The Madras High Court has refused to direct Chettinad Academy of Research and Education to issue an MBBS degree certificate and course completion certificate to a student whose tuition fees had been seized by the National Investigation Agency (NIA) on allegations that the money originated from funds raised for the banned Communist Party of India (Maoist).

Holding that a person cannot claim an equitable right to benefit from the proceeds of crime, the Division Bench observed that once the fees paid to the institution were seized, the student's account effectively stood in default and the college could not be compelled to release the certificates without receiving legitimate and untainted payment.

Case Details

Background of the Dispute

Puja Kumari had secured admission to the MBBS course at Chettinad Academy of Research and Education through the regular admission process and successfully completed her five-year academic programme along with the Compulsory Rotatory Resident Internship (CRRI). During the course of her studies, a total amount of ₹1.13 crore was remitted towards tuition fees.

Subsequently, during investigation in RC No. 05/2021/NIA/RNC, the National Investigation Agency allegedly discovered that the money utilised for payment of the fees had been sourced from extorted funds raised for the Communist Party of India (Maoist), a proscribed terrorist organisation.

Acting under statutory powers, the NIA issued a production-cum-seizure notice to the institution and appropriated the entire fee amount, leaving the college without any effective payment for the education imparted to the student.

Consequently, the college withheld the student's course completion certificate and MBBS degree certificate.

Appeal Against Single Judge's Order

The student challenged the order of the Single Judge, who had earlier dismissed her writ petition seeking directions to the college and medical authorities to release her educational certificates without insisting upon repayment of the fees.

She contended that educational certificates cannot be retained as security or subjected to a general lien and maintained that she had no personal involvement with any unlawful organisation. The student further emphasised that she had maintained an unblemished academic record and had not been arrayed as an accused in the criminal proceedings.

College Opposes Plea

The institution argued that the entire fee amount amounting to ₹1,13,70,500 had been seized by the NIA under the Unlawful Activities (Prevention) Act, 1967, and that it had been deprived of its legitimate dues despite imparting education to the student.

The college further submitted that completion certificates could be issued only after full settlement of institutional fees and that it could not be compelled to bear substantial financial losses arising from funds identified as proceeds of crime.

Whether Educational Certificates Can Be Withheld?

The Court acknowledged that, ordinarily, educational certificates are not marketable commodities and cannot be withheld merely for recovery of dues. Referring to earlier decisions, including R.D. Saxena v. Balram Prasad Sharma, S. Muthukamatchi v. Anna University and other precedents, the Bench reiterated that there is no general lien over educational certificates.

However, the Court clarified that the present case involved extraordinary circumstances touching upon issues of national security, terrorist funding and seizure of criminal assets under the Unlawful Activities (Prevention) Act, 1967.

Court's Observations

The Bench noted that the NIA charge sheet had named the appellant's brother Tarun Kumar and paternal uncle Pradyuman Sharma as principal operatives allegedly involved in raising extorted funds for the banned organisation. Investigators had traced the money paid towards the student's education directly to such illegal funding.

While acknowledging that the student herself had not been arraigned as an accused, the Court held that she could not claim an equitable right to benefit from the fruits of crime.

According to the Court, once the fee amount was seized and appropriated by the NIA, the student's account with the institution legally reverted to an unpaid status. Since the college had already utilised its infrastructure, resources and faculty to provide medical education, compelling it to release certificates without receiving legitimate fees would amount to a miscarriage of justice.

The Bench held that the institution was not obligated to release the certificates until its dues were reimbursed through lawful and untainted means.

Remedy Available to the Student

The Court observed that if the appellant maintained her innocence and believed that the funds were legitimate, her remedy lay in approaching the competent Special Court for release of the seized amount from the NIA.

The institution, being a private educational body, could not be forced to undertake litigation against the NIA to recover the appropriated fees.

Final Decision

Upholding the order passed by the Single Judge, the Division Bench held that the decision adequately protected the financial autonomy of the educational institution while preserving the student's liberty to deposit the requisite fees afresh and thereafter claim her certificates.

Finding no ground for interference, the Court dismissed the writ appeal and confirmed the earlier order.

Why This Judgment Matters

The ruling highlights the intersection between educational rights and anti-terror financing laws.

The judgment clarifies that although educational certificates generally cannot be retained for recovery of dues, exceptional situations involving proceeds of crime and national security considerations may warrant a different approach.

The decision also underscores that equitable relief cannot extend to permitting indirect benefits arising from allegedly tainted funds and reaffirms the importance of safeguarding the financial autonomy of educational institutions.

Key Takeaways

• Madras High Court refused to direct release of an MBBS degree certificate where the tuition fees had been seized by the NIA.

• The Court held that a person cannot claim equitable benefits arising from proceeds of crime.

• Although educational certificates ordinarily cannot be withheld, exceptional circumstances involving terror funding justified a different approach.

• The institution could not be compelled to bear the burden of litigation against the NIA.

• The student may seek release of the seized amount before the competent Special Court or repay the fees through legitimate means.

Case Title: Puja Kumari v. Union of India and Others

Case Number: W.A. No. 2422 of 2025

Citation: 2026 MHC 2170