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

The petitioners are NRI quota MBBS students who challenged the collection of ₹5,000,00/- as a "Corpus Fund" (intended for BPL student scholarships) as part of their annual tuition fees.

Historically, the Fee Regulatory Committee (FRC) increased NRI fees from ₹15 lakhs to ₹20 lakhs in 2017, directing ₹5 lakhs of that sum to a Corpus Fund.

This bifurcation was previously set aside by a Division Bench in *Director, Jubilee Mission Medical College* (2020), which ruled that the FRC lacked legislative authority to divert fees for other purposes.

The State subsequently issued G.O.(MS) No. 107/2018 to validate the fund, but this too was quashed by the High Court.

On appeal, the Supreme Court in *State of Kerala v. Principal KMCT Medical College* (2025) upheld the quashing of the G.O. but explicitly directed NRI students to pay the "entire fees" to colleges, refusing any refund of the Corpus Fund component.

Despite this, students filed fresh writ petitions alleging that since the scholarship scheme was illegal, they were only liable to pay the "base" tuition fee (₹15 lakhs adjusted for inflation) and sought to set aside demand notices for the ₹5 lakh component.

1. Whether the Admission and Fee Regulatory Committee or the State has the power to direct that a portion of the NRI tuition fee be kept in a Corpus Fund in the absence of specific legislation.

2. Whether NRI students are entitled to a refund of the ₹5,00,000/- component or an exemption from paying it following the invalidation of the Corpus Fund scholarship scheme.

The court applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017, specifically Section 8 regarding the powers of the Committee and Section 11 regarding fee determination.

It relied heavily on the precedent set by the Supreme Court in *P.A. Inamdar v. State of Maharashtra*, which suggested utilizing NRI fees to subsidize poorer students.

The specific holding in *State of Kerala v. Principal KMCT Medical College (2025)*, which established that while the State must enact legislation to create a formal Corpus Fund, the colleges are entitled to retain the "entire fees" approved by the Committee to improve education quality and subsidize BPL students internally.

The court reasoned that the petitioners proceeded on a "mistaken assumption" that their tuition fee was ₹15 lakhs and the ₹5 lakhs was an additional illegal levy.

In reality, the FRC had approved a total fee of ₹20 lakhs (later increased to ₹21.65 lakhs) after determining such an amount was reasonable and not representative of profiteering.

The court noted that while the *diversion* of the money to a State-managed fund was illegal without legislation, the *collection* of the total amount as tuition fee remained valid.

Applying the Supreme Court's 2025 directions, the court found that since the Apex Court categorically denied refunds to NRI students and ordered them to pay the "entire fees" approved by the FRC, the petitioners could not claim exemption from the ₹5 lakh component.

Furthermore, the court observed that the petitioners had not challenged the most recent Government Order (25.09.2024) which fixed the total fees.

The writ petitions were dismissed.

However, the court granted the petitioners six weeks to satisfy the arrears of the disputed "Corpus Fund" component before colleges may take steps to encash bank guarantees.