NRI Students are Liable for Entire Approved Fees Including Portions Disputed as Corpus Fund Remittances

The petitioners, MBBS students admitted under the Non-Resident Indian (NRI) quota in self-financing medical colleges, challenged the collection of ₹5,00,000 as a "Corpus Fund" intended to subsidize BPL students.

Historically, the Admission and Fee Regulatory Committee (Fee Committee) fixed the NRI fee at ₹20 lakhs (previously ₹15 lakhs), directing ₹5 lakhs be diverted to the State’s Corpus Fund.

A Division Bench of the Kerala High Court previously quashed G.O.(MS) No. 107/2018/H&FWD, which mandated this fund, holding that the State lacked legislative authority for such a levy.

The Supreme Court, in State of Kerala v. Principal KMCT Medical College, upheld the quashing of the G.O. but ruled that students were not entitled to a refund and must pay the "entire fees" as approved by the Fee Committee.

Consequently, colleges issued fresh demand notices for the ₹5 lakh component, prompting this batch of writ petitions.

1. Whether medical colleges are legally entitled to collect the disputed ₹5,00,000 component previously designated as a "Corpus Fund" following the Supreme Court’s judgment.

2. Whether the fee payable by NRI students is restricted to ₹15,00,000 (or the base tuition fee) excluding the corpus fund component.

The court applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017, specifically Section 11 regarding fee determination.

It relied on the precedent from P.A. Inamdar v. State of Maharashtra, which allows for the utilization of NRI fees to benefit economically weaker sections but requires statutory backing for specific fund mechanisms.

Finally, it followed the directions in State of Kerala v. Principal KMCT Medical College (2025), which established that while the State cannot maintain a Corpus Fund without legislation, the self-financing institutions are entitled to retain the full committee-approved fee to ensure financial viability and subsidize BPL students.

The Court noted that the Fee Committee had actually approved a total fee of ₹20 lakhs for NRI students, essentially increasing it from the earlier ₹15 lakhs.

The legal controversy arose not from the quantum of the fee, but from the Committee’s unauthorized attempt to "bifurcate" and divert ₹5 lakhs to a State-managed fund.

Applying the Supreme Court’s 2025 judgment, the Court observed that the Apex Court explicitly directed NRI students to pay the "entire fees" to their colleges and denied any refund.

The Court found that the students were operating under the "mistaken assumption" that the fee was only ₹15 lakhs with an additional ₹5 lakh surcharge; in reality, the ₹5 lakhs was an integral part of the total approved fee structure.

Since the Supreme Court allowed colleges to retain these amounts to support BPL scholarships and institutional upkeep, the demand notices issued by the colleges were found to be in compliance with the Apex Court’s mandate.

The writ petitions were dismissed.

The Court directed that since the petitioners previously enjoyed interim protection, they are granted six weeks to satisfy the arrears; colleges may only encash bank guarantees after the expiry of this period.