New DelhiFrom exorbitant fee hikes to ‘donations’ for admission, three judgments of the Supreme Court and High Courts in the last few months have taken a strong stand against educational institutions profiting from the “business of education”.
In the most recent instance, the Supreme Court said on 7 November that tuition fees should always be “affordable” and that education is “not a profit-making business”.
did this while observing rejected A 2021 petition filed by a private medical college against a judgment of the Andhra Pradesh High Court, which had quashed the state government’s order to increase the annual fees to be paid by MBBS students in the state to Rs 24 lakh per annum.
Under its order passed in 2017, the Andhra Pradesh government “unilaterally” increased MBBS fees by seven times at the request of private medical colleges, the judgment said.
The apex court’s decision is a repetition of its landmark 2002 TMA Pie Decision, In that judgment, the SC upheld the autonomy of private institutions in issues of management and administration, including deciding on fees, but held that education cannot be a “business”.
,[The] Management should have maximum autonomy with respect to administration [of unaided private institution]In 2002, the Supreme Court said, “The fees charged by unaided institutions, including the right of appointment, disciplinary powers, admission of students and fees to be charged,” cannot be regulated, but any institution subject to capitation Should not be charged.
Last month, the Supreme Court in another important decisionsThe judgment was against “profit-oriented” educational institutions that sought exemption from paying income tax by projecting themselves as “charitable institutions”.
The top court had said that charitable educational institutions can claim such exemption only if they are solely concerned with education or activities related to education and are not engaged in any commercial or profit-making activities.
Meanwhile, the Madras High Court has called the collection of capitation fees – essentially any amount collected in excess of the prescribed fee, as ‘donation’ – illegal and punishable.
one in 124 page judgment Dated October 31, the HC had expressed regret over the commercialization of education and said that the desire of parents to spend beyond their means to “fulfill their dreams through their children” has made certain educational institutions ” Have inspired to transform service, which was once known and worshiped to be a great business into money making opportunity”.
The court also noted that such practices continued despite various directions including from the SC.
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‘No trade, no trade, no commerce’
In 2017, the Andhra government increased tuition fees for private medical colleges to Rs 24 lakh per year, almost seven times the fees notified for 2011-12 to 2013-14.
This month’s Supreme Court judgement, upholding the Andhra High Court order setting aside the fee hike, clearly stated that education is not a profit-making business and tuition fees should be affordable.
The SC said the state government’s decision to increase tuition fee for private medical colleges on the basis of the latter’s representation was “wholly unjustified and arbitrary”. It added that the decision was made only with a view to “favour or oblige” the colleges.
As per the decision, the state government had issued the order without waiting for the recommendations of the Admission and Fee Regulatory Committee, as Andhra Pradesh Admission and Fee Regulatory Committee (for professional courses offered in private unaided professional institutions) Mandatory under Rule 4 of the Rules, 2006.
Last month, another Supreme Court bench comprised former Chief Justice UU Lalit and Justices S Ravindra Bhat and PS Narasimha. emphasis on That the constitution considers education equal to charity.
“Our Constitution reflects a value which equates education to charity. It is neither to be treated as business, nor trade nor commerce, declared by the pronouncement of this Court.
The apex court was interpreting Section 10(23C) of the Income Tax Act, which exempts from taxation any income received on behalf of a university or other educational institution, which exists solely for educational purposes and not for profit. for purposes. , In its judgment, it said that for-profit educational trusts cannot claim exemption from income tax.
The ‘threat’ of capitation fees
The Madras High Court in a judgment last month addressed the issue of donations or capitation fees in lieu of getting admission in colleges, declaring them illegal and punishable.
“Any amount collected in excess of the prescribed fee, directly or indirectly, is treated as capitation fee, irrespective of whether it is a voluntary contribution or donation,” it noted.
The court noted that the state had failed to comply with the “directives contained in the Constitution” to strive for education for all and to provide equal opportunities to all sections of society.
The HC further said that despite the “dictatorship” of various courts, including the SC, on the matter, “the menace of capitation fees cannot be curtailed, forget abolished”.
The court cited the poor reputation of government schools as one of the reasons, stating that “parents are reluctant to send their children to public schools, unlike in other countries.” It said that 78.6 per cent colleges are privately managed, citing the Education Ministry’s All India Survey on Higher Education report for the year 2019-20.
Associating privatization of education with “exploitation” and “commercialisation” by the private sector, it said the state could not remain a “silent spectator”.
,[It is]]beyond any doubt that education can never be a commercial activity or trade or business and those in the field of education have to consistently and consistently adhere to this guiding principle,” the court said.
The Madras HC order also cited a Supreme Court observation 2020 Christian Medical College CaseWherein it reinforced that the activity of education is neither business nor profession, which means “commercialization and profiteering cannot be allowed”.
Echoing this, the Madras HC said that education was a “welfare activity” aimed at bringing about “social transformation” and could not be treated as a purely economic enterprise. Therefore, the court said, it was “open to impose reasonable restrictions in the interest of the general public”.
(Edited by Poulomi Banerjee)
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