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……… The private institutions cannot be permitted to operate like money minting institutions.

……. Over a period of time, education has become a commodity in India. All the genres of society are so overly obsessed with education that it has devalued the real essence of education. Education is no more a noble cause but it has become a business, therefore, the paradigm shift, especially in the higher education from service to business is a matter of concern. The commercialization of education has a dreadful effect that is so subtle that it often goes unnoticed. 

 …… Educational Institutions are indulging in gross misleading advertisements. which can only be termed to be persuasive, manipulative and exploitative to attract the widest possible audience. 

 …….. It is shocking that the private institutions have been raising their assets after illegally collecting funds like building fund, development fund, infrastructure fund etc. It is high time these practices are stopped forthwith and there is a crack down on all these institutions. 

…… Himachal Pradesh High Court

The Himachal Pradesh taking serious cognizance of ill practices of certain educational institution to conduct in unauthorized manner, collecting exorbitant fees and issuing misleading advertisement has directed State Government to set up a Committee to investigate all the Institutions and further directed State Government to ensure that no fees is charged in name of building fund, development fund, infrastructure fund etc.

The Judgement was passed on a petition directed against the order passed in against the Petitioner Institutions to jointly and severally refund the fees taken from the students.

The petitioner is the so called franchisee of the Sikkim Manipal University based at Sikkim and claims to be running its study centre at Shimla. The students had filed petition under Section 11 of the H.P. Private Educational Institutions (Regulatory Commission), Act, 2010 claiming refund of admission fee paid to the petitioner for MBA PGDM course, on the ground that the same was exorbitant and had never been approved either by the State Government or by the UGC. These petitions were contested by the petitioner and vide impugned order, the petitioner was directed to refund the fee.

The order was challenged on the ground that the Education Commission had no jurisdiction to entertain the petition, as the dispute relating to Sikkim Manipal University was beyond its territorial jurisdiction

The Court considered the finding that neither the petitioner Institute had permission by the UGC to run the institute as a distance education programme study centre nor it had  obtained permission from the State Government and thus observed that the petitioner was concerned only with minting money and was least concerned with the prospects and future of the students. It also observed that “Education institution of the petitioner is no less than a commercial shop, where the aspiring needs of the students stand defeated due to the malpractices and frivolous activities of the petitioner. This is a classical example where the petitioner institute has presented an imaginary and illusory picture for making a successful career to the innocent students admitted in their institute, that too, by charging exorbitant fees and thereafter leaving them in the lurch to fend for themselves little knowing that even the courses undertaken by them may probably not even be recognized in the country. This practice is not only to be deprecated, but is also to be handled and dealt with a heavy hand.”

The Court considering various, guidelines and notification relating to territorial restrictions of a State Private University came to the conclusion that the petitioner could not act as a franchisee of the Sikkim Manipal University and dismissed the Petition.

However before it parted with the Judgement, it made certain important observations, regarding practice of educational institutions to issue misleading advertisements, charge exorbitant fees in different names, commercialization of education etc.:

The private institutions cannot be permitted to operate like money minting institutions.

  1. Imparting education can never be equated with profit oriented business as it is neither commerce nor business and if it is so, then the regulatory controls by those at the helm of affairs have not only to be continued, but are also required to be strengthened.
  2. Over a period of time, education has become a commodity in India. All the genres of society are so overly obsessed with education that it has devalued the real essence of education. Education is no more a noble cause but it has become a business, therefore, the paradigm shift, especially in the higher education from service to business is a matter of concern. The commercialization of education has a dreadful effect that is so subtle that it often goes unnoticed. 
  1. Mushroom growth of ill-equipped, understaffed and unrecognized educational institutions was noticed by the Hon’ble Supreme Court and it was observed that the field of education had become a fertile, perennial and profitable business with the least capital outlay in some States and that societies and individuals were establishing such institutions without complying with the statutory requirements.
  1. Educational Institutions are indulging in gross misleading advertisements. which can only be termed to be persuasive, manipulative and exploitative to attract the widest possible audience. These institutes trap into their web the innocent, vulnerable and unsuspecting students. Their lucrative and mesmerizing advertisements hypnotize the students only to fall into an unknown world of uncertainties. Some institutes promise hundred percent placement, some claim excellent staff, some claim free wi-fi campus, some promise free transportation etc. But what should really matter is ‘education’. This problem is further compounded by the proliferation of coaching institutes which have only made ‘education’ more dirty and murkier. 
  1. It is shocking that the private institutions have been raising their assets after illegally collecting funds like building fund, development fund, infrastructure fund etc. It is high time these practices are stopped forthwith and there is a crack down on all these institutions. Every education institution is accountable and no one, therefore, is above the law. It is not to suggest that the private education institutions are not entitled to their due share of autonomy as well as profit, but then it is out of this profit that the private education institutions, including schools are required to create their own assets and other infrastructure. They cannot under the garb of building fund etc. illegally generate funds for their “business expansion” and create “business empires”. 

The Court in light of all these observations felt that there is an urgent need for Government intervention by conducting a fresh investigation of all these institutions and directed the Chief Secretary to Government of Himachal Pradesh is directed to constitute a committee which shall carry out inspection of all the private education institutions at all levels i.e. schools, colleges, coaching centres, extension centres, (called by whatever name), universities etc. throughout the State of Himachal Pradesh regarding requisite infrastructure, parents teacher associations, qualified staff and submit report regarding compliance of the H.P. Private Educational Institutions (Regulation) Act, 1997 within three months.

The Court directed the State Government to ensure that no private education institution is allowed to charge fee towards building fund, infrastructure fund, development fund etc.

In addition to this, the Principal Secretary (Education) is directed to issue mandatory orders to all educational institutions, whether private or government owned, to display the following detailed information relating to faculty, infrastructure, fees breakup, details of internship and placement, on the notice board which shall be placed at the entrance of the campus and on their websites.

EduLegaL View:

Commercialization of education is certainly a serious issue. It is opposed to public policy and Indian tradition. Education has never been commerce in this country. The object of establishing an institution has thus been to provide technical or professional education to the deserving candidates, and is not necessarily a commercial venture.

To put it differently, in the establishment of an educational institution, the object should not be to make a profit, inasmuch as education is essentially charitable in nature. There can, however, be a reasonable revenue surplus, which may be generated by the educational institution for the purpose of development of education and expansion of the institution.

Appropriate machinery can be devised by the state or university to ensure that exorbitant fee is not charged and that there is no profiteering, though a reasonable surplus for the furtherance of education is permissible. Reasonable surplus to meet cost of expansion and augmentation of facilities does not, however, amount to profiteering.

But nonetheless, after these borderlines have been drawn in plethora of judgements, the issue remaining a burning issue !

Ravi Bhardwaj | mail@edulegal.in 

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