IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

Bench Sr.Nos:- SL-1 to 19 [3446]

APHC010158802020

WRIT PETITION NO: 9871 of 2020 ALONG WITH W.P. Nos.5696 and 5699 of 2022; W.P.Nos.9750, 9812, 9814, 9874, 9875, 9876, 9877, 10159, 10195, 10229, 10290, 10292, 10300, 10345 & 10371 of 2020 and W.P.(PIL) NO: 150 of 2020

WRIT PETITION NO: 9871 of 2020

Mother Theressa Educational Society and Others

...Petitioner(s)

Vs.

The State Of Ap and Others ...Respondent(s)

**********

Advocate for Petitioner:	Mr. Srinivasa Rao Narra, Mr. Challa<br>Gunaranjan, Mr. Dharmesh D K<br>Jaiswal, Mr. S.V.S.S.Sivaram
Advocates for Respondents:	Learned Advocate General, Learned<br>Deputy Solicitor General of India,<br>Mr. C Sudesh Anand

CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE R RAGHUNANDAN RAO

DATE : 12th December, 2024.

PER DHIRAJ SINGH THAKUR, CJ:

There are two sets of petitioners before us. One set of petitioners are the various private unaided minority and non-minority medical colleges and their associations, who challenge Government Order No. 56, dated 29.05.2020, issued by the Government of Andhra Pradesh, Medical, Health and Family Welfare Department, which fixes the fee for postgraduate medical courses for the block period 2020-21 to 2022-23.

2. Second set of petitioners are the candidates who seek the enforcement of Government Order No. 56, fixing the fee for the PG courses in various medical colleges. WP(PIL) No. 150 of 2020 is filed seeking a similar relief.

LEGAL FRAMEWORK:

3. There is in force in the State of Andhra Pradesh an Act called the Andhra Pradesh Higher Education Regulatory and Monitoring Commission Act, 2019 (hereinafter referred to as, "the Act of 2019"). The said Act, according to the preamble, was enacted "to establish the Andhra Pradesh Higher Education Regulatory and Monitoring Commission to maintain standards of education, regulation of fee, service condition of teachers and safeguard the interest of students and to ensure public spiritedness, equity, excellence, financial stability and probity along with good governance and for matters connected therewith or incidental thereto."

4. The Act is meant to apply to all higher educational institutions including medical, dental, agriculture, horticulture and veterinary institutions in the State of Andhra Pradesh.

The Commission is headed by a Chairperson, who is to be a retired Judge of the High Court and other members, in terms of Section 4 of the said Act.

5. Chapter III deals with Powers and Functions of the Commission. Section 9(ii), in particular, provides that the Commission shall have the power to monitor and regulate fee in higher educational institutions in accordance with the rules, guidelines and procedures prescribed for that purpose.

6. In exercise of the powers conferred under sub-section 1 of Section 23 of the Act of 2019, the rules called as the Andhra Pradesh Higher Education Regulatory and Monitoring Commission Rules, 2019 (for short, "the Rules") have been framed.

Rule 8 of the said Rules deals with the power of the Commission to call from each institution its proposed fee structure well in advance along with the relevant documents and books of account for scrutiny.

The Commission in terms of Rule 8(2) has the power to decide whether the fee proposed by the institutions is justified and does not amount to profiteering or charging of capitation fee.

Rule 8(3) vests in the Commission the liberty to approve or alter the proposed fee for each course to be charged by the institution. The proviso,

however, envisages that it shall give the institution an opportunity of being

heard before fixing any fee or fees. Rule 8(4) requires the Commission to

take into consideration the following factors while prescribing the fee.

"(a) The location of the Higher Educational Institution,

(b) The nature of the 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 Higher Educational Institutions,

(f) The revenue foregone on account of waiver of fee, if any, in respect of students belonging to the Scheduled Caste, Scheduled 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."

7. The Rules further envisage that the Commission shall communicate the fee structure as determined by it to the Government for notification under Act 5 of 1983.

8. It has been further envisaged that the fee determined by the Commission shall be valid for a period of three years. Rule 8(7) envisages further that 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/her course in the institution in which he/she was originally admitted.

9. Section 22 of the Act provides that the Commission may make regulations to carry out the provisions of this Act, with prior approval of the Government. In exercise of the powers conferred by sub-section 1 of Section 22 of the Act of 2019, the Government approved the Regulations called as the Andhra Pradesh Higher Education Regulatory and Monitoring Commission Regulations, 2020 (for short, "the Regulations").

10. The said Regulations were notified in the Andhra Pradesh Gazette on 5th of March 2020. Regulation 4 (4) inter alia envisages that the Commission shall have the power to request a higher educational institution to furnish information as may be necessary for enabling the Commission to regulate the conduct of admissions and/or to fix the fee in respect of each course offered in the institution.

11. Regulation 5(5) envisages that the Commission shall decide whether the fees collected or proposed to be collected by the institutions, whatsoever under all heads including hostel and mess charges is justified and does not amount to profiteering or charging of capitation fee.

It further provides that the decision of the Commission shall be final provided that such decision shall be taken only after giving a reasonable opportunity to the institution to represent its case.

For facility of reference, the relevant sub-regulations in Regulation 5 are reproduced hereunder:

"(6) For furnishing the fee proposal by the Institution, the Institutions shall submit audited statements of income and expenditure, balance sheets and particulars of expenditure including salaries, infrastructure, hostel & mess facilities and such other information as the Commission may prescribe along with the necessary supporting documents, ledgers and Bank statements in PDF files.

(7) The fee proposals furnished by the Institutions have to be evaluated based on the income and expenditure of the Institutions as well as the societies/trusts under whose umbrella the said Institutions are established.

(8) The Institutions shall submit all the required financial information as per the mercantile (accrual) system of accounting only.

(9) The Institution shall submit the required information such as the details of the fee collections, income and expenditure statements, teaching and non-teaching staff salaries of all kinds, administrative and other expenses, statement of revenue grants received, utilization of amounts collected under the NRI quota, details of Term Deposits of the Institutions, details of the loans received from the Societies, Banks/Financial Institutions and loans received from other non-banking Financial Institutions, statements of corpus / capital fund, capital grants received and utilised, grants/funds received from any source on account of research projects and their utilization details, legal expenditures, student result particulars and other information.

(10) In order to consider the expenditure on teaching and non-teaching staff, the cadre strength fixed by the respective regulatory authorities and accreditation bodies needs to be adopted.

(12) In case of any infrastructure and/or services of any staff utilized for more than one programme, the expenditure on such infrastructure and/or staff shall be apportioned appropriately, based on students strength, among the different programmes.

(19) The Institutions shall maintain details of student fee collection and utilization, salaries of teaching and nonteaching staff, faculty details subject wise, particulars of infrastructure and other expenditure and furnish the same online to the Commission.

(20) If the details required under these guidelines are not furnished or the financial statements furnished are found inaccurate, the financial statements shall not be considered for the fee proposals.

(34) The fee approved by the Commission at any point in time shall be valid for a period of three years next; and subsequent change in fees, if any, shall be applicable only in respect of new admissions.

(35) The Commission may recommend the fee in Private Aided or Unaided Higher Educational Institution for different professional programmes of study and different categories of students, having due regard to the guidelines, if any, notified by Regulatory Authorities from time to time.

(36) (a). The principle of determining uniform fee structure for all students of Higher Education Institutions shall not come in the way of determining differential fee structure to benefit the more meritorious sections of students admitted under the convener quota from that of the Management and NRI quota;

(b) The institution shall be at liberty to collect the fee for the Management quota seats up to two (2) times of the fee notified for the Convener quota of seats in order to maintain quality of education by providing proper infrastructural and instructional facilities and amenities;"

12. The case of the petitioner colleges is that the Andhra Pradesh Higher Education Regulatory and Monitoring Commission (for short, "Commission - APHERMC") invited private, unaided medical and dental institutions to submit their proposals for fee structure for the block period 2020-21 to 2022-23 vide notification dated 09.01.2020.

13. The petitioner colleges responding to the said notification submitted the requisite material and data in support of the proposals for fee structures in respect of the fee structures proposed by them. The Commission, it is stated, sent its recommendations to the Government vide

letter dated 24.05.2020 and the Government subsequently notified the said recommendations vide the Government Order No.56, dated 29.05.2020, which is impugned in the present petitions.

14. The fee which has been fixed in the order impugned for postgraduate medical courses as also dental courses is as under:

Sl.No	Name of the<br>Course	Category-A<br>Convener Quota	Category-B<br>Management Quota	Category-C<br>NRI/Institutional Quota
1	Clinical degree	Rs.4,32,000/-	Rs.8,64,000/-	Rs.50,00,000/-
2	Para clinical degree<br>and diploma	Rs.1,35,000/-	Rs.2,70,000/-	Rs.15,00,000/-
3	Pre clinical degree	Rs.61,200/-	Rs.1,22,400/-	Rs.8,00,000/-

For Post Graduate Medical Courses:

For Post Graduate Dental Courses:

Sl.No	Name of the<br>Course	Category-A<br>Convener Quota	Category-B<br>Management Quota	Category-C<br>NRI/Institutional Quota
1	Clinical degree	Rs.2,97,000/-	Rs.5,94,000/-	Rs.12,00,000/-
2	Para clinical degree<br>and diploma	Rs.2,67,300/-	Rs.4,34,600/-	Rs.7,00,000/-

15. The petitioners who are running the medical colleges are aggrieved of the Government Order impugned, inasmuch as they state that the data and material which was furnished by them to the Commission was not at all considered and was ignored. It was urged that fee had to be fixed qua every college/institution and that uniform fee could never have been fixed as the same was never envisaged by the Act, the Rules and the Regulations. It was urged that the fee for a 'Category-A Convener Quota' seat for the block period of three years from 2020-21 to 2022-23 which was fixed at Rs.4,32,000/-, was even less than the fee fixed for a 'Category-A Convener Quota' seat for the previous block period from 2017-18 to 2019-20 which was Rs.6,90,000/-.

16. Learned counsel for the petitioner Colleges, Mr. Challa Gunaranjan, would submit that by fixing a uniform fee structure for all the medical colleges across the board, the Commission has not only violated the provisions of the Act, the Rules and the Regulations framed under the Act, but also acted in gross violation of the Apex Court judgment rendered in the case of T.M.A. Pai Foundation v. State of Karnataka**, ¹** wherein the majority judgment observed that fixation of a rigid fee structure would be an unacceptable restriction.

17. It is stated that as per the said judgment, the decision to fix the fee ought to have necessarily been left to a private education institution which was not seeking any aid from the Government.

18. It was urged that if the right to fix the fee was taken away from the petitioners who are running the colleges, it would grossly affect the standards of their institutions inasmuch as lowering of the fee chargeable

¹ (2002) 8 SCC 481

from the candidates would result in payment of lesser scales of fee to the faculty, which would have the effect of a brain drain from the institutions run by the petitioners.

19. It was stated that while the right to propose the fee was vested in the petitioners, the official respondents clearly could question the fee proposed, in case, it was found on the basis of data that there was any element in the fee structure proposed by them, which would amount to profiteering.

20. Learned Advocate General appearing for the State at the very outset stated that the legal position as propounded by the learned counsel for the petitioner colleges is unquestionable and that the fee had to be fixed on the basis of the data provided by the colleges. Yet an effort was made by the Learned Advocate General to suggest that perhaps the fixation of fee, in accordance with the ratio of the Apex Court judgments rendered in the case of T.M.A. Pai Foundation (supra), and P.A. Inamdar v. State of Maharashtra, 2 as also the Act, the Rules and the Regulations framed thereunder could be followed for the next block period 2023 to 2026, and that perhaps if the candidates who are either undergoing the courses or have already finished the courses could agree to paying some extra amount in addition to the one which was fixed by the Commission, the matter could perhaps be settled without going into the evaluation of the data individually produced by the colleges.

² (2005) 6 SCC 537

21. Learned counsel for the candidates, Mr. Dharmesh D K Jaiswal, however, submitted that he would have to take time to seek instructions from the candidates on the suggestion made by the Learned Advocate General.

22. We, however, feel that it may not be absolutely necessary to proceed on the suggestion made by the Learned Advocate General, inasmuch as we have to consider whether the procedure adopted by APHERMC was in accordance with the Act, the Rules and the Regulations framed.

23. We have heard learned counsel for the parties at length.

24. It is not denied by any of the respondents that the Commission in fixing a uniform rate of fee across the board for all institutions has in fact violated not only the directions of the Apex Court but also the entire scheme which was framed under the Act and the Rules and the Regulations. The scheme as it is applicable in the State of Andhra Pradesh by virtue of the application of the Rules and the Regulations supra would clearly show that the Commission was required to, based upon the data produced by each of those institutions, determine whether there was any element of profiteering in the fee structure so proposed by them.

25. It is not understandable that even when the Commission had invited from all the institutions, the requisite data with regard to various aspects pertaining to fee regulation in the form of Schedules 1 to 31 and the said information was provided by the institutions, yet nothing is put forth for our perusal as to how the said data was treated by the Commission. It appears that the Commission had adopted some sort of a thumb rule even when each of the individual institutions had put forth for the perusal of the Commission the material justifying their fee proposals.

26. In fact, the uniform fee fixed by the Commission – APHERMC, may also be contrary to the interest of some students who may be forced to pay more fee to certain colleges, which did not even justify charging the fee that was fixed by Commission. There may still be colleges who may still be profiteering from the fee fixed by the Commission, as we do not know whether the uniform fee fixed by the Commission and applicable to such category of colleges actually deserve to charge that fee on account of lack of infrastructure, lack of good faculty, etc.

27. On the other hand, there may be colleges, which may justify charging a higher fee on account of better infrastructure, better faculty, equipment, etc. Unfortunately, these issues appeared never to have been gone into by the Commission - APHERMC.

28. It would be worthwhile to reproduce the observations made by the Apex Court in T.M.A. Pai Foundation (supra), wherein at paragraphs 54 and 56, it was held:

"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 or nominating students for admissions would be unacceptable restrictions.

56. An educational institution is established for the purpose of imparting education of the type made available by the institution. Different courses of study are usually taught by teachers who have to be recruited as per qualifications that may be prescribed. It is no secret that better working conditions will attract better teachers. More amenities will ensure that better students seek admission to that institution. One cannot lose sight of the fact that providing good amenities to the students in the form of competent teaching faculty and other infrastructure costs money. It has, therefore, to be left to the institution, if it chooses not to seek any aid from the Government, to determine the scale of fee that it can charge from the students. One also cannot lose sight of the fact that we live in a competitive world today, where professional education is in demand. We have been given to understand that a large number of professional and other institutions have been started by private parties who do not seek any governmental aid. In a sense, a prospective student has various options open to him/her where, therefore, normally economic forces have a role to play. The decision on the fee to be charged must necessarily be left to the private educational institution that does not seek or is not dependent upon any funds from the Government."

29. While holding so, the Apex Court further went on to hold that since education was regarded as a charitable occupation, education institutions could not be permitted to charge a fee which amounts to profiteering. It was held:

"57. …Since the object of setting up an educational institution is by definition "charitable", it is clear that an educational 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 educational 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."

30. The Apex Court in P.A. Inamdar (supra) sounded a note of caution to the Committees, which were directed to be constituted in terms of the judgment of the Apex Court in Islamic Academy of Education v. State 3

of Karnataka, in the following manner:

"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 [(2003) 6 SCC 697] . Certain decisions of some of the Committees were subjected 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

³ (2003) 6 SCC 697

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 the purpose of finding out what would be an ideal and reasonable fee structure for that institution."

31. To our mind, the responsibility which lies upon the Commission to consider the fee proposals, with a view to remove any element of profiteering is an onerous responsibility. A balance has to be maintained to ensure that the fee structure which is proposed by the institutions is not interfered with on general considerations of compassion for the students, inasmuch as an unqualified compassion for students may result in greater harm to the institutions, which might be affected in terms of quality, efficiency and productivity. An abysmally low fee structure or a fee structure tinkered by the Commission, which is unrealistic, will only ensure that the institutions involved in specialized professional courses would face closure sooner than later.

32. In fact, there is no justification for the Commission not to go into all the elements of the proposed fee structure and test them on the basis of the criteria which has been fixed according to the Rules and Regulations as they have the wherewithal and assistance of the requisite professional chartered accountants to guide them on that aspect.

33. We need to mention here that after the Commission had fixed the uniform fee, which was made applicable to all institutions across the board, the institutions had decided to not make any admissions to the PG courses run by them. It then appears that there was an out-of-court arrangement between the institutions as also the candidates, whereby it was decided that each candidate would pay approximately 45,000 per year during the block period in addition to the fee which had been fixed by the Commission. Not only this, it also appears that the candidates had undertaken that they would abide by the decision of the Court in the batch of petitions, which were pending. The aforementioned agreement was also recorded by this Court in its order, dated 9th of July, 2020.

34. Be that as it may, we hold that G.O.Ms.No.56, dated 29.05.2020, issued by the Health Medical and Family Welfare (C1) Department is unsustainable in law. The same is accordingly set aside. The commission is directed to undertake the exercise of fee fixation to examine the proposed fee structures individually in all the cases and pass orders thereupon within a period of two (2) months. In case the Commission wishes to disagree with the fee proposed in regard to any head, an opportunity would be given to the concerned institution to seek its view on the same before final orders are passed, which should be reasoned.

35. We make it clear that in case the Commission increases the fee structure of any of the colleges, the same would entitle such of the petitioner colleges to claim the balance fee from the candidates who are either undergoing the course or have even completed the courses, as per the

undertakings submitted by them. However, we leave the colleges free to decide whether they would proceed to claim such additional fee.

36. The petitions are disposed of accordingly. No order as to costs.

Pending miscellaneous applications, if any, shall stand closed.

DHIRAJ SINGH THAKUR, CJ.

R RAGHUNANDAN RAO, J.

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