NRI Students Obligated to Pay Approved Tuition Fee Inclusive of Component Labeled as Corpus Fund

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

Historically, the Admission and Fee Regulatory Committee (AFRC) fixed the NRI fee at ₹15,00,000, but later enhanced it to ₹20,00,000, directing that ₹5,00,000 thereof be diverted to a "Corpus Fund" to subsidize BPL students.

A previous Division Bench judgment in *Director, Jubilee Mission Medical College* [2020 (3) KLT 615] held that the AFRC lacks statutory power to divert fees for other purposes.

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

Both colleges and students appealed to the Supreme Court.

The Supreme Court in *State of Kerala v. Principal, KMCT Medical College* [2025 KHC OnLine 6505] confirmed the quashing of the fund but directed students to pay the "entire fees" to the colleges and denied them a refund of the ₹5,00,000.

Despite this, students filed the present writ petitions contending that the ₹5,00,000 collection is illegal and that the government’s G.O.(Ms) No. 240/2024 treated the fee as ₹16,65,720 plus an optional ₹5,00,000 fund subject to court orders.

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 of *P.A. Inamdar v. State of Maharashtra* regarding the utilization of NRI fees to benefit economically weaker sections.

The court relied on the specific holding in *State of Kerala v. Principal, KMCT Medical College*, which stated that NRI students are not entitled to a refund and must pay the "entire fees" approved by the Committee.

The Court reasoned that the petitioners' claim rested on a "mistaken assumption" that the base tuition fee was only ₹15,00,000 and that the ₹5,00,000 was an additional, separate levy.

The Court clarified that the AFRC had actually enhanced the total NRI tuition fee to ₹20,00,000 (and later ₹21,65,720); the illegality resided only in the *bifurcation* and *diversion* of a portion of that fee to a government-managed fund, not in the quantum of the fee itself.

Applying the Supreme Court direction in *KMCT Medical College*, the Court observed that the Apex Court explicitly directed NRI students to pay the "entire fees" to their respective colleges.

Furthermore, the Court noted that while G.O.(Ms) No. 240/2024 seemingly bifurcated the fee, that order was never challenged, and a similar challenge had already been dismissed in W.P.(C) No. 16489 of 2025.

The colleges are entitled to retain the full amount to maintain their operations and subsidize BPL students internally as per the Supreme Court’s modified directions.

The court answered the core issue by stating that although the *fund* was illegal, the full *fee* remains payable by the students.

The petitioners were granted six weeks to satisfy the arrears, and colleges were directed not to encash bank guarantees until the expiry of this period.