Supreme Court Partially Allows Appeal, Holds Subvention Scheme Unconstitutional After TMA Pai Judgment

Case Snapshot

Case Name: Government of India & Anr. v. Sri Devraj Urs Medical College

Citation: 2026 INSC 799

Bench: Justice Sheel Nagu & Justice Dipankar Datta

Date of Judgment: August 4, 2026

Area of Law: Constitutional Law, Education Law, Subvention Scheme

The Judgment in One Line

Subvention payments beyond 2002-03 set aside as scheme declared unconstitutional by TMA Pai Foundation; absence of financial data fatal to college's claim.

Why This Judgment Matters

This judgment clarifies the interplay between interim orders and final constitutional pronouncements. The Supreme Court held that the subvention scheme floated pursuant to the interim order in TMA Pai Foundation became unconstitutional once the 11-Judge Bench delivered its final judgment on October 31, 2002. The Court rejected the argument that the scheme had created a "vested right" in favour of colleges. It also emphasized that colleges claiming financial hardship must plead and prove their financial data—mere assertions are insufficient. The judgment reconciles the interim scheme with the final constitutional declaration, ensuring that unconstitutional schemes do not continue indefinitely.

Background

The subvention scheme was created pursuant to the interim order dated August 11, 1995, in TMA Pai Foundation v. State of Karnataka, which aimed to eliminate the evil of capitation fee by ensuring that merit was the sole criterion for admission to professional courses. The scheme provided ₹5,000 per annum per student (except NRIs) to eligible colleges, subject to the final outcome in TMA Pai

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