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Thursday, July 26, 2018

We hold that the University was not entitled and competent to devise its own fee structure in the present matter without having the fee fixed by the Committee on Fixation of Fee as contemplated under 1992 Act.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6654 OF 2018
(Arising out of Special Leave Petition (Civil) No.30567 of 2016)
M. Aamira Fathima and Others ………Appellants
VERSUS
Annamalai University and Others ..…. Respondents
WITH
CIVIL APPEAL NOS. 6655-56 OF 2018
(Arising out of Special Leave Petition (Civil) No.30658-30659 of 2016)
WITH
CIVIL APPEAL NO.6657-59 OF 2018
(Arising out of Special Leave Petition (Civil) No.31078-31080 of 2016)
WITH
CIVIL APPEAL NO.6660 OF 2018
(Arising out of Special Leave Petition (Civil) No.9806 of 2017)
WITH
CIVIL APPEAL NO.6661 OF 2018
(Arising out of Special Leave Petition (Civil) No.28543 of 2017)
2
JUDGMENT
Uday Umesh Lalit, J.
Special leave to appeal granted in all matters.
These appeals are directed against the common judgment and order
dated 26.09.2016 passed by the High Court of Judicature at Madras in Writ
Appeal No.1637 of 2014 and other connected matters. Matter arising from
Writ Appeal No.1637 of 2014 which in turn arose from Writ Petition
No.20720 of 2014, namely M. Aamira Fathima and others v. Annamalai
University and others is taken to be the lead matter and the facts leading to
the filing of the said writ appeal are set out in detail hereunder.
2. Annamalai University (hereinafter referred to as “the University”) was
constituted under the Annamalai University Act, 1928 (Madras Act No.1 of
1929)1
. This Act received the assents of Governor and Governor General on
03.11.1928 and 11.12.1928 respectively and was first published in the Fort
of St. George Gazette dated 01.01.1929. The University established
Respondent No.2 College, namely, Rajah Muthiah Medical College in the
year 1985.
1Words “Tamil Nadu” were substituted for the word “Madras” by Tamil Nadu Adaptation
of Law and Order, 1969
3
3. In 1992 the State legislature enacted the Tamil Nadu Educational
Institutions (Prohibition of Collection of Capitation Fee) Act, 1992
(hereinafter referred to as “1992 Act”). Section 2(b) defined Educational
Institution as under:-
“(b) “educational institution” means any institution by
whatever name called, whether managed by any person, private
body, local authority, trust or University, carrying on the
activity of imparting education leading to a degree or diploma
(including a degree or diploma in law, medicine or engineering)
conferred by any University established under any law made by
the Legislature of the State of Tamil Nadu and any other
educational institution or class or classes of educational
institutions (other than any educational institution established
by the Central Government or under any law made by
Parliament) as the Government may, by notification, specify;”
Section 4 dealt with regulation of tuition fee or other fees or deposits
and was initially as under:-
“4. (1) Notwithstanding anything contained in any other law for
the time being in force, the Government may, by notification,
regulate the tuition fee or any other fee or deposit that may be
received or collected by any educational institution or class or
classes of such educational institutions in respect of any or all
class or classes of students :
Provided that before issuing a notification under this subsection,
the draft of which shall be published in the Tamil Nadu
Government Gazette stating that any objection or suggestion
which may be received by the Government, within such period
as may be specified therein, shall be considered by them.
4
(2) No educational institution shall receive or collect any fee or
accept deposit in excess of the amount notified under subsection
(1).
(3) Every educational institution shall issue an official receipt
for the fee or deposit received or collected by it.”
4. After the judgment of this Court in Islamic Academy of Education
and another v. State of Karnataka and others2
, sub-section (2-A) was
added along with an Explanation in Section 4 of 1992 Act by the State
Legislature vide Tamil Nadu Educational Institutions (Prohibition of
Collection of Capitation Fee) Amendment Act, 2007. As a result of the
aforesaid insertion of sub-section (2-A) and Explanation, Section 4 of 1992
Act now reads as under:
“4. (1) Notwithstanding anything contained in any other law for
the time being in force, the Government may, by notification,
regulate the tuition fee or any other fee or deposit that may be
received or collected by any educational institution or class or
classes of such educational institutions in respect of any or all
class or classes of students :
Provided that before issuing a notification under this subsection,
the draft of which shall be published in the Tamil Nadu
Government Gazette stating that any objection or suggestion
which may be received by the Government, within such period
as may be specified therein, shall be considered by them.
(2) No educational institution shall receive or collect any fee or
accept deposit in excess of the amount notified under subsection
(1).
2
(2003) 6 SCC 697
5
(2-A) Notwithstanding anything contained in sub-section (1) or
sub-section (2), no educational institution imparting education
leading to a degree in medicine or engineering shall receive or
collect any fee in excess of the amount fixed by the ‘Committee
on fixation of fee’ constituted by the Government.
Explanation – For the purpose of this sub-section ‘Committee
on fixation of fee’ means the Committee constituted in
pursuance of the direction of the Supreme Court in Islamic
Academy of Education and another v. State of Karnataka and
others [(2002) 6 SCC 697].
(3) Every educational institution shall issue an official receipt
for the fee or deposit received or collected by it.”
5. The University, though originally established as a private University
had always received contributions and funding from the State Government.
But the University never adhered to the statutory provisions or the norms set
by the State Government or the University Grants Commission resulting in
financial losses during the years 2009-10 and 2010-11. Under the orders
passed by the Government of Tamil Nadu a Special Local Fund Audit Team
was appointed which found various irregularities, whereafter by another
order dated 14.12.2012 a High Level Committee was constituted to analyze
the audit report submitted by the Special Local Fund Audit Team. The
events which took place thereafter were summed up by the Single Judge in
the instant matters and the relevant observations in paragraphs 17 to 19 are
quoted hereunder:
6
“17. After examining the report and the supporting material,
this High Level Committee concluded that the Founder had
grossly abused the privileges conferred upon him and that
despite receiving grants from the State Government to the tune
of Rs.427.98 crores during the period from 1998-99 to 2012-13,
the University had landed up in serious financial crisis.
Therefore, the Committee recommended that the Government
shall issue necessary directions to the Senate and the Syndicate
and also to appoint some person to carry out those directions.
18. In pursuance of the aforesaid recommendations, the
Government issued a letter dated 7.3.2013 to the Vice
Chancellor, to convene the meeting of the Syndicate and
Senate, to respond to the report of the Special Local Fund Audit
Team. A special meeting of the Senate was held on 13.3.2013
and the meeting of the Syndicate was held on 14.3.2013. The
report of the Syndicate showed that by and large, the findings of
the Special Local Fund Audit Team were correct. Therefore,
the Government issued a directive on 26.3.2013 to convene a
special meeting of the Senate and the Syndicate. This was
opposed by the Vice-Chancellor by a reply dated 1.4.2013 on
the ground that a second meeting will serve no purpose.
19. Therefore, the Government, by G.O. Rt. No.1401, Public
Department dated 4.4.2013, appointed an Administrator in
exercise of the powers conferred by Section 28(4) of the
Annamalai University Act, 1928. ……. ”
6. In 2013, the State Legislature enacted the Annamalai University Act,
2013 (hereinafter referred to as “2013 Act”) which came into force w.e.f.
25.09.2013 and repealed the Annamalai University Act, 1928. Sections 3(1),
4(13) and 20(1)(m) and (ab) of said 2013 Act were as under:
“3(1) On and from the date of commencement of this Act, the
Annamalai University established under the Annamalai University
Act, 1928 shall be deemed to have been established and incorporated
7
under this Act and is hereby declared to be the University by the
aforesaid name.
4. The University shall have the following objects and powers,
namely:-
(1) to (12)…………………
(13) to fix fees and to demand and receive such fees as may be
prescribed;
“20. (1) The Syndicate shall have the following powers, namely:-
(a) to (l)……………….
 (m) to prescribe the fees to be charged for admission to the
examinations, degrees, titles and diplomas of the University and
for all or any of the purposes specified in section 4:
(n) to (z)(aa)…………….
(ab) to charge and collect such fees as may be prescribed;
(ac) to (an)……………”
7. 150 students who had taken admission in First MBBS Course in
Respondent No.2 College for the Academic Session 2013-14 preferred Writ
Petition No.20720 of 2014 in the High Court of Judicature at Madras
questioning fees of more than Rs.5.54 lakhs per annum imposed by the
University. Similar challenge was raised by students studying in Dental
Courses which petitions were heard and dealt with by the High Court along
with the main matter. It was urged by the petitioners that the fees fixed in
8
Government Colleges in the State were Rs.12,290/- for MBBS Course and
Rs.10,290/- for BDS Course; that the Committee on Fixation of Fee
constituted in terms of 1992 Act had fixed the tuition fees for MBBS Course
at Rs.2.30 lakhs for two self-financing colleges, Rs.2.60 lakhs for one selffinancing
college and Rs.2.80 for other self-financing colleges and that in so
far as ESI Medical Colleges were concerned, it had fixed the tuition fees at
Rs.24,000/-. Highlighting the enormous difference between the fees charged
by the University on one hand and the scale fixed by the Government as well
as the Committee on Fixation of Fee on the other, it was prayed that the
matter for fixation of fee be referred to the Committee in terms of 1992 Act.
8. While opposing the aforesaid submissions, it was contended on behalf
of the University that the fees stipulated by the University were in terms of
its statutes and the provisions of 2013 Act: that the object of 1992 Act was to
curtail the menace of self-financing colleges imposing high fees and that the
Government Colleges and State Universities did not come within the
purview of 1992 Act: that presently the University was running in deficit and
if the fee structure was reduced it would put the financial condition of the
University in great jeopardy.
9
9. The Single Judge of the High Court by his common Judgment and
Order dated 02.12.2014 dismissed the challenge raised by the petitioners. It
was observed that the petitioners having been admitted to MBBS and BDS
Courses in pursuance of the prospectus for the year 2013-14, were bound by
the terms and conditions contained therein and were therefore estopped from
raising any challenge. Reliance in that behalf was placed on the decision of
this Court in Cochin University of Science and Technology and another v.
Thomas P. John and others3
. The Single Judge then proceeded to consider
whether the provisions of 1992 Act would apply and get attracted in the
present case. After considering the definition of Educational Institution
under Section 2(e) of 1992 Act, he observed that for the purposes of
application of the provisions of 1992 Act, the concerned Institution must
have been notified by the State Government under the said 1992 Act. It was
further observed that the University was initially established in preindependence
days and merely because the earlier Act was repealed and
replaced by 2013 Act, the first limb of Section 2(b) would not apply without
the State Government referring the University to the Fee Fixation
Committee.
3
(2008) 8 SCC 82
10
10. The correctness of the decision of the Single Judge was questioned by
the students by filing Writ Appeal Nos.1637 and 1638 of 2014. Writ Petition
Nos.6909, 6910, 12515, 27098 and 31848 of 2015 and 14562, 22911 and
26388 of 2016 preferred by some of the students were also heard along with
said writ appeals by the Division Bench of the High Court. By its common
judgment and order dated 26.09.2016 the Division Bench rejected the
challenge and dismissed the appeals. The Division Bench affirmed the
reasoning which weighed with the Single Judge. It went on to observe that
the University was empowered under 2013 Act to fix, demand and receive
such fees as were prescribed.
11. These appeals by special leave question the correctness of the decision
rendered by the Division Bench of the High Court. Mr. Ranjit Kumar,
learned Senior Advocate while leading the arguments on behalf of the
petitioners, submitted that it was completely erroneous on part of the High
Court to observe that the provisions of 1992 Act would not apply in the
present case. He further submitted that on plain reading of its provisions,
1992 Act must apply and get attracted in the present case. These
submissions were countered by Mr. S. Nandakumar, learned Advocate who
appeared for the University. In his submission, the provisions of 1992 Act
11
would not get attracted without an appropriate reference having been made
by the State Government to the Fee Fixation Committee.
12. In the present case the Single Judge considered the definition of
Educational Institution as appearing in Section 2(e) of 1992 Act and came to
the conclusion that for the purposes of application of the provisions of 1992
Act the concerned institution ought to have been notified by the State
Government and an appropriate reference must be made to the Fee Fixation
Committee. This reasoning has been affirmed by the Division Bench. It is,
therefore crucial to consider the scope and ambit of the said provision. For
facility the definition of “educational institution” can be divided in two parts
as under:
Section 2(b) “educational institution” means:
(I) any institution by whatever name called, whether managed by any
person, private body, local authority, trust or University, carrying on
the activity of imparting education leading to a degree or diploma
(including a degree or diploma in law, medicine or engineering)
conferred by any University established under any law made by the
Legislature of the State of Tamil Nadu.
and
12
(II) any other educational institution or class or classes of educational
institutions (other than any educational institution established by the
Central Government or under any law made by Parliament) as the
Government may, by notification, specify.
According to (I) part, the activity must lead to award of degree or
diploma conferred by any University established under any law made by the
Legislature of the State. There is element of certainty about this first part of
definition and it is not left to the discretion of the Government in any
manner. If there is a course which leads to award of degree or diploma by
any University as specified, the concerned institution carrying on the activity
of imparting education would be an educational institution within the
meaning of said Section 2(b).
The definition has an inclusive provision which is specified in the (II)
part and empowers the Government to specify any other educational
institution or class or classes of educational institutions. Upon such
specification by notification, such institution or class or classes of
institutions would also stand covered by the definition. The (II) part also
contains a bracketed portion which is an exclusionary aspect of the
definition. This bracketed portion excludes any institution established by the
13
Central Government or under any law made by the Parliament with respect
to which the State Government cannot, even by exercising power of
specification include such institution.
13. The aforesaid analysis thus conclusively establishes that in so far as
cases covered under (I) Part are concerned, no specification by the
Government is required or necessary. If the concerned activity leads to
award of degree or diploma by any University established under any law
made by the State Legislature, such institution shall be “educational
institution” within the meaning of provisions of Section 2(b). The
specification by notification is a pre-requisite only if the institution
concerned is otherwise not covered under (I) Part. The High Court was
completely in error in observing that for the application by the provisions of
1992 Act an educational institution must always be specified by the
Government by notification. In our view, the requirement of specification of
notification is only in respect of “any other educational institution or class or
classes of educational institutions” and has not to be read with (I) part of
definition, which part of the definition is an independent and stand alone
provision and does not require any specification by the Government.
14
14. The next question which must be considered is whether University in
the present case answers the description in (I) Part of Section 3(b) of 1992
Act. According to Section 3(1) of 2013 Act, on and from the
commencement of said Act the University established under the Annamalai
University Act, 1928 shall be deemed to have been established and
incorporated under the provisions of 2013 Act. It is well settled that
whenever a Legislation deems, by way of legal fiction that a particular state
of affairs has to be assumed, that legal fiction has to be given full effect.
After quoting famous passage of Lord Asquith in East End Dwellings Co.
Ltd. v. Finsbury Borough Council4
, this Court in Gurupad Khandappa
Magdum v. Hirabai Khandappa Magdum and others5
 held that the legal
fiction engrafted in Explanation I to Section 6 of the Hindu Succession must
be given due and full effect. There is thus no escape from the situation that
the University in the present case is the one established under any law made
by the Legislature of the State of Tamil Nadu.
41952 AC 109, 132 =(1951) 2 All ER 587
“If you are bidden to treat an imaginary state of affairs as real, you must
also imagine as real the consequences and incidents which, if the putative state of
affairs had in fact existed, must inevitably have flowed from or accompanied it;
and if the statute says that you must imagine a certain state of affairs, it cannot be
interpreted to mean that having done so, you must cause or permit your
imagination to boggle when it comes to the inevitable corollaries of that state of
affairs.”
5
(1978) 3 SCC 383
15
15. In Islamic (supra), this Court directed constitution of two
Committees, namely, Fee Fixation Committee and Admissions Committee.
Paragraph 7 of the decision dealt with the concept of Fixation of Fee by the
Committee and said paragraph was as under:
“7. So far as the first question is concerned, in our view the
majority judgment is very clear. There can be no fixing of a
rigid fee structure by the Government. Each institute must have
the freedom to fix its own fee structure taking into
consideration the need to generate funds to run the institution
and to provide facilities necessary for the benefit of the
students. They must also be able to generate surplus which must
be used for the betterment and growth of that educational
institution. In paragraph 56 of the judgment it has been
categorically laid down that the decision on the fees to be
charged must necessarily be left to the private educational
institutions that do not seek and which are not dependent upon
any funds from the Government. Each institute will be entitled
to have its own fee structure. The fee structure for each institute
must be fixed keeping in mind the infrastructure and facilities
available, the investments made, salaries paid to the teachers
and staff, future plans for expansion and/or betterment of the
institution etc. Of course there can be no profiteering and
capitation fees cannot be charged. It thus needs to be
emphasized that as per the majority judgment imparting of
education is essentially charitable in nature. Thus the
surplus/profit that can be generated must be only for the
benefit/use of that educational institution. Profits/surplus cannot
be diverted for any other use or purpose and cannot be used for
personal gain or for any other business or enterprise. As, at
present, there are statutes/regulations which govern the fixation
of fees and as this Court has not yet considered the validity of
those statutes/regulations, we direct that in order to give effect
to the judgment in T.M.A. Pai case the respective State
Governments/concerned authority shall set up, in each State, a
committee headed by a retired High Court Judge who shall be
16
nominated by the Chief Justice of that State. The other member,
who shall be nominated by the Judge, should be a Chartered
Accountant of repute. A representative of the Medical Council
of India (in short “MCI”) or the All India Council for Technical
Education (in short “AICTE”), depending on the type of
institution, shall also be a member. The Secretary of the State
Government in charge of Medical Education or Technical
Education, as the case may be, shall be a member and Secretary
of the Committee. The Committee should be free to
nominate/co-opt another independent person of repute, so that
the total number of members of the Committee shall not exceed
five. Each educational institute must place before this
Committee, well in advance of the academic year, its proposed
fee structure. Along with the proposed fee structure all relevant
documents and books of accounts must also be produced before
the Committee for their scrutiny. The Committee shall then
decide whether the fees proposed by that institute are justified
and are not profiteering or charging capitation fee. The
Committee will be at liberty to approve the fee structure or to
propose some other fee which can be charged by the institute.
The fee fixed by the Committee shall be binding for a period of
three years, at the end of which period the institute would be at
liberty to apply for revision. Once fees are fixed by the
Committee, the institute cannot charge either directly or
indirectly any other amount over and above the amount fixed as
fees. If any other amount is charged, under any other head or
guise e.g. donations, the same would amount to charging of
capitation fee. The Governments/appropriate authorities should
consider framing appropriate regulations, if not already framed,
whereunder if it is found that an institution is charging
capitation fees or profiteering that institution can be
appropriately penalised and also face the prospect of losing its
recognition/affiliation.”
16. The directions issued in Islamic (supra) including one regarding
constitution of Fee Fixation Committee came up for consideration in P.A.
17
Inamdar and others v. State of Maharashtra and others6
 and the matter
was settled in following terms:
“151. On Question 4, our conclusion, therefore, is that the
judgment in Islamic Academy insofar as it evolves the scheme
of the two Committees, one each for admission and fee
structure, does not go beyond the law laid down in Pai
Foundation and earlier decisions of this Court, which have been
approved in that case. The challenge to setting up of the two
Committees in accordance with the decision in Islamic
Academy therefore, fails……….....”
17. But the situation in the present matter stands on a slightly different
footing inasmuch as by inserting sub-section (2-A) along with an
explanation in Section 4 in 1992 Act, Fee Fixation Committee is a statutory
mechanism in terms of said provisions of 1992 Act. Said Section 4 shows
that under sub-section (1) the Government is empowered to regulate the
tuition fee or any other fees or deposits in the manner prescribed therein.
But in relation to imparting of education leading to a degree in medicine or
engineering, sub-section (2-A) has been given an overriding effect by
incorporating non-obstante provision. Sub-section (2-A), unlike sub-section
(1), does not require any notification by the Government. If an institution
carries on activity of imparting education leading to a degree or diploma as
spoken of in sub-section (2-A) of said Section 4, the fee structure has to be
that which is fixed by the Committee. The legislative intent is very clear and
6
(2005) 6 SCC 537
18
no educational institution which comes within the scope of sub-section (2-A)
can receive or collect any fees in excess of the amount fixed by the
“Committee on Fixation of Fee”.
18. We now have to deal with the submission whether the University by
virtue of Section 4(13) and 20(1)(m) of 2013 Act could charge, collect and
receive tuition fee without the intervention of “Committee on Fixation of
Fee” as contemplated by Section 4(2-A) of 1992 Act. The University by its
very nature of activities would be running numerous courses and to that
extent provisions of 2013 Act are general in nature. The provisions of
Section 4(2-A) of 1992 Act are specific and special and apply to courses
leading to degrees in Medicine and Engineering. Therefore, insofar as
professional courses leading to degrees in Medicine and Engineering are
concerned, the matter must be screened and assessed by Committee on
Fixation of Fee and the submission that the University was entitled to fix
fees on its own without the intervention of such Committee has to be
rejected. The other submission that the students were estopped from raising
a challenge must also fail. If a particular modality is prescribed by the
Legislature any action in defiance or ignorance of such modality cannot be
protected or preserved on the plea of estoppel. The reliance placed on the
decision of this Court in Cochin University of Science and Technology
19
(supra) was also misplaced. In that case students who had taken admission
in NRI Quota, thereafter contended that their fee structure be slashed to the
same level as applicable to non NRI students. The concept of estoppel was
pressed into service while rejecting said submission but that cannot be a
ground to deny the express protection available under a legislation.
19. We, therefore, allow these appeals and set aside the judgments and
orders under appeal. We hold that the University was not entitled and
competent to devise its own fee structure in the present matter without
having the fee fixed by the Committee on Fixation of Fee as contemplated
under 1992 Act. The matters shall therefore have to be referred to said
Committee and the University is directed to place the entire material
including its balance-sheet and accounts before the Committee on Fixation
of Fee within two weeks from the date of this Judgment. The Committee
shall thereafter bestow attention and fix appropriate fee structure for the
academic year 2013-14 onwards. It goes without saying that if the fee
structure fixed by the University is found by the Committee to be
inappropriate, consequential benefit and advantage shall be given to each
and every student. The Committee shall fix the appropriate fee structure for
the current academic Session 2018-19 as well. The entire exercise shall be
completed by 31.08.2018.
20
20. These appeals stand allowed in aforesaid terms. No costs.
……………..…………J.
(Arun Mishra)

………………..………J.
(Uday Umesh Lalit)
New Delhi,
July 13, 2018

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