Education Must Not Be Commercial Venture, Must Remain Noble Service: Madras High Court Quashes Break Fee, Orders Refund By CARE University
Sanchayita Lahkar
The High Court of Madras Single Bench of Justice G.K. Ilanthiraiyan held that institutions cannot impose additional tuition demands described as break fee or miscellaneous charges and directed the Chettinad Academy of Research and Education (CARE) University to refund the deposits collected from students with interest of 6% per annum. The petitions arose after students were asked to pay break fee linked to arrear examinations before being permitted to begin internship. The Court stated that education must not be perceived merely as a commercial venture undertaken for profit but must remain a service to society and noted that such fee demands were not supported by any regulatory requirement. The Bench required adherence to the approved fee structure and found no basis for additional charges.
The petitions were filed by MBBS students admitted under the management quota at the Chettinad Academy of Research and Education (CARE) University. After completing nine semesters and clearing all examinations, the students were required to begin their compulsory internship. At that stage, the university demanded a “break fee” calculated per arrear paper and issued calculation memos, demand notices, and email reminders instructing students to remit the amount. When they did not pay, the university restricted access to campus facilities, denied face-identity entry required for stipend, blocked internship participation, and withheld provisional certificates and other original documents.
The students contended that the demand was arbitrary, not authorised by any statutory regulation, and contrary to the fee fixed by the State Fee Fixation Committee and the norms of the University Grants Commission (UGC) and National Medical Commission (NMC). They asserted that no supplementary classes were attended and that the prospectus did not disclose any such additional fee. They relied on UGC Regulations prohibiting capitation fee in any form and referred to public notices and judicial precedents clarifying that institutions cannot collect charges beyond the approved fee structure.
The university argued that the amount represented tuition for supplementary or extended classes required for students who had failed and that such classes were necessary under medical education regulations. It submitted evidence of circulars and handbooks informing students about payments for extended course duration and maintained that students attended sessions with junior batches to compensate for attendance deficits.
The Court examined the statutory framework governing deemed universities and referred to the UGC Regulations, noting that they expressly prohibit any additional levies beyond the approved structure. It recorded that “Donation or capitation fee in whatever nomenclature or form, either directly or indirectly, is strictly prohibited.” It further stated that “The fee shall be collected as declared in the prospectus of the institution deemed to be University and with a proper receipt for such payment.”
While assessing the university’s reliance on handbooks and internal circulars, the Court noted that the medical education regulations do not require supplementary or special classes for failed students. It stated that “No Regulation speaks about the supplementary classes except the handbook and circular issued by the CARE University.” It added that “Those who have failed in the examinations are not compelled to attend the supplementary classes.” The Court recorded that the relevant regulation only contemplates supplementary examinations, noting that “It doesn't mandate supplementary classes for the students who had failed.”
The Court observed that the circular issued by the institution introducing “special coaching sessions” had no statutory foundation. It recorded that “No Regulation mandates supplementary classes or special classes for supplementary examinations.” Based on the students’ submissions, the Court noted that “No extra classes were conducted by the CARE University.” It further stated that attendance with junior batches, as claimed by the university, “doesn't amount to extra classes in a separate batch.”
The Court examined the fee fixation mechanism and referred to the governing framework, stating that “The regulating Act strictly prohibits the collection of capitation fee in any form and instructed the deemed to be universities not to fleece the students by any fee or charges other than what was declared to them at the time of admission in the prospectus.”
The Court quoted the Supreme Court, recording that “Once fee is fixed by the Committee, the institute cannot charge either directly or indirectly any other amount over and above the amount fixed as fee.” It also noted the definition applied in earlier decisions that “Capitation fee means any amount by whatever name called, paid or collected directly or indirectly in excess of the fee prescribed.”
The Court observed: “Education must not be perceived merely as a commercial venture undertaken for profit. It is, and must remain, a noble service to society that carries with it a profound moral and constitutional responsibility. While students are expected to invest their time, discipline and commitment in shaping their careers, educational institutions, on their part, bear the solemn duty of shaping intellects and nurturing responsible citizens who will illuminate the nation's future. The pursuit of profit making may well define other enterprises, but when applied to education, such an approach undermines its very essence and becomes counterproductive to the larger purpose it seeks to serve.”
The Court directed that “the CARE University is directed not to charge any additional tuition fee in the form of break fee/miscellaneous fee. The State Government, UGC and National Medical Council are directed to implement the fee structure fixed by the Fee Fixation Committee to all deemed to be universities including the CARE University. The CARE University is also directed to refund the deposit made by the petitioners in view of the interim order passed by this Court with interest at the rate of 6% per annum, within a period of two weeks from the date of receipt of a copy of this Order.”
“The CARE University shall release all the educational certificates which were produced by the petitioners at the time of their admission, within a period of two weeks from the date of receipt of a copy of this Order, to pursue their future career. Accordingly, all the Writ Petitions stand allowed. Consequently, connected miscellaneous petitions are closed. There shall be no order as to costs.”
Advocates Representing the Parties
For the Petitioners: Mr. T. Gowthaman, Senior Counsel for Mr. R. Swarnavel
For the Respondents: Mr. M. S. Krishnan, Senior Counsel for Mr. T. Balaji. Mr. B. Rabu, Manohar, Special Panel Counsel, Mrs. V. Sudha, Special Panel Counsel.
Case Title: R.K. Sarathkumaran v. The Chairman & Others
Case Number: W.P.No.39756 of 2024 etc.
Bench: Justice G.K. Ilanthiraiyan
