IQ City Foundation v Union of India: Supreme Court on Medical College Renewal and Bank Guarantee

The Supreme Court upheld the refusal to renew permission for the fifth batch of 150 MBBS students at IQ City Medical College for academic year 2017-18. It nevertheless directed that the institution's request be considered for 2018-19 and that the bank guarantee already furnished be treated as a deposit for that next year's inspection and consideration.

Case details and judicial bench

Case: IQ City Foundation and Another v. Union of India and Others, Writ Petition (Civil) No. 502 of 2017. The bench comprised Chief Justice Dipak Misra, Justice Amitava Roy and Justice A. M. Khanwilkar. The institution was located at Burdwan, West Bengal, and sought renewal of permission for the fifth MBBS batch of 150 students.

Background: Permissions granted from 2013 to 2016

The Medical Council of India (MCI) granted the initial Letter of Permission on 15 July 2013 for an annual intake of 150 students beginning in academic year 2013-14. Renewals for the second, third and fourth batches were granted by letters dated 4 July 2014, 10 June 2015 and 15 December 2015 respectively.

On 6 July 2016 the college submitted its scheme and prescribed fee seeking the fourth renewal, corresponding to the fifth batch for 2017-18. The regulator advised the college that assessors could conduct an inspection after 15 July 2016 and asked it to keep inspection forms and declarations ready.

Inspection, compliance proceedings and refusal

An assessment was carried out on 3 and 4 November 2016. The college maintained that the initial faculty and resident-doctor shortfalls were approximately 4.5% and 3.5%, and that other deficiencies were capable of rectification. The MCI Executive Committee, however, recommended against renewal. The Central Government called for a point-wise compliance response and held a hearing on 9 February 2017.

The Hearing Committee initially considered that the deficiencies did not warrant disapproval at that stage. The matter was returned for further regulatory examination. A compliance verification assessment followed on 21 March 2017, which the college challenged as extending beyond the intended scope. The college made further representations, including one dated 20 May 2017.

On 31 May 2017 the Central Government accepted the regulator's recommendation and rejected permission for the fifth MBBS batch for academic year 2017-18. The college challenged that refusal under the legal framework then in force.

Supreme Court findings on the deficiencies

The Supreme Court considered the college's objections to the assessment and hearing process, including records relating to outpatient attendance. The judgment recorded that the subsequent assessment found faculty deficiency of 15.9% and resident-doctor deficiency of 25.88%. In light of these findings and the regulatory guidelines, the Court declined to interfere with the refusal for academic year 2017-18.

The Court held that it was difficult to find perversity in the authorities' decision to deny renewal, while expressly limiting its conclusion to the academic year 2017-18.

Although the college did not obtain the requested renewal for that year, the Court directed the competent authorities to consider the prayer for academic year 2018-19. It also directed that any bank guarantee already furnished be treated as a deposit for the next year's inspection and consideration. The direction did not dispense with future inspection or statutory compliance.

Legal provisions applicable when the case was decided

Section 10A of the Indian Medical Council Act, 1956

At the time of the dispute, Section 10A governed prior permission for establishing a medical college, opening a new or higher course of study or increasing admission capacity. A scheme had to be assessed against prescribed standards and the Central Government was required to take a decision under the then applicable statutory process. Section 10A(4) addressed approval or disapproval after considering the relevant recommendations and material, with an opportunity of hearing where required.

Establishment of Medical College Regulations, 1999

These regulations formed part of the historical framework for permissions and renewals, including assessment of teaching faculty, resident doctors, infrastructure, clinical facilities and other minimum standards. Their role in this case must be understood in the context of the 2017-18 academic year rather than treated as a statement of today's permission procedure.

Current law: National Medical Commission framework

The National Medical Commission Act, 2019 replaced the earlier Indian Medical Council regulatory structure. The National Medical Commission (NMC) and its autonomous boards now regulate medical education under the Act and applicable current regulations. The former MCI framework should not be used as a substitute for checking present-day NMC requirements.

• Section 26: describes the functions of the Medical Assessment and Rating Board, including assessment and rating of medical institutions and permissions within the statutory framework.
• Section 28: addresses permission for establishing a new medical college, starting a postgraduate course or increasing seats, subject to the statutory scheme and regulations.
• Section 29: sets out criteria relevant to approval or disapproval of schemes, including infrastructure, faculty, financial resources and other prescribed factors.
• Section 30: provides for appeal against decisions under the relevant permission process.

For the current statutory text, notifications, standards and applicable permissions procedure, consult the National Medical Commission's official website, the India Code legislative database and the Ministry of Health and Family Welfare. The exact regulations in force for a particular academic year and type of application should be checked separately.

Why the ruling matters

The decision illustrates two distinct principles. First, judicial review does not automatically replace the assessment of specialist medical-education regulators where the decision is supported by relevant deficiencies and the prescribed process. Second, refusal for one academic year does not necessarily decide a later application: the later request must be evaluated on its own facts, rules and inspection results.

Important distinction: This is a report of a 2018 judgment. Its directions concerning the 2018-19 academic year and a particular bank guarantee were case-specific; they do not create a general entitlement to renewal or automatic carry-forward of deposits under today's law.

Read the Supreme Court judgment

Read the judgment in IQ City Foundation and Another v. Union of India and Others, dated 6 February 2018, using the original ../judgments/medical-college-writ-for-renewal-dismissed-consider-next-year-iq-city-v-uoi-502-2017-judgement-6-2-2018.pdf retained on this website. For court records and other judicial material, visit the Supreme Court of India's official website.

Legal information: The historical case summary is not a substitute for checking the full judgment, current regulations and subsequent binding judicial decisions.