Lalitha R Nath vs Kannur Medical College on 18 February, 2021


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Supreme Court of India

Lalitha R Nath vs Kannur Medical College on 18 February, 2021

Author: Sanjiv Khanna

Bench: S. Abdul Nazeer, Sanjiv Khanna

                                                           NON-REPORTABLE

                      IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 596 OF 2021
 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 7907 OF 2020)

LALITHA R NATH AND OTHERS                               .....   APPELLANTS(S)

                             VERSUS

KANNUR MEDICAL COLLEGE AND OTHERS                       ..... RESPONDENT(S)

                                           WITH

                       CIVIL APPEAL NO. 597            OF 2021
 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 9507 OF 2020)

                       CIVIL APPEAL NO. 598            OF 2021
 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 8121 OF 2020)

                                            AND

                         CIVIL APPEAL NO. 599 OF 2021
 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 7462 OF 2020)



                                JUDGMENT

SANJIV KHANNA, J.

Leave granted.

2. Appeal preferred by Lalitha R Nath and 24 others impugns the

final order and judgment dated 29 th May, 2020 of the Division

Bench of the Kerala High Court, partially allowing Writ Petition

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 1 of 30
(Civil) No. 10205 of 2020 filed by Kannur Medical College

(hereinafter referred to as ‘KMC’ or ‘the College’) by staying

operation of the order dated 29 th April, 2020 passed by the Kerala

University of Health Sciences (in short, ‘KUHS’) whereby the

College was denied affiliation for conducting MBBS and post

graduate courses for the academic year 2020-21. The stay, as

granted, is subject to the College satisfying the following

conditions: (i) furnishing of bank guarantee of Rs.10 crores before

the Registrar of the Kerala High Court; and (ii) depositing of the

title deed of 25 acres of land situated at Sy.No. 13/1 in Village

Anjarakkandi, as security for payment of any amount that the

College may be liable to pay as per directions to be issued in Writ

Petition (Civil) No. 15337 of 2019, titled The Principal v. The

Admission and Fee Regulatory Committee.

3. Appeal preferred by Sita V.K. impugns the final order and

judgment dated 22nd November, 2019 passed by the Division

Bench of the Kerala High Court in Writ Petition (Civil) No. 26995 of

2019 filed by the Principal of the College, inter alia, quashing the

reopening notices issued by the Admission Supervisory

Committee for Professional Colleges in Kerala (in short, ‘ASC’) in

16 cases, with a further direction to not reopen 92 other cases

where students had been issued notice after 4 th October, 2018

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 2 of 30
and had submitted to the ASC that they had received the entire

amount or had failed to appear and make their submissions.

However, in cases of students who had objected to the refund

made by the College, the ASC shall consider their claim and pass

appropriate orders.

4. Appeal preferred by V. Prasanna Kumar and others, like the

appeal preferred by Sita V.K., impugns order dated 22 nd

November, 2019 in Writ Petition (Civil) No. 26995 of 2019 passed

by the Division Bench of the Kerala High Court.

5. Appeal preferred by the ASC, like the appeal preferred by Lalitha

R Nath, impugns order dated 29th May, 2020 passed by the

Division Bench of the Kerala High Court in Writ Petition (Civil) No.

10205 of 2020 filed by KMC.

6. In order to appreciate the controversy and the contentions, a brief

synopsis of the relevant facts is required to be noticed.

6.1 KMC is a private self-financing medical college which was

established in the year 2006 with sanctioned intake of 100

students. Subsequently, it appears, an additional intake of 50

students was permitted thereby increasing the sanctioned intake

to 150 students per year.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 3 of 30
6.2 On 28th April, 2016, in Sankalp Charitable Trust and Another v.

Union of India and Others,1 this Court had directed that

admissions to MBBS courses shall be conducted through National

Eligibility-cum-Entrance Test (NEET).

6.3 On 9th August, 2016, the Union Government had directed all

States and Union Territories to conduct combined/centralised

counselling for 2016-17 MBBS admissions, consistent with the

judgment of this Court in Modern Dental College and Research

Centre and Others v. State of Madhya Pradesh and Others.2

6.4 In consonance with the aforesaid directions, the Government of

Kerala, on 20th August, 2016, had directed that all medical

colleges would only admit students selected by the Commissioner

for Entrance Examinations (in short, ‘CEE’) through common

counselling.

6.5 This direction was challenged by KMC before the Kerala High

Court. On 26th August, 2016, an interim order was passed by the

High Court to the effect that MBBS admissions for 2016-17 shall

be conducted on the basis of NEET-2016 and that all applications

shall be made online to facilitate transparency with regard to merit

and identity of the applicants.

1
(2016) 7 SCC 487
2
(2016) 7 SCC 353

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 4 of 30
6.6 However, the ASC, on 3rd September, 2016, reiterated its stand

stating that admissions in contravention of its directions would not

be registered by KUHS. Subsequently, on 15th September, 2016,

the ASC, after conducting an inquiry, cancelled all admissions

made by KMC on the ground that the college had neither called

for online applications nor had it complied with the requirements in

the revised approval of prospectus dated 10th September, 2016.

Thereafter, the ASC issued an order dated 17 th September, 2016

reiterating its earlier directions and calling upon KMC to publish

relevant details online. Applications for MBBS degree course in

KMC for 2016-17 were also invited.

6.7 The matter reached this Court in Special Leave Petition (Civil) No.

9835 of 2016 and vide order dated 28th September, 2016, it was

directed that all counselling shall be centralised.

6.8 Shortly thereafter, on 2nd October, 2016, the ASC cancelled MBBS

admissions granted by KMC due to non-compliance of its orders.

The Government of Kerala was also requested to direct CEE to

conduct centralised admissions.

6.9 KMC, thereupon, moved the Kerala High Court vide Writ Petition

(Civil) No. 32186 of 2016 challenging the order cancelling the

admissions to the MBBS course. On 6 th October, 2016 an interim

order was passed by the High Court directing KMC to submit

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 5 of 30
records to the CEE for conducting spot admissions. On 13 th

October, 2016, the CEE submitted its report alleging absence of

cooperation by KMC. Several irregularities were also highlighted

as applications had been received by KMC without NEET rank

and roll numbers, etc. Some of the applicants were disqualified.

Representatives of KMC could not furnish letter of authorisation

from the college authorities and on being asked to register their

attendance, the representatives had left the counselling hall

without registering their attendance. The writ petition filed by KMC

was dismissed by the High Court on 28 th October, 2016 imposing

costs of Rs.1,00,000/- (rupees one lakh only) and with a direction

to the ASC to scrutinise all records of KMC with regard to the

admissions made.

6.10 The order dated 28th October, 2016 of the High Court was

challenged before this Court vide Special Leave Petition (Civil)

Nos. 35374-75 of 2016. On 22nd March, 2017, this Court declined

to interfere with the judgment of the Kerala High Court.

6.11 In the meanwhile, on 14th November, 2016, the admissions made

by KMC were cancelled once again due to continued non-

compliance with various directions, including non-publication of

lists and conduct of admissions offline, among other reasons.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 6 of 30
6.12 In view of the aforesaid position, including order passed by this

Court on 22nd March, 2017, the Registrar of KUHS, on 31 st March,

2017, directed the Principal of KMC to discharge the 150 students

admitted for the academic year 2016-17 and report compliance.

6.13 The students had instituted Writ Petition (Civil) No. 16411 of 2017

in the Kerala High Court to challenge the order of cancellation of

admissions, which petition was dismissed on 22nd June, 2017.

6.14 The dismissal order was confirmed by this Court on 10 th July, 2017

in Special Leave Petition (Civil) No. 17080 of 2017.

6.15 State of Kerala had thereafter 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, however, held to be ultra vires by this Court in Medical

Council of India v. State of Kerala and Others.3

6.16 In the meanwhile, several students/parents started pressing KMC

to return the original documents of the students, and for refund of

the fees paid. Many students had joined other colleges for their

studies, including MBBS courses. Some students/parents had

filed complaints with the police. First Information Reports were

registered.

3

(2019) 13 SCC 185

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 7 of 30
6.17 Thereupon, KMC entered into settlements with the students/

parents and applications were filed for withdrawal of complaints. In

some cases, the Chairperson of the Admission and Fee

Regulatory Committee for Medical Education had passed orders

permitting withdrawal of the complaints as having been settled.

However, in several cases, in spite of the settlement, disputes

persisted as to the amounts paid towards capitation fee, etc. and

that full refund had not been issued. In some cases, the Admission

and Fee Regulatory Committee for Medical Education, after due

consideration, had issued directions to KMC for further payment.

7. To cut short the controversy, on 29th August, 2018, a consent

order was passed by a two Judge Bench of this Court in Special

Leave Petition (Civil) No. 23225 of 2018, The Principal, Kannur

Medical College v. Admission Supervisory Committee, the

relevant terms of which read as under:

“1. The college shall return the double of the amount
than the fees at (sic) deposited by each one of 150
students with college, by 4th September, 2018.

It is submitted that the amount shall be remitted
in the bank account of each of the students. Let
compliance report including bank statements, bank
account numbers with names of students be filed not
only in this Court but also to the Admission
Supervisory Committee (ASC). The ASC shall
ascertain and submit the report whether amount has

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 8 of 30
been refunded, as ordered, to the students and bank
accounts belong to them.

2. It is agreed to that the order of ASC for withdrawal
of the affiliation shall not be acted upon in case the
order is complied with.

3. It is also agreed to that Kannur Medical College,
shall be permitted to participate in the mop-up round,
which is going to take place on 4th and 5th of
September, 2018, before the Controller of Entrance
Examination, Kerala, and only those students who
opt for college shall be allotted and no other.

4. The fees fixed by the ASC shall only be realised by
the college from the students who opt for the college
in question for the year 2018-19 onwards.

5. The college shall not admit even a single student
for the year 2018-19, other than the one allotted by
the Controller of Examination in the counselling that
is to be held on 4th and 5th of September, 2018. In
case of violation, entire order shall be withdrawn.

6. It is also undertaken that in future the college shall
not collect the fees in any name more than one
year’s fees as prescribed under the Kerala Medical
Education (Regulation and Control of Admission to
Private Medical Educational Institutions) Act, 2017
and by ASC.

7. Let the amount of Rupees One Crore cost be paid
by the college to the Chief Minister’s Relief Fund,
Kerala, by 20th September, 2018. The college shall
also deposit the sum of Rs.10,00,000/- (Rupees Ten
Lakhs) with the Supreme Court Advocates-on-Record
Welfare Trust and Rs.1,00,000/- (Rupees One Lakh)
with the Supreme Court Bar Association.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 9 of 30

8. If the original documents, if any, of the students,
which may be lying with the college, shall be returned
to the concerned students.

In case of non-compliance, the order shall be
withdrawn by this Court. In view of disposal of the
main petition, pending applications shall also stand
disposed of.”

8. Subsequently, the issue of refund was revisited in the order dated

4th October, 2018, passed by another two Judge Bench of this

Court in M.A. No. 2354 of 2018 in Special Leave Petition (Civil)

No. 23225 of 2018. Pertinently, the order refers to the ASC’s

report dated 4th September, 2018, to the effect that diverse

amounts ranging from Rs.35,00,000/- to Rs.1,00,00,000/- were

collected from most of the 150 students admitted to the College.

The relevant portion of the order dated 4 th October, 2018 reads as

under:

“Thereafter ASC prepared the Report on 1.9.2018
pursuant to the order issued by this Court. The
Report is extracted hereunder:

“Sub: Refund of Amount Paid by The 2016-17
Batch Mbbs Students – Public Notice Issued
By The Kannur Medical College Matters – Reg.

Ref: 1. Order of the Hon’ble Supreme Court of
India in SLP (C) No. 23225 of 2018 dated
29.08.2018.

2. This office letter of even number dated
31.08.2018.

3. Your email dated 31.08.2018 at 11.40 AM
enclosing a Public notice.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 10 of 30

The Admission Supervisory Committee
has noticed the contents in the public notice
issued by the Kannur Medical College and
found that the notice issued is totally against
the direction contained in the Hon’ble Supreme
Court order dated 29.08.2018 and it appears
that the Medical College has not properly
understood the order.

The apex court has directed the medical
college to comply with (sic) was clearly stated
in the communication referred as 2nd paper
above, i.e. the Hon’ble Supreme court has
directed to refund double of the amount than
the fees deposited by each one of the 150
students.

The tuition fees regulated by the Fee
Regulatory Committee for Kannur Medical
College during the academic year 2016-17 was
Rs.3 lakhs as per the order no. FRC
50/16/MBBS/KMC dated 23.02.2018, which
was already received by the Medical College.
The Medical College has to refund this amount
of 3 lakhs to each of the 150 students.

In addition the Medical College had
collected an amount ranging from 35 lakhs to
one crore most of from those 150 students
which was admitted by the Medical College as
well as by the representatives of the Medical
College during the course of hearing
conducted in connection with the refund of the
capitation on various occasions.

Therefore, you have to refund double of
the said amount so received from each of the
150 students in addition to Rs. 3 Lakhs.

It is made still clear as follows:

From one student viz. Ms. Rehna Banu,
the Medical College had collected Rs.35
Lakhs. As per the directions of the Hon’ble
Supreme Court, the Medical College has to

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 11 of 30
pay Rs.64 lakhs + 3 lakh = 67 lakh (35 lakh – 3
lakh = 32 lakh x 2 = 64 lakh + 3 lakh = 67 lakh)
to the above candidate.

The Principal of the Kannur Medical
College shall refund each students the amount
as calculated above and report to this office on
03.09.2018 at 4.00 PM, without fail.”
(emphasis as originally supplied)

The admissions of 150 students were found to
have been made in illegal manner and matter had
attained finality in this Court in the first round of
litigation. Thereafter the State of Kerala had
promulgated ordinance regularising the aforesaid
admissions. The ordinance has been declared ultra
vires by this Court vide judgment and order dated
12th September, 2018 in W.P. (C) No. 231 of 2018.

It is seriously disputed fact in the instance case
that how much amount had been collected from each
of the students and what has been refunded as per
the Order passed by this Court is not the appropriate
sum. In the facts and circumstances of the case, as
certain material has been placed on record by the
college in this Court only and that was not placed
before the ASC and students have also come up with
certain documents indicating how they had collected
amount paid, they are also required to be considered
by the ASC. This Court cannot conduct factual
enquiry. It was suggested by Mr. Jaydeep Gupta,
learned senior counsel that the parties may be
relegated to the ASC for adjudication of the aforesaid
aspect. The ASC to consider the material which may
be placed on record by the respective parties and
take a decision in accordance with law on the basis
of the evidence adduced in each of the case with
respect to each of the students.

Sh. Mukul Rohatgi, learned senior counsel
submitted that college may be permitted to give
admissions in the current session i.e. in 2018-2019.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 12 of 30
After hearing learned counsel for the parties, we are
of the opinion that as there is serious dispute with
respect to adequacy of the refund that has been
made; and apart from that we are already in the
month of October, 2018; admissions are over for the
current academic session i.e. 2018-2019; no
admission can be ordered to be given at this juncture
– in the Kunoor Medical College.

With respect to refund, let enquiry be made by
the ASC and let appropriate order be passed in this
regard. Accordingly, the application stands disposed
of.”

9. Significantly, the consent order dated 29 th August, 2018 passed by

this Court records that the College had agreed and accepted that

the order of the ASC for withdrawal of affiliation of KMC shall not

be acted upon in case the directions given in the order dated 29 th

August, 2018 for refund of double the amount to each of the 150

students is complied with. Affirming the position, the order dated

4th October, 2018 of this Court notices and records that there was

a serious dispute of fact as to how much amount had been

collected from each student. Allegations made being that the

amount refunded by the College to the students was not the

appropriate amount as per order dated 29 th August, 2018. These

disputes, it was specifically held, would be examined by the ASC.

Students were permitted to come up with documents evidencing

how they arranged/obtained the amount paid, and the ASC was to

consider the material placed on record by the respective parties

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 13 of 30
and take a decision on the basis of evidence adduced in case of

each student.

10. More significant and important for our purpose, the order dated 4 th

October, 2018 had rejected the prayer of the College that they be

permitted to grant admissions for the current academic year 2018-

19. This Court was of the opinion that there was a serious dispute

with respect to the adequacy of the refund that had been made.

Besides, it was already the month of October, 2018, and the

admissions for the academic session 2018-19 were over.

11. KMC had thereupon preferred a review petition numbered Review

Petition (Civil) No. 2012 of 2018 which was dismissed by a

Division Bench of this Court vide order dated 16th January, 2019.

12. KMC had also filed Writ Petition (Civil) No. 25895 of 2018 before

the Kerala High Court challenging withdrawal of affiliation/

recognition by KUHS for the academic year 2018-19. This writ

petition was dismissed by a Division Bench of the Kerala High

Court vide judgment dated 1st August, 2018. Relief was refused as

the Court was not satisfied that KMC had cleared the mess

created by it for the academic year 2016-17. The High Court

observed that it was in the interest of justice that further

admissions in KMC should be deferred till the whole state of

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 14 of 30
affairs was sorted out and the misdeeds were purged. A number of

complaints were pending before the ASC from students alleging

collection of amounts far in excess of the fee stipulated and for

refund of the amounts paid. It was recorded that claims of the

students had not been settled till then. Reference was also made

to the orders passed by the ASC directing KMC to produce

demand drafts for undisputed amounts, but a number of

adjournments had been taken by KMC without compliance.

13. KMC had filed yet another Writ Petition (Civil) No. 15642 of 2019

for permission to admit students and affiliation for the academic

year 2019-20, which had been denied by KUHS. By judgment

dated 28th June, 2019, the writ petition was dismissed after

referring to the orders passed by this Court on 29 th August, 2018

and 4th October, 2018, observing that the recommendation for

cancellation of affiliation cannot be acted upon till these orders

were fully complied. Consequently, KMC was not entitled to invoke

the jurisdiction of the High Court for issuance of mandamus for

subsequent years as long as compliance of the two consent

orders was not made. Compliance would require repayment of

double the fee paid by the students admitted in 2016-17. Specific

details from the orders passed by the ASC viz. the defaults made

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 15 of 30
were recorded. The contention that the ASC was passing orders

prejudicial to KMC behind their back was rejected.

14. Judgment dated 28th June, 2019 in Writ Petition (Civil) No. 15642

of 2019 was challenged before this Court in Special Leave Petition

(Civil) Nos. 16368-16369 of 2019 but was withdrawn with liberty to

seek appropriate remedy next year. However, the order records

that this Court had not commented on the merits of the case as

the special leave petitions had been withdrawn.

15. Before we examine and determine the merits, it is pertinent to

state that vide interim order dated 18 th June, 2020 passed in the

special leave petition filed by Lalitha R Nath and others, impugned

judgment and order dated 29th May, 2020 has been stayed.

16. The primary contention of the ASC and the appellants is premised

on the assertion that the students/guardians were compelled and

forced to sign documents by the College even without informing

them about the contents. Students/guardians were coerced as

they required money at the earliest so that the students could take

admission in some other college. Secondly, without discharge

receipt, the College would not return the original certificates

submitted by the students. Accordingly, these documents obtained

under duress and coercion should not be accepted as valid ‘No

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 16 of 30
Dues Certificates’. In particular, reliance is placed on the decision

dated 21st February, 2019 in Writ Petition (Civil) No. 1247 of 2018

titled Riya George v. Kannur Medical College and Others,

wherein, this Court had noted the contention that the withdrawal of

the complaint against KMC by the father of the student therein

might not be voluntary and could be occasioned by the urgency to

obtain certificates deposited with the College and refund of

money, so as to secure the admission in another college.

17. The appellants submit that the Division Bench of the High Court

ought not have granted the relief, as this Court vide two orders

dated 29th August, 2018 and 4 th October, 2018, had directed the

ASC to examine the disputed factual matrix pertaining to the

actual amount paid by the students and for refund of double the

amount, which direction and mandate had been agreed to and

accepted by KMC. Further, the impugned order dated 22 nd

November, 2019 was passed by the Division Bench without

hearing the adversely affected parties, namely, the

guardians/students who had purportedly signed the certificates in

favour of KMC.

18. Challenging the order dated 29 th May, 2020, it has been submitted

that the order directing furnishing of bank guarantee of Rs.10

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 17 of 30
crores and title documents etc. does not take into account the

misery and suffering of the students who have not been

paid/refunded double the amount they had paid, though orders in

this regard were passed by this Court in August and October,

2018. The impugned order, it is submitted, is at variance with, and

ignores the continued non-compliance of the orders of this Court

as well as those of the High Court. Even the amounts due and

payable as per the orders of the High court have not been paid,

though KMC has not challenged the determination. KMC in its

affidavit filed on 16th December, 2020, accepts and admits that an

amount of Rs.4,82,46,000/- is due to one batch of students. This

amount has not been paid, though the College submits that it is

ready and willing to secure payment of the amount by bank

guarantee or other means considered fit by this Court. Similarly,

with regard to another batch of students, this affidavit states that

an amount of Rs.6,49,29,000/- has been ordered to be paid by the

ASC and that it is ready and willing to secure the amount by a

bank guarantee or other means as may be considered fit by this

Court. The College has primarily paid double of the fee including

tuition fee deposited by the students at the time of admission,

amounting to Rs.23.30 lakhs in each case. In respect of the other

amounts, including capitation fee paid in cash, no

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 18 of 30
refunds/payment has been made. Thus, KMC has been

deliberately disobeying the orders passed by this Court and the

High Court. The students should not be put in a disadvantageous

position by permitting KMC to furnish bank guarantee, which on

invocation would only lead to another round of litigation for

realisation of the amount. Besides, the amount of bank guarantee,

as directed, is wholly inadequate and ignores the quantum

actually payable. Selling land would be a long drawn, if not an

impossible exercise. KMC has to pay substantial amount to

different banks and the College property itself (valued at Rs.136

crores) had been mortgaged with a bank.

19. KMC, on the other hand, submits that it has been penalised as it

was not permitted to admit students for the academic years 2016-

17, 2018-19 and 2019-20. KMC has been conducting MBBS

course since the academic session 2006-07, and is a fully

compliant institution which meets all regulatory and statutory

requirements for a medical college. The facilities, including the

infrastructure, plant and equipment, have a market value of

Rs.1,000 crores. Excellent medical facilities are, therefore, not

being utilised and taken full advantage of, as students are not

being allocated and admitted to the MBBS course. KMC is a self-

financing minority medical college and any further restraint on

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 19 of 30
admitting students would bring the institution itself to a state of

bankruptcy. KMC has already offered to deposit Rs.15.71 crores

to be paid, if required, towards double the amount of fee paid by

the students. KMC has entered into settlements with 134

guardians/students. Further, payment of Rs.39 crores has been

made to students/guardians.

20. We have given our consideration to the arguments raised before

us.

21. The impugned order dated 22nd November, 2019 quashing the re-

opening notices issued by the ASC in the case of 92 students for

several reasons is liable to be set aside. The said 92 students

were not made parties to the writ petition preferred by KMC before

the High Court and were not heard on the stand and stance with

regard to receipts or No Dues Certificates signed by them. This

Court in its order dated 4th October, 2018 had referred to the

report of the ASC inter alia recording that KMC had collected

different amounts ranging from Rs.35 lakhs to Rs. 1 crore from

most of the 150 students. The report referred to one particular

case of Ms. Rehna Banu who had paid Rs.35 lakhs for admission.

The report also noticed that the tuition fee to be paid was

regulated by the Fee Regulatory Committee, albeit the students

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 20 of 30
had paid different amounts in addition to the tuition fee for

securing admission. Accordingly, on account of the seriously

disputed facts, this Court had directed that these aspects would

be examined by the ASC. Liberty was given to the guardians/

students to place relevant material before the ASC. This Court did

not consider it appropriate to conduct a factual inquiry into the

disputed facts on the aspect of total amount paid and adequacy of

the refund. The Division Bench of the High Court, by allowing the

writ petition filed by KMC and by quashing the notices issued by

the ASC to 92 students, has virtually made this Court’s order

dated 4th October, 2018, a dead letter in the case of those 92

students. In the aforementioned case of Riya George, a Division

Bench of this Court had dealt with an identical controversy – as in

its defence, KMC had relied on the No Dues Certificate, along with

the application and affidavit of the father of Riya George

withdrawing all claims in lieu of payment of Rs. 20 lacs, and the

order of the Chairperson of the Admission Fee Regulatory

Committee allowing withdrawal of the complaint. The court also

lamented failure of Riya George to make fair and candid

disclosure of full facts in the writ petition. In spite of observing that

there were sufficient indications to hold that Riya George/ her

father had knowledge of what had transpired, the judges took

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 21 of 30
notice of the contention that the claim was withdrawn under

duress, since the petitioner therein required refund of fee as she

had taken admission elsewhere. Referring to the two orders dated

29th August, 2018 and 4th October, 2018, it was held that it would

be inappropriate for this court to compute damages. Accordingly,

given that the ASC had already issued notice to examine facts, it

was held:

“27. There can be no manner of doubt that the
petitioner is entitled to be compensated for the loss of
a valuable year which was occasioned by the
misdemeanours of the first respondent. A student
who has been deprived of a valuable year in pursuing
her studies, cannot be left in the lurch. It is in this
background, that the explanation that the complaints
made by the father of the petitioner were withdrawn
only because there was an urgent need to obtain a
refund of the fee, to enable the petitioner to secure
admission to the Amrita Institute of Medical Sciences
must be understood. Middle class parents do not
have the luxury of resources. We must form a robust
understanding of the circumstances in which the
father of the petitioner withdrew his complaint. The
Committee has in fact recorded a finding of fact that
the withdrawal was not voluntary and was
occasioned by the serious impediment in receiving a
refund of fees. Hence, the petitioner would be entitled
to the benefit of the principle which was formulated in
the orders of this Court dated 29 August 2018 and 4
October 2018. Since the issue has been remitted
back to the Committee by a coordinate bench,
following the norm of judicial discipline, we are
inclined to follow the same course of action.

28. In order not to prejudice the case of the petitioner,
we leave it open to her to pursue her claim before the

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 22 of 30
Committee. The petitioner would be at liberty to
pursue her claim before the Committee in terms of
Clause 1 of the order dated 29 August 2018 passed
by this Court as clarified by the subsequent order
dated 4 October 2018. We request the Admissions
Committee to take a decision expeditiously and
within a period of three months of the receipt of a
certified copy of this judgment. All the rights and
contentions of the parties are kept open.”

22. The impugned order dated 22nd November, 2019 does not refer to

or examine the order dated 21st February, 2019 passed by this

Court in the case of Riya George. This apart, it was accepted

during the course of arguments before us that KMC has paid a

total amount of Rs.38,35,63,000/- to the guardians/students.

Rs.36,09,87,000/- has been paid to the guardians/students for

refund of the actual tuition fee and other amounts which were

admittedly paid. These payments were made on or before 4 th

October, 2018, i.e. the date on which the second order was

passed by this Court with the observations that there is a factual

dispute as to the total amount paid by the students to KMC. After

4th October, 2018, KMC has, in its affidavit filed on or about 3 rd

February, 2021, accepted that it had remitted an amount of

Rs.2,25,76,000/- to the students who had settled their disputes

before the ASC. These payments have been made through

demand drafts. It is also accepted that KMC is still to make

payment of Rs.15,72,89,020/- which is an undisputed figure

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 23 of 30
payable to guardians/students as per the amount determined by

the High Court or ASC. This is the final and undisputed figure as it

refers to the amount payable to about 55 students in terms of the

orders passed by the High Court and the ASC, which direction and

computation has not been challenged by the KMC before this

Court or before the High Court.

23. Once we accept the appeal against the impugned order dated 22 nd

November, 2019, we have to also accept the appeal against the

second impugned order dated 29th May, 2020. The latter order that

directs the College to furnish a bank guarantee of Rs.10 crores is

predicated on the assumption that no further amounts would be

due and payable in respect of 92 students as the notices issued

by the ASC to these students have been quashed. Further, the

impugned order does not notice that KMC had failed to make

payment even in cases where it had accepted the orders passed

by the ASC or the High Court. As noticed above, KMC, before us,

has accepted that they had to make payment of Rs.15,72,89,020/-

as per the amount finally awarded by the High Court or the ASC.

KMC has not filed any appeal to question and challenge these

orders. Therefore, this amount of Rs.15,72,89,020/- must be

immediately paid to the students/guardians. This figure of

Rs.15,72,89,020/- gives us an indication and is the basis of the

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 24 of 30
directions that we propose to issue to secure the interests and

rights of the 92 students, while permitting admission/affiliation in

the College.

24. We have already referred to the two orders passed by this Court

on 29th August, 2018 and 4 th October, 2018 which had inter alia

directed that double the fee paid by the guardians/students would

be refunded by KMC through electronic mode. Obviously, the

intent being that the payment must be made. In order to ensure

that payment is actually made, specific directions were issued that

the amount would be remitted to the bank account of each

student. Further, a compliance report including bank statement,

bank account numbers with the names of the students was to be

filed before this Court and also the ASC. The ASC was thereupon

to ascertain and submit the report to this Court as to refund of the

amounts to the students in their bank accounts. In order to ensure

prompt payment and also by way of penalty, KMC was directed to

not admit even a single student for the year 2019-20 other than

the students allotted by the CEE in their counselling to be held on

4th and 5th of September 2018. It was further directed that in case

of violation of the order, i.e. non-refund of double the amount of

fee paid, the entire order shall be withdrawn. Paragraph 2 of the

order dated 29th August, 2018 had, by consent, recorded that KMC

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 25 of 30
had agreed that the order of the ASC for withdrawal of the

affiliation shall not be acted upon if the directions given for refund

of double the fee, etc. by way of consent were complied with. It

obviously means that the order of withdrawal of affiliation would

remain in operation until and unless there was full compliance by

KMC. In case of non-compliance, the order passed by the ASC for

withdrawal of the affiliation would continue. We do not, therefore,

find anything wrong in the letter dated 29 th April, 2020 whereby

KUHS has rejected KMC’s application for continuation of affiliation

for the academic year 2020-21 as it is a necessary sequitur and

consequence of the two orders passed by this Court.

25. In light of the abovementioned facts and with due regard to orders

passed by this Court on 29th August, 2018 and 4th October, 2018,

we are inclined to issue the following directions:

(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

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 26 of 30
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

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 27 of 30
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.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 28 of 30

(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

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 29 of 30
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.

26. Accordingly, the impugned orders are set aside and the appeals

are allowed in the aforesaid terms. Pending applications, including

application I.A. No. 120323 of 2020 filed by the College, are also

disposed of in the above terms.

………………………………..J.

(S. ABDUL NAZEER)

………………………………..J.

(SANJIV KHANNA)
NEW DELHI;

FEBRUARY 18, 2021.

Civil Appeal a/o. of SLP (C) No. 7907 of 2020 & Ors. Page 30 of 30



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