LexTHE STATE OF KERALA ETC. ETC. versus THE PRINCIPAL, KMCT MEDICAL COLLEGE AND ORS. ETC. ETC.
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[2025] 5 S.C.R. 2593 : 2025 INSC 518 The State of Kerala Etc. Etc. v. The Principal, KMCT Medical College and Ors. Etc. Etc. (Civil Appeal No(s). 6908-6911 of 2025) 16 May 2025 [Surya Kant* and Nongmeikapam Kotiswar Singh, JJ.] Issue for Consideration (a) Whether the Admission and Fee Regulatory 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? (b) Whether the self-financing medical colleges are entitled to retain the fees collected for the corpus fund which were to be transferred to the State? Headnotes† Medical Education – Admission and Fee Regulatory Committee – Creation of a corpus fund for scholarships from fees of NRI students – Whether the Committee has the authority to create such a fund: Held: Reliance is placed upon the judgement of P.A. Inamdar and Ors. v. State of Maharashtra and Islamic Academy of Education v. State of Karnataka to establish that the Committee can only decide whether the fees proposed by the institution are exploitative or not — The Committee has no discretionary power to divert a part of the approved fees for any purpose — As such, the Committee cannot create a corpus fund for the benefit of economically weaker students — It can only direct the State to come up with a suitable plan to subsidize their education through the fees charged from NRI students — Recourse to expropriatory measures cannot be sheltered under a piece of subordinate legislation, unless where the power is drawn from the plenary legislation — There is nothing discernible in Sections 8A and 11 of the 2017 Act, based on which the Committee can assert its power to divert a part of the fee * Author 2594 [2025] 5 S.C.R. Supreme Court Reports determined by it or issue a direction how such diverted fee is to be utilised — The provisions also do not permit the levy of any amount which will ultimately be retained by the State, regardless of its purpose — The High Court was correct in striking down the GO dated 06.06.2018 since its objective is not traceable to a legislative action. [Paras 13-16, 18-21, 25-27] Medical Education – Fees for NRI students – Entitlement to refund of amounts paid to a corpus fund – Whether the NRI students are entitled to a refund of the amount transferred: Held: Reliance is placed upon the judgements of Islamic Academy of Education v. State of Karnataka and Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors. to establish that the NRI students are not entitled to a refund of the amount transferred for the creation of the corpus fund, as their fees are not determined solely by the factor of subsidization — The fees for NRI students are utilized for various purposes, including but not limited to subsidizing other students, and for upkeep and continuous development expenses to improve the quality of education — Self- financing institutions are the best judge of their own expenses and can 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. [Paras 33-36] Medical Education – Self-financing colleges – Entitlement to retain fees collected for a corpus fund – Obligation to utilize for BPL students: Held: Colleges are obligated to provide quality education and utilize a substantial part of these retained funds for subsidizing the education of the BPL students, admitted to their institutions — The colleges will act as trustees of the corpus fund amount and will have to furnish their accounts to the State or the Committee to establish compliance with this direction — Such an arrangement shall continue till an appropriate legislation is enacted by the State. [Para 37] Case Law Cited P.A. Inamdar and Ors. v. State of Maharashtra [2005] Supp. 2 SCR 603 : (2005) 6 SCC 537 – explained. [2025] 5 S.C.R. 2595 The State of Kerala Etc. Etc. v. The Principal, KMCT Medical College and Ors. Etc. Etc. Modern Dental College & Research Centre and Ors. v. State of Madhya Pradesh and Ors. [2016] 3 SCR 579 : (2016) 7 SCC 353; Islamic Academy of Education v. State of Karnataka [2003] Supp. 2 SCR 474 : (2003) 6 SCC 697 – relied on. Najiya Neermunda v. Kunhitharuvai Memorial Charitable Trust (2021) 5 SCC 515 – referred to. List of Acts The Kerala Medical Education (Regulation of Admission in Private Medical Educational Institutions) Act
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