Unaided professional institutions can decide fee but it should not result in profiteering: SC

New Delhi: Unaided professional institutions have the autonomy to decide on the fee to be charged, subject to the condition that it should not result in profiteering, the Supreme Court said on Thursday.

A bench of Justices L Nageswara Rao and S Ravindra Bhat said the right conferred on the institutions to fix fee for professional courses is subject to regulation.

The observation came while delivering a judgment on appeals pertaining to fee fixation by the Admission and Fee Regulatory Committee for MBBS students in private self-financing medical colleges in Kerala.

Unaided professional institutions have the autonomy to decide on the fee to be charged, subject to the fee not resulting in profiteering or collection of capitation fee.

Regulation of fee is within the domain of the Committee which shall ensure that the fee is non-exploitative and reasonable, the apex court said.

The Kerala High Court had held that the institutions shall propose the fee structure and the scrutiny by the Committee shall only be for the purpose of ensuring that such fee is not exploitative and that the institutions are not indulging in profiteering or collecting capitation fee.

According to the High Court, the Committee can formulate a policy of directing the colleges to submit audited accounts of previous years for the purpose of ascertaining that there is no profiteering by the institutions in fixing the fee.

The High Court made it clear that the Committee cannot go into the desirability or appropriateness of the expenses incurred by the institution as per its own notions and standards.

The high court decision was challenged in the apex court.

The top court said that no fetter can be placed on the exercise of power for fee fixation by the Committee, which shall be in accordance with the rules.

The High Court committed an error in directing the Committee to take into account only audited balance sheets, and provisional profit and loss accounts in the absence of audited balance sheets, to fix the fee.

Though we are in agreement with the submission made on behalf of the managements that the fee as proposed by them should be considered by the Committee, it is no more res integra that the right conferred on the institutions to fix fee for professional courses is subject to regulation, it said.

It directed the Committee to reconsider the proposals of the managements for fee fixation 2017-18 onwards.

The delay that is caused in finalizing the fee in medical colleges is beneficial neither to the institutions nor the students, the top court said.

Therefore, we direct the Committee to expeditiously reconsider the proposals of the private self-financing colleges for fee fixation from 2017-18 onwards.

Needless to mention that fee for earlier years also needs to be finalized in case it has not been done in respect of any college. It can direct the managements to furnish any information that is required for the purpose of arriving at a decision that the fee proposed by the managements is neither excessive nor exploitative in nature, it said.

A reasonable opportunity should be given to the managements of private self-financing colleges in respect of their proposals for fee fixation, the bench said adding that entire exercise shall be completed within a period of three months.