SC: Educational institutions cannot demand capitation fee

Sending strong warning to educational institutions in the country against demanding capitation fee/donation from admission seekers, the Supreme Court today once again reminded the state as well as the private unaided educational institutions that they can not charge or demand capitation fee from the admission seekers or their families.

A Vacation bench comprising Justices Markandey Katju and Deepak Verma held that absolute autonomy cannot be granted to private unaided educational institutions. At the same time, they said it can not be left to the unilateral decision of the state government to say that the private institutions have failed to meet the triple test mentioned in Inamdar’s case, because that will be giving unbridled, absolute and unchecked power to the state government.

The Judges further said in the order, " In our prima facie opinion, the Madhya Pradesh Niji Vyavsayik Shikshan Sansthan (Pravesh Ka Viniyaman Awan Shulk Ka Nirdharan) Adhiniyam 2007, appears to have handed over the entire selection process to the state government or the agencies appointed by the state government for undergraduate, graduate and post-graduate, medical/dental colleges and fee fixation.

This in our prima facie opinion, is contrary to and inconsistent with the observation made by the 11 judge bench decision of this court in TMA Pai’s case and hence the 2007 act would become unconstitutional if it is read literally." The apex court also said “capitation fee is prohibited, both to the state government as well as the private institutions." The important observations were made by the top court of the country while directing that 15 per cent fees will be reserved for NRI’s in professional colleges in Madhya Pradesh and out of remaining 85 per cent, state government and private unaided educational institutions, will be allowed to make admissions to 42 per cent and 43 per cent seats respectively.

The apex court also noted that to run an educational institution is fundamental right guaranteed under Article 19(1)(g) of the constitution of India and, therefore, some amount of autonomy must be granted to private unaided institutions because they have to generate their own funds and hence must be given more autonomy as compared to the aided institutions, to enable them to generate these funds.