Chhattisgarh HC Sets Aside AFRC Charge Cuts And Refund Orders Against Two Medical Colleges, Ordering Fresh Review Of Cost Data

The petitioners, private medical institutions, challenged the AFRC’s recommendation dated 03.04.2025 reducing their hostel, mess and transportation charges, and consequential State and Commissioner orders dated 18.09.2025 and 23.09.2025, including directions to refund alleged excess collections.

They contended that the AFRC had not properly considered their expenditure records and actual facility usage.

In W.P.(C) No. 284 of 2026, the institution’s claimed annual hostel and mess charge of ₹3,00,000 and transportation charge of ₹2,50,000 were reduced to ₹78,059 and ₹13,719 respectively.

The respondents maintained that the proceedings arose from complaints of excessive collection under Section 4(9) of the 2008 Act and that the institutions had received repeated opportunities to provide supporting material.

The Court applied the Chhattisgarh Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2008, including Section 4(9), which empowers the AFRC to inquire into complaints of excessive collection and profiteering and recommend consequential action, and Section 9(2), which requires an opportunity of hearing in the fee-determination process.

The Court relied on P.A. Inamdar v. State of Maharashtra, (2005) 6 SCC 537, and Modern Dental College & Research Centre v. State of Madhya Pradesh, (2016) 7 SCC 353, for the principle that unaided professional institutions have fee-setting autonomy subject to regulation preventing profiteering and capitation fees.

It also applied Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515, on consideration of relevant material and reasonable opportunity;

Automotive Tyre Manufacturers Association v. Designated Authority, (2011) 2 SCC 258, on fair hearing;

and Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496, on the duty to give reasoned decisions.

A complaint proceeding under Section 4(9) does not relieve the AFRC of the obligation to determine permissible charges on relevant material and give reasons.

Although the record showed that the petitioners had received notices and opportunities to be heard, the Court distinguished the existence of a hearing opportunity from meaningful consideration of the material submitted.

The impugned determination did not demonstrate adequate examination of expenditure, student strength and hostel occupancy, or provide reasons for rejecting the institutions’ figures; nor did it establish a rational basis for the substantial difference between the claimed costs and the amounts treated as permissible.

Since those matters were necessary to determine whether the collections were excessive, characterising the proceedings as an inquiry under Section 4(9) did not justify proceeding on assumptions or disregarding the statutory safeguards.

The failure to consider relevant material vitiated the recommendation and the orders founded upon it.

The matters were remitted for fresh consideration, with an effective hearing, consideration of relevant financial and supporting material, and a reasoned order; the Court did not determine the permissible quantum of charges.

The refund directions founded on the impugned determination were also set aside, with any excess-collection issue left to the fresh determination.

The fresh exercise was directed to be completed expeditiously, preferably within three months.

Both petitions were allowed, with no order as to costs.