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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)

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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

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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 sub- section, 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.

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(2) No educational institution shall receive or collect any fee or accept  deposit  in  excess  of  the  amount  notified  under  sub- section (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 sub- section, 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  sub- section (1).

2(2003) 6 SCC 697

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(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:

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“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

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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

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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 self-

financing 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.

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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  pre-

independence  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

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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

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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

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(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

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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.

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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

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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

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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.

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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

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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

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(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.

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20. These appeals stand allowed in aforesaid terms.  No costs.

……………..…………J. (Arun Mishra)

                                              ………………..………J. (Uday Umesh Lalit)

New Delhi, July 13, 2018