Case Note & Summary
The Supreme Court of India heard cross-appeals arising from a common judgment of the Kerala High Court dated 23.07.2020 concerning the validity of a corpus fund created by the State of Kerala's Admission and Fee Regulatory Committee. The Committee, by its decision dated 27.02.2018, fixed NRI student fees at Rs. 20 lakhs per annum, with an extra Rs. 5 lakhs to be kept as a corpus fund for scholarships to Below Poverty Line (BPL) students. This was supported by Government Order (GO) dated 06.06.2018. The High Court quashed the GO, holding that such a levy could only be imposed under legislative authority, not by executive order, as the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017 contained no provision for a corpus fund. The High Court directed that amounts collected from NRI students be transferred to respective institutions and maintained jointly with a State nominee for the benefit of economically weaker students. The State appealed against the quashing of the GO; self-financing colleges challenged the direction to use the fund only for their own students; and NRI students sought refunds. The Supreme Court, after considering contentions, held that the corpus fund creation lacked legislative backing and was invalid. However, it modified the High Court's directions to allow the amounts already collected to be used for scholarships to economically weaker students of the respective institutions, with joint control by the institution and State nominee. The Court also directed that no further amounts be collected towards the corpus fund until suitable legislation is enacted. The appeals were disposed of accordingly.
Headnote
A) Constitutional Law - Executive Order - Levy Without Legislative Authority - Creation of corpus fund from NRI fees by Government Order without enabling provision in the Kerala Medical Education (Regulation and Control of Admission to Private Medical Educational Institutions) Act, 2017 - Held that any levy or collection of money must be under authority of law, not by executive fiat (Paras 5.11, 6(c)). B) Medical Education - Fee Regulation - NRI Quota - Committee's power under Section 8 of the 2017 Act does not extend to directing utilization of fee amounts for corpus fund - Held that Committee can only fix fees to prevent profiteering, not impose additional levies (Paras 5.7, 6(c)). C) Medical Education - Corpus Fund - Utilization for BPL Students - Direction to transfer corpus fund amounts to respective institutions for benefit of economically weaker students - Held that such amounts must be used only for students of that institution, not pooled by State (Paras 3, 5.11).
Issue of Consideration
Whether the creation of a corpus fund through an executive order (GO dated 06.06.2018) for subsidizing medical education of BPL students from NRI fees is valid without legislative backing
Final Decision
Supreme Court upheld High Court's quashing of GO dated 06.06.2018 but modified directions: amounts already collected from NRI students towards corpus fund shall be transferred to respective institutions and maintained jointly by institution nominee and State nominee, to be utilized only for scholarships to economically weaker students of that institution. No further amounts to be collected towards corpus fund until suitable legislation is enacted. Appeals disposed of accordingly.
Law Points
- Corpus fund cannot be created by executive order without legislative authority
- NRI fee regulation must be non-exploitative
- fee fixation by committee subject to judicial review
