2026 INSC 799 Page 1 of 17

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.10669 OF 2010

GOVERNMENT OF INDIA & ANR. ……APPELLANT(S)

VS.

SRI DEVRAJ URS MEDICAL COLLEGE …...RESPONDENT(S)

WITH

CIVIL APPEAL NO………... OF 2026

(arising out of SLP (C) No.9079 of 2011)

J U D G M E N T

SHEEL NAGU, J.

CIVIL APPEAL NO.10669 OF 2010

1. The present appeal emanates from the impugned order

of the Division Bench of the High Court of Karnataka

rendered on 03.07.2009 in Writ Appeal No.1407 of 2009

(FDN-RES), upholding the order of the Single Bench passed

on 05.11.2008 in Writ Petition No.15640 of 2005.

Page 2 of 17

2. We have heard the learned counsel for the Government

of India, the Government of Karnataka, and also the learned

counsel for the respondent-college at length and have

perused the relevant documents on record.

2.1. The Single Bench of the High Court of Karnataka, while

allowing the writ petition filed by the respondent herein,

passed the following orders:

I. Quashed communication dated 13.05.2005

issued by the Central Government (by which payment

of the subvention amount was denied qua academic

year 2002-03 & onwards).

II. Writ of mandamus was issued against respondent

No.1-Government of India to make payment of the

subvention amount in terms of the interim order dated

11.08.1995 in TMA Pai Foundation and Ors. vs.

State of Karnataka and Ors.

1 in respect of students,

who were admitted latest in the academic year 2002-03

for a period of 5 years or until the students complete

the course, whichever is earlier.

1

(1995) 5 SCC 220

Page 3 of 17

III. However, it was directed that the petitioner-

college is not entitled to the subvention amount in

respect of students admitted in the academic year

2003-04, and thereafter, owing to the final decision

dated 31.10.2002 by 11-Judge Bench in the case of

TMA Pai Foundation & Ors vs. State of Karnataka

2.

3. Rationale behind grant of relief by the Single Bench was

that the subvention scheme floated pursuant to the interim

order dated 11.08.1995, in TMA Pai Foundation case

(supra) was meant to eliminate the evil of capitation fee and

that merit ought to be the sole consideration in matters of

admission to professional courses. It was also noticed by the

Single Bench that the subvention scheme was made effective

from academic year 1995-96. Therefore, the Single Bench

held the respondent-college to be entitled to the subvention

amount in respect of such students till they complete their

course.

2

(2002) 8 SCC 481

Page 4 of 17

4. Pertinently, the same interim order dated 11.08.1995,

which created the subvention scheme, also referred the issue

to a larger Bench, which led to the constitution of 11-Judge

Bench in the case of TMA Pai Foundation & Ors. vs. State

of Karnataka (supra) which finally overruled the decision

of Unni Krishnan, J.P. And Ors. Etc. Etc vs State Of

Andhra Pradesh And Ors. Etc. Etc.

3 by laying down the

law, which in context of this case is extracted below:-

“xxx

Question No.9 Whether the decision of this Court in

Unnikrishnan J.P. vs. State of A.P. 1993 1 SCC 645

(except where it holds that primary education is a

fundamental right) and the scheme framed

thereunder require reconsideration/modification

and if yes, what?

Answer: The scheme framed by this Court in Unni

Krishnan’s case and the direction to impose the

same, except where it holds that primary education

is a fundamental right, is unconstitutional.

However, the principle that there should not be

capitation fee or profiteering is correct. Reasonable

surplus to meet cost of expansion and

augmentation of facilities does not, however,

amount to profiteering.

xxx”

3

(1993) 1 SCC 645

Page 5 of 17

5. We, after hearing the learned counsel for rival parties,

formulate the following questions to be answered by this

order:

I. Whether the final decision in TMA Pai

Foundation (supra) case by 11-Judge Bench renders

the decision of the Single Bench as well as the Division

Bench of the High Court of Karnataka, impugned

herein, liable to be interfered with or not?

II. Whether the appellants herein, Government of

India and Government of Karnataka are entitled to any

relief or not?

6. During the course of arguments, we put a pointed

question to the counsel for the respondent-college, as to

whether in regard to fee charged and expenses incurred by

them for the academic year 2002-03, prior and subsequent

thereof, any data has been furnished? The answer is in the

negative.

6.1. In view of the above, in the absence of any data provided

by the respondent-college, we are unable to adjudicate upon

the said aspect and therefore, we move on with the

assumption based on acquiescence of the respondent-college

Page 6 of 17

that fee was charged by the respondent -college from

students qua academic year 2002 -03, prior, and also

subsequent thereto. However, whether the revenue (by way

of tuition fee and other sources) generated by the

respondent-college fell short of the expenses incurred to run

the respondent-college, or not, is a question which remains

unanswered.

6.2 In the absence of any pleading in support of the

aforesaid query raised by this Court, we draw inspiration

from the law laid down by this Court in the case of Bharat

Singh and Others. vs. State of Haryana and Others

4.

Relevant paragraph 13 of Bharat Singh (supra), for

reference and convenience is reproduced herein below:

“xxx

13. As has been already noticed, although the

point to profiteering by the State was pleaded in

the writ petitions before the High Court as an

abstract point of law, there was no reference to any

material in support thereof nor was the point

4

. (1988) 4 SCC 534

Page 7 of 17

argued at the hearing of the writ petitions. Before

us also, no particulars and no facts have been

given in the special leave petitions or in the writ

petitions or in any affidavit, but the point has been

sought to be substantiated at the time of hearing

by referring to certain facts stated in the said

application by HSIDC. In our opinion, when a point

which is ostensibly a point of law is required to be

substantiated by facts, the party raising the point,

if he is the writ petitioner, must plead and prove

such facts by evidence which must appear from the

writ petition and if he is the respondent, from the

counter-affidavit. If the facts are not pleaded or the

evidence in support of such facts is not annexed to

the writ petition or to the counter-affidavit, as the

case may be, the court will not entertain the point.

In this context, it will not be out of place to point out

that in this regard there is a distinction between a

pleading under the Code of Civil Procedure and a

writ petition or a counter-affidavit. While in a

pleading, that is, a plaint or a written statement,

the facts and not evidence are required to be

pleaded, in a writ petition or in the counter-affidavit

not only the facts but also the evidence in proof of

such facts have to be pleaded and annexed to it.

So, the point that has been raised before us by the

appellants is not entertainable. But, in spite of that,

we have entertained it to show that it is devoid of

any merit.

xxx”

As such, in view of the above, we are unable to

subscribe to the view of the impugned orders for payment of

the subvention amount to the respondent -college for the

period after academic year 2002-2003.

Page 8 of 17

7. We further take judicial notice of the fact that only two

colleges have approached this Court against the stoppage of

the subvention amount by the Government of

India/Government of Karnataka despite the stoppage having

affected a large number of professional colleges. Though this

data is insufficient to draw an adverse inference against the

respondent-college but certainly has persuasive force.

8. The final decision in TMA Pai Foundation (supra) case

by 11-Judge Bench impliedly declared the subvention

scheme to be unconstitutional. It may not be out of place to

mention here that under the subvention scheme an amount

of Rs.5,000/- per annum per student was extended by the

Central Government (except to NRI’s). The s cheme also

provided that the subvention amount shall be paid till the

students complete the course or for a period of 5 years,

whichever is earlier. However, these directions issued under

this scheme were made subject to the final outcome in TMA

Pai Foundation (supra) case by 11-Judge Bench, which was

pronounced on 31.10.2002.

Page 9 of 17

8.1 The Single Bench, while allowing the writ petition,

made the following findings and observations:

I. The final decision in TMA Pai Foundation (supra)

case by 11-Judge Bench did not touch upon the

provision of the subvention amount pursuant to the

interim order passed by this Court on 11.08.1995

(meaning thereby that things done pursuant to the

interim order dated 11.08.1995 were saved).

II. That pursuant to the interim order dated

11.08.1995, the subvention amount has already been

paid to the college in respect of the students admitted

from academic year 1995 -96 onwards till they

completed their course or for a period of 5 years,

whichever is earlier.

III. That vested right was created in favour of the

colleges to receive the subvention amount which could

not be curtailed or taken away retrospectively by virtue

of the final decision in TMA Pai Foundation (supra)

case by 11-Judge Bench.

IV. It was thus held by the Single Bench that all

actions taken pursuant to the interim order dated

11.08.1995, in TMA Pai Foundation (supra) are

treated to be valid and continued till the academic year

2002-03 (since final judgment in TMA Pai Foundation

case was rendered on 31.10.2002).

Page 10 of 17

V. The Single Bench also noticed that the Division

Bench of this Court by the clarificatory decision dated

01.04.2003 passed in State of Karnataka vs. TMA

Pai Foundation and Ors.

5 held that the declaration of

law in the final decision in TMA Pai Foundation

(supra) case by 11-Judge Bench is prospective,

meaning thereby that there would be no re-opening of

the settled issues.

VI. That the respondent-college cannot be denied

payment of the subvention amount in respect of

students admitted during the academic year 2002-03

and prior thereto, and that these students so admitted

are entitled to receive the subvention amount for the

entire 5 years period of the course.

9. Pertinently, the clarificatory decision dated 01.04.2003

of the Division Bench of this Court in State of Karnataka

vs. TMA Pai Foundation and Ors. (supra), which was held

by the Single Bench to give prospectivity to the final decision

in TMA Pai Foundation (supra) case by 11-Judge Bench, on

perusal does not expressly lay down that the ratio in TMA

5

(2003) 6 SCC 790

Page 11 of 17

Pai Foundation (supra) case, was prospective. For ready

reference, the said clarificatory decision dated 01.04.2003 in

State of Karnataka vs. TMA Pai Foundation and Ors.

(supra) is reproduced in toto as follows:

“1. Leave granted in special leave petitions.

2. The several questions raised in these matters are

covered by the decision of a Constitution Bench of

this Court in T.M.A. Pai Foundation v. State of

Karnataka and the connected batch of cases

decided on 31.10.2002. Since larger questions have

been decided by this Court, it becomes necessary

for the High Court to re-examine the matters which

have been decided and which are in appeal before

this Court. The orders of the High Court are,

therefore, set aside without expressing any opinion

on merits and the matters are remitted to the High

Court for fresh consideration in accordance with

law.

3. Status quo shall continue unless the High Court

so decides to modify the same by an appropriate

application made to them by any of the parties. The

parties are at liberty to file fresh pleadings, if any,

within the period fixed by the High Court. It is made

clear that all statutory enactments, orders,

schemes, regulations will have to be brought in

conformity with the decision of the Constitution

Bench of this Court in T.M.A. Pai Foundation case

decided on 31.10.2002. As and when any problem

arises, the same can be dealt with by an

appropriate forum in an appropriate proceeding.

4. The appeals are disposed of accordingly.

5. The questions of law are left open.”

Page 12 of 17

10. From the aforesaid, it is obvious that after the final

decision in TMA Pai Foundation (supra) case by 11-Judge

Bench laid down the law on 31.10.2002, certain petitions in

the High Courts of various States were pending before this

Court which were taken up and decided by the said

clarificatory decision dated 01.04.2003. This Court in the

clarificatory decision dated 01.04.2003 held that since larger

questions on the issue have already been decided by the final

decision in TMA Pai Foundation (supra) case by 11-Judge

Bench, the orders of different High Courts challenged before

this Court, are set aside without expressing any opinion on

merits and the matters are remitted to the respective High

Courts for fresh consideration in accordance with law. This

clarificatory decision dated 01.04.2003 further laid down

that status quo shall continue unless the High Court so

decides to modify the same and the parties before the High

Court were granted liberty to file fresh pleadings. Further,

the clarificatory decision dated 01.04.2003, before

concluding, held that all statutory enactments, orders,

schemes, regulations will have to be brought in conformity

Page 13 of 17

with the final decision in TMA Pai Foundation (supra) case

by 11-Judge Bench decided on 31.10.2002.

10.1 It appears that the impression of the final decision in

TMA Pai Foundation (supra) case by 11-Judge Bench is

prospective, was derived by the Single Bench by reading the

clarificatory decision of the Division Bench of this Court

dated 01.04.2003, where the direction of status quo was

issued with further direction that all statutory enactments,

orders, schemes, regulations will have to be brought in line

with the final decision in TMA Pai Foundation by 11-Judge

Bench.

11. If a decision of the Apex Court does not expressly

provide its application to be prospective, then it is settled law

that all decisions of this Court are retrospective in

application as held in paragraph 29 of P.V. George v. State

of Kerala

6, which is reproduced herein below:

6

(2007) 3 SCC 557

Page 14 of 17

“29. …….The law declared by a Court will have a

retrospective effect if not otherwise stated to be so

specifically. …..”

12. That another extract of the final decision in TMA Pai

Foundation (supra) case by 11-Judge Bench which

indicates towards the intention of the 11-Judge Bench

decision to be prospective, in paragraph 393 which is

reproduced below:

“393. The learned Chief Justice has repeatedly

emphasised that capitation fees cannot be charged

and that there must be no profiteering. We clarify

that the authorities concerned will always be

entitled to prevent by enactment or by regulations

the charging of exorbitant fees or capitation fees.

There are many such enactments already in force.

We have not gone into the validity or otherwise of

any such enactment. No arguments regarding the

validity of any such enactment have been submitted

before us. Thus those enactments will not be

deemed to have been set aside by this judgment. Of

course now by virtue of this judgment the fee

structure, fixed under any regulation or enactment,

will have to be reworked so as to enable educational

institutions not only to break even but also to

generate some surplus for future

development/expansion and to provide for free

seats”

12.1 A conjoint reading of paragraph 393 of the final

decision in TMA Pai Foundation (supra) case by 11-Judge

Bench and the clarificatory order dated 01.04.2003 of the

Page 15 of 17

Division Bench of this Court makes it abundantly clear that

the intention of this Court was to give prospective application

to only such statutory provisions which stipulated

something contrary to the ratio laid down in the final

decision in TMA Pai Foundation (supra) case by 11-Judge

Bench.

12.2 However, the schemes or executive instructions,

particularly the subvention scheme, died its own death on

31.10.2002 when the scheme was declared unconstitutional

by the final decision in TMA Pai Foundation (supra) case by

11-Judge Bench.

12.3 Moreso, the scheme of subvention, which was

formulated by way of the interim order dated 11.08.1995,

during pendency of TMA Pai Foundation (supra) case before

this Court, obligated the Central Government to pay the

subvention amount to each eligible college on an annual

basis and not for the entire course in lump sum. Thus, the

said obligation is for payment of the subvention amount

annually. Therefore, it was not incumbent upon the Central

Government to pay the subvention amount for the entire 5-

Page 16 of 17

year course in one go and therefore, the Single Bench and

the Division Bench of the High Court of Karnataka were

incorrect in directing release of the subvention amount for

the entire 5 years even after academic year 2002-03. Such a

course was impermissible once the subvention scheme was

declared unconstitutional on 31.10.2002. (see answer to

question No.9 of final order in TMA Pai Foundation)

13. In the conspectus of the above discussion, we partly

uphold the order of the Single Bench as well as the Division

Bench of the High Court of Karnataka, to the extent it denies

the payment of the subvention amount beyond the academic

year 2002-03.

13.1 We are persuaded to hold so, primarily because of

absence of any pleading furnished by the respondent-college

as to whether the revenue generated by way of tuition fees

and from other sources was enough or not to cater to the

expenditure incurred to run the respondent-institution.

Consequently, this appeal is partly allowed to the extent

indicated below:

Page 17 of 17

A) The order of the Single Bench as well as the

Division Bench of the High Court of Karnataka, are set

aside to the extent it directs payment of the subvention

amount for the entire course of 5 years for students

who were admitted in 2002-03.

14. Consequently, the questions framed in paragraph No.5

of this judgment are answered accordingly.

CIVIL APPEAL NO…… OF 2026 @ SLP (C) No.9079 of 2011

1. Leave granted.

2. Disposal of Civil Appeal No….of 2026 (arising out of SLP

(C) No.9079 of 2011) shall be governed mutatis mutandis by

this order.

……………………………...J.

(DIPANKAR DATTA)

…...………………………...J.

(SHEEL NAGU)

NEW DELHI;

AUGUST 04, 2026