No Prospectus, No Precondition: Karnataka High Court Declares Full-Course Bank Guarantee Demands Ultra Vires and Awards Compensation for Wrongful Denial of MBBS Admission

Introduction

In Sanjana V Tumkur v. The State of Karnataka (Karnataka High Court, 20 August 2025), a Division Bench comprising Justice Anu Sivaraman and Dr. Justice K. Manmadha Rao addressed a recurring tension in medical admissions: whether a private/deemed university may insist upon a bank guarantee for the entire course fee as a condition precedent to admission when such a requirement is not expressly set out in the governing admission documents. The case also revisits the remedial architecture created by the Supreme Court in S. Krishna Sradha regarding relief for a meritorious candidate who loses a seat due to institutional fault after the statutory cut-off date.

The petitioner, a NEET-UG 2017 candidate with All India Rank 195911, alleged that she was orally assured admission to Sri Siddhartha Medical College (a constituent of Respondent No. 6 – Sri Siddhartha Academy of Higher Education) after she deposited original certificates and paid the first-year fee. Days later, she was asked to furnish a bank guarantee for the balance of the course fees. Despite furnishing a bank guarantee within three days, admission was denied on the ground that all seats had been filled. The petitioner asserted that less meritorious candidates were admitted in violation of NEET merit and that the institutional demand for a full-course bank guarantee lacked legal basis. The college later issued an assurance letter (Annexure L, 11.10.2017) promising a free seat in 2018–19, which was never honoured.

The petition sought multiple reliefs, including a writ of mandamus enforcing the assurance of a free seat, inquiries by regulatory bodies, withdrawal of recognition of the college, and damages of Rs. 5 crores. Ultimately, the Court crafted a measured remedy: it declared the college’s insistence on a full-course bank guarantee (absent a prospectus clause) arbitrary and illegal and awarded compensation of Rs. 15,00,000 to the petitioner, applying the Supreme Court’s framework in S. Krishna Sradha.

Summary of the Judgment

The Court found no provision in the prospectus, admission notification, or governing statutes authorizing the college to insist on a bank guarantee for the entire course as a precondition for admission.
Reliance on Islamic Academy of Education to justify such a demand was rejected: while security may be permissible in narrowly tailored situations, it cannot be imposed ad hoc in the absence of enabling stipulation or reasonable grounds.
The petitioner had paid first-year fees on time and furnished the bank guarantee promptly (within three days of being told), yet was denied admission, while less meritorious candidates were admitted. The action was held “per se arbitrary and illegal.”
Although the petitioner approached the Court in February 2018, the Court held there was no undue delay because she reasonably awaited compliance with the written assurance given by the Chancellor on 11.10.2017; the institution’s allegation of coercion was unsupported by any complaint or proof.
Following S. Krishna Sradha, the Court declined to disturb admissions long after the cut-off date but awarded compensation—fixed at Rs. 15,00,000—to offset the petitioner’s loss, to be paid within two months. Other wide-ranging prayers (including recognition withdrawal and Rs. 5 crores damages) were not granted.

Factual Background and Issues

Key Facts

NEET-UG 2017 AIR: 195911; counseling by Respondent No. 6 on 01.09.2017.
Petitioner deposited original certificates and first-year fee of Rs. 15,65,750 on 01.09.2017; no written acknowledgment or allotment letter issued.
On 05.09.2017, the college sought a bank guarantee for the balance course fees; the petitioner furnished a bank guarantee of Rs. 52,50,000 on 08.09.2017.
Admission was refused on 08.09.2017 with the claim that all seats were filled and the list had already been sent to the Medical Council of India (MCI).
Annexure J allegedly showed candidates with lower NEET ranks (from Sl. No. 15 onwards) were admitted instead of the petitioner.
On 11.10.2017 (Annexure L), the Chancellor assured a free medical seat in 2018–19; the assurance was countersigned by the Principal and the petitioner. The institution later denied its validity, alleging coercion, but produced no contemporaneous complaint.
The petitioner joined Basaveshwara Medical College in 2018–19 through KEA counseling and paid Rs. 24,22,500 in first-year fees.

Issues

Can a medical college insist on a bank guarantee for the entire course as a condition precedent to admission, absent any express stipulation in the prospectus or governing regulations?
Was the denial of admission to a more meritorious candidate, and admission of less meritorious candidates, arbitrary and illegal?
Was the writ petition delayed, and did the post-event assurance by the Chancellor justify the petitioner’s timing?
What is the appropriate relief after the statutory cut-off date—admission, seat reallocation/increase, or compensation?

Detailed Analysis

Precedents Cited and Their Influence

S. Krishna Sradha v. State of Andhra Pradesh (AIR 2020 SC 47; CA No. 1081/2017, 13.12.2019)
The Supreme Court laid down a calibrated remedial scheme for MBBS admissions wrongfully denied due to institutional fault. It directs:
- Prioritizing early disposal of such petitions.
- In exceptional and rare cases, permitting admission in the same year by increasing seats within one month beyond the 30 September cut-off (not beyond 30 October).
- If same-year relief is impossible, directing admission in the next academic year by adjusting management quota seats.
- Compensation as an additional remedy when admission relief is not feasible.
The High Court quoted and applied these principles, ultimately awarding compensation given the lapse of several years and the petitioner’s subsequent admission elsewhere.
Islamic Academy of Education v. State of Karnataka (14.08.2003)
This seminal case addressed fee regulation in private institutions. It prohibits upfront collection of the entire course fee but allows reasonable safeguards (like security/bank guarantees) to prevent mid-course dropouts. The High Court distinguished this authority by emphasizing:
- Security mechanisms cannot be imposed arbitrarily; they must have legal footing (prospectus/notification/statute) and rationale.
- In this case, there was no enabling provision, no prior stipulation, and no reasonable apprehension about this candidate (who had already paid first-year fees).
Hence, the court found the demand ultra vires and its use to displace a meritorious candidate as “per se arbitrary and illegal.”
Asha v. PT. B.D. Sharma University of Health Sciences (2012) 7 SCC 389; and Chandigarh Administration v. Jasmine Kaur (2014) 10 SCC 521
Both decisions emphasize the sanctity of the admission schedule and the centrality of merit. They permit judicial intervention only in rare cases and with restraint when cut-off dates have passed. These principles undergird the High Court’s refusal to unsettle admissions many years after the event, while still granting restitutionary compensation.
National Medical Commission v. Mothukuru Sriyah Koumudi (CA No. 3940/2020, 07.12.2020)
The Supreme Court reinforced strict adherence to cut-off dates and cautioned against judicial directions that distort the admission calendar. The High Court’s remedy—compensation rather than admission long after the fact—aligns with this discipline.
Other High Court decisions cited by Respondents (e.g., Shafna A.M.; Shankar Gowda T.K.; Sanjat Suman Lenka)
These were invoked to argue against post cut-off interference and to justify institutional discretion. The Bench did not find them determinative in the face of the Supreme Court’s binding framework in Krishna Sradha and the college’s lack of legal authority to demand a full-course bank guarantee.

Legal Reasoning Applied by the Court

No authority to insist on a full-course bank guarantee absent a prospectus clause.
The Court categorically held that neither the prospectus nor any statutory/regulatory instrument authorized the college to require a bank guarantee for the entire course fee as a precondition to admission. A condition that affects eligibility or seat allotment must be transparent, pre-announced, and uniformly applied. An after-the-fact, undocumented condition is ultra vires.
Islamic Academy does not license ad hoc demands.
While Islamic Academy allows reasonable security to deter mid-course discontinuance, it neither permits wholesale collection of full-course fees nor endorses arbitrary security demands. The High Court emphasized two guardrails:
- There must be a legal basis in the prospectus/regulations to impose such a requirement; and
- There must be a reasonable apprehension justifying security in the specific case.
Neither existed here. The petitioner had paid the first-year fee promptly and offered the bank guarantee within three days of the request; yet, the college refused it, claiming post-facto that seats were filled.
Merit and non-arbitrariness: the heart of NEET regime.
The Court noted that less meritorious candidates were admitted over the petitioner, violating the NEET-mandated merit order. The decision labels the college’s conduct “per se arbitrary and illegal,” squarely offending equality and fair treatment norms.
Delay rejected: reliance on institutional assurance was reasonable.
Although the writ was filed months after the September 2017 denial, the Court found the petitioner’s timing justified. The Chancellor’s letter of 11.10.2017 (promising a free seat in 2018–19) provided a legitimate basis to await voluntary compliance. The college’s allegation that the letter was coerced was unsubstantiated—no complaint was lodged and no proof offered—so the Court refused to penalize the petitioner for that waiting period.
Remedy tailored under Krishna Sradha.
The petitioner had already joined another college in 2018–19. Years had elapsed, well beyond the permissible window for seat adjustments. Applying Krishna Sradha, the Court denied admission-linked relief but awarded compensation of Rs. 15,00,000 to offset the wrongful denial’s consequences. Broader prayers—COD inquiry orders, recognition withdrawal, and Rs. 5 crores damages—were not granted.

Impact and Prospective Significance

Admissions governance in private/deemed universities: Institutions cannot superimpose significant eligibility or compliance conditions (like full-course bank guarantees) unless these are expressly embedded in the prospectus/admission notification and are consistent with regulatory norms. Ad hoc, undocumented demands will be struck down as arbitrary.
Merit enforcement within NEET regime: The judgment reinforces that merit is paramount. Denying a meritorious candidate on the back of an extra-prospectus condition—especially when less meritorious candidates are admitted—invites judicial censure and monetary liability.
Remedial clarity post cut-off dates: The Court faithfully applies Krishna Sradha: admissions will not be disturbed beyond the narrow window; compensation is the primary restorative tool when time has lapsed. This deters institutional opportunism near cut-off dates.
Institutional assurances carry legal weight: Written assurances (like the Chancellor’s letter here) can explain and excuse perceived delay and shape remedies, especially when alleged coercion is unproven.
Compliance incentives: Monetary liability—even if well short of punitive damages—creates an incentive for institutions to adhere to transparent, pre-declared criteria and to document all admission interactions (acknowledgments, allotment letters, and receipt of guarantees/fees).

Complex Concepts Simplified

Writ of Mandamus: A judicial order compelling a public authority (or a body performing public functions, such as a deemed university) to discharge a legal duty. Here, the petitioner sought mandamus to enforce an admission/assurance.
Prospectus primacy: In admission law, the prospectus functions as the foundational contract between the institution and applicants. Any material condition must be in the prospectus or a binding governing instrument; institutions cannot spring new conditions later.
Bank Guarantee: A promise by a bank to pay the beneficiary (here, the college) if the student defaults. Islamic Academy allows reasonable security measures, but they must be authorized and reasonable—not a backdoor to coerce early payment or to screen out candidates.
Cut-off Date: The last permissible date for admissions (typically 30 September for MBBS). Courts avoid displacement of settled admissions beyond this date, save in rare exceptions defined by the Supreme Court.
Per se arbitrary: An action so lacking in legal basis and fairness that it is arbitrary on its face—here, denying admission to a more meritorious candidate by imposing an unwritten bank guarantee condition and then admitting lower-ranked candidates.
Compensation under Krishna Sradha: A monetary remedy to offset loss (e.g., a lost academic year or extra financial burden) when admission cannot be practically restored. It is “additional” and not a substitute for seat-allocation remedies when those are feasible within the permitted window.

Practical Takeaways

For Institutions:
- Embed any security requirements (e.g., bank guarantees) in the prospectus with clear rationale and uniform application. Do not improvise post-counseling.
- Issue contemporaneous acknowledgments and allotment letters; maintain rigorous records of fee receipts and documents.
- If an assurance is later contested as coerced, contemporaneously lodge a formal complaint and preserve evidence.
For Candidates:
- Insist on written acknowledgments of fee payments and document submissions.
- If an additional condition is demanded, ask for the written rule or prospectus clause that authorizes it.
- Approach court promptly; if you rely on an institutional assurance, preserve that document and communications to explain any delay.
For Regulators:
- Audit prospectuses for clarity and legality; direct institutions to avoid informal conditions that affect merit-based admissions.
- Codify permissible security instruments, if any, with safeguards against misuse.

Conclusion

This decision sets an important marker in admission jurisprudence: a medical college cannot impose a full-course bank guarantee as a precondition for admission unless such a requirement is expressly authorized by the prospectus or governing rules and is applied transparently and reasonably. Invoking Islamic Academy does not validate ad hoc, undocumented demands. Where a meritorious candidate is denied admission due to such illegality and time has eclipsed the possibility of restorative admission, compensation is the appropriate remedy under S. Krishna Sradha.

The Court’s approach balances two imperatives: preserving the integrity of the admission calendar and ensuring that institutional arbitrariness does not go unanswered. By awarding Rs. 15 lakhs and refusing disruptive relief years after the event, the Bench reinforces merit, transparency, and the centrality of the prospectus—principles that will guide both institutions and courts in future admission disputes.