The Supreme Court said on Thursday that private universities cannot be run for profit. Their purpose should be to serve the public interest.
The court directed all states and Union territories to submit details of their audited accounts within six weeks. The information must include surplus income, expenditure, fee collection and employee salaries.
A bench of Justices Ahsanuddin Amanullah and N.V. Anjaria also sought information on admissions, recruitment and the standard of education. The court said these institutions cannot be allowed to operate merely as profit-making industries.
The order was issued in a case related to Amity University. A student had sought a change of her name in the college records, after which she was harassed.
Court had issued directions earlier too
The Court had also issued directions to the states and Union Territories in November 2025. They were asked to provide details of the process for establishing universities, the facilities provided and the framework for implementing the “no profit, no loss” rule.
The states and Union Territories will have to state how much fees were collected from students at the time of admission and during the course. They will also have to provide details of the boards responsible for recruiting teaching and non-teaching staff.
Investigation into the Amity University case
In the case related to Amity University, the court had ordered a preliminary investigation into the incident involving the petitioner student.
The committee was also directed to contact Amity University and gather evidence. The student’s lawyer told the court that despite repeated reminders, several witnesses were not coming forward to give their statements.
Following this, the court ordered the university and all the officials concerned to co-operate with the investigation. The court directed that the final report be submitted by the date of the next hearing.
No-Profit, No-Loss Model and Legal Rules
In India, colleges are not private businesses but service institutions run under trusts or societies. Their aim is not to earn profits, but only to recover their costs.
Even if there are any savings from the fees, the owners cannot keep the money for themselves; the entire amount must be invested in improving the college and education, and maintaining a transparent account of every penny is legally mandatory.
