In a major relief to thousands of students, the Supreme Court on Thursday put a complete ban on charge of capitation fee by all private professional colleges and put their fee structure to scrutiny in each state by a committee headed by a retired high court judge.
Clarifying certain ambiguities in the landmark judgment on Minority Educational Institutions (MEIs) given last year, a five-judge Constitution Bench headed by Chief Justice V N Khare in its majority judgment said under no circumstances the educational colleges could charge capitation fee or indulge in profiteering.
Reiterating that educational institutions were set up for charitable purposes, the bench said the government should consider framing regulations to cancel the recognition and the affiliation given to private colleges if these charged capitation fee or indulged in profiteering from the admission fee asked from the students.
The bench also looked into the admission process for the management quota seats and the general seats offered by each of the private professional colleges, including those run by Unaided Minority Educational Institutions (UMEIs).
It also said the determination of management quota in private colleges and unaided MEIs would be done by another four-member committee headed by another retired judge.
The chief justice of the respective states would nominate both the retired judges, the bench added.
However, the bench added, as very little time was left for completion of the admission process for the current academic year, the apex court said for the academic year 2003-04, the management quota and the state quota would be 50:50.
But the same would be determined by the four-member committee from next year onwards.
The fee-scrutiny committee would include a Chartered Accountant of repute, an eminent doctor or an engineer depending on the nature of the college, secretary of medical education or technical education of the state government and an eminent personality of the state.
Holding that each institution could have separate fee structures depending on the facilities, infrastructure, salary paid to its staff and the investments made for future, the bench said the professional colleges would submit their proposed fee structure to the Committee.
The committee after scrutinising the details of various aspects could fix a fee structure, which would remain valid for three years and only thereafter the institution could approach the committee again for revision, the bench said.
Writing for himself, Justice S N Variava, Justice K G Balalkrishnan and Justice Arijit Pasayat, the chief justice said the expenditure of both the committees would be borne by the respective state governments.
Coming back to the question of capitation fee, the bench said, "The governments should consider framing appropriate regulations and cancel the recognition as well as the affiliation given to a professional college if it was found to be charging capitation fee or indulging in profiteering."
Taking into account the fact that several institutions were charging fees for the entire four or five year course, the bench said no institution could charge fee for more than one semester or at the most for a year.
On the fixation of management quota for private and unaided MEIs, the apex court said the four-member committee would determine the same keeping in mind the local needs.
"Even for the management quota a common entrance test should be held," the court said.
It said even in admitting students under the management quota, the institutions could not ignore 'inter-se merit' of the students and added that seats falling vacant under management quota would go to the candidates passing Common Entrance Test conducted by the respective state governments.
The court said that apart from the retired high Court Judge, the four-member Committee would be the same as the committee for determination of the fee structure except for the Chartered Accountant.
However, the Bench said that for this year it was exempting certain colleges like Christian Medical College, Vellore, from the 50:50 quota distribution scheme as they have been permitted earlier by the apex court to go ahead with their previous arrangements.
The bench made it clear that till the government enacted appropriate legislation to the effect of the judgment, the directions given today would operate under Article 141 of the Constitution. Article 141 provides that the Supreme Court declared law was the law of the land and all authorities should abide by it.