Deposit 15.72 Cr Refundable To Students And Extra 25 Cr With ASC To Claim Affiliation: Supreme Court Directs Kannur Medical College

The Supreme Court directed the Kannur Medical College to deposit Rs.15,72,89,020/- with the Admission Supervisory Committee for Professional Colleges in Kerala along with full details of the guardians/students to whom the amounts have to be refunded within a period of one month.

The bench comprising Justices S. Abdul Nazeer and Sanjeev Khanna also directed it to make a deposit of Rs.25 crores with the Admission Supervisory Committee as a pre condition to claim affiliation.

The court said that, thereafter, ASC has to issue fresh notices to the remaining students (possibly 92 in number) and examine the objections or claims made by the guardians/students as to the actual amount paid by them on the basis of material placed by the guardians/students and the college. ASC was directed to complete this exercise preferably within a period of nine months.

"KMC would be entitled to claim affiliation and admit students only after they have deposited Rs.15,72,89,020/- and Rs.25 crores, as indicated above. Of course, KMC, for affiliation would have to meet and satisfy all statutory conditions. It is made absolutely clear that if the aforesaid payments of Rs.15,72,89,020/- and Rs.25 crores are not made, the order passed by the ASC and KUHS denying/rejecting KMC's application for continuation of affiliation for academic year 2020-21 and future academic years would continue.", the Court observed.

The court issued these directives while disposing an appeal filed against the Kerala High Court order which had stayed the operation of the order dated 29th April, 2020 passed by the Kerala University of Health Sciences whereby the College was denied affiliation for conducting MBBS and post graduate courses for the academic year 2020-21.

The Supreme Court had, in 2017, upheld the order passed by the High Court in October 2016, cancelling the admissions made by the college, after it found that it had not published correct prospectus on their website, and were not transparent in furnishing all the details regarding the online admissions. Thereafter, the State of Kerala promulgated the Kerala Professional Colleges (Regularisation of Admissions in Medical Colleges) Ordinance, 2017 to regularise MBBS admissions in certain colleges against payment of Rs.3,00,000/- (rupees three lakhs only) per student as a regularisation fee. The Ordinance was struck down by the Supreme Court. Later, the Supreme court also directed the college to return the double of the amount than the fees at deposited by each one of 150 students with college, by 4th September, 2018. 

Now, the court has issued following directives: 

(a) KMC shall deposit Rs.15,72,89,020/- with the ASC along with full details of the guardians/students to whom the amounts have to be paid, their addresses and bank accounts, within a period of one month from today. On deposit of the said amounts, the ASC would disburse and make payments to the guardians/students.

(b) ASC would issue fresh notices to the remaining students (possibly 92 in number) as was the position before impugned order dated 22nd November, 2019 was passed. It will examine the objections or claims made by the guardians/students as to the actual amount paid by them on the basis of material placed by the guardians/students and the college. It will thereupon pass appropriate orders. Any party, i.e. the guardian/student/college, aggrieved by the order to be passed by the ASC would be entitled to challenge the same before the High Court.

(c) KMC would make a deposit of Rs.25 crores with the ASC, which deposit would be converted into multiple fixed deposit receipts as the ASC may deem appropriate.

(d) ASC would disburse and make payments to the guardians/ students on the basis of the orders passed by it or on the basis of the orders passed by the High Court in case a writ petition is filed impugning the order passed by the ASC regarding quantification and refund.

(e) The orders passed by the ASC would indicate that the payments in terms of the said order would be made within 45 days of the passing of the order and that any party, be it the student/guardian or KMC, would have the right to challenge the order before the High Court. The High Court upon examination of the case would be entitled to grant stay or direct refund/payment.

(f) KMC would be entitled to claim affiliation and admit students only after they have deposited Rs.15,72,89,020/- and Rs.25 crores, as indicated above. Of course, KMC, for affiliation would have to meet and satisfy all statutory conditions. It is made absolutely clear that if the aforesaid payments of Rs.15,72,89,020/- and Rs.25 crores are not made, the order passed by the ASC and KUHS denying/rejecting KMC's application for continuation of affiliation for academic year 2020-21 and future academic years would continue. As the amount of Rs.15,72,89,020/- has not been disputed by the College, in case it fails to deposit the same, the students/ guardians will be well within their rights to approach the authorities for enforcement and payment. Further, in the event that KMC does not deposit Rs.15,72,89,020/- and Rs.25 crores, decision with regards to grant of affiliation shall be made by the ASC and KUHS only upon determination, settlement and refund of all claims pertaining to the students admitted in the academic year 2016-17. Compliance report would be filed in terms of order dated 4th October, 2018.

(g) As indicated above, the ASC would be entitled to open a separate bank account and convert the amounts received in multiple fixed deposits of varying amounts for different periods. The bank account and the fixed deposits would be in the name of KMC, i.e. Kannur Medical College, but the account/deposits would be only operated and abide by the instructions of the Authorised Officer/Member of the ASC. For the purpose of account opening, KMC would provide their PAN number and other details. KMC would assist and cooperate with the ASC. Tax at source, if any, deducted on the interest would be reflected as deducted on interest earned by KMC. The interest accrued on the fixed deposits would also be income and would be reflected in the income-tax returns of KMC. However, the interest accrued on the deposits/bank account (minus the TDS) would be also available to the ASC to make payment to the students.

(h) ASC is requested to complete the aforesaid exercise as expeditiously as possible and preferably within a period of nine months from the date of this order. Upon completion of the entire exercise, including awaiting the decision of the High Court/this Court, the ASC shall refund excess amount, if any, to KMC. In case of a shortfall, it would be the obligation of KMC to make the amount available for disbursal to the guardians/students. In case of failure to make payment, the ASC would be entitled to issue appropriate orders/directions, including direction to restrain KMC from admitting students in the then current or the next academic year. Such direction, however, would not affect the students who have already been admitted.

(i) In case of any difficulty in implementation or clarification of this order, it would be open to the parties to move an application for directions, clarification or modification before this Court.

CASE: LALITHA R NATH vs. KANNUR MEDICAL COLLEGE [CIVIL APPEAL NO. 596 OF 2021]

CORAM: Justices S. Abdul Nazeer and Sanjeev Khanna

COUNSEL: Adv Raghenth Basant, AOR Liz Mathew, Adv Mohammed Sadique T A, for petitioners, Sr Adv Jaideep Gupta for ASC, Sr. Adv Maninder Singh for College

CITATION: LL 2021 SC 96

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