Private universities cannot be run for profit: Supreme Court orders disclosure of finances, fees et al.

The Supreme Court has directed the Central government, States and Union Territories (UTs) to collect detailed information about the finances, admissions, fees, use of surplus funds, staff recruitment and grievance-redressal systems of private universities and colleges. [Ayesha Jain v. Amity University, Noida and Others]

In an order passed on 17 September, a Bench of Justices Ahsanuddin Amanullah and NV Anjaria issued the directions while making it clear that private universities could not be run as commercial ventures.

“No private university shall be allowed to be run as a profit-making institution. It has to serve a purpose with some sort of a cushion so that its finances/resources are responsibly managed to ensure smooth functioning of the institution and that the teaching and non-teaching employees are compensated suitably,” the Court said.

The Bench added that funds beyond this requirement could not be diverted towards purposes such as paying members of governing boards or providing facilities to them.

The case originated from a petition filed by one Ayesha Jain against Amity University at Noida over the university’s handling of the change of her name in its records and the academic consequences allegedly suffered by her.

However, as the case progressed, the Court expanded its scope to examine wider issues concerning the establishment, regulation and functioning of private universities across the country.

In its latest order passed on September 17, the Court directed the States to ensure that private universities under their jurisdiction submit their audited accounts for the past five years.

The Court said the records must show how the universities generated and utilised their funds and provide details of payments made to people who were not directly connected with their functioning as educational institutions.

Besides the above, the Court also sought the following details:

- any benefits received from the Central or State governments, such as land allotments, relaxations under existing laws or other special privileges;

- the admission procedure followed for each course;

- names of those responsible for admitting students, setting question papers, conducting examinations, evaluating answer sheets and handling university funds, along with details of the management’s role in these processes;

- fees collected from students at the time of admission and throughout the course;

- details of additional amounts collected under heads such as development funds or special events, as well as the manner in which surplus funds were used and invested;

- how teaching and non-teaching employees were recruited and paid and whether their service conditions had been formally notified.

- number of classes allotted to each teacher since January 2025, the classes actually conducted and the alternative arrangements made when a teacher was unavailable;

- grievance-redressal mechanisms in place and the composition of the committees constituted to deal with complaints;

- nature and number of complaints received during the past three years, how they were decided and the time taken to resolve them;

- colleges attached to hospitals to disclose the nature of their relationship with those hospitals.

It separately directed professional regulatory and affiliating bodies to provide details of inspections conducted during the past five years.

The Bench also sought information about the faculty and supporting staff on whose basis recognition or affiliation was granted, the deficiencies identified during inspections and whether they were subsequently rectified.

The Court directed the Centre, States and UTs to collect the information from the universities and colleges concerned and file their affidavits within six weeks.

The affidavits have to be personally affirmed by the respective Chief Secretaries of the States and that regulatory bodies must file separate affidavits affirmed by their respective heads.

The matter will be heard next on November 19.

Advocate Charu Mathur appeared for the petitioner.

Additional Solicitor General (ASG) Archana Pathak Dave and Senior Advocates Nalin Kohli and S Niranjan Reddy appeared for the respondents, among others.

[Read Order]