The Supreme Court recently ruled that a State's Admission and Fee Regulatory Committee cannot mandate the transfer of fees collected from Non-Resident Indian (NRI) medical students to a State-maintained corpus fund. This corpus fund was intended to subsidize education for students from Below Poverty Line (BPL) backgrounds. The Court directed the State of Kerala to refund the amounts collected from self-financing medical colleges for this corpus fund, affirming that these colleges have the right to retain the collected fees.
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The Court held that the Committee’s directive exceeded its authority, as highlighted in the judgments of P.A. Inamdar v. State of Maharashtra (2005) 6 SCC 537 and Islamic Academy of Education v. State of Karnataka. The Committee cannot issue such directions without legislative backing.
Quoting the Supreme Court’s judgment:
"A conjoint reading of paragraph 131 of P.A. Inamdar and paragraph 7 of Islamic Academy amplifies that the Committee's power is not limitless... The Committee can only set rules for admission to NRI quota seats and review fees to ensure they are not exploitative."
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The Supreme Court clarified that self-financing medical colleges are entitled to retain the NRI fees, especially since the fee structure was already approved by the Committee. The bench noted:
"Since self-financing institutions are the best judge of their own needs, there is no reason why they cannot retain the amount transferred to the corpus fund."
However, the Court ensured that BPL students in these colleges must continue to receive subsidized fees, and any excess amount paid by such students must be refunded within three months.
- BPL Students: They are entitled to a subsidized fee structure in self-financing medical colleges. Any excess fee paid beyond the subsidized amount must be refunded within three months.
- NRI Students: They are required to pay the full fee without any refund for the amount transferred to the State’s corpus fund.
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The Court emphasized that the Committee's role is limited to:
- Setting admission rules for NRI quota seats.
- Reviewing fees to prevent exploitation.
The directive to use NRI fees for a corpus fund for BPL students was beyond the Committee’s jurisdiction. The Court suggested that if the State wishes to maintain such a fund, it must do so through proper legislation.
Case Title: THE STATE OF KERALA Versus THE PRINCIPAL KMCT MEDICAL COLLEGE AND ORS., SLP(C) Nos. 9885-9888/2020 (and connected cases)
