Apex court clears IIM fee cut

Centre not to interfere in the running of IIMs, says Additional Solicitor-General Mukul Rohtagi.

A bench, comprising Chief Justice V N Khare, Justice S B Sinha and Justice S H Kapadia, recorded the statement of Rohtagi that the government would grant additional funds to make good the deficit arising from the fee reduction.

Rohtagi said the fee reduction would not in any way lead to interference in the running of these institutions.

The Bench, in view of the undertaking given by the government, disposed of a public interest litigation challenging the February 4 decision of Union Human Resources Development Minister Murli Manohar Joshi to cut IIM fees.

Appearing for the petitioners, senior advocate Harish Salve said the fee cut was not a major issue as long as the government did not tinker with the running of the IIMs.

A major controversy had erupted as the government's decision was severely criticised by corporate chiefs including Infosys Chairman and Chief Mentor N R Narayana Murthy and Hindustan Lever Ltd chief M S Banga.

Narayana Murthy, who heads IIM-Ahmedabad board, had said the IIMs were keeping all its legal options open to challenge the fee-cut decision.

The petitioners were asked during the last hearing on February 16 to supply details of the accounts of the IIMs and also justify the high fees charged by the institutions.

When everyone was expecting that the case would be adjourned as the petitioners had sought time to comply with the earlier directions, the additional solicitor-general sprang a surprise by promising that the fee cut would not amount to interference in the management of the B-schools.

In the last hearing, the apex court had said that these institutes should not be accessible only to the elite section of the society and sought to know the basis for the IIMs to charge an annual fee of Rs 1.5 lakh per student.

The bench had also questioned the locus standi of the petitioners. "Who are you, what is your locus?" it had asked and said: "If the iims were satisfied with the decision of the government, who are you to challenge it."

The petitioners had contended that drastic reduction of fees would make these institutions completely dependant on the government for funds which could result in the interference of the government in their administration.

The centre had said that it still gives rs 12 crore as annual subsidy to the society running the iims and subsidies the fee to the tune of rs 2.5 lakhs per student at present.

The ministry had said the decision to drastically cut the fees were taken after considering a recent supreme court order and recommendations of the u r rao review committee which went into the issue.