Section 3(2) in Maharashtra Educational Institutions (Prohibition of Capitation Fee) Act, 1987
(2)Notwithstanding anything contained in sub-section (1), the management may in good faith, demand or, collect or accept donations in cash or kind in prescribed manner, from benevolent persons or organisations or public trusts or any other association of persons, for opening of new educational institution or for development or expansion of educational facilities in the existing educational institutions or for creation of endowment fund for award of scholarships, prizes or the like, but while collecting or accepting such donations the management shall not reserve any seats in any educational institution run by it in consideration of such donations. All money and articles received in donation shall be accounted for in the institution and the money shall be deposited in the name of the institution in any scheduled or co-operative bank and shall be applied or expended for the purpose for which such donations are collected or accepted or shall be applied towards the objects of the institution : Provided that, where in consideration of accepting such donations any seat is reserved for admission to any student in such institution such acceptance of donation shall be deemed to be collection of capitation fee.
