2008 (5) TMI 755 - SC - Indian Laws

Supreme Court Upholds University's Fee Autonomy, Emphasizes Non-Profit Motive and Estoppel in Fee Structure Dispute.

Cochin University of Science and Technology and Ors. Versus Thomas P. John and Ors.

The SC reversed the HC's decision, allowing the University's fee structure. The SC ruled that fee fixation is integral to educational administration and ... - Issues Involved:1. Arbitrary and unfair fee structure.2. Estoppel from challenging the fee structure.Summary:Issue 1: Arbitrary and Unfair Fee StructureThe Division Bench of the High Court examined whether the University's action of charging different fees based on the admission batches was arbitrary and unfair. The Court observed that there was no rationale for subjecting the writ petitioners to a higher fee rate than that fixed in the years 1995-96 and 1999-2000 onwards. The University failed to provide a basis for differential treatment and did not substantiate the claim that a reduction in fees would lead to financial stress. The Court emphasized that even if the University had the right to fix fees, it must act fairly and base its decisions on reasonable facts, ensuring any classification between students had a rational basis.Issue 2: Estoppel from Challenging the Fee StructureThe High Court held that the principle of estoppel did not bind the respondents, even though the University had issued a prospectus disclosing the fee structure. Estoppel, being a principle of equity, could not override the fundamental right under Article 14 of the Constitution, which the writ petitioners claimed was violated. Consequently, the Court directed the University to refund the extra fee charged from the petitioners within two weeks, failing which the amount would accrue interest at 10% from the date of deposit until the refund date.Supreme Court's Decision:The Supreme Court set aside the High Court's judgment, emphasizing that the fixation of fees is part of the administration of an educational institution. The Court noted that while educational institutions must not engage in profiteering or charge capitation fees, they should have substantial autonomy in fee fixation. The Court found that the University had justified the initial increase and subsequent reduction in fees based on the need for infrastructure development and attracting a broader base of NRI students. The Supreme Court concluded that the High Court's requirement for the University to justify the fee structure with mathematical precision was unreasonable and that the principle of estoppel was applicable, preventing students from challenging the fee structure they had initially accepted. The appeals were allowed with no order as to costs.