The Supreme Court of India has issued a significant directive demanding comprehensive transparency from private universities and colleges regarding their financial and operational practices. This landmark decision, rendered on September 17 by Justices Ahsanuddin Amanullah and NV Anjaria, underlines the non-commercial nature of educational institutions, emphasizing that they should not operate as profit-driven enterprises.
The Court’s order requires the Central government, States, and Union Territories (UTs) to gather detailed information on various aspects of private universities’ operations. This includes their finances, admission processes, fee structures, utilization of surplus funds, staff recruitment, and grievance-redressal systems. The directive stems from the case Ayesha Jain v. Amity University, Noida and Others, which initially addressed a specific complaint against Amity University but evolved to encompass broader regulatory issues affecting private educational institutions nationwide.
The Supreme Court explicitly stated, “No private university shall be allowed to be run as a profit-making institution. It has to serve a purpose with some sort of a cushion so that its finances/resources are responsibly managed to ensure smooth functioning of the institution and that the teaching and non-teaching employees are compensated suitably.” The ruling further prohibits the diversion of funds beyond operational requirements for personal benefits of governing board members or other non-educational purposes.
In this extensive order, the Court has also instructed private universities to submit audited financial records for the last five years, detailing revenue sources and expenditures. Additionally, these institutions must disclose any governmental benefits, such as land grants or legal exemptions, and outline their admission procedures, including those responsible for key academic and financial decisions.
The Court insists on transparency regarding fees charged, both at admission and throughout courses, and any additional financial demands made under categories like development funds. Moreover, private universities must clarify how they utilize and invest surplus funds.
Details on recruitment and compensation practices for teaching and non-teaching staff are required, alongside documentation of service conditions. The Court also seeks records of class allocations and actual classes conducted, along with measures in place for teacher absences.
Grievance-redressal mechanisms must be disclosed, including committee compositions and complaint management over the past three years. Universities associated with hospitals need to reveal the nature of their affiliations.
Furthermore, the Supreme Court has tasked professional regulatory and affiliating bodies to provide inspection reports from the last five years, highlighting faculty and staff credentials that justified recognition or affiliation, and any deficiencies found during inspections.
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States and UTs are instructed to compile the required information from the relevant educational institutions and submit affidavits within six weeks, personally affirmed by their Chief Secretaries. Regulatory bodies are similarly mandated to provide affidavits affirmed by their heads. The next hearing is scheduled for November 19.
Advocate Charu Mathur represented the petitioner, while Additional Solicitor General Archana Pathak Dave and Senior Advocates Nalin Kohli and S Niranjan Reddy appeared for the respondents.
