The Supreme Court on Friday upheld a penalty of Rs 23.10 crore imposed on FORE School of Management by the AICTE for admitting 42 students in excess to the sanctioned seats in 2016.
The court said it has been noticed that the educational institutions admit students beyond the numbers permitted putting the future of the students at stake.
A vacation bench of justices Deepak Gupta and Surya Kant said it is not setting aside the admission of the students because that action would be too harsh upon them and they should not suffer for the totally illegal action of the institute.
"Time and again, this court has noticed that the educational institutions admit students beyond the numbers permitted putting the future of the students at stake," it said.
"In the present case, we are not setting aside the admission of the students because that action would be too harsh upon the students who should not suffer for the totally illegal action of the petitioner institution."
The bench said that even if it assumes that the decision of the AICTE was not correct, the institution had no business to admit students beyond the number permitted by the AICTE.
It said even if the institution felt that the AICTE was delaying the matter or was not acting fairly, the proper course for the petitioner was to have approached this court and prayed for appropriate relief.
"The petitioner could not take the law into its own hand and grant admission to students in excess of the seats permitted by the AICTE. Therefore, we have no doubt in our mind that the action of the petitioner in granting admission to the students beyond the seats sanctioned is totally illegal and contrary to law," it said.
The petitioner, Foundation for Organizational Research and Education Fore School of Management is a registered educational institution running courses in management. It is situated in South Delhi area here.
The bench said that the AICTE which had many prescribed penalties had only imposed the financial penalty which is the first penalty prescribed.
It noted that the management institute was charging Rs 11 lakh from each student for the entire course and the AICTE according to laid down norms had imposed penalty five times of the amount charged from each student, which in the case for 42 students works out to be Rs 23.10 crore.
"The AICTE has no discretion to award a lesser penalty and, in fact, the petitioner has been let off lightly since only one penalty has been imposed whereas the AICTE could have imposed more than one penalty prescribed," the bench said.
It allowed the institute to adjust Rs 4 crore already deposited with the court in the penalty and directed balance amount of Rs 19.10 crore be deposited with the All India Council of Technical Education (AICTE) within eight weeks.
Granting relief to the students, who have taken admission in excess to the sanctioned seats, the bench said, "We are also of the considered view that the students who had paid large sums of money should not be made to suffer. They have already completed the course but the degrees have not been awarded to them. We, therefore, direct that the degrees be awarded to the said students."
On March 15, 2016, the institute had applied to the AICTE, for extension of approval of existing seats and for increase in seats in certain courses.
The AICTE had on April 25, granted extension of approval for the existing seats in the existing courses but said nothing about approval to increase in seats.
On June 22, 2016, the AICTE rejected the request of the institute to increase the number of seats in certain courses it offers.
However, the management institute admitted students in access to the sanctioned seats despite have no permission for them.
It filed a writ petition in the Supreme Court seeking to quash the June 22, 2016 decision of the AICTE refusing to accede to the request of increasing the number of seats saying that it be allowed to continue with increased seats for the academic year without jeopardizing the career of the students who had already been admitted.
The court had then asked the institute to deposit Rs 2 crores each on two occasions till its case is being adjudicated and allowed to AICTE to inspect the institute to ascertain whether there exists any deficiencies.
During the pendency of the petition in the apex court, the AICTE imposed a penalty of Rs 23.10 crore towards the excess admission of 42 students.
The institute in the apex court contended that inaction of the AICTE in not responding to the request for increase in seats was itself an arbitrary action and the reasons given for not permitting increase in the intake in the courses was totally illegal.
It had contended that when the apex court was seized of the matter the AICTE could not impose penalty which is highly excessive and arbitrary.
The AICTE on other hand contended that the penalty has been imposed strictly in accordance with the Approval Process Handbook (20162017) of the council.
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