Medical Colleges Duty Bound & Legally Obligated To Pay Stipend To PG Students - Madras HC Observes

A Madras High Court Bench of Chief Justice Sanjay V Gangapurwala and Justice PD Audikesavalu has observed that medical colleges have an obligation to pay stipend to the postgraduate students, and the same cannot be denied to them on the basis of equitable set-off, even when the amount is not ascertained yet.

In that context, it was said that "The payment of stipend being a statutory liability of the College, it would not be open for the College to deny the payment of the same to the students. On the contrary, they are duty-bound and have legal obligation to pay the said amount to the students and cannot deny the same on the ground of equitable set-off, even when the amount that is sought to be claimed by the Colleges is not yet ascertained".

Senior Counsel Vijay Narayanan and Senior Counsel PS Raman appeared for the appellants. Counsel VBR Menon, among others, appeared for the respondents.

In this case, the Court was hearing an appeal filed by Mahatma Gandhi Medical College and Aarupadai Veedu Medical College & Hospital against a Single Judge's order directing them to pay stipends to Post-Graduate medical students as per the regulations set by the Medical Council of India (MCI). The colleges contested the order, stating that there was ongoing litigation concerning non-payment of fees by the students.

The colleges argued that they had financial claims against the students for unpaid fees and believed that if a student demands stipend payment, they should also be aware of their fee obligations. The students, on the other hand, argued that stipend and fees were distinct transactions, with stipend being remuneration for their work as resident doctors during their course. They didn't see it as part of the tuition fees. The colleges fear that if forced to pay stipends, it might become difficult to recover unpaid fees from the students.

On hearing the parties and perusing the applicable statutory provisions, the Court observed that the liability to pay stipend on the part of the Colleges to the students is under a statutory regulation. In that context, the Court further observed that "In the present case, the claims between the parties are not arising out of a commercial transaction. The liability to pay stipend on the part of the Colleges to the students is under a statutory regulation. The amount payable by the College to the petitioners / students as stipend is an ascertained sum of amount. No dispute exists with regard to the payment of amount as stipend. Whereas, the dispute with regard to the payment of fees still subsists. The petitioners / students have complied with the orders passed by this Court and has also paid the amount as per the directions of this Court. They have also given their undertaking that in case the Court decides, they would pay the higher amount and / or the difference amount of fees. Today, there are no orders directing the students to pay the enhanced amount of fees and or fees claimed by the college."

Further, the Court also held that the question of equitable set-off would not arise, as there was no ascertained sum of money directed to be paid by the students to the Colleges towards the fees. 

In light of the same, the petitions were dismissed.

Cause Title: The Registrar, Mahatma Gandhi Medical College and Research Institute v. D Rajasree & Anr.

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