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

The petitioners, NRI quota MBBS students in self-financing medical colleges, challenged the demand for ₹5,000,000 as a "Corpus Fund".

Historically, the Fee Regulatory Committee enhanced NRI fees from ₹15 lakhs to ₹20 lakhs in 2017, directing ₹5 lakhs of that sum toward a fund for BPL scholarships.

A Division Bench in Director, Jubilee Mission (2020) and a subsequent 2023 judgment quashed the government order (G.O.(MS) No. 107/2018) establishing this fund, citing a lack of legislative authority to bifurcate fees.

The Supreme Court, in State of Kerala v. Principal KMCT Medical College (2025), affirmed the quashing of the fund but held that colleges could retain the full approved fee to subsidize BPL students and directed NRI students to pay the "entire fees".

Despite the quashing of the fund, petitioners argued their liability was only the "basic" fee of ₹15 or ₹16.65 lakhs, excluding the ₹5 lakh corpus component.

1. Whether NRI students are liable to pay the ₹5,00,000 component originally earmarked for the "Corpus Fund" as part of their total tuition fees.

2. Whether the quashing of the "Corpus Fund" scheme entitles NRI students to a refund or reduction of that specific amount.

The court primarily 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 set in Director, Jubilee Mission Medical College v. State of Kerala [2020 (3) KLT 615], which established that the Committee has no power to divert a portion of collected fees for other purposes absent legislative authority.

Furthermore, it followed the binding directions of the Supreme Court in State of Kerala v. Principal KMCT Medical College [2025 KHC OnLine 6505], which ruled that NRI students are not entitled to a refund of the amount transferred for the corpus fund and must pay the "entire fees" as approved by the Committee.

The court reasoned that the petitioners proceeded under a "mistaken assumption" that the NRI fee was ₹15 lakhs plus an additional ₹5 lakh surcharge.

In reality, the Fee Committee had approved a total fee of ₹20 lakhs (later adjusted with 5% annual increments), merely directing that ₹5 lakhs of that total be diverted to the State.

The High Court observed that while the Supreme Court confirmed the illegality of the mechanism used to create the fund (absent legislation), it explicitly denied NRI students any refund and directed them to pay the "entire fees" to the colleges.

Because the ₹5 lakh component was an integral part of the total "approved fee" rather than an unauthorized extra levy, the quashing of the fund's administrative structure did not reduce the students' substantive liability to pay the full amount approved by the Committee and notified by the Government.

The court answered that NRI students are not entitled to a refund or reduction based on the quashing of the Corpus Fund scheme.

The petitioners were granted six weeks to satisfy the arrears, and colleges were restrained from encashing bank guarantees until the expiry of this period.