Tamil Nadu and its neighbouring Union territory of Puducherry account for more than 50 medical colleges, half of the run by the government.
If left unchecked, these 'factories' would churn out money-minded medicos to the detriment of public welfare and people, it said.
The first bench comprising Acting Chief Justice Satish K Agnihotri and Justice M M S Sundresh has ordered notices to the Centre and the state.
The PIL of M Swaminathan said that while admission process and fee structure were as per rules in government colleges, the private unaided institutions charged up to Rs 1 crore for medical seat.
Shady deals are struck, all ethics are thrown to the winds and huge black money transactions are done in MBBS admission profess, according to the PIL said.
It said the errant colleges conducted their own farcical entrance tests by supplying both question papers and answer keys to students who had paid capitation fees.
It said even the CBI had not properly conducted a probe into the racket. The CBI had not booked any purchaser and sellers of medical seats involving huge black money, it added.
It was a cruel joke played on the future of millions of brilliant and innocent students from poor family background, the PIL said.
Describing it as mother of all maladies, it said private medical colleges and deemed universities were the biggest culprits.
Calling for an overhaul of educational policy, the PIL wanted the court to ask the state and central governments to constitute committees to monitor medical education admissions and curb the practice of capitation fee collection.
"If capitation fee and profiteering are to be checked, the method of admission has to be regulated so that the admission is based on merit and transparency, and students are not exploited," the PIL said.
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