Sub-Section (3): It says that where regulations of the nature referred to in sub-section (2) have been made, no college shall levy or charge fees in excess of what is specified. When such regulations are made in respect of any course of study, Sub-section (3) makes it obligatory that no college providing for the specified course of study shall charge fees contrary to the regulations, nor can it directly or indirectly accept any payment or donation or gift from any student in connection with his admission or prosecution of the specified course of study. If any college contravenes the provisions of Sub-section (3) it is liable for action by the UGC which may after issuing notice prohibit such college from presenting any students to any university for the award of any degree or other qualification.
Clause (a) bans colleges from levying or charging any fees for matters not explicitly listed in the UGC regulations, closing loopholes for unauthorized charges. Clause (b) prohibits charging fees higher than the maximum scale fixed by the regulations, curbing excessive or arbitrary hikes. Clause (c) forbids accepting, directly or indirectly, any payment other than official fees, donation, or gift in cash or kind linked to a student’s admission or continuation in the course, effectively outlawing capitation fees or disguised bribes that favor wealth over merit. In essence, this provision enforces UGC-set fee ceilings, restricts charges to only approved items and amounts, and completely bans any form of compulsory or voluntary extra payments tied to admission or studies, protecting students from exploitation and promoting fair, merit-based access to regulated courses. Although this provision is there, higher education had become business now-a-days.
Sub-Section (4): Sub-section (4) provides the consequence of violation by any college of such regulations. Sub-section (4) of Section 12A authorizes UGC to conduct an inquiry in the manner provided under the Regulations, if the Commission is satisfied after providing reasonable opportunity to such colleges that such college contravenes the provisions of sub-section (3) of the Section 12A of the Act. In such case, the Commission may, with the previous approval of the Central Government pass an order prohibiting such college from presenting any students then undergoing such course of study therein to any university for the award of the Degree for the qualification concerned. The enquiry may be conducted under sub-section (4) of Section 12A of the Act with a rider that no retrospective effect shall be given to any regulations so as to prejudicially affect the interests of any person, to whom such Regulation may be applicable.
Sub-Section (5): It says that violation shall also mean disaffiliation. Sub-section (5) of Section 12A further provides for the Commission to forward a copy of the order made by it under sub-section (4) to the University concerned, and on and from the date of receipt by the University of a copy of such order, the affiliation of such college to such University shall, in so far as it relates to the course of study specified in such order, stand terminated and on and from the date of termination of such affiliation for a period of three years thereafter affiliation shall not be granted to such college in relation to such similar course of study by that or any other University.
Sub-Section (6): Sub-Section (6) speaks that in case of termination of affiliation of any college under sub-section (5), the Commission shall take all such steps as it may consider appropriate for safeguarding the interests of the students concerned.
Sub-Section (7): Sub-section (7) further states that regulations made for the purpose of the aforesaid provisions of Section 12A of the UGC Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.[1]
14.3 Critical Analysis:
Section 12A was inserted in 1984 to curb the commercialization of education, specifically targeting capitation fees and the sale of seats in professional colleges. It grants the UGC significant power to regulate fee structures and penalize institutions that demand donations. Here is critical analysis of this important section.
Procedural Delay: The enforcement mechanism in Section 12A is heavy with administrative layers that often render the protection obsolete for the affected student. Before any action is taken against a college for overcharging, the Commission must conduct an inquiry under Sub-section (4) in the manner provided by regulations and provide a reasonable opportunity of being heard. In practice, these quasi-judicial proceedings can take years in absence of specific time bound schedule to take every step towards justice. By the time a violation is satisfied, the student who filed the complaint has often already graduated or left the institution.
Even after the Commission finds a college guilty under sub-section (4), it cannot pass a prohibition order without the previous approval of the Central Government. This adds a political and bureaucratic layer to a regulatory issue, causing significant lag in enforcement. It also cause corruption as now a days, imparting education is a business and not a noble service. When affiliation is terminated under sub-section (5), the Commission is tasked with safeguarding student interests under Sub-section (6). However, the Act does not specify a timeline or a concrete mechanism for transferring students to other colleges, leading to educational limbo for months or years during litigation.
Constitutional Validity and Ultra Vires: This section exists in a delicate balance between the Union’s power to maintain standards and the fundamental right to establish educational institutions. While the state can prevent “profiteering,” it cannot completely take away the autonomy of private unaided institutions to determine their own fee structure.[2] : Clause (c) under Sub-section (2) allows the UGC to regulate fees to ensure candidates don’t secure admission by reason of economic power. While noble, if the resulting regulations are so restrictive that a private college cannot meet its operational costs, the regulations can be challenged as ultra vires of the Constitution for violating the right to carry on an occupation. Sub-section (7) is an overriding provision. The “notwithstanding anything inconsistent” clause attempts to give Section 12A supremacy over State Acts. This is often challenged when State Governments have their own Fee Regulatory Committees (FRC). The courts usually favor the State’s specific FRC laws over the UGC’s general regulations, provided they don’t lower the standards of education.
Colonial Era Policy and Irrelevance: Although Section 12A was added post-independence in 1984, it retains a Command and Control philosophy inherited from colonial administration. Sub-section (4) uses the threat of prohibiting the presentation of students for examination as a primary weapon. This is an archaic, blunt instrument that punishes the student for the sins of the management. Modern regulatory theory suggests financial penalties on the management are more effective than stopping examinations. The definitions of college and university in sub-section (1) are tied to physical institutions and traditional affiliations. In 2026, where Specified Courses of Study are often delivered via hybrid or online modes by global consortia, Section 12A struggles to regulate fees charged by third-party platforms that associate with universities but aren’t colleges in the 1984 sense. Sub-section (3)(c) prohibits any donation or gift. While aimed at capitation fees, it fails to distinguish between illegal premium for admission and genuine philanthropic endowments which are standard in modern global universities. This prevents Indian private universities from building sustainable financial reserves through alumni gifting.
Room for Misinterpretation: The language of Section 12A is broad, leaving several “gray areas” for legal maneuvering. The Act mentions preventing admission by reason of economic power under Sub-section (2)(c). This is highly interpretive. Does it forbid Management Quotas entirely? Or does it simply require a merit-cum-means approach? Different High Courts have interpreted this differently depending on the specific “Specified Course of Study.” The word “indirectly” under Sub-Section (3)(c) is a legal minefield. Colleges often charge for additional services like hostels, mess, laptops, or library donations to NGOs run by the same management. Interpreting whether these constitute indirect admission fees is a source of constant litigation. What constitutes a reasonable opportunity to be heard under Sub-section (4) is not defined. Institutions often use this vagueness to demand multiple adjournments, effectively stalling the inquiry for years. The phrase “all other relevant factors” under Sub-section (2)(d) allows the UGC to include almost any criteria in its fee regulations, which can lead to regulatory creep where the Commission starts dictating internal university budget allocations under the guise of fee regulation.
[1] Asson. Of Mgmt. Of Private Colleges vs All India Council For Tech.Edu.& Anr, Supreme Court, [CIVIL APPEAL NO. 1145 OF 2004 Connected with CIVIL APPEAL NOS. 5736-5745 OF 2004]
[2] P.A. Inamdar v. State of Maharashtra [(2006) 1 CIVLJ 908]
