Case at a Glance
A 1995 interim order in the TMA Pai Foundation litigation made the Central Government pay private professional colleges ₹5,000 a year per student, for up to five years, to help eliminate capitation fees. When the Centre stopped paying from 2002–03, a Karnataka medical college won orders from the High Court directing subvention for the 2002–03 batch for the full course. The Supreme Court held that the subvention scheme “died its own death on 31.10.2002” when the eleven-Judge Bench declared the Unni Krishnan scheme unconstitutional; that law declared by a court is retrospective unless stated otherwise; and that the interim order required only annual payment. The direction for five years’ payment for 2002–03 admissions was set aside.
On 11 August 1995, in the TMA Pai Foundation case, the Supreme Court made an interim subvention scheme from academic year 1995–96: the Central Government would pay ₹5,000 per annum per student (other than NRIs) until course completion or five years, whichever was earlier, with the aim of eliminating capitation fees and making merit the sole basis of admission. On 31 October 2002, the eleven-Judge Bench in TMA Pai Foundation v. State of Karnataka, (2002) 10 SC CK 0109 held that “the scheme framed by this Court in Unni Krishnan’s case” was unconstitutional, while upholding the bar on capitation fees. A clarificatory order followed on 1 April 2003.
By a communication of 13 May 2005, the Centre refused subvention from 2002–03 onwards. Sri Devraj Urs Medical College challenged it in the Karnataka High Court. On 5 November 2008 a Single Judge quashed the communication and directed payment for students admitted up to 2002–03 for five years or course completion, treating the subvention as a vested right and reading the 2003 clarification as making TMA Pai prospective; subvention from 2003–04 was denied. A Division Bench upheld this on 3 July 2009.
The Key Question Before the Court
Did the 1995 interim subvention scheme survive the eleven-Judge Bench decision of 31 October 2002, so that a college could claim five years of payments for students admitted in 2002–03?
Interim scheme, final judgment and the rule of retrospectivity
The Court held that the eleven-Judge Bench, by declaring the Unnikrishnan J.P. v. State of Andhra Pradesh scheme unconstitutional, impliedly declared the subvention scheme unconstitutional too. The 2003 clarificatory order in State of Karnataka v. TMA Pai Foundation did not expressly make the ratio prospective; read with paragraph 393 of the main judgment, prospectivity applied only to statutory provisions contrary to the ratio. Relying on P.V. George v. State of Kerala, the Court reiterated: “The law declared by a Court will have a retrospective effect if not otherwise stated to be so specifically.” Hence the scheme “died its own death on 31.10.2002.”
The 1995 interim order also required annual payment, not a lump sum for the full course, so the High Court erred in directing release for five years for the 2002–03 batch. The college, asked whether it had furnished data on fees and expenses for 2002–03 onwards, answered no; following Bharat Singh v. State of Haryana, a point must be pleaded with facts and evidence, and the Court primarily rested on the absence of any pleading that fees and other revenue fell short of expenses. It also noted that only two colleges had challenged the stoppage, which was “insufficient to draw an adverse inference” but had “persuasive force.”
What the Court Actually Held
- The 1995 interim subvention scheme in TMA Pai Foundation ceased on 31 October 2002, when the eleven-Judge Bench declared the Unni Krishnan scheme unconstitutional.
- Law declared by a court operates retrospectively unless expressly made prospective; the 2003 clarificatory order did not make the ruling prospective for the subvention scheme.
- The interim order contemplated annual payment, so no lump-sum or full five-year payment could be directed for students admitted in 2002–03.
- The High Court orders were upheld insofar as they denied subvention beyond 2002–03 and set aside insofar as they directed five years’ subvention for the 2002–03 batch; the connected appeal is governed by the same order.
Why This Judgment Matters
- It closes a long-running dispute over Central subvention to private professional colleges after the 2002 TMA Pai ruling.
- It restates that an interim arrangement made pending a reference falls with the final decision unless expressly saved.
- It reinforces that claims of financial hardship in writ petitions must be pleaded with facts and figures.
What Should Advocates Take Away From the Judgment?
For Institutions
- Interim court-made schemes do not create vested rights beyond the final judgment that disposes of the reference.
- If you claim revenue shortfall, plead and prove fees, income and expenses with data.
For Counsel
- Check whether a later judgment expressly states it is prospective; otherwise it applies retrospectively.
- Read clarificatory orders together with the main judgment before arguing prospectivity.
- Annual-payment schemes cannot be converted into lump-sum entitlements by a court.
Key Takeaways
- The TMA Pai subvention scheme ended on 31 October 2002.
- Court-declared law is retrospective unless expressly stated otherwise.
- No five-year subvention payout for 2002–03 admissions.
- Unpleaded financial grounds will not be entertained.
Frequently Asked Questions
What was the TMA Pai subvention scheme?
Under a 1995 interim order, the Central Government paid private professional colleges ₹5,000 per year per student (other than NRIs), until course completion or five years, to help eliminate capitation fees.
Why did the scheme end in 2002?
The eleven-Judge Bench on 31 October 2002 declared the Unni Krishnan scheme unconstitutional; the Court held the subvention scheme thereby died, and that ruling applied retrospectively as it was not expressly made prospective.
Does the college get anything for its 2002–03 batch?
The Court set aside the High Court’s direction to pay subvention for the full five-year course for students admitted in 2002–03, since the interim order contemplated only annual payment.
Conclusion
The judgment ties up a loose end of the TMA Pai saga: once the eleven-Judge Bench struck down the Unni Krishnan framework, the interim subsidy built on it could not be stretched into a five-year entitlement.
Practical takeaway: Benefits flowing from interim court orders last only as long as the order itself — and a final ruling applies retrospectively unless it says otherwise.
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