Soumya Ranjan Panda vs Subhalaxmi Dash
- Court
- Supreme Court
2026 INSC 488
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). OF 2026
(Arising out of SLP(Civil) No(s). 35075-35076 of 2015)
SOUMYA RANJAN
PANDA & ORS. ….APPELLANT(S)
VERSUS
SUBHALAXMI DASH & ORS. ….RESPONDENT(S)
J U D G M E N T
Mehta, J.
1. Heard.
2. Leave Granted.
3. Application(s) for impleadment/intervention are
allowed.
Scope of the Present Controversy: -
4. These appeals, though arising out of special
leave petitions challenging the judgment and order
th th
dated 18 November, 2015, and 9 December, 2015
Signature Not Verified
Digitally signed by
POOJA SHARMA
Date: 2026.05.14
18:12:33 IST
Reason:
1
1
passed by the High Court of Orissa , have, over the
course of time, assumed a distinct and focused
contour. What commenced as a challenge to the
directions issued by the High Court concerning the
relocation of students from Sardar Rajas Medical
College, Hospital and Research Centre, Jaring,
2
Kalahandi, Odisha was subsequently shaped by a
series of interim orders passed by this Court
regulating the process of relocation and safeguarding
the academic interests of the students. By order
th
dated 8 January, 2016, this Court expressed
reservations with the approach adopted by the High
Court in directing relocation based strictly on quota
th
distinctions. Thereafter, another order dated 12
January, 2016 was passed permitting the
continuation of students in recognised private
institutions and enabled the State authorities to
carry out relocation in a manner consistent with
maintaining academic continuity. Pursuant to these
directions, the relocation process was undertaken
through a State-supervised counselling mechanism,
ensuring that the students were accommodated in
1
Hereinafter, referred to as the “High Court”.
2
For short, “SRMCH”.
2
recognised private medical colleges (transferee
colleges) thereby preventing loss of an academic year.
5. During the course of these proceedings, the
transferee private medical colleges, namely, Kalinga
Institute of Medical Sciences (KIMS), Bhubaneswar,
Institute of Medical Sciences & SUM Hospital,
Bhubaneswar, and Hi-Tech Medical College &
3
Hospital, Bhubaneswar , have filed interlocutory
applications being I.A. Nos. 73763 of 2019, 69514 of
2019 and 151684 of 2022, seeking issuance of
appropriate directions/clarifications, inter alia , for
payment/reimbursement of fees for the education
imparted by them to the transferred students
pursuant to the orders of this Court.
6. The present controversy is no longer centred
around the validity of the impugned orders passed by
the High Court but is focused on a fair resolution of
the financial liabilities arising out of an extraordinary
situation, where the academic trajectory of the
students was preserved through judicial
intervention, but the resultant financial burden
remains to be equitably apportioned. In view of the
3
Hereinafter, referred to as the “transferee colleges”.
3
subsequent developments and the directions issued
by this Court, the lis now stands crystallised around
the adjudication of the claims raised in the said
interlocutory applications.
Background: -
7. The brief background facts are that two batches
of students for the MBBS course were admitted in a
college named SRMCH, which is under the control
and management of the Selvam Educational and
4
Charitable Trust (respondent No.76). The
admissions pertain to the academic sessions 2013-
2014 and 2014-2015. After the students had
undergone a few academic sessions, numerous
deficiencies in infrastructure, facilities, and
regulatory compliances were noticed in the college by
5
the Medical Council of India during its inspections,
resulting in denial of renewal of recognition to the
institution. These developments, during the
academic sessions 2013-2014 and 2014-2015, led to
a situation wherein the academic future of the
students admitted in these batches was placed in
grave jeopardy.
4
Hereinafter, referred to as the “Selvam Trust”.
5
Hereinafter, referred to as the “MCI/NMC”.
4
8. Initially, the controversy was taken up by the
High Court, which passed various directions in order
to safeguard the interests of the students and
accordingly ensured that the students be
relocated/transferred from SRMCH to other
recognized medical colleges within the State. The
High Court, while directing relocation, had also
observed that students admitted under Government
quota could be accommodated in Government
medical colleges, whereas students admitted under
the management/private quota could be
accommodated in private medical institutions, which
led to further controversy regarding disruption of the
admission framework in the Government colleges.
9. The said orders came to be challenged before
this Court by way of the present appeals, inter alia ,
on the ground that such relocation, particularly to
Government medical colleges, disturbed the existing
admission framework and adversely affected other
aspirants who, despite being higher in merit, would
be deprived of opportunity to secure admission in the
Government institutions.
10. While taking up the appeals, interim orders
were issued by this Court from time to time to
5
regulate the relocation and continuation of the
students in other private medical institutions,
keeping open the issue of fee liability and financial
adjustment between the parties.
11. Consequent to these directions, the State
Government relocated/transferred the students to
three transferee private medical colleges (referred to
supra ), which have preferred the present
interlocutory application(s) for intervention and
seeking further directions for payment of the fees due
to them on account of education imparted to the
transferred students. A total of 124 students were
affected by the relocation process, comprising
admissions under both Government quota and
Management/Private quota. As one student
withdrew, 123 out of the total of 124 candidates were
subjected to online counselling by the Director of
Medical Education and Training, Odisha and 41
students each were allocated to the three
applicant/transferee colleges; however, at this stage,
one more candidate did not take admission, resulting
in 122 provisional admissions. Ultimately, 41
students each were relocated to KIMS and IMS, and
6
40 to Hi-Tech Medical College, as is evident from the
record.
12. The transferee colleges have stated that the
students admitted in their institutions have paid only
the Government-rate fee (approximately Rs.30,000/-
per annum) pursuant to interim directions of this
Court, and that too for a limited period, and that a
substantial portion of the academic fees payable for
the courses imparted to these students remains
outstanding and payable to these colleges as per their
entitlement.
13. It is further submitted that the transferee
colleges at the initial stage could not raise any protest
regarding shortfall of fees, as the students were
transferred to their institutions pursuant to the
directions of this Court.
14. The transferee colleges have also placed on
record charts indicating the fees due from each
student, along with a comparative analysis of the fee
structure prevailing in their respective institutions
vis-à-vis the fee chargeable at SRMCH. A comparative
chart in respect of one such transferee college,
namely, KIMS, is set out hereinbelow by way of
illustration: -
7
KIMS
a. Batch of 2013-14. [Total 33 Students]
SEMESTER FEE in KIMS FEE in SRMCH
th
4 Semester Rs.3,00,000/- Rs.2,12,500/-
th
5 Semester Rs.3,00,000/- Rs.2,12,500/-
th
6 Semester Rs.3,00,000/- Rs.2,12,500/-
th
7 Semester Rs.3,00,000/- Rs.2,12,500/-
th
8 Semester Rs.3,00,000/- Rs.2,12,500/-
th
9 Semester Rs.3,00,000/- Rs.2,12,500/-
Total Rs.18,00,000/- Rs.12,75,000/-
Fee for 33 Students (2013-14
Batch) as per SRMCH
33 x 12,75,000/-
=
Rs.4,20,75,000/-
b. Batch of 2014-15. [Total 8 Students]
SEMESTER FEE in KIMS FEE in SRMCH
rd
3 Semester Rs.3,00,000/- Rs.2,12,500/-
th
4 Semester Rs.3,00,000/- Rs.2,12,500/-
th
5 Semester Rs.3,00,000/- Rs.2,12,500/-
th
6 Semester Rs.3,00,000/- Rs.2,12,500/-
th
7 Semester Rs.3,00,000/- Rs.2,12,500/-
th
8 Semester Rs.3,00,000/- Rs.2,12,500/-
th
9 Semester Rs.3,00,000/- Rs.2,12,500/-
Total Rs.21,00,000/- Rs.14,87,500/-
Fee for 8 Students (2014-15
Batch) as per SRMCH
8 x 12,75,000/- =
Rs.1,19,00,000/-
c. 33+8 transferred students would have paid
Rs.4,20,75,000/- + Rs.1,19,00,000/- =
Rs.5,39,75,000/- as Fee in SRMCH.
8
15. The above figures clearly demonstrate that the
fee structure of KIMS was substantially higher than
that of SRMCH. Similarly, the fee structures of the
other transferee colleges are also higher than that of
SRMCH, though their detailed charts are not being
reproduced herein for avoiding repetition.
16. We may also note here that pursuant to the
th
order of this Court dated 19 April, 2016, the Selvam
Trust, under whose aegis SRMCH was being run, had
deposited a sum of Rs.2 crores with the Registry of
this Court, which, along with accrued interest, now
stands at Rs.3,58,69,331/-.
17. Furthermore, the Selvam Trust had furnished a
sum of approximately Rs.10 crores, as recorded in
th
the order of this Court dated 8 January 2016, with
the MCI/NMC by way of bank guarantees as security
in connection with regulatory requirements relating
to the establishment and functioning of the
institution.
Submissions advanced on behalf of the Parties: -
18. The students (respondents before us), who were
transferred to the aforesaid three colleges, have, inter
9
alia , contended through Shri Pratap Venugopal,
learned senior counsel, that they were admitted to
SRMCH through a valid admission process and were
subsequently compelled to shift to private medical
institutions for no fault of theirs. It is submitted that
they have already paid fees at Government rates in
compliance with the interim directions of this Court
and have since completed their medical courses after
facing great hardship and uncertainty. It is,
therefore, urged that these passed-out students
should not be burdened with any additional financial
liability at this belated stage.
19. The Selvam Trust, represented by Shri V. Giri,
learned senior counsel, has contended that the
findings regarding deficiencies in SRMCH are still
under challenge before the competent forums. He
submitted that the Trust is contesting the said
findings by raising issues with the MCI/NMC and
that the question of its liability cannot be
conclusively determined in the present proceedings
without due adjudication of such disputes. It is
further urged that the students have already derived
the benefits of continued education in other
recognised medical institutions, which would be
10
either equivalent to or even better than the institution
in which they were originally admitted i.e. SRMCH,
and therefore, the entire financial burden ought not
to be saddled upon the Trust. It is emphatically
contended that no additional liability should be
fastened on the Trust without determining its
defaults, vis-à-vis , the regulatory mechanism.
20. The transferee colleges, being the intervenors,
have contended that they undertook the burden of
accommodating the transferred students pursuant to
the directions of this Court, without a demur, and
provided them the requisite infrastructural and
logistic facilities and high-quality education by facing
significant challenges. It is also submitted that only
a meagre proportion of actual fees calculated at
Government rates was paid by the students, and that
too for a limited duration, and that a substantial
amount towards the fees chargeable by the colleges
remains outstanding. Not only this, but these
students were also paid stipends as per the course
module . It is further urged that these institutions,
having been burdened with additional students,
suffered unprecedented financial loss, and are
entitled to receive the difference of fees and stipend
11
amounts applicable to their respective institutions
and cannot be compelled to impart education at
Government-rate fees which are highly subsidised. It
is urged that the colleges ought to be fully
compensated for the cost of the education imparted,
along with appropriate interest for the delayed
payment.
21. The Medical Council of India (now the National
Medical Commission), represented by Shri Gaurav
Sharma, learned senior counsel, has taken a stand
that the fee structure is required to be determined in
accordance with the applicable statutory and
regulatory framework. It is submitted that the
admission categories ought to be classified on a
quota-based system, whereby students admitted
under the Government quota would be liable to pay
fees at Government rates, whereas those admitted
under the management quota would be liable to pay
higher fees as applicable to such category.
22. Shri Gaurav Sharma has further submitted that
the bank guarantee of Rs.10 crores furnished by the
Selvam Trust with the MCI/NMC ought not to be
adjusted towards the dues of the private medical
colleges, as the said amount may be subject to
12
regulatory disposition, including possible transfer to
the State Government.
23. The State of Odisha has contended that the
admissions to SRMCH were conducted through a
valid admission process undertaken by the State
authorities. It is submitted that, before determining
the issue of payment of fees to the transferee colleges
(applicants), it would be apposite to examine the
question of quota classification and then decide the
applicable rate of fees reimbursable to the transferee
colleges.
Discussion and Findings: -
24. We have considered the submissions advanced
at Bar and have gone through the material placed on
record.
25. In our opinion, the only controversy surviving in
the present is as to how the issue of fee liability is
lis
to be resolved, keeping in mind the following probable
scenarios: -
(a) Whether the students transferred to private
medical colleges are liable to pay fees at
Government rates or at the rates applicable
to private medical colleges;
13
(b) How the differential liability, if any, is to be
apportioned between the students and the
Selvam Educational and Charitable Trust;
(c) Whether the State of Odisha and/or the
MCI/NMC should be directed to make good
the deficiency.
(d) Whether the entire liability should be fixed on
the Selvam Education and Charitable Trust.
26. We are of the view that the issue regarding
classification of the transferred students against
Government/private/management quota does not
arise for consideration because there is no material
on record to show that any of the three transferee
colleges had any vacant seats against the
Government quota. Needless to state that the
question of admitting students against Government
quota seats would only arise if there were any
vacancies of such quota in the transferee colleges. In
the absence of material to indicate such vacancies,
we need not delve into the question as to whether any
of the transferee students could have been adjusted
against the Government quota. Hence, it is to be
presumed that all the students were accommodated
14
against private/management quota seats and the fee
structure applicable to such seats would have to be
applied for deciding the issues of liability and
entitlement.
27. As per the material available on record, during
the academic year 2014-15, when inspections were
carried out, they revealed the existence of serious
fundamental deficiencies in the defaulting institution
(SRMCH), particularly in relation to infrastructure,
availability of teaching faculty, and other essential
requirements mandated by law and procedure for
imparting medical education.
28. In view of these crucial deficiencies, the
Executive Committee of MCI/NMC, upon due
consideration, recommended to the Central
Government that renewal of permission for
admission of the second batch of 100 MBBS students
for the academic year 2014-15 ought not to be
granted. The said recommendation was duly
communicated and accepted by the Competent
Authority, resulting in denial of renewal to SRMCH.
The said decision was assailed by the medical college
before this Court by way of Writ Petition (C) No. 681
15
6 th
of 2014 . However, by order dated 8 August, 2014,
the said writ petition was dismissed in limine . The
dismissal of the said writ petition lends credence to
the findings and allegations of MCI/NMC regarding
inadequate infrastructure, faculty, and other
essential facilities at SRMCH during the relevant
years, thereby affirming that the institution was not
compliant with the prescribed standards. Manifestly,
the decision not to continue the recognition had a
cascading effect on the 2013-2014 batch of students
as well. However, we make it clear that these
observations may not be construed to be prejudicing
the rights of the defaulting institution, i.e., SRMCH,
in appropriate proceedings, if any.
29. It is equally pertinent to note that, in a separate
proceeding being W.P.(Civil) No. 469 of 2014 titled
Hind Charitable Trust & Ors. v. Union of India &
th
Ors. , this Court, by an interim order dated 18
September, 2014, permitted admissions to MBBS
courses in certain private medical colleges, including
those whose renewal of recognition was either
pending or denied, subject to compliance with
6
Sardar Rajas Medical College v. UoI.
16
specified conditions. Subsequently, by order dated
th
25 September, 2014, this Court directed that the
fees chargeable from such students shall be at par
with the fees applicable in Government medical
colleges and that admissions shall be made through
a common State list, without any distinction between
Government and management quota. These
directions had a direct bearing on the admissions
made in SRMCH for the academic sessions 2013-
2014 and 2014–2015.
30. The Court further directed that the
Government-rate fee shall continue to be applicable
till the students so admitted complete their course.
Thus, under the interim arrangement made by this
Court, the entire course duration of the students
admitted in the academic session 2014-2015 was
governed by this subsidised fee structure. Both the
orders stated above are reproduced hereinbelow for
ease of reference :
th
Order dated 18 September, 2014
“Heard the learned senior counsel appearing for
both the sides. Looking at the peculiar facts and
circumstances of the case and, especially, when
several seats for medical admission are likely to
remain vacant for the academic year 2014-15, we
17
are of the view that these matters require urgent
consideration and we are giving these interim
directions under the provisions of Article 142 of the
Constitution of India.
There is one more reason for passing this
interim order. We are conscious of the fact that
number of physicians in our country is much
less than what is required and because of non-
renewal of recognition of several medical
colleges, our citizens would be deprived of a
good number of physicians and therefore, we are
constrained to pass this order, whereby at least
there would be some increase in the number of
physicians after five years. We are running
against time because the last date for giving
admissions to MBBS Course for the academic
th
year 2014-15 is 30 September, 2014.
We also desire to reconsider the directions given
by this Court in the judgment of Priya Gupta v.
State of Chhattisgarh [(2012) 7 SCC 433], but at
this juncture, as we do not have sufficient time to
decide all these petitions finally, we are passing this
interim order and the matter with regard to
reconsideration of the aforestated judgment would
be considered while finally disposing of this group
of petitions.
It has been submitted on behalf of the learned
senior counsel appearing for all the petitioners/
respondents, who are managing medical colleges,
that the defects which had been recorded at the
time of the last inspection by the representatives of
the Medical Council of India have been duly
rectified and at present, the defects pointed out in
the reports do not exist. The said fact can be
ascertained only by having a fresh Compliance
Verification/Inspection. However, the stand taken
18
by the Central Government and the Medical
Council of India is to the effect that no such
inspection can be undertaken in the present
academic session because of paucity of time and it
would violate the time schedule laid down by this
Court in the case of Priya Gupta (supra).
The learned senior counsel appearing for the
Medical Council of India has also submitted that
the petitioners do not have any legal right for
getting renewal of the recognition, especially in view
of the fact that the Verification/Inspection Reports
are not available for the period in question. The
learned senior counsel has relied upon some of the
Judgments to substantiate his case and according
to him, it would not be just and proper to permit
the said medical colleges to take fresh batch of
students.
Looking at the peculiar facts of the case and
the circumstances stated hereinabove, we
direct the petitioners to file undertakings by
President/Chairman and Secretary of the
petitioners' institutions running medical
colleges within 10 days from today, to the effect
that there is no defect in the medical colleges
run by them and they would also state that their
deposit with the MCI, which is around Rs.10
crores, be forfeited by way of penalty if the
statement made in the undertaking is found to
be incorrect at the time of the next inspection.
A draft undertaking has been given to this
Court. A copy of the undertaking, which might
be filed by the institutions, shall be served upon
the office of the Medical Council of India as well
as to the Ministry of Health and Family Welfare,
Govt. of India, New Delhi.
19
We also record the fact that in the recent
past, the Medical Council of India has renewed
recognition of Government Medical Colleges on
the basis of undertakings and therefore, we see
no reason not to permit the private colleges to
admit students on the basis of undertakings
given by their office bearer as a special case.
Notwithstanding any direction given in the case
of Priya Gupta (supra), if undertakings as stated
hereinabove are filed by the institutions managing
medical colleges for the academic year 2014-15,
admissions shall be given to the students from the
merit list prepared by the States and they shall be
charged fees prescribed by the Government Medical
Colleges of their respective States. The State
Authorities, i.e., the Directorate of Medical
Education & Research, of the respective States
shall send students, in order of their merit, to the
medical colleges run by the petitioners, which are
situated within their States, within one week from
the date of receipt of a copy of this order and the
said students shall be admitted to the MBBS
Course in accordance with the rules and
regulations of the MCI and also regulations dated
16.04.2010 framed by the Medical Council of India,
provided undertakings as mentioned above are
filed on behalf of the concerned institutions.
It is also clarified that there would be no further
counselling in respect of the students who are to be
given admission, even if it might result into some
heart burning among other students, but in the
peculiar facts of the case, we give this direction.
In no case, the admission shall be given after
30th September, 2014. This order shall also apply
to all the institutions which had filed their petitions
earlier for renewal of their recognition for the
20
academic year 2014- 15, but their petitions were
rejected or withdrawn for whatever reason,
provided undertakings as stated hereinabove are
filed by President/Chairman and the Secretary of
those institutions. All those petitions shall be
deemed to have been revived and this order shall
be deemed to have been passed in those cases also.
This order shall only be in respect of renewal of
recognition and not for creation of additional seats
or for new colleges. We also record that the Union
of India has supported the petitioners in the
interest of students.
We also direct the Union of India to give wide
publicity to this order in print as well as
electronic media in the interest of the
concerned students.
It is directed that the list of students getting
admission in pursuance of this order shall be
placed on record of this Court by 1st October, 2014
by the concerned institutions and a copy thereof
shall also be sent to the MCI.
These matters shall be treated as part-heard and
shall be notified for further hearing in the month of
December, 2014.”
th
Order dated 24 September, 2014
“After hearing the learned counsel for the parties
we deem it appropriate to issue following
clarifications with regard to our earlier order dated
18th September, 2014. These clarifications shall be
read into the said order as if they were always part
thereof : -
1. The order dated 18th
September, 2014 shall also apply to
21
cases where colleges or institutions
were seeking increase in intake
capacity and in the current year
have been denied permission to
admit students after first or second
or third or forth renewal/inspection.
In our view such institutions where
Renewal/Inspection with respect to
increase in capacity were conducted
in the present academic year are
also entitled to the benefit under the
order dated 18th September, 2014.
2. We also clarify that fees
chargeable from the students
admitted pursuant to our order
dated 18th September, 2014 shall be
at the same rates as applicable to
the students in Government medical
colleges in respective States and
such fees shall be at the same levels
as that of the Government medical
colleges till the students so
admitted pass out from the private
medical colleges or institutions.
3. Our order shall also apply to
all similarly situated institutions
irrespective of the fact whether any
petitions were or are pending in this
Court or in any of the High Courts or
even if they had not approached any
court at all. This order shall also
apply even in cases where there were
orders of stay in favour of the
Medical Council of India restraining
22
the colleges from admitting
students for the current academic
session.
4. The order shall not apply to
colleges or institutions which have
been disqualified by the Medical
Council of India and/or the Central
Government and have been prohibited
from making any admissions for the
current academic year 2014-15.
5. In cases where two separate
lists are prepared and sent by the
State agencies one relating to State
quota and the other relating to
management quota in private
institutions, we clarify that for the
current academic year there shall be
only one list and that shall be the
“State quota” alone. There shall not
be any management quota list to be
sent to the private colleges or
institutions taking the benefit under
our order dated 18th September,
2014. The Management quota shall
also be be filled through the State
list and the fees chargeable for the
management quota shall also be
charged at the same levels and rates
as applicable to State quota list.
6. We further clarify that private
institutions taking benefit under our
th
order dated 18 September, 2014 shall
have to take students only from the
23
State agencies and at fees chargeable
for students in Government medical
colleges as stated above, regardless of
their status or claim as Minority
Institutions or Deemed Universities.”
[Emphasis supplied]
th
31. It is further borne out from the letter dated 20
January, 2015 written by Directorate of Medical
Education & Training, Odisha that Sardar Rajas
Medical College (SRMCH) had already collected fees
@ of Rs.4,25,000/- per student. However, since only
Rs.30,000/- per student, being the fee applicable to
Government medical colleges, was permissible in
terms of the aforesaid directions, the competent
authorities directed the college to refund the excess
amount of Rs.3,95,000/- per student.
32. It may be further noted that the payment of fees
at Government rates by the students of 2014-2015
batch was in pursuance of the interim directions
issued by this Court in the present proceedings. In
addition, insofar as the students admitted in the
academic session 2014–2015 are concerned, the said
position also stood reinforced by the directions issued
by this Court in Hind Charitable Trust (supra) ,
24
whereby it was mandated that such students would
be liable to pay fees at rates applicable to Government
medical colleges. However, clearly this direction was
in the nature of an interim arrangement devised in
order to tide over the prevailing exigencies arising
from the non-renewal of recognition of the concerned
institution(s) by the MCI/NMC and the attendant
issues relating to Government and management
quota admissions.
33. It cannot be denied that admissions to private
medical colleges, particularly under the
management/private quota would carry a
substantially higher fee structure than that
applicable to Government Medical Colleges. The
students had initially taken admission in SRMCH,
which indisputably was a private medical institution
operating under a public-private partnership
framework within the State of Odisha, wherein
admissions were conducted through the State
counselling process, comprising both Government
quota and management quota seats. Thus, these
students had consciously contracted to pay at the
higher fee standards charged by the private medical
college. Possibly, on their own merit, these students
25
may not have got admission into the Government
medical colleges.
34. Be that as it may, on account of subsequent
developments and the intervention of this Court, they
continued their education and completed the same in
the three transferee colleges.
35. In this scenario, what arises for consideration is
whether the students, who had initially taken
admission in a private medical college having a
higher fee structure, can be permitted to continue to
avail the benefit of Government-rate fees on account
of the interim directions issued by this Court even
though in the first place, they had not qualified for
the Government colleges in the admission process
conducted for this purpose.
36. This, in our opinion, would amount to unjust
enrichment of these transferee students while being
conscious of the fact that they had to face a chaotic
situation of being transferred to different medical
colleges mid-session. However, all interests of these
students were duly protected by this Court ensuring
that they cleared the medical course without losing a
single academic year. Thus, neither the students can
be given undue advantage or bonanza nor can the
26
defaulting institution, i.e., the SRMCH/Selvam
Trust, be permitted to take benefit of its own follies.
37. Undeniably, the finding of deficiencies taken
note of by the MCI/NMC during inspection of the
infrastructure/faculty of the SRMCH is no longer
under debate, as the SRMCH/Selvam Trust failed to
maintain the requisite standards for imparting MBBS
course to the students admitted by it by charging
much heavier fees than what is applicable in
Government colleges. The Writ Petition (C) No.681 of
2014, filed by the college having been dismissed,
these findings of deficiencies stood firmly affirmed.
38. The situation at hand is well defined by the latin
maxim
Commodum ex injuria sua nemo habere debet
i.e., no one should derive a benefit from their own
wrong. While the admitted students had undertaken
to pay the prescribed fees to SRMCH, it is equally true
that, upon payment of such fees, they were entitled
to complete their course without any hitch or
difficulty. However, what transpired subsequently,
as noted in the preceding paragraphs, presents an
entirely different picture. Owing to the deficiencies in
SRMCH, its recognition was not renewed, resulting in
the students being subjected to a very tumultuous
27
and volatile situation, putting their future in grave
risk.
39. Hence, the core question which arises for
consideration pertains to the manner in which the
resultant financial liability is to be apportioned
between the parties while balancing the equities.
40. It is indicated from the record that, despite
directions issued to SRMCH to refund the excess fee
collected from the students admitted in the academic
session 2014-2015, the said amount has not been
paid till date and SRMCH/Selvam Trust continues to
retain the same.
41. A bank guarantee to the tune of approximately
Rs.10 crores was furnished by the Selvam Trust with
the MCI/NMC. A further sum of Rs.2 crores was
deposited by the Trust with the Registry of this Court
th
pursuant to the order dated 19 April, 2016. The
charts placed on record by the transferee colleges
indicate that the fee structure prevailing in these
institutions was substantially higher than that being
charged by SRMCH.
42. However, since the students were transferred
and admitted to these colleges pursuant to the
directions of this Court in exceptional circumstances,
28
the primary brunt of liability must be fastened upon
SRMCH/Selvam Trust, subject to such adjustments
as may be permissible in law.
43. It has not been demonstrated before this Court
that the MCI/NMC has an overriding charge or
exclusive lien over the amount of Rs.10 crores
secured by way of bank guarantee furnished by the
Selvam Trust. Even otherwise, assuming that any
such claim exists, the MCI/NMC, being a statutory
regulatory authority vested with powers relating to
recognition and de-recognition of medical
institutions, would be at liberty to take appropriate
steps in accordance with law to recover applicable
levies, if any, from the defaulting institution.
Disbursal of amounts deposited by the
SRMCH/Trust: -
44. We, therefore, direct that the amount of
approximately Rs.10 crores furnished by the Selvam
Trust by way of bank guarantees with the MCI/NMC,
along with the amount of Rs.2 crores deposited before
this Court, together with accrued interest thereupon,
shall be payable to the three transferee colleges.
29
45. It is accordingly ordered that the amount of
approximately Rs.10 crores covered by the bank
guarantee furnished by the Trust with the MCI/NMC,
shall be made available for distribution amongst the
three transferee colleges in equal proportions. The
MCI/NMC shall ensure that the said amount is
released and paid to the three colleges in their
respective bank accounts within a period of three
months from today.
46. The amount of Rs.2 crores deposited by the
Trust with the Registry of this Court, along with
accrued interest thereupon, shall also be divided into
three equal portions and disbursed to the transferee
colleges.
47. The bank details of the respective colleges shall
be furnished before the Registry by their respective
AOR within a period of two weeks from today, upon
which the Registry shall take necessary steps for
disbursement.
Liability of Students: -
48. An interim arrangement was made by this Court
whereby the students were permitted to deposit fees
in the private medical colleges at Government rates.
The said fee was approximately one-eighth of the fee
30
being charged by SRMCH per semester. However,
owing to the prevailing circumstances and pursuant
to the directions issued by this Court, the students
were transferred to the applicant colleges, where they
continued their studies and completed the courses,
albeit without loss of an academic year save for
exceptions. Additionally, these students were paid
stipends by transferee colleges as and where
applicable. An argument has been advanced that the
students did not pay all tranches of the Government
fees also. However, it would be difficult for this Court
to verify the said assertion at this belated stage.
49. Going by the chart of calculations prepared by
the three applicant colleges and placed for perusal of
this Court, the students transferred to these colleges
would have paid approximately Rs.5,39,75,000/- to
each college, if the fee structure prevailing at SRMCH
were to be applied. The fee structure of the transferee
colleges is slightly higher but the learned counsel
representing the colleges fairly conceded on
instructions that they would be satisfied by
reimbursement of due fees at the rates being charged
by SRMCH. Thus, in aggregate, the total amount
payable to the three colleges would work out to
31
approximately Rs.16.2 crores. This amount is
significantly lower than the fee ordinarily chargeable
by the transferee colleges from their own students at
private rates and does not account for the interest
which would have accrued in the intervening period.
The total amount secured by way of bank guarantees
furnished by the Trust, together with the amount
deposited before this Court along with accrued
interest, would aggregate to approximately Rs.14
crores. Even upon applying the fee standards of
SRMCH, the transferee colleges would still face a
shortfall in the recovery of their lawful dues.
50. We may note that the students who have passed
out from the transferee colleges have virtually
undertaken the full MBBS course by paying the fees
at the Government rates, which would be only a
pittance of what they would have paid to the SRMCH
under normal circumstances.
51. The factual situation available on record is not
clear on the aspect as to the number of students
originally admitted in SRMCH under the Government
quota and those admitted under the private
quota/management quota.
32
52. It is also borne out from the record that the
transferee colleges had obtained undertakings from
the transferred students at the time of issuance of
course-completion documents/certificates, wherein
the students acknowledged that the issue relating to
fee liability was pending consideration before this
Court and undertook to abide by the final directions
passed herein. Thus, the passed-out students cannot
be allowed the benefit of a windfall or a bonanza
merely by dint of the interim orders passed by this
Court, which was in form of an emergent measure in
order to tide over the situation where the students
faced imminent risk of losing their entire careers.
Now that, by virtue of the orders passed by this
Court, the students have completed the medical
courses, it is the right time when they should be
asked to make good their outstanding fee obligations.
53. The present status of these passed out students
is not available to the Court. Thus, looking to the
piquant situation, we permit the transferee colleges
to make representations to the MCI/NMC with details
of the exact shortfall of the fee due from each student
(applying SRMCH rates) for recovery of their
remaining dues, if any. It is expected that, upon such
33
representations being made, the NMC shall provide
due redressal to the colleges for recovery of the deficit
amount, if any, from these passed out students.
Excess amount, if any, received from the students
may be utilized to recoup the amount of bank
guarantee (Rs. 10 Crores) which we have directed
MCI/NMC to pay to the applicant colleges.
Furthermore, at the time of evaluation, the MCI/NMC
shall take into account and adjust the amount
initially paid by these students at the time of
admission to SRMCH. We further provide that
observations made in this order shall not prejudice
the claims/defences, if any, of the Selvam Trust or
SRCMH in appropriate proceedings, if any.
54. For the sake of clarification and in view of the
directions issued hereinabove, it is provided that the
students who comply with the fee liability determined
in terms of the present judgment shall be entitled to
forthwith receive such academic and course-
completion documents, certificates and other
consequential records, which are ordinarily issued
upon completion of the course and are required by
the students, in accordance with the applicable
rules/regulations.
34
55. I.A. Nos.73763 of 2019, 69514 of 2019, and
151684 of 2022 (applications for
direction/clarification) are disposed of as above.
Other pending application(s), if any, shall also stand
disposed of.
56. The appeals are closed and consigned to the
record.
….……………………J.
(VIKRAM NATH)
...…………………….J.
(SANDEEP MEHTA)
NEW DELHI;
MAY 14, 2026.
35