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Education: Mid-session relocation of students – Resolution of outstanding educational fee liabilities

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Subject Matter: Resolution of outstanding educational fee liabilities and financial apportionment arising from the mid-session relocation of MBBS students from a defaulting medical college to three transferee private medical institutions.

Final Outcome: Appeals closed. The Supreme Court directed the complete disbursal of ₹12 crores (plus accrued interest) deposited by the defaulting trust to the transferee colleges. It further permitted the colleges to recover the remaining fee deficits from the passed-out students based on the original college’s fee rates via a regulatory framework managed by the National Medical Commission (NMC).

1. Introduction and Crystallization of the Dispute

The matter originally commenced as a challenge to an Orissa High Court directive concerning the relocation of MBBS students from the defunct Sardar Rajas Medical College, Hospital and Research Centre (SRMCH). SRMCH was managed by the Selvam Educational and Charitable Trust. Over time, the core controversy shifted.

Through a series of interim orders, the Supreme Court successfully protected the students’ academic careers by overseeing their relocation to three recognized private institutions (“transferee colleges”): Kalinga Institute of Medical Sciences (KIMS), Institute of Medical Sciences & SUM Hospital, and Hi-Tech Medical College & Hospital. Consequently, the final dispute shrank exclusively to the equitable resolution of financial liabilities and the recovery of outstanding educational fees claimed by these transferee colleges.

2. Background and the Institutional Default

SRMCH admitted two batches of MBBS students during the 2013–2014 and 2014–2015 academic sessions. Subsequent regulatory inspections by the Medical Council of India (MCI/NMC) exposed severe infrastructure deficiencies and a shortage of teaching faculty, leading to a denial of its recognition renewal.

SRMCH’s legal challenge against this de-recognition was dismissed by the Supreme Court in 2014. To prevent the loss of an academic year, a total of 124 affected students were subjected to a State-supervised online counseling mechanism. This resulted in 122 students being provisionally distributed across the three transferee private medical colleges.

3. Fee Discrepancies and Contentions of the Parties

A sharp financial mismatch arose due to varying fee structures and interim judicial mandates:

  • The Transferee Colleges: They argued that they absorbed the sudden influx of students and provided full medical training and stipends. However, under the Court’s interim orders, the students paid only heavily subsidized, government-rate fees (approx. ₹30,000 per annum), leaving a massive deficit relative to the actual costs incurred by these private institutions. They agreed to settle for reimbursement calculated at SRMCH’s original rates (ranging between ₹12.75 lakhs to ₹14.87 lakhs per student in aggregate) rather than their own higher standard fees.
  • The Students: Represented by senior counsel, the students contended that they were victims of institutional failure. They argued that having completed their courses under stressful conditions, they should not be saddled with retroactive financial burdens.
  • The Selvam Trust: The defaulting management claimed its regulatory disputes with the MCI were ongoing and argued that it should not bear the entire financial burden since the students received equivalent or superior education at the transferee colleges.

4. Findings and Allocation of Financial Liability

The Supreme Court evaluated the situation using the legal maxim Commodum ex injuria sua nemo habere debet (no one should derive a benefit from their own wrong). It held that while the students faced chaos, allowing them to complete a private medical course at government rates would constitute “unjust enrichment,” especially since they originally contracted to pay higher private fees and might not have qualified for highly competitive government seats on merit. Concurrently, the Selvam Trust could not evade liability for its operational failures.

The Court determined that the aggregate amount due to the three colleges—even when calculated at the lower SRMCH fee baseline—stood at approximately ₹16.2 crores. To satisfy this, the Court targeted the security pools established by the defaulting Trust.

5. Directives on Disbursal and Recovery Mechanisms

To equitably close the shortfall, the Court issued the following operational orders:

  • Release of Funds: The Court directed that the ₹10 crore bank guarantee furnished by the Selvam Trust to the MCI/NMC, alongside the ₹2 crores (which grew to over ₹3.58 crores with accrued interest) deposited with the Supreme Court Registry, be released immediately. These accumulated funds (approx. ₹13.58 crores) must be divided and disbursed in equal proportions among the three transferee colleges within three months.
  • Recovery from Passed-out Students: Recognizing a remaining deficit of roughly ₹2.2 crores, the Court permitted the transferee colleges to submit formal representations to the NMC mapping out the exact student-wise shortfalls. The NMC is mandated to recover these residual deficits from the passed-out students, factoring in any initial fees the students paid to SRMCH at the time of admission.
  • Release of Certificates: The Court clarified that all students who fulfill their designated outstanding fee obligations shall be immediately entitled to receive their degree certificates, migration records, and other course-completion documentation.

2026 INSC 488

Soumya Ranjan Panda &Ors. V. Subhalaxmi Dash &Ors. (D.O.J. 14.05.2026)

2026 INSC 488 click here to view full text of judgment

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Admissibility of Deceased Witness Testimony Against Absconding Accused

July 18, 2026 No Comments

Supreme Court allowed the appeals filed by the State of West Bengal, ruling that the deposition of a deceased witness recorded in an earlier trial is admissible in a subsequent trial against an absconding accused, provided the requirements of Section 299 of the Code of Criminal Procedure (CrPC) are met. The Court clarified that the provision serves to preserve evidence when an accused deliberately absconds, preventing them from benefiting from the unavailability of material witnesses due to the passage of time. The Court set aside the High Court’s order, which had denied the admission of the victim’s testimony, confirming that the statutory preconditions—the accused absconding and no immediate prospect of arrest—were satisfied at the time the witness deposed.

  • Background: In a 2012 gang-rape case, the respondent and another accused were absconding while three others were tried and convicted. The victim, a key witness, testified in the first trial but passed away in 2015. After the respondent was arrested in 2016, the prosecution sought to admit the victim’s earlier deposition as evidence under Section 33 of the Indian Evidence Act read with Section 299 of the CrPC.
  • High Court Order: The High Court of Calcutta had rejected the application, observing that the prosecution had a duty to obtain a specific direction from the Trial Court to record evidence against the absconder during the first trial, and thus the earlier deposition could not be used against the respondent.
  • Interpretation of Section 299 CrPC: The Supreme Court held that Section 299 CrPC acts as an exception to the general rule requiring a witness to be examined in the presence of the accused. It does not mandate a formal, prior order from a Magistrate to record that the accused is absconding; rather, what is relevant is whether the conditions—that the accused is absconding and there is no immediate prospect of arrest—were established at the time the evidence was recorded.
  • Preventing Misuse of Process: The Court reasoned that taking a restrictive view of Section 299 would jeopardize the criminal justice system by incentivizing accused persons to wilfully abscond and await the death or unavailability of material witnesses.
  • Application to Facts: The Court noted that the respondent was a declared absconder when the victim’s testimony was recorded (2013), and he remained at large until his arrest in 2016. As the two essential conditions of Section 299(1) were met, the deceased victim’s evidence is admissible in the trial against the respondent.

Legislative Continuity: The Court noted that the legislature has maintained this principle in Section 335 of the recently enacted Bharatiya Nagarik Suraksha Sanhita, 2023, reinforcing the intent to ensure evidence is preserved against those who evade trial.

2026 INSC 718

The State of West Bengal v. Kader Khan – (D.O.J. 17.07.2026)

2026 INSC 718 click here to view full text of judgment

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Insolvency and Bankruptcy: Finality of Resolution Plans and Extinguishment of Sub-judice Claims

July 18, 2026 No Comments

Supreme Court allowed the appeals filed by the Successful Resolution Applicant (Appellant-SRA), ruling that upon the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC), all claims—including those pending adjudication (sub-judice)—that are not specifically provided for in the plan stand extinguished. The Court held that the “clean slate” doctrine is fundamental to the IBC, preventing unresolved or contingent claims from resurfacing and undermining the revival of the corporate debtor. Consequently, the Court set aside the High Court orders and dismissed the civil suit and arbitration proceedings initiated by operational creditors, affirming that they are bound by the terms of the approved Resolution Plan.

  • Background: The Appellant-SRA challenged Bombay High Court orders that allowed a civil recovery suit and arbitration proceedings to continue against the corporate debtor (Bhushan Steel Limited) despite the approval of its Resolution Plan. The respondents, operational creditors, sought to pursue claims that were pending at the time of the Corporate Insolvency Resolution Process (CIRP).
  • Treatment of Claims: During the CIRP, the Resolution Professional admitted the respondents’ disputed claims at a notional value of Rupee One (1) each. The approved Resolution Plan stipulated that because the liquidation value was NIL, no amounts were due to operational creditors; however, a settlement fund was provided for those with admitted claims.
  • The “Clean Slate” Doctrine: The Court emphasized that a successful resolution applicant must start on a “clean slate,” free from “hydra-headed” surprise claims. Once a Resolution Plan is approved under Section 31(1) of the IBC, it becomes binding on all stakeholders, and claims not incorporated therein are deemed extinguished, withdrawn, or abated.
  • Finality of the Plan: The Court noted that the Final List of Creditors attained finality, and the respondents could not seek to reopen or question the commercial wisdom of the Committee of Creditors after the plan’s approval. The Court found no merit in the allegations of fraud, noting that no proceedings had been initiated under Rule 11 of the NCLT Rules to challenge the plan’s integrity.
  • No Express Carve-out: Upon a harmonious reading of the Resolution Plan, the Court concluded there was no express “carve-out” protecting sub-judice claims from extinguishment. The plan explicitly mandated that all legal proceedings relating to the period prior to the effective date stand extinguished, except to the extent of the specific settlement amount provided.
  • Observation on MSMEs: In an “Afterword,” the Court observed that the current insolvency framework does not adequately account for the position of small operational creditors and MSMEs, who are often placed at the bottom of the repayment waterfall. The Court suggested that the Legislature and Law Commission examine this to ensure a more balanced repayment mechanism.
  • Outcome: The Court allowed the appeals, set aside the contrary High Court orders, and dismissed the pending civil suit and arbitration proceedings, enforcing the finality of the Resolution Plan.

2026 INSC 717

M/S Tata Steel Ltd. v. Varsha & Anr. (D.O.J. 17.07.2026)

2026 INSC 717 click here to view full text of judgment

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Excluding Nominated Members from Local Authority Elections

July 18, 2026 No Comments

The Supreme Court upheld the High Court of Karnataka’s decision to exclude nominated members of Town Panchayats from participating in Legislative Council elections for Local Authorities’ Constituencies. The Court ruled that under the constitutional framework established by the 74th Amendment (Part IX-A), nominated members, who serve only in an advisory capacity, lack the democratic mandate of elected representatives. Consequently, their inclusion in the electoral roll was declared unconstitutional, and the Court affirmed the direction to conduct a recount of votes after segregating the invalid votes cast by these nominated members.

  • Background: The election to the Karnataka Legislative Council (Chikkamagaluru Local Authorities Constituency) was challenged because 12 nominated members from four Town Panchayats were included in the electoral roll and participated in the voting. The appellant, who won by a narrow margin of 6 votes, contended that the electoral roll’s finality should be respected.
  • Constitutional Interpretation: The Court held that while Article 171(3)(a) mentions “members” of local authorities, this must be interpreted through the lens of the 74th Constitutional Amendment. Article 243-R establishes that while nominated members may be appointed for their expertise, they are expressly barred from voting in municipal meetings, underscoring their advisory rather than representative role.
  • Democratic Representation: The Supreme Court emphasized that allowing nominated members to vote in Legislative Council elections would undermine the democratic nature of the electoral process, as they are not democratically elected. The Court affirmed that “members” in the context of electoral colleges refers to democratically elected representatives.
  • Finality of Electoral Rolls: While acknowledging the principle that electoral rolls typically attain finality, the Court distinguished this case by noting that the inclusion of the nominated members was void ab initio and unconstitutional. Therefore, the finality of the roll could not be used to validate an illegality that strikes at the core of the electoral college’s composition.
  • Secrecy of the Ballot: The Court rejected the argument that segregating these votes would violate the secrecy of the ballot. It maintained that the higher constitutional goal of preserving free and fair elections and ensuring the purity of the electoral process outweighs the requirement for absolute secrecy in this specific context.
  • Outcome: The Supreme Court dismissed the appeals and affirmed the High Court’s orders. The Court directed the authorities to proceed with the consequential actions based on the recount results already obtained, ensuring that the election outcome reflects only the valid votes cast by elected representatives.

2026 INSC 716

Pranesh M.K. v. Shanthegowda & Ors. – (D.O.J. 16.07.2026)

2026 INSC 716 click here to view full text of judgment

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Railway: Establishing Liability in Untoward Railway Incidents

July 18, 2026 No Comments

The Supreme Court set aside the concurrent dismissal of a compensation claim by the Railway Claims Tribunal and the High Court of Madhya Pradesh. The Court held that when a passenger dies in an “untoward incident” (falling from a running train), the absence of a recovered ticket does not automatically negate the status of a bona fide passenger. Emphasizing the “no-fault liability” principle under Section 124A of the Railways Act, 1989, the Court ruled that once the claimant establishes the foundational facts through an affidavit, the burden shifts to the Railways. Technical lapses and the inability to recover personal belongings should not defeat the humanitarian and welfare objectives of the legislation.

  • Background: The appellant filed a claim for compensation following the death of her husband, who fell from a running train while traveling from Raipur to Ahmedabad. The Railway Claims Tribunal and the High Court previously rejected the claim, citing a lack of proof regarding the deceased being a bona fide passenger (specifically due to the missing ticket).
  • Legal Principle (No-Fault Liability): The Court reiterated that Section 124A of the 1989 Act is a beneficial, “no-fault” provision. It is designed to provide expeditious relief to victims of untoward incidents without requiring proof of negligence by the Railway Administration.
  • Burden of Proof: Relying on Union of India v. Rina Devi and Doli Rani Saha v. Union of India, the Court clarified that:
    • The mere absence of a ticket does not disprove that a person was a bona fide
    • The initial burden is on the claimant, which is sufficiently discharged by filing an affidavit stating the facts.
    • Once this is done, the burden shifts to the Railways to disprove the claim based on attending circumstances.
  • Operational Concerns: The Court highlighted the critical issue of chronic overcrowding in Indian Railways. It noted that while the Railway Manuals contain detailed safety and ticketing protocols, the execution often fails. The Court suggested that Railways should increase manpower to better manage safety and ticketing, which could simultaneously reduce such tragedies and provide employment.
  • Constitutional Perspective: The Court observed that using terms like “second class passenger” is outdated and potentially offensive to the spirit of the Constitution of India; it suggested that class designations should refer to the “coach” rather than the “passenger.”

Decision: The Supreme Court allowed the appeal and set aside the lower court judgments. It ordered the Railways to pay compensation of ₹8,00,000 to the appellant within four weeks, failing which the amount would attract interest at 8% from the date of the original claim filing.

2026 INSC 715

Lata v. Union of India & Anr. – (D.O.J. 17.07.2026)

2026 INSC 715 click here to view full text of judgment

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