In this case, a writ petition (PIL) was filed by the Petitioner, an advocate by profession, Mr. Deepesh Singh Beniwal. Further, the main grievance raised in the petition was that all the private medical institutions in the State of Rajasthan at the time of admission in MBBS Course were insisting upon the students and/or their parents to submit bank guarantee against the fees for the next 3½ years of the course duration. But the submission of the bond/undertaking does not stand on the same footing as submission of the bank guarantee since, generally, no bank guarantee was provided by the banks unless the adequate amount was deposited with the banks and thus, the students belonging to middle-class families/low-income groups were facing grave hardship at the hands of private medical institutions. Further, some prominent cases were also referred to. Moreover, it was submitted that the educational institution could only charge prescribed fees for one semester/year and even if an institution feels that any particular student may leave in midstream, then at the highest, it may require to give a bond/bank guarantee with the balance fees for the whole course would be received by the Institute even if the student left in the midstream. The grievance of the Petitioner was that out of these two modes i.e., bond and a bank guarantee provided for as aforesaid, the Respondents were invariably insisting on furnishing of bank guarantee only, which was arbitrary and unfair.
Mr Deepesh Singh Beniwal, the Petitioner, contended that a constitutional Bench of the Hon’ble Supreme Court in Islamic Academy(supra), while dealing with the question ‘whether the educational institutions are entitled to fix their own fee structure’, categorically held that in educational institutions, there can be no profiteering motive and capitation fee cannot be charged. And thus, the institution cannot charge either directly or indirectly any other amount over and above the amount fixed as fees and if any amount was charged under any other head or guise e.g. donations, the same would amount to charging capitation fees. Also, 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. Moreover, the Respondent institutions cannot insist upon the furnishing of bank guarantee only and not the bond. Further, the Petitioner submitted that where the parents of the students were not in a position to furnish the bank guarantee, the Respondent institutions in addition to the annual tuition fee for the first year of the MBBS Course were charging advance fee from the students for one more year, which was apparently, violative of the directions issued by the Supreme Court. The Petitioner submitted that the advance fee charged was also not kept in a separate account and the interest accrued thereon was neither adjusted against the annual fee payable by the students for the subsequent years nor returned to them at the end of the course and thus, the Respondent institutions were indulged in profiteering and charging capitation fee in defiance of the directions issued by the Hon’ble Supreme Court.
Further, some prominent cases were also referred to. It was submitted that as laid down by the Supreme Court in the Islamic Academy case, charging the fee by any institution other than the fee prescribed by the appropriate committee entailed a penalty 10 to 15 times of the amount so collected and such institution may also lose its recognition or affiliation.
The Petitioner submitted that ordinarily, the management should insist on a bond from the concerned student and not the bank guarantee. Furthermore, the Petitioner Mr Deepesh Beniwal submitted that it was incorrect to state that the Petitioner had claimed relief only against the private medical institutions. Referring to the relief clause in the petition, it was submitted that the prayer was made against the colleges run by the State as well. According to the Petitioner, the strict rule of locus standi was not applicable in PIL. Furthermore, It was submitted that the material facts were not even disputed by the Respondent institutions. And there was no reason as to why the issues raised by the Petitioner out of public spirit espousing the cause of the students admitted to MBBS Course should not be entertained and adjudicated upon by this Court. Reliance was placed in this regard on some prominent decisions of the Supreme Court.
Firstly, the Court observed the preliminary objection raised against the maintainability of this PIL filed by the Petitioner, an advocate by profession, espousing the cause of students who intend to pursue the medical course. In this regard, the Court stated that the strict rule of locus standi does not apply to PILs. Further, Reliance was made on some prominent decisions.
It was noticed that in the instant case, there was nothing on record suggesting that the Petitioner, an advocate by profession, had filed the present petition identifying himself with the interest of his clients. Moreover, merely because the Petitioner was an advocate by profession, it cannot be assumed that he must have filed the present petition espousing the cause of his clients and not for the protection of the larger interest of students intending to pursue the studies of medical courses. Instead, the Petitioner had only sought implementation of the directions issued by the Hon’ble Supreme Court. Thus, on the facts and in the circumstances of the case, the Court was not inclined to nonsuit the petitioner on the ground of locus standi to maintain the PIL petition espousing the cause of the student community intending to pursue the medical courses in the State of Rajasthan. Accordingly, the preliminary objection raised questioning the maintainability of the writ petition was rejected.
Further, the Court observed the history of some judicial pronouncements of the Hon’ble Supreme Court ( namely Islamic Academy’s case, Mohini Jain (Miss) vs. State of Karnataka & Ors.) germane to the issues raised in the present case. In the first instance, the issue regarding charging of capitation fee was taken up. By referring to various decisions, the Court noted that previously it was decided that the ‘right to education’ was concomitant to the fundamental rights enshrined under Part III of the Constitution and it flows directly from ‘Right to life’ enshrined under Article 21 of the Constitution. Besides this, every citizen has a “right to education” under the Constitution. The State was under an obligation to establish educational institutions to enable the citizens to enjoy the said right. The State may discharge its obligation through state-owned or state-recognised educational institutions. When the State Government grants recognition to the private educational institutions it creates an agency to fulfil its obligation under the Constitution. The students were given admission to the educational institutions-whether state-owned or state-recognised- in recognition of their “right to education” under the Constitution. Charging capitation fee in consideration of admission to educational institutions, was a patent denial of a citizen’s right to education under the Constitution. Therefore, in the instant case also the Court declared that charging a capitation fee by the private educational institutions as a consideration for admission wholly illegal and not permissible. Further, some more prominent cases were referred to, namely, Unni Krishnan J.P. & Ors. vs. State of Andhra Pradesh & Ors, Mohini Jain’s case, T.M.A. Pai Foundation’s case, Islamic Academy case, P.A.Inamdar’s case, and Modern Dental College’s case.
The Court further observed that insisting upon the students who were otherwise eligible to be admitted to the course being meritorious but were not in a position to arrange the requisite funds to procure a bank guarantee towards the fees for the entire course duration would be unjustified. Moreover, the Court noted that the banks were usually discouraged from giving an unsecured guarantee. Thus, bank guarantees were obtained only on furnishing collateral security or fixed deposits, which may not be possible for every student.
Furthermore, it was observed that insistence for furnishing bank guarantee towards the fee for the entire duration of the course upon every student, merely because some of the students may leave the course in midstream, appears to be unreasonable and unfair. Moreover, generally, there is no student who had already deposited the huge fee for one year and pursued the studies would leave the course in midstream.
Based on the above-mentioned observations, the action of the Respondent private institutions and the medical/dental institutions run by the State Government in levying an advance fee in addition to the annual fee for one year from the students admitted to the medical courses and insisting upon every student to submit the bank guarantee at the time of admission equivalent to the fee for 3½ years of course duration was declared illegal. Therefore, the Respondent private institutions and the institutions run by the State Government were restrained from recovering any amount as advance fee in addition to the fee for one year from any student admitted to the course. Also, the Respondent private institutions and the State Government were directed not to insist upon the furnishing of bank guarantee towards the fee for the entire duration of the course from every student. And the advance fee in addition to the fee for one year already recovered by any of the private institutions from the students admitted to the medical courses shall be kept in a fixed deposit in a nationalized bank against which no loan or advance may be granted. Besides, the advance fee deposited as aforesaid shall carry interest at the rate equivalent to the rate of interest admissible on fixed deposit by the nationalized bank. The interest already accrued and the future interest on the amount of advance fee shall be paid to the students from whom the advance fees were collected at the time of admission. The State Government was directed to ensure the compliance of the directions issued by this Court as aforesaid.
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