The Kerala High Court has clarified that candidates who voluntarily exit allocated medical seats to re-enter mop-up counselling forfeit a 10% fee under binding prospectus terms, rejecting claims that such payment is merely a registration charge.
Background & Facts
The Dispute
The dispute arose from the State of Kerala’s NEET PG 2021 counselling process. Respondents 1 to 4, all qualified medical graduates, secured seats in State Quota postgraduate programmes during the first or second phase of allotment. Dissatisfied with their allotted institutions, they opted to surrender these seats under the ‘free exit’ window and participated in the subsequent State Mop-Up counselling. To do so, they each paid ₹1,57,500 - 10% of the annual tuition fee of their previously allotted seats - as mandated by the Commissioner of Entrance Examinations.
Procedural History
- September 2021: Respondents secured seats in State Quota PG programmes across five medical colleges.
- March 2022: Respondents surrendered their seats and paid ₹1,57,500 each to participate in the State Mop-Up counselling under Ext.P6 notification.
- April - June 2022: Respondents 1 and 4 secured new seats in the State Mop-Up round; Respondent 2 failed to secure any seat; Respondent 3 secured admission via All India Mop-Up and withdrew from State counselling.
- September 2022: The Commissioner issued Ext.P14 communication denying refund of the ₹1,57,500, citing Clause 10-1.18 of the Ext.P1 prospectus.
- January 2024: The Single Judge allowed the writ petition, directing refund or adjustment of the fee.
- February 2026: The Division Bench heard the State’s writ appeal.
Relief Sought
The respondents sought: (i) refund of ₹1,57,500 each paid for mop-up registration; (ii) declaration that Clause 10-1.18 is inapplicable to them; and (iii) quashing of Ext.P14 communication.
The Legal Issue
The central question was whether the payment of 10% of the annual tuition fee under Clause 10-1.18 of the Ext.P1 prospectus constitutes a forfeitable condition for participation in mop-up counselling, or whether it is merely a non-refundable registration fee that must be returned if no new seat is secured.
Arguments Presented
For the Appellant
The State contended that Clause 10-1.18 of the Ext.P1 prospectus, approved by Government Order, explicitly conditions participation in mop-up counselling on the forfeiture of 10% of the annual fee upon exit from a previously allotted seat. The provision was designed to deter frivolous exits that disrupt seat allocation and leave seats vacant. The respondents were fully aware of this condition, did not challenge the prospectus, and voluntarily accepted its terms. Ext.P6 notification merely operationalized the prospectus and did not override it.
For the Respondent
The petitioners argued that Ext.P6 notification framed the ₹1,57,500 as a ‘registration fee’ for mop-up participation, not a forfeiture. They claimed the amount was to be adjusted or refunded if no seat was secured, as orally assured by the Commissioner’s office. They contended that Clause 10-1.18 only applies to candidates who exit after joining a seat, not those who exit before joining. The Single Judge correctly held that the notification’s language prevailed over the prospectus’s ambiguity.
The Court's Analysis
The Court examined the interplay between the Ext.P1 prospectus and Ext.P6 notification. It emphasized that the prospectus, approved by the Government, is the foundational document governing the entire counselling process. Clause 10-1.18 unambiguously states: “Those Candidates who have been allotted PG Course in State Quota, on exit after being allotted to the seats in the second round will have to forfeit 10% of the annual fee if they do not join the course.” The phrase “if they do not join the course” refers to the course in the mop-up round, not the original seat.
"The condition of forfeiture is not a penalty but a contractual obligation undertaken by the candidate upon opting for exit and re-entry into the counselling process."
The Court held that Ext.P6 notification did not create a new obligation but merely reiterated the existing condition under the prospectus. The payment was not a ‘registration fee’ as claimed; it was the mechanism for enforcing the forfeiture clause. The respondents’ argument that the fee must be refunded if no seat is secured contradicts the prospectus’s explicit language. The Court further noted that the respondents did not challenge the validity of Clause 10-1.18 at any stage, thereby accepting its terms.
The Single Judge erred in treating the payment as a non-forfeitable deposit. The prospectus’s terms, being part of a public admission process governed by transparency and contractual fairness, bind all participants equally. The Court concluded that the forfeiture is triggered by the act of exiting a secured seat to re-enter counselling, regardless of whether a new seat is obtained.
The Verdict
The State won. The Kerala High Court held that the 10% fee paid under Clause 10-1.18 of the Ext.P1 prospectus is a forfeitable condition for participating in mop-up counselling and need not be refunded even if the candidate fails to secure a new seat. The impugned judgment was set aside and the writ petition dismissed.
What This Means For Similar Cases
Forfeiture Clauses Are Contractual, Not Administrative
- Practitioners must treat prospectus-based forfeiture clauses as binding contractual terms, not discretionary administrative charges.
- Candidates cannot claim refund on grounds of ‘unforeseen outcome’ if the prospectus clearly states the condition.
- Legal challenges must be mounted before participating in the process, not after.
Notification Cannot Override Prospectus Without Explicit Authority
- Government notifications that operationalize prospectus rules cannot dilute or reinterpret core forfeiture conditions.
- Where a prospectus is approved by government order, it carries the force of a public instrument.
- Any ambiguity in notifications must be resolved in favour of the prospectus’s express terms.
Mere Oral Assurances Do Not Override Written Terms
- Oral assurances by officials regarding refund eligibility are legally unenforceable if contradicted by the prospectus.
- Candidates must rely on written documentation; reliance on verbal promises is not protected under administrative law.
- Institutions are not estopped by informal representations made during counselling.
