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2021 (5) TMI 1046 - HC - Indian LawsValidity of condition imposed by the respondents private medical institutions that the students seeking admission to MBBS Course to submit bank guarantee against the annual fees for next 3½ years of course duration in addition to deposit of annual fee for the first year of the course, at the time of admission - petitioner is an advocate by profession - interest of petitioner in the present case - HELD THAT:- The education is essentially a charitable activity, which cannot be regarded as profession, trade or business rather, it will fall within the meaning of expression "occupation" under Article 19(1)(g) of the Constitution of India. 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. In establishment of the education institutions, there cannot be a profiteering motive but it is permissible for such institution to generate a reasonable revenue surplus for the purpose of development of education and expansion of the institution - There is autonomy with the institution in fixing the fee structure but it has to be rational and there cannot be any profiteering motive and no capitation fee could be charged. Until the suitable legislation or regulation framed by the State, the fee structure in various institutions shall be determined by the Committee separately having regard to relevant factor and the management is not entitled to charge anything more. It is permissible for the institutions to charge fee only for one year in accordance with the rules and not the fee for the entire course. As laid down in Islamic Academy [2003 (8) TMI 469 - SUPREME COURT], if an educational institution feels that any particular student may leave in midstream then at the highest it may require that student to give bond/bank guarantee that the balance fee for the whole course would be received by the institution if the student left in midstream, however, in such situation, ordinarily, the management should insist a bond from the concerned student and thus, the management of the educational institution cannot insist upon each and every student to furnish a bank guarantee as a matter of course and the advance fee cannot be charged in addition to annual fee for more than one year. It is pertinent to note that the factum of the respondent private medical institutions insisting upon each and every student admitted to the professional course to deposit the fee for one year and to furnish bank guarantee towards the fee for remaining duration of the course, is not even disputed before this Court. Rather, some of the institutions have even admitted that in addition to the fee for one year, the advance fee is being accepted generally for one more year, which is not kept in separate account and the interest accrued thereon is also not credited to the fee account of the concerned student or refunded to him at the time of completion of the course - the respondent private educational institutions imparting medical education, inherently with a charitable purpose, must always take care of the students belonging to lower echelons of the society or to a middle income group admitted to the medical courses on being found meritorious and must ensure that they are not deprived from pursuing the medical course merely on account of their inability to deposit advance fee in addition to the annual fee for one year or the bank guarantee for remaining 3½ years duration of the medical course. Insisting upon the students who are otherwise eligible to be admitted to the course being meritorious but are not in position to arrange the requisite funds to procure a bank guarantee towards the fees for entire course duration would be absolutely unjustified - the directions issued by the Hon'ble Supreme Court in Islamic Academy are quite unequivocal that if an institution feels that any particular student may leave in midstream then, at the highest, it may require that student to give a bond/bank guarantee that the balance fees for the whole course would be received by the institute even if the student left in midstream. The fee structure determined by the 'Fee Fixation Committee' constituted by the respondent University in supersession of fee structure already proposed by the 'Fee Regulatory Committee' constituted by the State of Rajasthan pursuant to the directions of the Supreme Court was held not sustainable in the eyes of law. Petition allowed.
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