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Foundation for Organizational Research and Education Fore School of Management v. The All India Council for Technical Education

Writ Petition (Civil) · 2019 INSC 695Decided 21 Jun 2019
Writ Petition (Civil) No. 581 of 2016
Justice Deepak Gupta · Justice Surya Kant

Background

A management institute applied to AICTE (the technical education regulator) for an increase in seats, but before getting any approval for the increase, went ahead and admitted far more students than its sanctioned intake of 240: ultimately 372 students instead of 240. AICTE rejected the seat-increase request and later imposed a financial penalty of about Rs. 23.1 crore for the 42 students admitted in excess of what the Supreme Court itself had earlier permitted during the case's pendency. The institute challenged both the rejection and the penalty.

Decision Breakdown

The Court held that regardless of whether AICTE had delayed or acted unfairly in processing the seat-increase request, the institute had no right to unilaterally admit students beyond its sanctioned strength: its proper course was to seek court relief, not take matters into its own hands. It upheld the penalty, finding it was correctly calculated under AICTE's own Approval Process Handbook (five times the fees collected per excess student), and noted AICTE had actually been lenient by imposing only one of several permissible penalties. However, to protect the students themselves, who were not at fault, the Court declined to cancel their admissions and directed that their degrees be awarded, while ordering the institute to pay the balance penalty after adjusting the Rs. 4 crore already deposited with the Court.

Lesson Learnt

An institution cannot bypass regulatory limits by admitting students first and arguing later, but courts will try to shield innocent students from an institution's own illegal conduct, placing the financial consequences on the wrongdoing institution instead.

Official source (sci.gov.in)View Judgment (PDF)

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