Court held that students relocated from a derecognised private medical college could not indefinitely claim Government-rate fees under interim judicial protection, and the primary financial liability for the fee differential must fall on the defaulting institution.

on

Facts

The dispute arose from the relocation of MBBS students admitted in 2013–2014 and 2014–2015 to Sardar Rajas Medical College, Hospital and Research Centre (SRMCH), Odisha, managed by Selvam Educational and Charitable Trust. Inspections conducted by the MCI/NMC revealed serious deficiencies in infrastructure, faculty, and regulatory compliance, leading to denial of renewal of recognition. As a result, the academic future of the students was jeopardised.

The High Court directed relocation of students to recognised institutions. Subsequently, the Supreme Court, through interim orders dated 8 January 2016 and 12 January 2016, permitted continuation of studies in recognised private medical colleges and protected students from losing an academic year. Around 122 students were ultimately transferred to KIMS, IMS & SUM Hospital, and Hi-Tech Medical College.

The transferee colleges later sought reimbursement of unpaid fees, contending that students had paid only Government-rate fees pursuant to interim orders, whereas the actual fee structure in private colleges was substantially higher.

Issues Framed

(a) Whether transferred students were liable to pay Government-rate fees or fees applicable to private medical colleges.

(b) How liability for differential fees should be apportioned between students and the Selvam Trust.

(c) Whether MCI/NMC or the State should bear any part of the liability.

(d) Whether the entire liability should be fastened on the Selvam Trust.

Court’s Reasoning

(a) The Court held that the issue of Government quota versus management quota did not survive because there was no material showing availability of Government quota seats in the transferee colleges. Hence, the transferred students were deemed accommodated against private/management quota seats and liable under the corresponding fee structure (Para 26).

(b) The Court relied upon earlier interim orders passed in Hind Charitable Trust v. Union of India, where students were temporarily allowed admission at Government-rate fees under Art. 142 Const. of India owing to exceptional circumstances. However, the Court clarified that these directions were only interim arrangements devised to address the emergency arising from derecognition of institutions (Paras 29–32).

(c) The Court observed that students had consciously taken admission in a private medical college carrying higher fees and “possibly, on their own merit,” may not have secured admission in Government colleges (Para 33). Therefore, permitting them to permanently continue at subsidised Government rates would amount to “unjust enrichment” (Para 36).

(d) Simultaneously, the Court held that the defaulting institution could not “take benefit of its own follies.” Referring to the maxim Commodum ex injuria sua nemo habere debet, the Court held that SRMCH/Selvam Trust bore the “primary brunt of liability” because the crisis arose from its infrastructural and regulatory failures (Paras 37–42).

(e) Accordingly, the Court directed disbursal of approximately Rs.10 crores secured by bank guarantees furnished by the Trust with MCI/NMC, together with Rs.2 crores deposited before the Court and accrued interest, equally among the three transferee colleges (Paras 44–47).

(f) The Court further permitted transferee colleges to approach NMC for recovery of remaining deficits from students, after adjustment of amounts already paid to SRMCH (Para 53).

Held

The Court directed release of approximately Rs.12 crores plus accrued interest from securities/deposits furnished by Selvam Trust to the transferee colleges in equal proportions. Students were held liable for any remaining fee shortfall calculated at SRMCH rates, subject to adjustment of prior payments. The NMC was directed to facilitate recovery of any deficit amounts.

Ratio

Students relocated from a derecognised private medical college pursuant to interim judicial orders cannot permanently claim Government-rate fees where they had originally undertaken liability under a private-college fee structure; the principal financial liability must fall upon the defaulting institution whose deficiencies necessitated the relocation


Case Details

Citation: 2026 INSC 488
Decided on: 14 May 2026
Case Title: Soumya Ranjan Panda & Ors. v. Subhalaxmi Dash & Ors.
Court: Supreme Court of India
Bench: Vikram Nath, J. and Sandeep Mehta, J.