V.GOPALA GOWDA, CJ & B.N.MAHAPATRA, J. W.A. NO.387 OF 2011 (With Batch) (Decided on 06.09.2011) D.AV. COLLEGE MANAGING COMMITTEE & ORS. ………Appellants. .Vrs. LAXMINARAYAN MISHRA & ORS. ……….Respondents. For Appellants: M/s. : Jagannath Patnaik, B.Mohanty, T.K.Pattnayak &A.Patnaik (In WA No.387/2001) M/s.: Saurjya K. Padhi, B.Mohanty, S.Patnaik M/s. Sanjit Mohanty, K.S.Patnayak, Ashok K. Parija, M/s. Milan Kanungo, P.P.Panda, Y.Mohanty& S.K. Misra, B.B.Mohanty, B.B.Mohanty For Respondents : Mr : J. Das M/s/ D.K. Mohapatra, S.Jena, M/s. : M.K. Sahoo, A.Mishra, P.K.Praharaj, Mr Bijoy K. Mohanti Mr Shyamananda Mohapatra Mr . J. Das M/s. K.P.Mishra, L.Samantray, C.Mohanty, P.K.Mishra, S.Pattnaik Mr Y.Mohanty, Mr J. Das, A.N. Das, N.Sarkar, E.A. Das & J.J.Das, S.Das V. GOPALA GOWDA, C.J. These appeals are filed by the D.A.V. College Management represented through its Regional Director, D.A.V. Institutions, Orissa, West Bengal, Sikkim and Manipur, Markat Nagar, Section -6, Cuttack, Orissa. The correctness of the common judgment dated 27.06.2011 passed in W.P.(C) Nos.5030, 525, 893, 3460, 4713, 4922, 5113, 5147, 5326, 7251 and 11359 of 2009, wherein the learned Single Judge while disposing of the writ petitions has made certain observations and directions, is challenged in these appeals urging various facts and legal contentions. 2. The brief facts of the case are stated below for the purpose of appreciation of rival legal contentions and to answer them. 3. It is stated by the appellants-Institutions that all the DAV Public Schools situated in Cuttack and in the State of Orissa are managed by the DAV College Trust and Management Society, a Charitable Educational Trust established in 1986. All the DAV Public Schools, Colleges and other institutions are managed by the above Trust having charitable purpose and there is no individual/private interest in it. The employees of the DAV Public Schools are the employees of DAV College Managing Committee, a functional wing of the DAV College Trust and Management Society, New Delhi. DAV Public Schools are imparting education to the students in CBSE pattern and other vernacular patterns. The appellants-Institutions are guided by the rules and regulations of the CBSE which is the affiliating agency. The appellant’s schools are the largest Non- Government Educational Institutions which do not receive any grant either from the Central Government or the State Government. The employees of the appellant- Institutions are getting salary as per the guidelines of the C.B.S.E. The track records of the appellants-Institutions are very good over the years than the other educational institutions situated in Orissa. The teaching faculty, infrastructure and the facilities provided by the Schools are better than other Non-Government Schools and the appellants-Institutions always follow the guidelines issued by the CBSE and the State Government. The Managing Committee of the appellants-Schools has published its administrative manual, wherein under Chapter VII at Clause 7.1 the guidelines for determining fee structure for schools has been prescribed, which reads as under: “The DAV Public Schools, as is known, are non-profit making, non-commercial institutions. Their sole aim is to provide high quality of school education. As they do not receive any grant-in-aid from the government, and as there is no other source of income, they have to depend largely on fees to meet their expenditure. There are many other things besides the physical facilities provided by a school which form essential elements of expenditure which is turn become the basis for determining the fees” 4. It is stated that the CBSE guidelines provided in clear terms provide for obtaining No Objection Certificate (for short, “NOC”) from the State Government to establish DAV institutions affiliated to CBSE Board. There is no law in operation in the State of Orissa for giving NOC to CBSE affiliation institution. Government of Orissa in the Department of School and Mass Education, Orissa on 23.09.1996 has passed Resolution No.30720- VISSME-M-17/96-SME giving NOC to CBSE Institutions including DAV Institutions after fulfilling the conditions prescribed purported to have been issued keeping in mind the requirement prescribed under Sections 5 and 6 of the Orissa Education Act, 1969 (for short, “the Act, 1969”). The executive instructions provide for various establishments including the fees, admission of students, withdrawal of No Objection Certificates issued in favour of DAV institutions affiliated to CBSE/ICSE. The provisions of the Orissa Education Act have no application to Schools, Higher Secondary Schools, Colleges and Junior Colleges in terms of definition of Section 3(j-1), which reads as under: “Section (j-1) : Junior College means an educational institution imparting instructions in Higher Secondary courses as defined in the Orissa Higher Secondary Act, 1982” The schools do not come under the private educational institution. Bye-Laws Clause Nos.20 and 21 of the Affiliation Bye-Laws of the CBSE provides for School Managing Committee, its constitution, powers and functions. The term of office of the Managing Committee is three years. The Committee is taking all relevant factors into consideration under the different heads, as has been provided by the State Government in exercise of its power to fix the free structure to the students. The appellants submit that during pendency of the writ applications before this Court, the State Government issued letter dated 27.3.2009 in respect of private English Medium Schools of the State from the academic session 2009-10, wherein the State Government has decided to increase the fee structure of private English Medium Schools in the State provisionally up to 25% over the last year tuition fees only for those schools which are paying 5th Pay Commission scale and are going to pay 6th Pay Commission scale to the staff. Similarly, development fee should not be increased beyond 15%. After the same was issued by 2 the State Government, the Management of DAV Public School, Unit-8, Bhubaneswar, DAV Public School, Chandrasekharpur, Bhubaneswar and DAV Public School, Pokharipout, Bhubaneswar filed three writ petitions bearing W.P.(C) Nos.5113, 5030 and 5147 of 2009. The State Government filed an affidavit in W.P.(C) No.5030 of 2009. In para-3 of the said affidavit, the State Government has stated that the Orissa Education Act, 1969 is relatable to the educational institutions which are required to be affiliated to the Board of Secondary Education and Universities of the State. The English medium schools which are affiliated to CBSE and ICSE are not coming under the Orissa Education Act. 5. Mr J. Patnaik, learned Sr. Counsel Mr Sanjit Mohanty, learned Sr. Counsel, Mr S.K.Padhi, learned Sr. Counsel and Mr M. Kanungo, learned counsel appearing on behalf of the appellants vehemently contended that the impugned common judgment passed by the learned Single Judge is ex-facie illegal, erroneous and contrary to the principles of law in view of the decisions of the Supreme Court in catena of cases. The impugned judgment passed by the learned Single Judge is based on erroneous findings in coming to the conclusion and holding that the Orissa Education Act is applicable to the institutions run by the appellants. Further, applicability of the Orissa Education Act to the institutions of the appellants is a misnomer and misconceived. All the DAV Public Schools, which are affiliated to CBSE Board, have already taken NOC from the Government of Orissa as per the requirement prescribed in the CBSE Guidelines. In the resolution dated 23.9.1996 it is stipulated that for opening of private un-aided English Medium School in the State of Orissa NOC has to be obtained from the State Government with other conditions. The DAV Schools were never granted any kind of NOC under Section 5 and 6 of the Act,1969. The said resolution has taken the spirit of requirements prescribed under Sections 5 and 6 of the Act, 1969. Learned Single Judge has committed an error in arriving at the conclusion that the requirements prescribed under the resolution being similar to the requirements prescribed under Sections 5 and 6 of the Orissa Education Act, 1969 make the Orissa Education Act applicable to DAV Schools in general terms. Therefore, the said findings and conclusion are illegal and erroneous. 6. It is stated that the finding of the learned Single Judge that the executive instruction has merged into the Orissa Education Act has no legal basis or foundation. The resolution of 1996, which prescribes conditions for granting of NOC to the unaided private English Medium Schools, is a distinct executive instruction and has no nexus with the Act, 1969. Learned Single Judge has misconstrued that the resolution of 1996 is a product of the Act, 1969 for which the same is applicable to the DAV Public Schools. Therefore, the impugned judgment passed by the learned Single Judge is liable to be set aside. 7. It is stated that the learned Single Judge has erroneously recorded the finding that the School Managing Committee is illegally continuing being de hors Section 7 of the Act, 1969. The Managing Committee of DAV Public School is constituted as per the guidelines prescribed under the CBSE Board. These guidelines are sacrosanct and applicability of Section 7 of the Orissa Education Act, 1969 and rules pertaining to the constitution of Managing Committee under the Orissa Education (Establishment, Recognition and Management of Private High Schools) Rules, 1991 ( for short, “the Rules, 1991” ) are not applicable to appellants-Schools in any manner. The DAV Public Schools have taken NOC and the Managing Committee of DAV Public School has been 3 constituted under the CBSE guidelines, which are distinct and independent from Section 7 of the Act, 1969. The stand taken by the State Government in its counter is that the DAV Public Schools have not taken the recognition under the Act, 1969 rather they have taken NOC as per the requirements prescribed under the CBSE guidelines. Therefore, the Act, 1969 is not applicable and thus the impugned judgment passed by the learned Single Judge is liable to be quashed. 8. Further, the learned Single Judge has failed to take into consideration that “Higher Secondary School” means an educational institution imparting education in Higher Secondary Courses as defined in the Orissa Higher Secondary Education, Act, 1982 (for short, “the Act, 1982”) and may have standards or classes VIII, IX and X attached. “Higher Secondary School” has been defined as an educational institution preparing candidates for the examination of the Council and recognized as such by the Council. “Higher Education Course” means the course immediately following the High School Certificate course covering a period of two academic years which is provided for either in a college or a Higher Secondary School and includes Arts, Science, Commerce and Vocational Courses. “Higher Secondary Education” means such general and vocational education forming in itself a complete purposive whole which immediately follows Secondary Education as has been defined in the Orissa Education Act, 1952 (for short, “the Act, 1952”) and immediately precedes a stage of education controlled by any University. 9. It is further stated that “Higher Secondary School” means an educational institution preparing candidates for the examination of the Council and recognized as such by the Council but does not include for the purpose of this Act and Regulations made thereunder as the part of that institution which prepares candidates for examination other than Higher Secondary Examination. DAV Public Schools that are imparting Higher Secondary Education up to XII class and not affiliated to the Council of Higher Secondary Education, Orissa, but affiliated to CBSE do not come under the Act, 1969 or the Rules framed thereunder. But, the learned Single Judge in a very mechanical manner has not appreciated the aforesaid contention of the appellants and has come to an erroneous conclusion that DAV Schools being the Higher Secondary Schools come under the ambit of the Orissa Education Act, 1969. 10. Further, it is stated that learned Single Judge has erred in passing the judgment by relying upon the definition clause of the Rules, 1991, which defines “High School” to mean the school preparing candidates for High School Certificate Examination conducted by the Board or an equivalent examination conducted by the CBSE or ICSE and came to an erroneous conclusion that as per these Rules DAV Public Schools are High Schools falling within the ambit. The aforesaid Rules are applicable to DAV Public Schools and consequently the Managing Committee constituted for the schools is illegal for not being established as per these Rules. The definition of “High School” given in the Rules stands contrary to the definition of “High School” provided in the Act, 1969 for which the provisions of the Act will over ride the Rules. Hence, the impugned judgment passed by the learned Single Judge placing reliance upon the Rules arriving at a conclusion that the Schools of the appellants-Management though affiliated to CBSE they are all subject to regulation of the State Government under the provisions of the Orissa Education Act, 1969 is an erroneous conclusion. The learned Single Judge has failed to notice that for Class +2 Junior College there being separate Rules referred to in 4 ground (1), consideration of the Rules, 1991 is not relevant. Hence, the impugned judgment is liable to be set aside. Therefore, reliance placed on the definition clause where private Higher Secondary School has been defined in Rule 2(k) of the Orissa Education (Establishment, Recognition and Management of Private Junior College/Higher Secondary Schools), Rules, 1991 which defines private Higher Secondary School to mean any Higher Secondary School, which is not established, maintained by Government of Orissa, Union Government or any other State and came to an erroneous conclusion that DAV Schools are imparting education up to Class-X or to Higher Secondary level fall within the definition, for which the aforesaid Rules are also applicable. The aforesaid Rules are not at all applicable to DAV Public Schools. In the premises, the definition of “Higher Secondary School” which is provided in the Orissa Higher Secondary Education Act, 1982, prescribes that “Higher Secondary School” means an educational institution in preparing candidates for examination of the Council. The appellants-Public Schools never prepare such students for the Council Examination, as, admittedly, it prepares the students for CBSE Board Examination. Therefore, the Rules are not applicable to the Schools run by the appellants. Therefore, reliance placed by the learned Single Judge on the aforesaid Rules, 1991 and the conclusion arrived at that the Orissa Education Act, 1969 is applicable, is apparently erroneous and legally not tenable. 11. Further, the learned Single Judge has failed to take into consideration the averments that hike in fees are very much non-profitable but commensurate with the service and facilities that are provided by the DAV Public Schools. But the learned Single Judge in a very mechanical manner has quashed the hike in fees on the ground that no reasons have been assigned in order to hike in fees. Therefore, it is stated that hike in fees is very reasonable as is reflected from the reasons given by the appellants- opp. parties in counter affidavit to the writ petitions, which are quoted hereunder: “That the enhancement of fees was determined by the School authorities after consultation with the parents’ representatives who are the members of the Local Managing Committee ( for short “LMC”). The fees of the deponent schools are enhanced for the following reasons. A) To meet the CBSE requirement mentioned in the guidelines so far as the school infrastructure is concerned, B) To appoint the faculties in different disciplines for better academic performance in the school. C) To pay the salary to the employees of the school after introduction of 6th Pay Commission by the Central Government and subsequently by the State Government. D) Revised fee structure must take into consideration to need to generate funds to be utilized for betterment and growth of the infrastructure of the deponent schools. 5 E) That the deponent humbly submits that the deponent schools are governed by the C.B.S.E. guidelines so far as the academics are concerned and also admitting the students in the school as per the C.B.S.E. guidelines and as per the infrastructure and staff of the school. The academic performance of the schools is better than the other schools of Cuttack city. The present infrastructure of all the schools are just and sufficient to meet the requirement of C.B.S.E. guidelines for the sessions 2007-08 leaving room for its betterment. F) That the parents’ allegation that fees for the academic session 2009-10 is exorbitantly high is not correct. As per the decision of the local Managing Committee, the fee structure of the school was revised to meet the heavy financial burden on account of the revision of pay structure following implementation of 6th Pay Commission introduced by the Central and State Government. In the Local Managing Committee the parents’ representatives were also present and with their consent the resolution was passed in Local Managing Committee. The fees and Annual charges were revised in order to meet the requirement of C.B.S.E. stipulations and to pay the salary to the employees of the school after introduction of 6th Pay Commission by the Central Government and subsequently by the State Government. The fees structure were revised as the schools are not getting any grant from the State Government and the Central Government and there is no other source of income to meet the additional burden source of income to meet the additional burden of the revised pay. For the above reason the notification dt. 5.1.2009 under Annexure-3 issued by the School authorities is proper. G) That the deponent humbly submits that the notification/letter dated 05.01.2009 under Annexure-3 was issued by the authority after discussion with the parents’ representatives in the Local Managing Committee. Therefore the allegations made by some of the parents are false and hereby denied. So far as the circular dated 09.01.2009 under Annexure-4 series are concerned the deponent respectfully submits that the revised fee structure under Annexure-3 was issued after detailed discussions with the parents’ representative and the members of the Local Managing Committee. For the above reason the other allegations of the petitioners (Parents) are not correct. H) That a bare perusal of the notice dated 09.01.2009 under Annexure-4 series issued by the authority of DAV Public School, Cuttack would go to show that in the notice dated 09.01.2009 it was mentioned that the academic performance of the students of the school are excellent than the other schools situated at Cuttack. It is further stated that the staff working in DAV schools are to be paid salary at the rate prescribed by the Government besides other statutory dues like P.F. Gratuity, Insurance etc. The staff salaries constitute a major expenditure of the school budget. The school also appoints qualified and experienced faculties in the school to impart education to the students. The Central Government revised the pay structure of the employee. In order to give them salary an enhancement of fee is necessary. By giving the above reason in the notice dt e 09.01.2009 the authority revised the fee structure. For the above reason the allegation of the petitioners are not correct. 6 I) That the Hon’ble apex court have decided a case of T.M.A. Pai Foundation and others-versus-State of Karnataka and other reported in AIR-2003 (SC) Page-355 and observed in Para-56 of the judgment that an educational institution is established for the purpose of imparting education of the type made available by the institution different courses of study are usually taught by the teachers who have to be recruited as per qualification that may be prescribed. It is no secret the better working conditions will attract better teachers. More amenities will ensure that better students week admission to that institution. One cannot lose sight of the fact that providing good amenities to the students in the form of competent teaching faculty and other infrastructure costs money. It has, therefore, to be left to the Institution, if it chooses not to seek any aid from the Government to determine the scale of fee that it can charge from the students. One also cannot lose sight of the fact that we live in a competitive world today. The decision on the fee to be charged must necessarily be left to the private educational institution that does not seek or is not dependent upon funds from the Government. J) It is relevant to state here that it is not the case of the petitioners (some of the parents) that the quality of Education in the deponent school is poor or inferior. It is a fact that the Opp. Party No.6 is not receiving any grant from State Government and Central Government. That Hon’ble Apex Court in the case of T.M.A.Pai Foundation-vrs-State of Karnataka held in para-60 of the judgment that in the case of un-aided private schools, maximum autonomy has to be with the management with regard to administration, including the right of appointment, disciplinary powers, admission of students and the fees to be charged. K) That the deponent humbly submits that the school is not getting any grant in aid from the Central Government as well as the State Government. The salary of the employees of the schools are to be paid from the fees collected from the students and as such the revision of fees is essential and unavoidable. L) It is relevant to state here that some students abandon the school without completing their study chiefly due to transfer of their parents to outside Cuttack and Bhubaneswar without clearing the school dues. The fees collected from the students are not sufficient to meet the salary of the employees of the school. After declaration of 6th Pay Commission by the Government the deponent schools have to pay the salary its employees at the higher rate. For the above reason the fee hike is just and proper as the deponent school are not getting any aid from the State Government and also from the Central Government. M) That deponent further submits that we have no objection to the constitution of any committee by this Hon’ble Court to go into the fee structure charged by the different private schools of the State. N) It is relevant to state here that the fees collected from the students before implementation of the 6th Pay Commission are not sufficient to pay the salary to the employees of the school. After introduction of 6th Pay Commission, the schools prepared the Budget and revised in fee structure after getting approval 7 from the Local Managing Committee (in short LMC). The fee structure of the deponent school also not sufficient to pay the salary as per the recommendation of the 6th Pay Commission. The Management of Central School/Kendriya Vidyalaya and the State Government are paying salary to their employees are more than the salary of the Opp. Party Nos.6 and 7. The income out of proposed fees charged by the schools is not sufficient to pay the salary to its employees. O) For that the appellants humbly submit that the judgment passed by the Hon’ble Single Judge is based on erroneous findings on the ground that the Hon’ble Single Judge has not given any reasoning as to how the hike in price is construed to be profiteering as per the judgment of T.M.A. Pai case. Hence the impugned judgment is liable to be quashed. P) For that the appellants humbly submits that the judgment passed by the Hon’ble Single Judge is erroneous because the hike in fees is based on rational basis without any motive for profiteering, therefore interference of the Hon’ble Single Judge quashing the hike in fees is unwarranted. Q) For that the appellants humbly submits that the judgment passed by the Hon’ble Single Judge is based on erroneous findings on the ground that the T.M.A. Pai judgment and other judgments clearly prescribe that hike in fees is the clear cut domain of the management of the schools. In the instant case, the Hon’ble Single Judge has not relied on a single material to establish that hike in fees is made for profiteering. The only findings given by the Hon’ble Single Judge is that the hike in fees needs interference because no reason has been prescribed in the order for hike in fees. Hence the impugned order is otherwise liable to be quashed. R) For that the appellants humbly submit that