A High Court division Bench of Justice Goda Raghuram and Justice P. Durga Prasad on Saturday declared the fee structure prescribed by the state based on the recommendations of the Annual Fee Regulating Committee (AFRC) as invalid and quashed notifications issued in 2010 and 2011.

While allowing a batch of petitions challenging the fee structures of private unaided educational institutions, the Bench directed the government to notify fresh fee structure proposals for the academic years 2010-11, 2011-12 and 2012-13 after considering the AFRC recommendations and the current judgement.

Citing the constraints under Section 7 of the Capitation Fee Act, the Bench called for regulatiory mechanism to ensure that there was collection of capitation fees.
The HC division bench that quashed the government's fee structure, directed the government to scan the accounts of the institutions.

The Bench held that cross-subsidy of the fees payable by one class of students by another was unconstitutional. It said the government could not notify differential fee structures for different classes of seats, whether called A or B categories, which did not represent the per capita cost of an institution and incorporated elements of crosssubsidy.

The Bench ruled that the fees chargeable from each student of private
unaided colleges should reflect the per capita cost of such education in accordance with the parameters in GO No. 6 of Higher Education dated January 8, 2007.

The court also said that the AFRC might recommend and the government might notify a higher fee for students admitted to 15 per cent of the sanctioned intake in each course as NRI quotas in private unaided educational institutions.

It asked the institutions to deposit the fees collected from general categories (A&B) in separate accounts. The bench also declared that the institutions which did not respond to the AFRC notification should not be permitted to collect any fees.