Educational certificates cannot be withheld for fee recovery as they are not marketable commodities.

The first respondent (student) discontinued his dental course at the appellant’s self-financing college due to illness and subsequently joined an engineering college

At the time of admission, the student had executed an agreement bond; Clause 6 of said bond required payment of discontinuation fees, while Clause 7 allowed for the recovery of dues as arrears of land revenue

The student filed a writ petition seeking to declare Clause 6 null and void and for the return of his original certificates

The learned Single Judge rejected the prayer to declare the clause illegal but directed the college to return the original certificates within one week, allowing the college to recover dues through legal channels

The college appealed, contending that as a self-financing institution, it should be permitted to retain certificates as security for the unpaid discontinuation fees

Whether an educational institution is entitled to withhold the original certificates of a student as security for the payment of discontinuation fees or bond amounts.

The court relied on the principle that educational certificates are not "marketable commodities" and cannot be subject to a general lien under Section 171 of the Indian Contract Act

It applied the Division Bench ruling in Nirmal M. v. The State of Tamil Nadu (W.A.No.2256 of 2022), which held that institutions must return certificates and seek recovery of damages through civil suits or other legal remedies

The court further cited R.D. Saxena v. Balram Prasad Sharma (2000) and Islamic Academic Education v. State of Karnataka (2003), establishing that no institution is authorized to maintain custody of original documents solely to recover fees

the court noted that the University Grants Commission (Grievance Redressal) Regulations, 2018, classifies the withholding of documents as a 'grievance'

The Court analyzed the appellant’s contention that mid-course discontinuation results in revenue loss for self-financing colleges

the Court reasoned that the right to recover money is distinct from the right to possess original documents.

It noted that Clause 7 of the parties' own agreement provided a specific mechanism for recovery—as arrears of land revenue

Following established precedents, the Court observed that because certificates are not marketable goods, they cannot be retained as leverage for debt recovery

The Court found that the learned Single Judge correctly balanced the interests of both parties by upholding the validity of the recovery clause while ensuring the student's progress in education was not stalled by the illegal withholding of documents

The High Court dismissed the writ appeal, affirming the Single Judge's order. The appellant college was directed to return the first respondent’s certificates and documents forthwith, while remaining at liberty to pursue the recovery of discontinuation fees as arrears of land revenue or through other appropriate legal remedies