Supreme Court of India
FOUNDATION FOR ORGANIZATIONAL RESEARCH AND EDUCATION FORE SCHOOL OF MANAGEMENT THROUGH ITS DIRECTOR versus THE ALL INDIA COUNCIL FOR TECHNICAL EDUCATION THROUGH THE MEMBER SECRETARY on 21 June 2019
FOUNDATION FOR ORGANIZATIONAL RESEARCH ANDEDUCATION FORE SCHOOL OF MANAGEMENT THROUGHITS DIRECTOR
v.
THE ALL INDIA COUNCIL FOR TECHNICAL EDUCATIONTHROUGH THE MEMBER SECRETARY
(Writ Petition (Civil) No. 581 of 2016)
JUNE 21, 2019
[DEEPAK GUPTA AND SURYA KANT. JJ.]
Education/Educational Institution:
Admission – Management course – Application by institutionseeking extention of approval of existing seats and for increase inseats – All India Council for Technical Education (AICTE) grantedextention while did not communicate anything about increase inseats – After exchange of correspondence between the parties,AICTE rejected the prayer for increase in seats – In the meantime,the institution had already admitted students in excess of the seats –Institution filed writ petition challenging order of AICTE rejectingincrease in seats – During pendency of the petition AICTE imposedpenalty of Rs. 23 crores for admission of 42 students in excess ofthe permissible seats – Held: Action of the institution in grantingadmission to the students beyond sanctioned seats was illegal andcontrary to law – AICTE is empowered to impose the penalties forexcess admission, as prescribed in Approval Process Handbook(2016– 2017) of AICTE – Penalty being only financial penalty israther very light penalty and hence not unjustified – However,admission of students are not set aside.
Disposing of the appeal, the Court
HELD : 1. The action of the petitioner in granting admissionto the students beyond the seats sanctioned, is totally illegal andcontrary to law. Even assuming that the decision of the AICTEwas not correct, the petitioner institution had no business to admitstudents beyond the number permitted by the AICTE. In casethe petitioner institution felt that the AICTE was delaying thematter or was not acting fairly, the proper course for the petitioner
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Awas to have approached this Court and prayed for appropriaterelief. The petitioner could not take the law into its own handand grant admission to students in excess of the seats permittedby the AICTE. The admission of the students are not set asidebecause that action would be too harsh upon the students whoshould not suffer for the totally illegal action of the petitionerBinstitution. [Paras 7 and 8] [791-D-G]
2. The Approval Process Handbook (2016-2017) of theAICTE provides the penalties in case excess admissions arecarried out. The AICTE can impose any one or more of theprescribed penalties. In the present case, the AICTE has onlyCimposed the financial penalty which is the first penalty prescribed.It is the admitted case of the petitioner that it was chargingRs.11,00,000/- as fees for the entire course from each student.In terms of Clause 3.1 of Chapter IV of Approval ProcessHandbook, 5 times penalty for each student works out toDRs.55,00,000/- and for 42 students it works out to Rs.23,10,00,000/-, which is the penalty imposed by the AICTE. TheAICTE has no discretion to award a lesser penalty and, in fact,the petitioner has been let off lightly since only one penalty hasbeen imposed whereas the AICTE could have imposed more thanone penalty prescribed. However, it is made clear that the amountEof Rs.4,00,00,000/-, which is deposited, shall be adjusted towardsthe penalty and the petitioner is directed to deposit the balanceamount of Rs.19,10,00,000/- with the AICTE within 8 weeks fromthe date of the judgment, failing which AICTE shall be at libertyto take appropriate action in accordance with law. [Para 10]F[791-H; 792-A, E-H]
Parshvanath Charitable Trust v. AICTE (2013) 3 SCC385 : [2012] 11 SCR 1057 - referred to.
Case Law Reference
G[2012] 11 SCR 1057 referred toPara 6
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No. 581 of2016.
(Under Article 32 of the Constitution of India)
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Shekhar Naphade, Sr. Adv., M. Shoeb Alam, R. K. Joshi,Ms. Fauzia Shakil, Saurabh Joshi, Ujjwal Singh, Gautam Prabhakar,Mojahid Karim Khan, Advs. for the petitioner.
Harish Pandey, Anil Soni, R. Anand Padmanabhan, PrawalChaturvedi, Shashi Bhushan Kumar, Ginny J. Rautray, Ms. AnushkaAshok, Mrs. Kanchan Kaur Dhodi, Advs. for the respondent.
The Judgment of the Court was delivered by DEEPAK GUPTA, J.
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1. The petitioner, Foundation for Organizational Research andEducation Fore School of Management is a registered educationalinstitution running courses in management. On 15[th] March, 2016, thepetitioner applied to the respondent, the All India Council for TechnicalEducation (for short ‘the AICTE’) for extension of approval of existingseats and for increase in seats in certain courses. On 25[th] April, 2016,the AICTE granted extension of approval to the petitioner for existingseats in the existing courses. However, in this communication nothingwas written with regard to the prayer for increase in seats.Correspondence was exchanged between the parties but finally on 22[nd]June, 2016, the AICTE rejected the request of the petitioner.
2. The petitioner, despite having no permission for increase inseats, admittedly granted permission to students in excess of the seats.Therefore, the petitioner filed a writ petition before this Court for quashingof the letter dated 22[nd] June, 2016 and also prayed that the petitioner bepermitted to continue with the session which had commenced on 6[th]July, 2016 for the current academic year without jeopardizing the careerof the students who had already been admitted. When the matter wastaken up by this Court on 25[th] July, 2016, the petitioner institution wasdirected to deposit Rs. 2,00,00,000/- (Rupees Two Crore only) and itwas noticed that the petitioner had admitted 51 students in the meantime.Thereafter, on 6[th] September, 2016 another order was passed in which itwas recorded that a sum of Rs.2,00,00,000/- (Rupees Two Crore only)in terms of the order dated 25[th] July, 2016 had been deposited and it wasalso noticed that admission of 51 students who had been admitted beyondthe sanctioned number of seats had been axed without giving anyexplanation. We may also note that in the order it has been recorded asfollows:
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A“Mr. Khurshid, learned senior counsel, conceded that the sanctionstrength is 240, but 372 students were admitted; but the Institutionhad reasons to do so, for the A.I.C.T.E. did not proceed with theapproval within the stipulated framework of time and further theInstitution had been experiencing that the students after takingadmission, leave the Institution.”B
Thereafter, the Court issued the following directions:
(a) “A.I.C.T.E. shall verify who are the students eligible underthe norms regard being had to the concept of merit, to continue inthe petitioner-Institution.
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(b) The Inspection Team of A.I.C.T.E. shall carry out anotherinspection to find out as to whether the Institution has removedthe deficiencies that were pointed out by the inspecting authority.
(c) The petitioner-Institution shall cooperate with the InspectionTeam.
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(d) The petitioner-Institution shall deposit a further sum of Rs. 2crores before the Registry of this Court within four weeks hence.”
3. The petitioner deposited another sum of Rs.2,00,00,000/-(Rupees Two Crore only) pursuant to the said direction. Therefore,Rs.4,00,00,000/- (Rupees Four Crore only) stands deposited in this Court.EThe inspection report was received, according to which the deficienciesearlier pointed out by the AICTE had been removed but the inspectioncommittee pointed out certain other deficiencies.
4. During the pendency of the petition, the AICTE issued noticeto the petitioner as to why a penalty should not be imposed upon it.FAfter considering the reply of the petitioner, the AICTE imposed a penaltyof Rs.23,10,00,000/- (Rupees Twenty Three Crore Ten Lakhs only)towards the excess admission made of 42 number of students. Thepetitioner has not cared to amend the writ petition to challenge the orderimposing penalty but has filed an application being I.A. No.8 in this regard.GThough this may not be technically correct, we are examining this issuealso.
5. Mr. Shekhar Naphade, learned senior counsel for the petitionerhas drawn our attention to the various communications exchanged betweenthe parties and submits that inaction of the AICTE in not responding toHthe request of the petitioner for increase in seats was itself an arbitrary action and the reasons given for not permitting increase in the intake inthe courses was totally illegal. Mr. Naphade also argued that an affidavithad been submitted clearly setting out that all the deficiencies would beremoved before the session commences. Mr. Naphade further urgedthat the penalty imposed is highly excessive and arbitrary. He furthersubmits that when the Court is seized of the matter, penalty should nothave been imposed.
6. On the other hand, Mr. Harish Pandey, learned counsel for therespondent submits that the AICTE had zero deficiency policy especiallywith regard to the students who have come from abroad. According tothe AICTE, statutory committees were not set up by the last date, asprovided in the case of Parshvanath Charitable Trust v. AICTE[1] andtherefore, the petitioner’s case was rejected. Mr. Pandey further submitsthat the penalty has been imposed strictly in accordance with the ApprovalProcess Handbook (2016-2017) of the AICTE.
7. We are not going into the submissions made by Mr. Naphadethat the AICTE delayed the grant of permission and acted arbitrarily.Even assuming that the decision of the AICTE was not correct, thepetitioner institution had no business to admit students beyond the numberpermitted by the AICTE. In case the petitioner institution felt that theAICTE was delaying the matter or was not acting fairly, the propercourse for the petitioner was to have approached this Court and prayedfor appropriate relief. The petitioner could not take the law into its ownhand and grant admission to students in excess of the seats permitted bythe AICTE. Therefore, we have no doubt in our mind that the action ofthe petitioner in granting admission to the students beyond the seatssanctioned is totally illegal and contrary to law.
8. Time and again, this Court has noticed that the educationalinstitutions admit students beyond the numbers permitted putting the futureof the students at stake. In the present case, we are not setting asidethe admission of the students because that action would be too harshupon the students who should not suffer for the totally illegal action ofthe petitioner institution.
9. This brings the question as to whether the penalty imposed isproper or not. The Approval Process Handbook (2016-2017) of theAICTE itself provides the penalties in case excess admissions are carried 1 (2013) 3 SCC 385
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Aout. Chapter IV deals with Actions in case of Violation of Regulations.Clause 3.1 of Chapter IV of this handbook reads as follows:
“3. Excess admissions
3.1 Excess admissions over the sanctioned intake shall not beallowed under any circumstances. In case any excess admissionBis reported to/noted by the Council, appropriate penal action willbe initiated against the Institution. The Institution shall be liable tofollowing punitive action from any one or more of the followingby the Council.
Penalty for excess admission amounting to five times the totalCfees collected per student shall be levied against each excessadmission Suspension of approval for supernumerary seats for oneacademic year Reduction in sanctioned intakeD
No admission status in one/more courses for one academicyear Withdrawal of approval for Program/course Withdrawal of approval of the Institution”E
10. The AICTE can impose any one or more of the aforesaidprescribed penalties. In this case, the AICTE has only imposed thefinancial penalty which is the first penalty prescribed. It is the admittedcase of the petitioner that it was charging Rs.11,00,000/- as fees forthe entire course from each student. In terms of Clause 3.1 of ChapterFIV of Approval Process Handbook, 5 times penalty for each studentworks out to Rs.55,00,000/- and for 42 students it works out toRs.23,10,00,000/-, which is the penalty imposed by the AICTE. TheAICTE has no discretion to award a lesser penalty and, in fact, thepetitioner has been let off lightly since only one penalty has been imposedGwhereas the AICTE could have imposed more than onepenalty prescribed. However, we make it clear that the amount ofRs.4,00,00,000/-, which is deposited, shall be adjusted towards the penaltyand the petitioner is directed to deposit the balance amount ofRs.19,10,00,000/- with the AICTE within 8 weeks from today failingwhich AICTE shall be at liberty to take appropriate action in accordanceHwith law.
FOREFSM THR. ITS DIR. v..AICTE THR. THE MEMBER SECY.[DEEPAK GUPTA, J.]
11. Having held thus we are also of the considered view that thestudents who had paid large sums of money should not be made to suffer.They have already completed the course but the degrees have not beenawarded to them. We, therefore, direct that the degrees be awarded tothe said students.
12. The writ petition is disposed of in the aforesaid terms. Allpending application(s) also stand disposed of.
Kalpana K. Tripathy
Appeal disposed of.
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