Chief Justice of Madras High Court Rajesh Kumar Agarwal and Justice N Paul Vasantha Kumar, who heard the petition, ordered issue of notice to the officials.
Petitioner P Vellaichamy, a lawyer, said the first round of counselling for medicine was held between June 16 to 20 and another for engineering from June 21 to Jul 30.
The second round of medical counselling had begun and students who scored higher marks and joined top engineering colleges had opted for medical course, resulting in nearly 1,170 seats in premier institutes falling vacant.
As engineering counselling was over, such vacancies, though coming under government merit quota, are being sold for Rs 20 lakh to Rs 30 lakh, according to the reputation enjoyed by the college, he alleged.
Vacant seats under government quota in premier institutes were filled under management quota for want of further counselling (for engineering), defeating the very objective of counselling, he said.
As counselling for medical course is conducted in three phases, government quota seats falling vacant were filled by management of engineering colleges, and "Vacancies were not filled with eligible candidates".
Most students who failed to get seats in counselling under government quota in premier colleges are unreasonably denied their chance due to non-disclosure of vacancy subsequently caused by engineering students who opted for medical course.
He submitted that government should restrain the respondent officials from allowing engineering colleges to fill such vacancies after second and third round of medical course counselling.
He also prayed for a direction from the court to the respondents to announce engineering seats falling vacant under government quota in government colleges, government aided and reputed private colleges after medical counselling. The case will come up for further hearing on Aug 30.