NRI Students are Liable to Pay Entire Approved Fees Inclusive of Earmarked Corpus Fund Amounts

The petitioners, NRI quota MBBS students in Self-Financing Medical Colleges, challenged the collection of ₹5,00,000 toward a "Corpus Fund" intended for BPL student scholarships

Historically, the Fee Committee (AFRC) increased NRI fees from ₹15 lakhs to ₹20 lakhs in 2017-18, directing that ₹5 lakhs be diverted to the State’s Corpus Fund

This diversion was previously quashed by a Division Bench in *Director, Jubilee Mission Medical College* [2020 (3) KLT 615] and later in *W.P.(C) 33160/2018*, where the Court held that neither the Committee nor the Government had the legislative authority to levy such funds

The State appealed to the Supreme Court, which in *State of Kerala v. Principal KMCT Medical College* [2025 KHC OnLine 6505], affirmed the quashing of the fund-creation order but simultaneously directed NRI students to pay the "entire fees" to the colleges and denied them refunds

Following this, colleges issued demand notices for the ₹5 lakh component, prompting this batch of writ petitions

The court primarily applied the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017, specifically Sections 3 and 11 regarding the fixation of fees.

It relied on the precedent set by the Supreme Court in *P.A. Inamdar v. State of Maharashtra*, which allowed for NRI student fees to subsidize economically weaker students but necessitated valid legislation for such mechanisms.

Crucially, the court applied the final directions from *State of Kerala v. Principal KMCT Medical College*, which mandated the payment of the "entire fees" as approved by the Fee Committee while prohibiting students from claiming refunds of the disputed component.

The court reasoned that although the mandatory diversion of ₹5 lakhs to a State-run Corpus Fund was illegal in the absence of specific legislation, that amount was integral to the total tuition fee already determined by the Fee Committee to be reasonable and non-exploitative.

The Supreme Court explicitly directed that colleges are entitled to "retain the fees" and that NRI students must pay the "entire fees" approved by the AFRC.

The petitioners' argument that the "fee" was only ₹15-16 lakhs was a "mistaken assumption"; the AFRC’s decision was to set the total fee at ₹20-21 lakhs, with only the *allocation* of ₹5 lakhs being the subject of the legal dispute.

Furthermore, the court noted that the current Government Order (G.O.(Ms) No. 240/2024), which explicitly includes the ₹5 lakh component within the total fee of ₹21,65,720, remained unchallenged by the petitioners.

Consequently, while the label "Corpus Fund" may be invalid, the monetary amount remains payable as part of the total approved tuition fee.

The Court ruled that the NRI students were explicitly directed by the Apex Court to satisfy the "entire fees" and are not entitled to any refund or exclusion of the disputed amount.

However, the Court granted the petitioners six weeks to satisfy the arrears, staying the encashment of bank guarantees for that duration.