P A INAMDAR Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) Management of privately owned professional colleges imparting education in Health Science disciplines are before me court in proceedings under Article 226 of the Constitution. They are aggrieved by the determination of fees made by a Committee constituted under the Chairmanship of Mr. Justice R. A. Jahagirdar, a former Judge of this Court. The institutions have several objections to the decision of the Committee, both in regard to the methodology and on the merits of the determination. The institutions and their management urge that the deprivation of an opportunity of a personal hearing is a matter of prejudice to them because were they to be given that opportunity they would have established that expenditure which the Committee proposed to disallow was legitimate and had to be allowed. The Colleges urge that the methodology and basis are at variance with judgments of the Supreme Court. They contend that the jurisdiction of the committee is not to fix fees but to determine whether the fees proposed amount to profiteering or capitation. In the conclusion that we have arrived at, we have permitted the institutions to have an opportunity to place their objections before the Committee. The committee is being requested to consider those objections and to render a decision within three months. In me meantime, in view of the imminent deadline for admissions, the Court has directed mat admissions shall be granted on the fees allowed by the Committee subject to the undertaking of each student to pay the difference, should there be an enhancement.

(2.) On 31" October 2002, a Bench of eleven judges of me supreme Court delivered judgment in T. M. A. Pai Foundation vs. State of Karnataka (2002) SCC 481. The Court inter alia emphasised the principle of institutional autonomy and of merit based admissions in colleges imparting education leading up to professional degrees. On 14th October 2003, a Constitution Bench delivered judgment in Islamic Academy of Education vs. State of kamataka (2003) 6 SCC 697. In T. M. A. Pai Foundation, the supreme Court held that it was not to Government to government to fix a rigid fee structure and, each Institution must have the freedom to fix its own fees based on the need to generate funds to run the institution and or provide facilities necessary for the benefit of students. These institutions, the Court held, must be able to generate a surplus which has or be used for the betterment and growth of the institution. The judgment laid down that a decision of the fee to be charged must be left to private educational institutions that do not seek funds from the Government and each institute would be entitled to have its own fee structure. The fee structure must be based upon the infrastructure and facilities available, investment made, salaries paid to teachers and the staff, future plans for the expansion or betterment of the institution and such other factors. While the fees which are determined must provide funds for the growth of the institution and the development of facilities, profiteering should not be permitted. Governmental regulation was permissible in order to prevent the imposition of a capitation fee or profiteering. The surplus which is generated must be used by the institution for the betterment of education and me development of facilities.

(3.) In Islamic Academy of Education (supra) the Constitution bench formulated four questions for determination, the first being whether educational institutions are entitled to fix their own fee structure. Adverting to the principles which were formulated in T. M. A. Pai Foundation, the Constitution Bench directed the State governments to constitute in each State a Committee headed by a retired Judge of the High Court to be nominated by the Chief justice. The Committee was to consist of a Chartered Accountant nominated by the Judge, a representative of the Medical Council of india or A. I. C. T. E. , as the case may be, and the Secretary to the government in Medical or Technical Education, as its Secretary. The Committee was empowered to co-opt another independent person so that the total members of the Committee would be five. The parameters of the work and function of the Committee were laid down by the Supreme Court thus: