Telangana High Court Criticizes State Over Colleges Holding Student Certificates as Fee 'Collateral'
The Telangana High Court has issued a stern rebuke to the state government regarding the practice of colleges withholding students' original educational certificates as collateral for pending fee reimbursements and scholarship disbursements. The court emphasized that such actions cost students valuable opportunities that cannot be compensated later.
Court Directs Establishment of Grievance Redressal Mechanism
During a hearing on Thursday, the Division Bench comprising Chief Justice Aparesh Kumar Singh and Justice G M Mohiuddin directed the Telangana Minorities Welfare Department to develop a comprehensive grievance redressal system. This mechanism aims to ensure that students do not have to approach courts individually when their certificates are withheld by educational institutions awaiting government payments.
The bench specifically questioned the government's enforcement capabilities, asking:
- What steps are in place to verify institutions are following existing circulars?
- Has the Minorities Welfare Department received complaints against defaulting colleges?
- What action has been initiated against violators?
- Are there grievance cells, toll-free numbers, or help desks available to students?
PIL Highlights Systemic Issues in Scholarship Disbursement
The court was hearing a Public Interest Litigation (PIL) filed in 2025 by the Association for Socio Economic Empowerment of the Marginalised (ASEEM) and Students Islamic Organisation (SIO) Telangana. The PIL sought several important measures:
- Immediate payment of all pending scholarships and tuition fee reimbursements for eligible students
- Prohibition of colleges withholding students' original educational certificates as collateral
- Establishment of a time-bound system to resolve disputes regarding delayed payments
- Proactive online disclosure of fund distribution details and pending claims
- Transparent guidelines for scholarship fund release to colleges
Court Observations on Student Hardships
The bench made significant observations about the hardships faced by students, particularly those from economically disadvantaged backgrounds who depend on scholarships. Retention of certificates for even six months can cost students crucial opportunities in higher education or employment that may never be recovered.
The court noted that students who cannot afford fees and rely on scholarships are forced to approach judicial institutions for certificate release, thereby incurring additional costs and litigation burdens. This creates an unjust system where students bear the consequences of administrative delays in scholarship disbursements.
Government Circular and Enforcement Questions
The Minorities Welfare Department's counter affidavit included a circular dated February 23, 2024, sent to principals of affiliated private colleges and private universities. This circular warned of stringent action against institutions found withholding original certificates while awaiting government reimbursements.
However, the court questioned the effectiveness of this circular, asking about the actual enforcement mechanism and whether any complaints had been received or actions taken against violating institutions.
Pending Financial Sanctions and Next Hearing
The court also observed that certain financial sanctions are currently pending with the state Finance Department, which has not yet filed a counter-affidavit in the case. The bench granted two weeks for the Finance Department to respond and adjourned the matter for further hearing to March 3.
This case highlights systemic issues in scholarship disbursement mechanisms and the need for more robust student protection measures in Telangana's education system.
