Medical education – Closure/De-recognition of private medical college – Relocation of students – Liability for fees – Equitable apportionment – Interim directions under Art. 142 – Liability of defaulting institution – Rights of transferee colleges and students.

advocatemmmohan

APEX COURT HELD THAT 

EDUCATION LAW – Medical education – Closure/De-recognition of private medical college – Relocation of students – Liability for fees – Equitable apportionment – Interim directions under Art. 142 – Liability of defaulting institution – Rights of transferee colleges and students.

Students admitted to private medical college (SRMCH) for MBBS course during academic sessions 2013-2014 and 2014-2015 – MCI/NMC inspections revealed serious deficiencies in infrastructure, faculty and regulatory compliance leading to denial of renewal of recognition – Students relocated by judicial orders to recognised private medical colleges to save academic careers – Interim directions of Supreme Court permitted continuation of studies on payment of Government-rate fees – Transferee colleges sought reimbursement of differential fees and stipend amounts – Selvam Trust contended that liability could not be fastened without adjudication of deficiencies – Determination of liability.

Held : Present controversy confined not to legality of relocation but to fair and equitable apportionment of financial liabilities arising from extraordinary judicial intervention undertaken to protect academic interests of students. Since no material existed to show availability of Government quota seats in transferee colleges, all relocated students were deemed to have been accommodated against private/management quota seats and fee structure applicable to such seats governed determination of liability.

Students had consciously taken admission in private medical institution having substantially higher fee structure than Government colleges. Benefit of Government-rate fees granted pursuant to interim orders of Supreme Court was only emergent and temporary arrangement devised to protect students from losing academic years owing to deficiencies of institution. Such interim arrangement could not confer permanent financial windfall upon students.

Deficiencies found by MCI/NMC in infrastructure and faculty of SRMCH stood substantially affirmed upon dismissal of writ petition filed by institution challenging denial of renewal. Defaulting institution could not be permitted to derive benefit from its own wrong. Applying maxim Commodum ex injuria sua nemo habere debet, primary liability for financial consequences arising from relocation was fastened upon Selvam Trust/SRMCH.

Amounts secured by bank guarantees furnished by Selvam Trust with MCI/NMC and deposits made before Supreme Court together with accrued interest directed to be disbursed equally amongst transferee colleges. Students held liable to pay remaining outstanding fees at rates chargeable by SRMCH and not merely Government-rate fees. Transferee colleges permitted to approach NMC for recovery of remaining shortfall from passed-out students after adjusting amounts already paid by them to SRMCH.

Court clarified that observations in judgment would not prejudice independent claims or defences of Selvam Trust in appropriate proceedings.

(Paras 24 to 54)

HELD

Interim directions issued under Article 142 permitting students to continue MBBS course at Government-rate fees were emergent measures intended to preserve academic continuity and could not result in unjust enrichment of students admitted to private medical institution. (Paras 29 to 36)

Where relocated students were accommodated in private medical colleges against management/private quota seats, applicable fee structure of such category governed determination of liabilities. (Paras 25 and 26)

Defaulting institution whose deficiencies resulted in denial of renewal of recognition could not avoid primary liability for financial consequences arising from relocation of students. (Paras 37 to 42)

Students who completed medical course pursuant to protective interim orders of Supreme Court could not claim permanent benefit of highly subsidised Government-rate fees when they had originally contracted for admission in private medical college. (Paras 48 to 52)

Bank guarantee amount furnished by Selvam Trust and deposits made before Supreme Court directed to be released and distributed equally amongst transferee colleges towards reimbursement of fees. (Paras 44 to 47)

RESULT

Amounts covered by bank guarantees furnished by Selvam Trust with MCI/NMC and deposits made before Supreme Court with accrued interest directed to be distributed equally amongst three transferee colleges. Transferee colleges permitted to seek recovery of remaining fee shortfall from students through NMC mechanism after appropriate adjustments. Appeals closed.