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 collection of ₹5,00,000/- as a "Corpus Fund" meant for BPL student scholarships

Historically, the Fee Regulatory Committee (FRC) increased NRI fees from ₹15 lakhs to ₹20 lakhs in 2017, directing ₹5 lakhs be diverted to the State’s Corpus Fund

In *Director, Jubilee Mission Medical College*, the High Court ruled the FRC lacked the statutory power to divert fees for other purposes

Subsequently, the Government issued G.O.(MS) No. 107/2018 to validate this collection, which was also quashed by the High Court in 2020

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

The petitioners argued that since the Corpus Fund was illegal, their total fee liability should only be the base tuition fee (approx. ₹16.65 lakhs) excluding the ₹5 lakh component

1. Whether the medical colleges are entitled to collect the ₹5,00,000/- component previously designated as "Corpus Fund" from NRI students following the Supreme Court’s judgment

2. Whether the NRI students are entitled to a refund or reduction of fees on the ground that the creation of the Corpus Fund was declared illegal

The Court applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017, specifically Sections 3, 8, and 11 regarding fee fixation

It relied on the precedent set in *P.A. Inamdar v. State of Maharashtra*, which allows NRI fees to subsidize economically weaker sections but requires a state-led plan

and *Islamic Academy of Education v. State of Karnataka*, regarding the limits of the Committee’s powers

Crucially, it applied the final directions from *State of Kerala v. Principal KMCT Medical College (2025)*, which established that while the State cannot maintain the fund without legislation, the colleges are entitled to retain/collect the "entire fees" approved by the FRC to subsidize BPL students at the institutional level

The Court reasoned that the petitioners were operating under a "mistaken assumption" that the NRI fee was ₹15 lakhs with an additional ₹5 lakh illegal levy; rather, the FRC had approved a total fee of ₹20 lakhs (later adjusted with 5% annual increases), and the illegality attached only to the *diversion* of a portion to the State, not the *quantum* of the fee itself

The Court noted that the Supreme Court had explicitly directed NRI students to pay the "entire fees" to their institutions as approved by the FRC and denied any requests for refunds

The Court further found that the 2024 Government Order (G.O. 240/2024), which fixed the NRI fee at ₹21,65,720/-, had not been challenged by the petitioners and thus remained valid

Consequently, even though the "Corpus Fund" nomenclature was legally flawed in the absence of legislation, the underlying monetary obligation formed part of the reasonable, non-profiteering fee structure approved by the FRC

The Court ruled that the Supreme Court’s judgment precludes any refund to students and mandates the payment of the "entire fee" to the colleges

The colleges are directed to utilize these funds to subsidize education for BPL students within their respective institutions and must furnish accounts to the Committee to prove compliance

The petitioners were granted six weeks to satisfy the arrears, during which any bank guarantees shall not be encashed