NRI Students are Liable for Entire Approved Fees Including Portions Earmarked for Corpus Funds

The petitioners, MBBS students admitted under the Non-Resident Indian (NRI) quota in various self-financing medical colleges in Kerala, challenged the demand for ₹5,00,000/- towards a "Corpus Fund" by their respective institutions.

Historically, the NRI fee was ₹15,00,000/- until the Admission and Fee Regulatory Committee (Committee) enhanced it to ₹20,00,000/-, directing that ₹5,00,000/- be bifurcated for a Corpus Fund to scholarship BPL students.

A previous Division Bench judgment in Director, Jubilee Mission (2020) held that the Committee lacked statutory power under the Act of 2017 to divert fees for other purposes.

Subsequently, the Government issued G.O.(MS) No. 107/2018 to validate the fund, which was also quashed by the High Court in 2023.

On appeal, the Supreme Court in State of Kerala v. Principal KMCT Medical College (2025) confirmed the quashing of the G.O. but ruled that students were not entitled to a refund and must pay the "entire fees" to the colleges.

The petitioners then approached the High Court, arguing that since the Corpus Fund was illegal, they should only pay the base fee of ₹15,00,000/- (plus increments) as per G.O.(Ms) No.240/2024.

The court primarily applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017 regarding the Committee's power to fix fees.

It relied heavily on the precedent set by the Apex Court in State of Kerala v. Principal KMCT Medical College (2025), which established that while the State needs legislative measures to create a scholarship fund, colleges are entitled to retain the full fee amount approved by the Committee to ensure continued functioning and quality education.

The court also referenced P.A. Inamdar v. State of Maharashtra, which justifies higher NRI fees to subsidize weaker sections, provided it does not amount to profiteering.

The court reasoned that the petitioners proceeded under a "mistaken assumption" that the NRI fee was only ₹15,00,000/- and that the ₹5,00,000/- for the Corpus Fund was a separate, additional levy.

Referring to the Supreme Court's findings, the court clarified that the Committee had actually approved a total fee fixation of ₹20,00,000/- (later indexed) as being reasonable and non-exploitative.

The illegality identified in previous litigations was not the amount itself, but the bifurcation and diversion of a portion of that fee into a government-controlled fund without legislative authority.

Since the Supreme Court categorically directed NRI students to pay the "entire fees" as approved by the Committee and explicitly denied any entitlement to a refund, the total amount (including the disputed ₹5,00,000/-) constitutes the legally binding tuition fee.

Furthermore, the court noted that the petitioners had not challenged the subsequent Government Orders fixing the total fee at ₹21,65,720/-.

The writ petitions were dismissed.

The court directed that students who have not yet remitted the disputed component are granted six weeks to satisfy the arrears, and institutions must wait for the expiry of this period before encashing any bank guarantees provided as security.