NRI Students Liable for Full Committee-Approved Fees Including Disputed Corpus Fund Components

The petitioners, NRI quota MBBS students in self-financing medical colleges, challenged the demand for ₹5,00,000/- as a "Corpus Fund" contribution.

Historically, the Admission and Fee Regulatory Committee (AFRC) increased NRI fees from ₹15 lakhs to ₹20 lakhs per annum, directing that the additional ₹5 lakhs be diverted to a Corpus Fund for BPL student scholarships.

A Division Bench of the Kerala High Court previously quashed the scholarship scheme (G.O.(MS) No. 107/2018/H&FWD) for lack of legislative authority.

The Supreme Court, in *State of Kerala v. Principal KMCT Medical College*, confirmed that while the diversion to a Corpus Fund was unauthorized without legislation, NRI students were not entitled to a refund and must pay the "entire fees" as approved by the Committee to the colleges.

Petitioners argued that since the Corpus Fund was illegal, they should only pay the base fee of roughly ₹16.65 lakhs as per G.O.(Ms) No. 240/2024.

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 the fixation of tuition fees.

It relied on *Director, Jubilee Mission Medical College v. State of Kerala*, which ruled that the AFRC has power to fix fees but not to direct part of it to other purposes.

Most crucially, it followed the Apex Court precedent in *State of Kerala v. Principal KMCT Medical College (2025)*, which held that although the State cannot create a Corpus Fund without legislation, colleges can retain those funds from the approved fee structure to subsidize BPL education, and students must satisfy the "entire fees".

The Court reasoned that the petitioners proceeded under a mistaken assumption that the tuition fee was ₹15 lakhs plus an additional ₹5 lakh fund fee.

The Court clarified that the AFRC had actually enhanced the total approved fee to ₹20 lakhs (and subsequently adjusted it by 5% annually), merely directing a *bifurcation* of that existing fee for the scholarship fund.

Since the Supreme Court explicitly held that NRI students have no right to a refund of the fund component and must pay the "entire fees" to the colleges, the illegality of the *State-managed scholarship scheme* did not reduce the student's liability to pay the total approved tuition amount to the institution.

The Court further noted that G.O.(Ms) No. 240/2024, which mentioned the ₹5 lakh fund component separately, remained unchallenged and did not alter the fact that the total sanctioned fee included this amount.

The Court answered that while the students are not liable to pay into a *State* fund, they must satisfy the total approved fee to their respective colleges.

Petitioners were granted six weeks to satisfy arrears, and colleges were restrained from encashing bank guarantees during this period.