Depends on the session for which it is debarred. Let's understand it with an example.

Suppose a medical college is recognised/permitted by the MCI for session 2013–14 is debarred/derecognised for sessions 2017–18 and further, the students studying in session 2013–14 and further will receive their MBBS degree, which will be recognised. Degrees offered to students of session 2017–18 and further (until re-recognised) will be deemed as unrecognised by the MCI, and hence these students will not be eligible for registration to State/National Medical Council.

In the example quoted above,

• Students of session 2013–14 will be legally recognised as MBBS graduates on receiving their degrees.
• Students of session 2017–18 will not be legally recognised as MBBS graduates since their degree will hold no legal value.

All the best.