Professional colleges cannot hike fees mid-course except in exceptional circumstances, Supreme Court rules

Students admitted to the Appellant-College’s B.Tech. courses for the 2023–27 cohort completed admission in September 2023 on the basis of the fee structure then published.

On 16 October 2023, the State notified a revised fee ceiling, applicable from the 2023–24 academic year; the College adopted a higher fee structure from January 2024, increasing students’ fees by 37.5%.

The students challenged the revised fee as applied to their cohort.

The Calcutta High Court’s Division Bench held that the revised fees did not apply to students whose admissions were completed before 16 October 2023 and directed reversal or refund of additional amounts collected from them.

The College and other institutions appealed to the Supreme Court.

Whether the fee payable by students at self-financing professional higher education institutions may be varied after admission, during the course of study.

Whether the revised fee structure notified on 16 October 2023 could be applied to students admitted before that date.

Regulation 7(1), (4) and (5) of the AICTE (Norms and Guidelines for Fees and Guidelines for Admission in Professional Colleges) Regulations, 1994 requires fees to be determined by a committee, ordinarily fixed once every three years or at longer intervals, and based on the institution’s expenditure for efficient functioning, audited expenditure and projected requirements.

Regulation 7(7) requires advance intimation of the fees chargeable for the entire course.

T.M.A. Pai Foundation v. State of Karnataka and P.A. Inamdar v. State of Maharashtra recognise both the autonomy and legitimate financial interests of private unaided institutions and the need for regulatory fee fixation; Islamic Academy of Education v. State of Karnataka recognises the role of fee-fixation committees.

The National Education Policy 2020 requires transparent fee-setting and rejects arbitrary increases during a student’s enrolment.

Read together, these principles require authorities to notify the fee for the entire course before admission; variation during the course is permissible only in exceptional circumstances, such as an unforeseen increase in expenditure.

The Court balanced students’ need for certainty about a substantial financial commitment against institutions’ need for adequate resources and society’s interest in effective fee regulation.

It held that the fee-fixation process must be completed before admissions begin and, as far as reasonably possible, account for costs over the course’s duration.

Here, the State’s fee revision followed a seven-year gap and was issued after the 2023–24 admissions process; the College then implemented it mid-course.

The Court therefore upheld the High Court’s protection of students admitted before 16 October 2023, but rejected the High Court’s reasoning that applying the revision would give the notification retrospective effect or that equity and estoppel based on the prospectus barred the College from revising fees.

The Court affirmed the High Court’s directions that the revised fees under the 16 October 2023 notification apply only to students admitted on or after that date, and not to students whose admission process had concluded earlier; the College was directed to comply with the resulting refund or adjustment directions.

The Court further directed that fee-fixation committees be institutionally effective and that fees for the entire course ordinarily be notified before admission, with in-course variation permitted only exceptionally.