Apex Court Decisions Apply Retrospectively Unless Expressly Made Prospective: Supreme Court

A Bench of Justice Dipankar Datta and Justice Sheel Nagu, while observing that “If a decision of the Apex Court does not expressly provide its application to be prospective, then it is settled law that all decisions of this Court are retrospective in application”, partly allowed the Government of India’s appeal against directions requiring payment of subvention amount to Sri Devraj Urs Medical College for the full five-year course of students admitted in 2002-03.

Additional Solicitor General Brijender Chahar appeared for the appellants, while Dr Sushil Balwada appeared for the respondent-college.

Background

The Court was hearing an appeal against the Karnataka High Court’s decision which had upheld directions requiring the Central Government to pay subvention amount to the respondent-college in terms of the interim order passed in TMA Pai Foundation v. State of Karnataka (1995), for students admitted up to the academic year 2002-03 for five years or until completion of their course, whichever was earlier.

The subvention scheme arose from the interim arrangement in TMA Pai Foundation, intended to address the capitation fee issue and ensure that merit remained the governing consideration in admissions to professional courses. However, the final 11-Judge Bench decision in TMA Pai Foundation v. State of Karnataka (2002) overruled the Unni Krishnan scheme, except to the extent it recognised primary education as a fundamental right, and held that the scheme framed in Unni Krishnan, J.P. v. State of Andhra Pradesh (1993) was unconstitutional.

The High Court had held that the college could not be denied subvention for students admitted during 2002-03 and prior years, and that such students were entitled to receive the amount for the full course period. The Supreme Court examined whether that view could stand after the final decision in TMA Pai Foundation (2002).

Court’s Observations

The Court first noted that the respondent-college had not placed material to show whether the fee and other revenue generated by it fell short of the expenditure required to run the institution.

The Bench observed: “During the course of arguments, we put a pointed question to the counsel for the respondent-college, as to whether in regard to fee charged and expenses incurred by them for the academic year 2002-03, prior and subsequent thereof, any data has been furnished? The answer is in the negative.”

Relying on Bharat Singh v. State of Haryana (1988), the Court reiterated that where a point of law depends on facts, those facts and supporting evidence must be pleaded in writ proceedings.

The Court stated: “In view of the above, in the absence of any data provided by the respondent-college, we are unable to adjudicate upon the said aspect and therefore, we move on with the assumption based on acquiescence of the respondent-college that fee was charged by the respondent-college from students qua academic year 2002-03, prior, and also subsequent thereto.”

The Court noted that the interim subvention arrangement was subject to the final outcome of TMA Pai Foundation (2002). Once the 11-Judge Bench declared the Unni Krishnan scheme unconstitutional, the Court held that the subvention scheme could not continue as though it had created an indefeasible right.

The Bench observed: “The final decision in TMA Pai Foundation (supra) case by 11-Judge Bench impliedly declared the subvention scheme to be unconstitutional. It may not be out of place to mention here that under the subvention scheme an amount of Rs.5,000/- per annum per student was extended by the Central Government (except to NRI’s). The scheme also provided that the subvention amount shall be paid till the students complete the course or for a period of 5 years, whichever is earlier.”

The Court added that the High Court appeared to have treated the later clarificatory order in State of Karnataka v. TMA Pai Foundation (2003) as giving prospective application to the 11-Judge Bench ruling.

Rejecting that approach, the Court held that the clarificatory order did not expressly make the final judgment in TMA Pai Foundation prospective.

The Bench stated: “If a decision of the Apex Court does not expressly provide its application to be prospective, then it is settled law that all decisions of this Court are retrospective in application as held in paragraph 29 of P.V. George v. State of Kerala.”

It then quoted P.V. George v. State of Kerala (2007): “The law declared by a Court will have a retrospective effect if not otherwise stated to be so specifically.”

The Court further explained that the clarificatory order only protected statutory provisions to the limited extent they needed to be brought in conformity with TMA Pai Foundation (2002), and did not save executive schemes contrary to the final judgment.

The Bench held: “A conjoint reading of paragraph 393 of the final decision in TMA Pai Foundation (supra) case by 11-Judge Bench and the clarificatory order dated 01.04.2003 of the Division Bench of this Court makes it abundantly clear that the intention of this Court was to give prospective application to only such statutory provisions which stipulated something contrary to the ratio laid down in the final decision in TMA Pai Foundation (supra) case by 11-Judge Bench.”

The Court held that the subvention scheme, being an executive arrangement flowing from the interim order, ceased to operate after the final TMA Pai Foundation decision.

The Bench observed: “However, the schemes or executive instructions, particularly the subvention scheme, died its own death on 31.10.2002 when the scheme was declared unconstitutional by the final decision in TMA Pai Foundation (supra) case by 11-Judge Bench.”

It also noted that the scheme required annual payment, not a lump sum for the entire course.

The Court stated: “Moreso, the scheme of subvention, which was formulated by way of the interim order dated 11.08.1995, during pendency of TMA Pai Foundation (supra) case before this Court, obligated the Central Government to pay the subvention amount to each eligible college on an annual basis and not for the entire course in lump sum.”

On that basis, the Court held that the High Court was wrong in directing the release of subvention for the full five-year course after the academic year 2002-03.

Conclusion

The Supreme Court partly upheld the Karnataka High Court’s decision only to the extent it denied payment of subvention beyond the academic year 2002-03.

However, it set aside the High Court’s direction requiring payment of subvention amount for the entire five-year course for students admitted in 2002-03. The connected appeal arising from the special leave petition was directed to be governed by the same order.

Cause Title: Government of India & Anr. v. Sri Devraj Urs Medical College (Neutral Citation: 2026 INSC 799)

Appearances

Appellants: Brijender Chahar, ASG, with Madhulika Upadhyay, AOR, Rekha Pandey, Rohitash Singh Nagar, A. Deb Kumar, Sunita Sharma and Neelakshi Bhadauria

Respondent: Dr Sushil Balwada, AOR, with Kaushal Yadav, Nandlal Kumar Mishra, M/s. Lawyer S Knit & Co, AOR, Mahesh Thakur, Siddharth Sati, Narveer Yadav, Ruchi Kumari, Dushyant Pratap Singh and Ranvijay Singh Chandel

Click here to read/download Judgment