Recently, the Supreme Court held that students shifted from a derecognised private medical college cannot indefinitely continue to claim the benefit of Government-rate fees after completing their MBBS courses in private transferee institutions. While resolving the long-standing dispute relating to financial liability arising from relocation of medical students, the Court observed that neither the students can be given undue advantage or bonanza nor can the defaulting institution be permitted to take benefit of its own follies.
Brief facts:
The case arose from the academic crisis triggered after serious infrastructural and regulatory deficiencies were found in a private medical college by the Medical Council of India/National Medical Commission, resulting in the denial of renewal of recognition and placing the future of MBBS students in jeopardy. To safeguard the students from losing academic years, the Orissa High Court and subsequently the Supreme Court permitted their relocation to recognised private medical colleges through a State-supervised counselling process. During the pendency of the proceedings, the students continued their education by paying fees at Government rates pursuant to the interim directions of the Apex Court. The present controversy before the Court, however, centred on the determination of the financial liability and reimbursement of the fee differential claimed by the transferee colleges for imparting medical education to the relocated students.
Contentions of the Appellant:
The Appellant contended that the students had secured admission to Sardar Rajas Medical College, Hospital and Research Centre (SRMCH) through a lawful admission process and were subsequently compelled to shift institutions due to circumstances entirely beyond their control. It was argued that the students had already suffered immense hardship, uncertainty, and disruption during the relocation process and had complied with the interim directions issued by the Top Court by paying fees at Government rates. The students therefore submitted that imposing additional financial liability after completion of the MBBS course would be inequitable and excessively burdensome.
Contentions of the Respondent:
The Trust contended that the findings regarding deficiencies in SRMCH were still under challenge and therefore the entire financial liability could not be fastened solely upon the Trust. The Counsel argued that the students had ultimately completed their education in recognised institutions.
The transferee colleges, on the other hand, submitted that they had accommodated the students pursuant to directions of the Apex Court and incurred substantial infrastructural and financial expenses in imparting education. They contended that the students had paid only a fraction of the actual fees applicable to private medical colleges and that the institutions were entitled to recover the remaining dues along with stipends paid during the course period.
Observation of the Court:
The Division Bench of Justice Vikram Nath and Justice Sandeep Mehta observed “This, in our opinion, would amount to unjust enrichment of these transferee students while being conscious of the fact that they had to face a chaotic situation of being transferred to different medical colleges mid-session. However, all interests of these students were duly protected by this Court ensuring that they cleared the medical course without losing a single academic year. Thus, neither the students can be given undue advantage or bonanza nor can the defaulting institution, i.e., the SRMCH/Selvam Trust, be permitted to take benefit of its own follies.”
The Court observed that the central issue before it was equitable apportionment of the financial liability arising from the academic crisis caused by deficiencies in SRMCH, and not the legality of relocation of students. The Bench noted that the students had originally secured admission in a private medical college with a substantially higher fee structure and therefore could not indefinitely claim the benefit of Government-rate fees merely because interim arrangements had been made to protect their academic careers. According to the Court, permitting such benefit to continue permanently would amount to unjust enrichment at the expense of the transferee colleges.
The Bench further held that the deficiencies in infrastructure, faculty, and other mandatory requirements at SRMCH stood substantially affirmed after dismissal of the institution’s earlier challenge before the Supreme Court. While recognising the hardship faced by students during the transfer process, the Court clarified that the defaulting institution could not escape the financial consequences of its failures and held that the primary brunt of liability must fall upon SRMCH and the Selvam Trust.
The Court also observed that the transferee colleges had accommodated the students pursuant to Apex Court directions and imparted education despite receiving only Government-rate fees for a limited period, even though their actual fee structures were substantially higher. The Bench emphasised that the interim directions allowing payment of Government-rate fees were only emergent arrangements to protect students from losing academic years and could not be converted into a permanent financial windfall after completion of the MBBS course.
The Court ultimately held that while extraordinary judicial measures may be adopted to protect students during institutional failures, such interim protection cannot create a permanent financial advantage inconsistent with the original nature of admission to private professional colleges.
The decision of the Court:
The Apex Court directed that approximately ₹10 crore secured through bank guarantees furnished by the Selvam Trust with the MCI/NMC, along with ₹2 crore deposited before the Court and accrued interest, be disbursed equally among the three transferee colleges. The Court further permitted the colleges to approach the National Medical Commission for recovery of any remaining fee shortfall from the transferred students after adjusting the amounts already paid at the time of admission. It was also directed that students complying with the fee liability determined under the judgment would be entitled to immediate release of their course-completion certificates and academic records.
Case Title: Soumya Ranjan Panda & Ors. Vs. Subhalaxmi Dash & Ors.
Case No.: SLP(Civil) No(s). 35075-35076 of 2015
Citation: 2026 Latest Caselaw 386 SC
Coram: Hon’ble Mr. Justice Vikram Nath, Hon’ble Mr. Justice Sandeep Mehta
Advocate for the Petitioner: AOR Kedar Nath Tripathy, Adv. Aditya Narayan Tripathy, Adv. Prasad Hegde,
Advocate for the Respondent: Sr. Adv. Ashok Kumar Parija, Sr. Adv. V. Giri, AOR Merusagar Samantaray, AOR Ankur S. Kulkarni, AOR Milind Kumar, AOR Kedar Nath Tripathy, AOR Aswathi M.K., AOR S. K. Verma, AOR Siddhartha Chowdhury, AOR Prateek Bhatia, AOR Ramendra Mohan Patnaik, Adv. Surekha Raman, Adv. Amarjit Singh Bedi, Adv. Shreyash Kumar, Adv. Sidharth Nair, Adv. Harshit Singh, Adv. Yashwant Sanjenbam, Adv. Anurag Yadav and Ors.
