Supreme Court Rules on College Losses from Vacant Medical Seats Due to Interim Orders: Monetary Restitution via Fee Adjustment Allowed, Not Compensatory Seats

New Delhi: The Supreme Court, in a significant judgment, addressed the plight of medical colleges suffering financial losses due to seats remaining vacant because of interim court orders. The Court ruled that while colleges cannot be granted compensatory seats in subsequent academic years, they can seek monetary restitution by approaching the State's Fee Fixation Committee to adjust future fee structures to cover the deficit. The judgment emphasized the need for High Courts to exercise "adequate caution and circumspection" when passing interim orders that direct medical seats to be kept vacant.

The Apex Court partly allowed appeals from two medical colleges whose MBBS seats for the academic year 2023-24 remained unfilled due to prolonged litigation stemming from interim orders passed by the High Court.

Background of the Appeals: Colleges Caught in Crossfire

Two medical colleges, one being RKDF Homeopathy Medical College, found themselves with an unfilled MBBS seat each for the 2023-24 academic year. These vacancies arose because the Director of Medical Education, acting on interim orders from the High Court dated September 22, 2023, directed the colleges to keep one seat vacant pending the outcome of writ petitions filed by students. By the time these petitions were ultimately dismissed, the admission deadlines had passed, leaving the seats permanently vacant for the entire course duration.

Case 1 ( Mohammad Eaan Shaikh ): A student, Mohammad Eaan Shaikh , challenged an amendment to the ‘ Mukhyamantri Medhavi Vidyarthi Yojana ’ which increased the parental income ceiling for scholarship eligibility. He argued this jeopardized his chances. The High Court ordered a seat to be kept vacant. His writ petition was eventually dismissed on March 4, 2024, after the admission cut-off.

Case 2 (Ms. Tasmiya Khan ): Another student, Ms. Tasmiya Khan , sought admission under the unreserved category based on her NEET score. An interim order also led to a seat being kept vacant in the appellant college. Her writ petition was dismissed by the High Court on December 22, 2023. However, Ms. Khan later succeeded in the Supreme Court (in a separate SLP decided on August 20, 2024, by a bench including Justice B.R. Gavai ), and was granted admission for the 2024-25 academic year. Despite this, the seat in the appellant college for 2023-24 remained vacant.

The appellant colleges, having failed to get relief from the High Court despite intervention applications, approached the Supreme Court seeking a compensatory seat for the subsequent academic year, arguing they suffered losses due to an "act of court."

Arguments Before the Supreme Court

The appellant colleges contended that the vacant seats resulted in underutilization of resources, financial harm, and denial of opportunity to other meritorious candidates. They prayed for a compensatory additional seat for the ensuing academic year.

The State authorities argued they had merely complied with court orders and could not be held liable.

Supreme Court's Analysis: Scrutiny of Interim Orders and Path to Restitution

The Supreme Court expressed strong disapproval of how the interim orders were passed by the High Court.

Critique of High Court's Interim Orders

The judgment highlighted critical lapses: > "Firstly, the interim order directing one seat in the counselling to be kept vacant (if available) in both these matters is a cryptic order where neither the prima facie case nor the balance of convenience and irreparable loss aspects have been discussed... The High Court, in both the matters before us, has wholly ignored these principles."

The Court reiterated that interim relief requires at least a brief prima-facie assessment and consideration of balance of convenience and irreparable harm.

On Vacant Medical Seats and Compensatory Seats

The Supreme Court acknowledged the detrimental impact of vacant seats: > "Thirdly, this Court has held repeatedly that keeping vacant seats results in huge financial loss to the college apart from being a national wastage of resources (See Index Medical College, Hospital & Research Centre v. State of Madhya Pradesh & Ors., (2023) 11 SCC 570)."

However, it found that ordering an additional seat for the college in the succeeding academic year was not a viable option, citing Faiza Choudhary v. State of J&K & Anr. (2012), which established that a seat falling vacant cannot be carried forward. The Court distinguished this from cases like S. Krishna Sradha v. State of Andhra Pradesh & Ors. (2020), where an additional seat was created for a student prejudiced by authorities. Here, the prejudice was to the college.

The Principle of Restitution

The Court emphasized its duty to neutralize the effects of incorrect interim orders, invoking the principle of restitution and the maxim actus curiae neminem gravabit (an act of the court shall prejudice no one). > "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... or the other party had suffered an impoverishment, restitution can be made."

Guidance for Future Interim Orders

The Court laid down important safeguards for future cases: > "Only if there is a cast iron case for the petitioner... interim orders keeping seats vacant could be made... In appropriate cases... the court will be justified in directing the petitioner to provide security, to the concerned college-institution... to guarantee that in the event of the Writ Petition/Appeal being dismissed and the seat going unfilled... the Petitioner/Appellant would make good the loss which the college may incur financially." The Court also stressed that every endeavor must be made to dispose of such matters before admission deadlines.

The Final Decision: A Novel Approach to Compensation

Finding that the colleges were prejudiced for no fault of theirs, and ruling out the creation of compensatory seats, the Supreme Court devised a monetary solution:

> "In the special facts of the case and considering that it is a case of one seat in each college, we feel that ends of justice will be served if we grant liberty to the appellant colleges to make a representation to the Fee Fixation Committee/Fee Fixation Authority of the State highlighting the vacancy caused due to the interim order of the High Court. If such a representation is made, the Fee Fixation Committee/Fee Fixation Authority shall, while fixing the fees for college (for future batches) reckon the deficit in fees that has resulted due to the single vacant seat and fix the fees by adding such amount to the total fees proposed to be fixed which will restitute the colleges monetarily."

The Court reasoned that since the fee would be spread over five years, the financial impact on future students would be marginal.

The appeals were partly allowed with this direction. The judgment serves as a critical reminder to courts on the cautious exercise of power when granting interim reliefs that have significant financial and resource implications, especially in the context of professional education admissions.