Kerala HC Stays Condition Of Making Deposit Of Rs.11 Lakhs & Submitting Bank Guarantee For Rs.44 Lakhs For Admission In Pvt Medical Colleges [Read Order]

The Kerala High Court stayed the operation of the order issued by the Commissioner of Entrance Examinations, which imposed a condition of making an interest free deposit of Rs.11 lakhs for securing admission in medical seats. The order imposed a further condition that the students should produce bank guarantee for the fee of remaining four years, which would amount to Rs.44 lakhs. The said condition was for taking admission in the management quota of two private medical colleges i.e. MES Medical College Malappuram and Dr.Somervell Memerial CSI Medical College Thirvananthapuram, who had entered into separate agreements with the Government.

Earlier, the High Court had passed orders on 09.08.2017, making provisional arrangements for payment of fees in respect of private medical colleges. Though the Court declined to stay the provisional fixation of fee of Rs.11 lakhs in the above said medical colleges, the Court was of the prima facie view that the fixation may not be sustainable in law. However, to enable completion of admission process before the time-period set by the Supreme Court, the Court refrained from staying the operation of the fee fixation, and made provisional arrangements to avoid inconvenience to students.

After the said order of the High Court on 09.08.2017, the CEE passed the impugned order, which imposed the above mentioned conditions. The conditions were sought to be stayed in an interlocutory application filed in the main writ petition. The Division Bench comprising Chief Justice Navaniti Prasad Singh and Justice Raja Vijayaghavaran observed that the condition of making interest fee deposit was contrary to the specific directions of the Apex Court in Islamic Academy of Education and anr. vs. State of Karnataka and others (2003) 6 SCC 697. The Apex Court had directed that the deposit collected from the students should be kept in fixed deposit in nationalized banks for accrual of interest to enure to the benefit of students. The Court stated that the deposit collected as per the impugned order would amount to ‘capitation fee’.

The Court also held that the condition of furnishing bank guarantee for fee of remaining years, which would amount to Rs.44 lakhs, was an onerous condition. For securing the bank guarantee, the student will have to deposit equal sum with the bank. That would mean that a student will have to arrange for Rs.55 lakhs at the time of admission itself. The Court characterized the condition as unreasonable. The students were instead directed to execute bonds for the fee of remaining years.

It was also made clear that the 35% seats in the management quota in the colleges in question should be filled only by students of minority community, since the colleges were minority institutions. If minority seats are left vacant, those sets will be shifted to government quota, and the fee payable will be at the rates fixed by government.

The main writ petitions challenging the Fee Fixation done by the Fee Regulatory Committee, as well as the seat sharing agreements entered by some colleges with the government are likely to be heard next week.