NRI students must pay the entire approved tuition fee, including portions previously diverted to illegal corpus funds.

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

Historically, the Admission and Fee Regulatory Committee ("Fee Committee") increased the NRI fee from ₹15 lakhs to ₹20 lakhs, directing that ₹5 lakhs of this amount be earmarked as a "Corpus Fund" to subsidize BPL students.

A Division Bench of the Kerala High Court in Director, Jubilee Mission Medical College [2020 (3) KLT 615] held that the Committee lacked the statutory power under the Kerala Medical Education Act, 2017 to divert fees for other purposes.

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

The Supreme Court, in State of Kerala v. Principal KMCT Medical College [2025 KHC OnLine 6505], affirmed the quashing of the G.O. but ruled that while NRI students need not pay toward a "Corpus Fund" in the absence of legislation, they must pay the "entire fee" as approved by the Committee, and are not entitled to refunds.

Petitioners challenged fresh demand notices for ₹5 lakhs, arguing that the fee is effectively only ₹16,65,720 per subsequent G.O.s and that the "Corpus Fund" component is illegal.

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 on the precedent set in P.A. Inamdar v. State of Maharashtra regarding the subsidization of weaker sections through NRI fees.

The court also referred to Islamic Academy of Education v. State of Karnataka regarding limited committee powers.

Crucially, it applied the mandate from State of Kerala v. Principal KMCT Medical College, which established that NRI students are directed to pay the "entire fees" approved by the Committee.

The court reasoned that the petitioners' challenge was based on a "mistaken assumption" that the NRI fee was only ₹15 lakhs plus an additional illegal levy.

By examining the procedural history, the court determined that the Fee Committee had actually approved an enhancement of the total fee to ₹20 lakhs (and subsequently higher).

While the diversion of a portion of that fee into a state-managed "Corpus Fund" was declared illegal due to lack of legislative authority, the fixation of the total fee amount itself was found reasonable and non-exploitative by the Committee.

The Supreme Court explicitly directed NRI students to pay the "entire fees" to the colleges and denied any refund of the amounts already transferred to the State, essentially treating the ₹5 lakh component as part of the valid tuition fee rather than an extra-legal levy.

The court further noted that the petitioners had not challenged the subsequent Government Orders (e.g., G.O. dated 25.09.2024) which fixed the total fee at ₹21,65,720.

The writ petitions were dismissed.

However, the court granted the petitioners six weeks to satisfy the arrears and directed that bank guarantees should not be encashed until the expiry of this period.