The Supreme Court vide its recent order dated September 17, 2026 (“Order”) in the matter of Ayesha Jain v. Amity University, Noida & Ors., [W.P. (C) No. 531/2025] came down heavily on the manner of operation of universities and issued a series of stringent directions requiring greater disclosure by universities, including with respect to their finances, admissions, staffing, grievance redressal and regulatory compliance.

Background

The proceedings in Ayesha Jain v. Amity University, Noida & Ors. initially arose from a dispute concerning the petitioner’s request for change of name at Amity University. The matter subsequently assumed wider significance when, by order dated November 20, 2025, the Supreme Court directed a nationwide enquiry into private/non-government/deemed-to-be universities.¹ The Court thereafter sought affidavits and detailed information from the Union Government, States, Union Territories, the University Grants Commission and other authorities, and continued to monitor compliance with its directions.

No Diversion of Surplus Funds: Details of the Order

The Supreme Court observed that while universities may maintain a financial cushion to ensure smooth functioning of the institution and suitable compensation to teaching and non-teaching employees, private universities cannot be run as profit-making institutions. Frowning on the current trends, the Court directed that there should be no diversion of funds under any head, including payment of salaries to the governing board of directors or providing facilities to such members of the board/governing bodies and issued inter alia the following directions:

1. Financial Disclosures and Use of Funds: Emphasising on transparency of operations, the Court directed the States to ensure that all universities including private universities under their jurisdictions submit audited reports for the preceding 5 (five) years, setting out complete details of the: 

(a) funds generated by the university and their utilisation;

(b)payments made to individuals who are not directly involved in or related to the functioning of the university as an educational institution; and

(c)benefits received from the Central or State Governments, including allotment of land, relaxations under existing laws and any special or other privileges.

2. Admissions, Examinations and Fee Collection: The universities are required to disclose the exact procedure adopted for admitting students in each course, including details of the persons who are in-charge of admissions, setting of papers, conduct of examinations, evaluation of the answer sheets, handling of funds, as also the role of the management in these matters.

The Court has also directed disclosure of the fee collected, both at the time of admission, as also during the tenure of the course and whether there are any collections by whatever name during such course, like development fund, funds for holding any special event etc.

3.Surplus Funds Utilization: The Court directed universities to disclose in detail the way surplus funds are dealt with, including investments made from such funds.

4. Teaching and Non-Teaching Staff: Information relating to the mode of recruitment of teaching and non-teaching staff, the salaries and other emoluments and the manner of payment to such persons is required to be furnished, along with details of the service conditions notified by the concerned university, if any. The universities are further required to disclose the following details with effect from January 2025:

(a)the competent authority responsible for allotting classes to teaching staff,

(b)details of classes allotted to each teacher and actually taken;

(c) alternative arrangements made where a teacher was unavailable to ensure that students did not suffer due to the teacher’s non-availability.

5. Grievance redressal mechanism: For the last 3 (three) years, details of the grievance redressal mechanism are to be furnished, including:

(a) the composition of the relevant committee(s),

(b)the nature of grievances that may be considered,

(c) the number and details of complaints received,

(d) the outcome of such complaints and the time taken for their resolution.

6.Directions to Affiliation Bodies: The relevant affiliating/recognising bodies have also been directed to provide details of inspections conducted for recognition/affiliation, including details of faculty and supporting staff basis which recognition or affiliation was granted. The concerned regulatory bodies are required to inter alia identify deficiencies pointed out during their last inspection and whether those deficiencies have been removed. The said institutions/bodies are also required to file their responses on affidavits to be affirmed by the Chairman/President/Chief Executive Officer/Chief Controlling Officer of the said institution/body.

 7. Directions to Union/State Government: The Union of India/concerned State/UT Governments are required to obtain the aforesaid relevant details from the universities and colleges and file affidavits personally affirmed by their respective Chief Secretaries before the Supreme Court within 6 (six) weeks from the date of the Order.

The Court further directed that the State is required to ensure that all information is procured in time from the concerned universities/colleges and no State can take the position that it can furnish only that information forwarded by the concerned university/college. The Court further noted that the States have the power, including by taking coercive measures against the universities to ensure that the information directed by the Court is brought on record.

Conclusion

The Order is significant and has wide implications on the operations and management of higher education institutions including private universities. In particular, the Court’s directions on non-diversion of funds under any head including salaries and/or facilities provided to governing body members may have a direct bearing on the existing remuneration and benefit structures adopted by higher education institutions. Careful reassessment of such arrangements is warranted in view of the Court’s observations. Considering a wide range of disclosures sought by the Court, transparency in operations and management including admissions, use of funds and utilization and non-diversion of surplus are the focal point of the Order. Going forward, private universities, who so are enjoyed greater autonomy, will need to maintain clear and complete records, adhere to governance protocols, be open to scrutiny and offer greater transparency around management of admissions and fund utilization including related party transactions. It is expected that before long similar implications may apply to private schools.

Endnotes

^[1] Please refer our earlier update on the November 20, 2025 order here –https://lexcounsel.in/newsletters/nationwide-audit-of-universities/