Full Judgment Text
REPORTABLE
2025 INSC 518
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 9885 – 9888 / 2020)
The State of Kerala and Ors. ….Appellant(s)
versus
The Principal, KMCT Medical College and Ors. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) No. 12984 / 2020)
The Principal KMCT Medical College & Anr. ….Appellant(s)
versus
The Admission and Fee Regulatory Committee and Anr. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 4909 – 4910 / 2021)
Altaf Hussain & Ors. ….Appellant(s)
versus
The State of Kerala and Ors. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 12957 – 12958 / 2021)
Signature Not Verified
Digitally signed by
SATISH KUMAR YADAV
Date: 2025.05.16
16:36:10 IST
Reason:
Sanchana Pious & Ors. ….Appellant(s)
versus
Page of
1 32
The State of Kerala and Ors. ….Respondent(s)
JUDGEMENT
SURYA KANT, J.
Leave granted.
2. The issue that arises for consideration has emanated from a direction
given by the State of Kerala’s Admission and Fee Regulatory Committee
that a corpus fund be created to subsidize medical education for Below
Poverty Line ( ) students admitted to selffinancing medical
BPL
educational institutions in the State. This corpus fund was to be
created by remitting to the State Government a part of the fees collected
from NonResident Indian ( NRI ) students admitted to those colleges.
3. The Kerala High Court, at Ernakulam ( High Court ) vide the common
Impugned Judgement dated 23.07.2020 has: ( ) quashed Government
i
Order (MS) No. 107/2018/H&FWD dated 06.06.2018 ( GO dated
06.06.2018 ); ( ii ) directed that the amounts collected from each NRI
student to create a corpus fund be transferred to the respective
institutions and maintained as a separate account to be utilized only
for the benefit of students belonging to the economically weaker
sections, who may be admitted to such institutions on the basis of
allotment; ( iii ) directed such account to be operated only jointly by a
nominee of the selffinancing institution and a nominee of the State
Government; ( iv ) kept it open to the State to promulgate suitable
Page 2 of 32
legislative measures to achieve the object of providing scholarships to
students belonging to economically weaker sections of society as
observed by this Court in
P. A. Inamdar and Ors. v. State of
1
Maharashtra ; and has further directed that ( v ) till suitable legislative
measures are adopted by the State, no further amounts would be levied
or collected from NRI students, already admitted to or to be admitted to
NRI quota seats in that academic year, towards the creation or
maintenance of the corpus fund.
4. These directions of the High Court have given rise to three sets of cross
appeals preferred by: ( i ) The State of Kerala, who is aggrieved by the
quashing of its GO dated 06.06.2018; ( ii ) The selffinancing medical
colleges, who are challenging the direction that the corpus fund
amount be utilized only to subsidize education for students from
economicallyweaker sections of society admitted to the respective
institutions; and finally, ( iii ) The NRI students, who are dissatisfied
that the corpus fund amounts have not been refunded to them.
A. F ACTS
5. Owing to a parallel set of proceedings before the Courts concerning the
Committee’s overall functioning, it is vital to understand the detailed
facts before analyzing the legal issues.
1 P. A. Inamdar and Ors. v. State of Maharashtra, (2005) 6 SCC 537.
Page 3 of 32
5.1 The Kerala Medical Education (Regulation and Control of Admission to
Private Medical Educational Institutions) Act, 2017 ( )
the 2017 Act
came into force on 01.06.2017. It was introduced to, among other
things, regulate the admission and fixation of fees in private medical
educational institutions in the State of Kerala. Sections 3 and 3A of the
2017 Act contemplate the constitution of a Committee, described as the
Admission and Fee Regulatory Committee ( Committee ). The Committee
was tasked to determine the fees charged to students admitted to
private medical educational institutions in Kerala based on the annual
information and proposals submitted by those colleges.
5.2 KMCT Medical College moved an application and submitted the
prospectus for Academic Year 20172018 before the Committee on
01.08.2017, requesting it to fix the fees for NRI students at Rs. 20
lakhs per annum.
5.3 The Committee, on 27.02.2018, approved the fixation of fees for NRI
students at Rs. 20 lakhs per annum for all medical colleges whose fee
was to be regulated under the 2017 Act. Notedly, it decided to enhance
the fees for NRI students from Rs. 15 lakhs per annum in Academic
Year 20162017 to Rs. 20 lakhs per annum in Academic Year 2017
2018 and 20182019, with the condition that the extra amount of Rs. 5
lakhs would be kept as a ‘corpus fund’ to provide scholarships to BPL
students. The Committee further directed that the corpus fund amount
would be remitted to the State Government, as and when so directed by
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the State, the Committee, or a Court of Law. This decision was
substantiated by quoting paragraph 131 of P. A. Inamdar (supra) ,
where it was held that the fees collected from NRI students should be
utilized to benefit students from economicallyweaker sections of
society.
KMCT Medical College, being aggrieved, laid challenge to the
5.4
Committee’s decision before the High Court.
5.5 During the pendency of the writ proceedings before the High Court, the
Government of Kerala issued the GO dated 06.06.2018, seemingly to
validate and support the Committee’s decision dated 27.02.2018. It
emphasized that the mainstay of the corpus fund would be the
amounts earmarked and collected from NRI students who were
admitted to selffinancing medical educational institutions in the State.
Much like the Committee’s decision, the GO dated 06.06.2018 was
statedly issued in pursuance of the directions contained in paragraph
131 of P. A. Inamdar (supra) . Compelled by the GO dated 06.06.2018,
the selffinancing medical colleges consequently began collecting Rs. 20
lakhs per annum as fees from the newlyadmitted NRI students, while
remitting Rs. 5 lakhs to the corpus fund.
The Committee, meanwhile, continued to assess the fee proposals
5.6
submitted by various colleges. In some instances, it rejected the
proposals and determined the fees to be charged on its own initiative.
Viewing this as an overstep of the Committee’s powers and a violation
Page 5 of 32
of the institutions’ autonomy, several medical colleges filed writ
petitions before the High Court. This resulted in a parallel set of
proceedings concerning the Committee’s overall powers.
5.7 These proceedings culminated in a common judgment dated
19.05.2020, whereby the High Court remanded the matter to the
Committee to reexamine the proposals afresh and to pass suitable
orders. The High Court observed that though the Committee had the
power to fix the fee to be collected from NRI students, there was no
power vested in it under Section 8 of the 2017 Act to direct that a
portion of the fee amount be utilized for any other purpose.
5.8 The aggrieved State approached this Court in Civil Appeal No. 606
2
616/2021, which came to be decided on 25.02.2021, holding that the
fee, as proposed by the colleges, should be considered by the
Committee. This Court noted that it was no longer res integra that the
right conferred on the institutions to fix fees for professional courses
was subject to regulation. It was reiterated that unaided professional
institutions had the autonomy to decide on the fees to be charged,
subject to the condition that such fees do not result in profiteering or
collection of capitation fees. The Committee was only required to ensure
that the fee charged was nonexploitative and reasonable. This Court
thus directed the Committee to reconsider the proposals submitted by
the colleges, by taking into account the factors mentioned in Section 11
2 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515.
Page 6 of 32
of the 2017 Act and the law laid down in Modern Dental College &
3
Research Centre and Ors. v. State of Madhya Pradesh and Ors.
While this Court was seized of the abovementioned matter, various
5.9
selffinancing medical colleges and their NRI students initiated a
second round of litigation before the High Court, this time, challenging
the amounts collected from NRI students to create the corpus fund to
benefit BPL students enrolled in the same institutes. The High Court
clubbed these writ petitions with the earlier petition filed by KMCT
Medical College, and has decided all these writ petitions through the
common Impugned Judgment.
5.10 The High Court, being conscious of the fact that the Committee was
considering the fee proposals afresh, as was directed by it vide the
judgement dated 19.05.2020, restricted its assessment only qua the
‘validity of the creation of the corpus fund.’
5.11 The question that was formulated by the High Court for its
consideration was whether the creation of the corpus fund through the
GO dated 06.06.2018 could be sustained in the absence of law in the
form of plenary legislation or subordinate legislation. The High Court
opined that, regardless of the nature of the levy, such a fee could be
imposed only under the authority of law and not merely by an executive
order. Since there was no provision in the 2017 Act authorizing the
3 Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors.,
(2016) 7 SCC 353.
Page 7 of 32
Committee or the State Government to levy an amount to be credited to
a corpus fund, the GO dated 06.06.2018 could not be sustained.
Accordingly, the GO was quashed and the directions, as specified in
paragraph 3 above, have been issued.
This is how these crossappeals have arisen for our consideration.
5.12
B. C ONTENTIONS OF THE P ARTIES
6. Mr. Kapil Sibal and Mr. Nikhil Goel, Learned Senior Counsel, appearing
on behalf of KMCT Medical College and other selffinancing medical
colleges in the State, contended that the High Court has partly erred
and the Impugned Judgement deserves to be suitably modified in light
of the following submissions:
(a) This Court has time and again permitted institutions to charge a
higher amount of fees from NRI students as the fees paid by them
enable such institutions to strengthen their level of education and
enlarge their educational activities. KMCT Medical College has
always followed this dictum and has been using the enhanced fees
levied on NRI students to grant scholarships to students from
economicallyweaker sections of society. For instance, in 2014 and
2015, KMCT Medical College awarded scholarships worth Rs. 1.28
crores and Rs. 1.55 crores, respectively, to enable its students
Page 8 of 32
from economicallyweaker sections of society to pursue their
education.
(b) The fee proposed to be charged from the NRI students was only Rs.
20 lakhs per annum, which is one of the lowest fees in the entire
country. KMCT Medical College charges only Rs. 5.5 lakhs per
annum as fees for general category students. Thus, if the tuition
fee for NRI students was further reduced from Rs. 20 lakhs to Rs.
15 lakhs, by virtue of the corpus fund, the college would be unable
to continue financing its daytoday activities. Consequently, the
failure of the High Court to direct a refund, of the amount charged
from NRI students towards the corpus fund, to the institutions is
violative of Article 19 (1)(g) and Article 30 of the Constitution.
(c)
The State or the Executive cannot impose any levy, whatever may
be the nature of it, through an executive order, except under the
authority of law. At present, there is no provision in the 2017 Act
which empowers the State or its machinery to impose any tax or
levy of any nature on selffinancing medical colleges. The only
power granted to the Committee is to satisfy itself that the fees
charged by the selffinancing medical educational institutions do
not lead to profiteering or payment of capitation fees. If the
Committee finds the fees charged to be exploitative, it can propose
a different fee structure.
Page 9 of 32
(d) Once the High Court quashed the GO dated 06.06.2018 on the
ground that the Committee was not authorized under law to create
a corpus fund, it could not have permitted such unauthorized
action to continue by directing that the amounts collected for the
corpus fund be utilized only to subsidize education for other
students. The denial of a refund of the illegallycollected fees has
put the selffinancing medical colleges under financial strain.
(e) KMCT Medical College, like other selffinancing medical colleges,
specifically requested the Committee to approve its fixation of fees
at Rs. 20 lakhs per annum for NRI students, under the expectation
that if approved, it would be able to utilize the entire amount of Rs.
20 lakhs for educational purposes and for running the institution.
It was improper and imprudent of the Committee to approve the
fees of Rs. 20 lakhs per annum, only to retain Rs. 5 lakhs for the
creation of the corpus fund.
Mr. Shoeb Alam, Learned Senior Counsel, appearing on behalf of the
7.
NRI students, supported the quashing of the GO dated 06.06.2018 but
contended that the High Court erred in disallowing a refund to them. In
furtherance of this, he adduced the following submissions:
(a) NRI students are admitted to colleges on a higher fee scale to
subsidize the fees of students from economicallyweaker sections
of society. When an NRI student is admitted to a particular college,
the higher fees paid are utilized to subsidize the fees of a BPL
Page 10 of 32
student in that particular college, alone. It is unfair and unjust
that a higher fee charged from NRI students of a particular college
be utilized to subsidize the fees charged in another college or
multiple other colleges in the State.
Paragraph 67 of states that “ each NRI
(b) P. A. Inamdar (supra)
student would subsidize two other students belonging to the
economically and socially weaker sections .” Thus, if the fee fixed
for a general category student for a particular year is only Rs. 5
lakhs, there is no reason to fix the fees for NRI students above Rs.
15 lakhs as the NRI student would be subsidizing the fees of two
other students from economicallyweaker backgrounds. As a
result, any amount levied as a corpus fund, without the authority
of law, is over and above the amount contemplated for an NRI
student to bear.
(c) In addition to this, some colleges have forced the NRI students to
give postdated cheques of Rs. 5 lakhs, in advance, to create the
corpus fund. The NRI students are thus either liable to be
refunded the amounts collected under the guise of setting up the
corpus fund or the amounts so collected must be set off against
their future fees.
8. Per contra , Mr. Jayant Muth Raj, Learned Senior Counsel, appearing on
behalf of the State of Kerala, put forth the following submissions:
Page 11 of 32
(a) The GO dated 06.06.2018 was issued in pursuance of paragraph
131 of . The last line of paragraph 131
P. A. Inamdar (supra)
specifically permitted the Committee to create a mechanism to
subsidize education through the fees collected from NRI students,
in the absence of State Legislation on the subject. The authority to
create the corpus fund thus, came primarily from the Constitution
Bench judgement of this Court, which, being the law of the land,
need not be supplemented or supplanted by any State Legislation
or Regulations.
(b) The conduct of the selffinancing medical colleges is questionable
as they have collected the corpus fund amount of Rs. 5 lakhs in
advance from the NRI students who were admitted in the 2017
2018 batch, even in respect of their second, third, fourth, and fifth
years. They collected Rs. 43.6 crores in total but remitted only Rs.
4.15 crores to the State for the purpose of the corpus fund. The
college management did the same for the next 5 successive
batches of NRI students, i.e. the batches of 20182019, 2019
2020, 20202021, 20212022, and 20222023. Rs. 145.45 crores
were collected from these batches for the corpus fund, but only Rs.
2 crores have been remitted to the corpus fund maintained by the
Commissioner for Entrance Examinations. Thus, the colleges have
retained a total of Rs. 182.9 crores from the batches of 20172018
to 20222023. As a direct corollary to such action, the State of
Page 12 of 32
Kerala’s larger objective, of subsidizing education for students
from economicallyweaker sections of society, has been frustrated.
9. Mr. Gaurav Aggarwal, Learned Senior Counsel, appearing on behalf of
the intervenors, i.e. certain BPL students admitted to various self
financing medical colleges across Kerala, supported the GO dated
06.06.2018 and put forth the following submissions:
(a) The GO dated 06.06.2018 was adopted as a welfare measure by
the State of Kerala. The object of the GO dated 06.06.2018 was
laudable and the observations of this Court in
P. A. Inamdar
(supra) clearly compel the State to adopt such a course of action.
The GO dated 06.06.2018 should not have been quashed merely
due to the absence of legislative support. The Courts should
ordinarily not interfere with a policy decision of the Executive
unless the same is mala fide , unreasonable, arbitrary, or unfair.
(b) After the High Court directed that no further amount should be
credited towards the corpus fund, many BPL students have been
finding it difficult to continue their studies due to financial
hardships. Not only this, the selffinancing medical institutions are
exerting pressure on BPL students to remit the regular tuition fees.
These students chose to take admission to the respective colleges,
with the understanding that they would only have to pay
subsidized fees. Since they no longer receive BPL scholarships,
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they have been unable to pay their tuition and hostel fees and
many of them will be forced to discontinue their studies.
SSUES
C. I
Having given our thoughtful consideration to the submissions at
10.
length, we find that the following issues arise for our consideration:
i. Whether the Committee had the power to determine and direct
that a particular amount of the fees charged to NRI students be
kept in a corpus fund maintained by the State?
ii. Whether the NRI students are entitled to a refund of the amount
so charged or whether it can be set off against fees to be charged
for later years?
D. A NALYSIS
D.1 Issue No. 1: Power of the Committee to direct the creation of a
corpus fund for scholarships
To understand and deduce the powers of the Committee, we must
11.
conduct a detailed examination of the two sources from where it is
stated to have derived its powers: ( i ) The Constitution Bench
Judgement of this Court in ; and ( ) Section 8A
P. A. Inamdar (supra) ii
and Section 11 of the 2017 Act.
D.1.1 The Constitution Bench Judgement of this Court in P. A.
Inamdar (supra)
Page 14 of 32
12. Before we delve into the analysis, it will be useful to reproduce the text
of paragraph 131 of to appreciate the rival
P. A. Inamdar (supra)
submissions raised by the parties. It elucidates that:
“ 131. Here itself we are inclined to deal with the question
as to seats allocated for NonResident Indians (“NRI” for
short) or NRI seats. It is common knowledge that some of
the institutions grant admissions to a certain number of
students under such quota by charging a higher amount of
fee. In fact, the term “NRI” in relation to admissions is a
misnomer. By and large, we have noticed in cases after
cases coming to this Court, neither the students who get
admissions under this category nor their parents are NRIs.
In effect and reality, under this category, less meritorious
students, but who can afford to bring more money, get
admission. During the course of hearing, it was pointed
out that a limited number of such seats should be made
available as the money brought by such students admitted
against NRI quota enables the educational institutions to
strengthen their level of education and also to enlarge their
educational activities. It was also pointed out that people
of Indian origin, who have migrated to other countries,
have a desire to bring back their children to their own
country as they not only get education but also get
reunited with the Indian cultural ethos by virtue of being
here. They also wish the money which they would be
spending elsewhere on education of their children should
rather reach their own motherland. A limited reservation of
such seats, not exceeding 15%, in our opinion, may be
made available to NRIs depending on the discretion of the
management subject to two conditions. First, such seats
should be utilised bona fide by NRIs only and for their
children or wards. Secondly, within this quota, merit
should not be given a complete goby.
The amount of
money, in whatever form collected from such NRIs,
should be utilised for benefiting students such as
from economically weaker sections of the society,
whom, on welldefined criteria, the educational
institution may admit on subsidised payment of
their fee. To prevent misutilisation of such quota or
any malpractice referable to NRI quota seats,
suitable legislation or regulation needs to be
framed. So long as the State does not do it, it will be
Page 15 of 32
for the Committees constituted pursuant to the
direction in Islamic Academy [(2003) 6 SCC 697] to
regulate .”
[Emphasis supplied]
13. In this regard, the State of Kerala and the intervenorBPL students
have vehemently asserted that this Court, in the abovereproduced
paragraph, has unequivocally obligated each institution to subsidize
the fees charged to students from economicallyweaker sections of
society through fees paid by NRI students. Until suitable legislation is
made by the State, the Committee is obliged to regulate such
subsidization. The Committee, therefore, was justified in creating the
corpus fund.
14. Per contra , KMCT Medical College, other selffinancing medical colleges,
and some NRI students contend that P. A. Inamdar (supra) does not
grant the Committee the power to create a corpus fund; the power to do
so resides only with the State. The relevant paragraph only grants the
Committee the ability to regulate admissions to the NRI quota to
prevent its misutilization.
15. It is clear that paragraph 131 of P. A. Inamdar (supra) validates and
encourages the idea of charging higher fees to NRI students in order to
subsidize education for students from economicallyweaker or
backward sections of society, who are admitted to those colleges. This
aligns with the ideals of a welfare State. It cannot possibly be contested
that the Committee, in the instant case, has not been constituted in
Page 16 of 32
line with the directives given by the 5judge Bench of this Court in
4
Islamic Academy of Education v. State of Karnataka .
16. On a thorough reading of the paragraph, it further appears that the
powers granted to the Committee only concern the rules of allotment of
seats in the NRI quota, with particular emphasis on preventing
misutilization of the allotted quota and seats. The Committee is also
permitted to frame such rules only till the time the State fails to do so.
From the phrase, “ To prevent misutilisation of such quota or any
malpractice referable to NRI quota seats, ” which precedes the State’s
mandate to enact a suitable Legislation or frame Regulations, it is clear
that the Committee constituted in Islamic Academy (supra) has been
authorized to regulate NRI admissions. The power conferred on the
Committee, in this regard, is necessarily meant to prevent
misutilization of the NRI quota or any malpractice referable to that
quota. Conversely, the abovereproduced paragraph is silent on the
creation of any mechanism to subsidize fees for other students and
does not confer any power on the Committee in this regard. It is
difficult to accept that the Committee can create a corpus fund on the
strength of the transitional powers given to it in P. A. Inamdar (supra) .
The power to formulate creative solutions, such as a corpus fund, to
benefit students from economicallyweaker sections of society resides
only with the State, which should be introduced through appropriate
Legislation or Regulations.
4 Islamic Academy of Education v. State of Karnataka, (2003) 6 SCC 697, para 7.
Page 17 of 32
17. The last line of paragraph 131, which mentions that the Committee will
act as per the directions issued in , leaves no
Islamic Academy (supra)
room to doubt that the powers of the Committee to regulate NRI seats
are not boundless. For better appreciation, it will be useful, at this
stage, to refer to paragraph 7 of , which
Islamic Academy (supra)
pertains to the constitution and the powers of the Committee. It reads
as follows:
“7. So far as the first question is concerned, in our view
the majority judgment is very clear. There can be no fixing
of a rigid fee structure by the Government. Each institute
must have the freedom to fix its own fee structure taking
into consideration the need to generate funds to run the
institution and to provide facilities necessary for the
benefit of the students. They must also be able to generate
surplus which must be used for the betterment and growth
of that educational institution. In paragraph 56 of the
judgment it has been categorically laid down that the
decision on the fees to be charged must necessarily be left
to the private educational institutions that do not seek and
which are not dependent upon any funds from the
Government. Each institute will be entitled to have its own
fee structure. The fee structure for each institute must be
fixed keeping in mind the infrastructure and facilities
available, the investments made, salaries paid to the
teachers and staff, future plans for expansion and/or
betterment of the institution etc. Of course there can be no
profiteering and capitation fees cannot be charged. It thus
needs to be emphasized that as per the majority judgment
imparting of education is essentially charitable in nature.
Thus the surplus/profit that can be generated must be
only for the benefit/use of that educational institution.
Profits/surplus cannot be diverted for any other use or
purpose and cannot be used for personal gain or for any
other business or enterprise. As, at present, there are
statutes/regulations which govern the fixation of fees and
as this Court has not yet considered the validity of those
statutes/regulations, we direct that in order to give
effect to the judgment in T.M.A. Pai case [(2002) 8
Page 18 of 32
SCC 481] the respective State
Governments/concerned authority shall set up, in
each State, a committee headed by a retired High
Court Judge who shall be nominated by the Chief
The other member, who shall be
Justice of that State.
nominated by the Judge, should be a Chartered
Accountant of repute. A representative of the Medical
Council of India (in short “MCI”) or the All India Council for
Technical Education (in short “AICTE”), depending on the
type of institution, shall also be a member. The Secretary
of the State Government in charge of Medical Education or
Technical Education, as the case may be, shall be a
member and Secretary of the Committee. The Committee
should be free to nominate/coopt another independent
person of repute, so that the total number of members of
the Committee shall not exceed five. Each educational
institute must place before this Committee, well in advance
of the academic year, its proposed fee structure. Along
with the proposed fee structure all relevant documents
and books of accounts must also be produced before the
Committee for their scrutiny. The Committee shall then
decide whether the fees proposed by that institute
are justified and are not profiteering or charging
capitation fee. The Committee will be at liberty to
approve the fee structure or to propose some other
. The fee
fee which can be charged by the institute
fixed by the Committee shall be binding for a period of
three years, at the end of which period the institute would
be at liberty to apply for revision. Once fees are fixed by
the Committee, the institute cannot charge either directly
or indirectly any other amount over and above the amount
fixed as fees. If any other amount is charged, under any
other head or guise e.g. donations, the same would
amount to charging of capitation fee. The
Governments/appropriate authorities should consider
framing appropriate regulations, if not already framed,
whereunder if it is found that an institution is charging
capitation fees or profiteering that institution can be
appropriately penalised and also face the prospect of
losing its recognition/affiliation.”
[Emphasis supplied]
18. It becomes evident from the above extract that the Committee may only
decide whether the fees proposed by the institution are exploitative or
Page 19 of 32
not. Islamic Academy (supra) makes no mention of the Committee’s
discretionary power to divert a part of the approved fees for any
purpose, howsoever noble it may be, including for the purpose of
creating a corpus fund. Once the colleges submit their proposals to it,
the Committee must examine all the heads to determine whether such
proposed fee is reasonable. The Committee is also empowered to
propose an alternative fee structure in the event of profiteering or
charging of capitation fee by the college.
19. A conjoint reading of paragraph 131 of P. A. Inamdar (supra) and
paragraph 7 of Islamic Academy (supra) amplifies the idea that the
Committee’s power is not limitless. Such a combined reading leads us
to the conclusion that: ( ) the Committee is competent to prescribe fees
i
in respect of the NRI quota in selffinancing medical educational
institutions until the State enacts appropriate Legislation or
Regulations; and ( ii ) the Committee cannot draw unlimited powers
under the guise of ‘regulation of NRI quota/seats.’ In other words, the
Committee can only make rules for admission to such seats and can
review the fees charged to NRI students to ensure that they are not
exploitative. This is the cumulative power granted to the Committee
within which it must act. The Committee cannot perforate these
bounds unless and until its power is expanded through a suitable
Legislation or upon a direction by this Court.
Page 20 of 32
20. In light of the above, it is evident that paragraph 131 of P. A. Inamdar
(supra) does not clothe the Committee with the power to create a
corpus fund for the benefit of economicallyweaker students. It only
directs the State to come up with a suitable plan to subsidize their
education through the fees charged from NRI students. The Committee
cannot usurp the powers vested in the State in this regard.
D.1.2 Section 8A and Section 11 of the 2017 Act
Given that we have established the confines of the directions in
21. P. A.
, it is also necessary to ascertain whether the State
Inamdar (supra)
has accounted for the proposed scholarship scheme/corpus fund
through the aegis of the 2017 Act, which constitutes the Committee
and regulates its functions.
22. Before we proceed further, we must take a glance at Section 8A and
Section 11 of the 2017 Act. These provisions read as follow:
“
8A. Powers and functions of the Fee Regulatory
(1) The Committee shall exercise the following
Committee:
powers and perform the following functions, namely: (a)
require a private medical educational institution to furnish,
within a specified date, information, documents or records
as may be necessary for enabling the Fee Regulatory
Committee to determine the fee that may be charged by
the institution in respect of each medical course;
[]*
hear complaints with regard to admission in contravention
of the provisions of this Act or the rules made thereunder
either on receipt of a complaint or suo motu and shall:
[]*
Page 21 of 32
(2) The [Fee Regulatory Committee] shall, for the purpose
of making any enquiry under this Act, have all the powers
of a civil court under the Code of Civil Procedure, 1908
(Central Act 5 of 1908) while trying a suit in respect of the
following matters, namely: (a) summoning and enforcing
the attendance of any witness and examining him on oath;
(b) requiring the discovery and production of any
document; (c) receiving evidence on affidavit.
(3) The fee determined by the Fee Regulatory Committee
shall be applicable to a student who is admitted to a
private medical educational institution in that academic
year and shall not be revised till the completion of his
course in the said institution or University. No private
medical educational institution shall collect a fee
amounting to more than one year's fee from a student in
an academic year. Collection of more than one year's fee in
an academic year shall be construed as collecting of
capitation fee and shall be liable to be proceeded against.
(4) The Fee Regulatory Committee may, if it is satisfied
that there has been any violation by such institution of the
provisions of this Act or the rules made thereunder
regarding [] fees, it may recommend to the Government*
to take the following actions against such institution,
namely:
(a) impose a monetary fine up to ten lakh rupees on the
institution together with interest thereon at the rate of
twelve per cent per annum which shall be recovered as
if it were an arrear of public revenue due on land;
(b) order the institution to refund to the student within
such time as specified in the order, any amount received
by the institution in excess of the fees fixed by the Fee
Regulatory Committee or any amount received by way
of capitation fee or any amount received for profiteering:
Provided that if the institution fails to refund the amount
within the specified time to the student, the same shall
be recoverable along with interest thereon at the rate of
twelve per cent per annum as if it were an arrear of
public revenue due on land and paid to the student;
(c) recommend to the University or the appropriate
authority to withdraw the recognition of the institution;
(d) any other course of action, as it deems fit.
Page 22 of 32
(5) Before recommending to the Government to initiate
actions under subsection (4) the institutions shall be given
a reasonable opportunity of being heard.
11. Factors for determination of fee: (1) the Fee
Regulatory Committee shall determine the fee considering
the following factors, namely:
(a) the location of the private medical educational
institution;
(b) the nature of the medical course;
(c) the cost of land and building;
(d) the available infrastructure, teaching and non
teaching staff and other equipments;
(e) the expenditure on administration and maintenance
of the medical educational institution;
(f) a reasonable surplus required for growth and
development of the medical educational institution;
(g) any other relevant factor.
(2) The Fee Regulatory Committee shall, before fixing any
fee, give the institution a reasonable opportunity of being
heard:
Provided that no such fee as may be fixed by the
Committee shall amount to profiteering or
commercialization of education.”
23. Relying upon these provisions, the NRI students and the selffinancing
medical colleges support the Impugned Judgement to the extent that
the GO dated 06.06.2018 was quashed on the premise that the State
could not levy any amount without statutory backing permitting such
levy. They contend that, at present, there is no provision in the 2017
Act which empowers the State or its machinery to impose any fee or
levy of any nature on selffinancing medical educational institutions for
the purpose of creating a corpus fund.
Page 23 of 32
24. Per contra , the State of Kerala and the intervenorBPL students contend
that the GO dated 06.06.2018 did not offend any provision of the 2017
Act and was issued as a welfare measure by the State; to ensure that
meritorious students belonging to weaker sections of society receive the
opportunity to pursue quality education. The GO dated 06.06.2018
specifically authorized the Committee to levy an amount towards the
creation of a corpus fund for such laudable purpose. There was thus,
no need for the insertion of any provision in the Statute.
25. It is wellsettled law that a recourse to expropriatory measures cannot
be sheltered under a piece of subordinate Legislation, save and except
where the power is drawn from the competent Legislation. The power to
levy tax or fee cannot be delegated to the Executive unless the principal
Statute expressly authorizes to do so. Though the Committee indeed
enjoys vast powers and functions under Section 8A of the 2017 Act, as
reproduced above, such power is exercisable only for the purpose of
determining the fee structure of the selffinancing medical educational
institutions. To put it in simpler terms, there is nothing discernible in
Section 8A of the 2017 Act, based on which the Committee can assert
its power to divert a part of the fee determined by it or issue a direction
regarding how such diverted fee is to be utilized. We also find that
Section 8A of the 2017 Act does not permit the levy of any amount
which will ultimately be retained by the State, regardless of its purpose.
Similarly, Section 11 of the 2017 Act does not require the Committee to
consider the creation of scholarships as a relevant factor to determine
Page 24 of 32
and approve the fee proposal submitted by a particular institution.
Even assuming that the creation of a corpus fund for scholarships can
be protected under the omnibus clause (g) of Section 11, whereunder
the Committee can take into account “ any other relevant factor ” while
determining the fee structure, such power cannot be exercised unless
the Legislature authorizes the Committee to create a corpus fund or to
prescribe its utility.
26. For the reasons aforesaid, the High Court was correct in striking down
the GO dated 06.06.2018 as devoid of any authority of law.
27. At this juncture, it is pertinent to clarify that though we appreciate the
State’s initiative to implement the welfare measures envisioned in
paragraph 131 of P. A. Inamdar (supra) , the same cannot be justified
when it is implemented without the proper authority of law. Howsoever
laudable, pious, or noble the objective behind the GO dated 06.06.2018
may be, it cannot be legitimized unless its genesis is traceable to a
legislative action.
D.2 Issue No. 2: The NRI students’ entitlement towards a refund or
setoff
28. Since we have firmly set forth that the corpus fund could not have been
created or maintained by the Committee, we must turn our attention to
the next pressing issue, i.e. whether the NRI students are entitled to a
refund of the amount so collected or whether it should be setoff
against fees charged for later years?
Page 25 of 32
29. The NRI students contend that when the imposition of such an amount
has been held to be illegal, there is no reasonable justification for the
State or the selffinancing medical colleges to retain it. Further, these
students claim that paragraph 67 of only
P. A. Inamdar (supra)
requires an NRI student to subsidize two other students’ fees.
Accordingly, it is their specific contention that when the fees for regular
students are set at Rs. 5 lakhs per annum, the NRI students cannot be
charged more than Rs. 15 lakhs per annum.
Contrarily, the selffinancing medical colleges contend that the fees
30.
charged under the heading of ‘corpus fund’ should be returned to them
to enable their continued functioning. The amounts collected for the
corpus fund were unfairly deducted from the proposals submitted,
leaving the colleges to function with fees much lower than what was
genuinely projected by them. The fees charged from NRI students are
utilized not only to subsidize education for students from economically
weaker backgrounds but also for various upkeep and continuous
development expenses to improve the quality of education.
31. The State of Kerala, however, contends that though the selffinancing
medical colleges were required to remit Rs. 5 lakhs received from each
NRI student to the corpus fund, they have not been doing so. As a
result, the colleges have retained a total of Rs. 182.9 crores from the
batches of 20172018 to 20222023.
Page 26 of 32
32. Two 5judge Benches of this Court in Islamic Academy (supra) and
Modern Dental College (supra) have unequivocally held that the
Government cannot fix rigid fee structures for selffinancing
institutions. Further, each institute must have the freedom to fix its
own fee structure by taking into consideration the need to generate
funds to run the institution and to provide facilities necessary for the
benefit of the students. These institutes are permitted to generate
surplus, which must be used for the betterment and growth of that
educational institution. The fee structure for each institute must be
fixed keeping in mind the infrastructure and facilities available, the
investments made, salaries paid to the teachers and staff, future plans
for expansion and/or betterment of the institution, etc. Though the fees
may differ from one institution to another, owing to the quality of
education imparted, no institution can be permitted to charge excessive
or exploitative fees leading to profiteering or charging of capitation fees.
33. The cited judgements have further explained that the fees collected
from NRI students can be utilized for a variety of purposes, including
but not limited to subsidizing fees for other students through
scholarships. Accordingly, the fees for NRI students cannot be
determined solely considering the factor of subsidization of education;
all the abovestated factors must be taken into account. Resultantly,
the NRI students’ contention that their fees should be restricted to only
subsidize the education of only two students from economicallyweaker
Page 27 of 32
sections of society falls flat and cannot be considered a valid reason for
a refund.
34. When a selffinancing medical educational institution presents its fee
proposal for a particular academic year, it has done so keeping in mind
its own needs, present and future. It is the responsibility of the
Committee to consider all the comprehensive requirements and the
principles enunciated in Islamic Academy (supra) and Modern
Dental College (supra) , when assessing those proposals. The
Committee must ascertain that the fees proposed will not exploit the
students and lead to profiteering by the management of the medical
colleges. This is why such Committees have been set up, not just in
Kerala, but in various States across the country.
35. Since the selffinancing institutions are the best judge of their own
needs and expenses, there appears to be no reason why they cannot
retain the amount that was to be transferred to the corpus fund, when
those amounts came out of the fee structures already approved by the
Committee. By approving the proposals at the relevant time, the
Committee has signified that the fees proposed to be charged were
reasonable and did not amount to profiteering.
In the same vein, selffinancing medical educational institutions that
36.
were aggrieved by the Committee’s actions and sought reconsideration
of their proposals from 20172018 onwards by virtue of directions
Page 28 of 32
issued by this Court in Najiya Neermunda v. Kunhitharuvai
5
, are also entitled to retain the amount
Memorial Charitable Trust
claimed by the State under the heading of ‘corpus fund,’ if any.
37. After allowing the colleges to retain the fees which were to be diverted
towards the corpus fund, we are of the considered view that the self
financing medical educational institutions are under the obligation to
provide quality education to the BPL students who were admitted to
those colleges. No additional fees of any nature, therefore, shall be
charged from the BPL students, over and above the subsidized fee that
they were required to pay as per the Committee’s approved fee
structure. To clarify, a substantial part of the amount which we have
allowed the colleges to retain shall have to be utilized by them for
subsidizing the education of the BPL students. The Committee or the
State Government shall, in this regard, be well within their right to
direct the colleges to furnish their accounts and establish that the
directions issued hereinabove have been complied with. To this extent,
the selffinancing medical educational institutions are merely
designated as the trustees of the ‘corpus fund’ amount, without
permitting it to be utilized by them as per their own free will. Such an
arrangement shall continue till an appropriate Legislation is enacted by
the State.
5 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515.
Page 29 of 32
38. This batch of appeals and their parallel proceedings have caused
confusion and chaos for medical education in the State of Kerala for
years. This case seems to be the closing act, which will hopefully
provide finality and certainty to all the stakeholders.
E. C ONCLUSION AND D IRECTIONS
39. In light of above discussion, we deem it appropriate to allow the appeal
by the selffinancing medical colleges in part; dismiss the appeals filed
by the State of Kerala and the NRI students; and modify the Impugned
Judgment of the High Court dated 23.07.2020, with the following
directions and conclusions:
i. The High Court was correct in quashing the Government Order
(MS) No. 107/2018/H&FWD dated 06.06.2018;
If the State seeks to establish a corpus fund or any other such
ii.
mechanism to subsidize education for students from weaker
backgrounds, in line with the vision enshrined in P. A. Inamdar
, it may do so by enacting suitable Legislation to that effect;
(supra)
The selffinancing medical colleges are entitled to retain the fees
iii.
transferred to the State for the creation of the ‘corpus fund’
substantially for the purpose of subsidizing the fees charged to
BPL students admitted to those colleges, as per the directions
contained in paragraph 37 of this judgement;
Page 30 of 32
iv. The BPL students, who were admitted on the basis of scholarship
schemes or who are to be admitted in future, shall not be required
to pay the full, regular fees. They will continue to pay fees at the
subsidized rate fixed by the State or the Committee. If they have
paid any fees, over and above the subsidized amount promised,
they are entitled to a refund of the amounts so paid. Alternatively,
those amounts may be setoff against the fees to be charged for
later years. Such a refund must be made within 3 months;
v. The State of Kerala is directed to release the fees collected for the
creation of a corpus fund back to the respective colleges within a
period of 3 months without prejudice to the right and
responsibility assigned in paragraph 37 of this judgement;
vi. The NRI students are not entitled to a refund of the amount
transferred to the State for the creation of the ‘corpus fund.’ They
are directed to pay the entire fees to their respective colleges, as
approved by the Admission and Fee Regulatory Committee, if not
already done, within 3 months; and
vii. The State of Kerala or the Admission and Fee Regulatory
Committee is at liberty to direct the colleges to furnish their
accounts to establish that the directions given herein have been
complied with.
Page 31 of 32
40. Ordered accordingly. Pending applications if any, are to be disposed of
in the above terms.
..............…….........J.
(SURYA KANT)
............................................…….........J.
(NONGMEIKAPAM KOTISWAR SINGH)
NEW DELHI;
MAY 16, 2025
Page 32 of 32
2025 INSC 518
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 9885 – 9888 / 2020)
The State of Kerala and Ors. ….Appellant(s)
versus
The Principal, KMCT Medical College and Ors. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) No. 12984 / 2020)
The Principal KMCT Medical College & Anr. ….Appellant(s)
versus
The Admission and Fee Regulatory Committee and Anr. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 4909 – 4910 / 2021)
Altaf Hussain & Ors. ….Appellant(s)
versus
The State of Kerala and Ors. ….Respondent(s)
WITH
Civil Appeal No. _______ / 2025
(Arising out of Special Leave Petition (C) Nos. 12957 – 12958 / 2021)
Signature Not Verified
Digitally signed by
SATISH KUMAR YADAV
Date: 2025.05.16
16:36:10 IST
Reason:
Sanchana Pious & Ors. ….Appellant(s)
versus
Page of
1 32
The State of Kerala and Ors. ….Respondent(s)
JUDGEMENT
SURYA KANT, J.
Leave granted.
2. The issue that arises for consideration has emanated from a direction
given by the State of Kerala’s Admission and Fee Regulatory Committee
that a corpus fund be created to subsidize medical education for Below
Poverty Line ( ) students admitted to selffinancing medical
BPL
educational institutions in the State. This corpus fund was to be
created by remitting to the State Government a part of the fees collected
from NonResident Indian ( NRI ) students admitted to those colleges.
3. The Kerala High Court, at Ernakulam ( High Court ) vide the common
Impugned Judgement dated 23.07.2020 has: ( ) quashed Government
i
Order (MS) No. 107/2018/H&FWD dated 06.06.2018 ( GO dated
06.06.2018 ); ( ii ) directed that the amounts collected from each NRI
student to create a corpus fund be transferred to the respective
institutions and maintained as a separate account to be utilized only
for the benefit of students belonging to the economically weaker
sections, who may be admitted to such institutions on the basis of
allotment; ( iii ) directed such account to be operated only jointly by a
nominee of the selffinancing institution and a nominee of the State
Government; ( iv ) kept it open to the State to promulgate suitable
Page 2 of 32
legislative measures to achieve the object of providing scholarships to
students belonging to economically weaker sections of society as
observed by this Court in
P. A. Inamdar and Ors. v. State of
1
Maharashtra ; and has further directed that ( v ) till suitable legislative
measures are adopted by the State, no further amounts would be levied
or collected from NRI students, already admitted to or to be admitted to
NRI quota seats in that academic year, towards the creation or
maintenance of the corpus fund.
4. These directions of the High Court have given rise to three sets of cross
appeals preferred by: ( i ) The State of Kerala, who is aggrieved by the
quashing of its GO dated 06.06.2018; ( ii ) The selffinancing medical
colleges, who are challenging the direction that the corpus fund
amount be utilized only to subsidize education for students from
economicallyweaker sections of society admitted to the respective
institutions; and finally, ( iii ) The NRI students, who are dissatisfied
that the corpus fund amounts have not been refunded to them.
A. F ACTS
5. Owing to a parallel set of proceedings before the Courts concerning the
Committee’s overall functioning, it is vital to understand the detailed
facts before analyzing the legal issues.
1 P. A. Inamdar and Ors. v. State of Maharashtra, (2005) 6 SCC 537.
Page 3 of 32
5.1 The Kerala Medical Education (Regulation and Control of Admission to
Private Medical Educational Institutions) Act, 2017 ( )
the 2017 Act
came into force on 01.06.2017. It was introduced to, among other
things, regulate the admission and fixation of fees in private medical
educational institutions in the State of Kerala. Sections 3 and 3A of the
2017 Act contemplate the constitution of a Committee, described as the
Admission and Fee Regulatory Committee ( Committee ). The Committee
was tasked to determine the fees charged to students admitted to
private medical educational institutions in Kerala based on the annual
information and proposals submitted by those colleges.
5.2 KMCT Medical College moved an application and submitted the
prospectus for Academic Year 20172018 before the Committee on
01.08.2017, requesting it to fix the fees for NRI students at Rs. 20
lakhs per annum.
5.3 The Committee, on 27.02.2018, approved the fixation of fees for NRI
students at Rs. 20 lakhs per annum for all medical colleges whose fee
was to be regulated under the 2017 Act. Notedly, it decided to enhance
the fees for NRI students from Rs. 15 lakhs per annum in Academic
Year 20162017 to Rs. 20 lakhs per annum in Academic Year 2017
2018 and 20182019, with the condition that the extra amount of Rs. 5
lakhs would be kept as a ‘corpus fund’ to provide scholarships to BPL
students. The Committee further directed that the corpus fund amount
would be remitted to the State Government, as and when so directed by
Page 4 of 32
the State, the Committee, or a Court of Law. This decision was
substantiated by quoting paragraph 131 of P. A. Inamdar (supra) ,
where it was held that the fees collected from NRI students should be
utilized to benefit students from economicallyweaker sections of
society.
KMCT Medical College, being aggrieved, laid challenge to the
5.4
Committee’s decision before the High Court.
5.5 During the pendency of the writ proceedings before the High Court, the
Government of Kerala issued the GO dated 06.06.2018, seemingly to
validate and support the Committee’s decision dated 27.02.2018. It
emphasized that the mainstay of the corpus fund would be the
amounts earmarked and collected from NRI students who were
admitted to selffinancing medical educational institutions in the State.
Much like the Committee’s decision, the GO dated 06.06.2018 was
statedly issued in pursuance of the directions contained in paragraph
131 of P. A. Inamdar (supra) . Compelled by the GO dated 06.06.2018,
the selffinancing medical colleges consequently began collecting Rs. 20
lakhs per annum as fees from the newlyadmitted NRI students, while
remitting Rs. 5 lakhs to the corpus fund.
The Committee, meanwhile, continued to assess the fee proposals
5.6
submitted by various colleges. In some instances, it rejected the
proposals and determined the fees to be charged on its own initiative.
Viewing this as an overstep of the Committee’s powers and a violation
Page 5 of 32
of the institutions’ autonomy, several medical colleges filed writ
petitions before the High Court. This resulted in a parallel set of
proceedings concerning the Committee’s overall powers.
5.7 These proceedings culminated in a common judgment dated
19.05.2020, whereby the High Court remanded the matter to the
Committee to reexamine the proposals afresh and to pass suitable
orders. The High Court observed that though the Committee had the
power to fix the fee to be collected from NRI students, there was no
power vested in it under Section 8 of the 2017 Act to direct that a
portion of the fee amount be utilized for any other purpose.
5.8 The aggrieved State approached this Court in Civil Appeal No. 606
2
616/2021, which came to be decided on 25.02.2021, holding that the
fee, as proposed by the colleges, should be considered by the
Committee. This Court noted that it was no longer res integra that the
right conferred on the institutions to fix fees for professional courses
was subject to regulation. It was reiterated that unaided professional
institutions had the autonomy to decide on the fees to be charged,
subject to the condition that such fees do not result in profiteering or
collection of capitation fees. The Committee was only required to ensure
that the fee charged was nonexploitative and reasonable. This Court
thus directed the Committee to reconsider the proposals submitted by
the colleges, by taking into account the factors mentioned in Section 11
2 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515.
Page 6 of 32
of the 2017 Act and the law laid down in Modern Dental College &
3
Research Centre and Ors. v. State of Madhya Pradesh and Ors.
While this Court was seized of the abovementioned matter, various
5.9
selffinancing medical colleges and their NRI students initiated a
second round of litigation before the High Court, this time, challenging
the amounts collected from NRI students to create the corpus fund to
benefit BPL students enrolled in the same institutes. The High Court
clubbed these writ petitions with the earlier petition filed by KMCT
Medical College, and has decided all these writ petitions through the
common Impugned Judgment.
5.10 The High Court, being conscious of the fact that the Committee was
considering the fee proposals afresh, as was directed by it vide the
judgement dated 19.05.2020, restricted its assessment only qua the
‘validity of the creation of the corpus fund.’
5.11 The question that was formulated by the High Court for its
consideration was whether the creation of the corpus fund through the
GO dated 06.06.2018 could be sustained in the absence of law in the
form of plenary legislation or subordinate legislation. The High Court
opined that, regardless of the nature of the levy, such a fee could be
imposed only under the authority of law and not merely by an executive
order. Since there was no provision in the 2017 Act authorizing the
3 Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors.,
(2016) 7 SCC 353.
Page 7 of 32
Committee or the State Government to levy an amount to be credited to
a corpus fund, the GO dated 06.06.2018 could not be sustained.
Accordingly, the GO was quashed and the directions, as specified in
paragraph 3 above, have been issued.
This is how these crossappeals have arisen for our consideration.
5.12
B. C ONTENTIONS OF THE P ARTIES
6. Mr. Kapil Sibal and Mr. Nikhil Goel, Learned Senior Counsel, appearing
on behalf of KMCT Medical College and other selffinancing medical
colleges in the State, contended that the High Court has partly erred
and the Impugned Judgement deserves to be suitably modified in light
of the following submissions:
(a) This Court has time and again permitted institutions to charge a
higher amount of fees from NRI students as the fees paid by them
enable such institutions to strengthen their level of education and
enlarge their educational activities. KMCT Medical College has
always followed this dictum and has been using the enhanced fees
levied on NRI students to grant scholarships to students from
economicallyweaker sections of society. For instance, in 2014 and
2015, KMCT Medical College awarded scholarships worth Rs. 1.28
crores and Rs. 1.55 crores, respectively, to enable its students
Page 8 of 32
from economicallyweaker sections of society to pursue their
education.
(b) The fee proposed to be charged from the NRI students was only Rs.
20 lakhs per annum, which is one of the lowest fees in the entire
country. KMCT Medical College charges only Rs. 5.5 lakhs per
annum as fees for general category students. Thus, if the tuition
fee for NRI students was further reduced from Rs. 20 lakhs to Rs.
15 lakhs, by virtue of the corpus fund, the college would be unable
to continue financing its daytoday activities. Consequently, the
failure of the High Court to direct a refund, of the amount charged
from NRI students towards the corpus fund, to the institutions is
violative of Article 19 (1)(g) and Article 30 of the Constitution.
(c)
The State or the Executive cannot impose any levy, whatever may
be the nature of it, through an executive order, except under the
authority of law. At present, there is no provision in the 2017 Act
which empowers the State or its machinery to impose any tax or
levy of any nature on selffinancing medical colleges. The only
power granted to the Committee is to satisfy itself that the fees
charged by the selffinancing medical educational institutions do
not lead to profiteering or payment of capitation fees. If the
Committee finds the fees charged to be exploitative, it can propose
a different fee structure.
Page 9 of 32
(d) Once the High Court quashed the GO dated 06.06.2018 on the
ground that the Committee was not authorized under law to create
a corpus fund, it could not have permitted such unauthorized
action to continue by directing that the amounts collected for the
corpus fund be utilized only to subsidize education for other
students. The denial of a refund of the illegallycollected fees has
put the selffinancing medical colleges under financial strain.
(e) KMCT Medical College, like other selffinancing medical colleges,
specifically requested the Committee to approve its fixation of fees
at Rs. 20 lakhs per annum for NRI students, under the expectation
that if approved, it would be able to utilize the entire amount of Rs.
20 lakhs for educational purposes and for running the institution.
It was improper and imprudent of the Committee to approve the
fees of Rs. 20 lakhs per annum, only to retain Rs. 5 lakhs for the
creation of the corpus fund.
Mr. Shoeb Alam, Learned Senior Counsel, appearing on behalf of the
7.
NRI students, supported the quashing of the GO dated 06.06.2018 but
contended that the High Court erred in disallowing a refund to them. In
furtherance of this, he adduced the following submissions:
(a) NRI students are admitted to colleges on a higher fee scale to
subsidize the fees of students from economicallyweaker sections
of society. When an NRI student is admitted to a particular college,
the higher fees paid are utilized to subsidize the fees of a BPL
Page 10 of 32
student in that particular college, alone. It is unfair and unjust
that a higher fee charged from NRI students of a particular college
be utilized to subsidize the fees charged in another college or
multiple other colleges in the State.
Paragraph 67 of states that “ each NRI
(b) P. A. Inamdar (supra)
student would subsidize two other students belonging to the
economically and socially weaker sections .” Thus, if the fee fixed
for a general category student for a particular year is only Rs. 5
lakhs, there is no reason to fix the fees for NRI students above Rs.
15 lakhs as the NRI student would be subsidizing the fees of two
other students from economicallyweaker backgrounds. As a
result, any amount levied as a corpus fund, without the authority
of law, is over and above the amount contemplated for an NRI
student to bear.
(c) In addition to this, some colleges have forced the NRI students to
give postdated cheques of Rs. 5 lakhs, in advance, to create the
corpus fund. The NRI students are thus either liable to be
refunded the amounts collected under the guise of setting up the
corpus fund or the amounts so collected must be set off against
their future fees.
8. Per contra , Mr. Jayant Muth Raj, Learned Senior Counsel, appearing on
behalf of the State of Kerala, put forth the following submissions:
Page 11 of 32
(a) The GO dated 06.06.2018 was issued in pursuance of paragraph
131 of . The last line of paragraph 131
P. A. Inamdar (supra)
specifically permitted the Committee to create a mechanism to
subsidize education through the fees collected from NRI students,
in the absence of State Legislation on the subject. The authority to
create the corpus fund thus, came primarily from the Constitution
Bench judgement of this Court, which, being the law of the land,
need not be supplemented or supplanted by any State Legislation
or Regulations.
(b) The conduct of the selffinancing medical colleges is questionable
as they have collected the corpus fund amount of Rs. 5 lakhs in
advance from the NRI students who were admitted in the 2017
2018 batch, even in respect of their second, third, fourth, and fifth
years. They collected Rs. 43.6 crores in total but remitted only Rs.
4.15 crores to the State for the purpose of the corpus fund. The
college management did the same for the next 5 successive
batches of NRI students, i.e. the batches of 20182019, 2019
2020, 20202021, 20212022, and 20222023. Rs. 145.45 crores
were collected from these batches for the corpus fund, but only Rs.
2 crores have been remitted to the corpus fund maintained by the
Commissioner for Entrance Examinations. Thus, the colleges have
retained a total of Rs. 182.9 crores from the batches of 20172018
to 20222023. As a direct corollary to such action, the State of
Page 12 of 32
Kerala’s larger objective, of subsidizing education for students
from economicallyweaker sections of society, has been frustrated.
9. Mr. Gaurav Aggarwal, Learned Senior Counsel, appearing on behalf of
the intervenors, i.e. certain BPL students admitted to various self
financing medical colleges across Kerala, supported the GO dated
06.06.2018 and put forth the following submissions:
(a) The GO dated 06.06.2018 was adopted as a welfare measure by
the State of Kerala. The object of the GO dated 06.06.2018 was
laudable and the observations of this Court in
P. A. Inamdar
(supra) clearly compel the State to adopt such a course of action.
The GO dated 06.06.2018 should not have been quashed merely
due to the absence of legislative support. The Courts should
ordinarily not interfere with a policy decision of the Executive
unless the same is mala fide , unreasonable, arbitrary, or unfair.
(b) After the High Court directed that no further amount should be
credited towards the corpus fund, many BPL students have been
finding it difficult to continue their studies due to financial
hardships. Not only this, the selffinancing medical institutions are
exerting pressure on BPL students to remit the regular tuition fees.
These students chose to take admission to the respective colleges,
with the understanding that they would only have to pay
subsidized fees. Since they no longer receive BPL scholarships,
Page 13 of 32
they have been unable to pay their tuition and hostel fees and
many of them will be forced to discontinue their studies.
SSUES
C. I
Having given our thoughtful consideration to the submissions at
10.
length, we find that the following issues arise for our consideration:
i. Whether the Committee had the power to determine and direct
that a particular amount of the fees charged to NRI students be
kept in a corpus fund maintained by the State?
ii. Whether the NRI students are entitled to a refund of the amount
so charged or whether it can be set off against fees to be charged
for later years?
D. A NALYSIS
D.1 Issue No. 1: Power of the Committee to direct the creation of a
corpus fund for scholarships
To understand and deduce the powers of the Committee, we must
11.
conduct a detailed examination of the two sources from where it is
stated to have derived its powers: ( i ) The Constitution Bench
Judgement of this Court in ; and ( ) Section 8A
P. A. Inamdar (supra) ii
and Section 11 of the 2017 Act.
D.1.1 The Constitution Bench Judgement of this Court in P. A.
Inamdar (supra)
Page 14 of 32
12. Before we delve into the analysis, it will be useful to reproduce the text
of paragraph 131 of to appreciate the rival
P. A. Inamdar (supra)
submissions raised by the parties. It elucidates that:
“ 131. Here itself we are inclined to deal with the question
as to seats allocated for NonResident Indians (“NRI” for
short) or NRI seats. It is common knowledge that some of
the institutions grant admissions to a certain number of
students under such quota by charging a higher amount of
fee. In fact, the term “NRI” in relation to admissions is a
misnomer. By and large, we have noticed in cases after
cases coming to this Court, neither the students who get
admissions under this category nor their parents are NRIs.
In effect and reality, under this category, less meritorious
students, but who can afford to bring more money, get
admission. During the course of hearing, it was pointed
out that a limited number of such seats should be made
available as the money brought by such students admitted
against NRI quota enables the educational institutions to
strengthen their level of education and also to enlarge their
educational activities. It was also pointed out that people
of Indian origin, who have migrated to other countries,
have a desire to bring back their children to their own
country as they not only get education but also get
reunited with the Indian cultural ethos by virtue of being
here. They also wish the money which they would be
spending elsewhere on education of their children should
rather reach their own motherland. A limited reservation of
such seats, not exceeding 15%, in our opinion, may be
made available to NRIs depending on the discretion of the
management subject to two conditions. First, such seats
should be utilised bona fide by NRIs only and for their
children or wards. Secondly, within this quota, merit
should not be given a complete goby.
The amount of
money, in whatever form collected from such NRIs,
should be utilised for benefiting students such as
from economically weaker sections of the society,
whom, on welldefined criteria, the educational
institution may admit on subsidised payment of
their fee. To prevent misutilisation of such quota or
any malpractice referable to NRI quota seats,
suitable legislation or regulation needs to be
framed. So long as the State does not do it, it will be
Page 15 of 32
for the Committees constituted pursuant to the
direction in Islamic Academy [(2003) 6 SCC 697] to
regulate .”
[Emphasis supplied]
13. In this regard, the State of Kerala and the intervenorBPL students
have vehemently asserted that this Court, in the abovereproduced
paragraph, has unequivocally obligated each institution to subsidize
the fees charged to students from economicallyweaker sections of
society through fees paid by NRI students. Until suitable legislation is
made by the State, the Committee is obliged to regulate such
subsidization. The Committee, therefore, was justified in creating the
corpus fund.
14. Per contra , KMCT Medical College, other selffinancing medical colleges,
and some NRI students contend that P. A. Inamdar (supra) does not
grant the Committee the power to create a corpus fund; the power to do
so resides only with the State. The relevant paragraph only grants the
Committee the ability to regulate admissions to the NRI quota to
prevent its misutilization.
15. It is clear that paragraph 131 of P. A. Inamdar (supra) validates and
encourages the idea of charging higher fees to NRI students in order to
subsidize education for students from economicallyweaker or
backward sections of society, who are admitted to those colleges. This
aligns with the ideals of a welfare State. It cannot possibly be contested
that the Committee, in the instant case, has not been constituted in
Page 16 of 32
line with the directives given by the 5judge Bench of this Court in
4
Islamic Academy of Education v. State of Karnataka .
16. On a thorough reading of the paragraph, it further appears that the
powers granted to the Committee only concern the rules of allotment of
seats in the NRI quota, with particular emphasis on preventing
misutilization of the allotted quota and seats. The Committee is also
permitted to frame such rules only till the time the State fails to do so.
From the phrase, “ To prevent misutilisation of such quota or any
malpractice referable to NRI quota seats, ” which precedes the State’s
mandate to enact a suitable Legislation or frame Regulations, it is clear
that the Committee constituted in Islamic Academy (supra) has been
authorized to regulate NRI admissions. The power conferred on the
Committee, in this regard, is necessarily meant to prevent
misutilization of the NRI quota or any malpractice referable to that
quota. Conversely, the abovereproduced paragraph is silent on the
creation of any mechanism to subsidize fees for other students and
does not confer any power on the Committee in this regard. It is
difficult to accept that the Committee can create a corpus fund on the
strength of the transitional powers given to it in P. A. Inamdar (supra) .
The power to formulate creative solutions, such as a corpus fund, to
benefit students from economicallyweaker sections of society resides
only with the State, which should be introduced through appropriate
Legislation or Regulations.
4 Islamic Academy of Education v. State of Karnataka, (2003) 6 SCC 697, para 7.
Page 17 of 32
17. The last line of paragraph 131, which mentions that the Committee will
act as per the directions issued in , leaves no
Islamic Academy (supra)
room to doubt that the powers of the Committee to regulate NRI seats
are not boundless. For better appreciation, it will be useful, at this
stage, to refer to paragraph 7 of , which
Islamic Academy (supra)
pertains to the constitution and the powers of the Committee. It reads
as follows:
“7. So far as the first question is concerned, in our view
the majority judgment is very clear. There can be no fixing
of a rigid fee structure by the Government. Each institute
must have the freedom to fix its own fee structure taking
into consideration the need to generate funds to run the
institution and to provide facilities necessary for the
benefit of the students. They must also be able to generate
surplus which must be used for the betterment and growth
of that educational institution. In paragraph 56 of the
judgment it has been categorically laid down that the
decision on the fees to be charged must necessarily be left
to the private educational institutions that do not seek and
which are not dependent upon any funds from the
Government. Each institute will be entitled to have its own
fee structure. The fee structure for each institute must be
fixed keeping in mind the infrastructure and facilities
available, the investments made, salaries paid to the
teachers and staff, future plans for expansion and/or
betterment of the institution etc. Of course there can be no
profiteering and capitation fees cannot be charged. It thus
needs to be emphasized that as per the majority judgment
imparting of education is essentially charitable in nature.
Thus the surplus/profit that can be generated must be
only for the benefit/use of that educational institution.
Profits/surplus cannot be diverted for any other use or
purpose and cannot be used for personal gain or for any
other business or enterprise. As, at present, there are
statutes/regulations which govern the fixation of fees and
as this Court has not yet considered the validity of those
statutes/regulations, we direct that in order to give
effect to the judgment in T.M.A. Pai case [(2002) 8
Page 18 of 32
SCC 481] the respective State
Governments/concerned authority shall set up, in
each State, a committee headed by a retired High
Court Judge who shall be nominated by the Chief
The other member, who shall be
Justice of that State.
nominated by the Judge, should be a Chartered
Accountant of repute. A representative of the Medical
Council of India (in short “MCI”) or the All India Council for
Technical Education (in short “AICTE”), depending on the
type of institution, shall also be a member. The Secretary
of the State Government in charge of Medical Education or
Technical Education, as the case may be, shall be a
member and Secretary of the Committee. The Committee
should be free to nominate/coopt another independent
person of repute, so that the total number of members of
the Committee shall not exceed five. Each educational
institute must place before this Committee, well in advance
of the academic year, its proposed fee structure. Along
with the proposed fee structure all relevant documents
and books of accounts must also be produced before the
Committee for their scrutiny. The Committee shall then
decide whether the fees proposed by that institute
are justified and are not profiteering or charging
capitation fee. The Committee will be at liberty to
approve the fee structure or to propose some other
. The fee
fee which can be charged by the institute
fixed by the Committee shall be binding for a period of
three years, at the end of which period the institute would
be at liberty to apply for revision. Once fees are fixed by
the Committee, the institute cannot charge either directly
or indirectly any other amount over and above the amount
fixed as fees. If any other amount is charged, under any
other head or guise e.g. donations, the same would
amount to charging of capitation fee. The
Governments/appropriate authorities should consider
framing appropriate regulations, if not already framed,
whereunder if it is found that an institution is charging
capitation fees or profiteering that institution can be
appropriately penalised and also face the prospect of
losing its recognition/affiliation.”
[Emphasis supplied]
18. It becomes evident from the above extract that the Committee may only
decide whether the fees proposed by the institution are exploitative or
Page 19 of 32
not. Islamic Academy (supra) makes no mention of the Committee’s
discretionary power to divert a part of the approved fees for any
purpose, howsoever noble it may be, including for the purpose of
creating a corpus fund. Once the colleges submit their proposals to it,
the Committee must examine all the heads to determine whether such
proposed fee is reasonable. The Committee is also empowered to
propose an alternative fee structure in the event of profiteering or
charging of capitation fee by the college.
19. A conjoint reading of paragraph 131 of P. A. Inamdar (supra) and
paragraph 7 of Islamic Academy (supra) amplifies the idea that the
Committee’s power is not limitless. Such a combined reading leads us
to the conclusion that: ( ) the Committee is competent to prescribe fees
i
in respect of the NRI quota in selffinancing medical educational
institutions until the State enacts appropriate Legislation or
Regulations; and ( ii ) the Committee cannot draw unlimited powers
under the guise of ‘regulation of NRI quota/seats.’ In other words, the
Committee can only make rules for admission to such seats and can
review the fees charged to NRI students to ensure that they are not
exploitative. This is the cumulative power granted to the Committee
within which it must act. The Committee cannot perforate these
bounds unless and until its power is expanded through a suitable
Legislation or upon a direction by this Court.
Page 20 of 32
20. In light of the above, it is evident that paragraph 131 of P. A. Inamdar
(supra) does not clothe the Committee with the power to create a
corpus fund for the benefit of economicallyweaker students. It only
directs the State to come up with a suitable plan to subsidize their
education through the fees charged from NRI students. The Committee
cannot usurp the powers vested in the State in this regard.
D.1.2 Section 8A and Section 11 of the 2017 Act
Given that we have established the confines of the directions in
21. P. A.
, it is also necessary to ascertain whether the State
Inamdar (supra)
has accounted for the proposed scholarship scheme/corpus fund
through the aegis of the 2017 Act, which constitutes the Committee
and regulates its functions.
22. Before we proceed further, we must take a glance at Section 8A and
Section 11 of the 2017 Act. These provisions read as follow:
“
8A. Powers and functions of the Fee Regulatory
(1) The Committee shall exercise the following
Committee:
powers and perform the following functions, namely: (a)
require a private medical educational institution to furnish,
within a specified date, information, documents or records
as may be necessary for enabling the Fee Regulatory
Committee to determine the fee that may be charged by
the institution in respect of each medical course;
[]*
hear complaints with regard to admission in contravention
of the provisions of this Act or the rules made thereunder
either on receipt of a complaint or suo motu and shall:
[]*
Page 21 of 32
(2) The [Fee Regulatory Committee] shall, for the purpose
of making any enquiry under this Act, have all the powers
of a civil court under the Code of Civil Procedure, 1908
(Central Act 5 of 1908) while trying a suit in respect of the
following matters, namely: (a) summoning and enforcing
the attendance of any witness and examining him on oath;
(b) requiring the discovery and production of any
document; (c) receiving evidence on affidavit.
(3) The fee determined by the Fee Regulatory Committee
shall be applicable to a student who is admitted to a
private medical educational institution in that academic
year and shall not be revised till the completion of his
course in the said institution or University. No private
medical educational institution shall collect a fee
amounting to more than one year's fee from a student in
an academic year. Collection of more than one year's fee in
an academic year shall be construed as collecting of
capitation fee and shall be liable to be proceeded against.
(4) The Fee Regulatory Committee may, if it is satisfied
that there has been any violation by such institution of the
provisions of this Act or the rules made thereunder
regarding [] fees, it may recommend to the Government*
to take the following actions against such institution,
namely:
(a) impose a monetary fine up to ten lakh rupees on the
institution together with interest thereon at the rate of
twelve per cent per annum which shall be recovered as
if it were an arrear of public revenue due on land;
(b) order the institution to refund to the student within
such time as specified in the order, any amount received
by the institution in excess of the fees fixed by the Fee
Regulatory Committee or any amount received by way
of capitation fee or any amount received for profiteering:
Provided that if the institution fails to refund the amount
within the specified time to the student, the same shall
be recoverable along with interest thereon at the rate of
twelve per cent per annum as if it were an arrear of
public revenue due on land and paid to the student;
(c) recommend to the University or the appropriate
authority to withdraw the recognition of the institution;
(d) any other course of action, as it deems fit.
Page 22 of 32
(5) Before recommending to the Government to initiate
actions under subsection (4) the institutions shall be given
a reasonable opportunity of being heard.
11. Factors for determination of fee: (1) the Fee
Regulatory Committee shall determine the fee considering
the following factors, namely:
(a) the location of the private medical educational
institution;
(b) the nature of the medical course;
(c) the cost of land and building;
(d) the available infrastructure, teaching and non
teaching staff and other equipments;
(e) the expenditure on administration and maintenance
of the medical educational institution;
(f) a reasonable surplus required for growth and
development of the medical educational institution;
(g) any other relevant factor.
(2) The Fee Regulatory Committee shall, before fixing any
fee, give the institution a reasonable opportunity of being
heard:
Provided that no such fee as may be fixed by the
Committee shall amount to profiteering or
commercialization of education.”
23. Relying upon these provisions, the NRI students and the selffinancing
medical colleges support the Impugned Judgement to the extent that
the GO dated 06.06.2018 was quashed on the premise that the State
could not levy any amount without statutory backing permitting such
levy. They contend that, at present, there is no provision in the 2017
Act which empowers the State or its machinery to impose any fee or
levy of any nature on selffinancing medical educational institutions for
the purpose of creating a corpus fund.
Page 23 of 32
24. Per contra , the State of Kerala and the intervenorBPL students contend
that the GO dated 06.06.2018 did not offend any provision of the 2017
Act and was issued as a welfare measure by the State; to ensure that
meritorious students belonging to weaker sections of society receive the
opportunity to pursue quality education. The GO dated 06.06.2018
specifically authorized the Committee to levy an amount towards the
creation of a corpus fund for such laudable purpose. There was thus,
no need for the insertion of any provision in the Statute.
25. It is wellsettled law that a recourse to expropriatory measures cannot
be sheltered under a piece of subordinate Legislation, save and except
where the power is drawn from the competent Legislation. The power to
levy tax or fee cannot be delegated to the Executive unless the principal
Statute expressly authorizes to do so. Though the Committee indeed
enjoys vast powers and functions under Section 8A of the 2017 Act, as
reproduced above, such power is exercisable only for the purpose of
determining the fee structure of the selffinancing medical educational
institutions. To put it in simpler terms, there is nothing discernible in
Section 8A of the 2017 Act, based on which the Committee can assert
its power to divert a part of the fee determined by it or issue a direction
regarding how such diverted fee is to be utilized. We also find that
Section 8A of the 2017 Act does not permit the levy of any amount
which will ultimately be retained by the State, regardless of its purpose.
Similarly, Section 11 of the 2017 Act does not require the Committee to
consider the creation of scholarships as a relevant factor to determine
Page 24 of 32
and approve the fee proposal submitted by a particular institution.
Even assuming that the creation of a corpus fund for scholarships can
be protected under the omnibus clause (g) of Section 11, whereunder
the Committee can take into account “ any other relevant factor ” while
determining the fee structure, such power cannot be exercised unless
the Legislature authorizes the Committee to create a corpus fund or to
prescribe its utility.
26. For the reasons aforesaid, the High Court was correct in striking down
the GO dated 06.06.2018 as devoid of any authority of law.
27. At this juncture, it is pertinent to clarify that though we appreciate the
State’s initiative to implement the welfare measures envisioned in
paragraph 131 of P. A. Inamdar (supra) , the same cannot be justified
when it is implemented without the proper authority of law. Howsoever
laudable, pious, or noble the objective behind the GO dated 06.06.2018
may be, it cannot be legitimized unless its genesis is traceable to a
legislative action.
D.2 Issue No. 2: The NRI students’ entitlement towards a refund or
setoff
28. Since we have firmly set forth that the corpus fund could not have been
created or maintained by the Committee, we must turn our attention to
the next pressing issue, i.e. whether the NRI students are entitled to a
refund of the amount so collected or whether it should be setoff
against fees charged for later years?
Page 25 of 32
29. The NRI students contend that when the imposition of such an amount
has been held to be illegal, there is no reasonable justification for the
State or the selffinancing medical colleges to retain it. Further, these
students claim that paragraph 67 of only
P. A. Inamdar (supra)
requires an NRI student to subsidize two other students’ fees.
Accordingly, it is their specific contention that when the fees for regular
students are set at Rs. 5 lakhs per annum, the NRI students cannot be
charged more than Rs. 15 lakhs per annum.
Contrarily, the selffinancing medical colleges contend that the fees
30.
charged under the heading of ‘corpus fund’ should be returned to them
to enable their continued functioning. The amounts collected for the
corpus fund were unfairly deducted from the proposals submitted,
leaving the colleges to function with fees much lower than what was
genuinely projected by them. The fees charged from NRI students are
utilized not only to subsidize education for students from economically
weaker backgrounds but also for various upkeep and continuous
development expenses to improve the quality of education.
31. The State of Kerala, however, contends that though the selffinancing
medical colleges were required to remit Rs. 5 lakhs received from each
NRI student to the corpus fund, they have not been doing so. As a
result, the colleges have retained a total of Rs. 182.9 crores from the
batches of 20172018 to 20222023.
Page 26 of 32
32. Two 5judge Benches of this Court in Islamic Academy (supra) and
Modern Dental College (supra) have unequivocally held that the
Government cannot fix rigid fee structures for selffinancing
institutions. Further, each institute must have the freedom to fix its
own fee structure by taking into consideration the need to generate
funds to run the institution and to provide facilities necessary for the
benefit of the students. These institutes are permitted to generate
surplus, which must be used for the betterment and growth of that
educational institution. The fee structure for each institute must be
fixed keeping in mind the infrastructure and facilities available, the
investments made, salaries paid to the teachers and staff, future plans
for expansion and/or betterment of the institution, etc. Though the fees
may differ from one institution to another, owing to the quality of
education imparted, no institution can be permitted to charge excessive
or exploitative fees leading to profiteering or charging of capitation fees.
33. The cited judgements have further explained that the fees collected
from NRI students can be utilized for a variety of purposes, including
but not limited to subsidizing fees for other students through
scholarships. Accordingly, the fees for NRI students cannot be
determined solely considering the factor of subsidization of education;
all the abovestated factors must be taken into account. Resultantly,
the NRI students’ contention that their fees should be restricted to only
subsidize the education of only two students from economicallyweaker
Page 27 of 32
sections of society falls flat and cannot be considered a valid reason for
a refund.
34. When a selffinancing medical educational institution presents its fee
proposal for a particular academic year, it has done so keeping in mind
its own needs, present and future. It is the responsibility of the
Committee to consider all the comprehensive requirements and the
principles enunciated in Islamic Academy (supra) and Modern
Dental College (supra) , when assessing those proposals. The
Committee must ascertain that the fees proposed will not exploit the
students and lead to profiteering by the management of the medical
colleges. This is why such Committees have been set up, not just in
Kerala, but in various States across the country.
35. Since the selffinancing institutions are the best judge of their own
needs and expenses, there appears to be no reason why they cannot
retain the amount that was to be transferred to the corpus fund, when
those amounts came out of the fee structures already approved by the
Committee. By approving the proposals at the relevant time, the
Committee has signified that the fees proposed to be charged were
reasonable and did not amount to profiteering.
In the same vein, selffinancing medical educational institutions that
36.
were aggrieved by the Committee’s actions and sought reconsideration
of their proposals from 20172018 onwards by virtue of directions
Page 28 of 32
issued by this Court in Najiya Neermunda v. Kunhitharuvai
5
, are also entitled to retain the amount
Memorial Charitable Trust
claimed by the State under the heading of ‘corpus fund,’ if any.
37. After allowing the colleges to retain the fees which were to be diverted
towards the corpus fund, we are of the considered view that the self
financing medical educational institutions are under the obligation to
provide quality education to the BPL students who were admitted to
those colleges. No additional fees of any nature, therefore, shall be
charged from the BPL students, over and above the subsidized fee that
they were required to pay as per the Committee’s approved fee
structure. To clarify, a substantial part of the amount which we have
allowed the colleges to retain shall have to be utilized by them for
subsidizing the education of the BPL students. The Committee or the
State Government shall, in this regard, be well within their right to
direct the colleges to furnish their accounts and establish that the
directions issued hereinabove have been complied with. To this extent,
the selffinancing medical educational institutions are merely
designated as the trustees of the ‘corpus fund’ amount, without
permitting it to be utilized by them as per their own free will. Such an
arrangement shall continue till an appropriate Legislation is enacted by
the State.
5 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515.
Page 29 of 32
38. This batch of appeals and their parallel proceedings have caused
confusion and chaos for medical education in the State of Kerala for
years. This case seems to be the closing act, which will hopefully
provide finality and certainty to all the stakeholders.
E. C ONCLUSION AND D IRECTIONS
39. In light of above discussion, we deem it appropriate to allow the appeal
by the selffinancing medical colleges in part; dismiss the appeals filed
by the State of Kerala and the NRI students; and modify the Impugned
Judgment of the High Court dated 23.07.2020, with the following
directions and conclusions:
i. The High Court was correct in quashing the Government Order
(MS) No. 107/2018/H&FWD dated 06.06.2018;
If the State seeks to establish a corpus fund or any other such
ii.
mechanism to subsidize education for students from weaker
backgrounds, in line with the vision enshrined in P. A. Inamdar
, it may do so by enacting suitable Legislation to that effect;
(supra)
The selffinancing medical colleges are entitled to retain the fees
iii.
transferred to the State for the creation of the ‘corpus fund’
substantially for the purpose of subsidizing the fees charged to
BPL students admitted to those colleges, as per the directions
contained in paragraph 37 of this judgement;
Page 30 of 32
iv. The BPL students, who were admitted on the basis of scholarship
schemes or who are to be admitted in future, shall not be required
to pay the full, regular fees. They will continue to pay fees at the
subsidized rate fixed by the State or the Committee. If they have
paid any fees, over and above the subsidized amount promised,
they are entitled to a refund of the amounts so paid. Alternatively,
those amounts may be setoff against the fees to be charged for
later years. Such a refund must be made within 3 months;
v. The State of Kerala is directed to release the fees collected for the
creation of a corpus fund back to the respective colleges within a
period of 3 months without prejudice to the right and
responsibility assigned in paragraph 37 of this judgement;
vi. The NRI students are not entitled to a refund of the amount
transferred to the State for the creation of the ‘corpus fund.’ They
are directed to pay the entire fees to their respective colleges, as
approved by the Admission and Fee Regulatory Committee, if not
already done, within 3 months; and
vii. The State of Kerala or the Admission and Fee Regulatory
Committee is at liberty to direct the colleges to furnish their
accounts to establish that the directions given herein have been
complied with.
Page 31 of 32
40. Ordered accordingly. Pending applications if any, are to be disposed of
in the above terms.
..............…….........J.
(SURYA KANT)
............................................…….........J.
(NONGMEIKAPAM KOTISWAR SINGH)
NEW DELHI;
MAY 16, 2025
Page 32 of 32