The High Court of Chhattisgarh at Bilaspur Bench has held that the Admission and Fee Regulatory Committee (AFRC) cannot reduce hostel, mess and transport charges or direct refunds without properly examining the institutions’ actual expenditure records and recording clear reasons for rejecting their cost claims. The Court held that the AFRC must base its determination of hostel, mess and transport charges on a proper assessment of financial records and cannot arrive at figures through assumptions or unexplained calculations.
The Court said that the regulator must genuinely consider the documents and explanations submitted by institutions and address them in its decision-making process. It also clarified that actual occupancy and operational costs matter Student occupancy, maintenance costs, salaries, electricity, fuel, hygiene, infrastructure and other operational expenses are relevant factors that must be examined while determining permissible charges.
If the regulator disagrees with the expenditure figures placed on record by a college, it must record specific reasons for accepting or rejecting such claims. A speaking order is essential for transparency and judicial review. Accordingly, the Court asserted that refund directions cannot survive a flawed determination. Since the underlying fee determination was found to be legally unsustainable, the consequential directions requiring refund of alleged excess amounts were also set aside.
Briefly, the petitions were filed by Raipur Institute of Medical Sciences and Shri Balaji Institute of Medical Science, challenging recommendations of the Admission and Fee Regulatory Committee (AFRC) and consequential State orders which substantially reduced the hostel, mess and transportation charges collected by the colleges and directed refund of alleged excess amounts to students.
The colleges argued that the AFRC ignored the actual expenditure incurred on infrastructure, salaries, electricity, maintenance, fuel, hygiene, transportation and other operational heads, reduced the charges without proper reasons, and failed to properly consider the materials and documents furnished by them.
A Single Judge Bench of Justice Amitendra Kishore Prasad observed that while the AFRC has the authority to prevent profiteering and collection of capitation fees, any determination of permissible charges must be based on a proper examination of the actual expenditure incurred by the institution. The Court noted that the colleges had supplied material relating to operational costs and student occupancy, but the impugned determination did not demonstrate meaningful consideration of that material.
The Court emphasized that giving an opportunity of hearing is not enough by itself. Natural justice requires not only allowing institutions to submit documents and explanations but also genuinely evaluating the material produced before arriving at an adverse conclusion. A hearing becomes meaningless if the submitted material is ignored.
The Court further observed that hostel occupancy figures were a relevant factor. If the AFRC intended to reject the actual occupancy data furnished by the institutions and proceed on a different basis, it was required to record reasons for doing so. The determination of charges could not be based on assumptions detached from the actual number of students availing the facilities.
The Court also held that where expenditure claims relating to salaries, electricity, maintenance, infrastructure, fuel, hygiene and transportation are rejected, clear reasons must be recorded. A reasoned order is vital because it demonstrates that relevant factors were considered and permits judicial review of the decision-making process.
