The Supreme Court has ordered a nationwide exercise to examine how private universities and colleges collect, use and manage money, while also seeking details about admissions, faculty, examinations and student grievance mechanisms.
The order was passed on September 17 in Ayesha Jain vs Amity University, Noida. What began as a dispute between a student and a university has developed into a wider examination of the functioning of private higher education institutions.
How did the case begin?
The case was filed by Ayesha Jain against Amity University, Noida. Jain had changed her name from Khushi Jain to Ayesha Jain in 2021 and later enrolled in a certificate programme at the university in 2023. She subsequently joined an MBA programme.
Her dispute with the university centred on the recognition of her changed name in its records. She alleged that the issue affected her attendance and academic progression and that she was eventually forced to pursue her studies elsewhere. The case brought questions about the university's handling of student grievances and its internal functioning before the Supreme Court.
As the proceedings continued, the Court began seeking information that went beyond Jain's individual grievance. In November 2025, it brought private, non-government and deemed universities within the scope of its scrutiny and sought responses from the Union government, States, Union Territories and the UGC.
The Court has since been examining how these institutions are established, governed and regulated, including the government concessions they receive and the role of their management bodies.
Why are finances now under scrutiny?
The latest order examines the basic issue in the regulation of private education; a private university can generate money and maintain a surplus, but it cannot be operated as a profit-making institution.
The Supreme Court has clarified that private universities can generate a surplus to meet their operational needs and support future development. But they cannot be run as profit-making institutions.
In its September 17 order, the Court said, “No private university shall be allowed to be run as a profit-making institution.”
At the same time, it said universities need a reasonable “cushion” in their finances to ensure smooth functioning, develop infrastructure and provide appropriate compensation to teaching and non-teaching staff.
The Court also raised concerns about funds being used for payments or facilities benefiting members of governing or management bodies who are not involved in the institution's educational functions.
The Court is not questioning the existence of a surplus itself. It is examining how that surplus is generated, where it goes and whether money collected in the name of education is being used for purposes connected to the institution's educational functions.
This is not the first time the SC has examined private education
The Supreme Court has dealt with the financial and administrative autonomy of private educational institutions in several earlier cases.
In Mohini Jain v State of Karnataka (1992), the Court examined excessive fees and capitation fees in private medical education. The issue was revisited a decade later in T.M.A. Pai Foundation v State of Karnataka (2002), where an 11-judge Bench considered the rights of private and minority educational institutions, including their autonomy over admissions and fees. The Court's position has since been developed through cases including Islamic Academy of Education v State of Karnataka (2003) and P.A. Inamdar v State of Maharashtra (2005).
What does the Supreme Court want to know now?
The Court has asked private universities to provide five years of audited financial records.
These records will have to show:
How much money the university generated and how it was spent
Fees collected from students, including additional charges
Surplus funds and how those funds were invested
Payments made to people who are not directly involved in educational functions
Government benefits, including land allotments, concessions and relaxations
The university's admission process and who is responsible for admissions
How examinations are conducted and answer sheets evaluated
Faculty recruitment, salaries and service conditions
The allocation of classes to teachers and the classes actually conducted
Student grievance mechanisms and complaints received over the previous three years
The Court is looking at more than the amount a university charges. It wants to trace where the money comes from, where it goes and how that financial structure relates to the university's educational functions.
What about government support?
Another part of the exercise concerns benefits received by private institutions from governments.
The Court has sought details of land allotted to universities, concessions and relaxations provided under laws or regulations, and other benefits extended to them. As private universities operate within a regulatory framework created by the government while often receiving access to public resources or concessions. The Court is seeking information that can show the nature of that relationship.
Admissions and faculty are also part of the scrutiny
The Court has separately sought details of how students are admitted to different courses, who takes those decisions and how the examination process works.
It has also asked for information on teaching and non-teaching staff, including recruitment, salaries and service conditions. Universities must provide records from January 2025 showing how classes were assigned to teachers and how many classes were actually conducted.
Regulatory and professional bodies have also been asked to provide details of inspections, deficiencies found and whether those deficiencies were subsequently corrected. This includes bodies such as the National Medical Commission, Dental Council of India, Indian Nursing Council and Bar Council of India.
What happens next?
The Union government, States and Union Territories have been given six weeks from the September 17 order to collect the information and submit affidavits through their Chief Secretaries. The case is scheduled to be heard again on November 19.