Narayana Medical College vs The State Of Andhra Pradesh

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. OF 2022 (@ Special Leave Petition (Civil) Nos. 2969­2970 of 2021)

Narayana Medical College ...Appellant(s)

Versus

The State of Andhra Pradesh & Ors. …Respondent(s)

JUDGMENT

M.R. SHAH, J.

Leave granted.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court of Andhra

Pradesh at Amravati in Writ Petition Nos. 33656/2018 and

8210/2019 the medical college/institution has preferred

the present appeals.

2. Pursuant to the judgment and order passed by this Court

Signature Not Verified in the case of P.A. Inamdar and Ors. Vs. State of Digitally signed by NIRMALA NEGI Date: 2022.11.07 17:07:01 IST Reason: Maharashtra and Ors.; (2005) 6 SCC 537, the State of

Andhra Pradesh framed Rules called the Andhra Pradesh 1 Admission and Fee Regulatory Committee (for Professional

Courses offered in Private Un­Aided Professional

Institutions) Rules, 2006 (hereinafter referred to as the

Rules, 2006). Rule 4 of the Rules, 2006 is with respect to

the fee fixation. Following the report of the Admission and

Fee Regulatory Committee (hereinafter referred to as the

AFRC), the State Government issued G.O. dated

18.06.2011 fixing and enhancing the fee for the academic

years 2011­12 to 2013­14. However, for the subsequent

years, more particularly, for the block years 2017 to 2020

(period in question) without waiting for the report from the

AFRC and on the representations made by the private

medical colleges, the State Government issued G.O. dated

06.09.2017 and enhanced the tuition fee payable by the

MBBS students. At this stage, it is required to be noted

that under the said G.O. the State Government enhanced

the tuition fee at an exorbitant rate of Rs. 24 lakhs per

annum i.e., almost seven times the tuition fee notified for

the previous block period. The G.O. dated 06.09.2017 was

the subject matter of writ petitions before the High Court.

By the impugned common judgment and order the High

2 Court has set aside the G.O. dated 06.09.2017 by

observing and holding that considering the provisions of

the Rules, 2006 the fee cannot be enhanced/fixed without

the recommendations/report of the AFRC. Therefore, the

High Court by the impugned common judgment and order

has held that the recovery of enhanced tuition fee by the

respective private medical colleges is bad in law.

Consequently, the High Court has set aside the G.O. dated

06.09.2017 to the extent of enhancement of fee. The High

Court has also directed that if any fee already fixed by the

Government vide G.O. dated 06.09.2017 dehors the G.O.

dated 18.06.2011, the same shall be refunded by the

colleges to the students after adjusting the amounts

payable under G.O. dated 18.06.2011.

2.1 Feeling aggrieved and dissatisfied with the impugned

common judgment and order passed by the High Court,

the respective medical college/institution qua who now is

required to refund the amount collected pursuant to G.O.

dated 06.09.2017 has preferred the present appeals.

3. Having heard Shri K.V. Viswanathan, learned Senior

Advocate appearing on behalf of the appellant, Shri Basava

3 Prabhu S. Patil, learned Senior Advocate appearing on

behalf of the original writ petitioners, learned counsel

appearing on behalf of the State of Andhra Pradesh and

Shri Krishna Dev Jagarlamudi, learned counsel appearing

on behalf of A.P. Admission and Fee Regulatory Committee

and on considering the impugned common judgment and

order passed by the High Court, we are of the opinion that

the High Court has not committed any error in quashing

and setting aside the G.O. dated 06.09.2017 enhancing

the tuition fee for the block years 2017­2020. Even Shri

K.V. Viswanathan, learned Senior Advocate appearing on

behalf of the appellant – medical college has fairly

conceded that the tuition fee could not have been

enhanced by the State Government unilaterally and

without report/recommendations by the AFRC under the

provisions of the Rules, 2006.

3.1 Even otherwise considering the relevant provisions of the

Rules, 2006 the fixation could have been only on the

recommendations/report by the AFRC and under Rule 4 of

the Rules, 2006 a duty is cast upon the AFRC to

recommend the fee fixation. Under the relevant provisions

4 of the Rules, 2006, the AFRC while fixing the fee is

required to undertake detailed enquiry as provided in Rule

4 of the Rules, 2006. Rule 4 of the Rules, 2006 reads as

under: ­ “4. Fee Fixation. ­ (i) The AFRC shall call for, from each Institution, its proposed fee structure well in advance before the date of issue of notification for admission for the academic year along with all the relevant documents and books of accounts for security,

(ii) The AFRC shall decide whether the fees proposed by the Institution is justified and does not amount to profiteering or charging of capitation fee.

(iii) The AFRC shall be at liberty to approve or alter the proposed fee for each course to be charged by the Institution. Provided that it shall give the Institution an Opportunity of being heard before fixing any fee or fees.

(iv) The AFRC shall take into consideration the following factors while prescribing the fee: (a) the location of the professional institution, (b) the nature of the professional course, (c) the cost of available infrastructure, (d) the expenditure on administration and maintenance, (e) a reasonable surplus required for growth and development of the professional Institution, (f) the revenue foregone on account of waiver of fee, if any, in respect of students belonging to the Schedule Caste, Schedule Tribes and wherever applicable to the Socially and Educationally Backward Classes and other Economically Weaker Sections of the society, to such extent as shall be notified by the Government from time to time. (g) Any other relevant factor. Provided that, no such fees, as may be fixed by the AFRC, shall amount to profiteering or commercialization of education,

(v) The AFRC shall communicate the fee structure as determined by it, to the Government, for notification.

(vi) The fee or scale of fee determined by the AFRC shall be valid for a period of three years.

5

(vii) The fee so determined shall be applicable to a candidate who is admitted to an institution in that academic year and shall not be altered till the completion of his course in the Institution in which he was originally admitted. No Professional Educational Institution shall collect at a time a fee which is more than one year's fee from a candidate.”

Therefore, the G.O. issued by the State Government

enhancing the tuition fee for the private medical colleges

on the representations made by the private medical

colleges was wholly impermissible and most arbitrary and

only with a view to favour and/or oblige the private

medical colleges. The same is rightly set aside by the High

Court. The State could not have issued the G.O. enhancing

the tuition fee for private medical colleges dehors the

recommendations of the AFRC. Any enhancement of the

tuition fee without the recommendations of the AFRC shall

be contrary to the decision of this Court in the case of P.A.

Inamdar (supra) and even the relevant provisions of the

Rules, 2006. Therefore, the High Court has rightly

quashed and set aside G.O. dated 06.09.2017.

4. Now so far as the directions issued by the High Court to

refund the amount collected under G.O. dated 06.09.2017

6 after adjusting the fee fixed by the Government vide G.O.

dated 18.06.2011 by the colleges to the students is

concerned, Shri K.V. Viswanathan, learned Senior

Advocate appearing on behalf of the appellant – private

medical college has submitted that it is true that the State

Government could not have enhanced the tuition fee

without recommendations/report of the AFRC. It is true

that in the present case the tuition fee was lastly fixed in

the year 2011 and thereafter the process for

determination/fixation of tuition fee for the block period

2017 to 2020 was in progress by the AFRC. It is submitted

that between 2011 and 2017 the costs/expenses of the

colleges had increased and the requirement of paying

stipend to students has been introduced in the year 2016

and therefore, the fee fixed in the year 2011 would cause

significant loss to the colleges and the tuition fee is bound

to be increased and therefore, the increase which the

respective college is entitled to recover (enhanced fee). It

is, therefore, prayed that at this stage the respective

colleges may not be directed to refund the amount i.e.,

tuition fee collected pursuant to G.O. dated 06.09.2017

7 after adjusting the amount of tuition fee to be paid as per

G.O. dated 18.06.2011. Shri K.V. Viswanathan, learned

Senior Advocate has pointed out that in many cases

students have adjusted the difference in the subsequent

fees.

4.1 The prayer on behalf of the medical college not to refund

the amount at this stage is vehemently opposed by Shri

Basava Prabhu S. Patil, learned Senior Advocate appearing

on behalf of the students. It is submitted that with respect

to the similar G.O. issued by the State of Telangana the

same has been set aside by the High Court and the High

Court has directed to refund the amount paid in excess,

paid pursuant to illegal G.O. issued by the State

Government. It is vehemently submitted that the private

medical colleges who are the beneficiaries of illegal G.O.

which was issued on the representations made by the

private medical colleges cannot be permitted to retain the

amount which they have recovered illegally on the basis of

the illegal G.O.

4.2 It is submitted that under G.O. dated 06.09.2017 there

was an exorbitant increase of tuition fee of Rs. 24 lakhs

8 i.e., seven times the tuition fixed earlier by the AFRC and

many students/their parents were required to avail the

bank loan to pay the exorbitant tuition fee and were

required to pay the higher rate of interest. Therefore, it is

prayed not to interfere with the impugned common

judgment and order passed by the High Court including

the order of refund passed by the High Court.

4.3 Learned counsel appearing on behalf of the AFRC has

submitted that during the enquiry/proceedings to

determine the tuition fee for the block period 2017­2020,

the State Government unilaterally and without waiting for

the report/recommendations by the AFRC increased the

tuition fee. It is submitted that in fact the AFRC vide

notification dated 08.12.2016 proposed to review and

determine the fees’ structure and call for relevant

materials from the medical colleges and the students and

the review and determination of fees was pending, the

association of the colleges addressed a letter to the

Government seeking revision which the State Government

granted/permitted in clandestine manner.

9

5. As observed hereinabove no error has been committed by

the High Court in quashing and setting aside G.O. dated

06.09.2017 enhancing the tuition fee for the private

medical colleges. The Government of Andhra Pradesh on

the representations made by the private medical colleges

enhanced the tuition fee for private medical colleges

though the revision of fees was pending consideration with

the AFRC. The State Government enhanced the tuition fee

exorbitantly to Rs. 24 lakhs per annum which was seven

times the fee fixed earlier. Once the State Government

enacted the Rules, 2006 which provides determination and

fixation and the review of the tuition fees by the AFRC, the

State Government was bound by the Rules, 2006 and

could not have enhanced the fee during the review pending

with the AFRC. To enhance the fee unilaterally would be

contrary to the objects and purpose of Andhra Pradesh

Educational Institutions (Regulation of Admissions and

Prohibition of Capitation Fee) Act, 1983 as well as the

Rules, 2006 and the decision of this Court in the case of

P.A. Inamdar (supra). To enhance the fee to Rs. 24 lakhs

per annum i.e., seven times more than the fee fixed earlier

10 was not justifiable at all. The education is not the business

to earn profit. The tuition fee shall always be affordable.

Determination of fee/review of fee shall be within the

parameters of the fixation rules and shall have direct

nexus on the factors mentioned in Rule 4 of the Rules,

2006, namely, (a) the location of the professional

institution; (b) the nature of the professional course; (c) the

cost of available infrastructure; (d) the expenditure on

administration and maintenance; (e) a reasonable surplus

required for growth and development of the professional

Institution; (f) the revenue foregone on account of waiver of

fee, if any, in respect of students belonging to the reserved

category and other Economically Weaker Sections of the

society. All the aforesaid factors are required to be

considered by the AFRC while determining/reviewing the

tuition fees. Therefore, the High Court is absolutely

justified in quashing and setting aside G.O. dated

06.09.2017.

6. Now so far as the directions issued by the High Court to

refund the amount of tuition fee collected under G.O.

dated 06.09.2017 and to refund the balance amount after

11 adjusting the fee paid pursuant to the earlier

determination as per G.O. dated 18.06.2011 is concerned,

we are of the opinion that the High Court has not

committed any error in issuing such directions. The

management cannot be permitted to retain the amount

recovered/collected pursuant to the illegal G.O. dated

06.09.2017. The medical colleges are the beneficiaries of

the illegal G.O. dated 06.09.2017 which is rightly set aside

by the High Court. The respective medical colleges have

used/utilized the amount recovered under G.O. dated

06.09.2017 for a number years and kept with them for a

number of years on the other hand students paid the

exorbitant tuition fee after obtaining loan from the

financial institutions/banks and paid the higher rate of

interest. If at all the AFRC determines/fixes the tuition fee

which is higher than the tuition fee fixed earlier it will be

always open for the medical colleges to recover the same

from the concerned students, however, the respective

medical colleges cannot be permitted to retain the amount

collected illegally pursuant to G.O. dated 06.09.2017.

Therefore, even the directions issued by the High Court to

12 refund the amount of tuition fee collected pursuant to G.O.

dated 06.09.2017 after adjusting the amount payable as

per the earlier determination is not required to be

interfered with.

7. In view of the above and for the reasons stated above both

the appeals fail and the same deserve to dismissed and are

accordingly dismissed, however, with cost which is

quantified at Rs. 5 lakhs to be equally paid by the

appellant(s) as well as the State of Andhra Pradesh (i.e.,

Rs. 2.5 lakh by the appellant(s) and Rs. 2.5 lakh by the

State of Andhra Pradesh) to be deposited with the Registry

of this Court within a period of six weeks from today and

on such deposit the same be transferred to National Legal

Services Authority (NALSA) and Mediation and Conciliation

Project Committee, Supreme Court of India (MCPC)

equally.

………………………………….J. [M.R. SHAH]

NEW DELHI; ………………………………….J. NOVEMBER 07, 2022 [SUDHANSHU DHULIA]

13