LEGAL ISSUE: Whether an educational institution can admit students beyond the sanctioned intake and whether the penalty imposed by the All India Council for Technical Education (AICTE) for excess admissions is justified.
CASE TYPE: Education Law
Case Name: Foundation for Organizational Research and Education Fore School of Management vs. The All India Council for Technical Education
Judgment Date: 21 June 2019
Date of the Judgment: 21 June 2019
Citation: (2019) INSC 577
Judges: Deepak Gupta, J. and Surya Kant, J.
Can an educational institution, facing delays in approval for increased seats, take the law into its own hands and admit students beyond the sanctioned limit? The Supreme Court of India recently addressed this critical issue, emphasizing that institutions cannot bypass regulatory norms. This case revolves around a management school that admitted students beyond its sanctioned capacity, leading to a penalty imposed by the All India Council for Technical Education (AICTE). The judgment, delivered by a two-judge bench of Justices Deepak Gupta and Surya Kant, clarifies the importance of adhering to regulatory frameworks in the education sector.
Case Background
The Foundation for Organizational Research and Education Fore School of Management (the petitioner), a registered educational institution, applied to the All India Council for Technical Education (AICTE) on March 15, 2016, for an extension of approval for existing seats and an increase in seats for certain courses. On April 25, 2016, the AICTE granted an extension of approval for existing seats but did not address the request for an increase in seats.
Despite not receiving permission for increased seats, the petitioner admitted students in excess of the sanctioned number. Consequently, the petitioner filed a writ petition before the Supreme Court, seeking to quash the AICTE’s rejection letter dated June 22, 2016, and to allow the current academic session to continue without jeopardizing the careers of the admitted students.
On July 25, 2016, the Supreme Court directed the petitioner to deposit Rs. 2,00,00,000 and noted that the institution had already admitted 51 students beyond the sanctioned limit. Further, on September 6, 2016, the Court recorded that the initial deposit had been made but also noted that the admission of 51 students beyond the sanctioned limit had been cancelled without explanation. The Court also noted that the petitioner had admitted 372 students against a sanctioned strength of 240. The petitioner stated that the AICTE did not proceed with the approval within the stipulated time and the institution had been experiencing that the students after taking admission leave the institution.
The Court then directed the AICTE to verify the eligibility of students, conduct another inspection to check for the removal of deficiencies, and directed the petitioner to deposit a further sum of Rs. 2,00,00,000.
Timeline
| Date | Event |
|---|---|
| March 15, 2016 | Petitioner applied to AICTE for extension of approval and increase in seats. |
| April 25, 2016 | AICTE granted extension of approval for existing seats but did not address the request for increase in seats. |
| June 22, 2016 | AICTE rejected the petitioner’s request for an increase in seats. |
| July 6, 2016 | Academic session commenced. |
| July 25, 2016 | Supreme Court directed the petitioner to deposit Rs. 2,00,00,000. |
| September 6, 2016 | Supreme Court recorded the deposit of Rs. 2,00,00,000 and noted the cancellation of 51 excess admissions. Further directions were issued to the AICTE for verification and inspection. |
Course of Proceedings
The petitioner filed a writ petition before the Supreme Court challenging the AICTE’s rejection of their request for increased seats and seeking permission to continue the current academic session. The Supreme Court initially directed the petitioner to deposit Rs. 2,00,00,000 and later another Rs. 2,00,00,000, totaling Rs. 4,00,00,000. An inspection report indicated that while previous deficiencies were removed, new ones were identified. During the pendency of the petition, the AICTE imposed a penalty of Rs. 23,10,00,000 on the petitioner for excess admissions. Although the petitioner did not formally amend the writ petition to challenge this penalty, the Court examined the issue.
Legal Framework
The Supreme Court referred to the Approval Process Handbook (2016-2017) of the AICTE, which outlines the penalties for excess admissions. Chapter IV, Clause 3.1 of the handbook states:
“3. Excess admissions
3.1 Excess admissions over the sanctioned intake shall not be allowed under any circumstances. In case any excess admission is reported to/noted by the Council, appropriate penal action will be initiated against the Institution. The Institution shall be liable to following punitive action from any one or more of the following by the Council.
✓ Penalty for excess admission amounting to five times the total fees collected per student shall be levied against each excess admission
✓ Suspension of approval for supernumerary seats for one academic year
✓ Reduction in sanctioned intake
✓ No admission status in one/more courses for one academic year
✓ Withdrawal of approval for Program/course
✓ Withdrawal of approval of the Institution”
The handbook empowers the AICTE to impose one or more of the prescribed penalties for excess admissions.
Arguments
Petitioner’s Arguments:
- The AICTE acted arbitrarily by not responding to the request for an increase in seats and by providing illegal reasons for denying the increase.
- The petitioner submitted an affidavit stating that all deficiencies would be removed before the session commenced.
- The penalty imposed by the AICTE is excessive and arbitrary.
- The penalty should not have been imposed while the matter was under consideration by the Court.
Respondent’s (AICTE) Arguments:
- The AICTE has a zero-deficiency policy, especially for students from abroad.
- The petitioner did not set up statutory committees by the last date, as required by the judgment in Parshvanath Charitable Trust v. AICTE [(2013) 3 SCC 385].
- The penalty was imposed strictly in accordance with the Approval Process Handbook (2016-2017) of the AICTE.
| Main Submission | Sub-Submissions by Petitioner | Sub-Submissions by AICTE |
|---|---|---|
| AICTE’s inaction and arbitrary decision |
|
|
| Deficiencies |
|
|
| Penalty Imposed |
|
|
The petitioner’s argument that the AICTE’s inaction was arbitrary was not considered by the Court. The Court held that even if the AICTE’s decision was incorrect, the petitioner had no right to admit students beyond the permitted number.
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section, but the core issues addressed were:
- Whether the petitioner was justified in admitting students beyond the sanctioned intake.
- Whether the penalty imposed by the AICTE was proper.
Treatment of the Issue by the Court
The following table demonstrates how the Court decided the issues:
| Issue | Court’s Decision | Brief Reasons |
|---|---|---|
| Whether the petitioner was justified in admitting students beyond the sanctioned intake. | No | The Court held that the petitioner could not take the law into its own hands and admit students beyond the permitted number, even if the AICTE’s decision was incorrect or delayed. |
| Whether the penalty imposed by the AICTE was proper. | Yes | The Court found that the penalty was imposed in accordance with the AICTE’s Approval Process Handbook, which prescribes a penalty of five times the total fees collected per student for excess admissions. |
Authorities
Cases Relied Upon:
- Parshvanath Charitable Trust v. AICTE [(2013) 3 SCC 385] – The Supreme Court cited this case to highlight that the statutory committees were not set up by the last date.
Legal Provisions Considered:
- Approval Process Handbook (2016-2017) of the AICTE – The Court relied on Chapter IV, Clause 3.1 of the handbook, which specifies the penalties for excess admissions.
| Authority | Court | How it was used |
|---|---|---|
| Parshvanath Charitable Trust v. AICTE [(2013) 3 SCC 385] | Supreme Court of India | Cited to emphasize that statutory committees were not set up by the last date. |
| Approval Process Handbook (2016-2017) of the AICTE, Chapter IV, Clause 3.1 | AICTE | Relied on to determine the penalty for excess admissions. |
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | Party | Court’s Treatment |
|---|---|---|
| AICTE’s inaction and arbitrary decision | Petitioner | Not considered by the Court. The Court held that even if the AICTE’s decision was incorrect, the petitioner had no right to admit students beyond the permitted number. |
| Deficiencies would be removed | Petitioner | The Court acknowledged that the petitioner had removed the deficiencies but did not consider this a justification for excess admissions. |
| Penalty imposed is excessive and arbitrary | Petitioner | Rejected. The Court found that the penalty was in accordance with the AICTE’s handbook. |
| Penalty should not have been imposed while the matter was under consideration by the Court. | Petitioner | Rejected. The Court held that the imposition of penalty was as per the rules. |
| Statutory committees were not set up by the last date. | AICTE | Accepted. The Court noted that the petitioner had not followed the rules as laid down in Parshvanath Charitable Trust v. AICTE [(2013) 3 SCC 385]. |
| Penalty has been imposed strictly in accordance with the Approval Process Handbook (2016-2017) of the AICTE. | AICTE | Accepted. The Court agreed that the penalty was in accordance with the handbook. |
How each authority was viewed by the Court?
- The Supreme Court relied on Parshvanath Charitable Trust v. AICTE [(2013) 3 SCC 385]* to underscore the importance of adhering to the prescribed timelines for setting up statutory committees.
- The Court also relied on the Approval Process Handbook (2016-2017) of the AICTE to determine the penalty for excess admissions. The Court specifically referred to Chapter IV, Clause 3.1 of the handbook, which prescribes a penalty of five times the total fees collected per student for each excess admission.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily driven by the need to uphold regulatory norms and prevent educational institutions from taking the law into their own hands. The Court emphasized that even if the AICTE’s decision-making process was flawed, the petitioner was not justified in admitting students beyond the sanctioned intake. The Court also highlighted the importance of adhering to the AICTE’s rules and regulations, particularly those related to admissions. The Court was also concerned about the future of the students and therefore did not set aside their admissions.
| Sentiment | Percentage |
|---|---|
| Upholding Regulatory Norms | 40% |
| Preventing Institutions from Taking Law into Their Own Hands | 30% |
| Adherence to AICTE Rules and Regulations | 20% |
| Concern for Students’ Future | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Court’s reasoning was primarily based on the legal framework and the need to maintain the integrity of the regulatory process.
Logical Reasoning:
The Court considered the AICTE’s handbook and the principle that institutions cannot bypass regulatory norms. The Court rejected the petitioner’s argument that the penalty was excessive, stating that the AICTE had no discretion to award a lesser penalty and, in fact, the petitioner was let off lightly since only one penalty was imposed. The Court stated:
“Even assuming that the decision of the AICTE was not correct, the petitioner institution had no business to admit students beyond the number permitted by the AICTE.”
“The AICTE has no discretion to award a lesser penalty and, in fact, the petitioner has been let off lightly since only one penalty has been imposed whereas the AICTE could have imposed more than one penalty prescribed.”
“We, therefore, direct that the degrees be awarded to the said students.”
The Court did not set aside the admission of the students, stating that such an action would be too harsh on the students who should not suffer for the illegal actions of the petitioner. The Court directed that the degrees be awarded to the students.
Key Takeaways
- Educational institutions must adhere to the sanctioned intake of students and cannot admit students beyond the permitted number, even if there are delays or perceived errors in the regulatory process.
- The AICTE has the authority to impose penalties for excess admissions, as per its Approval Process Handbook.
- Institutions should approach the Court for relief if they believe that the AICTE is acting unfairly or delaying the approval process, rather than taking the law into their own hands.
- The Court will protect the interests of students who have been admitted, even if the admissions were illegal.
Directions
The Supreme Court directed the petitioner to deposit the balance amount of Rs. 19,10,00,000 with the AICTE within 8 weeks, after adjusting the deposited amount of Rs. 4,00,00,000. The Court also directed that the degrees be awarded to the students who had been admitted in excess.
Development of Law
The ratio decidendi of this case is that educational institutions cannot admit students beyond the sanctioned intake, even if they believe the regulatory body is acting unfairly. The case reinforces the importance of adhering to regulatory norms and provides clarity on the penalties for excess admissions under the AICTE’s regulations. This decision does not change any previous position of law but reinforces the existing legal principles.
Conclusion
The Supreme Court upheld the AICTE’s penalty of Rs. 23,10,00,000 imposed on the Foundation for Organizational Research and Education Fore School of Management for admitting students in excess of the sanctioned intake. The Court emphasized that educational institutions must adhere to regulatory norms and cannot take the law into their own hands. While the Court did not set aside the admissions of the students, it directed the institution to pay the penalty and awarded degrees to the students. This judgment serves as a reminder of the importance of following regulatory frameworks in the education sector.
Category
Parent Category: Education Law
Child Categories:
- All India Council for Technical Education (AICTE)
- Excess Admissions
- Approval Process Handbook
Parent Category: All India Council for Technical Education Act
Child Categories:
- Approval Process Handbook
FAQ
Q: Can an educational institution admit students beyond the sanctioned intake?
A: No, educational institutions cannot admit students beyond the sanctioned intake, even if they believe the regulatory body is acting unfairly or delaying the approval process.
Q: What happens if an institution admits students in excess of the sanctioned intake?
A: The institution is liable to face penalties, including financial penalties, suspension of approval, reduction in sanctioned intake, or even withdrawal of approval.
Q: What is the penalty for excess admissions according to the AICTE?
A: The AICTE’s Approval Process Handbook prescribes a penalty of five times the total fees collected per student for each excess admission.
Q: What should an institution do if it believes the AICTE is acting unfairly?
A: The institution should approach the Court for relief rather than taking the law into its own hands and admitting students beyond the sanctioned intake.
Q: Will the students suffer if the institution admits them illegally?
A: The Court will try to protect the interests of the students and may not set aside their admissions. However, the institution will face penalties for its illegal actions.