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