Supreme Court of India orders audit of private universities

The Supreme Court of India has ruled that private universities may not operate as profit-making institutions. While the Court acknowledged that these institutions may maintain a financial cushion to ensure responsible management and suitable compensation for staff, it prohibited the diversion of funds to governing boards or their members.

A bench comprising Justice Ahsanuddin Amanullah and Justice N. V. Anjaria ordered a comprehensive audit and disclosure exercise for universities and colleges nationwide. This mandate requires institutions to submit information via affidavit regarding their finances, admission processes, fee structures, faculty deployment, and grievance mechanisms.

Specifically, the Court has requested five years of audited financial records, including details on fee collections, the use of surplus funds, and investments. The disclosure must also cover student admission methods, salary details for faculty and staff, and any additional charges such as development funds. The proceedings originated from a petition involving Amity University in Noida but were expanded to address broader regulatory concerns across the country.