Raipur Institute Of Medical Sciences vs State Of Chhattisgarh & Ors.

SB-Hon’ble Shri Justice Amitendra Kishore Prasad

Since common questions of fact and law arise for consideration in both these writ petitions, they are being heard and decided by this common order.

For the sake of convenience, W.P.(C) No.253/2026 is taken up as the lead case, and the facts of the said petition, as well as the reliefs sought therein, are being referred to for the purpose of adjudication of both the petitions.

By way of these writ petitions, the petitioners have called in question the orders/communications issued by the respondents pursuant to the recommendations of the Admission and Fee Regulatory Committee, whereby the hostel, mess and transportation charges proposed/collected by the respective petitioner-institutions have been reduced/determined and consequential directions have been issued for refund of the alleged excess amount collected from the students.

The principal grievance of the petitioners is that the Admission and Fee Regulatory Committee, while determining the aforesaid charges, has exceeded the jurisdiction conferred upon it under the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2008. It is contended that the Committee has failed to consider the material and financial details furnished by the petitioners and has reduced the charges without recording any finding of profiteering or capitation fee and without assigning cogent reasons.

In W.P.(C) No.253/2026, the petitioner-Raipur Institute of Medical Sciences has challenged, inter alia, the recommendation dated 03.04.2025 made by the Admission and Fee Regulatory Committee, the consequential order dated 18.09.2025 issued by the State authorities and the subsequent order dated 23.09.2025 passed by the Commissioner, Medical Education. The petitioner has also questioned the competence of the Committee to determine hostel, mess and transportation charges and has alleged violation of the principles of natural justice, particularly Section 9(2) of the Act of 2008. The petitioner has further contended that the charges proposed by it were based upon the actual expenditure incurred towards providing hostel, mess and transportation facilities, and that the Committee, without properly appreciating the material placed before it, has substituted its own assessment and reduced the charges substantially. It has also been contended that the Committee proceeded on incorrect assumptions regarding the number of students availing hostel and mess facilities and the expenditure incurred by the institution.

In WPC No. 284 of 2026, the petitioner No.1 is a private medical college run by petitioner No.2-Society. The dispute in the present petition relates to the fixation of Hostel, Mess and Transportation charges by the Admission and Fee Regulatory Committee under the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Act, 2008. The petitioner institution had furnished the details and documents justifying the charges claimed by it, namely Rs.3,00,000/- per student per year towards Hostel and Mess and Rs.2,50,000/- towards Transportation. However, by its recommendation dated 03.04.2025, the Committee reduced the same to Rs.78,059/- and Rs.13,719/- respectively. Pursuant thereto, the State Government passed the order dated 18.09.2025 and subsequently the order dated 23.09.2025 directing determination of the charges and refund of the amounts collected by the petitioner. The petitioners contend that the charges were reduced without recording any finding of profiteering or considering the documents submitted by the institution and without affording proper opportunity of hearing under Section 9(2) of the Act, and have therefore challenged the recommendation and the consequential orders.

For the sake of convenience and to avoid repetition, the reliefs sought in WPC No. 253 of 2026 (Raipur Institute Of Medical Sciences vs. State of Chhattisgarh and Others) are taken as the common reliefs prayed for by the petitioners as the nature of grievances and the reliefs claimed therein are substantially identical across both the petitions. In the said writ petition, the petitioners have prayed for following reliefs :-

The reliefs sought in W.P.(C) No.284 of 2026 are also reproduced hereinbelow for convenience:-

Mr. Jitendra Singh along with Mr. Nishant Shokeen, Ms. Shalini Kashyap, Ms. Rashmipriya & Mr. Anant Amrit Raj, learned counsel appearing for the petitioners, while assailing the impugned action, would submit that the Admission and Fee Regulatory Committee (AFRC) has travelled beyond the statutory jurisdiction vested in it under the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Act, 2008 (for short, ‘the Act of 2008’). It is contended that the power of the Committee is regulatory in nature and is primarily intended to prevent profiteering and collection of capitation fee. The Committee, therefore, could not have mechanically substituted its own assessment for the charges proposed by the unaided private educational institutions. Learned counsel would further submit that the petitioners had furnished relevant financial particulars, expenditure statements and supporting documents before the Committee, but the same have not been duly considered. According to learned counsel, the impugned determination is based on assumptions and incomplete data and there is no finding that the charges proposed by the petitioners contained any element of profiteering or capitation fee. It is further submitted that the impugned recommendation dated 03.04.2025 was made without affording an effective opportunity of hearing to the petitioners, in violation of Section 9(2) of the Act of 2008, which specifically provides that the Committee shall give the institution an opportunity of being heard before fixing any fee. It is, therefore, contended that the impugned recommendation and the consequential orders stand vitiated on account of breach of the principles of natural justice.

Learned counsel would submit that the aforesaid issue is also covered by the judgment of this Court dated 24.08.2023 passed in W.P.(C) Nos.3415 of 2023 and 3488 of 2023, as well as the judgment dated 07.09.2023 passed in W.P.(C) No.3782 of 2023, wherein the earlier exercise of fee fixation undertaken by the AFRC and the State Government was set aside for non-compliance with Section 9(2) of the Act of 2008 and violation of the principles of natural justice. It is submitted that, despite the said directions, the respondents have again undertaken the exercise without affording an effective opportunity of hearing to the petitioners.

Learned counsel would further rely upon the judgment of the Hon’ble Supreme Court in Najiya Neermunda & Anr. v. Kunhitharuvai Memorial Charitable Trust & Ors., reported in (2021) 5 SCC 515, as also P.A. Inamdar & Ors. v. State of Maharashtra, reported in (2005) 6 SCC 537, and Icon Education Society v. State of Madhya Pradesh, reported in 2023 SCC OnLine SC 289, to contend that unaided professional educational institutions have autonomy in determining the fee to be charged, subject to regulatory control to ensure that such fee does not result in profiteering or collection of capitation fee.

It is also submitted that the Committee proceeded on an erroneous assumption that all the students were availing hostel and mess facilities, whereas the actual hostel occupancy varied from academic year to academic year. Learned counsel would submit that, for the financial years 2022-23, 2023-24 and 2024-25, against the total strength of 664, 867 and 889 students respectively, the number of students residing in the hostel was 506, 652 and 732 respectively. Thus, according to the petitioners, the assumption of 100% hostel occupancy was factually incorrect and materially affected the determination of the charges. Learned counsel would further submit that the Committee has failed to consider the actual expenditure incurred by the institutions towards hostel, mess and transportation facilities, including salaries, utilities, maintenance, fuel, infrastructure, hygiene and other operational expenses. It is contended that the Committee proceeded on hypothetical figures, including a student strength of 600 MBBS and 60 MD/MS students, which, according to the petitioners, was not the actual number of students availing the facilities during the relevant academic sessions.

Learned counsel would particularly refer to the AFRC recommendation dated 03.04.2025 and submit that, on its own showing, the Committee recorded that complete and sufficient data was not available for accurately assessing the actual cost structure and recommended submission of a detailed cost sheet by the petitioner-institution. It is argued that, despite the said recommendation, the Directorate of Medical Education proceeded to direct refund of the alleged excess amount without first undertaking the foundational exercise of determining the actual cost incurred by the institution. It is further submitted that the petitioners had, from time to time, furnished detailed information and supporting documents in justification of the charges, including a head-wise justification relating to infrastructure, staff salaries, fuel, maintenance, hygiene and capital expenditure. Learned counsel would submit that such material has not been properly considered while determining the impugned charges.

Learned counsel would also submit that the petitioners had placed on record their financial position, including the certificates issued by the Chartered Accountant indicating losses incurred by the institution, and therefore, the conclusion regarding the charges could not have been arrived at without considering the complete financial material produced by the petitioners. It is further submitted that the impugned recommendation was not duly signed by all the members constituting the Committee. According to learned counsel, the Committee is required to consist of five members, whereas the recommendation dated 03.04.2025 bears the signatures of only four members. It is contended that the statutory composition of the Committee could not have been disregarded while exercising the powers vested under the Act of 2008 and that the decision-making process is consequently vitiated. Learned counsel would further submit that the consequential direction for refund of the alleged excess amount collected from the students is also unsustainable, particularly when the determination of the charges itself is under challenge and no individual determination has been made as to the students who actually availed the concerned facilities. It is contended that the refund direction could not have been issued mechanically without first determining the actual charges payable and the amount, if any, collected in excess.

Learned counsel would lastly submit that the impugned action also suffers from non-application of mind inasmuch as the respondents have failed to take into consideration the year-on-year escalation in operational costs, including salary, statutory compliances, maintenance, utilities, consumables and infrastructure upkeep. It is argued that such factors were relevant for determination of the actual cost of providing the facilities. On the aforesaid grounds, learned counsel for the petitioners submits that the impugned recommendation dated 03.04.2025 and the consequential orders dated 18.09.2025 and 23.09.2025 are liable to be quashed. In the alternative, it is submitted that the matter may be remitted to the competent authority for fresh consideration, after taking into account the relevant material placed by the petitioners and after affording them an effective opportunity of hearing in accordance with Section 9(2) of the Act of 2008.

Mr. Manoj Paranjpe, Senior Advocate along with Mr. Ujjawal Kumar Gouraha & Mr. Kabeer Kalwani, learned counsel for the petitioner in WPC No. 284 of 2026 submits that the recommendation dated 03.04.2025 and the consequential order dated 18.09.2025 passed by the Regulatory Committee are illegal, arbitrary and contrary to the provisions of the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Act, 2008. It is submitted that the Regulatory Committee has reduced the Transportation, Hostel and Mess charges proposed by the petitioner institution without recording any finding of profiteering, unreasonableness or commercialization and without assigning any cogent reason for disagreeing with the charges proposed by the institution. Learned counsel submits that the petitioner had furnished all relevant documents, including its accounts, income and expenditure statements, budget and other material, to justify the proposed charges, but the same were not duly considered. It is further submitted that the Committee has virtually fixed the charges itself, whereas its power is confined to regulating profiteering and ensuring that the fees and charges proposed by a private institution do not amount to profiteering. It is also submitted that Transportation, Hostel and Mess charges are required to be considered having regard to the individual circumstances, expenditure and facilities of each institution. Learned counsel further submits that the impugned decision was taken without affording proper opportunity of hearing as contemplated under Section 9(2) of the Act of 2008 and was also passed at the fag end of the academic session. It is contended that the recommendation was not signed by one of the members of the Committee and, therefore, the decision suffers from legal infirmity. Relying upon the judgments of the Hon'ble Supreme Court, including P.A. Inamdar v. State of Maharashtra, (2005) 6 SCC 537, and the judgment of this Court in W.P.(C) No.3674 of 2011, learned counsel submits that the impugned recommendation and order are liable to be set aside.

Reliance has been placed upon the matters of Automotive Tyre Manufacturers Association v. Designated Authority and Others (2011) 2 SCC 258, Chhattisgarh Dental College and Research Institute v. Shweta Kabra and Others 2025 SCC OnLine SC 1169, Babu Verghese and Others v. Bar Council of Kerala and Others (1999) 3 SCC 422, Saral Wire Craft Private Limited v. Commissioner of Customs, Central Excise and Service Tax and Others (2015) 14 SCC 523, Narayana Medical College v. State of Andhra Pradesh and Others (2023) 2 SCC 636, Rashtreeya Sikshana Samithi Trust Etc. v. Committee for Fixation of Fee Structure of Private Professional Colleges AIR 2022 SC 2434, Icon Education Society v. State of Madhya Pradesh and Others (2024) 16 SCC 509, Bindiya Khatri and Others v. State of Uttarakhand and Others 2025 SCC OnLine Utt 4626, Najiya Neermunda & Anr. v. Kunhitharuvai Memoraial Charitable Trust and Others (2021) 5 SCC 515, Glocal Medical College and Super Speciality Hospital and Reserch Centre v. Union of India (2017) 15 SCC 690, Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan (2010) 9 SCC 496, Shanker Doon and Others v. Government of NCT of Delhi and Others 2019 SCC OnLine Del 6737. Reliance has also been placed in the judgments passed by this Court in the matters of Margdarshan Sansthan Shiksha Mahavidyalaya v. State of Chhattisgarh WPC No. 3674/2011, Raipur Institute of Medical Sciences v. State of Chhattisgarh & Ors. WPC No. 3415/2023 and Harihar Prasad Parate v. State of Chhattisgarh & Ors. WPS No. 3341/2015.

Per contra, Mr. Sabhyasachi Choubey, learned State counsel appearing for the respondents would submit that the impugned proceedings were initiated in exercise of the complaint-adjudicatory jurisdiction of the Admission and Fee Regulatory Committee (AFRC) under Section 4(9) of the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2008 (for short, ‘the Act of 2008’), and not as part of any general exercise of fee fixation under Section 9 of the Act. It is submitted that the proceedings arose out of complaints alleging excessive collection and profiteering in respect of hostel, mess and transportation charges, and the Committee, after enquiry, recorded its findings and recommended refund of the excess amount in accordance with Section 4(9) of the Act. Learned State counsel would further submit that the petitioners’ contention that the Committee has encroached upon the autonomy of the unaided private institutions in the matter of fee fixation is misconceived, as the impugned action is referable to the distinct jurisdiction conferred upon the Committee under Section 4(9) to enquire into complaints relating to collection of fee in excess of the fee determined and profiteering by an institution. According to learned counsel, the judgments relied upon by the petitioners regarding the limited regulatory role of the Committee in fee fixation have no application to an adjudicatory proceeding initiated upon a complaint of profiteering. It is further submitted that Section 4(9) expressly empowers the Committee, upon enquiry and finding of violation, to recommend return of the excess amount collected to the person concerned and also recommend imposition of fine. Thus, according to learned State counsel, the direction for refund is not an independent or arbitrary exercise of power but a statutory consequence flowing from the finding recorded by the Committee.

Learned State counsel would submit that the plea of violation of principles of natural justice is wholly misconceived. The petitioner was afforded repeated opportunities over a considerable period to furnish the requisite information and supporting documents. The record discloses that notices were issued and hearings were held on several dates, including 15.01.2024, 07.02.2024, 07.01.2025, 03.02.2025, 19.02.2025, 24.02.2025, 25.02.2025, 27.02.2025, 03.03.2025, 10.03.2025 and 17.03.2025. Learned counsel submits that the petitioner’s representatives appeared before the Committee and were repeatedly directed to furnish point-wise information and supporting documents, but failed to furnish the complete material sought by the Committee. Learned State counsel would further submit that the petitioner itself admits having received and responded to various notices issued by the Committee. Therefore, the allegation that no opportunity of hearing was afforded is contrary to the record. It is contended that the petitioner, having been afforded repeated opportunities, cannot subsequently allege violation of audi alteram partem merely because the material furnished by it did not result in acceptance of its claim. It is submitted that the Committee had specifically called upon the petitioner to furnish relevant material concerning the hostel, mess and transportation charges, including sanctioned layout plans, details of rooms, bills and vouchers, electricity bills, staff particulars, ledger accounts, construction expenditure, loan documents, Chartered Accountant certificates, mess expenditure/contracts, transportation agreements, vehicle documents, log books, fuel and maintenance bills and particulars of drivers. Learned State counsel submits that such material was necessary for determining whether the charges claimed by the petitioner were commensurate with the actual expenditure incurred.

Learned counsel would submit that, despite repeated opportunities, the petitioner failed to furnish the requisite head-wise and student-wise cost justification. Consequently, the Committee proceeded on the basis of the material available on record. It is argued that a party which fails to produce the primary material necessary for determination of its own claim cannot subsequently assail the determination on the ground that the authority had proceeded on the available material. Learned State counsel would further submit that the finding of excess collection was not based upon conjectures or surmises but upon the financial material furnished by the petitioner itself. According to the respondents, the justifiable expenditure on a ‘No Profit, No Loss’ basis was worked out at Rs.96,407/- per student per annum, whereas the petitioner had recovered Rs.5,50,000/-per student per annum towards the concerned heads, resulting in an excess collection of Rs.4,53,593/- per student per annum. It is further submitted that the petitioner’s reliance upon Chartered Accountant certificates showing overall losses of the institution does not answer the specific issue involved in the proceedings. Learned counsel submits that the controversy before the Committee concerned the actual expenditure attributable to hostel, mess, transportation and allied heads, and therefore, consolidated financial losses of the institution could not, by themselves, justify the charges collected from the students.

Learned State counsel would also submit that the hostel, mess and transportation facilities were required to be optional, whereas the petitioner had recovered a consolidated amount of Rs.5,50,000/- from the students without demonstrating that the charges were separately optional or that the students had the liberty to avail or decline individual facilities. It is contended that such compulsory collection was inconsistent with the applicable regulatory framework and the conditions governing the fee structure. As regards the challenge to the competence of the Committee, learned State counsel would submit that the plea of coram non judice is without substance. It is pointed out that the regulations framed by the State Government under Section 13 of the Act of 2008 prescribe a minimum quorum of three members, whereas the impugned recommendation bears the signatures of four members. It is, therefore, submitted that the prescribed quorum stood duly satisfied. Learned counsel would further submit that the Act does not require the recommendation to bear the signatures of every member of the Committee or prescribe unanimity in its decision-making process. Learned State counsel would further submit that the proceedings cannot be assailed on the ground that the complaints were not confined to a particular academic session. According to the respondents, Section 4(9) of the Act prescribes no period of limitation for entertaining complaints of profiteering or excessive collection. It is also submitted that the recommendation records the petitioner’s own fee structure for the subsequent academic session, and therefore, the finding regarding excess collection was not confined merely to one academic year.

Learned State counsel has also raised a preliminary objection regarding non-joinder of necessary parties. It is submitted that the proceedings originated from complaints made by students and the impugned orders direct refund of the excess amount to the concerned students. Since the petitioners seek to set aside the refund direction, the students in whose favour the refund has been directed are directly affected parties and ought to have been impleaded in the writ proceedings. Learned counsel would submit that the petitioners cannot seek an order adversely affecting the rights of the complainant students without impleading them as parties. It is, therefore, contended that the writ petitions are liable to be dismissed on the ground of non-joinder of necessary parties as well.

Learned State counsel would lastly submit that the impugned recommendation dated 03.04.2025 and the consequential orders dated 18.09.2025 and 23.09.2025 have been passed by the competent statutory authorities, after enquiry and after affording adequate opportunity to the petitioners. It is submitted that no jurisdictional error, violation of natural justice or perversity has been demonstrated warranting interference under Article 226 of the Constitution of India. On the aforesaid submissions, learned State counsel submits that the writ petitions are devoid of merit and are liable to be dismissed. Reliance has been placed upon the judgment passed by this Court in Disha Education Society v. State of Chhattisgarh and Others WPC No. 2112 of 2010.

Learned counsel appearing for respondent No.3–Admission and Fee Regulatory Committee (AFRC), Mr. Rajkumar Gupta, supporting the submissions advanced by learned State counsel, would submit that the impugned recommendation dated 03.04.2025 was made by the Committee in exercise of the statutory jurisdiction conferred upon it under Section 4(9) of the Act of 2008, upon complaints regarding excessive collection of hostel, mess and transportation charges and alleged profiteering by the petitioner-institution. It is submitted that the proceedings were conducted after affording repeated opportunities to the petitioner to furnish the requisite financial and supporting documents, and that the Committee considered the material available on record before arriving at its recommendation. Learned counsel would further submit that the contention of the petitioner that the AFRC had undertaken a fresh exercise of fee fixation is misconceived, as the proceedings in question arose from complaints alleging excess collection and profiteering and were therefore distinct from the general exercise of fee fixation contemplated under Section 9 of the Act. It is submitted that Section 4(9) specifically empowers the Committee to enquire into such complaints and, upon finding excess collection, to recommend return of the excess amount to the concerned persons and such other action as may be permissible under the Act.

Learned counsel for the AFRC would further submit that the petitioner was granted sufficient opportunity to place before the Committee the relevant material concerning the actual expenditure incurred towards hostel, mess and transportation facilities. Despite repeated notices and hearings, the petitioner failed to furnish complete and satisfactory head-wise material necessary for determining the actual cost. The Committee, therefore, proceeded on the basis of the material available on record. It is submitted that the petitioner cannot challenge the recommendation merely because the material furnished by it was not accepted in its entirety. Learned counsel would also support the submission of learned State counsel that the plea of violation of principles of natural justice is without substance, as the record demonstrates that the petitioner was afforded repeated opportunities of hearing and to produce the relevant documents. It is submitted that the recommendation was passed after due consideration of the material placed before the Committee and does not suffer from any jurisdictional error or procedural illegality.

Learned counsel would further submit that the objection regarding the constitution/quorum of the Committee is also untenable. According to learned counsel, the applicable regulations prescribe the requisite quorum, which stood duly satisfied when the impugned recommendation was made. The fact that the recommendation bears the signatures of four members, according to learned counsel, does not render the proceedings invalid. On the aforesaid submissions, learned counsel appearing for respondent No.3–AFRC would submit that the impugned recommendation was made in accordance with the statutory framework and after following the prescribed procedure and, therefore, no interference by this Court in exercise of jurisdiction under Article 226 of the Constitution of India is warranted.

I have heard learned counsel appearing for the petitioners as well as learned counsel appearing for the respective respondents, including learned counsel for the Admission and Fee Regulatory Committee (AFRC), and perused the material available on record.

I have heard learned counsel appearing for the petitioners as well as learned counsel appearing for the respective respondents, including learned counsel appearing for respondent No.3–Admission and Fee Regulatory Committee (AFRC), and have perused the material available on record.

The principal issue which arises for consideration in these writ petitions is whether the impugned recommendation dated 03.04.2025 and the consequential orders dated 18.09.2025 and 23.09.2025 can be sustained when the charges relating to hostel, mess and transportation facilities have been determined without a proper consideration of the expenditure actually incurred by the respective institutions and without undertaking the statutory exercise contemplated under Section 9 of the Act of 2008 in its proper perspective.

The petitioners have specifically contended that the charges proposed by them were founded upon the actual expenditure incurred towards providing hostel, mess and transportation facilities. They placed before the Committee various particulars relating to infrastructure, salaries, electricity, maintenance, fuel, hygiene, transportation, staff and other operational expenditure. It is also their specific case that the number of students actually availing the hostel and mess facilities varied from academic year to academic year and, therefore, the determination could not have proceeded on the assumption of uniform or complete occupancy.

The material placed before this Court indicates that the petitioners had furnished material relating to the expenditure incurred towards hostel, mess and transportation facilities, including expenditure on infrastructure, salaries, electricity, maintenance, fuel, hygiene, transportation and other operational requirements. The petitioners had also placed material concerning the actual number of students availing the hostel and mess facilities during the relevant academic sessions. The determination made by the respondent-Committee, however, does not demonstrate that the aforesaid material was examined in its proper perspective before arriving at the permissible charges.

It is true that the regulatory authority is entitled to scrutinize the expenditure claimed by an institution and to prevent profiteering or collection of capitation fee. The regulatory power, however, does not dispense with the requirement of considering the relevant material produced by the institution. The exercise of determination has necessarily to be based upon relevant and legally permissible considerations. Equally, the authority cannot substitute an assumed expenditure figure for the actual expenditure without recording cogent reasons for rejecting the material produced by the institution.

The Hon’ble Supreme Court in P.A. Inamdar (Supra), has held that every institution is free to devise its own fee structure subject to the limitation that there can be no profiteering or collection of capitation fee. The principles governing regulation of fee in private unaided professional institutions have also been reiterated in Modern Dental College & Research Centre & Ors. v. State of Madhya Pradesh & Ors., (2016) 7 SCC 353.

The contention of the respondents that several opportunities were afforded to the petitioners has also been considered. The record, as referred to by learned State counsel and learned counsel for the AFRC, indicates that notices were issued and hearings were held on several dates and the petitioners were called upon to furnish various documents. The existence of opportunity of hearing, however, is distinct from proper consideration of the material furnished pursuant to such opportunity. Compliance with the principles of natural justice requires not merely an opportunity to submit documents but also a meaningful consideration of the relevant material before an adverse determination is made.

In Automotive Tyre Manufacturers Association (Supra), the Hon’ble Supreme Court has reiterated that the rule of audi alteram partem includes reasonable opportunity to meet the case and to explain the material relied upon, particularly where the decision entails adverse civil consequences. The relevant paras are quoted hereinbelow:-

In the present case, the grievance of the petitioners is not confined merely to denial of an opportunity to appear before the Committee. Their principal grievance is that the material relating to actual expenditure, occupancy, infrastructure, staff, utilities, maintenance, transportation and other relevant heads was not duly considered while arriving at the permissible charges. The said grievance goes to the root of the decision-making process.

The Hon’ble Supreme Court in Najiya Neermunda & Anr. (Supra), has emphasized the necessity of consideration of the relevant material and affording reasonable opportunity to the management in the matter of fee determination concerning private self-financing medical institutions.

The statutory scheme also requires the fee determination exercise to be undertaken upon consideration of the relevant financial material and after affording the institution an effective opportunity of being heard. Therefore, the requirement under Section 9(2) of the Act of 2008 cannot be treated as a mere procedural formality. Where the authority is required to determine or regulate the fee structure of a private professional educational institution, the financial material placed by such institution constitutes a relevant component of the decision-making exercise.

The respondents have sought to distinguish the provisions of Section 9 from the proceedings under Section 4(9), contending that the present proceedings originated from complaints alleging excessive collection and profiteering and, therefore, constituted a complaint-adjudicatory exercise. There can be no dispute that Section 4(9) confers jurisdiction upon the AFRC to enquire into complaints regarding excessive collection and profiteering and to take consequential action in accordance with law. However, while examining whether the amount collected is excessive, the authority must necessarily determine the legitimate and permissible cost/fee component on the basis of the statutory framework and the relevant material available before it.

In other words, the characterization of the proceedings as proceedings under Section 4(9) cannot authorize the Committee to disregard the statutory safeguards and principles governing determination of fee. The power to enquire into an allegation of excess collection necessarily carries with it the obligation to correctly determine the amount which could lawfully be charged. Such determination must be founded upon relevant material and cannot rest upon assumptions which have the effect of excluding legitimate expenditure incurred for providing the facilities.

The aforesaid principle is also consistent with the law declared by the Hon’ble Supreme Court in Modern Dental College & Research Centre & Ors. (Supra) wherein the regulatory exercise concerning fee in private professional institutions has been considered in the context of the legitimate financial requirements of the institution and the permissible regulatory control against profiteering.

The respondents have relied upon the figure of Rs.96,407/-per student per annum as the permissible expenditure and have compared the same with the amount of Rs.5,50,000/-allegedly recovered per student per annum. However, before arriving at such a substantial difference, the authority was required to examine the actual expenditure under each relevant head and record reasons for accepting or rejecting the particulars furnished by the petitioners. A determination of this nature, particularly where it results in a finding of excess collection and a consequential direction for refund, must disclose a rational nexus between the material placed on record and the conclusion reached.

The requirement of recording reasons in such decision-making is also settled by the Hon’ble Supreme Court in Kranti Associates Pvt. Ltd. (Supra), wherein it has been held that reasons operate as a restraint against arbitrary exercise of power, demonstrate consideration of relevant grounds and facilitate judicial review. The relevant para is quoted hereinbelow:-

The issue of hostel occupancy is also material. The petitioners have furnished year-wise figures showing that the number of students actually residing in the hostel was less than the total student strength. If the authority intended to proceed on a different basis, it was incumbent upon it to record reasons for doing so and to explain why the actual occupancy figures furnished by the institutions were not accepted. The determination of expenditure cannot be divorced from the number of students actually availing the facility, particularly where the expenditure comprises both fixed and variable components.

Likewise, expenditure towards salaries, electricity, maintenance, fuel, infrastructure, hygiene, transportation, staff and allied operational requirements cannot be excluded merely because the authority considers the overall amount claimed to be high. Each relevant head is required to be examined in the light of the material produced, the nature of the facility, the number of students availing the same and the applicable statutory parameters. Where an expenditure claim is rejected, reasons must be furnished so that the institution is able to understand the basis of such rejection and the Court is able to examine whether the decision-making process was lawful.

The aforesaid approach is consistent with the principles laid down by the Hon’ble Supreme Court in P.A. Inamdar (supra) and Modern Dental College (supra), recognising the relevance of the expenditure, infrastructure, facilities and other legitimate components in determining the fee structure of private unaided professional educational institutions.

The submission of the petitioners regarding the Chartered Accountant certificates and the financial position of the institutions also deserves consideration. While the overall loss suffered by an institution may not, by itself, establish that every individual charge levied upon a student is justified, such financial material cannot be completely disregarded where it is relied upon to demonstrate the actual cost of providing the concerned facilities. The relevant question is not whether the institution has suffered an overall loss, but whether the particular expenditure claimed towards the regulated facilities was genuine, relevant and supported by material. That exercise does not appear to have been satisfactorily undertaken.

The submission regarding the number of members who signed the recommendation need not be examined independently for the purpose of disposal of these petitions, particularly when the impugned exercise otherwise fails to withstand judicial scrutiny on the substantive ground of non-consideration of relevant material. Even assuming that the requisite quorum was available, satisfaction of quorum by itself does not cure defects in the decision-making process arising from failure to consider relevant financial material in accordance with the statutory scheme.

Similarly, the question whether the complaints were confined to a particular academic session need not be conclusively determined in these proceedings. The impugned determination itself must, in any event, disclose the factual and financial basis on which the charges for the concerned period have been examined. A general conclusion regarding excessive collection cannot substitute a proper year-wise and head-wise consideration where the expenditure and student occupancy materially vary from one academic session to another.

This Court is conscious of the limited scope of judicial review in matters involving expert regulatory authorities. Ordinarily, the Court would not substitute its own assessment of the appropriate fee or expenditure for that of the statutory authority. Judicial review, however, extends to examining whether the authority has acted within the statutory framework, considered relevant material, excluded irrelevant considerations and followed the prescribed procedure. Where the foundational exercise itself suffers from non-consideration of relevant material, remand for fresh consideration becomes necessary.

The requirement that a quasi-judicial or administrative authority must record reasons and demonstrate consideration of relevant material has been reiterated by the Hon’ble Supreme Court in Kranti Associates Pvt. Ltd. (Supra).

In Saral Wire Craft (P) Ltd. v. Commr. of Customs, Central Excise & Service Tax, (2015) 14 SCC 523, following observation has been made vide para 9:-

In the present case, the petitioners had placed before the AFRC material concerning the actual expenditure incurred towards hostel, mess and transportation facilities. The impugned determination, however, does not demonstrate adequate consideration of such material in the manner required by the statutory scheme. The determination consequently cannot be sustained merely on the ground that the petitioners were given several opportunities to submit documents. An opportunity of hearing has meaning only when the material submitted pursuant thereto is duly considered before arriving at an adverse conclusion.

This Court, therefore, finds that the impugned recommendation dated 03.04.2025 suffers from a material infirmity in the decision-making process. Since the consequential orders dated 18.09.2025 and 23.09.2025 are founded upon the said recommendation, they too cannot be permitted to operate in their present form.

The principles governing consideration of relevant financial material and effective opportunity in the matter of fee determination have also been recognised by the Hon’ble Supreme Court in Najiya Neermunda (Supra).

For the aforesaid reasons, this Court is of the considered view that the matter requires reconsideration by the competent statutory authority. Such reconsideration shall not be an empty formality. The competent authority shall undertake a fresh exercise in accordance with the Act of 2008 and the applicable regulations, particularly keeping in view the requirements of Section 9, and shall consider the relevant financial material produced by the petitioners.

While undertaking the fresh exercise, the competent authority shall consider, inter alia, the actual student strength and hostel occupancy for the relevant academic sessions, the expenditure towards hostel, mess and transportation facilities, salaries, electricity, maintenance, fuel, infrastructure, hygiene, transportation, staff and other relevant operational expenses, together with the supporting documents produced by the petitioners. The authority shall also examine the distinction between fixed and variable expenditure wherever relevant and shall record reasons for accepting or rejecting the material placed before it.

It is clarified that this Court has not expressed any opinion on the quantum of fee or charges that may ultimately be found permissible. The competent authority shall undertake the exercise independently and in accordance with law. The regulatory power to prevent profiteering and excessive collection shall remain fully available to the competent authority; however, any such conclusion must follow a lawful, reasoned and material-based determination.

In view of the foregoing discussion, the impugned recommendation dated 03.04.2025 passed by respondent No.3–Admission and Fee Regulatory Committee, the consequential order dated 18.09.2025 passed by respondent No.1 and the order dated 23.09.2025 passed by respondent No.4, insofar as they relate to the petitioners, are hereby quashed and set aside.

The matters are remitted to the competent authority/AFRC for fresh consideration. The petitioners shall be afforded an effective opportunity of hearing and shall be permitted to place all relevant financial and supporting material on record. The authority shall thereafter pass a fresh, reasoned and speaking order in accordance with the Act of 2008, the applicable regulations and the observations made herein.

In consequence of the aforesaid order, the directions for refund founded upon the impugned determination shall also stand set aside. Any question regarding excess collection, if found permissible in law after the fresh determination, shall abide by the fresh order to be passed by the competent authority.

The fresh exercise shall be completed expeditiously, preferably within a period of three months from the date of receipt of a copy of this order, subject to the petitioners extending full cooperation and furnishing the requisite material within the time granted by the authority.

Both the writ petitions, accordingly, stand allowed in the aforesaid terms.

There shall be no order as to costs.

All pending interlocutory applications, if any, shall stand disposed of accordingly.