Supreme Court orders 7 point Formula to End Capitation Fee at Medical Colleges

The top court has strictly prohibited the medical institutions from accepting payment of fees in cash in order to avoid charging capitation fee observing that this menace is prevalent even today despite enacting several legislations restricting it. 

The 7 point formula by the Supreme Court upholds merit for NEET admissions across the country and calls for the development of a web-portal maintained and regulated by the National Informatics Centre (NIC) under the aegis of the top Court itself wherein any information about the private medical colleges charging capitation fees can be furnished by the students.

The guidelines further include drafting the schedule for the admission process by the National Medical Commission and the Dental Council of India ensuring that the counselling for all the rounds, including the stray vacancy round, is completed at least two weeks before the last date of admissions. 

Moreover, Fee Fixation Committees of the States have been directed to take into account all the components of the fee, leaving no scope for managements to charge any additional amounts apart from what has been prescribed by the fee fixation committee from time to time.

The bench headed by honourable Justice L. Nageswara Rao and comprising B R Gavai was considering Special Leave Petitions in which orders passed by Fee Fixation Committee for undergraduate medical courses for the academic years 2004-2005, 2005-2006 and 2006-2007 were under challenge.

The fee structures were contested by the students and private medical colleges in the High Courts that later allowed the writ petitions filed by the students. Notice was issued by the Supreme Court in the Special Leave Petition in the year 2010 and the judgment of the High Court was stayed subject to the condition that the private medical colleges would refund fee to the students and the students furnish bank guarantees.

Thereafter in 2014, when it was brought to the notice of the Supreme Court that there is a legislation in the States of Karnataka, Tamil Nadu, Maharashtra and Andhra Pradesh to curb the menace of charging capitation fee, the Court expressed its concern that in spite of the legislations, the said practice has not been effectively stopped.

In order to put in place effective measures to end the practice of charging capitation fee, Shri Salman Khurshid, learned senior counsel was appointed as Amicus Curiae to make a detailed analysis of the problem and suggest an appropriate mechanism by which the charging of capitation fee can be stalled. A direction was given to the States of Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra to furnish required information to the learned Amicus Curiae, especially regarding complaints received, action taken report and any other data available on the aspect of levying capitation fee.

The top court referred to its earlier judgments which have dealt with the imperative need to curb the practice of levying capitation fee. "It is necessary to refer to how this Court has previously dealt with the evil practice of charging capitation fee and the immediate need to stop the practice of collection of capitation fee by private medical colleges," the bench said.

In TMA Pai Foundation & Ors. v. State of Karnataka, the Supreme Court had observed that a rational model should be adopted by the management, which would not be entitled to charge a capitation fee. Appropriate machinery can be devised by the State or university to ensure that no capitation fee is charged and there is no profiteering, though a reasonable surplus for the furtherance of education is permissible.

While clarifying the judgment, the top Court in Islamic Academy of Education and Anr. v. State of Karnataka and Ors. 3 had observed that once fee is fixed by the Committee, the institute cannot charge either directly or indirectly any other amount over and above the amount fixed as fee. If any other amount is charged, under any other head or guise, e.g. donations, the same would amount to charging of capitation fee. The Governments/appropriate authorities should consider framing appropriate regulations, if not already framed, whereunder if it is found that an institution is charging capitation fees or profiteering, that institution can be appropriately penalised and also face the prospect of losing its recognition/affiliation. In the said judgment, this Court took note of the fact that the States of Tamil Nadu, Maharashtra, Karnataka and Andhra Pradesh have enacted statutes prohibiting collection of capitation fee and regulating admission process in professional colleges. In terms of the provisions of the said Acts, the management of the professional colleges were prohibited from charging any amount other than fee determined under the said Acts.

Lastly, in P.A. Inamdar v. State of Maharashtra, the top Court had held that capitation fee cannot be permitted to be charged and no seat can be permitted to be appropriated by payment of capitation fee. This Court observed that it cannot shut its eyes to the hard realities of commercialization of education and evil practices being adopted by many institutions to earn large amounts. The Court was of the opinion that the method of admission has to be regulated so that the admissions are based on merit and transparency if the charging of capitation fee and profiteering has to be kept in check.

The 7 point Formula to END Capitation Fee

In spite of the State Governments enacting legislation prohibiting the practice of charging capitation fee and making it an offence, the stark reality which cannot be ignored is that capitation fee being charged for admission to medical colleges is prevalent even today, the Supreme Court observed while issuing the following directions:

(1) A web-portal under the aegis of Supreme Court has to be set-up wherein any information about the private medical colleges charging capitation fees can be furnished by the students. 

The web portal has to be maintained and regulated by the National Informatics Centre (NIC) under the Ministry of Electronics and Information Technology.

(2) The Chief Secretaries of the States and Union Territories are directed to publish the details about the web-portal in the English as well as vernacular newspapers at the time of admission. In addition, a pamphlet should be compulsorily given to the students and their parents at the time of counselling informing them about the availability of the web-portal.

(3) While fixing the schedule for the admission process, the National Medical Commission and the Dental Council of India have to make sure that the counselling for all the rounds, including the stray vacancy round, is completed at least two weeks before the last date of admission.

(4) The names of students who are recommended by the authority for admission in the stray round vacancy have to be made public along with rank allotted to them in the NEET exam. The admissions should be made strictly on the basis of merit and in the event of any admission to the contrary, suitable action shall be taken against the private medical colleges.

(5) While fixing fee, the Fee Fixation Committees of the States should take into account all the components of fee, leaving no scope for managements to charge any additional amounts apart from what has been prescribed by the fee fixation committee from time to time. In the event that the management intends to charge additional amounts over and above the price band fixed by the Fee Fixation Committee, or for any component not included in the structure fixed by the Fee Fixation Committee, the same can only be done with the concurrence of the Fee Fixation Committee.

(6) The management of private medical colleges are strictly prohibited from accepting payment of fees in cash, in order to avoid charging of capitation fee. The students or any other aggrieved persons are at liberty to report on the web-portal regarding collection of fees in cash by any medical colleges.

(7) The Director General of Health Services and other concerned authorities to the State Governments should ensure that the All-India Quota and State Quota rounds of counselling are completed strictly in accordance with the time schedule that is fixed.