College cannot recover full fees when student has withdrawn from the course: Karnataka High Court

The Karnataka High Court recently directed a medical college and institution not to demand the full 3-year-course fee from a student, who had withdrawn his admission to their post-graduate program [Vaibhav Khosla v. State of Karnataka and Ors].The division bench of Justices Alok Aradhe and MGS Kamal said that the college had no legal right to ask for full course fees and ordered Rajarajeshwari Medical College and Hospital to return the petitioner's original documents to him, and to not insist on the full 3-year-course fees of ₹25,32,000 since the petitioner had withdrawn from the program before it commenced..The Court referred to the case of Islamic Academy of Education and Anr. v. State of Karnataka and Ors (2003) 6 SCC 697, in which the Supreme Court said that educational institutions can only charge prescribed fees for one semester or one year. If the institution is concerned that a student might leave midstream, at most they can require the student to give a bond or bank guarantee for the balance fees. ."Thus, it is evident that the institution has only a right to recover the prescribed fee for one semester/year. In the instant case, the petitioner has not left the course midstream... in view of the law laid down Islamic Academy of Education and Another, the respondent no. 5 has no right in law to demand the remaining course fee of three years course from the petitioner," the High Court held..The petitioner in this case appeared for the Post Graduate National Eligibility cum Entrance Test, 2018 by the Karnataka Examination Authority after completing his MBBS course. He was allotted a seat in MD Psychiatry by the respondent college, for which he deposited ₹7,74,500 and all his original documents with the Karnataka Examination Authority. However, after that he was admitted to Christian Medical College, Ludhiana in MS Orthopedics. He thus surrendered his seat in the medical college of the respondent and requested them to return his original documents. This was done before the last date of counseling and much before the commencement of the course. .After the petitioner surrendered his seat, the college asked him to deposit a sum of ₹25,32,000, the fee for the entire three year program, without which they would not return his original documents. Advocate Chandrakanth R Goulay, appearing on behalf of the respondent college argued that if the original documents were returned, the college would not be able to recover the full course fee from the petitioner. As he had withdrawn from the course, the college was deprived from admitting another person to the course, and is therefore entitled to recover the entire course fee for him, it was contended..The Court did not accept the contentions of the college, observing that the petitioner had withdrawn from the course before the last date of counseling. Moreover, as per the law laid down by the Supreme Court in Islamic Academy of Education and Another, institutions do not have the legal right to demand full course fees from students who leave the program, the Court observed.On September 24, 2019, the Court had granted interim relief to the petitioner, directing the institution to return his original documents. The petitioner agreed to not seek a refund of ₹7,74,500 which he had deposited with the institution. In view of the above, the Court disposed of the petition..Advocate Ajoy Kumar Patil appeared on behalf of the petitioner, Advocate NK Ramesh appeared for the Karnataka Examination Authority and Advocate Chandrakanth R. Goulay represented the medical college..[Read Order]