respondent-University, then it was not
within the jurisdiction and competence of the respondent-
University to effect any changes in the criterion relating to
fee structure contrary to one which has been determined by
the 'Fee Regulatory Committee' constituted by the State of
Rajasthan."
Accordingly, the fee structure determined by the 'Fee
Fixation Committee' constituted by the respondent University in
supersession of fee structure already proposed by the 'Fee
Regulatory Committee' constituted by the State of Rajasthan
pursuant to the directions of the Supreme Court was held not
sustainable in the eyes of law.
52. As a matter of fact, the question with regard to the
determination of fee structure is not directly raised before us in
the present petition and therefore, we are not required to delve
into the said questions any further moreso when the special leave
petition preferred by the respondent no.10 herein, against the
Bench decision of this Court in Sachin Mehta's case (supra), is
pending consideration before the Supreme Court.
53. For the aforementioned reasons, the writ petition deserves to
be allowed.
54. Accordingly, the writ petition is allowed. The action of the
respondent private institutions and the medical/dental institutions
run by the State Government in levying advance fee in addition to
annual fee for one year from the students admitted to the medical
courses and insisting upon each and every student to submit the
bank guarantee at the time of admission equivalent to the fee for
3½ years of course duration, is declared illegal. The respondent
(49 of 49) [CW-13535/2020]
private institutions and the institutions run by the State
Government are restrained from recovering any amount as
advance fee in addition to the fee for one year from any student
admitted to the course. The respondent private institutions and
the State Government are directed not to insist upon furnishing of
bank guarantee towards the fee for entire duration of the course
from each and every student. The respondent private medical
institutions shall be at liberty to ask for the bond/bank guarantee
from a particular student in conformity with the directions issued
by the Hon'ble Supreme Court in Islamic Academy's case (supra)
as discussed/explained hereinabove by this Court. The advance
fee in addition to the fee for one year already recovered by any of
the private institutions from the students admitted to the medical
courses shall be kept in a fixed deposit in a nationalized bank
against which no loan or advance may be granted. The advance
fee deposited as aforesaid shall carry interest at the rate
equivalent to the rate of interest admissible on fixed deposit by
the nationalized bank. The interest already accrued and the future
interest on the amount of advance fee shall be paid to the
students from whom the advance fees were collected at the time
of admission. The State Government is directed to ensure the
compliance of the directions issued by this Court as aforesaid. No
order as to costs.
(RAMESHWAR VYAS),J (SANGEET LODHA),J
Aditya/-
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