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

The petitioners are MBBS students admitted under the Non-Resident Indian (NRI) quota in various self-financing medical colleges in Kerala.

Historically, the Admission and Fee Regulatory Committee ("Fee Committee") enhanced NRI fees from ₹15 lakhs to ₹20 lakhs (and subsequently higher) per annum, directing that ₹5 lakhs of this amount be diverted to a "Corpus Fund" to subsidize education for BPL category students.

A previous Division Bench judgment in *Director, Jubilee Mission Medical College v. State of Kerala* (2020) held that the Fee Committee lacked statutory power under the Kerala Medical Education Act, 2017 to bifurcate fees for such purposes.

Subsequently, the State issued G.O.(MS) No. 107/2018/H&FWD to validate this fund, which was also quashed by the High Court.

On appeal, the Supreme Court in *State of Kerala v. Principal KMCT Medical College* (2025) confirmed the quashing of the Government Order but held that NRI students were not entitled to a refund and must pay the "entire fees" as approved by the Committee to the colleges.

The petitioners challenged the recent demands by colleges for the ₹5 lakh component, arguing it remains illegal in the absence of specific legislation.

The Court applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017, specifically Sections 3 and 11 regarding the fixation of fee structures.

It relied heavily on the precedent set by the Supreme Court in *P.A. Inamdar v. State of Maharashtra*, which allows for NRI seat regulation provided the fees are not exploitative.

Crucially, the Court followed the recent Apex Court judgment in *State of Kerala v. Principal KMCT Medical College* (2025), which established that while a Corpus Fund cannot be created without legislation, colleges are entitled to retain the full approved fee amount to subsidize BPL students and cover developmental expenses, and NRI students have no right to a refund of any portion of the "entire fees".

The Court reasoned that the petitioners were acting under a mistaken assumption that the "tuition fee" was only ₹15 lakhs and the "Corpus Fund" was a separate, additional levy of ₹5 lakhs.

Referring to the procedural history and the Supreme Court’s findings, the Court determined that the Fee Committee had actually approved a total fee of ₹20 lakhs (or the enhanced amounts in later orders) as reasonable and non-profiteering.

The bifurcation of ₹5 lakhs was merely an internal direction on how the college should *utilize* a portion of that total fee.

Since the Supreme Court categorically directed NRI students to pay the "entire fees" to their institutions and explicitly denied requests for refunds or set-offs, the petitioners cannot claim immunity from paying the ₹5 lakh component.

The Court further noted that the subsequent Government Order (G.O. dated 25.09.2024) fixing the fee at ₹21,65,720 remained unchallenged.

The Court answered the issues by stating that while the specific *mechanism* of a State-managed Corpus Fund was illegal without legislation, the underlying fee amount remains valid and payable to the colleges as part of the "entire fee".

The petitioners were granted six weeks to satisfy the arrears, and institutions were directed not to encash bank guarantees until the expiry of this period.