Supreme Court Says Private Universities Cannot Run for Profit, Orders Five Years of Accounts and Financial Disclosures
The Supreme Court has directed private universities across India to disclose extensive financial, administrative and academic information, while making it clear that private universities cannot be operated as profit-making institutions. The directions were issued by a Bench of Justices Ahsanuddin Amanullah and N.V. Anjaria on September 17, 2026, in Ayesha Jain v. Amity University, Noida & Ors.
The Court said a private university must serve an educational purpose and may maintain a reasonable financial cushion to ensure smooth functioning and suitable compensation for teaching and non-teaching employees. However, it held that funds cannot be diverted beyond those legitimate requirements, including for payments or facilities for members of governing boards that are not connected with the institution’s educational functioning.
As part of the nationwide scrutiny, States and Union Territories have been directed to obtain audited financial records covering the previous five years from universities within their jurisdiction. The information must show funds generated, how those funds were utilised and payments made to individuals who are not directly involved in the university’s educational functions.
The universities must also disclose the benefits they have received from the Central or State Governments. This includes allotment of land, relaxations under existing laws and any special or other privileges granted to them. The Court has therefore placed government concessions and public resources within the scope of its examination of private higher-education institutions.
Fee collection is another major area covered by the order. Universities have been asked to provide details of fees collected at admission and during the course, together with any additional collections described as development funds, event-related funds or under other names. They must also explain how surplus funds are dealt with and identify investments made from those funds.
The Court has further sought details about the admission process for every course offered by each university. Institutions must identify the persons responsible for admissions, setting examination papers, conducting examinations, evaluating answer sheets and handling funds, as well as the role played by management in these processes.
Faculty and staff practices have also come under scrutiny. Universities must disclose recruitment procedures, salaries and other remuneration, payment arrangements and applicable service conditions for teaching and non-teaching employees. For teaching staff, information from January 2025 onward must include classes allotted, classes actually conducted and alternative arrangements made when teachers were unavailable.
The Supreme Court has additionally ordered disclosure of grievance-redressal mechanisms, including the composition of grievance committees, the types of complaints they handle, the number of complaints received during the previous three years, their outcomes and the time taken to resolve them.
Regulatory and affiliating bodies have separately been directed to provide details of inspections conducted during the preceding five years. They must disclose deficiencies identified during inspections and whether those deficiencies were subsequently rectified. The order covers regulatory bodies associated with areas including medicine, dentistry, allied healthcare, nursing, law, Indian systems of medicine, homoeopathy, veterinary education and pharmacy.
The proceedings began with a dispute involving Ayesha Jain and Amity University, Noida, but the Supreme Court’s September 17 order broadened the examination to private universities and colleges more generally. The Court’s order specifically states that the public at large is the beneficiary of the education system and frames the financial scrutiny in that broader context.
The Union Government, States and Union Territories have been given six weeks from the date of the order to obtain the required information and file affidavits. Those affidavits are to be personally affirmed by the respective Chief Secretaries, while the concerned regulatory bodies have been directed to submit affidavits through their senior heads.
The matter has been listed for further consideration on November 19, 2026. The disclosures ordered by the Court are expected to give it a broader picture of the financial structure, fee practices, governance, staffing, admissions and regulatory compliance of private higher-education institutions across the country.
