'No Private University Can Run As Profit-Making Institution', Supreme Court Seeks Financial Details From All Pvt Universities
The Court has directed the Union and the States to get details from the Universities.
Observing that private universities cannot be permitted to function as profit-making institutions, the Supreme Court has directed private universities across the country to disclose their five years' audited financial records, utilisation of funds, fee structures, surplus investments and payments made to persons not directly involved in educational functions.
The Union Government, States and UTs have been directed to file affidavits through their Chief Secretaries after getting the details from the universities and colleges concerned within six weeks from the date of the order, i.e., September 17, 2026.
“…we make it clear that 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.”, observed a bench of Justice Ahsanuddin Amanullah and Justice NV Anjaria.
The bench observed that private universities may maintain a reasonable financial cushion for responsible management and smooth functioning, but their resources cannot be diverted for purposes unrelated to education.
The Court's observation came in proceedings that originated from a student's grievance against Noida-based Amity University but subsequently expanded into a nationwide examination, noting that “in the larger public interest” it was necessary to examine the establishment, regulation and benefits received by private universities across India.
The Court has now directed private universities to submit five years of audited financial records, including details of funds generated and utilised, payments to persons not directly involved in educational functions, surplus funds and their investments.
Information has also been sought regarding fees, admissions, faculty recruitment and remuneration, grievance redressal mechanisms, government concessions and benefits, and regulatory inspections.
The following details have been sought by the Court:
"1. Such universities shall also be required to furnish details of what benefits it has taken from the Central and State Government(s) with regard to allotment of land and other relaxations in the existing laws or any special/other privilege conferred on them.
2. The said details shall also disclose the exact procedure adopted for admitting students in each and every course which may be offered by that university. It shall also disclose the persons who are in-charge of admissions, setting of papers, conduct of examinations, evaluation of the answer sheets, handling of funds, as also the role of the management in these matters.
3. Details of the fee collected, both at the time of admission, as also during the tenure of the course and whether there are any collections by whatever name during such course, like development fund, funds for holding any special event, etc. The manner in which surplus funds are dealt with, including investments made out of such funds, should be specifically dealt with in detail.
4. The mode of recruitment of teaching and non-teaching staff, the salaries and other emoluments attached thereto and the way in which the same are paid to such persons would also be fully disclosed in detail. Whether service conditions are specifically notified by the concerned university relating to the teaching and non-teaching staff and if so, details thereof shall also be disclosed. The details of who is the competent authority to allot classes to the teaching staff and details of all the teaching staff and how many classes were allotted to them and actually how many classes were taken by them and if not taken, what alternative arrangements have been made so that the students did not suffer due to non-availability of any teacher. Details starting from January, 2025, onwards be submitted with regard to this direction relating to allotment of classes to the teaching staff.
5. Mechanism in place relating to the redressal of grievances, giving details of its composition and the nature of grievances which can be gone into by such Committee(s), as also the exact number and details of complaints received and the result thereof, including the time frames, for the last three years, be clearly specified in such affidavits.
6. Further details shall also be furnished by them with regard to the hospitals to which such colleges are attached. The relationship of the college with the hospital.
7. The affiliating/recognizing body shall furnish details of the inspections held in such universities/colleges relating to such recognition/affiliation giving details of the entire faculty, as also the supporting staff based on which such recognition/affiliation is granted. The names of the doctors in each and every post shall be disclosed by the concerned recognizing/affiliating body, viz., the National Medical Commission, Dental Council of India, National Commission for Allied and Healthcare Professions, Indian Nursing Council, Bar Council of India, National Commission for Indian System of Medicine, National Commission for Homeopathy, Veterinary Council of India and Pharmacy Council of India, for the last five years. Affidavit in this regard be filed, personally affirmed by the respective Chairman/President of such body.
8. The said affidavit shall be filed by the Union of India/concerned State/Union Territory Governments after getting the details from the universities and colleges concerned within six weeks from today, with advance copy to Dr. R.M. Sharma (Chairman of School Monitoring Committee)."
The matter will next be heard on November 19, 2026.
Cause Title: AYESHA JAIN VERSUS AMITY UNIVERSITY, NOIDA & ORS.
Citation : 2026 LiveLaw (SC) 965