2  16 May, 2025
Listen in mins | Read in 48:00 mins
EN
HI

The State of Kerala and Ors. Vs. The Principal, KMCT Medical College and Ors.

  Supreme Court Of India Special Leave Petition Civil/9885-9888/2020
Link copied!

Case Background

As per the case facts, the State of Kerala's Admission and Fee Regulatory Committee directed the creation of a corpus fund, partially from fees collected from NRI students, to subsidize ...

Bench

Applied Acts & Sections
Hello! How can I help you? 😊
Disclaimer: We do not store your data.
Document Text Version

2025 INSC 518 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION 

Civil Appeal No. _______ / 2025

(Arising out of Special Leave Petition (C) Nos. 9885 – 9888 / 2020)

The State of Kerala and Ors.  ….Appellant(s)

versus

The Principal, KMCT Medical College and Ors.        ….Respondent(s)

WITH

Civil Appeal No. _______ / 2025

(Arising out of Special Leave Petition (C) No. 12984 / 2020)

The Principal KMCT Medical College & Anr.    ….Appellant(s)

versus

The Admission and Fee Regulatory Committee and Anr.      ….Respondent(s)

WITH

Civil Appeal No. _______ / 2025

(Arising out of Special Leave Petition (C) Nos. 4909 – 4910 / 2021)

Altaf Hussain & Ors.           ….Appellant(s)

versus

The State of Kerala and Ors.        ….Respondent(s)

WITH

Civil Appeal No. _______ / 2025

(Arising out of Special Leave Petition (C) Nos. 12957 – 12958 / 2021)

Sanchana Pious & Ors.           ….Appellant(s)

versus

Page 1 of 32

The State of Kerala and Ors.        ….Respondent(s)

JUDGEMENT

SURYA KANT, J.

Leave granted. 

2.The issue that arises for consideration has emanated from a direction

given by the State of Kerala’s Admission and Fee Regulatory Committee

that a corpus fund be created to subsidize medical education for Below

Poverty   Line   (BPL)   students   admitted   to   self­financing   medical

educational   institutions   in   the   State.   This   corpus   fund   was   to   be

created by remitting to the State Government a part of the fees collected

from Non­Resident Indian (NRI) students admitted to those colleges. 

3.The Kerala High Court, at Ernakulam (High Court) vide the common

Impugned Judgement dated 23.07.2020 has: ( i) quashed Government

Order   (MS)   No.   107/2018/H&FWD   dated   06.06.2018   (GO   dated

06.06.2018); (ii) directed that the amounts collected from each NRI

student   to   create   a   corpus   fund   be   transferred   to   the   respective

institutions and maintained as a separate account to be utilized only

for   the   benefit   of   students   belonging   to   the   economically   weaker

sections, who may be admitted to such institutions on the basis of

allotment; (iii) directed such account to be operated only jointly by a

nominee of the self­financing institution and a nominee of the State

Government;   (iv)   kept   it   open   to   the   State   to   promulgate   suitable

Page 2 of 32

legislative measures to achieve the object of providing scholarships to

students   belonging   to   economically   weaker   sections   of   society   as

observed   by   this   Court   in  P.   A.   Inamdar   and   Ors.   v.   State   of

Maharashtra

1

; and has further directed that (v) till suitable legislative

measures are adopted by the State, no further amounts would be levied

or collected from NRI students, already admitted to or to be admitted to

NRI   quota   seats   in   that   academic   year,   towards   the   creation   or

maintenance of the corpus fund. 

4.These directions of the High Court have given rise to three sets of cross­

appeals preferred by: (i) The State of Kerala, who is aggrieved by the

quashing of its GO dated 06.06.2018; (ii) The self­financing medical

colleges,   who   are   challenging   the   direction   that   the   corpus   fund

amount   be   utilized   only   to   subsidize   education   for   students   from

economically­weaker   sections   of   society   admitted   to   the   respective

institutions; and finally, (iii) The NRI students, who are dissatisfied

that the corpus fund amounts have not been refunded to them. 

A.FACTS   

5.Owing to a parallel set of proceedings before the Courts concerning the

Committee’s overall functioning, it is vital to understand the detailed

facts before analyzing the legal issues.  

1 P. A. Inamdar and Ors. v. State of Maharashtra, (2005) 6 SCC 537.

Page 3 of 32

5.1The Kerala Medical Education (Regulation and Control of Admission to

Private   Medical   Educational   Institutions)   Act,   2017   (the   2017   Act)

came   into  force   on   01.06.2017.   It   was   introduced   to,   among   other

things, regulate the admission and fixation of fees in private medical

educational institutions in the State of Kerala. Sections 3 and 3A of the

2017 Act contemplate the constitution of a Committee, described as the

Admission and Fee Regulatory Committee (Committee). The Committee

was   tasked   to   determine   the   fees   charged   to   students   admitted   to

private medical educational institutions in Kerala based on the annual

information and proposals submitted by those colleges.  

5.2KMCT   Medical   College   moved   an   application   and   submitted   the

prospectus   for   Academic   Year   2017­2018   before   the   Committee   on

01.08.2017, requesting it to fix the fees for NRI students at Rs. 20

lakhs per annum.

5.3The Committee, on 27.02.2018, approved the fixation of fees for NRI

students at Rs. 20 lakhs per annum for all medical colleges whose fee

was to be regulated under the 2017 Act. Notedly, it decided to enhance

the fees for NRI students from Rs. 15 lakhs per annum in Academic

Year 2016­2017 to Rs. 20 lakhs per annum in Academic Year 2017­

2018 and 2018­2019, with the condition that the extra amount of Rs. 5

lakhs would be kept as a ‘corpus fund’ to provide scholarships to BPL

students. The Committee further directed that the corpus fund amount

would be remitted to the State Government, as and when so directed by

Page 4 of 32

the   State,   the   Committee,   or   a   Court   of   Law.   This   decision   was

substantiated by quoting paragraph 131 of  P. A. Inamdar (supra),

where it was held that the fees collected from NRI students should be

utilized   to   benefit   students   from   economically­weaker   sections   of

society. 

5.4KMCT   Medical   College,   being   aggrieved,   laid   challenge   to   the

Committee’s decision before the High Court.

5.5During the pendency of the writ proceedings before the High Court, the

Government of Kerala issued the GO dated 06.06.2018, seemingly to

validate and support the Committee’s decision dated 27.02.2018. It

emphasized   that   the   mainstay   of   the   corpus   fund   would   be   the

amounts   earmarked   and   collected   from   NRI   students   who   were

admitted to self­financing medical educational institutions in the State.

Much like the Committee’s decision, the GO dated 06.06.2018 was

statedly issued in pursuance of the directions contained in paragraph

131 of P. A. Inamdar (supra). Compelled by the GO dated 06.06.2018,

the self­financing medical colleges consequently began collecting Rs. 20

lakhs per annum as fees from the newly­admitted NRI students, while

remitting Rs. 5 lakhs to the corpus fund. 

5.6The   Committee,   meanwhile,   continued   to   assess   the   fee   proposals

submitted   by   various   colleges.   In   some   instances,   it   rejected   the

proposals and determined the fees to be charged on its own initiative.

Viewing this as an overstep of the Committee’s powers and a violation

Page 5 of 32

of   the   institutions’   autonomy,   several   medical   colleges   filed   writ

petitions   before   the   High   Court.   This   resulted   in   a   parallel   set   of

proceedings concerning the Committee’s overall powers. 

5.7These   proceedings   culminated   in   a   common   judgment   dated

19.05.2020,   whereby   the   High   Court   remanded   the   matter   to   the

Committee to re­examine the proposals afresh and to pass suitable

orders. The High Court observed that though the Committee had the

power to fix the fee to be collected from NRI students, there was no

power vested in it under Section 8 of the 2017 Act to direct that a

portion of the fee amount be utilized for any other purpose. 

5.8The aggrieved State approached this Court in Civil Appeal No. 606­

616/2021, which came to be decided on 25.02.2021,

2

 holding that the

fee,   as   proposed   by   the   colleges,   should   be   considered   by   the

Committee. This Court noted that it was no longer res integra that the

right conferred on the institutions to fix fees for professional courses

was subject to regulation. It was reiterated that unaided professional

institutions had the autonomy to decide on the fees to be charged,

subject to the condition that such fees do not result in profiteering or

collection of capitation fees. The Committee was only required to ensure

that the fee charged was non­exploitative and reasonable. This Court

thus directed the Committee to reconsider the proposals submitted by

the colleges, by taking into account the factors mentioned in Section 11

2 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515. 

Page 6 of 32

of the 2017 Act and the law laid down in Modern Dental College &

Research Centre and Ors. v. State of Madhya Pradesh and Ors.

3

5.9While this Court was seized of the above­mentioned matter, various

self­financing   medical   colleges   and   their   NRI   students   initiated   a

second round of litigation before the High Court, this time, challenging

the amounts collected from NRI students to create the corpus fund to

benefit BPL students enrolled in the same institutes. The High Court

clubbed these writ petitions with the earlier petition filed by KMCT

Medical College, and has decided all these writ petitions through the

common Impugned Judgment.

5.10 The High Court, being conscious of the fact that the Committee was

considering the fee proposals afresh, as was directed by it  vide  the

judgement dated 19.05.2020, restricted its assessment only  qua  the

‘validity of the creation of the corpus fund.’  

5.11  The   question   that   was   formulated   by   the   High   Court   for   its

consideration was whether the creation of the corpus fund through the

GO dated 06.06.2018 could be sustained in the absence of law in the

form of plenary legislation or subordinate legislation. The High Court

opined that, regardless of the nature of the levy, such a fee could be

imposed only under the authority of law and not merely by an executive

order. Since there was no provision in the 2017 Act authorizing the

3 Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors.,

(2016) 7 SCC 353. 

Page 7 of 32

Committee or the State Government to levy an amount to be credited to

a   corpus   fund,   the   GO   dated   06.06.2018   could   not   be   sustained.

Accordingly, the GO was quashed and the directions, as specified in

paragraph 3 above, have been issued. 

5.12 This is how these cross­appeals have arisen for our consideration. 

B.CONTENTIONS OF THE PARTIES   

6.Mr. Kapil Sibal and Mr. Nikhil Goel, Learned Senior Counsel, appearing

on behalf of KMCT Medical College and other self­financing medical

colleges in the State, contended that the High Court has partly erred

and the Impugned Judgement deserves to be suitably modified in light

of the following submissions:

(a)This Court has time and again permitted institutions to charge a

higher amount of fees from NRI students as the fees paid by them

enable such institutions to strengthen their level of education and

enlarge   their   educational   activities.   KMCT   Medical   College   has

always followed this dictum and has been using the enhanced fees

levied  on  NRI  students  to grant   scholarships  to students  from

economically­weaker sections of society. For instance, in 2014 and

2015, KMCT Medical College awarded scholarships worth Rs. 1.28

crores and Rs. 1.55 crores, respectively, to enable its students

Page 8 of 32

from   economically­weaker   sections   of   society   to   pursue   their

education. 

(b)The fee proposed to be charged from the NRI students was only Rs.

20 lakhs per annum, which is one of the lowest fees in the entire

country. KMCT Medical College charges only Rs. 5.5 lakhs per

annum as fees for general category students. Thus, if the tuition

fee for NRI students was further reduced from Rs. 20 lakhs to Rs.

15 lakhs, by virtue of the corpus fund, the college would be unable

to continue financing its day­to­day activities. Consequently, the

failure of the High Court to direct a refund, of the amount charged

from NRI students towards the corpus fund, to the institutions is

violative of Article 19 (1)(g) and Article 30 of the Constitution.

(c)The State or the Executive cannot impose any levy, whatever may

be the nature of it, through an executive order, except under the

authority of law. At present, there is no provision in the 2017 Act

which empowers the State or its machinery to impose any tax or

levy  of any  nature on self­financing  medical colleges. The only

power granted to the Committee is to satisfy itself that the fees

charged by the self­financing medical educational institutions do

not   lead   to   profiteering   or   payment   of   capitation   fees.   If   the

Committee finds the fees charged to be exploitative, it can propose

a different fee structure.  

Page 9 of 32

(d)Once the High Court quashed the GO dated 06.06.2018 on the

ground that the Committee was not authorized under law to create

a corpus fund, it could not have permitted such unauthorized

action to continue by directing that the amounts collected for the

corpus   fund   be   utilized   only   to   subsidize   education   for   other

students. The denial of a refund of the illegally­collected fees has

put the self­financing medical colleges under financial strain. 

(e)KMCT Medical College, like other self­financing medical colleges,

specifically requested the Committee to approve its fixation of fees

at Rs. 20 lakhs per annum for NRI students, under the expectation

that if approved, it would be able to utilize the entire amount of Rs.

20 lakhs for educational purposes and for running the institution.

It was improper and imprudent of the Committee to approve the

fees of Rs. 20 lakhs per annum, only to retain Rs. 5 lakhs for the

creation of the corpus fund. 

7.Mr. Shoeb Alam, Learned Senior Counsel, appearing on behalf of the

NRI students, supported the quashing of the GO dated 06.06.2018 but

contended that the High Court erred in disallowing a refund to them. In

furtherance of this, he adduced the following submissions:

(a)NRI students are admitted to colleges on a higher fee scale to

subsidize the fees of students from economically­weaker sections

of society. When an NRI student is admitted to a particular college,

the higher fees paid are utilized to subsidize the fees of a BPL

Page 10 of 32

student in that particular college, alone. It is unfair and unjust

that a higher fee charged from NRI students of a particular college

be   utilized   to  subsidize   the   fees   charged   in   another   college   or

multiple other colleges in the State. 

(b)Paragraph 67 of  P. A.  Inamdar (supra)  states that “each NRI

student   would   subsidize   two   other   students   belonging   to   the

economically and socially weaker sections.” Thus, if the fee fixed

for a general category student for a particular year is only Rs. 5

lakhs, there is no reason to fix the fees for NRI students above Rs.

15 lakhs as the NRI student would be subsidizing the fees of two

other   students   from   economically­weaker   backgrounds.   As   a

result, any amount levied as a corpus fund, without the authority

of law, is over and above the amount contemplated for an NRI

student to bear. 

(c)In addition to this, some colleges have forced the NRI students to

give post­dated cheques of Rs. 5 lakhs, in advance, to create the

corpus   fund.   The   NRI   students   are   thus   either   liable   to   be

refunded the amounts collected under the guise of setting up the

corpus fund or the amounts so collected must be set off against

their future fees. 

8.Per contra, Mr. Jayant Muth Raj, Learned Senior Counsel, appearing on

behalf of the State of Kerala, put forth the following submissions: 

Page 11 of 32

(a)The GO dated 06.06.2018 was issued in pursuance of paragraph

131 of  P. A. Inamdar (supra). The last line of paragraph 131

specifically permitted the Committee to create a mechanism  to

subsidize education through the fees collected from NRI students,

in the absence of State Legislation on the subject. The authority to

create the corpus fund thus, came primarily from the Constitution

Bench judgement of this Court, which, being the law of the land,

need not be supplemented or supplanted by any State Legislation

or Regulations.

(b)The conduct of the self­financing medical colleges is questionable

as they have collected the corpus fund amount of Rs. 5 lakhs in

advance from the NRI students who were admitted in the 2017­

2018 batch, even in respect of their second, third, fourth, and fifth

years. They collected Rs. 43.6 crores in total but remitted only Rs.

4.15 crores to the State for the purpose of the corpus fund. The

college   management   did   the   same   for   the   next   5   successive

batches  of NRI  students, i.e. the batches of  2018­2019, 2019­

2020, 2020­2021, 2021­2022, and 2022­2023. Rs. 145.45 crores

were collected from these batches for the corpus fund, but only Rs.

2 crores have been remitted to the corpus fund maintained by the

Commissioner for Entrance Examinations. Thus, the colleges have

retained a total of Rs. 182.9 crores from the batches of 2017­2018

to 2022­2023. As a direct corollary to such action, the State of

Page 12 of 32

Kerala’s   larger   objective,   of   subsidizing   education   for   students

from economically­weaker sections of society, has been frustrated. 

9.Mr. Gaurav Aggarwal, Learned Senior Counsel, appearing on behalf of

the   intervenors, i.e.   certain   BPL   students   admitted   to   various   self­

financing   medical   colleges   across   Kerala,   supported   the   GO   dated

06.06.2018 and put forth the following submissions: 

(a)The GO dated 06.06.2018 was adopted as a welfare measure by

the State of Kerala. The object of the GO dated 06.06.2018 was

laudable and the observations of this Court in  P. A. Inamdar

(supra) clearly compel the State to adopt such a course of action.

The GO dated 06.06.2018 should not have been quashed merely

due   to   the   absence   of   legislative   support.   The   Courts   should

ordinarily   not   interfere   with   a   policy   decision   of   the   Executive

unless the same is mala fide, unreasonable, arbitrary, or unfair. 

(b)After the High Court directed that no further amount should be

credited towards the corpus fund, many BPL students have been

finding   it   difficult   to   continue   their   studies   due   to   financial

hardships. Not only this, the self­financing medical institutions are

exerting pressure on BPL students to remit the regular tuition fees.

These students chose to take admission to the respective colleges,

with   the   understanding   that   they   would   only   have   to   pay

subsidized fees. Since they no longer receive BPL scholarships,

Page 13 of 32

they have been unable to pay their tuition and hostel fees and

many of them will be forced to discontinue their studies. 

C.ISSUES   

10.Having   given   our   thoughtful   consideration   to   the   submissions   at

length, we find that the following issues arise for our consideration: 

i.Whether the Committee had the power to determine and direct

that a particular amount of the fees charged to NRI students be

kept in a corpus fund maintained by the State?

ii.Whether the NRI students are entitled to a refund of the amount

so charged or whether it can be set off against fees to be charged

for later years? 

D.ANALYSIS   

D.1 Issue No. 1: Power of the Committee to direct the creation of a

corpus fund for scholarships

11.To  understand and deduce the powers  of the Committee, we must

conduct a detailed examination of the two sources from where it is

stated   to   have   derived   its   powers:   (i)   The   Constitution   Bench

Judgement of this Court in P. A. Inamdar (supra); and (ii) Section 8A

and Section 11 of the 2017 Act.

D.1.1   The   Constitution   Bench   Judgement   of   this   Court   in   P.   A.

Inamdar (supra)

Page 14 of 32

12.Before we delve into the analysis, it will be useful to reproduce the text

of paragraph 131 of  P. A. Inamdar (supra)  to appreciate the rival

submissions raised by the parties. It elucidates that:

“131. Here itself we are inclined to deal with the question

as to seats allocated for Non­Resident Indians (“NRI” for

short) or NRI seats. It is common knowledge that some of

the institutions grant admissions to a certain number of

students under such quota by charging a higher amount of

fee. In fact, the term “NRI” in relation to admissions is a

misnomer. By and large, we have noticed in cases after

cases coming to this Court, neither the students who get

admissions under this category nor their parents are NRIs.

In effect and reality, under this category, less meritorious

students, but who can afford to bring more money, get

admission. During the course of hearing, it was pointed

out that a limited number of such seats should be made

available as the money brought by such students admitted

against NRI quota enables the educational institutions to

strengthen their level of education and also to enlarge their

educational activities. It was also pointed out that people

of Indian origin, who have migrated to other countries,

have a desire to bring back their children to their own

country   as   they   not   only   get   education   but   also   get

reunited with the Indian cultural ethos by virtue of being

here. They also  wish the  money which  they would  be

spending elsewhere on education of their children should

rather reach their own motherland. A limited reservation of

such seats, not exceeding 15%, in our opinion, may be

made available to NRIs depending on the discretion of the

management subject to two conditions. First, such seats

should be utilised bona fide by NRIs only and for their

children   or   wards.   Secondly,   within   this   quota,   merit

should not be given a complete go­by.  The amount of

money, in whatever form collected from such NRIs,

should be utilised for benefiting students such as

from   economically   weaker  sections   of   the   society,

whom,   on   well­defined   criteria,   the   educational

institution   may   admit   on   subsidised   payment   of

their fee. To prevent misutilisation of such quota or

any   malpractice   referable   to   NRI   quota   seats,

suitable   legislation   or   regulation   needs   to   be

framed. So long as the State does not do it, it will be

Page 15 of 32

for   the   Committees   constituted   pursuant   to   the

direction in Islamic Academy [(2003) 6 SCC 697] to

regulate.”

[Emphasis supplied]

13.In this regard, the State of Kerala and the intervenor­BPL students

have   vehemently   asserted   that   this  Court,   in   the   above­reproduced

paragraph, has unequivocally obligated each institution to subsidize

the   fees   charged   to   students   from   economically­weaker   sections   of

society through fees paid by NRI students. Until suitable legislation is

made   by   the   State,   the   Committee   is   obliged   to   regulate   such

subsidization. The Committee, therefore, was justified in creating the

corpus fund. 

14.Per contra, KMCT Medical College, other self­financing medical colleges,

and some NRI students contend that P. A. Inamdar (supra) does not

grant the Committee the power to create a corpus fund; the power to do

so resides only with the State. The relevant paragraph only grants the

Committee   the   ability   to   regulate   admissions   to   the   NRI   quota   to

prevent its misutilization.  

15.It is clear that paragraph 131 of P. A. Inamdar (supra) validates and

encourages the idea of charging higher fees to NRI students in order to

subsidize   education   for   students   from   economically­weaker   or

backward sections of society, who are admitted to those colleges. This

aligns with the ideals of a welfare State. It cannot possibly be contested

that the Committee, in the instant case, has not been constituted in

Page 16 of 32

line with the directives given by the 5­judge Bench of this Court in

Islamic Academy of Education v. State of Karnataka .

4

 

16.On a thorough reading of the paragraph, it further appears that the

powers granted to the Committee only concern the rules of allotment of

seats   in   the   NRI   quota,   with   particular   emphasis   on   preventing

misutilization of the allotted quota and seats. The Committee is also

permitted to frame such rules only till the time the State fails to do so.

From   the   phrase,   “To   prevent   misutilisation   of   such   quota   or   any

malpractice referable to NRI quota seats,” which precedes the State’s

mandate to enact a suitable Legislation or frame Regulations, it is clear

that the Committee constituted in Islamic Academy (supra) has been

authorized to regulate NRI admissions. The power conferred on the

Committee,   in   this   regard,   is   necessarily   meant   to   prevent

misutilization of the NRI quota or any malpractice referable to that

quota. Conversely, the above­reproduced paragraph is silent on the

creation of any mechanism to subsidize fees for other students and

does   not   confer   any   power   on   the   Committee   in   this   regard.   It   is

difficult to accept that the Committee can create a corpus fund on the

strength of the transitional powers given to it in P. A. Inamdar (supra).

The power to formulate creative solutions, such as a corpus fund, to

benefit students from economically­weaker sections of society resides

only with the State, which should be introduced through appropriate

Legislation or Regulations. 

4 Islamic Academy of Education v. State of Karnataka, (2003) 6 SCC 697, para 7. 

Page 17 of 32

17.The last line of paragraph 131, which mentions that the Committee will

act as per the directions issued in Islamic Academy (supra), leaves no

room to doubt that the powers of the Committee to regulate NRI seats

are not boundless. For better appreciation, it will be useful, at this

stage,  to refer  to  paragraph  7  of  Islamic  Academy  (supra),  which

pertains to the constitution and the powers of the Committee. It reads

as follows: 

“7. So far as the first question is concerned, in our view

the majority judgment is very clear. There can be no fixing

of a rigid fee structure by the Government. Each institute

must have the freedom to fix its own fee structure taking

into consideration the need to generate funds to run the

institution   and   to   provide   facilities   necessary   for   the

benefit of the students. They must also be able to generate

surplus which must be used for the betterment and growth

of   that   educational   institution.   In   paragraph   56   of   the

judgment   it   has   been   categorically   laid   down   that   the

decision on the fees to be charged must necessarily be left

to the private educational institutions that do not seek and

which   are   not   dependent   upon   any   funds   from   the

Government. Each institute will be entitled to have its own

fee structure. The fee structure for each institute must be

fixed   keeping   in   mind   the   infrastructure   and   facilities

available,   the   investments   made,   salaries   paid   to   the

teachers   and   staff,   future   plans   for   expansion   and/or

betterment of the institution etc. Of course there can be no

profiteering and capitation fees cannot be charged. It thus

needs to be emphasized that as per the majority judgment

imparting of education is essentially charitable in nature.

Thus the surplus/profit that can be generated must be

only   for   the   benefit/use   of   that   educational   institution.

Profits/surplus cannot be diverted for any other use or

purpose and cannot be used for personal gain or for any

other   business   or   enterprise.   As,   at   present,   there   are

statutes/regulations which govern the fixation of fees and

as this Court has not yet considered the validity of those

statutes/regulations,  we direct that in order to give

effect to the judgment in T.M.A. Pai case [(2002) 8

Page 18 of 32

SCC   481]   the   respective   State

Governments/concerned   authority   shall   set   up,   in

each State, a committee headed by a retired High

Court Judge who shall be nominated by the Chief

Justice of that State. The other member, who shall be

nominated   by   the   Judge,   should   be   a   Chartered

Accountant   of   repute.   A   representative   of   the   Medical

Council of India (in short “MCI”) or the All India Council for

Technical Education (in short “AICTE”), depending on the

type of institution, shall also be a member. The Secretary

of the State Government in charge of Medical Education or

Technical   Education,   as   the   case   may   be,   shall   be   a

member and Secretary of the Committee. The Committee

should  be   free   to   nominate/co­opt   another  independent

person of repute, so that the total number of members of

the   Committee   shall   not   exceed   five.   Each   educational

institute must place before this Committee, well in advance

of the academic year, its proposed fee structure. Along

with  the  proposed  fee   structure   all  relevant  documents

and books of accounts must also be produced before the

Committee for their scrutiny. The Committee shall then

decide whether the fees proposed by that institute

are  justified  and  are not  profiteering or  charging

capitation fee. The Committee will be at liberty to

approve the fee structure or to propose some other

fee which can be charged by the institute . The fee

fixed by the Committee shall be binding for a period of

three years, at the end of which period the institute would

be at liberty to apply for revision. Once fees are fixed by

the Committee, the institute cannot charge either directly

or indirectly any other amount over and above the amount

fixed as fees. If any other amount is charged, under any

other   head   or   guise   e.g.   donations,   the   same   would

amount   to   charging   of   capitation   fee.   The

Governments/appropriate   authorities   should   consider

framing   appropriate   regulations,   if   not   already   framed,

whereunder if it is found that an institution is charging

capitation   fees   or   profiteering   that   institution   can   be

appropriately   penalised   and   also   face   the   prospect   of

losing its recognition/affiliation.”

[Emphasis supplied]

18.It becomes evident from the above extract that the Committee may only

decide whether the fees proposed by the institution are exploitative or

Page 19 of 32

not. Islamic Academy (supra) makes no mention of the Committee’s

discretionary   power   to   divert   a   part   of   the   approved   fees   for   any

purpose,   howsoever   noble   it   may   be,   including   for   the   purpose   of

creating a corpus fund. Once the colleges submit their proposals to it,

the Committee must examine all the heads to determine whether such

proposed   fee   is   reasonable.   The   Committee   is   also   empowered   to

propose   an   alternative   fee   structure   in   the   event   of   profiteering   or

charging of capitation fee by the college. 

19.A conjoint reading of paragraph 131 of  P. A. Inamdar (supra)  and

paragraph 7 of  Islamic Academy (supra)  amplifies the idea that the

Committee’s power is not limitless. Such a combined reading leads us

to the conclusion that: (i) the Committee is competent to prescribe fees

in   respect   of   the   NRI   quota   in   self­financing   medical   educational

institutions   until   the   State   enacts   appropriate   Legislation   or

Regulations;   and   (ii)   the   Committee   cannot   draw   unlimited   powers

under the guise of ‘regulation of NRI quota/seats.’ In other words, the

Committee can only make rules for admission to such seats and can

review the fees charged to NRI students to ensure that they are not

exploitative. This is the cumulative power granted to the Committee

within   which   it   must   act.   The   Committee   cannot   perforate   these

bounds unless and until  its  power  is expanded through a  suitable

Legislation or upon a direction by this Court. 

Page 20 of 32

20.In light of the above, it is evident that paragraph 131 of P. A. Inamdar

(supra)  does   not   clothe   the   Committee   with   the   power   to  create   a

corpus fund for the benefit of economically­weaker students. It only

directs the State to come up with a suitable plan to subsidize their

education through the fees charged from NRI students. The Committee

cannot usurp the powers vested in the State in this regard.  

D.1.2 Section 8A and Section 11 of the 2017 Act

21.Given that we have established the confines of the directions in P. A.

Inamdar (supra), it is also necessary to ascertain whether the State

has   accounted   for   the   proposed   scholarship   scheme/corpus   fund

through the aegis of the 2017 Act, which constitutes the Committee

and regulates its functions. 

22.Before we proceed further, we must take a glance at Section 8A and

Section 11 of the 2017 Act. These provisions read as follow:  

“8A.   Powers   and   functions   of   the   Fee   Regulatory

Committee: (1) The Committee shall exercise the following

powers and perform the following functions, namely: (a)

require a private medical educational institution to furnish,

within a specified date, information, documents or records

as   may   be   necessary   for   enabling   the   Fee   Regulatory

Committee to determine the fee that may be charged by

the institution in respect of each medical course; 

[***]

hear complaints with regard to admission in contravention

of the provisions of this Act or the rules made thereunder

either on receipt of a complaint or suo motu and shall: 

[***]

Page 21 of 32

(2)  The [Fee Regulatory Committee] shall, for the purpose

of making any enquiry under this Act, have all the powers

of a civil court under the Code of Civil Procedure, 1908

(Central Act 5 of 1908) while trying a suit in respect of the

following matters, namely: (a) summoning and enforcing

the attendance of any witness and examining him on oath;

(b)   requiring   the   discovery   and   production   of   any

document; (c) receiving evidence on affidavit. 

(3) The fee determined by the Fee Regulatory Committee

shall   be  applicable  to  a   student   who  is   admitted   to  a

private medical educational institution in that academic

year and shall not be revised till the completion of his

course   in   the   said   institution   or   University.   No   private

medical   educational   institution   shall   collect   a   fee

amounting to more than one year's fee from a student in

an academic year. Collection of more than one year's fee in

an   academic   year   shall   be   construed   as   collecting   of

capitation fee and shall be liable to be proceeded against.

(4) The Fee Regulatory Committee may, if it is satisfied

that there has been any violation by such institution of the

provisions   of   this   Act   or   the   rules   made   thereunder

regarding [***] fees, it may recommend to the Government

to   take   the   following   actions   against   such   institution,

namely: 

(a) impose a monetary fine up to ten lakh rupees on the

institution together with interest thereon at the rate of

twelve per cent per annum which shall be recovered as

if it were an arrear of public revenue due on land; 

(b) order the institution to refund to the student within

such time as specified in the order, any amount received

by the institution in excess of the fees fixed by the Fee

Regulatory Committee or any amount received by way

of capitation fee or any amount received for profiteering:

Provided that if the institution fails to refund the amount

within the specified time to the student, the same shall

be recoverable along with interest thereon at the rate of

twelve per cent per annum as if it were an arrear of

public revenue due on land and paid to the student; 

(c)   recommend   to   the   University   or   the   appropriate

authority to withdraw the recognition of the institution; 

(d) any other course of action, as it deems fit. 

Page 22 of 32

(5)   Before   recommending   to   the   Government   to   initiate

actions under subsection (4) the institutions shall be given

a reasonable opportunity of being heard.

11.   Factors   for   determination   of   fee:  (1)   the   Fee

Regulatory Committee shall determine the fee considering

the following factors, namely: 

(a)   the   location   of   the   private   medical   educational

institution;

(b) the nature of the medical course; 

(c) the cost of land and building; 

(d)   the   available   infrastructure,   teaching   and   non­

teaching staff and other equipments; 

(e) the expenditure on administration and maintenance

of the medical educational institution; 

(f)   a   reasonable   surplus   required   for   growth   and

development of the medical educational institution; 

(g) any other relevant factor. 

(2) The Fee Regulatory Committee shall, before fixing any

fee, give the institution a reasonable opportunity of being

heard: 

Provided   that   no   such   fee   as   may   be   fixed   by   the

Committee   shall   amount   to   profiteering   or

commercialization of education.” 

23.Relying upon these provisions, the NRI students and the self­financing

medical colleges support the Impugned Judgement to the extent that

the GO dated 06.06.2018 was quashed on the premise that the State

could not levy any amount without statutory backing permitting such

levy. They contend that, at present, there is no provision in the 2017

Act which empowers the State or its machinery to impose any fee or

levy of any nature on self­financing medical educational institutions for

the purpose of creating a corpus fund. 

Page 23 of 32

24.Per contra, the State of Kerala and the intervenor­BPL students contend

that the GO dated 06.06.2018 did not offend any provision of the 2017

Act and was issued as a welfare measure by the State; to ensure that

meritorious students belonging to weaker sections of society receive the

opportunity to pursue quality education. The GO dated 06.06.2018

specifically authorized the Committee to levy an amount towards the

creation of a corpus fund for such laudable purpose. There was thus,

no need for the insertion of any provision in the Statute.  

25.It is well­settled law that a recourse to expropriatory measures cannot

be sheltered under a piece of subordinate Legislation, save and except

where the power is drawn from the competent Legislation. The power to

levy tax or fee cannot be delegated to the Executive unless the principal

Statute expressly authorizes to do so. Though the Committee indeed

enjoys vast powers and functions under Section 8A of the 2017 Act, as

reproduced above, such power is exercisable only for the purpose of

determining the fee structure of the self­financing medical educational

institutions. To put it in simpler terms, there is nothing discernible in

Section 8A of the 2017 Act, based on which the Committee can assert

its power to divert a part of the fee determined by it or issue a direction

regarding how such diverted fee is to be utilized. We also find that

Section 8A of the 2017 Act does not permit the levy of any amount

which will ultimately be retained by the State, regardless of its purpose.

Similarly, Section 11 of the 2017 Act does not require the Committee to

consider the creation of scholarships as a relevant factor to determine

Page 24 of 32

and approve the fee proposal submitted by a particular institution.

Even assuming that the creation of a corpus fund for scholarships can

be protected under the omnibus clause (g) of Section 11, whereunder

the Committee can take into account “any other relevant factor” while

determining the fee structure, such power cannot be exercised unless

the Legislature authorizes the Committee to create a corpus fund or to

prescribe its utility.   

26.For the reasons aforesaid, the High Court was correct in striking down

the GO dated 06.06.2018 as devoid of any authority of law. 

27.At this juncture, it is pertinent to clarify that though we appreciate the

State’s   initiative   to   implement   the   welfare   measures   envisioned   in

paragraph 131 of P. A. Inamdar (supra), the same cannot be justified

when it is implemented without the proper authority of law. Howsoever

laudable, pious, or noble the objective behind the GO dated 06.06.2018

may be, it cannot be legitimized unless its genesis is traceable to a

legislative action. 

D.2 Issue No. 2: The NRI students’ entitlement towards a refund or  

set­off 

28.Since we have firmly set forth that the corpus fund could not have been

created or maintained by the Committee, we must turn our attention to

the next pressing issue, i.e. whether the NRI students are entitled to a

refund   of   the   amount   so   collected   or   whether   it   should   be   set­off

against fees charged for later years? 

Page 25 of 32

29.The NRI students contend that when the imposition of such an amount

has been held to be illegal, there is no reasonable justification for the

State or the self­financing medical colleges to retain it. Further, these

students   claim   that   paragraph   67   of  P.   A.   Inamdar   (supra)  only

requires   an   NRI   student   to   subsidize   two   other   students’   fees.

Accordingly, it is their specific contention that when the fees for regular

students are set at Rs. 5 lakhs per annum, the NRI students cannot be

charged more than Rs. 15 lakhs per annum. 

30.Contrarily, the self­financing  medical colleges contend that the fees

charged under the heading of ‘corpus fund’ should be returned to them

to enable their continued functioning. The amounts collected for the

corpus   fund   were   unfairly   deducted   from   the   proposals   submitted,

leaving the colleges to function with fees much lower than what was

genuinely projected by them. The fees charged from NRI students are

utilized not only to subsidize education for students from economically­

weaker   backgrounds   but   also   for   various   upkeep   and   continuous

development expenses to improve the quality of education.   

31.The State of Kerala, however, contends that though the self­financing

medical colleges were required to remit Rs. 5 lakhs received from each

NRI student to the corpus fund, they have not been doing so. As a

result, the colleges have retained a total of Rs. 182.9 crores from the

batches of 2017­2018 to 2022­2023.  

Page 26 of 32

32.Two 5­judge Benches of this Court in  Islamic Academy (supra)  and

Modern   Dental   College   (supra)  have   unequivocally   held   that   the

Government   cannot   fix   rigid   fee   structures   for   self­financing

institutions. Further, each institute must have the freedom to fix its

own fee structure by taking into consideration the need to generate

funds to run the institution and to provide facilities necessary for the

benefit   of   the   students.   These   institutes   are   permitted   to   generate

surplus, which must be used for the betterment and growth of that

educational institution. The fee structure for each institute must be

fixed keeping in mind the infrastructure and facilities available, the

investments made, salaries paid to the teachers and staff, future plans

for expansion and/or betterment of the institution, etc. Though the fees

may   differ   from   one   institution  to   another,   owing  to   the   quality   of

education imparted, no institution can be permitted to charge excessive

or exploitative fees leading to profiteering or charging of capitation fees. 

33.The cited judgements have further explained that the fees collected

from NRI students can be utilized for a variety of purposes, including

but   not   limited   to   subsidizing   fees   for   other   students   through

scholarships.   Accordingly,   the   fees   for   NRI   students   cannot   be

determined solely considering the factor of subsidization of education;

all the above­stated factors must be taken into account. Resultantly,

the NRI students’ contention that their fees should be restricted to only

subsidize the education of only two students from economically­weaker

Page 27 of 32

sections of society falls flat and cannot be considered a valid reason for

a refund. 

34.When a self­financing medical educational institution presents its fee

proposal for a particular academic year, it has done so keeping in mind

its   own   needs,   present   and   future.   It   is   the   responsibility   of   the

Committee  to  consider  all  the  comprehensive  requirements  and the

principles   enunciated   in  Islamic   Academy   (supra)  and  Modern

Dental   College   (supra),   when   assessing   those   proposals.   The

Committee must ascertain that the fees proposed will not exploit the

students and lead to profiteering by the management of the medical

colleges. This is why such Committees have been set up, not just in

Kerala, but in various States across the country. 

35.Since the self­financing institutions are the best judge of their own

needs and expenses, there appears to be no reason why they cannot

retain the amount that was to be transferred to the corpus fund, when

those amounts came out of the fee structures already approved by the

Committee.   By   approving   the   proposals   at   the   relevant   time,   the

Committee has signified that the fees proposed to be charged were

reasonable and did not amount to profiteering. 

36.In the same vein, self­financing medical educational institutions that

were aggrieved by the Committee’s actions and sought reconsideration

of   their   proposals   from   2017­2018   onwards   by   virtue   of   directions

Page 28 of 32

issued   by   this   Court   in  Najiya   Neermunda   v.   Kunhitharuvai

Memorial Charitable Trust,

5

  are also entitled to retain the amount

claimed by the State under the heading of ‘corpus fund,’ if any.  

37.After allowing the colleges to retain the fees which were to be diverted

towards the corpus fund, we are of the considered view that the self­

financing medical educational institutions are under the obligation to

provide quality education to the BPL students who were admitted to

those colleges. No additional fees of any nature, therefore, shall be

charged from the BPL students, over and above the subsidized fee that

they   were   required   to   pay   as   per   the   Committee’s   approved   fee

structure. To clarify, a substantial part of the amount which we have

allowed the colleges to retain shall have to be utilized by them for

subsidizing the education of the BPL students. The Committee or the

State Government shall, in this regard, be well within their right to

direct the colleges to furnish their accounts and establish that the

directions issued hereinabove have been complied with. To this extent,

the   self­financing   medical   educational   institutions   are   merely

designated   as   the   trustees   of   the   ‘corpus   fund’   amount,   without

permitting it to be utilized by them as per their own free will. Such an

arrangement shall continue till an appropriate Legislation is enacted by

the State.

5 Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust, (2021) 5 SCC 515. 

Page 29 of 32

38.This   batch   of   appeals   and   their   parallel   proceedings   have   caused

confusion and chaos for medical education in the State of Kerala for

years.   This   case   seems   to   be   the   closing   act,   which   will   hopefully

provide finality and certainty to all the stakeholders. 

E.CONCLUSION AND DIRECTIONS   

39.In light of above discussion, we deem it appropriate to allow the appeal

by the self­financing medical colleges in part; dismiss the appeals filed

by the State of Kerala and the NRI students; and modify the Impugned

Judgment   of   the   High   Court   dated   23.07.2020,   with   the   following

directions and conclusions:

i.The High Court was correct in quashing the Government Order

(MS) No. 107/2018/H&FWD dated 06.06.2018; 

ii.If the State seeks to establish a corpus fund or any other such

mechanism   to   subsidize   education   for   students   from   weaker

backgrounds, in line with the vision enshrined in P. A. Inamdar

(supra), it may do so by enacting suitable Legislation to that effect;

iii.The self­financing medical colleges are entitled to retain the fees

transferred   to   the   State   for   the   creation   of   the   ‘corpus   fund’

substantially for the purpose of subsidizing the fees charged to

BPL students admitted to  those  colleges,  as per  the directions

contained in paragraph 37 of this judgement;

Page 30 of 32

iv.The BPL students, who were admitted on the basis of scholarship

schemes or who are to be admitted in future, shall not be required

to pay the full, regular fees. They will continue to pay fees at the

subsidized rate fixed by the State or the Committee. If they have

paid any fees, over and above the subsidized amount promised,

they are entitled to a refund of the amounts so paid. Alternatively,

those amounts may be set­off against the fees to be charged for

later years. Such a refund must be made within 3 months; 

v.The State of Kerala is directed to release the fees collected for the

creation of a corpus fund back to the respective colleges within a

period   of   3   months   without   prejudice   to   the   right   and

responsibility assigned in paragraph 37 of this judgement;

vi.The   NRI   students   are   not   entitled   to   a   refund   of   the   amount

transferred to the State for the creation of the ‘corpus fund.’ They

are directed to pay the entire fees to their respective colleges, as

approved by the Admission and Fee Regulatory Committee, if not

already done, within 3 months; and 

vii.The   State   of   Kerala   or   the   Admission   and   Fee   Regulatory

Committee   is   at   liberty   to   direct   the   colleges   to   furnish   their

accounts to establish that the directions given herein have been

complied with.

Page 31 of 32

40.Ordered accordingly. Pending applications if any, are to be disposed of

in the above terms. 

 ..............…….........J.

                           (SURYA KANT)

      ............................................…….........J.

                         (NONGMEIKAPAM KOTISWAR SINGH)

NEW DELHI;

MAY 16, 2025

Page 32 of 32

Description

Supreme Court Clarifies NRI Fee Regulation and Medical Education Funding in Landmark Ruling (2025 INSC 518)

The Supreme Court of India's recent decision in 2025 INSC 518, a crucial Civil Appeal, addresses complex issues surrounding NRI Fee Regulation in Medical Colleges and mechanisms for Subsidized Medical Education. This landmark ruling, now available on CaseOn.in for detailed analysis, clarifies the scope of regulatory powers concerning fee fixation and the creation of corpus funds in self-financing medical institutions, setting a significant precedent for future cases.

The Genesis of the Dispute

The controversy originated from a direction by the Kerala State Admission and Fee Regulatory Committee to create a corpus fund. This fund, intended to subsidize medical education for Below Poverty Line (BPL) students in self-financing medical institutions, was to be generated by collecting a portion of fees from Non-Resident Indian (NRI) students. The Kerala High Court subsequently quashed the Government Order (GO) mandating this fund, leading to a series of cross-appeals from the State of Kerala, the medical colleges, and the NRI students themselves.

Issue(s) at Hand

The Supreme Court crystallized the core legal questions as:

  1. Whether the Admission and Fee Regulatory Committee possessed the authority to determine and direct that a specific portion of the fees charged to NRI students be allocated to a corpus fund maintained by the State.
  2. Whether the NRI students were entitled to a refund of the amounts collected for this corpus fund, or if these amounts could be adjusted against fees for subsequent academic years.

Governing Legal Principles and Precedents

To resolve these issues, the Court delved into foundational judgments and statutory provisions:

P. A. Inamdar and Ors. v. State of Maharashtra (2005)

This pivotal judgment, particularly paragraph 131, acknowledges that a limited number of NRI seats (not exceeding 15%) can be offered, allowing institutions to charge higher fees. The rationale is that these funds should benefit students from economically weaker sections, thus enabling institutions to strengthen their educational standards. It also stated that suitable legislation or regulation is needed to prevent misuse of such quotas, with the Committee acting in a transitional regulatory capacity until such laws are framed.

Islamic Academy of Education v. State of Karnataka (2003) and Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors. (2016)

These judgments established that private unaided professional institutions have the autonomy to fix their fee structures. However, this autonomy is subject to regulation to prevent profiteering or the collection of capitation fees. Fees must be reasonable, non-exploitative, and consider various factors such as infrastructure, salaries, and institutional growth.

The Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017

Sections 8A and 11 of the 2017 Act delineate the powers and functions of the Admission and Fee Regulatory Committee. Primarily, the Committee is tasked with determining a fair fee structure for private medical educational institutions, ensuring that fees do not lead to profiteering. The Act lists specific factors for fee determination, including operational costs, infrastructure, and a reasonable surplus for growth.

Analysis of the Supreme Court's Reasoning

The Supreme Court meticulously analyzed the arguments in light of the established legal framework.

Committee's Power to Create a Corpus Fund

The Court found that while P. A. Inamdar encouraged using higher NRI fees to subsidize economically weaker sections, it did not vest the Committee with the power to *create* a corpus fund or divert a part of the approved fees for this purpose. The transitional powers granted to the Committee were primarily for regulating NRI admissions to prevent misutilization, not for formulating creative financial solutions like corpus funds. Such measures, the Court stressed, require legislative backing from the State.

Crucially, the Court noted that neither Section 8A nor Section 11 of the 2017 Act explicitly empowered the Committee or the State to impose a levy for a corpus fund. The Committee's authority under the Act is confined to determining a reasonable fee structure and preventing profiteering, not to dictate the utilization of specific fee portions or create new levies without statutory sanction.

Thus, the High Court's decision to quash the GO dated 06.06.2018, which lacked the necessary authority of law, was upheld. The Court acknowledged the laudable objective behind the GO but emphasized that even welfare measures must originate from proper legislative action.

NRI Students' Entitlement to Refund vs. Colleges' Retention

This aspect of the case involved conflicting claims from NRI students (seeking refund) and medical colleges (seeking to retain the funds). NRI students argued that the levy was illegal and that their higher fees should only subsidize a limited number of BPL students in their specific institution, implying a cap on how much could be charged beyond a certain threshold.

The self-financing medical colleges contended that the amounts designated for the corpus fund were deducted from their proposed fee structures, impacting their ability to finance day-to-day operations and improve educational quality. They argued that NRI fees contribute to overall institutional development, not just specific subsidies.

Understanding the nuances of these multi-layered judgments, like how P. A. Inamdar is interpreted alongside the 2017 Act regarding regulatory powers, can be challenging. For legal professionals and students grappling with such complexities, CaseOn.in's 2-minute audio briefs provide a concise yet comprehensive analysis, helping to quickly grasp the core arguments and judicial reasoning behind these specific rulings.

The Supreme Court sided with the self-financing medical colleges on the issue of retention. It reiterated that fees for NRI students are determined by a multitude of factors—including infrastructure, staff, investments, and future growth plans—not solely by the subsidization of two other students. Since the Committee had initially approved the overall fee structures, the colleges were deemed to be the best judges of their institutional needs and expenses.

Colleges as Trustees and Relief for BPL Students

While allowing colleges to retain the fees that were initially intended for the corpus fund, the Court imposed a crucial obligation: a substantial part of these retained funds *must* be utilized by the colleges to subsidize the education of BPL students admitted to *their own institutions*. The colleges are effectively designated as “trustees” of this amount, implying that they cannot use it for purposes other than BPL student welfare. The Committee or the State Government retains the right to demand accounts to ensure compliance with this directive.

For BPL students, the Court directed that they should continue to pay fees at the subsidized rate. Any amounts they had paid above this subsidized rate must be refunded or set off against future fees within a period of three months.

Directions to the State of Kerala

The State of Kerala was directed to release any fees it had collected for the creation of the corpus fund back to the respective colleges within three months, subject to the colleges' obligation to utilize these funds for BPL students. The Court further clarified that if the State wishes to establish such a corpus fund or similar mechanism for student welfare, it must do so by enacting suitable legislation.

Conclusion and Directions

The Supreme Court allowed the appeals filed by the self-financing medical colleges in part, dismissed those from the State of Kerala and the NRI students, and modified the High Court's judgment with the following key directions:

  1. The High Court's decision to quash the Government Order (MS) No. 107/2018/H&FWD dated 06.06.2018 was affirmed.
  2. The State may establish mechanisms to subsidize education for weaker backgrounds, but only by enacting suitable legislation.
  3. Self-financing medical colleges are entitled to retain the fees collected for the 'corpus fund,' with the strict understanding that a substantial part of these funds must be used for subsidizing BPL students admitted to *those specific colleges*, operating as trustees.
  4. BPL students are to pay only subsidized fees. Any overpayments must be refunded or set off against future fees within three months.
  5. The State of Kerala must release collected corpus fund fees back to the colleges within three months, subject to the colleges' responsibilities.
  6. NRI students are not entitled to a refund of the amount transferred for the corpus fund and must pay their entire approved fees to their respective colleges within three months, if not already done.
  7. The State or the Committee can direct colleges to furnish accounts to ensure compliance with these directions.

Why This Judgment is Crucial for Lawyers and Students

This judgment serves as a significant guidepost for several reasons:

  • Limits of Executive Power: It powerfully reaffirms the principle that executive orders cannot impose levies or create funds without explicit legislative backing, underscoring the importance of the rule of law.
  • Clarity on Fee Regulation: The ruling meticulously re-interprets and applies the principles from seminal cases like P. A. Inamdar, Islamic Academy, and Modern Dental College, offering clear guidance on fee fixation and the scope of regulatory committees.
  • Balancing Autonomy and Welfare: The Court strikes a delicate balance between the autonomy of self-financing institutions to manage their finances and the State's welfare objective of providing subsidized education to economically weaker sections.
  • Protection for Students: It provides concrete relief for BPL students, ensuring they receive the promised subsidies and are compensated for any overpayments.
  • Legislative Imperative: The judgment highlights the necessity for the State to enact comprehensive legislation for implementing policy initiatives, rather than relying on executive directives for significant financial measures.

Disclaimer

All information provided in this article is for informational purposes only and does not constitute legal advice. Readers are advised to consult with a qualified legal professional for advice on specific legal issues.

Legal Notes

Add a Note....