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