CWP No.17752 of 2005 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.17752 of 2005 Date of decision: 29.3.2011 Navdeep Kaur Gill and others -----Petitioners Vs. State of Punjab and others ----Respondents And connected petitions being CWP Nos. 12013, 18675 of 2003, 1792, 7146, 13259 of 2004, 16153, 17905, 18349, 18394, 18478, 19339, 19364, 19667, 19895, 19929 of 2005, 11790, 12668, 7556 of 2006, 3600, 18593, 9447 of 2007, 294, 2720, 2946, 3037, 3671, 6808 of 2008, 12044 of 2010. CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE MEHINDER SINGH SULLAR Present:- Mr. Rajiv Atma Ram, Sr.Advocate with Mr. Arjun Partap Atma Ram, Advocate in CWP No.12668, 11790 of 2006. Mr. S.C.Sibal, Sr.Advocate with Mr. V.S.Rana, Advocate in CWP Nos. 17905 &17552 of 2005. Mr.A.K.Chopra, Sr.Advocate with Mr. Gagandeep Singh, Advocate in CWP No.18394 of 2005. Mr. Deepak Sibal,Advocate with Mr. Arun Arya, Advocate in CWP Nos.18675 of 2003, 19339 of 2005, 294, 3671 of 2008, 12044 of 2010. Mr. Sukhbir Singh, Advocate in CWP Nos.19929 & 19895 of 2005. Mr. Puneet Gupta, Advocate in CWP No.16153 of 2005. Mr. Vivek Sethi, Advocate in CWP No.18349 of 2005. Mr. Surinder Garg, Advocate in CWP Nos.18478 and 1792 of 2005. Dr. Surya Parkash, Advocate in CWP No.9447 of 2007. Mr. Ashish Rawal, Advocate for Mr. Anupam Gupta, Advocate in CWP No.6808 of 2008. 1 CWP No.17752 of 2005 Mr. Padam Jain, Advocate in CWP No.13259 of 2004. Mr. Kamal Sehgal, Advocate in CWP No.18593 of 2007. Mr. P.K.Mutneja, Advocate in CWP No.2720 of 2008. Mr. H.S.Sirohi, Advocate in CWP Nos.19364 of 2005, CWP No.3037 of 2008. Mr. Rajesh Gutpa, Advocate in CWP No.2946 of 2008. Mr. BBS Sobti, Advocate with Mr. S.S.Saini, Advocate in CWP Nos.12013 of 2003, 19667 of 2005 and 7556 of 2006. Mr. Animesh Sharma, Advocate for Mr. Akshay Bhan, Advocate in CWP No.3600 of 2007. None in CWP No.7146 of 2004. …for petitioners Mr. Amol Rattan Singh, Addl.A.G.Punjab for the State. Mr. Gurminder Singh, Advocate with Mr. Param Preet Singh, Advocate for DCI. Mr. IPS Doabia, Advocate for MCI. Mr. BBS Sobti, Advocate with Mr. S.S.Saini, Advocate for respondent No.2 in CWP No.12044 of 2010, for respondent No.3 in CWP Nos.7146 of 2004, 16153 and 19339 of 2005. For respondent No.4 in CWP Nos.1792, 13259 of 2004, 8349, 18349, 18394, 18478 and 19364 of 2005, 2946, 3037, 6808 of 2008. …for respondents Adarsh Kumar Goel,J. 1. This order will dispose of 29 writ petitions mentioned above involving questions relating to validity of regulation of fee fixation and admissions in medical colleges as follows:- I) CWP Nos. 18675 of 2003, 1792, 7146, 13259 of 2004, 16153, 17752, 17905, 18349, 18394, 18478, 19339 and 19364 of 2005 have been filed by students challenging demand of fee higher than the fee approved for the Academic Sessions 2003-04, 2004-05 and 2005- 2 CWP No.17752 of 2005 06 by the Fee Fixation Committee (FFC) constituted by the State of Punjab as per directions in the judgment of the Hon’ble Supreme court in Islamic Academy of Education and another v. State of Karnataka and others, (2003) 6 SCC 697, as reiterated in P.A.Inamdar and others v. State of Maharashtra and others, (2005) 6 SCC 537. CWP No.6808 of 2008 has been filed by 20 students of Dayanand Medical College, Ludhiana of the PGET 2000 batch seeking direction for release of MD/MS degree and detail marks certificates which has been contested on the ground that the petitioners have not paid the due fee. II) CWP Nos.12013 of 2003, 19667, 19895 and 19929 of 2005 have been filed by medical colleges challenging rate of fee fixed as per interim report dated 17.7.2004 and final report dated 8.7.2005 by the said FFC as being violative of their fundamental right under Article 19(1)(g) of the Constitution. III) CWP Nos. 294, 2720, 2946, 3037, 3671 of 2008 and 12044 of 2010 have been filed by the students challenging fixation of fee by the State of Punjab as per provisions of the Punjab Private Health Sciences Educational Institutions (Regulation of Admission, fixation of fee and making of reservation) Act, 2006 (‘2006 Act’) while IV) CWP Nos. 7556, 11790 of 2006, 3600, 9447, 12668 and 18593 of 2007 have been filed by private Ayurvedic Dental and Medical colleges challenging the provisions of the 2006 Act as violative of autonomy of the said colleges in the matter of fixation of fee and conduct of admissions. 2. The matter has been placed before this Bench in view of order of the Division Bench dated 8.11.2010 as under:- “…..Taking into account the facts in the present cases and the various judgments of Hon’ble Supreme Court as well as 3 CWP No.17752 of 2005 Division bench of this Court in Educate India Society v. State of Haryana and others, 2005(5) SLR 549 and also taking into account that this issue arises every year, we are of the view that matter ought to be heard and decided authoritatively by a Full Bench. The issue of vires and other allied issues raised in the colleges’ petitions would be considered alongwith the aforesaid writ petition on the next date of hearing before the Full Bench…..” Pleadings 3. We may give facts in the representative petitions in each of the four categories. Category I 4. We are referring to CWP No.17752 of 2005 as a representative petition in this category. Averments therein are that the students were admitted to MBBS course in the session 2003-04 after passing entrance test on the basis of prospectus issued by the Baba Farid University of Health Sciences (BFU). They were allocated to Sri Guru Ram Das Institute of Medical Sciences and research, Amritsar. They passed their first professional examination and were studying in second professional for which examinations were scheduled to be held w.e.f 22.11.2005. As per prospectus, fee required to be paid was Rs.1.10 lacs per annum which was increased to Rs.1.5 lacs vide notification dated 25.7.2003, Annexure P.1. The said fee was deposited by the petitioners apart from hostel fee and security advance. However, after the admissions were given, the State of Punjab constituted Justice Majithia Committee as per direction of the Hon’ble Supreme Court in Islamic Academy of Education. The Committee made its interim recommendation dated 17.7.2004,Anenxure P.3, taking into account the grievance of the students that increase of fee vide notification dated 25.7.2003 to 4 CWP No.17752 of 2005 Rs.1.50 lacs was not called for as it was on account of abolition of NRI quota which was later restored resulting in higher income to Medical College. The recommendation is as under:- “14. To summarize the Committee orders that the private unaided medical institutions in the State of Punjab - i) will charge from the students admitted in the year 2003-04, fee for the second year of their study i.e. year 2004-05 equivalent to the provisional fee as indicated in the government notification dated 17.6.2004 for the year 2004-05 i.e. the students admitted in the year 2003-04 will pay fee for the second year of their study @ Rs.75000/- for MBBS, Rs.55000/- for BDS and Rs.35000/- for BAMS/BHMS course. Institutions can take a fresh undertaking from the students that they would pay the difference as and when the final fee structure is approved by the committee; ii) Will not charge as security; hostel charges etc., in excess of what has been provided in government notification dated 25.7.2003. The excess amount if charged by them as explained above would be refunded forthwith. Sd/- Sd/- Sd/- Dr.K.K.Talwar Dr. R.P.Bambah G.R.Majithia Director, PGI Ex Vice Chancellor Chairman Punjab University Amarjit Chopra sd/- Chartered Accountant Satish Chandra Member Secretary Note: Before asking the students admitted in the year 2003-04 for deposit of fee for the second year of their study i.e. year 2004-05 as indicated in para 14(i), the institutions shall first adjust the amount received by them in the year 2003-04 in excess of the fee indicated in para 14(i) above. If after adjustment anything is due against the student then only he will be required to make the payment for the second year 2004-05. It is again made clear that the students admitted in the year 5 CWP No.17752 of 2005 2003-04 are liable to pay only Rs.75000/-, Rs.55000/- and Rs.35000/- for the year 2003-04 as well as for the year 2004-05 and if they have paid in excess of this amount in the year 2004- 05 and if any difference is left to be paid then only the students will be asked to make the payment. Decision in regard to fee structure for the year 2003-04 was taken and this para is added with the approval of the chairman for removal of all kinds of doubts. Satish Chandra Member Secretary.” 5. The FFC gave its final report dated 8.7.2005 extracts from which are as under:- “Having considered all the factors, the Committee has finally concluded the fee structure. Keeping in view the Cost Data and financial information submitted to Chartered Accountants, their comments there upon and also the analysis carried out subsequently in view of the various factors, the Committee is of the opinion that the fee fixed for various institutions is just, fair and equitable. The Committee has adhered to guidelines laid down by the Apex Court. The Committee while determining the fee structure, strictly followed the following criteria as indicated by the Apex Court in “T.M.A.Pai foundations v. state of Karnataka (2002) 8 SCC 481:- A. That the object of setting up an Educational Institution is by definition ‘Charitable’, it is clear that an Educational institution cannot claim a Fee as is not required for the purpose of fulfilling the object. B. That in the establishment of an Educational Institution, the object should not be to make a profit in as much as educational function is charitable in nature. 6 CWP No.17752 of 2005 C. That a reasonable regular surplus may be generated by the Educational Institution for the development of Education and expansion of the institution. D. That profiteering/capitation fee in any form directly or indirectly is forbidden for the management of the institution; E. That the fee structure shall be fixed keeping in mind the infrastructure and the facilities, the investment made, salary for teaching and non teaching staff, future plans of expansion and for betterment of the institution. F. That merit alone shall be the basis for selecting the students. The State Government has allowed admission of NRI students against the management quota. The Apex Court in its interim order in Islamic Academy of Education v. State of Karnataka, reported as 2004(6) SCC 573, allowed the admission of NRI students against the management quota. Various matters regarding the clarification of decision of the Apex Court in Islamic Academy of Education’s (supra) have been referred to a larger Bench. FINAL FEE STRUCTURE AT A GLANCE FOR THE YEARS 2003-04, 2004-05 and 2005-06 for MBBS, BDS and BHMS Courses only (Fee per annum per student) MBBS 1. Dayanand Medical College & Hospital,Ludhiana (DMCH) (MBBS) Rs.1.00 lac 2. Shri Guru Ram Dass Institute of Medical Sciences and Research (SGRD) (MBBS) Rs.1.00 lac BDS 1. Shri Guru Nanak Dev Dental College and Research Institute, Sunam (BDS Rs.82,000.00 2. Dashmesh Institute of Research and Dental Sciences, Faridkot (BDS) Rs.92,500.00 3. SGRD Institute of Dental Sciences Rs.78,000.00 7 CWP No.17752 of 2005 4. Laxmi Bai Dental College, Patiala (BDS) Rs.78,000.00 5. Desh Bhagat Dental College, Muktsar (BDS) Rs.40,000.00 6. National dental College, Gulabgarh, Dera Bassi (BDS) Rs.68,500.00 BHMS 1. I)Shri Guru Nanak Dev Homeopathic Medical College and Hospital, Canal Road,Ludhiana (BHMS) ii)D.M Rs.12,000.00 Rs.31,500.00 2. Lord Mahavira Homeopathic Medical College, Ludhiana (BHMS) Rs.17,500.00 3. Homeopathic Medical College, Abohar (BHMS) Rs.14,500.00 4. Institute of Homeopathic Medical Education and research, Chunni Kalan, Fatehgarh Sahib (BHMS) Rs.3500.00 5. Kalyan Homeopathic Medical College, Tarn Taran Rs.11,500.00 Notes:- i) The fee structure is subject to the decision of the bench of seven judges of the Hon’ble Apex Court. ii) The above fee shall be applicable for the years 2003-04, 04-05 and 05-06 for students admitted in 2003-04 and students admitted subsequently. iii) The Fee Fixation Committee can also review the fee structure recommended, as and when it feels the necessity on a motion by the management of such institutes which invest in any substantial improvements in infrastructure/staff/services for the student, who are the ultimate beneficiaries. iv) The variation in the fee structure of colleges offering the same course is because of the wide disparity in cost structure submitted and the amenities/services being provided to the students. Wherever the services rendered are superior, the committee has permitted a higher fee. v) The institutions shall charge excess fees if any (i.e. difference in fee fixed now and fee already charged) in four equated installments spread over a year. vi) The institutions shall also extend all help and guidance to needy students to arrange education loans for themselves. vii) C.M.C. (Medical & Dental) Ludhiana 8 CWP No.17752 of 2005 In absence of the income and expenditure account and also the segregated receipts for hospital, college and hostel, the cost per student cannot be worked out and the fee cannot be fixed for Christian Medical College Ludhiana. In view of the above, the CMC (Medical & Dental) Ludhiana are directed to supply the required information within a period of one month to enable the committee to fix their fees. As an interim measure they would charge Rs.75000/- p.a for MBBS and Rs.55,000/- per annum for BDS from each student for the session 2003-04, 2004-05 and 2005- 06. Other appropriate adjustments in excess/deficit fees charged would be done accordingly. viii) D.M.C (Ludhiana) and SGRD (Amritsar) The Committee decided that it will be fair and proper to maintain uniformity in fee Structure of these colleges to eliminate bias and prejudice and also that it will ensure that efficiency will not go unrewarded and inefficiency in cost would not be passed to the students. (ix) Baba Jaswant Singh dental College, Ludhiana (BJSDC) Fee in respect of Baba Jaswant Singh Dental College, Ludhiana (BJSDC) could not be fixed as per details given hereunder: The report in respect of BJSDC was submitted by M/s Mohinder Vij and Associates, Chartered Accountants, Ludhiana dated 6th February 2005. Subsequently in the meeting held with the Chartered Accountants on 16 Feb 2005, which was not attended by any representative of BJSDC, the Chartered accountants were requested to send their report on the following issues: Applicability of PF and from which date it became applicable Reconciliation of salary with PF and TDS applicability Average salary paid to staff Cost per student Depreciation for the period ended 31st March 2004 Shortage of staff. The Chartered Accountants vide their letter dated 9th March 2005 informed as under:- ‘In the case of Baba Jaswant Singh Dental College, it is not possible for us to segregate the expenditure incurred between college, hostel and hospital due to non 9 CWP No.17752 of 2005 maintenance of the separate records. Also Accounts Head of the institution has expressed his inability to provide the relevant details in the absence of classification of expenses under separate heads. Consequently it is not possible for us to calculate the cost per student in the absence of segregation of expenses relating to college, hostel and hospital.’ The Chartered Accountants have however furnished a depreciation chart. In view of the non segregation of the expenses relating to college, hostel and hospital and also due to non availability of information with regard to area under college, hostel and hospital the depreciation chart is of little consequence. The details furnished by the Chartered Accountants with regard to the teaching staff alongwith their report dated 6th Feb. 2005 showed total teaching staff of 97 persons including the principal, Dr. OP Nar. The list contained at serial no.34,35, 37,38 to 54, 88, 91 to 94, 96, 97 the names of various faculty member (Doctors) whose monthly remuneration is shown at Rs.5000. Besides at serial number 85, 86 and 87 the names of faculty member (Doctors) whose monthly remuneration is shown at Rs.6000, Rs.4500 and Rs.4500 respectively. Except for two, all aforementioned employees were employed throughout the year. Their total salary for the year works out to more than Rs.17 lacs. Provident Fund contribution for the management on such amount works out as more than Rs.2 lacs approximately. It is also observed that the total salary of the 97 employees as per list works out to Rs.150 lacs approximately against the debit of Rs.247 lacs in the income and expenditure account. It appears that Rs.97 lacs pertain to salary of non teaching staff. It can safely be assumed that almost 50% of such employees would be covered by the Provident Fund, which would mean an additional burden of Rs.6 lacs for management contribution towards Provident Fund. The total debit in income and expenditure account for management contribution towards Provident Fund and other funds is shown at Rs.1.63 lacs against approximate figure of Rs.8 lacs as stated herein above. Further appropriate bifurcation of revenue head into receipts from college, hostel and hospital etc. has not been furnished. In view of the Chartered accountants report and the facts stated herein above with regard to contribution to Provident Fund and the revenue head bifurcations, it is not possible to ascertain the cost per student and fix the fee in case of this institution. 10 CWP No.17752 of 2005 In view of the above, the institute is directed to supply the required information within a period of one month to enable the committee to fix their fees. As an interim measure they would charge Rs.55000/- p.a per student from each student for the sessions 2003-04, 2004-05 and 2005-06. Other appropriate adjustments in excess/deficit fees charged would be done according to instructions at para 14. The institute would not charge any amount under any head from students in addition to the fee. Xx xx xx xx xx 26. FEE STRUCTURE OF AYURVEDIC COLLEGES The Committee reserves sanction to the final fee structure for Ayurvedic colleges. The Committee is of the opinion that further probe and in depth analysis is required into the proposed fee structure of these colleges. After the completion of the probe and submission of the reports of Chartered Accountants and, if need be an opportunity of hearing would be granted to the institutions and only thereafter the final fee structure would be passed. Till then the institutions would charge the provisional fee from the students. The institutions are directed not to charge any amount under any head from the student in addition to the fees. The fees shall be applicable for the years 2003-04, 2004-05 and 2005-06 for students admitted in 2003-04 and students admitted subsequently. Requisite adjustments in fee should be made forthwith and only those amounts be realized this year (05-06) which are arrived at by such adjustment. No institute can charge any sum of money in addition to the fee prescribed under any garb or any other nomenclature on the pretext of enforcing discipline/or any other excuse.” 11 CWP No.17752 of 2005 6. In the details of fixation of fee annexed to the report, the Committee has given details of working out of the fee in respect of each concerned medical/Dental college having regard to expenses of the said colleges and infrastructure available and also explained reasons for disagreement with the report of the Chartered Accountants as under:- “GENERAL DEFICIECIES OBSERVED BY THE CHARTERED ACCOUNTANTS AND THE COMMITTEE Lack of adequate infrastructure e.g. Land and Building, Hostel facilities, laboratories, Library, toilets etc. Inadequate staff strength both teaching as well as administrative. Non segregation of expense and revenue between hospital, college, hostel and trust. Non availability of hospital facility for on the job training purposes. Arrangements made with the other hospitals are not adequately evidenced for want of attendance records. Non-coverage under Provident Fund Act despite the staff strength being far in excess of the stipulated limits under the Provident Fund Act. Excessive charge in respect of hostel and mess facility contrary to the norm laid down by the government. Levy of other charges e.g development charge/augmentation fee contrary to government norms. Non availability of student fee reconciliation. Non availability of exact number of NRI students with various institutions. ASSUMPTIONS Interest cost has not been considered to be a part of total expenses to be considered for calculation of cost per student. 12 CWP No.17752 of 2005 Interest income to the extent on Corpus investment has not been adjusted against the total expenses to be considered for calculation of cost per student but in case the same has been received against Investment of students Funds (Security deposit, advance tuition fee etc.), it has been reduced from the said expenses. Infrastructure provision shall be the responsibility of the management. However, depreciation and maintenance cost thereof shall form part of the total expenses to be considered for calculation of cost per student. In case the detail with regard to teaching and non teaching beds is available, hospital receipts I patient receipts are apportioned amongst the college and hospital in the ratio of teaching and non teaching beds. In case hostel receipts and mess charges form part of income, an equivalent amount has been reduced from the total expenses to be considered for calculation of cost per student. In case OPD charges and other related charges form part of income, expenditure incurred for providing these facilities form part of total expenditure and separate detail thereof is not available, an equivalent amount of such income has been reduced from the total expenses to be considered for calculation of cost per student. In case examination fee I other charges are credited to income and expenditure account, the same has been reduced from the total expenses to be considered for calculation of cost per student. The cost per student has been adjusted taking into consideration the surplus over the normal fee that would be generated because of fee received from NRI students. Calculations have been made treating all NRI seats as filled up. Cost per student for the purpose of fixation of fee has been calculated with reference to the approved strength rather than the actual number of students, as infrastructure has to be 13 CWP No.17752 of 2005 created based upon the approved strength. Even otherwise there are certain repeaters the impact of whom has not been considered.” 7. During pendency of the writ petitions, interim orders were passed directing the colleges to accept fee as per report of the FFC. Case of the petitioners is that the colleges were demanding fee in excess of that fixed by the FFC, which demand was liable to be set aside. The colleges have contested the stand of the students by way of their counter writs which are being referred to in Category II. Category II 8. In this category, CWP Nos.12013 of 2003 and 19667 of 2005 are taken as representative petitions. In CWP No.12013 of 2003, challenge is to the provisions contained in the prospectus Annexure P.1 issued by the Baba Farid University of Health Sciences, Faridkot (BFU) prescribing fee structure as per notification dated 25.7.2003 issued by the State of Punjab as being violative of the autonomy of the medical colleges recognized in judgment of the Hon’ble Supreme Court in TMA Pai Foundation and others v. State of Karnataka and others, (2002) 8 SCC 481. Case set out in the petition is that the petitioner was a society running a medical college. It was unaided minority institution. The State issued notification dated 14.5.2003 notifying that entrance test for admission to MBBS for the year 2003 in medical and Dental colleges in the State of Punjab will be conducted by the BFU. The University accordingly issued prospectus mentioning very low level of fee i.e. Rs.13000/- per student for free seats and Rs.1.10 lacs for paid seats. The petitioner also issued its own prospectus prescribing its rational fee structure i.e. Rs.4 lacs per annum per student in the general category. The said fee structure