REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 581 OF 2016

FOUNDATION FOR ORGANIZATIONAL RESEARCH  AND EDUCATION FORE SCHOOL OF  MANAGEMENT THROUGH ITS DIRECTOR   …PETITIONER(S)

Versus

THE ALL INDIA COUNCIL FOR TECHNICAL  EDUCATION THROUGH THE  MEMBER SECRETARY                …RESPONDENT(S)

J U D G M E N T

Deepak Gupta, J.

1. The petitioner, Foundation for Organizational Research and

Education Fore School of Management is a registered educational

institution running courses in  management.  On  15th  March,

2016, the petitioner applied to the respondent, the All India

Council for Technical Education (for short ‘the AICTE’) for

extension of approval of existing seats and for increase in seats in

certain courses.   On 25th  April, 2016, the AICTE granted

extension of approval to the petitioner for existing seats in the

existing courses.   However, in this communication nothing was

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written with regard to the prayer for increase in seats.

Correspondence was exchanged between the parties but finally

on 22nd  June, 2016, the AICTE rejected the request of the

petitioner.   

2. The petitioner, despite having no permission for increase in

seats, admittedly granted permission to students in excess of the

seats.   Therefore, the petitioner filed a writ petition before this

Court for quashing of the letter dated 22nd June, 2016 and also

prayed that the petitioner be permitted to continue  with the

session which had commenced on 6th July, 2016 for the current

academic  year  without jeopardizing the  career  of the  students

who had already been admitted.  When the matter was taken up

by this Court on 25th  July, 2016, the petitioner institution was

directed to deposit  Rs.  2,00,00,000/­  (Rupees Two Crore only)

and it was noticed that the petitioner had admitted 51 students

in the meantime.   Thereafter, on 6th  September, 2016 another

order was passed in which it was recorded that a sum of

Rs.2,00,00,000/­ (Rupees Two Crore only) in terms of the order

dated 25th July, 2016 had been deposited and it was also noticed

that admission of 51 students who had been admitted beyond the

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sanctioned number of  seats had been axed without giving any

explanation.  We may also note that in  the order  it  has been

recorded as follows:

“Mr. Khurshid, learned senior counsel, conceded that the sanction strength is 240, but 372 students were admitted; but the Institution had reasons to do so, for the A.I.C.T.E. did not proceed with the approval within the stipulated framework of time and further the Institution had been experiencing that the students after taking admission, leave the Institution.”

Thereafter, the Court issued the following directions:

(a)“A.I.C.T.E. shall verify  who  are the  students  eligible under the norms regard being had to the concept of merit, to continue in the petitioner­Institution. (b)The Inspection Team of A.I.C.T.E. shall carry out another inspection to find out as to whether the Institution has removed the deficiencies that were pointed out by the inspecting authority. (c) The petitioner­Institution shall cooperate with the Inspection Team. (d)The petitioner­Institution shall deposit a further sum of Rs. 2 crores before the Registry of this Court within four weeks hence.”

3. The petitioner deposited another sum of Rs.2,00,00,000/­

(Rupees Two Crore only) pursuant to the said direction.

Therefore, Rs.4,00,00,000/­ (Rupees Four Crore only) stands

deposited in this  Court.   The inspection report  was received,

according to  which  the  deficiencies earlier  pointed  out  by the

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AICTE had been removed but the inspection committee pointed

out certain other deficiencies.    

4. During the pendency of the petition, the AICTE issued

notice to the petitioner as to why a penalty should not be

imposed upon it.  After considering the reply of the petitioner, the

AICTE imposed a penalty of Rs.23,10,00,000/­ (Rupees Twenty

Three Crore Ten Lakhs only) towards the excess admission made

of 42 number of students.  The petitioner has not cared to amend

the writ petition to challenge the order imposing penalty but has

filed an application being I.A. No.8 in this regard.   Though this

may not be technically correct, we are examining this issue also.

5. Mr. Shekhar Naphade, learned senior counsel for the

petitioner has drawn our attention to the various

communications exchanged between the parties and submits

that inaction of the AICTE in not responding to the request of the

petitioner for increase in seats was itself an arbitrary action and

the reasons given for not permitting increase in the intake in the

courses  was  totally illegal.  Mr.  Naphade also  argued  that  an

affidavit had been submitted clearly setting out that all the

deficiencies  would  be removed  before the session  commences.

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Mr. Naphade  further urged that the penalty  imposed  is highly

excessive and arbitrary.  He further submits that when the Court

is seized of the matter, penalty should not have been imposed.

6. On the other hand, Mr. Harish Pandey, learned counsel for

the respondent submits that the AICTE had zero deficiency policy

especially with regard to the students who have come from

abroad.  According to the AICTE, statutory committees were not

set up by the last date, as provided in the case of Parshvanath

Charitable Trust v. AICTE1 and therefore, the petitioner’s case

was rejected.   Mr. Pandey further submits that the penalty has

been imposed strictly  in accordance with the Approval  Process

Handbook (2016­2017) of the AICTE.  

7. We are not going into the submissions made by Mr.

Naphade that the  AICTE delayed  the  grant  of  permission and

acted arbitrarily.  Even assuming that the decision of the AICTE

was  not  correct, the  petitioner institution had no  business to

admit students beyond the number permitted by the AICTE.  In

case the petitioner institution felt that the AICTE was delaying

the  matter  or  was not  acting  fairly, the  proper  course for the

petitioner  was to  have  approached this  Court and  prayed for 1 (2013) 3 SCC 385

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appropriate relief.   The petitioner could not take the law into its

own hand and grant admission to students in excess of the seats

permitted by  the AICTE.   Therefore,  we have no doubt  in our

mind that the action of the petitioner in granting admission to

the students beyond the seats sanctioned  is  totally  illegal  and

contrary to law.   

8. Time and again, this Court has noticed that the educational

institutions admit students beyond the numbers permitted

putting the future of the students at stake.  In the present case,

we are not setting aside the admission of the students because

that action would be too harsh upon the students who should

not suffer for the totally illegal action of the petitioner institution.

9. This brings the question as to whether the penalty imposed

is proper or not.   The Approval Process Handbook (2016­2017) of

the AICTE itself provides the penalties in case excess admissions

are carried out.   Chapter IV deals with Actions in case of

Violation of Regulations.   Clause 3.1 of Chapter IV of this

handbook reads as follows:

“3. Excess admissions

3.1 Excess admissions over the sanctioned intake shall not be allowed under any circumstances.   In case any excess

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admission is reported to/noted by the Council, appropriate penal action will be initiated against the Institution.   The Institution shall be liable to following punitive action from any one or more of the following by the Council.

 Penalty for excess admission amounting to five times the total fees collected per student shall be levied against each excess admission

 Suspension of approval for supernumerary seats for one academic year

 Reduction in sanctioned intake  No admission status in one/more courses for one

academic year  Withdrawal of approval for Program/course  Withdrawal of approval of the Institution”

10. The AICTE can  impose any one or  more of the aforesaid

prescribed penalties.   In this case, the AICTE has only imposed

the financial penalty which is the first penalty prescribed.   It is

the admitted case of the petitioner that it was charging

Rs.11,00,000/­ as fees for the entire course from each student.

In terms of Clause 3.1 of Chapter IV of Approval Process

Handbook, 5 times penalty for each student works out to

Rs.55,00,000/­ and for 42 students it works out to

Rs.23,10,00,000/­, which is the penalty imposed by the AICTE.

The AICTE has no discretion to award a lesser penalty and, in

fact, the petitioner has been let off lightly since only one penalty

has been imposed whereas the AICTE could have imposed more

than one penalty prescribed.  However, we make it clear that the

amount of Rs.4,00,00,000/­, which is deposited, shall be

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adjusted  towards  the  penalty  and  the  petitioner is  directed  to

deposit the balance amount of Rs.19,10,00,000/­ with the AICTE

within 8 weeks from today failing which AICTE shall be at liberty

to take appropriate action in accordance with law.

11. Having held thus we are also of the considered view that the

students who had paid large sums of money should not be made

to suffer.   They have already completed the course but the

degrees have not been awarded to them.   We, therefore, direct

that the degrees be awarded to the said students.

12. The writ petition is disposed of in the aforesaid terms.   All

pending application(s) also stand disposed of.   

…………………………J. (Deepak Gupta)

…………………………J. (Surya Kant)

New Delhi June 21, 2019

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