Private institutions cannot be permitted to operate like money minting institutions

Himachal Pradesh High Court– Dismissing the petition filed by the petitioner institute against the order wherein respondent 2 had directed the petitioners to jointly and severally refund the fees taken from private respondents, the bench of Tarlok S. Chauhan, J., observed that private institutions cannot be permitted to operate like money minting institutions; rather it has to be ensured that they comply with all the rules, regulations and norms before they are granted permission to operate within the State of Himachal Pradesh. The innocent people of this State cannot be allowed to be duped any further. The Court referred to State of Maharashtra v. Vikas Sahebrao Roundale, (1992) 4 SCC 435 wherein the Supreme Court 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’.

The impugned orders were challenged on the ground that respondent 2 had no jurisdiction to entertain the petition, as the dispute relating to Sikkim Manipal University was beyond its territorial jurisdiction and further that the private respondents did not fall within the definition of students, therefore, also their claim before the respondent No. 2 was not maintainable. On the other hand Respondent 2 averred that the petitioner was not authorized to act as franchisee or affiliated Institute of Sikkim Manipal University, therefore, it could not have collected any fee from the students.

After perusal of the relevant guidelines and statutes, the Court noted that the parent institutions shall not establish their study centers/regional centers outside their jurisdiction as specified in the parent institutions Act/MOA. The Court expressed its concern that the mushrooming of private universities has only led to a cut-throat competition leading to misleading advertisements which can only be termed to be persuasive, manipulative and exploitative to attract the widest possible audience. The Court also observed that private institutions have been raising their assets after illegally collecting funds like building fund, development fund, infrastructure fund etc. It is high time that these practices are stopped forthwith and there is a crack down on such institutions. Every education institution is accountable and no one can be assumed to be above the law. The Court directed that the respondent-State should act responsibly by conducting a fresh investigation of all these institutions. [Business Institute of Management Studies v. State of Himachal Pradesh, 2016 SCC OnLine HP 472, decided 27.04.2016]

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