Case Note & Summary
The petitioner, Foundation for Organizational Research and Education Fore School of Management, a registered educational institution, applied to AICTE on 15 March 2016 for extension of approval and increase in seats. AICTE granted extension for existing seats on 25 April 2016 but did not respond to the request for increase. After correspondence, AICTE rejected the increase request on 22 June 2016. Despite this, the institution admitted 51 students beyond the sanctioned intake of 240, later reduced to 42 excess students. The institution filed a writ petition challenging the rejection and seeking protection for the admitted students. The Supreme Court, while noting that the institution had deposited Rs. 4 crore as directed, examined the penalty imposed by AICTE of Rs. 23.10 crore (five times the fees of Rs. 11 lakh per student for 42 students). The Court held that the institution's action in admitting students without approval was illegal and contrary to law. It found that the penalty was correctly calculated as per the AICTE Approval Process Handbook, which mandates a penalty of five times the fees collected per excess student, and that AICTE had no discretion to impose a lesser penalty. The Court directed that the deposited amount be adjusted and the balance of Rs. 19.10 crore be paid within 8 weeks. It also ordered that degrees be awarded to the affected students to prevent them from suffering.
Headnote
A) Education Law - Excess Admissions - Penalty - AICTE Approval Process Handbook, 2016-2017, Chapter IV, Clause 3.1 - Institution admitted 42 students beyond sanctioned intake without approval - AICTE imposed penalty of five times fees collected per student - Held that institution cannot take law into its own hands and must approach court for relief; penalty is mandatory and AICTE has no discretion to reduce it (Paras 7-10). B) Education Law - Protection of Students - Degrees - Institution admitted students in excess of sanctioned seats - Court directed that degrees be awarded to students who completed course to prevent them from suffering due to institution's illegal action (Para 11).
Issue of Consideration
Whether the penalty imposed by AICTE on the petitioner for excess admissions is proper and whether the students who were admitted beyond sanctioned seats should be allowed to continue and awarded degrees.
Final Decision
The Supreme Court upheld the penalty of Rs. 23.10 crore imposed by AICTE, directed adjustment of Rs. 4 crore already deposited, and ordered payment of balance Rs. 19.10 crore within 8 weeks. It also directed that degrees be awarded to the students who completed the course. The writ petition was disposed of.
Law Points
- Educational institutions cannot admit students beyond sanctioned intake without prior approval
- AICTE has discretion to impose multiple penalties for excess admissions
- Penalty for excess admission is five times the total fees collected per student
- Students should not suffer for institution's illegal actions
