Supreme Court stays Karnataka High Court's order imposing Rs 75 lakh cost on Ayurvedic Colleges

New Delhi: The Supreme Court on Thursday stayed the Karnataka High Court's directions of September 1, 2025 to two Ayurvedic colleges to pay Rs 75 lakh each as exemplary cost for admitting students to BAMS, beyond the candidates recommended by the Karnataka Examination Authority in the academic year 2023-24.

A bench of Justices P S Narasimha and Atul S Chandurkar issued notice to the Union and the state governments on petitions filed by TMAE Society's Ayurvedic College and Hospital and another college, affiliated to Rajiv Gandhi University of Health Sciences, Bengaluru.

"In the meanwhile, there shall be stay of the direction of the High Court as regards to imposition of costs of Rs 75 lakhs. Pending disposal of the special leave petitions, the results of the students shall not be withheld," the bench ordered.

Senior advocate P B Suresh, and advocates Nishanth A V and Balaji Srinivasan appeared for the petitioner colleges, assailing the High Court's order.

The petitioner colleges contended that the present case was a classic instance where they were being punished for the failure of the system in filling up vacant seats through counselling. It reflected a glaring deficiency in the system that, despite the availability of students, the seats were not filled during counselling, causing prejudice to both the institution and the students.

The lead petitioner submitted, out of the 60 sanctioned seats, KEA could fill only 26 seats, i.e., just 40% of the total intake, leaving a substantial number of seats vacant. 

The plea also maintained all 27 students admitted at the institutional level had appeared for the NEET examination and fulfilled all eligibility criteria as prescribed by the regulations. Hence, there was no compromise on the merit or quality of admitted candidates.

The petitioner colleges also submitted that it is in the larger public and national interest that all vacant medical seats are filled, especially with eligible NEET-qualified candidates.

"The petitioner no. 1 is an unaided private institution that has established its college after securing loans from banks. Running the institution at only one-third of its sanctioned strength imposes unsustainable financial strain and jeopardizes its ability to meet basic operational and academic expenses," the plea said.

The plea claimed the policy which permitted Deemed-to-be Universities to admit students against vacant seats through offline institutional-level mechanisms after counselling, while prohibiting similarly placed affiliated private institutions from doing the same, was arbitrary and discriminatory and it violated Article 14 of the Constitution.