Uttarakhand Govt moves against Subharti Medical College to recover Rs 97 crore for accommodating 300 MBBS students

Dehradun: The management of the now shut Subharti Medical College has faced yet another court setback after the Uttarakhand HC recently ordered the management to deposit Rs 25 crore with the state government

Dismissing the medical college appeal, The division bench of Chief Justice R Ranganathan and Justice AK Verma gave the direction to the Subharti authorities to pay up Rs 25 crore as a condition for grant of stay of recovery of the balance amount of Rs 97.13 crore. The orders were passed noting the huge financial burden had been caused to the State by the transfer of 300 MBBS students in Government Medical Colleges (GMCs) from the Subharti institute after its controversial shutdown.

The court took note of the fact that the State Government had to garner resources to give education to these 300 students, which would mean not only additional infrastructure but the recruitment of new teachers, an increase of staff etc.

Medical Dialogues had earlier reported about the case of Subharti Medical College which was shut down after various discrepancies were noticed in the institute. On December 6, the Supreme Court had ordered the Uttarakhand government to take over the land, buildings and assets of the Medical College and run it as a government entity thereafter.

This decision was taken in view of the petitions filed by a group of 74 NEET qualified students, who were admitted to the first year MBBS course. The students moved the apex court saying that as there was a lack of infrastructure and faculty, they should be transferred to any other medical colleges in the state.

At that hearing, the Deputy Advocate General (DAG) of Uttarakhand J K Sethi told the bench that the state would be willing to take over the college along with its entire infrastructure and assets, both movable and immovable so that it could meet the norms of MCI and affiliated with Dehradun's Hemwati Nandan Bahuguna Uttarakhand Medical University (HNB Medical University).

Read Also: Take over Shridev Suman Subharti Medical College: Supreme Court directs Uttarakhand Govt

Thereafter, considering another plea by the students, the SC had ordered to the state to accommodate them to GMCs instead of private medical colleges.

Read Also: Accommodate all 300 MBBS students in GMCs: Supreme Court on Subharti Medical College case

Finally by April 30^th, the counselling process for Subharti MBBS students was over and the students were shifted to the various government medical colleges in the state.

Afterwards, the matter of financial burden which had come upon the state government subsequent to the transfer of students was apprised to the Subharti medical college authorities i.e Dr Jagat Narain Subharti Charitable Trust via show-cause notices issued by the state. This was followed by a recovery notice in July asking the college to deposit a sum of Rs 97.13 crore for causing losses to the exchequer, failing to provide qualified medical personnel as projected and wasting public resources.

It had been submitted that accommodating all 300 students required setting up of infrastructure, almost equal to that required for opening a fresh medical college, which had come as a huge unexpected financial burden on the State Government, which could not have been budgeted and had, perforce, to be borne by the State Government, even though the primary responsibility of funding the same rested with the Subharti, who had collected fees from these students for the last two years without any benefit to them.

The rough estimates provided by the 3 GMCs, keeping in view expenditure 150 students who would have to undergo at least a 2.5 years study, and 150 students who would have to undergo 3.5 years study was pegged at Rs 130.91 crore.

While noting that the Government would receive Rs 36 crore towards fees from 300 students, @Rs 4 lakh per year from each student, and a sum of Rs.2,22,18,575/- had already been paid, the show-cause notice thereafter recorded that the sum recoverable as damages and loss from the Trust and Medical College was Rs 130.91 crore + Rs2.22 crore – Rs36 crore = Rs.97.13 crore. On the ground that this liability was required to be borne by them, in view of the "fraud" committed by the medical college, they were called upon to pay the said amount, reads the Judgment.

This was followed by the impugned order dated 04.07.2019 directing recovery of Rs.97.13 crores –Rs.9.5 crore already received by way of encashment of the Bank Guarantee from the MCI i.e. a balance sum of Rs.87.63 crore.

The matter taken to the High court where an interlocutory order was passed by the single judge who had noted there was a huge financial burden on the state after the transfer of the students and all this could not be managed from the fees received from students who had been freshly inducted; an amount of Rs.97.13 crores was calculated as the approximate expenditure; and, after giving due notice, a final recovery order had been passed.

However, while taking note of the submission made by the Subharti trust that any order could only have been passed by the State Government and not by the Director, Medical Education, the Single Judge stayed the impugned order dated 04.07.2019, and the recovery sought to be made pursuant thereto, on condition that the trust deposit Rs 25 crore, from out of the total amount, with the Director, Medical Education; and this was to be subject to further orders of the Court. The amount was directed to be deposited within two weeks from the date of the order.

While contending that such recovery is not authorized by law, the counsel for the Subharti trust submitted in its appeal that imposition of such a huge liability of Rs.87.63 crore was wholly unjustified.

In its observation, the division bench stated

…As is evident from the show-cause notice issued by the Director, Medical Education, for the inability of the appellants-writ petitioners to run the institution and to provide education to the students admitted by it, the State Government has now been forced to take upon itself the additional burden which it had not even contemplated earlier…

…There was no legal obligation on the part of the State Government to take over these students, who were not in a position to pursue their medical courses in the appellants-writ petitioners' college. The unfortunate situation in which the students found themselves in, was not for any fault of the State Government, but solely on the account of the appellants-writ petitioners failure to obtain approval from the MCI which, in turn, was because of their failure to provide the necessary infrastructural and other facilities. Having admitted these students into their college, the appellants-writ petitioners cannot, prima facie, be permitted to walk away, without owning any responsibility for completion of the MBBS course by students hitherto admitted in its college by the appellants-writ petitioners…

…We are satisfied, however, that the discretion exercised by the learned Single Judge, in directing the appellants-writ petitioners to deposit Rs.25.00 crores as against the total sum of Rs.87.63 crores, does not suffer from a patent illegality warranting interference in an intra-court appeal, that too against an interlocutory order…

On the submission of the trust being ready and willing to deposit Rs.5.00 crore, before August 21^st, the bench dismissed the plea stating

… there appear to be several disputes, pending in various fora, between the appellants-writ petitioners and others, over the properties owned by them. We, therefore, asked Mr. S.K. Gangele, learned counsel for the appellants-writ petitioners, whether they were ready and willing to deposit the said amount of Rs.25.00 crores within a extended time frame…