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Najiya Neermunda & Anr. Etc. v. Kunhitharuvai Memorial Charitable Trust & Ors. Etc.

Civil Appeal · 2021 INSC 119Decided 25 Feb 2021
Civil Appeal Nos. 606-616 of 2021
Justice L. Nageswara Rao · Justice S. Ravindra Bhat

Background

Under Kerala's 2017 law regulating private medical education, an Admission and Fee Regulatory Committee is empowered to scrutinize and finalize the fees private self-financing medical colleges can charge MBBS students, to prevent profiteering or capitation fees. After rounds of litigation, the Kerala High Court found that the Committee had not genuinely reconsidered the colleges' fee proposals afresh (as earlier directed) and had instead simply repeated its old fee figures, so it sent the matter back to the Committee again, but this time also restricted the Committee to relying only on the colleges' audited balance sheets (or provisional accounts, if audited ones were unavailable). Students and the State of Kerala appealed this High Court order to the Supreme Court.

Decision Breakdown

The Supreme Court agreed with the High Court that the Committee had failed to properly reconsider the fee proposals on remand and must now do so genuinely, giving colleges a fair hearing and taking their proposed figures into account under Section 11 of the 2017 Act. However, it held that the High Court went too far by restricting the Committee to only audited balance sheets/provisional accounts: such a procedural straitjacket was not justified, since the Committee's power to scrutinize and regulate fee proposals under Section 11 should operate without artificial fetters on what material it may consider. The Court directed the Committee to complete the entire fee-fixation exercise for 2017-18 onward within three months, applying the settled principles from earlier precedents like P.A. Inamdar and Modern Dental College on non-exploitative, non-profiteering fee regulation.

Lesson Learnt

Private professional institutions have autonomy to propose their own fees, but that autonomy is always subject to oversight by a statutory regulator ensuring the fee is reasonable and non-exploitative, while courts can direct such regulators to redo a flawed exercise, they should avoid imposing rigid procedural restrictions that go beyond the statute and hamper the regulator's own judgment.

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

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