Case Note & Summary
The Supreme Court addressed the financial liability arising from the relocation of 123 MBBS students from Sardar Rajas Medical College (SRMCH), run by the Selvam Educational and Charitable Trust, to three recognised private medical colleges in Odisha—Kalinga Institute of Medical Sciences (KIMS), Institute of Medical Sciences & SUM Hospital (IMS), and Hi-Tech Medical College & Hospital—following the denial of renewal of recognition to SRMCH due to infrastructural and regulatory deficiencies. The students, admitted in the 2013-2014 and 2014-2015 academic sessions, were relocated pursuant to High Court and Supreme Court orders to prevent loss of academic years. The transferee colleges provided education but received only government-rate fees (approx. Rs.30,000 per annum) from the students, while their actual fee structures were significantly higher (e.g., KIMS charged Rs.3,00,000 per semester). The Selvam Trust had deposited Rs.2 crores with the Supreme Court Registry and furnished Rs.10 crores in bank guarantees with the Medical Council of India (MCI). The legal issues centered on whether the students, the Selvam Trust, or the State should bear the additional fee burden. The students argued they were not at fault and had already paid government-rate fees. The Selvam Trust contended that its regulatory defaults were still under challenge and that it should not be solely liable. The transferee colleges sought full compensation for the education imparted. The MCI and State of Odisha advocated for quota-based fee classification. The Supreme Court held that the Selvam Trust must pay the difference between the fees of SRMCH and the transferee colleges to the latter, as the trust had collected fees from the students and was responsible for the situation. The students were directed to pay the fees they would have paid at SRMCH. The Court ordered that the Rs.2 crores deposited by the trust, along with accrued interest (totaling Rs.3,58,69,331), be disbursed to the transferee colleges proportionally, and that the trust pay the remaining balance within three months. The bank guarantees with MCI were to be released to the trust to facilitate payment. The Court emphasized equitable apportionment to prevent unjust enrichment and ensure that the transferee colleges are fairly compensated without burdening the students beyond their original liability.
Headnote
A) Education Law - Fee Liability - Equitable Apportionment - Medical Council Act, 1956 - Students relocated from a non-recognised college to recognised private colleges due to regulatory deficiencies - Court held that the defaulter trust must pay the difference between the fees of the original college and the transferee colleges, and students must pay the fees of the original college, to prevent unjust enrichment and ensure fair compensation (Paras 25-30). B) Education Law - Judicial Intervention - Relocation of Students - Medical Council Act, 1956 - Court directed relocation of students to preserve academic continuity - Held that the financial burden arising from such relocation must be equitably shared, not solely borne by the transferee colleges (Paras 4-11). C) Contract Law - Unjust Enrichment - Restitution - Court held that the Selvam Trust cannot avoid liability by challenging regulatory findings, as it received the benefit of fees from students and must compensate the transferee colleges for the education provided (Paras 19, 25-30).
Issue of Consideration
How should the financial liability for fees of students relocated from a non-recognised medical college to recognised private medical colleges be equitably apportioned among the students, the defaulter trust, and the transferee colleges?
Final Decision
The Supreme Court directed that the Selvam Trust pay the difference between the fees of SRMCH and the transferee colleges to the latter. The students are liable to pay the fees they would have paid at SRMCH. The Rs.2 crores deposited by the trust with the Registry, along with accrued interest (Rs.3,58,69,331), shall be disbursed to the transferee colleges proportionally. The trust must pay the remaining balance within three months. The bank guarantees of Rs.10 crores with MCI shall be released to the trust to facilitate payment. The transferee colleges are entitled to receive the fee difference with interest at 6% per annum from the date of relocation until payment.
Law Points
- Equitable apportionment
- fee liability
- relocation of students
- judicial intervention
- restitution
- unjust enrichment
