NRI Students are Liable for Entire Tuition Fee Despite Invalidation of Corpus Fund Diversion

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

Historically, the tuition fee for the NRI quota was ₹15,00,000.

However, for the academic year 2017 onwards, the Admission and Fee Regulatory Committee ("Fee Committee") enhanced the fee to ₹20,00,000, directing that ₹5,00,000 of this amount be diverted to a "Corpus Fund" to provide scholarships for Below Poverty Line (BPL) students.

This diversion was previously challenged, leading to a High Court judgment in *Director, Jubilee Mission Medical College* (2020) and a subsequent quashing of Government Order G.O.(MS) No. 107/2018/H&FWD, which had attempted to validate the fund.

The High Court’s decision was appealed to the Supreme Court in *State of Kerala v. Principal KMCT Medical College* (2025).

Based on these judgments, the students filed current writ petitions alleging that the collection of ₹5,00,000 towards the Corpus Fund is illegal and that their total fee should only be ₹15,00,000 (plus approved increments).

1. Whether the medical colleges are entitled to collect the ₹5,00,000 component originally earmarked for the Corpus Fund as part of the "entire fee" from NRI students.

2. Whether NRI students are entitled to a refund or set-off of the ₹5,00,000 amount charged in instances where the Corpus Fund mechanism was declared unauthorized.

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 fee fixation.

It relied heavily on the precedent set by the Supreme Court in *State of Kerala v. Principal KMCT Medical College* [2025 KHC OnLine 6505], which held that while the State cannot create a Corpus Fund without specific legislation, the Fee Committee is competent to prescribe fees for the NRI quota to ensure they are not exploitative.

The court also referenced *P.A. Inamdar v. State of Maharashtra*, which suggested that NRI student fees could be utilized to cross-subsidize students from economically weaker backgrounds.

The Court noted that the Fee Committee had actually approved an enhancement of the total NRI fee to ₹20,00,000 per annum, and the subsequent controversy arose only because the Committee chose to *bifurcate* that approved fee, labeling ₹5,00,000 as a Corpus Fund.

Applying the Supreme Court’s 2025 ruling, the Court found that even though the specific Corpus Fund mechanism via Government Order was quashed, the Supreme Court explicitly directed NRI students to pay the "entire fees" to their respective colleges as approved by the Fee Committee.

The Court reasoned that the students were under a mistaken assumption that the base fee remained at ₹15,00,000; in reality, the ₹5,00,000 was part of a reasonable, non-profiteering fee structure already signified by the Committee.

Consequently, since the Supreme Court held that NRI students are not entitled to a refund of this component and must satisfy the "entire fee," the medical colleges’ demand for the ₹5,00,000 component is legally sustainable.

The writ petitions were dismissed.

The Court held that students must satisfy the arrears of the disputed fee component, as the Supreme Court previously ruled they are not entitled to any refund or set-off.

However, the Court granted the petitioners six weeks to satisfy the arrears, and further directed that any steps to encash bank guarantees provided by students shall only be taken after the expiry of this six-week period.