Sri Devaraj Urs Medical College Tamaka Reptd. by Its Director H. Anjanappa S/O G. Hanumante Gowda, Director and Trustee of Sri Devaraj Urs Education Trust Vs. Government of India Rep by Its Secretary Ministry of Health and Family Welfare Government of India and Government of Karnataka Rep. by the Secretary Deparment of Health and Family Welare, Government of Karnataka - Court Judgment

Excerpt:
constitution - subvention - petitioner was self-financing medical institute - petitioner filed petition against respondent to pay subvention amount for previous two academic year 2002-03 - respondent formulated scheme of admission with object of removing capitation fee - according to scheme central government provided subvention amount rs. 5000/- p.a.with regard to every student - after pronouncement of judgment in t.m.a. pai's case respondent has not made payment towards subvention - hence present petition - held, interim order was applicable to those student who were admitted prior to judgment in pai's case and therefore covered under terms of said interim order - hence, in respect of student who were admitted in academic year 2002-03,petitioner was entitled to subvention until they completed course of or period of 5 years whichever is earlier - petition allowed - payment of subvention amount: [b.v.nagarathana, j] claim made by the petitioner college in respect of payments to be made by the first respondent towards subvention -rejection of claim challenge as to mandamus sought to the first respondent to pay subvention amount for the academic year 2002-2003 and 2003-2004 - held, the fact that by virtue of the order dated 11.8.1995, the payment of subvention by the central government to the respective colleges had acquired right to the subvention fee until otherwise held by the larger bench in tma pai foundation case and further the fact that the law declared in tma pai foundation was to become effective only from the succeeding academic year i.e., 2003-04 onwards, all actions taken by virtue of the interim order dated 11.8.95 have to be held to be valid and continued till the academic year 2003-04 is already noted. considering the fact that the opinion of the apex court that the tma pai foundation case was rendered after the commencement of the academic year 2002-03 supreme court in its wisdom thought it fit to apply the law declared in the said case prospectively from the academic year 2003-04 onwards, so that all admissions made even in the academic year 2002-03 under the scheme of unnikrishnans case [unnikrishnan v state of a.p., air 1993 sc 2178]were validated and were not to be questioned in any court of law in the interest of students as the said scheme was over ruled in tma pai foundation case. the students who were admitted prior to the academic year 2002-03 in the petitioner/college created a right in favour of the petitioner/college to receive subvention in respect of such students until they completed the courts or for a period of five years whichever is earlier despite the order of the supreme court in t.m.a. pai foundation case. as far as the students who are admitted in the academic year 2002-03 is concerned, it is not in dispute that the said students were admitted as per the scheme in unnikrishnans case prior to the judgment delivered in t.m.a.pai foundation case. under the circumstances the interim order dated 11.8.1995 was applicable to even those students who were admitted prior to the judgment in t.m.a. pai foundation case and therefore covered under the terms of the said interim order. hence in respect of students who were admitted in the academic year 2002-03, the petitioner was entitled to subvention until they completed the course or for a period of five years whichever is earlier particularly when the pronouncement in t.m.a.pai foundation case was subsequent to the completion of admissions and till then the scheme in unnikrishnans case was in operation. - though the said review petitions were dismissed by the constitutional bench of the hon'ble supreme court by its older dated 14.5.1993, several minority educational institutions had however, complained against the extension of the scheme formulated in unnikrishnan's case to the said institutions by way of writ petitions. a in respect of every student admitted to a private medical college was made by the hon'ble supreme court by its interim order dated 11.8.1995 and that the subvention was to be paid until the student completed the course or for a period of five years whichever was earlier and that the first respondent has made payment towards subvention towards tee commencing from academic year 1995-96 and till the commencement of the academic year 2002-03. but in respect of students who have been admitted in the year 2002-03 as well as in respect of students on whose behalf the petitioner was receiving subvention till the academic year 2002-03, there has been stoppage of payment from the said academic year and that the reason given by the first respondent that it is on account of the judgment in t. having said that the hon'ble supreme court went ahead and formulated a scheme for the admission of students to professional colleges as well as gave direction regarding the fee structure, pending regulations to be framed by the respective authorities in the matter of fee structure. during the pendency of the said writ petitions and on the direction sought by the professional colleges with regard to the mode of admission as well as the fee structure for the academic year 1995-96, the interim order dated 11.8.1995 was made under which the provision of subvention was formulated by the hon'ble supreme court. the controversy is however, with regard to the students who are admitted from the academic year 2002-03 as well as with regard to students in respect of whom the college was entitled to receive subvention and in respect of whom it has been discontinued pursuant to the judgment of the hon'ble supreme court in t.orderb.v. nagarathna, j.1. this writ petition has been filed by a medical college challenging the communication dated 13.5.2005 in d.o. no. u 12012/1/ 200l-me(p-ii) 1971-vip/04 (annexure-e) and seeking a writ in the nature of mandamus or such other writ directing the first respondent to pay subvention amounts for the academic year 2002-2003 and 2003-2004 as claimed under letter dated 13.11.2004 and 20.1.2005 vide annexure c&d.;2. according to the petitioner it is a college administered by an educational trust having faculties in medicine and it does not receive any aid from the university or the state government or from the central government and is therefore a self-financing medical institution; that the hon'ble supreme court in the case of sri. unnikrishnan v. state of andhra pradesh reported in : [1993]1scr594 had formulated a scheme of admission with the object of removing mal-practice of charging capitation fee by the professional medical colleges and that the said scheme was pot into operation from the academic year 1993-94 cowards. subsequently, review petitions were filed by several institutions against the judgment in unnikrishnan's case. though the said review petitions were dismissed by the constitutional bench of the hon'ble supreme court by its older dated 14.5.1993, several minority educational institutions had however, complained against the extension of the scheme formulated in unnikrishnan's case to the said institutions by way of writ petitions. the said writ petitions were heard and the matter was referred to a larger bench by order dated 7.10.1993 and the larger bench of seven judges had framed questions, but the matter was not heard. but in view of the academic year 1994-95 certain institutions approached the supreme court for appropriate directions with regard to the admissions for the academic year 1995-96. by order dated 11.8.1995 the hon'ble supreme court passed an order with regard to the fee structure for the said academic year and also directed that subvention of rs. 5000/- p.a with regard to every student admitted in a private medical college, whether admitted against free/merit seat or against the payment seat, but not in respect of nri/foreign student quota had to be provided by the central government commencing with the academic year 1995-96 and that the said direction was subject to the directions that would be issued by the larger bench. a copy of the order dated 11.8.1995 is produced as annexure-a to the writ petition.3. according to the petitioner respondent no. 1 by its letter dated 10.12.2003 made payment of subvention towards fee in respect of students admitted in the petitioner's college from the academic year 1996-97 onwards till the academic year 2001-02. but subsequently on account of the pronouncement of the judgment in t.m.a. pai foundation and ors. v. state of karnataka and ors. by the hon'ble supreme court in october/november 2002, the first respondent had not made the payments towards subvention and therefore, annexure-c & d being letters dated 13.11.2004 and 20.1.2005 were addressed to the minister for health & family welfare, government of india requesting that the arrears of subvention towards fee as the judgment in t.m.a. pai's case was prospective in operation. in response to the said letters, the minister for health & family welfare, government of india (respondent no. l) by his communication dated 13.5.2005 stated that since the supreme court by its judgment dated 31.10.2002 in t.m.a. pai's case has held that the scheme framed in unnikrishnan's case was unconstitutional, the interim order for payment of subvention also stood discharged and therefore, the central government was not liable to make payments towards subvention from the academic year 2002-03 onwards. the said letter is produced as annexure-e and the same is impugned in this writ petition.4. the first respondent-union of india in its statement of objection has re-iterated the contents of annexure-e and has stated that the interim direction of the supreme court by order dated 11.8.1995 was subject to the decision by a larger bench and pursuant to the judgment in t.m.a. pai foundation's case dated 31.10.2002, the scheme framed in unnikrishnan's case was held to be unconstitutional and therefore, the first respondent was not bound to make payment towards subvention. in view of the said stand, the first respondent has sought for dismissal of the writ petition. the second respondent-state has not filed any statement of objections, but has adopted the stand of the first respondent4. i have heard sri. madhusudan r. naik, learned senior counsel for the petitioner, sri. v. k. narayanaswamy, learned counsel for the first respondent and sri. manohar, a.g.a. for second respondent.5. it is submitted on behalf of the petitioner that the provision for subvention of rs. 5000/ - p.a in respect of every student admitted to a private medical college was made by the hon'ble supreme court by its interim order dated 11.8.1995 and that the subvention was to be paid until the student completed the course or for a period of five years whichever was earlier and that the first respondent has made payment towards subvention towards tee commencing from academic year 1995-96 and till the commencement of the academic year 2002-03. but in respect of students who have been admitted in the year 2002-03 as well as in respect of students on whose behalf the petitioner was receiving subvention till the academic year 2002-03, there has been stoppage of payment from the said academic year and that the reason given by the first respondent that it is on account of the judgment in t.m.a. pai foundation's case, the subvention has been discontinued is not a correct understanding of the orders of the hon'ble supreme court, and he therefore, submits that the students on whose behalf the subvention was being paid to the college prior to the academic year 2002-03 must be entitled to receive till they complete their course or for a period of five years whichever is earlier. further the students who were admitted in the academic year 2002-03 are also entitled to be considered within the provision of subvention in as much as the judgment in t.m.a. pai foundation case is prospective and it came in the midst of the academic year whereas by then the students had already been admitted in august-september 2002 under the scheme of unnikrishnan's case and therefore, the right to receive subvention was a vested right in respect of those students and hence the respondent, discontinuing the subvention is not justified. he therefore, requests that annexure-e be quashed and a direction be issued to the respondent no. l to pay the arrears of subvention till the students who are admitted in the academic year 2002-03 complete their course or for a period of five years whichever is earlier.6. per contra, it is submitted on behalf of the respondents that the scheme enunciated in unnikrishnan's case was quashed by the hon'ble supreme court in the case of t.m.a. pai foundation and the said judgment was pronounced on 31.10.2002 and therefore, from that date onwards the respondent was not liable to pay any amount towards subvention to any medical college and therefore, any process which may have been commenced prior to the judgment had to be necessarily dis-continued. he further submits that the order dated 11.8.1995 was by way of interim arrangement and it was subject to the directions of the larger bench which decided t.m.a. pai foundation case and therefore the said interim order had merged with the said judgment and hence the said interim order could not over ride the final order passed in t.m.a. pai foundation case. he therefore, submits that the claim made by the petitioner is not tenable and therefore, the writ petition ought to be dismissed. learned counsel for the second respondent adopts the submission made by the learned counsel for the first respondent.7. before answering the rival contentions raised in this writ petition, it would be appropriate to appreciate the historical background to the issue raised in this writ petition. by a notification issued in june 1989, the state of karnataka had fixed tuition fee in respect of students to be enrolled for mbbs course and the said notification was challenged in the case of mohini jain v. state of karnataka : [1992]3scr658 before the hon'ble supreme court which held that in prescription of fee by a medical college in excess of what had been prescribed for the government colleges was a capitation fee and therefore, would be illegal. the correctness of the said decision was assailed in unnikrishnan's case reported in : [1993]1scr594 wherein it was contended that if the ratio in mohini jain case was applied, then the educational institutions particularly running professional courses would have to close down. in the context of the said submission, the hon'ble supreme court observed that commercialization of education was not permissible as it was opposed to public policy and indian tradition and hence charging of capitation fee was illegal. having said that the hon'ble supreme court went ahead and formulated a scheme for the admission of students to professional colleges as well as gave direction regarding the fee structure, pending regulations to be framed by the respective authorities in the matter of fee structure. the scheme in unnikrishnan's case was put into operation from the academic year 1993-94 onwards. but since several institutions particularly the minority educational institutions being aggrieved by the appropriation of its seats by the state and there being no foul play regarding admission of students to its institution and the tee structure being very rigid, filed several writ petitions questioning the scheme trained in unnikrishnan's case. during the pendency of the said writ petitions and on the direction sought by the professional colleges with regard to the mode of admission as well as the fee structure for the academic year 1995-96, the interim order dated 11.8.1995 was made under which the provision of subvention was formulated by the hon'ble supreme court.8. it was also observed that the direction regarding subvention grant was subject to the direction that was to be issued by the larger bench. subsequently, the hon'ble supreme court took up the matter with regard to the scope of right of minority institutions to establish and administer educational institutions and the questions framed in an earlier case namely st. stephen's case 1992(1) scc 558 were re-cast by order dated 6.2.1997 and the matter was referred to a bench of eleven judges who in turn formulated eleven questions and answered each of the eleven questions by its pronouncement dated 31.10.2002/25.11.2002 in t.m.a. pai foundation case reported in 2002 (8) scc 481. it is also necessary to state that certain doubts which arose on the opinion rendered in the hon'ble supreme court in the said decision were clarified by a subsequent order made by a bench of five judges in islamic academy of education v. state of karnataka reported in : air2003sc3724 and further in the case of p.a. inamdar v. state of maharashtra reported in 2005(6) scc 537 which is an order made by a bench of seven judges. be that as it may, what is relevant for the purpose of this case is with regard to the order made by the hon'ble supreme court in t.m.a. pai foundation case in october/ november 2002 and its effect on the interim order dated 11.8.1995 referred to above.9. by order dated 11.8.1995, the hon'ble supreme court while dealing with the fee structure for the academic year 1995-96 made a provision for subvention of rs. 5000/- p.a in respect of each student admitted in a private medical college and the order to that effect is extracted as follows:the central government shall provide a subvention of rs. 5000/- p.a in respect of every student admitted in a private medical college, whether admitted against free/merit seat or against a payment seat, but not in respect of a student admitted against n.r.i./foreign student quota specified above. the subvention shall be made and continued until the student completes the course or for a period of five years whichever is earlier. the subvention amount by the central government shall be sent directly to the concerned college, towards fee, every year commencing with academic year 1995-96. this direction shall be subject, of course, to the directions that may be issued by the larger bench.10. it is not in dispute that when the said order was made the constitutional validity of the scheme formulated in unnikrishnan's case though assailed had not yet been pronounced. but in t.m.a. pai foundation, the hon'ble supreme court specifically went into the question of the validity of the scheme given in unnikrishnan's case (question no. 2) and held that the decision in unnikrishnan's case in so tar as framed the scheme regarding the grant of admission of fixing the fee is not correct and to that said extent was unconstitutional and consequent directions to u.g.c., medical council of india central and state government etc., were over ruled. the said judgment however, nowhere touches upon the provision for subvention made by the interim order dated 11.8.1995.11. it is also not in dispute that the said provision was made in the context of unnikrishnan's case which was in operation until it was set aside by order made in t.m.a. pai foundation case in october/november, 2002. a reading of the extract regarding subvention makes it apparent that the private medical college would be entitled to a subvention of rs. 5000/- p.a in respect of every student admitted whether against a free or merit seat or against the private seat but not in respect of students admitted against n.k.i or foreign quota and that the subvention made and continued until the student continues the course or for a five years whichever is earlier the subvention was to be sent directly by central government to the concerned college every year commencing with the academic year 1995-96 and that this payment was subject to the direction of the larger bench.12. it is on record that the first respondent pursuant to the interim order dated 11.8.1995 has made, the payment towards subvention to the petitioner college in respect of the students admitted from the academic year 1995-96 onwards till they completed their course or for a period of five years whichever is earlier. the controversy is however, with regard to the students who are admitted from the academic year 2002-03 as well as with regard to students in respect of whom the college was entitled to receive subvention and in respect of whom it has been discontinued pursuant to the judgment of the hon'ble supreme court in t.m.a. pai foundation case. it is not in dispute that until the judgment of the supreme court in t.m.a. pai foundation case was pronounced in respect of the students who were admitted in a particular year, subvention was being paid, the petitioner was entitled to receive the said amount until the students completed their course or for a period of five years whichever was earlier. if that be so, then a vested right was created in favour of the colleges to receive the amount in terms of the provision so made and the said vested right could not have been curtailed retrospectively by virtue of the pronouncement in t.m.a. pai foundation case particularly when for the first time the scheme in unnikrishnan's case was set aside and until the said pronouncement all action taken pursuant to the said scheme was left undisturbed.13. the fact that by virtue of the order dated 11.8.1995, the payment of subvention by the central government to the respective colleges had commenced and the colleges had acquired right to the subvention fee until otherwise held by the larger bench in tma pai foundation case and further the fact that the law declared in tma pai foundation was to become effective only from the succeeding academic year i.e., 2003-04 onwards, all actions taken by virtue of the interim order dated 11.8.95 have to be held to be valid and continued till the academic year 2003-04 is already noted. the division bench by its order dated 5.4.2003 held that the declaration of law in tma pai foundation case was prospective which means that reopening of all settled issues was to be avoided so as to prevent multiplicity of proceedings and ail actions taken prior to the declaration of law stood validated. therefore, the interim order of this court pertaining to subvention fee is of binding effect till the commencement of the academic year 2003-04 and colleges receiving the subvention fee in respect of students admitted even in the year 2002-03 are entitled to receive the said fee until the students conclude their course or for a period of five years whichever is earlier. considering the fact that the opinion of the apex court that the tma pai foundation case was rendered after the commencement of the academic year 2002-03 the hon'ble supreme court in its wisdom thought it fit to apply the law declared in the said case prospectively from the academic year 2003-04 onwards, so that all admissions made even in the academic year 2002-03 under the scheme of unnikrishnan were validated and were not to be questioned in any court of law in the interest of students as the said scheme was over ruled in tma pai foundation case.14. therefore, the students who were admitted prior to the academic year 2002-03 in the petitioner/college created a right in favour of the petitioner/college to receive subvention in respect of such students until they completed the course or for a period of five years whichever is earlier despite the order of the supreme court in t.m.a. pai foundation case. as far as the students who are admitted in the academic year 2002-03 is concerned, it is not in dispute that the said students were admitted as per the scheme in unnikrishnan's case prior to the judgment delivered in t.m.a. pai foundation case. under the circumstances the interim order dated 11.8.1995 was applicable to even these students who were admitted prior to the judgment in t.m.a. pai foundation case and therefore covered under the terms of the said interim order. hence in respect of students who were admitted in the academic year 2002-03, the petitioner was entitled to subvention until they completed the course or for a period of five years whichever is earlier particularly when the pronouncement in t.m.a. pai foundation case was subsequent to the completion of admissions and till then the scheme in unnikrishnan's case was in operation.15. during the course of bis arguments, learned senior counsel has also submitted a list of the students admitted for the academic year 2002-03 along with the date of admission and on perusal of the same it becomes clear that a majority of the students were admitted in september, 2002 prior to the judgment in t.m.a. pai foundation case and a few were admitted around the time of the pronouncement of the judgment it is only in the decision of t.m.a. pai foundation case that the scheme formulated in unnikrishnan's case was struck down and the matter was placed before the division bench of the hon'ble supreme court and by order dated 1.4.2003 the division bench has held that the decision rendered in t.m.a. pai foundation case was prospective. this also supports my view that any action initiated in terms of the interim order dated 11.8.1995 prior to the decision of t.m.a. pai foundation case would not be rendered invalid on account of the said decision as it was to operate only prospectively.16. under the circumstances the stand of the first respondent that it was not liable to make the payments towards subvention on account of the decision of t.m.a. pai foundation case in respect of the students who were admitted during the academic year 2002-03 or in respect of students admitted prior to the said academic year and the petitioner not being entitled to receive subvention on their behalf till they completed their course or tor a period of five years whichever is earlier, is not correct17. accordingly, annexure-e communicated dated 13.5.2005 in d.o. no. u 12012/1/ 2001-me(p-ii) 1971-vip/04 is quashed and respondent no. 1 is directed to make payments of subvention amount in terms of the interim order dated 11.8.1995 in respect of students who were admitted prior to the academic year 2002-03 for a period of five years or until they complete the course whichever is earlier as also in respect of students admitted in the academic year 2002-03 for a period of five years or until they complete the course whichever is earlier in respect of the petitioner/college. it is made clear that the petitioner/college is not entitled to subvention in respect of students admitted in the academic year 2003-04. the writ petition is allowed without any order as to costs.

Judgment:
ORDER

B.V. Nagarathna, J.

1. This Writ Petition has been filed by a Medical College challenging the communication dated 13.5.2005 in D.O. No. U 12012/1/ 200l-ME(P-II) 1971-VIP/04 (Annexure-E) and seeking a writ in the nature of mandamus or such other writ directing the first respondent to pay subvention amounts for the academic year 2002-2003 and 2003-2004 as claimed under letter dated 13.11.2004 and 20.1.2005 vide Annexure C&D.;

2. According to the petitioner it is a College administered by an educational trust having faculties in medicine and it does not receive any aid from the University or the State Government or from the Central Government and is therefore a self-financing medical institution; that the Hon'ble Supreme Court in the case of Sri. Unnikrishnan v. State of Andhra Pradesh reported in : [1993]1SCR594 had formulated a scheme of admission with the object of removing mal-practice of charging capitation fee by the professional medical colleges and that the said scheme was pot into operation from the academic year 1993-94 cowards. Subsequently, review petitions were filed by several institutions against the Judgment in Unnikrishnan's case. Though the said review petitions were dismissed by the Constitutional Bench of the Hon'ble Supreme Court by its older dated 14.5.1993, several minority educational institutions had however, complained against the extension of the scheme formulated in Unnikrishnan's case to the said institutions by way of writ petitions. The said writ petitions were heard and the matter was referred to a larger Bench by order dated 7.10.1993 and the larger bench of seven Judges had framed questions, but the matter was not heard. But in view of the academic year 1994-95 certain institutions approached the Supreme Court for appropriate directions with regard to the admissions for the academic year 1995-96. By order dated 11.8.1995 the Hon'ble Supreme Court passed an order with regard to the fee structure for the said academic year and also directed that subvention of Rs. 5000/- p.a with regard to every student admitted in a private medical college, whether admitted against free/merit seat or against the payment seat, but not in respect of NRI/foreign student quota had to be provided by the Central Government commencing with the academic year 1995-96 and that the said direction was subject to the directions that would be issued by the larger Bench. A copy of the order dated 11.8.1995 is produced as Annexure-A to the writ petition.

3. According to the petitioner respondent No. 1 by its letter dated 10.12.2003 made payment of subvention towards fee in respect of students admitted in the petitioner's college from the academic year 1996-97 onwards till the academic year 2001-02. but subsequently on account of the pronouncement of the Judgment in T.M.A. Pai Foundation and Ors. v. State of Karnataka and Ors. by the Hon'ble Supreme Court in October/November 2002, the first respondent had not made the payments towards subvention and therefore, Annexure-C & D being letters dated 13.11.2004 and 20.1.2005 were addressed to the Minister for Health & Family Welfare, Government of India requesting that the arrears of subvention towards fee as the Judgment in T.M.A. Pai's case was prospective in operation. In response to the said letters, the Minister for Health & Family Welfare, Government of India (respondent No. l) by his communication dated 13.5.2005 stated that since the Supreme Court by its Judgment dated 31.10.2002 in T.M.A. Pai's case has held that the scheme framed in Unnikrishnan's case was unconstitutional, the interim order for payment of subvention also stood discharged and therefore, the Central Government was not liable to make payments towards subvention from the academic year 2002-03 onwards. The said letter is produced as Annexure-E and the same is impugned in this writ petition.

4. The first respondent-Union of India in its statement of objection has re-iterated the contents of Annexure-E and has stated that the interim direction of the Supreme Court by order dated 11.8.1995 was subject to the decision by a larger Bench and pursuant to the Judgment in T.M.A. Pai Foundation's case dated 31.10.2002, the scheme framed in Unnikrishnan's case was held to be unconstitutional and therefore, the first respondent was not bound to make payment towards subvention. In view of the said stand, the first respondent has sought for dismissal of the writ petition. The second respondent-State has not filed any statement of objections, but has adopted the stand of the first respondent

4. I have heard Sri. Madhusudan R. Naik, learned Senior Counsel for the petitioner, Sri. V. K. Narayanaswamy, learned Counsel for the first respondent and Sri. Manohar, A.G.A. for second respondent.

5. It is submitted on behalf of the petitioner that the provision for subvention of Rs. 5000/ - p.a in respect of every student admitted to a private medical college was made by the Hon'ble Supreme Court by its interim order dated 11.8.1995 and that the subvention was to be paid until the student completed the course or for a period of five years whichever was earlier and that the first respondent has made payment towards subvention towards tee commencing from academic year 1995-96 and till the commencement of the academic year 2002-03. But in respect of students who have been admitted in the year 2002-03 as well as in respect of students on whose behalf the petitioner was receiving subvention till the academic year 2002-03, there has been stoppage of payment from the said academic year and that the reason given by the first respondent that it is on account of the Judgment in T.M.A. Pai Foundation's case, the subvention has been discontinued is not a correct understanding of the orders of the Hon'ble Supreme Court, and he therefore, submits that the students on whose behalf the subvention was being paid to the college prior to the academic year 2002-03 must be entitled to receive till they complete their course or for a period of five years whichever is earlier. Further the students who were admitted in the academic year 2002-03 are also entitled to be considered within the provision of subvention in as much as the Judgment in T.M.A. Pai Foundation case is prospective and it came in the midst of the academic year whereas by then the students had already been admitted in August-September 2002 under the scheme of Unnikrishnan's case and therefore, the right to receive subvention was a vested right in respect of those students and hence the respondent, discontinuing the subvention is not justified. He therefore, requests that Annexure-E be quashed and a direction be issued to the respondent No. l to pay the arrears of subvention till the students who are admitted in the academic year 2002-03 complete their course or for a period of five years whichever is earlier.

6. Per contra, it is submitted on behalf of the respondents that the scheme enunciated in Unnikrishnan's case was quashed by the Hon'ble Supreme Court in the case of T.M.A. Pai Foundation and the said Judgment was pronounced on 31.10.2002 and therefore, from that date onwards the respondent was not liable to pay any amount towards subvention to any medical college and therefore, any process which may have been commenced prior to the judgment had to be necessarily dis-continued. He further submits that the order dated 11.8.1995 was by way of interim arrangement and it was subject to the directions of the larger Bench which decided T.M.A. Pai Foundation case and therefore the said interim order had merged with the said judgment and hence the said interim order could not over ride the final order passed in T.M.A. Pai Foundation Case. He therefore, submits that the claim made by the petitioner is not tenable and therefore, the writ petition ought to be dismissed. Learned Counsel for the second respondent adopts the submission made by the learned Counsel for the first respondent.

7. Before answering the rival contentions raised in this writ petition, it would be appropriate to appreciate the historical background to the issue raised in this writ petition. By a notification issued in June 1989, the State of Karnataka had fixed tuition fee in respect of students to be enrolled for MBBS course and the said notification was challenged in the case of Mohini Jain v. State of Karnataka : [1992]3SCR658 before the Hon'ble Supreme Court which held that in prescription of fee by a medical college in excess of what had been prescribed for the government colleges was a capitation fee and therefore, would be illegal. The correctness of the said decision was assailed in Unnikrishnan's case reported in : [1993]1SCR594 wherein it was contended that if the ratio in Mohini Jain case was applied, then the educational institutions particularly running professional courses would have to close down. In the context of the said submission, the Hon'ble Supreme Court observed that commercialization of education was not permissible as it was opposed to public policy and Indian tradition and hence charging of capitation fee was illegal. Having said that the Hon'ble Supreme court went ahead and formulated a scheme for the admission of students to professional colleges as well as gave direction regarding the fee structure, pending regulations to be framed by the respective authorities in the matter of fee structure. The scheme in Unnikrishnan's case was put into operation from the academic year 1993-94 onwards. But since several institutions particularly the minority educational institutions being aggrieved by the appropriation of its seats by the State and there being no foul play regarding admission of students to its institution and the tee structure being very rigid, filed several writ petitions questioning the scheme trained in Unnikrishnan's case. During the pendency of the said writ petitions and on the direction sought by the professional colleges with regard to the mode of admission as well as the fee structure for the academic year 1995-96, the interim order dated 11.8.1995 was made under which the provision of subvention was formulated by the Hon'ble Supreme Court.

8. It was also observed that the direction regarding subvention grant was subject to the direction that was to be issued by the larger Bench. Subsequently, the Hon'ble Supreme Court took up the matter with regard to the scope of right of minority institutions to establish and administer educational institutions and the questions framed in an earlier case namely St. Stephen's case 1992(1) SCC 558 were re-cast by order dated 6.2.1997 and the matter was referred to a Bench of eleven Judges who in turn formulated eleven questions and answered each of the eleven questions by its pronouncement dated 31.10.2002/25.11.2002 in T.M.A. Pai Foundation case reported in 2002 (8) SCC 481. It is also necessary to state that certain doubts which arose on the opinion rendered in the Hon'ble Supreme Court in the said decision were clarified by a subsequent order made by a Bench of five Judges in Islamic Academy of Education v. State of Karnataka reported in : AIR2003SC3724 and further in the case of P.A. Inamdar v. State of Maharashtra reported in 2005(6) SCC 537 which is an order made by a Bench of seven Judges. Be that as it may, what is relevant for the purpose of this case is with regard to the order made by the Hon'ble Supreme Court in T.M.A. Pai Foundation Case in October/ November 2002 and its effect on the interim order dated 11.8.1995 referred to above.

9. By order dated 11.8.1995, the Hon'ble Supreme Court while dealing with the fee structure for the academic year 1995-96 made a provision for subvention of Rs. 5000/- p.a in respect of each student admitted in a private medical college and the order to that effect is extracted as follows:

The Central Government shall provide a subvention of Rs. 5000/- p.a in respect of every student admitted in a private medical college, whether admitted against free/merit seat or against a payment seat, but not in respect of a student admitted against N.R.I./Foreign student quota specified above. The subvention shall be made and continued until the student completes the course or for a period of five years whichever is earlier. The subvention amount by the Central Government shall be sent directly to the concerned college, towards fee, every year commencing with academic year 1995-96. This direction shall be subject, of course, to the directions that may be issued by the larger Bench.

10. It is not in dispute that when the said order was made the constitutional validity of the scheme formulated in Unnikrishnan's case though assailed had not yet been pronounced. But in T.M.A. Pai Foundation, the Hon'ble Supreme Court specifically went into the question of the validity of the scheme given in Unnikrishnan's case (question No. 2) and held that the decision in Unnikrishnan's case in so tar as framed the scheme regarding the grant of admission of fixing the fee is not correct and to that said extent was unconstitutional and consequent directions to U.G.C., Medical Council of India Central and State Government etc., were over ruled. The said Judgment however, nowhere touches upon the provision for subvention made by the interim order dated 11.8.1995.

11. It is also not in dispute that the said provision was made in the context of Unnikrishnan's case which was in operation until it was set aside by order made in T.M.A. Pai Foundation case in October/November, 2002. A reading of the extract regarding subvention makes it apparent that the private medical college would be entitled to a subvention of Rs. 5000/- p.a in respect of every student admitted whether against a free or merit seat or against the private seat but not in respect of students admitted against N.K.I or Foreign quota and that the subvention made and continued until the student continues the course or for a five years whichever is earlier the subvention was to be sent directly by Central Government to the concerned college every year commencing with the academic year 1995-96 and that this payment was subject to the direction of the larger Bench.

12. It is on record that the first respondent pursuant to the interim order dated 11.8.1995 has made, the payment towards subvention to the petitioner college in respect of the students admitted from the academic year 1995-96 onwards till they completed their course or for a period of five years whichever is earlier. The controversy is however, with regard to the students who are admitted from the academic year 2002-03 as well as with regard to students in respect of whom the college was entitled to receive subvention and in respect of whom it has been discontinued pursuant to the Judgment of the Hon'ble Supreme Court in T.M.A. Pai Foundation Case. It is not in dispute that until the Judgment of the Supreme Court in T.M.A. Pai Foundation case was pronounced in respect of the students who were admitted in a particular year, subvention was being paid, the petitioner was entitled to receive the said amount until the students completed their course or for a period of five years whichever was earlier. If that be so, then a vested right was created in favour of the colleges to receive the amount in terms of the provision so made and the said vested right could not have been curtailed retrospectively by virtue of the pronouncement in T.M.A. Pai Foundation case particularly when for the first time the scheme in Unnikrishnan's case was set aside and until the said pronouncement all action taken pursuant to the said scheme was left undisturbed.

13. The fact that by virtue of the order dated 11.8.1995, the payment of subvention by the Central Government to the respective colleges had commenced and the colleges had acquired right to the subvention fee until otherwise held by the larger bench in TMA Pai Foundation case and further the fact that the law declared in TMA Pai Foundation was to become effective only from the succeeding academic year i.e., 2003-04 onwards, all actions taken by virtue of the interim order dated 11.8.95 have to be held to be valid and continued till the academic year 2003-04 is already noted. The Division Bench by its order dated 5.4.2003 held that the declaration of law in TMA Pai Foundation case was prospective which means that reopening of all settled issues was to be avoided so as to prevent multiplicity of proceedings and ail actions taken prior to the declaration of law stood validated. Therefore, the interim order of this Court pertaining to subvention fee is of binding effect till the commencement of the academic year 2003-04 and colleges receiving the subvention fee in respect of students admitted even in the year 2002-03 are entitled to receive the said fee until the students conclude their course or for a period of five years whichever is earlier. Considering the fact that the opinion of the Apex Court that the TMA Pai Foundation case was rendered after the commencement of the academic year 2002-03 the Hon'ble Supreme Court in its wisdom thought it fit to apply the law declared in the said case prospectively from the academic year 2003-04 onwards, so that all admissions made even in the academic year 2002-03 under the scheme of Unnikrishnan were validated and were not to be questioned in any court of law in the interest of students as the said scheme was over ruled in TMA Pai Foundation case.

14. Therefore, the students who were admitted prior to the academic year 2002-03 in the petitioner/college created a right in favour of the petitioner/college to receive subvention in respect of such students until they completed the course or for a period of five years whichever is earlier despite the order of the Supreme Court in T.M.A. Pai Foundation case. As far as the students who are admitted in the academic year 2002-03 is concerned, it is not in dispute that the said students were admitted as per the scheme in Unnikrishnan's case prior to the judgment delivered in T.M.A. Pai Foundation case. Under the circumstances the interim order dated 11.8.1995 was applicable to even these students who were admitted prior to the Judgment in T.M.A. Pai Foundation case and therefore covered under the terms of the said interim order. Hence in respect of students who were admitted in the academic year 2002-03, the petitioner was entitled to subvention until they completed the course or for a period of five years whichever is earlier particularly when the pronouncement in T.M.A. Pai Foundation Case was subsequent to the completion of admissions and till then the scheme in Unnikrishnan's case was in operation.

15. During the course of bis arguments, learned Senior Counsel has also submitted a list of the students admitted for the academic year 2002-03 along with the date of admission and on perusal of the same it becomes clear that a majority of the students were admitted in September, 2002 prior to the Judgment in T.M.A. Pai Foundation case and a few were admitted around the time of the pronouncement of the Judgment It is only in the decision of T.M.A. Pai Foundation case that the scheme formulated in Unnikrishnan's case was struck down and the matter was placed before the Division Bench of the Hon'ble Supreme Court and by order dated 1.4.2003 the Division Bench has held that the decision rendered in T.M.A. Pai Foundation case was prospective. This also supports my view that any action initiated in terms of the interim order dated 11.8.1995 prior to the decision of T.M.A. Pai Foundation case would not be rendered invalid on account of the said decision as it was to operate only prospectively.

16. Under the circumstances the stand of the first respondent that it was not liable to make the payments towards subvention on account of the decision of T.M.A. Pai Foundation case in respect of the students who were admitted during the academic year 2002-03 or in respect of students admitted prior to the said academic year and the petitioner not being entitled to receive subvention on their behalf till they completed their course or tor a period of five years whichever is earlier, is not correct

17. Accordingly, Annexure-E communicated dated 13.5.2005 in D.O. No. U 12012/1/ 2001-ME(P-II) 1971-VIP/04 is quashed and respondent No. 1 is directed to make payments of subvention amount in terms of the interim order dated 11.8.1995 in respect of students who were admitted prior to the academic year 2002-03 for a period of five years or until they complete the course whichever is earlier as also in respect of students admitted in the academic year 2002-03 for a period of five years or until they complete the course whichever is earlier in respect of the petitioner/college. It is made clear that the petitioner/college is not entitled to subvention in respect of students admitted in the academic year 2003-04. The Writ Petition is allowed without any order as to costs.