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Bank Guarantee from Students for Annual Fee Illegal: Rajasthan HC

Bank Guarantee from Students for Annual Fee Illegal: Rajasthan HC

12.06.2021 | Education News | EduLegaL  | www.edulegal.org | mail@edulegal.in

31st May 2021 the High Court of Rajasthan in Deepesh Singh Beniwal v. Union of India & Ors. declared that the practice of medical college requiring the students to submit a bank guarantee against the annual fees for the next 3½ years in addition to the deposit of their annual fee for the first year, as “illegal.

The court held:

“The action of the respondent private institutions and the medical/dental institutions run by the State Government in levying advance fee in addition to annual fee for one year from the students admitted to the medical courses and insisting upon each and every student to submit the bank guarantee at the time of admission equivalent to the fee for 3½ years of course duration, is declared illegal. The respondent private institutions and the institutions run by the State Government are restrained from recovering any amount as advance fee in addition to the fee for one year from any student admitted to the course.”

The petitioner, Deepesh Singh Beniwal, an advocate filed a writ petition i.e., a PIL challenging the private medical institutions on the rule that students who are in MBBS course need to give an advance annual fee for 3½ years of course duration in addition to deposit of annual fee for the first year of the course, at the time of admission. The said advance was payable by a bank guarantee.

Medical colleges require the students to submit a bank guarantee for the duration of the course program while submitting the fees for the first year. This is done to ensure that no student leaves the course in between. Banks are generally hesitative in giving bank guarantees. For obtaining a bank guarantee one must either have fixed deposit or have to give collateral securities. All parents cannot be expected to have such fixed deposits or collateral securities.

The above reasons were stated in the petition. This rule of medical colleges was submitted to be unjust and unfair on the part of students, as not everyone is competent enough to procure such a huge amount.

It was further stated that requiring each and every student to provide a bank guarantee for the whole duration of the program, simply because some students may drop out in the middle, looks to be irrational and unjust, on account that bank guarantees are obtained only on providing collateral security or fixed deposit, which is not possible for every student.

In conclusion the High Court of Rajasthan stated that it is illegal to ask students’ advance fees for future years.

Rasmita Behera | Research Intern | EduLegaL

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