Supreme Court Addresses Compensation for Vacant Medical Seats Due to Interim Orders: Ramkrishna Medical College vs. State of Madhya Pradesh (2024)

Date of the Judgment: 7th November 2024
Citation: 2024 INSC 845
Judges: B.R. Gavai, J. and K.V. Viswanathan, J.
Can interim court orders, intended to protect individual student interests, inadvertently harm educational institutions? The Supreme Court of India recently grappled with this question in a case involving medical colleges that were directed to keep seats vacant due to interim orders of the High Court. These orders, issued during ongoing litigation, resulted in seats remaining unfilled, causing financial losses to the colleges. The Supreme Court, in this judgment, examines the balance between protecting student rights and ensuring the stability of educational institutions. The judgment was authored by Justice K.V. Viswanathan, with Justice B.R. Gavai concurring.

Case Background

In 2017, the State Government of Madhya Pradesh introduced the ‘Mukhya mantri Medhavi Vidyarthi Yojana,’ a scheme providing fee payment for eligible students with parental income below Rupees six lacs per annum. In 2023, the income ceiling was raised to Rupees eight lacs.

Two separate cases led to the present appeals. In the first case, Mohammad Eaan Shaikh, a student who secured 86% in his 12th standard exams and 430 marks in NEET 2023, was not allotted a seat in the first two rounds of counseling. He filed a writ petition challenging the application of the amended income ceiling, arguing it reduced his chances of getting a seat. The High Court passed an interim order directing one seat to be kept vacant for him.

In the second case, Ms. Tasmiya Khan sought a seat under the unreserved category with a 5% government school quota. She claimed that students with lower NEET scores were admitted under the unreserved government school quota while she, an OBC candidate, had secured more marks. The High Court passed an interim order directing one seat to be kept vacant for her.

In both cases, the High Court ultimately dismissed the writ petitions, but the interim orders had already caused the colleges to keep one seat vacant each, which could not be filled due to the admission deadlines. The colleges, having suffered losses, appealed to the Supreme Court seeking a compensatory seat.

Timeline

Course of Proceedings

The High Court, in both cases, initially passed interim orders directing the medical colleges to keep one MBBS seat vacant. These orders were based on the students’ claims that they were unfairly denied admission. The colleges intervened, arguing that keeping seats vacant would cause them financial losses if the students did not ultimately get admission.

The High Court dismissed both writ petitions. In the first case, the court held that the amendment to the scheme was a policy decision and there were no grounds to hold it unconstitutional. In the second case, the court accepted the authorities’ plea that the student was only entitled to consideration under the OBC-Government School quota.

Despite the dismissal of the writ petitions, the colleges were left with vacant seats as the admission deadlines had passed. The colleges then appealed to the Supreme Court seeking a compensatory seat for the subsequent academic year.

Legal Framework

The Supreme Court considered several legal principles in this case. Firstly, the court reiterated that interim orders must be based on a prima facie assessment of the case, the balance of convenience, and the potential for irreparable harm. The court noted that the High Court’s interim orders failed to discuss these aspects.

Secondly, the court emphasized that a medical seat has a limited life, only valid for the academic year it falls due, and cannot be carried forward to the next year. The court cited the case of *Faiza Choudhary v. State of J&K & Anr., (2012) 10 SCC 149* to support this point. However, the court also noted that in exceptional circumstances, it can direct an increase in seats for the same academic year or direct admission in the next academic year, as held in *S. Krishna Sradha v. State of Andhra Pradesh & Ors., (2020) 17 SCC 465*.

The Supreme Court also referred to *Index Medical College, Hospital & Research Centre v. State of Madhya Pradesh & Ors., (2023) 11 SCC 570*, where it was held that keeping seats vacant results in huge financial loss to the college. Additionally, the court discussed the principles governing the grant of provisional admissions, citing *Krishna Priya Ganguly & Ors. v. University of Lucknow & Ors., (1984) 1 SCC 307*, stating that such admissions should only be granted in exceptional cases.

Finally, the court discussed the principle of restitution, stating that if a party gains an advantage from a court order that is later overturned, restitution can be made to the party that suffered a loss. The court referred to *Indore Development Authority v. Manoharlal & Ors., (2020) 8 SCC 129*, *Bhupinder Singh v. Unitech Ltd., 2023 SCC OnLine SC 321*, and *Kalabharati Advertising v. Hemant Vimalnath Narichania & Ors., (2010) 9 SCC 437* to support the principle that the court should neutralize the effect of wrong interim orders and that the maxim *actus curiae neminem gravabit* (an act of the court shall prejudice no one) applies.

Arguments

The appellant colleges argued that the interim orders of the High Court had resulted in a loss of one seat each, which could not be filled due to the cut-off dates. This resulted in underutilization and wastage of resources, causing financial harm to them and depriving meritorious candidates of admission. They sought a compensatory additional seat for the ensuing academic year.

The respondent authorities contended that they had no role in the matter, as they were merely carrying out the orders of the court. They argued that no liability could be fastened on them.

The core argument of the appellant colleges was that they suffered a loss due to an act of the court, specifically the interim orders, and that they should be compensated for this loss. They highlighted the financial implications of a vacant seat, which included loss of fees for the entire duration of the MBBS course, while their expenditure remained the same.

The respondent authorities, on the other hand, took a hands-off approach, stating that they were merely following the court’s orders and could not be held responsible for the consequences.

The innovativeness of the argument by the appellant colleges lies in their plea for compensation, not in the form of an additional seat, but through a financial adjustment by the Fee Fixation Committee. This argument acknowledged the limitations on creating additional seats for the next academic year and sought a practical solution to the financial loss suffered by the colleges.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

✓ Have the appellant colleges made out a case for a direction to the respondent authorities to create a compensatory seat in the ensuing academic year?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court acknowledged the loss suffered by the colleges due to the interim orders of the High Court. However, it did not grant the requested compensatory seat, citing the principle that a medical seat has a limited life and cannot be carried forward. Instead, the court devised a mechanism for financial restitution.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to balance the rights of students with the financial stability of educational institutions. The court emphasized the following points:

• The High Court’s interim orders were cryptic and did not adequately consider the prima facie case, balance of convenience, and irreparable loss aspects.
• A medical seat has a limited life and cannot be carried forward, making a compensatory seat for the next academic year unfeasible.
• Keeping seats vacant results in financial loss to the colleges, which needs to be addressed.
• The principle of restitution should be applied to compensate the colleges for the loss they suffered due to the interim orders.

The court also highlighted the importance of caution and circumspection when passing interim orders that could have significant financial implications for institutions. The court’s reasoning was driven by a sense of fairness and the need to rectify the unintended consequences of its own orders.

The Supreme Court considered alternative interpretations, including the possibility of granting a compensatory seat, but rejected this option due to the established legal principle that medical seats cannot be carried forward. The court also considered the arguments of the respondent authorities but ultimately focused on providing a remedy to the colleges that had suffered a loss.

The final decision was reached by balancing the legal limitations on creating additional seats with the need to provide restitution to the colleges. The court opted for a practical solution by allowing the colleges to seek financial compensation through the Fee Fixation Committee.

The court’s reasoning was based on the principle of fairness and the need to rectify the unintended consequences of interim orders. The court emphasized the importance of caution when passing such orders and the need to consider the financial implications for all parties involved.

The judgment was unanimous, with both judges concurring on the final decision and the reasoning provided.

The court quoted the following from the judgment:

“These cases highlight the complications that may arise if adequate caution and circumspection are not exercised, while passing interim orders in judicial proceedings.”

“The High Court, in both the matters before us, has wholly ignored these principles.”

“It is well settled that if on account of an act of a party persuading the court to pass an order, which at the end has been held not sustainable and if in the process one party has gained an advantage which it would not have otherwise earned or the other party had suffered an impoverishment, restitution can be made.”

Key Takeaways

✓ Courts must exercise caution and circumspection when passing interim orders, especially those that have financial implications for institutions.

✓ Medical seats have a limited life and cannot be carried forward to the next academic year.

✓ Colleges that suffer losses due to interim court orders are entitled to restitution.

✓ The Fee Fixation Committee can be directed to consider the financial losses of colleges when fixing fees for future batches.

The judgment may lead to a more cautious approach by courts when issuing interim orders that could affect educational institutions. It also sets a precedent for providing financial restitution to institutions that suffer losses due to such orders. The judgment clarifies the limitations on creating additional medical seats and provides a practical solution for addressing the financial impact of vacant seats.

Directions

The Supreme Court directed that the appellant colleges are at liberty to make a representation to the Fee Fixation Committee/Fee Fixation Authority, highlighting the vacancy caused due to the interim order of the High Court. The Fee Fixation Committee/Fee Fixation Authority shall pass appropriate orders in terms of the holding rendered in this judgment.

Development of Law

The ratio decidendi of this case is that while courts have the power to pass interim orders, they must exercise caution and circumspection, especially when such orders can have financial implications for institutions. The judgment also reaffirms the principle that medical seats have a limited life and cannot be carried forward, and that restitution should be provided to parties who suffer losses due to court orders that are later overturned.

This judgment does not change any previous positions of law but clarifies the application of existing principles in the context of interim orders affecting educational institutions.

Conclusion

The Supreme Court’s judgment in Ramkrishna Medical College vs. State of Madhya Pradesh addresses the issue of compensation for medical colleges that suffer losses due to interim court orders leading to vacant seats. While the court did not grant the requested compensatory seats, it provided a mechanism for financial restitution through the Fee Fixation Committee. The judgment emphasizes the importance of caution when passing interim orders and reaffirms the principle of restitution. This case highlights the complexities of balancing student rights and institutional stability.