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D.P. Joshi's case is an authority for the proposition that classification on the ground of residence is a justifiable classification under Articles 14 and 15(1) of the Constitution of India. The question that capitation fee as a consideration for admission is not permissible under the scheme of the constitution, was neither raised nor adverted to by this Court. The imposition of capitation fee was also not questioned on the ground of arbitrariness. The only question raised before the Court was that the Madhya Bharat students could not be exempted from the payment of capitation fee. It is settled by this Court that classification on the ground of residence is a valid classification. Subsequently this Court in Dr. Pradeep Jain etc. v. Union of India and Ors. etc., [1984] 3 SCR 942 reiterated the legal position on this point. we are, therefore, of the view that D.P. Joshi's case does not give us ary guidance on the points before us.

(3) Every educational institution shall issue an official receipt for the fee or capitation fee or deposits or other amount collected by it. (4) All monies received by any educational institution by way of fee or capitation fee or deposits or other amount shall be deposited in the account of the institution, in any Scheduled Bank and shall be applied and expended for the improvement of the institution and the development of the educational facilities and for such other related purpose and to such extent and in such manner as may be specified by order by the Government.

Section 3 of the Act prohibits the collection of capitation fee by any educational institution or by any person who is in charge of or is responsible for the management of such institutions. Contravention of the provisions of the Act has been made punishable under Section 7 of the Act with imprisonment for a term which shall not be less than three years but shall not exceed seven years and with fine which may extend to five thousand rupees. Section 5 of the Act authorises the Government to regulate the tuition fees by way of a notification. The Karnataka Government have issued a notification under Section 5(1) of the Act wherein the fee charged from Indian students from outside Karnataka has been fixed not exceeding Rs. 60,000 per annum. Whether Rs. 60,000 per annum can be considered a tuition fee or it is a capitation fee is the question for our determination.

in private medical colleges. Therefore, the tuition fee by student admitted to the private medical college is only Rs. 2000 per annum. The seats other than the "Government seats"

which are to be filled from outside Karnataka the management has been given free hand where the criteria of merit is not applicable and those who can afford to pay Rs. 60,000 per annum are considered at the discretion of the management. Whatever name one may give to this type of extraction of money in the name of medical education it is nothing but the capitation fee. If the State Government fixes Rs.2000 per annum as the tuition fee in government colleges and for "Government seats" in private medical colleges than it is the state- responsibility to see that any private college which has been set up with Government permission and is being run with Government recognition is prohibited from charging more than Rs. 2000 from any student who may be resident of any part of India. When the State Government permits a private medical college to be set-up and recognises its curriculum and degrees than the said college is performing a function which under the constitution has been assigned to the State Government. We are therefore of the view that Rs.60,000 per annum permitted to be charged from Indian students from outside Karnataka in Para. 1(d) of the notification is not tuition fee but in fact a capitation fee and as such cannot be sustained and is liable to be struck down. Whatever we have said about para 1(d) is also applicable to Para 1(c) of the notification.