The Supreme Court has held that where students admitted to a private medical college are compelled, due to serious deficiencies and loss of recognition of that defaulting institution, to be relocated by judicial intervention to other private medical colleges, the interim concession of Government-rate fees granted to preserve their academic careers does not confer a permanent right to continue education at such subsidised rates.
In the absence of material showing availability of Government quota seats in the transferee colleges, the transferred students are to be treated as accommodated against private/management quota seats, and fee liability must be worked out accordingly, though the transferee colleges in the present case restricted their claim to SRMCH rates, clarified the Court.
The Court further held that the primary brunt of the financial liability must fall on the defaulting institution, SRMCH/Selvam Trust, because it cannot be permitted to derive benefit from its own wrong, and amounts secured by bank guarantees furnished by it with MCI/NMC, together with the amount deposited before the Court and accrued interest, can be directed to be disbursed to the transferee colleges in equal proportions.
The Court also held that the students are not wholly absolved of liability merely because they had earlier paid Government-rate fees under interim orders, Having completed the course and having undertaken to abide by final directions, they remain liable for outstanding fee obligations computed at SRMCH rates after adjustment of amounts already paid, and the transferee colleges may seek recovery of any deficit through representations to the NMC.
A Two-Judge Bench of Justice Vikram Nath and Justice Sandeep Mehta observed that the surviving controversy was confined to resolution of fee liability and its apportionment. It specifically framed the issues as whether transferred students were liable to pay Government-rate fees or private college rates, how any differential liability should be apportioned between the students and Selvam Trust, whether the State or MCI/NMC should make good the deficiency, and whether entire liability should be fixed on Selvam Trust.
On quota classification, the Bench held that the issue did not arise because there was no material on record to show that any of the transferee colleges had vacant Government quota seats. In the absence of such material, the Bench presumed that all transferred students were accommodated against private/management quota seats, and therefore the fee structure applicable to such seats had to govern the determination of liability and entitlement.
The Bench noted that inspections in academic year 2014-2015 had revealed serious and fundamental deficiencies in SRMCH relating to infrastructure, teaching faculty and other essential legal requirements for imparting medical education. It further observed that the Executive Committee of MCI/NMC had recommended denial of renewal for the second batch of 100 MBBS students for 2014-2015, that recommendation was accepted by the competent authority, and SRMCH’s challenge had been dismissed in limine, thereby lending credence to the findings of non-compliance, though without prejudicing rights of SRMCH in appropriate proceedings.
The Bench further noted that SRMCH had already collected Rs.4,25,000 per student, while only Rs.30,000 per student was permissible under the earlier directions for the relevant batch, and the authorities had directed refund of the excess Rs.3,95,000 per student. The Bench also found from the record that despite such direction, the excess amount had not been refunded and SRMCH/Selvam Trust continued to retain it.
The Bench observed that admissions to SRMCH were to a private medical institution with a higher fee structure, and students had consciously contracted to pay higher fees applicable to a private college, possibly without being able to secure admission in Government colleges on merit. Therefore, permitting them to continue enjoying Government-rate fees merely because of interim judicial orders would amount to unjust enrichment, even though the Court acknowledged the hardship and chaotic circumstances faced by them during transfer.
At the same time, the Bench held that the defaulting institution, SRMCH/Selvam Trust, could not be allowed to take benefit of its own follies. It invoked the maxim Commodum ex injuria sua nemo habere debet and observed that the students had paid fees expecting to complete their course without difficulty, but due to the deficiencies of SRMCH they were placed in grave risk, and thus the primary brunt of liability had to be fastened upon SRMCH/Selvam Trust, subject to lawful adjustments.
On the students’ liability, the Bench recorded that the students had effectively completed the MBBS course by paying only Government-rate fees, which were only a pittance of what they would have paid to SRMCH under normal circumstances. It noted that on the colleges’ own calculations, applying SRMCH rates, each set of transferred students would have paid approximately Rs.5,39,75,000 per college and the aggregate payable to the three colleges would work out to approximately Rs.16.2 crores, whereas the secured amount was only approximately Rs.14 crores, leaving a shortfall even on SRMCH fee standards.
Briefly, the appeals arose from orders of the High Court of Orissa concerning relocation of students from Sardar Rajas Medical College, Hospital and Research Centre, Jaring, Kalahandi, Odisha (“SRMCH”). During the pendency of the matter, the controversy narrowed from the legality of the High Court’s relocation directions to the issue of financial liability arising after this Court’s interim orders had facilitated relocation of students to recognised private medical colleges so that no academic year was lost.
Two MBBS batches of SRMCH, for academic sessions 2013-2014 and 2014-2015, had been admitted under the management of Selvam Educational and Charitable Trust. Inspections by the Medical Council of India/National Medical Commission revealed numerous deficiencies in infrastructure, facilities and regulatory compliance, resulting in denial of renewal of recognition and placing the academic future of the students in jeopardy. The High Court initially directed relocation of students from SRMCH to recognised medical colleges in the State and observed that Government quota students could be accommodated in Government colleges while management/private quota students could be accommodated in private institutions. This led to further controversy because such relocation to Government colleges was said to disturb the existing admission framework and affect more meritorious aspirants.
This Court thereafter passed interim orders regulating relocation and continuation of the students in other private institutions, while keeping open the issue of fee liability and financial adjustment. Pursuant to these directions, 124 students were affected; after one withdrawal and one non-admission, ultimately 122 students were provisionally relocated through State-supervised online counselling, with 41 students each going to KIMS and IMS and 40 to Hi-Tech Medical College. The transferee colleges stated that the transferred students had paid only Government-rate fees of approximately Rs.30,000 per annum pursuant to interim directions, and that too for a limited period, whereas substantial academic fees remained unpaid.
The students contended that they had been validly admitted to SRMCH, were forced to shift to private institutions for no fault of theirs, had already paid fees at Government rates in compliance with interim orders, and should not be burdened with further liability after completing their courses. Selvam Trust argued that findings regarding deficiencies were still under challenge, that its liability could not be conclusively determined in these proceedings, and that the entire financial burden should not be imposed upon it. The transferee colleges argued that they had imparted education, provided infrastructure and stipends, suffered financial loss, and were entitled to compensation of differential fees and stipend amounts with interest.
The MCI/NMC contended that fee structure should ordinarily be determined under the statutory and regulatory framework and argued for quota-based classification, while also submitting that the Rs.10 crores bank guarantee ought not to be adjusted towards dues of private colleges because it could be subject to regulatory disposition. The State of Odisha submitted that the admissions to SRMCH had been conducted through a valid State process and that quota classification should first be examined before deciding reimbursable fees.
Appearances:
Kedar Nath Tripathy, AOR, Aditya Narayan Tripathy, Adv., Prasad Hegde, Adv., for Appellants
Surekha Raman, Adv., Amarjit Singh Bedi, Adv., Shreyash Kumar, Adv., Sidharth Nair, Adv., Harshit Singh, Adv., Yashwant Sanjenbam, Adv., M/S. K J John And Co, AOR, Merusagar Samantaray, AOR, Kanishk, Adv., Anurag Yadav, Adv., Tharani Sre, Adv., V. Giri, Sr. Adv., M. Gireesh Kumar, Adv., Ankur S. Kulkarni, AOR, Sanjay Singh, Adv., Milind Kumar, AOR, Kedar Nath Tripathy, AOR, D. Geetha, Adv., Dr. Sushma Priyadarshana, Adv., Aswathi M.K., AOR, Anand Chandra Swain, Adv., Sunshine Anand Swain, Adv., Vaishnavi Sahoo, Adv., Janmejay Verma, Adv., Manish Chaurasia, Adv., Khushi Chhetri, Adv., Piyush Garg, Adv., S. K. Verma, AOR, Siddhartha Chowdhury, AOR, Anand Chandra Swain, Adv., Snehasish Mukherjee, Adv., Sunshine Anand Swain, Adv., Vaishnavi Sahoo, Adv., Akanksha Verma Chandok, Adv., Prateek Bhatia, AOR, Dhawal Mohan, Adv., Ashok Kumar Parija, Sr. Adv., Gaurav Khanna, Adv., Avnish Kumar Sharma, Adv., Ramendra Mohan Patnaik, AOR, for Respondents
