HC refuses relief to Institute seeking ₹42 lakhs penalty waiver for unauthorized Admission

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In a setback to a Pune-based polytechnic institute, the Bombay high court (HC) has directed its management to pay ₹42.62 lakh as penalty, imposed by the Directorate of Technical Education (DTE), for admitting 150 students without the approval of the All India Council for Technical Education (AICTE), in 2007.

The institute, which was established in 1993, initially recovered ₹21,000 as fees from students and admitted them. As per the rules, the college had to pay 200% of the tuition fee recovered from students as penalty to DTE for admitting the 150 students, which the institute did. However, as the final fee recovered by the college was ₹35,875, for each student, DTE demanded that the institute pay an additional ₹42 lakh as penalty. Aggrieved by the increased penalty, the institute approached the HC. However, the court observed that DTE exercised its right to recover the penalty on the entire amount collected as fees by the institute and hence rejected the institute’s claim to quash the demand of ₹42 lakh.

A division bench of justice SS Shinde and VG Bisht, while hearing a petition filed by Sinhgad Technical Institution Society, was informed by senior advocate VP Sawant that the society ran a polytechnic institute by the name Venutai Chavan Polytechnic at Pune. In 2007, based on a government resolution to allow polytechnic institutes to run second shifts, the college had applied to the state authorities concerned for approval. The state had recommended the commencement of the second shift, and as the institute fulfilled the minimum eligibility criteria laid down by AICTE, the institute’s application for permission was forwarded to the apex body too.

Even as the approval from AICTE was awaited, the admission process had started, and under the assumption that the AICTE would grant its approval, the institute admitted 150 students and recovered ₹21,000 as the fee amount prescribed by the Shikshan Shulk Samiti (SSS) for new institutes from the students and informed that they would have to pay additional fees when the final approval was received by SSS. The final amount recovered as fees was Rs 35,875.

As the institute had admitted students before receiving all approvals, DTE recovered a penalty of ₹62 lakh from the institute to regularise the students based on the ₹21,000 collected towards tuition fees. However, after the final fee was fixed at ₹35,875, DTE demanded an additional penalty of ₹42 lakhs as per rules. Aggrieved by the additional penalty demand, the institute approached the HC seeking a declaration that the institute was not to pay in excess of ₹62 lakh as penalty.

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Additional government pleader Manish Pabale, however, argued that as the institute had recovered ₹35,785 as fees for academic year 2007-08, as per the rules, the institute had to pay 200% penalty for admitting students without getting approvals, and hence DTE was right in making the additional demand. He further added that the ₹21,000 fee was meant for new institutes and as the Sinhgad institute was established in 1993 they could not claim benefit of the same.

After hearing the submissions, the court observed that there was nothing perverse in DTE’s demand and that it was justified. Hence, the court rejected the petition of the institute and allowed DTE to recover the penalty from the institute.

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