INDIAN SCHOOL, JODHPUR & ANR. versus STATE OF RAJASTHAN & ORS.
[2021] 14 S.C.R. 1, Supreme Court of India, 2021
Outcome: Disposed off
Segment: Facts
[2021] 14 S.C.R. 1
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INDIAN SCHOOL, JODHPUR & ANR.
v.
STATE OF RAJASTHAN & ORS.
(Civil Appeal No. 1724 of 2021)
MAY 03, 2021
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Education/Educational Institutions:
Rajasthan Schools (Regulation of Fee) Act, 2016 – ss. 3, 4,
6-11, 15 and 16 – Rajasthan Schools (Regulation of Fee) Rules,
2017 – rr. 3, 4, 6-8 and 11 –Validity of – Challenge to, by the
Management of the private unaided schools in the State of Rajasthan,
on the ground of being ultra vires the Constitution; and violative of
Art. 19(1)(g) since it takes away autonomy to determine the School
fees – High Court rejected the challenge to the validity of the Act of
2016 and Rules framed thereunder – Justification of –Held: Justified
– High Court rightly concluded that the provisions of the Act of
2016 as well as the Rules of 2017 are intra vires the Constitution of
India and not violative of Arts. 13(2) and 19(1)(g) – However, it is
done so by reading down ss. 4, 7 and 10 –Act of 2016 provides for
the regulatory mechanism – Autonomy of the school Management
to determine the fee structure is untrammelled and not undermined
– Institution is entitled to fix its own fee structure, as long as it does
not entail in profiteering and commercialization – Thus, the order
passed by the High Court upheld – Constitutionof India – Arts 13(2)
and 19(1)(g).
Rajasthan Schools (Regulation of Fee) Act, 2016 – s. 18 –
Power to issue directions – On facts, order by the State Authorities-
Director,
Secondary Education regarding deferment of collection
of school fees, including reduction of 70% of tuition fees of CBSE
affiliated schools and 60% of Rajasthan State Board affiliated
schools due to pandemic – Challenge to, by the Management of the
private unaided schools in the State of Rajasthan – High Court
held that the State Government was competent and had jurisdiction
to issue directions – On appeal, held: Director, Secondary Education
had no authority whatsoever to issue direction in respect of fee
structure determined under the Act of 2016 including to reduce the
same for the academic year 2020-21 in respect of private unaided
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schools – Also order could not be sustained even in reference to
executive power u/Art. 162 – Furthermore, it was not open to the
State Government to issue directions in respect of commercial or
economic aspects of legitimate subsisting contracts/transactions
between two private parties with which the State has no direct causal
connection,in the guise of management of pandemic situation– Also,
no provision in the Act of 2005 which governs the subject of
interdicting the school fee structure fixed under the 2016 Act –
During the lockdown the School Management must have saved
overhead and operational costs on various heads, as such issuance
of direction of deduction of 15 per cent of the annual school fees in
lieu of unutilised facilities/activities–DisasterManagement Act,
2005–Rajasthan Epidemic Relief Act, 2020 – Judicial notice.
Disposing of the appeals, the Court
HELD: 1.1 The conclusion of the High Court in rejecting
the challenge to the validity of the impugned Act of 2016-
Rajasthan Schools (Regulation of Fee) Act, 2016 and Rules-
Rajasthan Schools (Regulation of Fee) Rules, 2017 framed
thereunder is upheld.However, it is done so by reading down
Sections 4, 7 and 10 of the Act in the manner indicated. These
provisions as interpreted be given effect to, henceforth, in
conformity with the law declared in this judgment. The High Court
rightly concluded that the provisions of the Act of 2016 as well as
the Rules of
2017 are intra vires the Constitution of India and
not violative of Articles 13(2) and 19(1)(g) of the Constitution.
[Para 52][58-D-F]
1.2 The appellants are justified in assailing the order dated
28.10.2020 issued by the Director, Secondary Education regarding
deferment of collection of school fees and must succeed. However,
that does not give licence to the appellants to be rigid and not be
sensitive about aftermath of pandemic. The general uniform
direction of deduction of 15 per cent of the annual school fees in
lieu of unutilised facilities/activities and not on the basis of actual
data school-wise are issued. This is with a view to obviate avoidable
litigation and to give finality to the issue of determination and
collection of school fees for the academic year 2020-21, as a one-
time measure. [Paras 114, 118][99-F-G; 102-C-D]
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2. It is not open to argue that the Government cannot
provide for external regulatory mechanism for determination of
school fees or so to say fixation of “just” and “permissible” school
fees at the initial stage itself. [Para 19][37-A-B]
T.M.A. Pai Foundation & Ors. vs. State of Karnataka
& Ors. (2002) 8 SCC 481 : [2002] 3 Suppl. SCR 587;
Society for Unaided Private Schools of Rajasthan vs.
Union of India &Anr. (2012) 6 SCC 1 : [2012] 2 SCR
715; Islamic Academy of Education &Anr. vs. State of
Karnataka & Ors. (2003) 6 SCC 697 : 2003 (2) Suppl.
SCR 474; P.A. Inamdar & Ors. vs. State of Maharashtra
& Ors. (2005) 6 SCC 537 : [2005] 2 Suppl. SCR 603;
Modern School vs. Union of India & Ors. (2004) 5 SCC
583; Action Committee, Unaided Private Schools & Ors.
vs. Director of Education, Delhi & Ors. (2009) 10 SCC
1 : [2009] 12 SCR 631; Modern Dental College and
Research Centre & Ors. vs. State of Madhya Pradesh
& Ors. (2016) 7 SCC 353 : 2004 (1) Suppl. SCR 668;
Association of Private Dental and Medical Colleges vs.
State of M.P. 2009 SCC Online MP 760 - referred to.
3.1 The Act of 2016 has been enacted by the State
legislature.It was enacted as it was noticed that the earlier
enactment on the self-same subject did not include provision of
appeal against the orders of fee determination by the Fee
Determination Committee.It was also noticed that there are large
number of private schools (approximately 34,000) and a single
fee determination committee cannot determine
the fee of such
schools in a proper manner in time.For that reason, the Act of
2016 came into being to provide for regulation of collection of
fees by schools in the State of Rajasthan and matters connected
therewith and incidental thereto.It extends to the whole of the
State of Rajasthan and applies to both aided and unaided
schools.The Act provides for a regulatory mechanism.It is clear
that the Act of 2016 applies to all the schools within the State of
Rajasthan referred to in Section 2(t) including private schools as
defined in Section 2(p).Section 3 of the Act of 2016 predicates
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that no school itself or on its behalf shall collect any fee in
excess of the fee fixed or approved under the Act of 2016.
[Para 20-22][37-B-E; 38-C-E]
3.2 After adverting to Section 8 and Rule 10, it is amply
clear that the relevant factors for determination of reasonable
school fees under the Act of 2016 and Rules framed thereunder
have been duly articulated and are based on objective parameters.
The factors referred to in Section 8 and Rule 10 for determination
of fee are founded on the dictum of this Court, as relevant
factors.The factor of location of the school is certainly relevant
for determination of fee as are the other factors referred to in
Section 8 and Rule 10.The totality of the effect of all the specified
factors is to be reckoned for determining the school fees of the
concerned school for the relevant period.The location of the
school is not the only factor that is to be taken into account.
[Para 25][40-A-C]
3.3 What is relevant is that the institution is entitled to fix
its own fee structure, which may include reasonable revenue
surplus for the purpose of development of education and
expansion of the institution, as long as it does not entail in
profiteering and commercialisation. Whether fee structure
evolved by the concerned school results in profiteering or
otherwise is a matter which eventually would become final with
the determination/adjudication by the Statutory Regulatory
Committees
constituted under Sections 7 and 10 of the Act of
2016, namely, Divisional Fee Regulatory Committee (DFRC) and
Revision Committee respectively, as the case may be.That
adjudication, however, becomes necessary only if the School Level
Fee Committee (SLFC) were to disapprove the proposal of the
school Management regarding fee structure determined by the
school.Whereas, if the SLFC were to accept the proposal of the
school Management regarding fee structure as it is, that would
be the fees under the Act of 2016 for the relevant period and
then there would be no need for the DFRC to adjudicate upon
the fixation of fee in the concerned school. [Para 26][40-C-F]
3.4 The SLFC is constituted institution or school wise,
whereas the DFRC is an independent statutory regulatory
authority empowered to enquire into the factum of whether fee
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structure of the given school determined by its Management
entails in profiteering.In the event, the SLFC disapproves the
proposal of the school Management, the dispensation provided
for adjudication of the contentious position between the
stakeholders in no manner violate the fundamental right of
establishment of educational institution guaranteed under Article
19(1)(g) of the Constitution. [Para 27][40-G-H]
3.5 Section 4 predicates that every private school shall
constitute the Parent-Teachers Association, which is to be formed
by the head of the school within thirty days from the beginning of
each academic year.Section 4(1)(b) envisages that every teacher
of the school and parent of every student in the school shall be a
member of the Parent-Teachers Association.Section 4(1)(c)
provides that on formation of the Parent-Teachers Association, a
lottery shall be conducted by drawing a lot of the willing parents
to constitute the SLFC. It was urged that for choosing the willing
parent to become member of the SLFC by draw of lots, no
eligibility criteria has been prescribed in the Act of 2016 or the
Rules of 2017.Besides, willing parent of the ward, who is admitted
in the school against the 25 per cent quota of free education under
the RTE Act, may also fit into this category even though he would
have no stakes in the fee structure proposed by the school
Management.The argument seems to be attractive, but for that
reason the provision need not be struck down
or declared as
violative of any constitutional right of management of the
school.This provision can be read down to mean that the draw of
lots would be in respect of willing parents whose wards have been
admitted against the seats other than the seats reserved for free
education under the RTE Act.Further, for ensuring that the willing
parent must be well-informed and capable of (meaningful)
interacting in the discourse on the proposal of fee structure
presented by the school Management, he/she must have some
minimum educational qualification and also familiar with the
development of school, management of finances and dynamics of
quality education.The desirability of such eligibility of the willing
parent ought to be specified.Absence of such provisions in the
Act or Rules, however, can be no basis to suspect the validity of
the provision in question. It is said so because draw of lots can
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be one of the ways of identifying the willing parent who could
become member of the SLFC.Whether the member should be
chosen by election from amongst the willing parents or draw of
lots or by nomination including his/her eligibility conditions, is a
legislative policy. [Para 28-29][42-C-H; 43-A-B]
3.6 The composition of the SLFC has been specified in
Section 4(2)(a) of the Act of 2016.It consists of a Chairperson
being representative of management of the private school
nominated by such management; Secretary-Principal of the
private school (Ex officio); three teachers nominated by the
management of private school as to be the members of the SLFC;
and five parents from Parent-Teachers Association chosen by a
lottery conducted by drawing a lot of willing parents.The SLFC
consists of ten members-five are, in a way, representatives or
nominees of the Management and five parents from the Parent-
Teachers Association.The constitution of the SLFC and for the
nature of its function, no fault can be found with Section 4 of the
Act of 2016 much less on the ground that it violates the
fundamental right to establish an educational institution.
[Para 30][43-C-F]
3.7 On bare perusal of s. 6, it is noticed that the
Management has the prerogative to submit its proposal regarding
the fee structure in the given school.That proposal is submitted
to the SLFC set up under Section 4 of the Act of 2016.The
mechanism provided in Section 6
onwards would primarily apply
to private unaided schools.Indeed, the expression “propose”
used in Section 6(1) would mean that the proposal of the school
Management is its in-principle decision regarding the fee
structure for the relevant period.The usage of expression
“propose” in no way undermines the autonomy of the school
Management, in particular to determine its own fee structure for
the relevant period.The consequence of proposal not being
accepted by the SLFC is a different issue.Notably, the SLFC’s
decision under Section 6(2) is not binding on the school
Management.For, it is open to the school Management to then
refer the matter for adjudication to the DFRC constituted under
Section 7 of the Act of 2016, who in turn is obliged to decide the
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reference one way or the other.Indeed, that decision would be
binding on both-the school Management as well as the parents,
unless it is interdicted by the Revision Committee constituted
under Section 10 of the Act of 2016 at the instance of the other
party.To put it differently, the dispensation envisaged under
Section 6 of the impugned Act of 2016 is not intended to
undermine the autonomy of the school Management in the matter
of determination of fee structure itself.What it envisages is that
the school Management may determine its own fee structure,
but may finalise or give effect to the same after interacting with
the SLFC.It is a broad-based committee, consisting of
representatives of the school Management as well as five parents
from Parent-Teachers Association.This is merely a consultative
process and democratisation of the decision-making process by
taking all the stakeholders on board.The SLFC does not sit over
the proposal submitted by the school Management as a court of
appeal, but only reassures itself as to whether the proposed fee
structure entails in profiteering by the school on applying the
parameters specified in Section 8 and Rule 10. [Para 33, 35]
[45-B-E, F-H; 46-A]
3.8 While deciding the school fees, the school Management/
SLFC including the Statutory Regulatory Authorities, all
concerned are guided by the factors delineated in Section 8 of
the Act of 2016 and Rule 10 of the Rules of 2017.The process
envisaged in Section 6 is
democratic and consensual resolution
of the issue of fee structure for the relevant period between the
school Management and the parents’ representative being part
of the SLFC.It is not to give final authority to the SLFC to
determine the fee structure itself which, is the prerogative of the
school Management as per Section 6(1) of the Act of 2016. Thus,
the autonomy of the school Management to determine the fee
structure itself in the first place is untrammelled and not
undermined in any way. [Para 36][46-C-E]
3.9 From the bare perusal of Section 7(1), it is noticed that
first five members are official members.It is a broad-based
independent Committee which includes two representatives of
private schools in the divisional area “nominated by the Divisional
Commissioner” and similarly two representatives of parents
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“nominated by the Divisional Commissioner”.The representation
is given to the concerned stakeholders in the matter of
determination of fee structure and in particular in the matter of
enquiry into the factum whether fee structure proposed by the
concerned school Management entails in profiteering or
otherwise. Thus understood, even Section 7 of the Act of 2016
does not violate the fundamental right guaranteed under Article
19(1)(g) of the Constitution in respect of establishment of
educational institution.The dispensation provided in Section 7,
is, thus, to create an independent machinery for adjudication of
the question as to whether the fee structure proposed/determined
by the school Management of the concerned school entails in
profiteering, commercialisation or otherwise. [Para 37-38]
[47-G-H; 48-A, D, F-G]
3.10 As regards challenge to Section 8 of the Act of 2016,
the usage of expression “determination”, does not take away
the autonomy of the school Management in determining its own
fee structure.This provision is only an indicator as to what factors
should be reckoned for determination of fee and on that scale
the SLFC as well as the Statutory Regulatory Committees would
be in a position to analyse the claim of the school
Management.This provision, in fact, sets forth objective
parameters as to what would be the reasonable fee structure –
not resulting in profiteering and commercialisation by the school
Management. [Para 39][48-G-H; 49-A]
3.11 Section 9 bestows power upon the DFRC to adjudicate
the dispute between the school Management and Parent-Teachers
Association regarding difference of opinion in respect of fee
structure for the concerned school. It is significant to note that
Section 9(5) makes it amply clear that the DFRC has no power to
grant any interim stay to the fee determined by the
Management.However, in light of Section 6(5) during the
pendency of the appeal or reference before the DFRC, school
Management is at liberty to collect fee of the previous academic
year plus ten per cent increase in such fee till the final decision
of the DFRC, as predicated in Section 6(5) of the Act of 2016.The
decision of the DFRC is amenable to appeal before the Revision
Committee constituted under Section 10 of the Act of 2016. None
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of these violate the fundamental right of the school Management
guaranteed under Article 19(1)(g) of the Constitution to determine
its own fee structure in any manner. [Para 41][51-B-D]
3.12 Section 10 deals with constitution of Revision
Committee.This Committee discharges the function of an
appellate authority where the aggrieved party, namely, school
Management or the Parent-Teachers Association can assail the
decision of the DFRC. This is again a broad-based independent
Committee to consider the revision preferred against the decision
of the DFRC, constituted on similar lines. Setting up of an
independent final adjudicatory authority especially created for
considering the question as to whether the fee structure proposed
by the school Management results in profiteering or otherwise,
it does not impinge upon the fundamental right of the school
Management guaranteed under Article 19(1)(g) of the
Constitution. [Para 42-43][51-D-E, F, H; 52-A]
3.13 Section 15 deals with consequences of contravention
of the provisions of the Act of 2016 or the Rules made thereunder
by an individual. Whereas, Section 16 deals with consequences
of violation by a management and persons responsible therefor.It
is unfathomable as to how these provisions can have the
propensity to violate the fundamental right of the school
Management under Article 19(1)(g) of the Constitution especially
when violation of the mandate of certain compliances under the
Act of 2016 and Rules framed
thereunder has been made an offence
and persons responsible for committing such violation can be
proceeded with on that count. [Para 44][52-A-C]
3.14 Rule 3 provides for a procedure for conducting meeting
of Parent-Teachers Association.The school Management can
have no grievance regarding the procedure for conducting
meeting of Parent-Teachers Association of the school concerned
much less violating its fundamental right guaranteed under Article
19(1)(g) regarding establishment of educational institution and
administration thereof, including determination of fee structure
on its own. [Para 46][52-D-F]
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3.15 Rule 4 is an enabling provision bestowing power
coupled with duty in the Parent-Teachers Association. This in no
way affect the right of the school Management in the matter of
determination of school fees by itself. The purpose of the provision
is to empower the Parent-Teachers Association to get information
about tuition fees, term fees and fees for co-curricular activities,
to facilitate it to analyse the claim of the school Management
regarding the fee structure being reasonable or otherwise.It is
on the basis of that information, the representatives of the Parent-
Teachers Association, forming part of the SLFC, will be in a
position to meaningfully interact either to give counter offer or
agree with the proposal submitted by the school Management.
[Para 47][53-B-D]
3.16 Rule 6 gives additional powers to the SLFC for
ensuring compliances of the provisions of the Act of 2016 and
the Rules made thereunder including regarding determination
of school fees. It cannot be understood as to how Rule 6 would
come in the way or infringe the fundamental right of the school
Management guaranteed under Article 19(1)(g) of the
Constitution. [Para 48][54-B]
3.17 Rules 7 and 8 of the Rules deal with purely procedural
matters and are in line with the powers and functions of the
concerned Committees.The Rules provide for the manner in
which the proposal is to be submitted by the school Management
and to be taken forward.These
provisions in no way affect the
fundamental right guaranteed under Article 19(1)(g) of the
Constitution much less autonomy of the school Management to
determine the fee structure itself in the first place including the
administration of the school as such. [Para 49][55-F-H]
3.18 Rule 11 by no stretch of imagination would affect the
fundamental right of the school Management under Article
19(1)(g) of the Constitution much less to administer the
school.This provision, however, is to ensure that a meaningful
inquiry can be undertaken by the SLFC or the Statutory
Regulatory-cum-Adjudicatory Authorities in determination of the
fact whether the fee structure propounded by the school
Management results in profiteering or otherwise. If information
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is furnished in any other manner (other than the manner specified
in Rule 11), it would become difficult for the concerned
Committees/Authorities to answer the contentious issue
regarding profiteering.The fee structure determined by the school
Management can be altered by the Adjudicatory Authorities only
upon recording a negative finding on the factum of amount claimed
towards school fees relating to particular activities is an essential
expenditure or otherwise; and that the fee would be in excess of
reasonable profit being ploughed back for the development of
the institution or otherwise.The recovery of excess amount
beyond permissible limit would result in profiteering and
commercialisation. Therefore, even Rule 11 is a relevant and
reasonable provision and does not impact or abridge the
fundamental right under Article 19(1)(g) of the Constitution.
[Para 50][57-C-F]
3.19 The submission that the issue regarding (school) fee,
in particular capitation fee is already covered by the law enacted
by the Parliament being RTE Act and for that reason, it was not
open to the State to enact law on the same subject such as the
impugned Act of 2016, is completely misplaced and tenuous.For,
the purpose for which the RTE Act has been enacted by the
Parliament is qualitatively different.It is to provide for free and
compulsory education to all children of the age of 6 to 14 years,
which is markedly different from the purpose for which the Act of
2016 has been enacted
by the State legislature.Merely because
the Central Act refers to the expression “capitation fee” as
defined in Section 2(b) and also in Section 13 of the RTE Act-
mandating that no school or person shall, while admitting a child,
collect any capitation fee, does not mean that the Central Act
deals with the mechanism needed for regulating fee structure to
ensure that the schools do not collect fees resulting in profiteering
and commercialisation. By its very definition, the capitation fee
under the Central Act means any kind of donation or contribution
or payment other than the fee notified by the school.On the other
hand, fee to be notified by the school is to be done under the
impugned Act of 2016 after it is so determined by the school
Management and approved by the SLFC or by the Statutory
Regulatory Authorities, as the case may be. The field occupied
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by the Central Act is entirely different than the field occupied by
the State legislation under the impugned Act of 2016.The
impugned Act of 2016 deals specifically with the subject of
regulating fee structure propounded by the private unaided school
management. [Para 51][57-F-H; 58-A-D]
4.1 It is not open to the State Authorities to modify the
school fees once fixed by the SLFC for the relevant academic
year that too in the manner done by the Director, Secondary
Education vide order dated 28.10.2020.The fact that the parties
are at liberty to challenge the modification/reduction of school
fees before the statutory forum does not justify the issue of such
an order – unless the State Authorities have clear mandate to do
so under the governing law.The departure made by the Director,
Secondary Education vide order dated 28.10.2020 was not
acceptable to the school Management, being ex facie illegal.It
does not disclose the source of power under which it has been
issued.At best, it can rely on the interim observations made by
the High Court in the proceedings pending at the relevant
time.Those observations cannot confer power on the State
Authorities when no such power exists in the State Government
in relation to modification/reduction of fee structure determined
by the school Management and approved by the SLFC.Moreover,
it is well-established that there can be no rigid uniform fee
structure for all the private unaided
schools in the State. The
High Court erroneously assumed that the power exercised by
the Director, Secondary Education was ascribable to Article 162
of the Constitution.For, the subject of school fees is fully covered
and governed by the provisions of the Act of 2016 and the Rules
framed thereunder.Therefore, in the name of policy decision, the
impugned order dated 28.10.2020 cannot be sustained, which on
the face of it is not in conformity with the express statutory
provisions governing the subject of school fees. [Para 63]
[70-F-H; 71-A-C]
4.2 Undeniably, an unprecedented situation has had evolved
on account of complete lockdown due to pandemic.It had serious
effect on the individuals, entrepreneurs, industries and the nation
as a whole including in the matter of economy and purchasing
capacity of one and all.A large number of people have lost their
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jobs and livelihood as aftermath of such economic upheaval.The
parents who were under severe stress and even unable to manage
their day-to-day affairs and the basic need of their family made
fervent representation to the school Management(s) across the
State.A public discourse in that regard surfaced in the media which
impelled the political dispensation to intervene.Thus, on the
directions of the Chief Minister of the State of Rajasthan, the
Department initially issued order dated 09.04.2020 merely to
defer the collection of school fees which restriction was extended
by subsequent order dated 07.07.2020. [Para 86][81-C-F]
4.3 s. 18 does bestow power on the State Government to
issue general or special directions to any school within the
State.However, such direction must be consistent with the
provisions of the Act of 2016 and the Rules framed thereunder.It
cannot be in conflict with the mandate of the Act and the
Rules.Additionally, such directions must be necessitated due to
expediency for carrying out the purposes of the Act and the Rules
or to give effect to the applicable provisions.If the direction issued
by the State Government does not qualify these parameters, it
must follow that the same has been issued in excess of power
bestowed under Section 18 of the Act of 2016. [Para 91][82-F-G]
4.4 Two aspects are amply clear, after analysing the scheme
of the Act of 2016.The first is that a firm mechanism has been
specified under the Act of 2016 regarding
determination of fee
structure in the form of approval by the SLFC and, if required,
adjudication by the DFRC and the Revision Committee.There is
no express provision in the Act or Rules authorising the stated
functionaries/authorities to modify the school fees once finalised
in the manner provided by the Act of 2016.Whereas, the explicit
mandate in the Act of 2016 is that, the fees so fixed by the
concerned functionaries/authorities shall be binding on all
concerned for three academic years.This is a clear indication of
not altering the school fees unilaterally after it is fixed under the
Act of 2016 in any manner for the specified period.By its very
nature, the direction given by the State Government is in conflict
with the scheme of finalisation of fee structure under the Act of
2016 and also the binding effect thereof for the specified period
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of three academic years on all concerned.Thus the direction
issued by the State Government in the form of order dated
28.10.2020 does not satisfy the twin tests of being consistent
with the provisions of the Act; and also being necessary or
expedient for carrying out the purposes of the Act. [Para 92]
[82-H; 83-A-D]
4.5 The order dated 28.10.2020 being in the nature of
direction, has been issued in breach of the pre-conditions specified
in Section 18 of the Act of 2016.As a matter of law, the State
Government had no power, whatsoever, to interdict the fee
structure much less which has been finalised and fixed by the
concerned functionaries/authorities under the Act of 2016 itself
before expiry of the statutory period as specified.As a result,
Section 18 would be of no avail to the respondents, in particular
the State Government to justify the order dated 28.10.2020.
[Para 93][83-D-F]
4.6 It is well-established position that the executive power
of a State under Article 162 of the Constitution extends to the
matters upon which the legislature of the State has competency
to legislate and is not confined to matters over which legislation
has already been passed.It is also well-settled that the State
Government cannot go against the provisions of the Constitution
or any law.The subject of determination of fee structure and
whether it entails in profiteering, is already covered by the
legislation in the form of the Act of
2016 and the Rules framed
thereunder.It is not as if there is no enactment covering that
subject or any incidental aspects thereof.The Act of 2016, which
in itself is a self-contained code on the said subject, not only
provides for the manner in which the concerned school ought to
finalise its fee structure, but also declares that the fee so finalised
either by consensus or through adjudication mode shall be binding
on all concerned for a period of three academic years.In any case,
determination of fees including reduction thereof is the exclusive
prerogative of the management of the private unaided school.The
State can provide independent mechanism only to regulate that
decision of the school Management to the extent that it does not
result in profiteering and commercialisation. [Para 94][83-F-H;
84-A-C]
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4.7 The fact remains that the direction issued in terms of
impugned order dated 28.10.2020, on the face of it, collide with
the dispensation specified in the Act of 2016 in the matter of
determination of school fees and its binding effect on all concerned
for a period of three academic years, without any exception.The
fact that in the proceedings before the High Court the State
Government had ratified the impugned order, does not take the
matter any further.In that, there can be no ex post facto ratification
by the State Government in respect of subject, on which, it itself
could not issue such direction in law. [Para 96][84-E-G]
4.8 Notably, not only the subject of finalisation of fee
structure and the matters incidental thereto have been codified
in the form of the Act of 2016, but also a law has been enacted to
deal with the matters during the pandemic situation in the form
of Central Act, namely, the Disaster Management Act 2005
including the State legislation i.e., the Act of 2020.In fact, the
State legislation deals with the subject of epidemic diseases and
its management.Even those enactments do not vest any power
in the State Government to issue direction with regard to
commercial or economic aspects of matters between private
parties with which the State has no direct causal connection. In
other words, the power of the State Government to deal with
matters during the pandemic situation have already been
delineated by the Parliament as well as the
State legislature. As
such, it is not open to the State Government to issue directions
in respect of commercial or economic aspects of legitimate
subsisting contracts/transactions between two private parties with
which the State has no direct causal connection, in the guise of
management of pandemic situation or to provide “mitigation to
one” of the two private parties “at the cost of the other”.It is a
different matter, if as a policy, the State Government takes the
responsibility to subsidise the school fees of students of private
unaided schools, but cannot arrogate power to itself much less
under Article 162 of the Constitution to issue impugned directions
(to school Management to collect reduced school fee for the
concerned academic year). There is no hesitation in observing
that the asservation of the State Government of existence of power
to issue directions even in respect of economic aspects of
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legitimate subsisting contracts/transactions between two private
parties, if accepted in respect of fee structure of private unaided
schools, is fraught with undefined infinite risk and uncertainty
for the State.For, applying the same logic the State Government
may have to assuage similar concerns in respect of other
contractual matters or transactions between two private
individuals in every aspect of life which may have bearing on right
to life guaranteed under the Constitution.That would not only
open pandora’s box, but also push the State Government to
entertain demands including to grant subsidy, from different
quarters and sections of the society in the name of mitigating
measures making it financially impossible and unwieldy for the
State and eventually burden the honest tax payers - who also
deserve similar indulgence.Selective intervention of the State in
response to such demands may also suffer from the vice of
discrimination and also likely to impinge upon the rights of private
individual(s) — the supplier of goods or service provider, as the
case may be.The State cannot exercise executive power under
Article 162 of the Constitution to denude the person offering
service(s) or goods of his just claim to get fair compensation/
cost from the recipient of such service(s) or goods, whence the
State has no direct causal relationship therewith. [Para 97-98]
[85-A-H; 86-A-B]
Rai Sahib Ram Jawaya Kapur & Ors. vs.
State of Punjab
AIR 1955 SC 549 : [1955] 2 SCR 225; Secretary, A.P.D.
Jain Pathshala & Ors. vs. Shivaji Bhagwat More & Ors.
(2011) 13 SCC 99 : [2011] 6 SCR 1173 – referred to.
4.9 It is one thing to say that the State may regulate the fee
structure of private unaided schools to ensure that the school
Management does not indulge in profiteering and commercialisation,
but in the guise of exercise of that power, it cannot transcend the
line of regulation and impinge upon the autonomy of the school
to fix and collect “just” and “permissible” school fees from its
students.It is certainly not an essential commodity governed by
the legislation such as Essential Commodities Act, 1955
empowering the State to fix tariff or price thereof.In light of
consistent enunciation by this Court including the Constitution
Bench, that determination of school fee structure (which includes
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reduction of fixed school fee for the relevant period) is the
exclusive prerogative of the school Management running a private
unaided school, it is not open to the Legislature to make a law
touching upon that aspect except to provide statutory mechanism
to regulate fees for ensuring that it does not result in profiteering
and commercialisation by the school Management.
Ex-consequenti, the State Government also cannot exercise
power under Article 162 of the Constitution in that regard.
[Para 99][86-C-E]
4.10 The direction given in the impugned order to the school
Management is to collect only specified percentage of annual
tuition fees on the assumption that the schools will not be
required to complete the course for the academic year 2020-
21.This assumption has been rebutted by the appellants by relying
on the instructions issued by the concerned Board indicating to
the contrary.In any case, that does not extricate the school
Management from incurring recurring capital and revenue
expenditure including to pay their academic and non-academic
staff their full salary and emoluments for the relevant period.For,
no corresponding authority is given to the school Management
to deduct suitable amount from their salaries.Thus, the effect of
the impugned order is to reduce school fees determined under
the Act in absence of authority to do so including under the Act
of 2016.Further, on the face of it, the direction given is inconsistent
with the provisions of the
stated Act. To put it tersely, the
impugned order issued is in respect of matters beyond the power
of the State Government - to regulate the fee structure for
ensuring that the school Management does not indulge in
profiteering and commercialisation. Accordingly, the impugned
order dated 28.10.2020 cannot be sustained even in reference to
executive power under Article 162 of the Constitution.
[Para 100][86-F-H; 87-A-B]
4.11 Having regard to the purport of the Act of 2005, it is
unfathomable as to how the State Authorities established under
the stated Act can arrogate unto themselves power to issue
directions to private parties on economic aspects of legitimate
subsisting contractual matters or transactions between them inter
se.In any case, the impugned order has not been issued by the
State Authority referred to in the Act of 2005.It is not enough to
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say that the same was issued under the directions of the Chief
Minister of the State.For, the Chief Minister is only the
Chairperson (Ex officio) of the State Disaster Management
Authority established under Section 14 of the Act of 2005.There
is no provision in the Act of 2005 which concerns or governs the
subject of interdicting the school fee structure fixed under the
Act of 2016. [Para 110][96-E-G]
4.12 Section 72 thereof predicates that the provisions of
the Act would have overriding effect on other laws for the time
being in force or anything inconsistent in any instrument having
effect by virtue of any law other than the Act of 2005.This
provision, however, would come into effect only if it is to be held
that the Statutory Authorities under the Act of 2005 have power
to deal with the subject of school fee structure of private unaided
schools. Section 72 of the Act of 2005 cannot be the basis to
justify the impugned order dated 28.10.2020.There is no express
provision in the Act of 2005 which empowers the Director,
Secondary Education (or the State Government) to issue order
and directions in respect of school fee structure because of the
pandemic situation. [Paras 101, 111][87-B; 96-G-H; 97-B]
4.13 Reliance placed on the provisions of the State
legislation, namely, the Rajasthan Epidemic Diseases Act, 2020
would be of no avail to justify the impugned order dated
28.10.2020. The measures enunciated in Section 4
of the Act of
2020 in no way deal with the “tariffs” of air, rail, road, hospital,
temporary accommodation.It only enables the Authority to prohibit
any usage or activities which the Government considers sufficient
to spread or transmit epidemic diseases and for that purpose to
inspect various places suspected of being infected with such
diseases.Indeed, it can regulate or restrict the functioning of
offices, Government and private and educational institutions in
the State.That, however, would be only in respect of manner of
its use and its timings including to observe standard operating
procedures to ensure that epidemic diseases do not transmit or
spread on account of activities carried out therein.That power to
regulate cannot be invoked to control the tariffs, fees or cost of
goods and services and in particular economic aspects of
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contractual matters between two private parties or so to say
school fees of private unaided schools. [Para 112][97-C; 98-F-H;
99-A]
4.14 A priori, it must follow that the Director, Secondary
Education had no authority whatsoever to issue direction in
respect of fee structure determined under the Act of 2016
including to reduce the same for the academic year 2020-21 in
respect of private unaided schools.Having failed to trace the
legitimate source of power under which the directions have been
issued, the respondents - State Authorities cannot fall back upon
the benign hope expressed by the High Court to do the needful
in the backdrop of the representations made by several parents
about the difficulties encountered by them due to pandemic
situation.It would have been a different matter if the Director,
Secondary Education had used his good offices to impress upon
the school management(s) of the concerned school(s) to explore
the mitigating measures/options on their own for the academic
year 2020-21 and to give concession to their students to the extent
possible at least in respect of unutilised facilities and savings on
overheads by the school Management in that behalf or to give
concession in the form of scholarship to deserving students.It is
stated by the appellants that the school Management on their
own had offered scholarship of 25 per cent of the annual fee to
their students.In other words, the Director, Secondary Education
could have mediated between
the Association of the school
Management and representatives of the Parent-Teachers
Association for arriving at an amicable solution due to pandemic
situation for the academic year 2020-21, on humanitarian grounds,
but could not issue the impugned order when even the State had
no power to issue the same. [Para 113][99-B-F]
4.15 The school Management supposedly engaged in doing
charitable activity of imparting education, is expected to be
responsive and alive to that situation and take necessary remedial
measures to mitigate the hardship suffered by the students and
their parents.It is for the school Management to reschedule
payment of school fee in such a way that not even a single student
is left out or denied opportunity of pursuing his/her education, so
as to effectuate the adage “live and let live”. [Para 114][99-G-H;
100-A]
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4.16 In law, the school Management cannot be heard to
collect fees in respect of activities and facilities which are, in
fact, not provided to or availed by its students due to
circumstances beyond their control.Demanding fees even in
respect of overheads on such activities would be nothing short
of indulging in profiteering and commercialisation. It is a well-
known fact and judicial notice can also be taken that, due to
complete lockdown the schools were not allowed to open for
substantially long period during the academic year 2020-
21.Resultantly, the school Management must have saved
overheads and recurring cost on various items such as petrol/
diesel, electricity, maintenance cost, water charges, stationery
charges, etc.Indeed, overheads and operational cost so saved
would be nothing, but an amount undeservedly earned by the
school without offering such facilities to the students during the
relevant period.Being fee, the principle of quid pro quo must
come into play.However, no accurate (factual) empirical data has
been furnished by either side about the extent to which such
saving has been or could have been made or benefit derived by
the school Management.Without insisting for mathematical
exactitude approach, it is assumed that the school Management(s)
must have saved around 15 per cent of the annual school fees
fixed by the school/adjudicated by the Statutory Regulatory
Authorities for the relevant period.
[Para 115][100-B-E]
4.17 It is assumed that at least 15 per cent of the annual
school fees would be towards overheads/expenses saved by the
school Management.Arguendo, this assumption is on the higher
side than the actual savings by the school Management of private
unaided schools, yet there is an inclination to fix that percentage
because the educational institutions are engaged in doing
charitable activity of imparting and spreading education and not
make money.That they must willingly and proactively do.Hence,
collection of commensurate amount (15 per cent of the annual
school fees for academic year 2020-2021), would be a case of
profiteering and commercialisation by the school Management.
[Para 116][100-E-H; 101-A]
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4.18 Ordinarily, it would have been appropriate to relegate
the parties before the Regulatory Authority to refix the school fees
for the academic year 2020-21 after taking into account all aspects
of the matter including the advantage gained by the school
Management due to unspent overheads/expenses in respect of
facilities not availed by the students.However, that course can be
obviated by the arrangement that is proposed in terms of this
judgment. To avoid multiplicity of proceedings (as school fee
structure is linked to school – school wise) including uncertainty of
legal processes by over 36,000 schools in determination of annual
fee structure for the academic year 2020-21, as a one-time measure
to do complete justice between the parties, the directions are issued:
(i)
The appellants (school Management of the concerned
private unaided school) shall collect annual school
fees from their students as fixed under the Act of 2016
for the academic year 2019-20, but by providing
deduction of 15 per cent on that amount in lieu of
unutilised facilities by the students during the relevant
period of academic year 2020-21.
(ii)
The amount so payable by the concerned students be
paid in six equal monthly instalments before
05.08.2021 as noted in the order dated 08.02.2021.
(iii)
It would be open to the appellants (concerned schools)
to give further concession to their students or to
evolve a different pattern for giving concession over
and above those noted in
clauses (i) and (ii).
(iv)
The school Management would not debar any student
from attending either online classes or physical classes
on account of non-payment of fees, arrears/outstanding
fees including the installments, and would not withhold
the results of the examinations of any student on that
account.
(v)
If any individual request is made by the parent/ward
finding it difficult to remit annual fees for the academic
year 2020-21 in the above terms, the school
Management to consider such representation on
case-to-case basis sympathetically.
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(vi)
The said arrangement would not affect collection of
fees for the academic year 2021-22, as is payable by
the students of the concerned school as and when it
becomes due and payable.
(vii) The school Management would not withhold the name
of any student/candidate for the ensuing Board
examinations for Classes X and XII on the ground of
non-payment of fee/arrears for the academic year
2020-21, if any, on obtaining undertaking of the
concerned parents/students. [Para 117][101-B-H;
102-A-B]
4.19 The quantum of deduction from annual school fees is
limited to 15 per cent although the school Management had
mentioned about its willingness to provide 25 per cent scholarship
to deserving students, as the school Management is compelled
to collect annual school fees for the academic year 2020-21 as
was fixed for the academic year 2019-20 on which some of the
school Management(s) could have legitimately asked for increase
of at least 10 per cent in terms of Section 6(5) of the Act of 2016.
[Para 118][102-D-E]
Ramjas School vs. Directorate of Education Writ
Petition (C) No. 9688 of 2018; Naresh Kumar vs.
Director of Education, Delhi Writ Petition (C) No. 2993
of 2020; Pramati Educational and Cultural Trust
(Registered) & Ors. vs. Union of India & Ors. (2014) 8
SCC 1 : [2014] 11 SCR 712; State of M.P. & Ors. vs.
Nandlal Jaiswal & Ors. (1986) 4 SCC 566 : [1987] 1
SCR 1; Pathan Mohammed Suleman Rehmatkhan vs.
State of Gujarat &
Ors. (2014) 4 SCC 156 : 2013 (12)
SCR 446; High Court of Gujarat & Anr. vs. Gujarat
Kishan Mazdoor Panchayat & Ors. (2003) 4 SCC 712
: [2003] 2 SCR 799; M.T. Khan & Ors. v. Govt. of A.P.
& Ors. (2004) 2 SCC 267 : [2004] 1 SCR 117; N. Mani
vs. Sangeetha Theatre & Ors. (2004) 12 SCC 278; Union
of India vs. Moolchand Kharaiti Ram Trust (2018) 8
SCC 321 : [2018] 7 SCR 939 – referred to.
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Case Law Reference
[2002] 3 Suppl. SCR 587
referred to
Para 7
[2012] 2 SCR 715
referred to
Para 7
[2003] 2 Suppl. SCR 474
referred to
Para 10
[2005] 2 Suppl. SCR 603
referred to
Para 10
(2004) 5 SCC 583
referred to
Para 10
[2009] 12 SCR 631
referred to
Para 10
[2004] 1 Suppl. SCR 668
referred to
Para 10
[2014] 11 SCR 712
referred to
Para 70
[1987] 1 SCR 1
referred to
Para 71
[2013] 12 SCR 446
referred to
Para 71
[2003] 2 SCR 799
referred to
Para 73
[2004] 1 SCR 117
referred to
Para 73
(2004) 12 SCC 278
referred to
Para 73
[2018] 7 SCR 939
referred to
Para 95
[1955] 2 SCR 225
referred to
Para 97
[2011] 6 SCR 1173
referred to
Para 97
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1724
of 2021.
From the Judgment and Order dated 14.08.2019 of the High Court
of Judicature for Rajasthan at Jodhpur in D.B. Civil Writ Petition No.
6453 of 2018 with D.B. Civil Writ Petition No. 6414 of 2018 with D.B.
Civil Writ Petition No. 5080 of 2017 with D.B. Civil Writ Petition No.
5088 of 2017 with D.B. Civil Writ Petition No. 6454 of 2018 with D.B.
Civil Writ Petition No. 6480 of 2018 with D.B. Civil Writ Petition No.
6485 of 2018 with D.B. Civil Writ Petition No. 6491 of 2018 with D.B.
Civil Writ Petition No. 6492 of 2018 and D.B. Civil Writ Petition No.
7919 of 2018.
With
Civil Appeal Nos. 1713-1722, 1723, 1725, 1729, 1730, 1726, 1727-
28, 1732, 1731, 1733-35, 1736 of 2021.
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
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Shyam Divan, Pallav Shishodia, Dr. Manish Singhvi, Devadatt
Kamat, Sr. Advs., Anuroop Singhi, Puneet Jain, Ankit Anandraj Shah,
Ms. Christi Jain, Saurabh Rajpal, Ms. Anshula Laroiya, Rishabh Sancheti,
Ms. Padma Priya, Anchit Bhandari, Ms. Shreya Gupta, K. Paarivendhan,
Sandeep Kumar Jha, Ms. Padhmalakshmi Iyengar, Nishanth Patil, Vidit
Monga, Azeem Samuel, Ms. Alankrita Sharma, Rishab Khandelwal, Ms.
Daisy Hannah, Prateek Kasliwal, Ms. Archana Pathak Dave, Ms. Gauri
Jasana, Prakhar Sharma, Sunil Samdaria, Santosh Mishra, Neeraj
Shekhar, Romy Chacko, Shakthi Chand Jaidwal, Ms. Anshul Sharma,
Amit Chhangani, Bhrigu Sharma, Ms. Anisha Upadhyay, M/S. Unuc
Legal Llp, Dr, Raman Deep Singh Sidhu (Kharlia), Mrs. Pragya Baghel,
Rupesh Kumar, Rajeev Sharma, Ms. Neelam Sharma, Ms. Pankhuri
Shrivastava, Alekshendra Sharma, Pravesh Bahuguna, Anilendra Pandey,
Charan Pal Singh Bagri, Sandeep, Advs. for the appearing parties.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J.
1. These two sets of appeals are being disposed of by this common
judgment.
2. In the first set of appeals, six appeals1 emanate from common
judgment and order dated 14.08.2019 passed by the High Court of
Judicature for Rajasthan at Jodhpur and two other appeals2 against the
judgment and order dated 11.02.2020 of the Jaipur Bench of the same
High Court, which followed the earlier decision of the Jodhpur seat
referred to above. In these matters, the
appellants (Management(s) of
private unaided schools in the State of Rajasthan) had assailed the validity
of the Rajasthan Schools (Regulation of Fee) Act, 20163, in particular
Sections 3, 4, 6 to 11, 15 and 16 and the Rules framed thereunder titled
Rajasthan Schools (Regulation of Fee) Rules, 20174, in particular Rules
3, 4, 6 to 8 and 11 thereof being ultra vires the Constitution and abridge
the fundamental right guaranteed under Article 19(1)(g) of the Constitution
of India.
1 arising out of SLP (C) No. 27881 of 2019; SLP (C) Nos.27907-27916 of 2019; SLP
(C) No. 27987 of 2019; SLP (C) No. 2942 of 2020; SLP (C) No. 5902 of 2020; and SLP
(C) No …………. of 2021 @ Diary No(s). 6803 of 2020;
2 arising out of SLP (C) Nos. 5470 and 5589 of 2020
3 for short, “the Act of 2016”
4 for short, “the Rules of 2017”
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3. In the second set of appeals, four appeals5, also filed by the
Management(s) of private unaided schools in the State of Rajasthan,
emanate from the common judgment and order dated 18.12.2020 of the
same High Court. In these appeals, the challenge is to the orders passed
by the State Authorities on 09.04.2020, 07.07.2020 and 28.10.2020
regarding deferment of collection of school fees including reduction of
fees limited to 70 per cent of tuition fees by schools affiliated with the
Central Board of Secondary Education and 60 per cent from the schools
affiliated with Rajasthan Board of Secondary Education, in view of
reduction of syllabus by the respective-Boards due to aftermath of
pandemic (lockdown) from March 2020.
4. The issues involved in all these appeals concern around 36,000
private unaided schools including 220 minority private unaided schools in
the State of Rajasthan governed by the provisions of the Act of 2016
referred to above. Accordingly, all these appeals were clubbed and heard
analogously. However, as aforesaid, two broad issues would arise for
our consideration.
Re: First Set:
5. Reverting to the first set of appeals, the challenge is to the
provisions of the Act of 2016 and Rules of 2017 being violative of rights
guaranteed under Article 19(1)(g) of the Constitution to carry on
occupation of imparting education which includes autonomy to determine
the school fees by the Managements of private unaided schools. It is
urged that any
restriction imposed in that regard would be arbitrary and
unreasonable. Further, the impugned provisions inevitably limit the
autonomy of the school Management of private unaided schools to the
level of merely proposing the school fees to the School Level Fee
Committee6, in which the Management has only one representative as
against eight others i.e., five parents, three teachers and one principal.
This imbalance in the constitution of the SLFC negates the effective
control of the Management in the affairs of the school and in particular
the autonomy to determine its own school fees. Notably, five parents,
who are appointed as members of the SLFC are chosen by draw of lots
from amongst the willing parents of the wards pursuing education in the
schools concerned and could include even the wards who are availing
5 arising out of SLP (C) No …………. of 2021 @ Diary No(s). 44 of 2021; SLP (C) No.
431 of 2021; SLP (C) Nos. 577-579 of 2021; and SLP (C) No. 2494 of 2021
6 for short, “the SLFC”
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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free education under the Right of Children to Free and Compulsory
Education Act, 20097. In fact, the latter have no stakes in the matter of
determination of school fees. As the willing parents are selected by lottery
system, in the process even the person who has no modicum of
knowledge of development of a school, management of finances and
dynamics of quality education, would become part of the process of
determination of school fees. The members of the SLFC would inevitably
have conflicting interest. They would be interested in ensuring that
minimum school fee is finalised. The nominated teachers may constantly
seek favour of the Management by exploiting their position as member
of the SLFC. In the process, an environment of constant difference of
opinion would prevail between the school Management on one side and
the parents of the wards and teachers, who would form part of the
SLFC. Pertinently, the provisions of the impugned Act of 2016 give
authority to the SLFC to override the proposal of the school Management
in the matter of school fees to be collected from the wards during the
relevant period. Effectively, the parents who are members of the SLFC,
would control the decision-making process impacting the autonomy of
the school Management in regard to determination of school fees,
guaranteed under Article 19(1)(g) of the Constitution. The parents-
teachers duo who are part of the SLFC would have no intention or
motivation to create new facilities or commitment to develop the school
towards excellence. Moreover, they would not be accountable for
anything that finally impacts the quality of education in the school
concerned. It is only the school Management who would be held
accountable in that regard, whilst school Management is denuded of its
autonomy to determine school fees. The school fees so determined by
the SLFC as per the provisions of the impugned Act of 2016, would
remain unchanged and binding for next three years with no provision for
increase in case of contingency of funds needed for new development
or general inflation or hike in salary and wages of staff or any other
legitimate purpose.
6. The impugned Act of 2016 also gives wide powers to the
Divisional Fee Regulatory Committee8 and Revision Committee including
power to issue summons, search, seizure and penalties as if the occupation
of imparting education is akin to res extra commercium. The school
7 for short, “the RTE Act”
8 for short, “the DFRC”
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Management-appellants apprehend that dispute with regard to
determination of school fees would be endless and get embroiled in the
process of appeal, revision and judicial proceedings. Resultantly, schools
would suffer uncertainty in financial matters. Furthermore, there is no
mechanism provided to guarantee the recovery of school fees after it is
finally determined under the Act of 2016. The working of the impugned
Act of 2016 would eventually stifle the growth and development of the
private unaided schools and that all schools — small and big, would be
treated equally with same measure, which would be arbitrary and
discriminatory and against the principle expounded by this Court that the
school fees of private unaided schools should be school-based and not a
rigid or uniform arrangement. According to the appellants, the factors
enumerated for determination of school fees are vague, subjective and
irrelevant. The crucial factors such as for making a good school are not
even adverted to in Section 8 of the impugned Act of 2016. The process
of determination of school fees is a dynamic exercise and could be
effectively done by the school Management on its own while keeping in
mind that establishing a school is essentially a charity. According to the
appellants, the provisions of the impugned Act of 2016 are unworkable
and violate the fundamental right guaranteed under Article 19(1)(g) of
the Constitution. The State can only regulate the fees determined by
the
private unaided schools only if it shows that the same entails in profiteering
or capitation, which is prohibited by law.
7. It is urged that by now it is well-established that the private
unaided schools ought to have maximum autonomy with regard to
administration including the right of appointment, disciplinary powers,
admission of students and the “fees to be charged” as expounded by this
Court in T.M.A. Pai Foundation & Ors. vs. State of Karnataka &
Ors.9. The Court noted that it is in the interests of the general public that
more good quality schools are established. Autonomy and non-regulation
of the school administration in matters referred to above will ensure that
more such institutions are established. This view has been restated in
Society for Unaided Private Schools of Rajasthan vs. Union of India
& Anr.10.
8. According to the appellants, the activities of school level
education are qualitatively different from that of professional level
9 (2002) 8 SCC 481 (paras 60 and 61)
10 (2012) 6 SCC 1 (paras 50 to 53)
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education. The determination of school fees, therefore, stands on a totally
different footing than determination of fees for professional colleges for
medicine etc. The impugned Act of 2016 falls foul of doctrine of
proportionality — as restrictions imposed on the school Management in
respect of determination of school fees have no cogent nexus/object
sought to be achieved.
9. It is lastly urged that the legislative field regarding regulation of
school fees is already occupied by the law made by the Parliament being
the RTE Act11 and the Rules12 framed thereunder. Hence, it was not
open to the State legislature to enact a law on the same subject.
10. These points were urged even before the High Court at the
instance of the appellants. The respondent-State countered the same on
the argument that the impugned Act of 2016 was in the nature of a
regulatory law, with complete autonomy to the school Management to
decide about its fee structure which, however, could be given effect to
upon approval given by the SLFC. The SLFC consists of not only parents
of wards, but also the school Management and their representatives in
the form of teachers. It ensures participation of all the stakeholders and
democratisation of the decision-making process. The proposal of the
school Management, if found to be in order, is generally approved and it
is open to the SLFC to give counter suggestion which if acceptable to
the school Management
can be acted upon by it. In case there is a
difference of opinion, only then the matter goes for adjudication of the
rival claims before the DFRC and the decision of that Authority becomes
binding on the parties. Further, the school Management, the SLFC as
well as the Adjudicatory-cum-Regulatory Authority, each one of them is
guided by the principles and factors delineated in Section 8 of the Act of
2016 and Rule 10 of the Rules of 2017 in the matter of determination of
school fees. Such external regulation for fee fixation has been recognised
and approved by this Court in successive decisions viz., Islamic
Academy of Education & Anr. vs. State of Karnataka & Ors.13, P.A.
Inamdar & Ors. vs. State of Maharashtra & Ors.14, Modern School
11 Sections 13 and 16 of the RTE Act
12 The Right of Children to Free and Compulsory Education Rules, 2010 (Rules 12, 15
and 16)
13 (2003) 6 SCC 697 (5-Judge Bench)
14 (2005) 6 SCC 537 (7-Judge Bench)
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vs. Union of India & Ors.15, Action Committee, Unaided Private
Schools & Ors. vs. Director of Education, Delhi & Ors.16 and Modern
Dental College and Research Centre & Ors. vs. State of Madhya
Pradesh & Ors.17. According to the respondent-State, the setting up of
External Fee Regulatory Authority is consistent with the jurisprudential
exposition of this Court and held not to be violative of Article 19(1)(g) or
Article 30 of the Constitution of India. According to the State, there is no
ambiguity in the provisions of the Act of 2016. In that, the principles
enunciated in the statutory provisions under consideration are not
irrelevant or irrational as suggested by the appellants.
11. The respondent-State has also refuted the challenge to the
impugned Act of 2016 merely on the basis of its nomenclature. According
to the State, non-mentioning of the words prevention of profiteering and
charging of capitation fee in the impugned Act of 2016, does not ipso
facto make the same constitutionally suspect. It is urged that a
Constitution Bench of this Court in Modern Dental College and
Research Centre (supra) has upheld the validity of identical provisions
enacted by the State of Madhya Pradesh in relation to fixation of fee by
external committees and, therefore, the challenge set up by the appellants
cannot be countenanced.
12. The respondent-State would urge that the High Court in the
impugned judgment after adverting to the exposition of different
Constitution
Benches of this Court, justly concluded that the impugned
Act of 2016 did not violate Article 19(1)(g) of the Constitution as the
right flowing therefrom was not an absolute fundamental right. Further,
there is no substance in the grounds set forth to assail the validity of the
impugned Act of 2016.
13. The High Court did advert to these arguments canvassed by
both sides and eventually dismissed the challenge to the validity of the
impugned Act of 2016 vide common judgment and order dated
14.08.2019. The High Court after adverting to the exposition in T.M.A.
Pai Foundation (supra), Islamic Academy of Education (supra),
Modern School (supra) and Modern Dental College and Research
Centre (supra), proceeded to dismiss the writ petitions by observing as
follows:
15 (2004) 5 SCC 583 (3-Judge Bench)
16 (2009) 10 SCC 1 (3-Judge Bench)
17 (2016) 7 SCC 353 (5-Judge Bench)
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“19. Therefore, in the backdrop of law laid down by Constitution
Bench in Modern Dental College & Research Centre (supra), if
the impugned Act and the provisions sought to be assailed by the
petitioners and the regulatory measures provided under the Rules
are examined objectively with pragmatic approach, then, it would
ipso facto reveal that State has not made any endeavour to trench
into autonomy of petitioner-institutions. The provisions are
regulatory in nature with the solemn object of preventing
profiteering and commercialization in school education. The
constitution of the Committee for regulating fee structure, by no
stretch of imagination be construed as an attempt to completely
bye-pass the school management. The Committee as such is
chaired by representative of the management besides principal as
a Secretary with three teachers nominated by the management
and five parents nominated from parent teachers association. Thus,
the contention of the petitioners that State has completely chipped
the wings of management or invaded their autonomy is an
euphonious plea bereft of any merit.
The criteria for determining fee are also based on legitimate
considerations provided under Section 8 of the Act. Thus, even
while considering fee structure of the school, the Committee cannot
be allowed to act at its whims and fancy but for adhering to the
criteria laid down under Section 8 of the Act. That apart, the
remedy against
the fee determined by the Committee is also
provided in the Statute by way of appeal/reference and second
appeal, which sufficiently repudiate the contention of the petitioners
about unreasonable restrictions on their autonomy within the
mischief of unacceptable constraints envisaged under clause (6)
of Article 19 of the Constitution.
20. Switching on to the coercive measures and penal provisions
provided under the Statute and enforcement methodology
prescribed under the Rules, it would be just and appropriate to
observe that all these provisions are essential and necessary
concomitant of regulatory mechanism for achieving desired
objectives, and therefore cannot be categorized as unreasonable
restrictions. In the overall scenario, we are also convinced that
Sections 13 to 18 of the impugned Act and Rule 11 of the Rules
are not intended to be invoked on sundry occasions for interfering
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with day to day functioning of the unaided recognized schools.
Thus, complaint of the petitioners about fanciful and capricious
supplication of these provisions per se appears to be a far cry
without any substance.
Indisputably, the Rules are in the nature of subordinate
legislation and framed by the Government in exercise of power
under Section 19 of the Act for carrying out all or any of the
purposes of the Act. Thus, the Rules as such are neither assailable
on the ground of lack of legislative competence, nor for failure to
conform to the parent statute under which Rules are made.
Moreover, these rules are also not offending any right conferred
on the petitioners under Part III of the Constitution or in violation
of any provision of the Constitution, therefore, challenge to the
Rules is wholly unsustainable.
21. The argument of the learned counsel for the petitioners, that
the impugned Act is unconstitutional as being in derogation to
Article 13(2) of the Constitution, appears to be quite alluring but
of no substance. Analyzing this argument meticulously in the
backdrop of lis involved in these matters, we have already
repudiated the same. At the cost of repetition, we may reiterate
here that the impugned Act and its other provisions are not taking
away or abridges rights of the petitioners conferred by Part III of
the Constitution. We may hasten to add that entire edifice of
challenge in these petitions is alleged infraction of Article 19(1)(g)
of the
Constitution, which indisputably is not an absolute
fundamental right. As observed hereinabove, the said fundamental
right is subject to reasonable restrictions and such restrictions are
permissible as they are aimed at seeking laudable objectives in
the larger public interest. Therefore, viewed from any angle, the
impugned provisions of the Act as well as Rules are intra-vires
of the Constitution not being in violation of Article 13(2) and
19(1)(g) of the Constitution.
The upshot of above discussion is that all these petitions
fail and are hereby dismissed. The stay petitions are also dismissed
and interim order passed on 9th of April, 2018 is vacated.”
14. We have heard Mr. Pallav Shishodia, learned senior counsel
for the appellants, Dr. Manish Singhvi and Mr. Devadatt Kamat, learned
senior counsel for the State of Rajasthan.
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15. After cogitating over the rival arguments and considering the
impugned judgment, we have no hesitation in observing that although the
High Court was right in its conclusion, it has disposed of the challenge to
the validity of different provisions of the impugned Act of 2016 and the
Rules framed thereunder in a summary manner. We agree that merely
adverting to the decisions of this Court was not enough. The High Court
should have then analysed the challenge to the respective provisions and
also the overall scheme of the Act of 2016. Ordinarily, we would have
relegated the parties before the High Court for reconsideration of the
entire matter afresh. However, considering the nature of issues raised
and the concerns expressed by the parties, we proceed to address the
challenge to the relevant provisions of the Act of 2016 in this judgment
itself.
16. Indeed, a Constitution Bench of this Court in T.M.A. Pai
Foundation (supra) has expounded that the private unaided school
management must have absolute autonomy to determine the school fees.
But at the same time the consistent view of this Court has been restated
and enunciated by the Constitution Bench in Modern Dental College
and Research Centre (supra) in paragraph 75 of the reported decision.
In that, though the fee can be fixed by the educational institutions and it
may vary from institution to institution depending upon the quality of
education provided by each of
such institutions, commercialisation is not
permissible; and in order to ensure that the educational institutions are
not indulging in commercialisation and exploitation, the Government is
equipped with necessary powers to take regulatory measures and to
ensure that the private unaided schools keep playing vital and pivotal
role to spread education and not to make money. The Court further
noted that when it comes to the notice of the Government that the
institution was charging fee or other charges which are excessive, it has
complete authority coupled with its duty to issue directions to such an
institution to reduce the same so as to avoid profiteering and
commercialisation.
17. In paragraph 76 of the same decision, the Court then proceeded
to consider the next question as to how a regulatory framework for
ensuring that no excessive fee is charged by the educational institutions,
can be put in place. For that, the Court adverted to the decision in T.M.A.
Pai Foundation (supra), Islamic Academy of Education (supra),
Modern School (supra) and P.A. Inamdar (supra) and noted that
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primary education is a fundamental right, but it was not an absolute right
as private schools cannot be allowed to receive capitation fee or indulge
in profiteering in the guise of autonomy to determine the school fees
itself. The Court plainly noted that every school management of private
unaided school is free to devise its own fee structure, but the same can
be regulated by the Government in the interests of general public for
preventing profiteering and/or charging of capitation fee. Further, fixation
of fees needs to be regulated and controlled at the initial stage itself. The
Constitution Bench noted with approval the exposition in Association of
Private Dental and Medical Colleges vs. State of M.P.18, which reads
thus:
“42. We are of the view that Sections 4(1) and 4(8) of the 2007
Act have to be read with Section 9(1) of the 2007 Act, which
deals with factors which have to be taken into consideration by
the Committee while determining the fee to be charged by a private
unaided professional educational institution. A reading of sub-
section (1) of Section 9 of the 2007 Act would show that the
location of private unaided professional educational institution, the
nature of the professional course, the cost of land and building,
the available infrastructure, teaching, non-teaching staff and
equipment, the expenditure on administration and maintenance, a
reasonable surplus required for growth and development of the
professional institution and any other
relevant factor, have to be
taken into consideration by the Committee while determining the
fees to be charged by a private unaided professional educational
institution. Thus, all the cost components of the particular private
unaided professional educational institution as well as the
reasonable surplus required for growth and development of the
institution and all other factors relevant for imparting professional
education have to be considered by the Committee while
determining the fee. Section 4(8) of the 2007 Act further provides
that the Committee may require a private aided or unaided
professional educational institution to furnish information that may
be necessary for enabling the Committee to determine the fees
that may be charged by the institution in respect of each
professional course. Each professional educational institution,
therefore, can furnish information with regard to the fees that it
18 2009 SCC Online MP 760
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proposes to charge from the candidates seeking admission taking
into account all the cost components, the reasonable surplus
required for growth and development and other factors relevant
to impart professional education as mentioned in Section 9(1) of
the 2007 Act and the function of the Committee is only to find out,
after giving due opportunity of being heard to the institution as
provided in Section 9(2) of the 2007 Act whether the fees proposed
by the institution to be charged to the student are based on the
factors mentioned in Section 9(1) of the 2007 Act and did not
amount to profiteering and commercialisation of the education.
The word “determination” has been defined in Black’s Law
Dictionary, Eighth Edn., to mean a final decision by the Court or
an administrative agency. The Committee, therefore, while
determining the fee only gives the final approval to the proposed
fee to be charged after being satisfied that it was based on the
factors mentioned in Section 9(1) of the 2007 Act and there was
no profiteering or commercialisation of education. The expression
“fixation of fees” in Section 4(1) of the 2007 Act means that the
fee to be charged from candidates seeking admission in the private
professional educational institution did not vary from student to
student and also remained fixed for a certain period as mentioned
in Section 4(8) of the 2007 Act. As has been held by the Supreme
Court in Peerless General
Finance and Investment Co.
Ltd. v. RBI19, the Court has to examine the substance of the
provisions of the law to find out whether provisions of the law
impose reasonable restrictions in the interest of the general public.
The provisions in Sections 4(1), 4(8) and 9 of the 2007 Act in
substance empower the Committee to be only satisfied that the
fee proposed by a private professional educational institution did
not amount to profiteering or commercialisation of education and
was based on the factors mentioned in Section 9(1) of the 2007
Act. The provisions of the 2007 Act do not therefore, violate the
right of private professional educational institution to charge its
own fee.”
18. After having quoted the above exposition with approval in
paragraph 81, the Court then proceeded to examine the need for a
regulatory mechanism. It noted that the regulatory measures are felt
19 (1992) 2 SCC 343
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necessary to promote basic well-being for individuals in need. In
paragraphs 90 to 92 in Modern Dental College and Research Centre
(supra), this Court noted as follows:
“90. Thus, it is felt that in any welfare economy, even for private
industries, there is a need for regulatory body and such a regulatory
framework for education sector becomes all the more necessary.
It would be more so when, unlike other industries,
commercialisation of education is not permitted as mandated by
the Constitution of India, backed by various judgments of this Court
to the effect that profiteering in the education is to be avoided.
91. Thus, when there can be regulators which can fix the charges
for telecom companies in respect of various services that such
companies provide to the consumers; when regulators can fix the
premium and other charges which the insurance companies are
supposed to receive from the persons who are insured; when
regulators can fix the rates at which the producer of electricity is
to supply the electricity to the distributors; we fail to understand
as to why there cannot be a regulatory mechanism when it comes
to education which is not treated as purely economic activity but
welfare activity aimed at achieving more egalitarian and
prosperous society by empowering the people of this country by
educating them. In the field of education, therefore, this
constitutional goal remains pivotal which makes it distinct and
special in contradistinction with other
economic activities as the
purpose of education is to bring about social transformation and
thereby a better society as it aims at creating better human
resource which would contribute to the socio-economic and political
upliftment of the nation. The concept of welfare of the society
would apply more vigorously in the field of education. Even
otherwise, for economist, education as an economic activity,
favourably compared to those of other economic concerns like
agriculture and industry, has its own inputs and outputs; and is
thus analysed in terms of the basic economic tools like the laws of
return, principle of equimarginal utility and the public finance.
Guided by these principles, the State is supposed to invest in
education up to a point where the socio-economic returns to
education equal to those from other State expenditures, whereas
the individual is guided in his decision to pay for a type of education
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by the possibility of returns accruable to him. All these
considerations make out a case for setting up of a stable regulatory
mechanism.
92. In this sense, when imparting of quality education to cross-
section of the society, particularly, the weaker section and when
such private educational institutions are to rub shoulders with the
State managed educational institution to meet the challenge of the
implementing ambitious constitutional promises, the matter is to
be examined in a different hue. It is this spirit which we have kept
in mind while balancing the right of these educational institutions
given to them under Article 19(1)(g) on the one hand and
reasonableness of the restrictions which have been imposed by
the impugned legislation. The right to admission or right to fix the
fee guaranteed to these appellants is not taken away completely,
as feared. T.M.A. Pai Foundation20 gives autonomy to such
institutions which remains intact. Holding of CET under the control
of the State does not impinge on this autonomy. Admission is still
in the hands of these institutions. Once it is even conceded by the
appellants that in admission of students “triple test” is to be met,
the impugned legislation aims at that. After all, the sole purpose of
holding CET is to adjudge merit and to ensure that admissions
which are done by the educational institutions, are strictly on merit.
This is again to ensure larger public interest.
It is beyond
comprehension that merely by assuming the power to hold CET,
fundamental right of the appellants to admit the students is taken
away. Likewise, when it comes to fixation of fee, as already dealt
with in detail, the main purpose is that the State acts as a regulator
and satisfies itself that the fee which is proposed by the educational
institution does not have the element of profiteering and also that
no capitation fee, etc. is charged. In fact, this dual function of
regulatory nature is going to advance the public interest inasmuch
as those students who are otherwise meritorious but are not in a
position to meet unreasonable demands of capitation fee, etc. are
not deprived of getting admissions. The impugned provisions,
therefore, are aimed at seeking laudable objectives in larger public
interest. Law is not static, it has to change with changing times
and changing social/societal conditions.”
20 supra at footnote No.9
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19. After this jurisprudential exposition, it is not open to argue that
the Government cannot provide for external regulatory mechanism for
determination of school fees or so to say fixation of “just” and
“permissible” school fees at the initial stage itself.
20. The question is: whether the impugned enactment stands the
test of reasonableness and rationality and balances the right of the
educational institutions (private unaided schools) guaranteed to them under
Article 19(1)(g) of the Constitution in the matter of determination of
school fees? The Act of 2016 has been enacted by the State legislature.
It was enacted as it was noticed that the earlier enactment on the self-
same subject did not include provision of appeal against the orders of
fee determination by the Fee Determination Committee. It was also
noticed that there are large number of private schools (approximately
34,000) and a single fee determination committee cannot determine the
fee of such schools in a proper manner in time. For that reason, the Act
of 2016 came into being to provide for regulation of collection of fees by
schools in the State of Rajasthan and matters connected therewith and
incidental thereto. It extends to the whole of the State of Rajasthan and
applies to both aided and unaided schools. The Act provides for a
regulatory mechanism. The expression “aided school” is defined in Section
2(b) to mean a school receiving any sum of money as aid from the State
Government. The
expression “unaided school” has not been defined. It
must, however, follow that all other private schools, other than aided
schools would qualify that category (i.e., unaided private schools). The
expression “school” has been defined in Section 2(t), which reads thus:
“2. Definitions.- In this Act, unless the context otherwise
requires,-
xxx
xxx
xxx
(t) “school” means the school imparting elementary, secondary
and senior secondary education recognized by the Government
and managed by any management and affiliated to any Indian or
foreign course or Board, whether aided, partially aided, un-aided
including the school run by the minority educational institution but
does not include a school imparting religious instructions only;”
21. The expression “private school” has been defined in Section
2(p), which reads thus:
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“2. Definitions.- In this Act, unless the context otherwise
requires,-
xxx
xxx
xxx
(p) ”private school” means a school established and administered
or maintained by any person or body of persons and which is a
recognized institution within the meaning of clause (q) of Section
2 of the Rajasthan Non-Government Educational Institutions Act,
1989 (Act No. 19 of 1992), but does not include -
(i) an aided school; and
(ii) a school established and administered or maintained by the
Central Government or the State Government or any local
authority;”
It is, thus, clear that the Act of 2016 applies to all the schools
within the State of Rajasthan referred to in Section 2(t) including private
schools as defined in Section 2(p).
22. Section 3 of the Act of 2016 predicates that no school itself or
on its behalf shall collect any fee in excess of the fee fixed or approved
under the Act of 2016. The expression “fee” has been defined in Section
2(h), which reads thus:
“2. Definitions.- In this Act, unless the context otherwise
requires,-
xxx
xxx
xxx
(h) “fee” means any amount, by whatever name called, collected,
directly or indirectly, by a school for admission of a pupil to any
Standard or course of study;”
23. Besides the definition of expression “fee”, it would be apposite
to advert to the factors for determination of fee under the Act of 2016 as
delineated in Section 8 of the Act of 2016. The same reads thus:
“8. Factors for
determination of fee. - The following factors
shall be considered while deciding the fee leviable by a school,
namely: -
(a) the location of the school;
(b) the infrastructure made available to the students for the
qualitative education, the facilities provided and as mentioned
in the prospectus or web-site of the school;
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(c) the education standard of the school as the State
Government may prescribe;
(d) the expenditure on administration and maintenance;
(e) the excess fund generated from non-resident Indians,
as a part of charity by the management and contribution by
the Government for providing free-ship in fee or for other
items under various Government schemes given to the
school for the Scheduled Castes, the Scheduled Tribes,
Other Backward Class and Special Backward Class
students;
(f) qualified teaching and non-teaching staff as per the norms
and their salary components;
(g) reasonable amount for yearly salary increments;
(h) expenditure incurred on the students over total income
of the school;
(i) reasonable revenue surplus for the purpose of
development of education and expansion of the school; and
(j) any other factor as may be prescribed.”
24. In addition to Section 8, it is essential to take note of Rule 10
of the Rules of 2017 which provides for additional factors to be reckoned
for determination of school fees. Rule 10 reads thus:
“10. Additional factors for determination of fee. - The
following factors shall be considered while deciding the fee in
addition to the factors specified in section 8 of the Act, namely:-
(i) facilities made available by the school under e-governance
i.e. hardware and software facilities;
(ii) strength of students;
(iii) other facilities made available to students such as
swimming pool, horse riding, shooting, archery and
performing
art etc.;
(iv) supply of books, notebooks, etc. and other educational
material provided to students;
(v) provision of meal or snacks; and
(vi) any other factor submitted by the Management before
the School Level Fee Committee.”
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25. After adverting to Section 8 and Rule 10, it is amply clear that
the relevant factors for determination of reasonable school fees under
the Act of 2016 and Rules framed thereunder have been duly articulated
and are based on objective parameters. It was urged that clause (a) of
Section 8 is vague. We find force in the argument of the respondent-
State that the factors referred to in Section 8 and Rule 10 for
determination of fee are founded on the dictum of this Court in successive
reported precedents, as relevant factors. The factor of location of the
school is certainly relevant for determination of fee as are the other
factors referred to in Section 8 and Rule 10. The totality of the effect of
all the specified factors is to be reckoned for determining the school
fees of the concerned school for the relevant period. The location of the
school is not the only factor that is to be taken into account.
26. At the end, what is relevant is that the institution is entitled to
fix its own fee structure, which may include reasonable revenue surplus
for the purpose of development of education and expansion of the
institution, as long as it does not entail in profiteering and
commercialisation. Whether fee structure evolved by the concerned
school results in profiteering or otherwise is a matter which eventually
would become final with the determination/adjudication by the Statutory
Regulatory Committees constituted under
Sections 7 and 10 of the Act
of 2016, namely, Divisional Fee Regulatory Committee (DFRC) and
Revision Committee respectively, as the case may be. That adjudication,
however, becomes necessary only if the SLFC were to disapprove the
proposal of the school Management regarding fee structure determined
by the school. Whereas, if the SLFC were to accept the proposal of the
school Management regarding fee structure as it is, that would be the
fees under the Act of 2016 for the relevant period and then there would
be no need for the DFRC to adjudicate upon the fixation of fee in the
concerned school.
27. The SLFC is constituted institution or school wise, whereas
the DFRC is an independent statutory regulatory authority empowered
to enquire into the factum of whether fee structure of the given school
determined by its Management entails in profiteering. In the event, the
SLFC disapproves the proposal of the school Management, the
dispensation provided for adjudication of the contentious position between
the stakeholders in no manner violate the fundamental right of
establishment of educational institution guaranteed under Article 19(1)(g)
of the Constitution.
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28. Section 4 of the Act of 2016 provides for Parent-Teachers
Association, which reads thus:
“4. Parent-Teachers Association. - (1)(a) Every private school
shall constitute the Parent-Teachers Association.
(b) The Parent-Teachers Association shall be formed by the head
of the school within thirty days from the beginning of each
academic year. Every teacher of the school and parent of every
student in the school shall be a member of the Parent-Teachers
Association and an annual amount of rupees fifty, in case of urban
area and rupees twenty, in case of rural area, shall be collected
from each member of such association.
(c) On formation of the Parent-Teachers Association, a lottery
shall be conducted by drawing a lot of the willing parents to
constitute the School Level Fee Committee and a notice of one
week before such lottery shall be given to the member of the
Parent-Teachers Association.
(2)(a) The School Level Fee Committee shall consist of, -
(b) The list of members of the School Level Fee Committee shall
be displayed on the notice board within a period of fifteen days
from formation of the School Level Fee Committee and copy
thereof shall forthwith be forwarded to the District Education
Officer concerned.
(c) The term of the School Level Fee Committee shall be for one
academic year and no parent member shall be eligible for drawing
a lot by lottery within the period of next three years since the
expiry of his/her last term as the member of the School
Level Fee
Committee.
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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(d) The School Level Fee Committee shall meet at least once in
three months. The procedure to be followed for conducting the
meeting of the School Level Fee Committee shall be such as may
be prescribed.
(e) The Parent-Teachers Association shall have a general meeting
at least once before the 15th August of every year. The procedure
to be followed for conducting the meeting of the Parent-Teachers
Association shall be such as may be prescribed. The Parent-
Teachers Association shall discharge such duties and perform such
functions as may be assigned to it under this Act and as may be
prescribed.”
Section 4 predicates that every private school shall constitute
the Parent-Teachers Association, which is to be formed by the head of
the school within thirty days from the beginning of each academic
year. Section 4(1)(b) envisages that every teacher of the school and
parent of every student in the school shall be a member of the Parent-
Teachers Association. Section 4(1)(c) provides that on formation of
the Parent-Teachers Association, a lottery shall be conducted by
drawing a lot of the willing parents to constitute the SLFC. In the
context of this provision, it was urged that for choosing the willing
parent to become member of the SLFC by draw of lots, no eligibility
criteria has been prescribed in the Act of 2016 or the Rules of 2017.
Besides, willing parent of the ward, who is admitted in the school against
the 25 per cent
quota of free education under the RTE Act, may also
fit into this category even though he would have no stakes in the fee
structure proposed by the school Management. The argument seems
to be attractive, but for that reason the provision need not be struck
down or declared as violative of any constitutional right of management
of the school. This provision can be read down to mean that the draw
of lots would be in respect of willing parents whose wards have been
admitted against the seats other than the seats reserved for free
education under the RTE Act. Further, for ensuring that the willing
parent must be well-informed and capable of (meaningful) interacting
in the discourse on the proposal of fee structure presented by the school
Management, he/she must have some minimum educational qualification
and also familiar with the development of school, management of
finances and dynamics of quality education. The desirability of such
eligibility of the willing parent ought to be specified.
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29. Absence of such provisions in the Act or Rules, however, can
be no basis to suspect the validity of the provision in question. We say so
because draw of lots can be one of the ways of identifying the willing
parent who could become member of the SLFC. Whether the member
should be chosen by election from amongst the willing parents or draw
of lots or by nomination including his/her eligibility conditions, is a
legislative policy. They may serve the same purpose for constituting the
SLFC to give representation to the parents of the wards who are already
admitted in the school and are pursuing education thereat. In any case,
this argument of the appellants will not take the matter any further much
less to declare the relevant provision ultra vires as being violative of
fundamental right of the appellants as such.
30. The composition of the SLFC has been specified in Section
4(2)(a) of the Act of 2016. It consists of a Chairperson being
representative of management of the private school nominated by such
management; Secretary — Principal of the private school (Ex officio);
three teachers nominated by the management of private school as to be
the members of the SLFC; and five parents from Parent-Teachers
Association chosen by a lottery conducted by drawing a lot of willing
parents. The SLFC consists of ten members — five are, in a way,
representatives or nominees of the Management and five parents from
the Parent-Teachers Association. The SLFC so
constituted would
continue to function for one academic year and the member chosen
from Parent-Teachers Association is not eligible to participate again for
a period of three years thereafter from the date of expiry of his/her term
as the member of the SLFC. By this process, the parents representing
different wards get opportunity to be part of the SLFC. Suffice it to
observe that the constitution of the SLFC and for the nature of its function,
no fault can be found with Section 4 of the Act of 2016 much less on the
ground that it violates the fundamental right to establish an educational
institution.
31. Section 5 of the Act of 2016 deals with fixation of fee in
“Government schools” and “aided schools”. However, we are not
concerned with the said provision in the cases before us.
32. Section 6 deals with regulation of fees in private schools and
the procedure to be followed for finalisation of the fee structure. The
same reads thus:
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
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“6. Regulation of fees in private schools. - (1) The
management of the private schools shall be competent to propose
the fee in such schools.
(2) On the formation of the School Level Fee Committee, the
management shall submit the details of the proposed fee along
with the relevant record to the School Level Fee Committee for
its approval at least six months before the commencement of the
next academic year. While giving the approval, the School Level
Fee Committee shall have the authority to decide the amount of
fee afresh.
(3) After considering all the relevant factors laid down under
Section 8, the School Level Fee Committee shall approve the fee
within a period of thirty days from the date of receipt of the details
of the proposed fee and the record under sub-section (2) and
communicate the details of the fee so approved in writing to the
management forthwith. The details of the fee so approved by the
School Level Fee committee shall be displayed on the notice board
in Hindi, English and in the respective medium of school, and if
such school has its own website it shall be displayed on the same
and it shall be binding for three academic years.
(4) The School Level Fee Committee shall indicate the different
heads under which the fee shall be levied.
(5) If the School Level Fee Committee fails to decide the fee
within the period specified in sub-section (3), the management
shall immediately refer the matter to the
Divisional Fee Regulatory
Committee for its decision under intimation to the School Level
Fee Committee in such manner as may be prescribed. During the
pendency of the reference, the management shall be at liberty to
collect the fee of the previous academic year plus ten percent
increase in such fee till the final decision of the Divisional Fee
Regulatory Committee.
(6) The Divisional Fee Regulatory Committee shall decide the
appeal or reference as far as possible within the period of sixty
days from the date of its filing after giving the opposite party an
opportunity of being heard.
(7) The management or the School Level Fee Committee
aggrieved by the decision of the Divisional Fee Regulatory
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Committee in appeal or reference may, within thirty days from
the date of such decision, prefer an appeal before the Revision
Committee in such manner as may be prescribed.”
33. On bare perusal of this provision, it is noticed that the
Management has the prerogative to submit its proposal regarding the
fee structure in the given school. That proposal is submitted to the SLFC
set up under Section 4 of the Act of 2016. The mechanism provided in
Section 6 onwards would primarily apply to private unaided schools.
Indeed, the expression “propose” used in Section 6(1) would mean that
the proposal of the school Management is its in-principle decision
regarding the fee structure for the relevant period. The usage of
expression “propose” in no way undermines the autonomy of the school
Management, in particular to determine its own fee structure for the
relevant period. The consequence of proposal not being accepted by the
SLFC is a different issue. Notably, the SLFC’s decision under Section
6(2) is not binding on the school Management. For, it is open to the
school Management to then refer the matter for adjudication to the DFRC
constituted under Section 7 of the Act of 2016, who in turn is obliged to
decide the reference one way or the other. Indeed, that decision would
be binding on both — the school Management as well as the parents,
unless it is interdicted by the Revision Committee constituted under
Section 10 of the Act of 2016 at the instance of the other
party.
34. The stipulation such as in Section 6(3) of the Act of 2016 that
the decision of fee structure proposed by the school Management, if
approved by the SLFC, would be binding for three academic years, had
been recognised and approved in Islamic Academy of Education (supra)
in paragraphs 7 and 161and also noted in P.A. Inamdar (supra).
35. To put it differently, the dispensation envisaged under Section
6 of the impugned Act of 2016 is not intended to undermine the autonomy
of the school Management in the matter of determination of fee structure
itself. What it envisages is that the school Management may determine
its own fee structure, but may finalise or give effect to the same after
interacting with the SLFC. It is a broad-based committee, consisting of
representatives of the school Management as well as five parents from
Parent-Teachers Association. This is merely a consultative process and
democratisation of the decision-making process by taking all the
stakeholders on board. The SLFC does not sit over the proposal submitted
by the school Management as a court of appeal, but only reassures itself
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
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as to whether the proposed fee structure entails in profiteering by the
school on applying the parameters specified in Section 8 and Rule 10. In
other words, it is open to the SLFC to take a different view regarding
the school fees proposed by the school Management and arrive at a
different fee structure. If that counter proposal is acceptable to the school
Management, nothing further is required to be done and the decision so
taken by the school Management would become binding for three
academic years on all concerned. However, in case the school
Management disagrees with the recommendations of the SLFC, it is
open to both sides, namely, the school Management as well as the parents
of wards to take the matter to the DFRC for adjudication on that aspect.
36. While deciding the school fees, the school Management/SLFC
including the Statutory Regulatory Authorities, all concerned are guided
by the factors delineated in Section 8 of the Act of 2016 and Rule 10 of
the Rules of 2017. Suffice it to note that the process envisaged in Section
6 is democratic and consensual resolution of the issue of fee structure
for the relevant period between the school Management and the parents’
representative being part of the SLFC. It is not to give final authority to
the SLFC to determine the fee structure itself which, as aforesaid, is the
prerogative of the school Management as per Section 6(1) of the Act of
2016. In that sense, the
autonomy of the school Management to determine
the fee structure itself in the first place is untrammelled and not
undermined in any way.
37. Section 7 of the Act of 2016 is about the constitution of the
DFRC. The same reads thus:
“7. Constitution of Divisional Fee Regulatory Committee. -
(1) The Government shall, by notification in the Official Gazette,
constitute a Divisional Fee Regulatory Committee for each
Revenue Division, which shall consist of the following members,
namely: -
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(2)(a) The term of office of the representatives of private schools
and parents shall be for a period of two years from the date of
their nomination and in case of vacancy arising earlier, for any
reason, such vacancy shall be filled for the remainder period of
the term.
(b) The representatives of private schools and parents shall not
be eligible for reappointment.
(c) The representatives of private schools and parents may resign
from the office in writing addressed to the Divisional Commissioner
and on such resignation being accepted, his office shall become
vacant and may be filled in within a period of three month from
the date of occurrence of vacancy.
(d) A representative of private schools and parents may be removed,
if he does any act which, in the opinion of the Divisional
Commissioner, is unbecoming of a member of Divisional Fee
Regulatory Committee:
Provided that no representative of private schools or parents shall
be removed from the Divisional Fee Regulation Committee without
giving him an opportunity of being heard.
(e) The other terms and conditions for the service of the
representatives of private schools and parents shall be such as
may be prescribed.”
From the bare perusal of Section 7(1), it is noticed that first five
members are official members. It is a broad-based independent
Committee which includes two representatives of private schools in the
divisional area “nominated by the Divisional Commissioner” and similarly
two
representatives of parents “nominated by the Divisional Commissioner”.
The representation is given to the concerned stakeholders in the matter
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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of determination of fee structure and in particular in the matter of enquiry
into the factum whether fee structure proposed by the concerned school
Management entails in profiteering or otherwise. In reference to Section
7(2)(a), we must observe that the term of office of representatives of
the private schools and, in particular parents has been earmarked as two
years from the date of their nomination. This would mean, necessarily,
that the concerned parent would be eligible until his/her ward continues
in the school during the tenure and is not a member of the SLFC of any
school within the divisional area. Any member not fulfilling this criterion
would be deemed to have vacated his office forthwith and, in his place,
a new member can be nominated by the competent authority from
amongst the parents of the wards pursuing studies in the school in the
concerned divisional area. Moreover, while nominating representative
of parents, the Divisional Commissioner must keep in mind that the person
so nominated must possess basic qualification of accounting, development
of a school and dynamics of quality education; and whose ward has not
secured admission against 25 per cent quota of free education under the
RTE Act. Thus understood, even Section 7 of the Act of 2016 does not
violate the fundamental right guaranteed under Article 19(1)(g) of the
Constitution in respect of establishment of educational institution.
38. Needless
to underscore that the Divisional Commissioner, who
is empowered to nominate two representatives of private schools would
keep in mind that his/her nominees are from the schools within the
divisional area and at least one amongst them should be chosen from a
minority school so that representation is given to all stakeholders, including
minority and non-minority private unaided schools. At the same time, it
must be borne in mind that such a person is already not a member of the
SLFC of any school in the divisional area. The dispensation provided in
Section 7, is, thus, to create an independent machinery for adjudication
of the question as to whether the fee structure proposed/determined by
the school Management of the concerned school entails in profiteering,
commercialisation or otherwise.
39. As regards challenge to Section 8 of the Act of 2016, the
usage of expression “determination”, in our opinion, does not take away
the autonomy of the school Management in determining its own fee
structure. This provision is only an indicator as to what factors should be
reckoned for determination of fee and on that scale the SLFC as well as
the Statutory Regulatory Committees will be in a position to analyse the
claim of the school Management. This provision, in fact, sets forth
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objective parameters as to what would be the reasonable fee structure
— not resulting in profiteering and commercialisation by the school
Management. As aforesaid, this provision will have to be read along
with Rule 10 of the Rules of 2017 which provides for additional factors
to be borne in mind while examining the question regarding reasonableness
of the fee structure proposed by the school Management.
40. Reverting to Section 9, which reads thus:
“9. Powers and functions of Divisional Fee Regulatory
Committee. - (1) The powers and functions of the Divisional
Fee Regulatory Committee shall be to adjudicate the dispute
between the management and the Parent-Teachers Association
regarding fee to be charged by the school management from the
students.
(2) The Divisional Fee Regulatory Committee may authorize any
officer not below the rank of the Head Master of Secondary School
to enter any private school or any premises belonging to the
management of such school, if the Divisional Fee Regulatory
Committee finds so necessary, and search, inspect and seize any
records, accounts, registers or other documents belonging to such
school or the management in so far as such records, accounts,
registers or other documents are necessary and relevant to decide
the issues before the said Committee. The provisions of the Code
of Criminal Procedure, 1973 (Central Act No. 2 of 1974) relating
to searches and seizures shall apply, so far as may be, to searches
and seizures
under this section.
(3) The Divisional Fee Regulatory Committee shall regulate its
own procedure, for the discharge of its functions, and shall, for
the purpose of making any inquiry under this Act, have all powers
of a civil court under the Code of Civil Procedure, 1908 (Central
Act No. 5 of 1908) while trying a suit, in respect of the following
matters, namely: -
(i) the summoning and enforcing the attendance of any
witness and examining him on oath;
(ii) the discovery and production of any document;
(iii) the reception of evidence on affidavits;
(iv) the issue of commission for the examination of the
witness;
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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(4) No order shall be passed by the Divisional Fee Regulatory
Committee in the absence of the Chairperson. The order of the
Divisional Fee Regulatory Committee shall be binding on the parties
to the proceedings before it for three academic years. It shall not
be called in question in any civil court except by way of an appeal
before the Revision Committee constituted under this Act.
(5) At the time of resolving the dispute, the Divisional Fee
Regulatory Committee shall not grant any interim stay to the fee
determined by the management. On decision in appeal or
reference, the Divisional Fee Regulatory Committee may pass
appropriate orders for refund of the excess fee to the student
concerned. In case the management fails to refund the excess
fee to such student, the Divisional Fee Regulatory Committee
shall proceed to recover such excess fee from the management
as an arrear of land revenue and pay the same to such student.
(6) The Divisional Fee Regulatory Committee shall, on determining
the fee leviable by a private school, communicates its decision to
the parties concerned.
(7) Every private school preferring an appeal before the Divisional
Fee Regulatory Committee shall place the copy of decision in
appeal on its notice board, and if such school has web-site, on its
web-site;
(8) The Divisional Fee Regulatory Committee shall indicate the
different heads under which the fee shall be levied.
(9) The orders passed by
the Divisional Fee Regulatory Committee
shall be binding on the private school for three academic years.
At the end of the said period, the private school shall be at liberty
to propose changes in its fee structure by following the procedure
as laid down under this Act.”
Section 9 deals with powers and functions of the DFRC inter
alia to adjudicate the dispute between the Management and the Parent-
Teachers Association regarding fee to be charged by the school
Management from the students. The DFRC has been empowered to
undertake search, inspect and seize any records, accounts, registers or
other documents belonging to the concerned school or the management
in so far as such records, accounts, registers or other documents are
necessary and relevant to decide the issues before the said Committee.
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It can regulate its own procedure for the discharge of its functions and
exercise all powers of a civil court under the Code of Civil Procedure,
1908.
41. Essentially, Section 9 bestows power upon the DFRC to
adjudicate the dispute between the school Management and Parent-
Teachers Association regarding difference of opinion in respect of fee
structure for the concerned school. What is significant to note is that
Section 9(5) makes it amply clear that the DFRC has no power to grant
any interim stay to the fee determined by the Management. However, in
light of Section 6(5) during the pendency of the appeal or reference
before the DFRC, school Management is at liberty to collect fee of the
previous academic year plus ten per cent increase in such fee till the
final decision of the DFRC, as predicated in Section 6(5) of the Act of
2016. The decision of the DFRC is amenable to appeal before the Revision
Committee constituted under Section 10 of the Act of 2016. None of
these violate the fundamental right of the school Management guaranteed
under Article 19(1)(g) of the Constitution to determine its own fee
structure in any manner.
42. Section 10 deals with constitution of Revision Committee. This
Committee discharges the function of an appellate authority where the
aggrieved party, namely, school Management or the Parent-Teachers
Association can assail the decision of the DFRC. This is a final
adjudicatory body created under Section 10 consisting of official
members
including two representatives of private schools nominated by the State
Government and two representatives of parents nominated by the State
Government. This is again a broad-based independent Committee to
consider the revision preferred against the decision of the DFRC,
constituted on similar lines. The latter Committee is constituted under
Section 7 of the Act of 2016. The observations made in reference to the
constitution of the DFRC under Section 7 hitherto would, therefore, apply
with full force to this provision as well.
43. The procedure to be followed by the Revision Committee is
specified in Section 11 of the Act of 2016, which provision makes it
amply clear that the decision of the Revision Committee shall be final
and conclusive and shall be binding on the parties for three academic
years. Setting up of an independent final adjudicatory authority especially
created for considering the question as to whether the fee structure
proposed by the school Management results in profiteering or otherwise,
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it does not impinge upon the fundamental right of the school Management
guaranteed under Article 19(1)(g) of the Constitution.
44. Even the challenge to the validity of Sections 15 and 16 of the
Act of 2016 is devoid of merit. Section 15 deals with consequences of
contravention of the provisions of the Act of 2016 or the Rules made
thereunder by an individual. Whereas, Section 16 deals with consequences
of violation by a management and persons responsible therefor. It is
unfathomable as to how these provisions can have the propensity to
violate the fundamental right of the school Management under Article
19(1)(g) of the Constitution especially when violation of the mandate of
certain compliances under the Act of 2016 and Rules framed thereunder
has been made an offence and persons responsible for committing such
violation can be proceeded with on that count.
45. The appellants having failed to substantiate the challenge to
the validity of the relevant provisions of the Act of 2016, must also fail
with regard to the challenge to Rules 3, 4, 6 to 8 and 11 of the Rules of
2017.
46. Rule 3 provides for a procedure for conducting meeting of
Parent-Teachers Association. The school Management can have no
grievance regarding the procedure for conducting meeting of Parent-
Teachers Association of the school concerned much less violating its
fundamental right guaranteed under Article 19(1)(g) of the Constitution
regarding
establishment of educational institution and administration
thereof, including determination of fee structure on its own.
47. Rule 4 deals with duties and functions of Parent-Teachers
Association, which reads thus:
“4. Duties and functions of Parent-Teachers Association. -
The Association shall discharge the following duties and perform
the following functions, namely:-
(i) to get information about Tuition fees, Term fees and fees
for co-curricular activities as decided by the School Level
Fee Committee;
(ii) to observe completion of syllabus as per the planning;
(iii) to assist school for planning of other co-curricular
activities; and
(iv) to assess the needs of co-curricular activities.”
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The above Rule enables the Parent-Teachers Association to get
information about tuition fees, term fees and fees for co-curricular
activities as decided by the SLFC; to also observe completion of syllabus
as per the planning; to assist school for planning of other co-curricular
activities; and to assess the needs of co-curricular activities. This is an
enabling provision bestowing power coupled with duty in the Parent-
Teachers Association. This in no way affect the right of the school
Management in the matter of determination of school fees by itself.
The purpose of above provision is to empower the Parent-Teachers
Association to get information about tuition fees, term fees and fees
for co-curricular activities, to facilitate it to analyse the claim of the
school Management regarding the fee structure being reasonable or
otherwise. It is on the basis of that information, the representatives of
the Parent-Teachers Association, forming part of the SLFC, will be in
a position to meaningfully interact either to give counter offer or agree
with the proposal submitted by the school Management. Even though,
the Act of 2016 is largely for regulation of fee, the information regarding
the incidental aspect thereof as to whether co-curricular activities
proposed by the school Management are necessary or not is significant.
For, if Parent-Teachers Association is of the view that it is unnecessary,
it can project its perception in that regard during the interaction
to
persuade the school Management to avoid such co-curricular activities
and to reduce the burden of expenses to be incurred therefor. That
would resultantly reduce the liability of the parents commensurately
due to reduced fee liability.
48. Rule 6 deals with duties and functions of the SLFC. It specifies
the additional duties to be performed by the SLFC besides the powers
and functions specified in the Act of 2016. Rule 6 reads thus:
“6. Duties and functions of School Level Fee Committee. -
The School Level Fee Committee shall, in addition to the powers
and functions specified in the Act, discharge the following duties
and perform the following functions, namely:-
(a) to oversee the compliance of the provisions of the Act
and rules made their under;
(b) to take decision on proposals received from
Management, regarding determination of fee within time
specified in sub-section (3) of section 6 of the Act; and
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(c) to make available necessary documents to the Divisional
Fee Regulatory Committee or Revision Committee, as the
case may be, where appeal is filed by the Management.”
We fail to understand as to how Rule 6 would come in the way or
infringe the fundamental right of the school Management guaranteed
under Article 19(1)(g) of the Constitution. This Rule gives additional
powers to the SLFC for ensuring compliances of the provisions of the
Act of 2016 and the Rules made thereunder including regarding
determination of school fees.
49. Rules 7 and 8 of the Rules of 2017 deal with meeting of the
SLFC and procedure to refer proposal to DFRC and to file appeal and
revision before the Statutory Regulatory Committees respectively. The
same reads thus:
“7. Meeting of the School Level Fee Committee. - (1) The
Chairperson of the School Level Fee Committee shall call the
meetings of the School Level Fee Committee. The Secretary of
the committee shall issue notice of meeting to the members of the
School Level Fee Committee in Form-II. The notice shall be issued
fifteen days before the date of meeting.
(2) The notice shall be sent to each member of the School Level
Fee Committee by registered post or delivered through any other
mode. The acknowledgement of notice shall be preserved for a
period of one year.
(3) No business shall be transacted in the meeting of the School
Level Fee Committee unless four members are present out of
which at least two shall be the parent members of the School
Level Fee Committee. If there is no quorum, the Chairperson of
the School Level Fee Committee shall adjourn the meeting. The
adjourned meeting shall be recalled again after the lapse of ten
days from the date of the meeting which is adjourned.
(4) The Secretary of the School Level Fee Committee shall
prepare minutes of the meeting and circulate the same to all the
members within fifteen days from the date of the meeting.
(5) The minutes of the meeting shall be made available to the
District Education Officer or Deputy Director concerned, as and
when required.
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(6) If a parent member is absent for three consecutive meetings,
his membership shall be deemed to be cancelled and such vacancy
shall be filled in by lottery, from amongst the applications received
for that academic year under rule 5.
8. Procedure to refer proposal to Divisional Fee Regulatory
Committee and to file appeal before Divisional Fee
Regulatory Committee and Revision Committee under
section 6 of the Act. - (1) The Management of the school shall
submit fee proposal to the School Level Fee Committee at least
six months before the commencement of the next academic year
in Form-III.
(2) If the School Level Fee Committee fails to decide the fees
within the period specified in sub-section (3) of section 6 of the
Act, the management shall immediately refer the matter in Form-
IV, along-with the proposal submitted to the School Level Fee
Committee, to the Divisional Fee Regulatory Committee, within
thirty days of expiry of the period specified in sub-section (3) of
section 6 of the Act, for its decision.
(3) The management may prefer an appeal in Form-V against the
decision of the School Level Fee Committee within 30 days from
the date of decision of the School Level Fee Committee.
(4) The management or School Level Fee Committee aggrieved
by the decision of the Divisional Fee Regulatory Committee in
appeal or reference may, within thirty days from the date of such
decision, prefer an appeal, in Form-VI, before the Revision
Committee along with the
proposal of fees submitted by
management and the copy of the decision of the School Level
Fee Committee and Divisional Fee Regulatory Committee.”
These Rules deal with purely procedural matters and are in line
with the powers and functions of the concerned Committees. The Rules
provide for the manner in which the proposal is to be submitted by the
school Management and to be taken forward. These provisions in no
way affect the fundamental right guaranteed under Article 19(1)(g) of
the Constitution much less autonomy of the school Management to
determine the fee structure itself in the first place including the
administration of the school as such.
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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50. The next challenge is to Rule 11 which obligates the private
schools to maintain accounts and other records in the manner prescribed
thereunder. The same reads thus:
“11. Maintenance of accounts and other records.- (1) Every
private school shall,-
(a) maintain separate accounts for different kinds of transactions,
such as, fees collected, grants received, financial assistance
received, payments of salary to staff, purchase of machinery and
equipment, laboratory apparatus and consumables, library books,
stationery, computers, software and other expenditure incurred;
(b) keep the registers, accounts and records within the premises
of their school as they shall be made available at all reasonable
time for inspection; and
(c) preserve the accounts maintained, together with all vouchers
relating to various items or receipts and expenditure, until the audit
of accounts is over and objections, if any, raised are settled.
(2) Every private school shall, in addition to accounts and records
specified in sub-rule (1), maintain the following, namely:-
(a) General Register;
(b) Admission Register;
(c) Fee Receipt;
(d) Fee Collection Register;
(e) Cash Book;
(f) Library and Reading Room Account;
(g) Staff Attendance Register and Staff Salary Register;
(h) Students Attendance Register;
(i) Voucher File;
(j) Cheque Register;
(k) Acquaintance Roll;
(1) Stock Registers;
(m) Transfer Certificate Book;
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(n) Examination Fees Collection Receipt;
(o) Contingency Expenditure Register;
(p) Asset Register; and
(q) Building Rent Register.
(3) Every private school shall also maintain the other record of
the institution as per the orders issued by the Government, from
time to time.”
In our opinion, even this provision by no stretch of imagination
would affect the fundamental right of the school Management under
Article 19(1)(g) of the Constitution much less to administer the school.
This provision, however, is to ensure that a meaningful inquiry can be
undertaken by the SLFC or the Statutory Regulatory-cum-Adjudicatory
Authorities in determination of the fact whether the fee structure
propounded by the school Management results in profiteering or
otherwise. If information is furnished in any other manner (other than
the manner specified in Rule 11), it would become difficult for the
concerned Committees/Authorities to answer the contentious issue
regarding profiteering. The fee structure determined by the school
Management can be altered by the Adjudicatory Authorities only upon
recording a negative finding on the factum of amount claimed towards
school fees relating to particular activities is an essential expenditure or
otherwise; and that the fee would be in excess of reasonable profit being
ploughed back for the development of the institution or otherwise. The
recovery of excess amount beyond permissible limit would result in
profiteering and
commercialisation. In our opinion, therefore, even Rule
11 is a relevant and reasonable provision and does not impact or abridge
the fundamental right under Article 19(1)(g) of the Constitution.
51. The last assail was on the argument that the field regarding
(school) fee, in particular capitation fee is already covered by the law
enacted by the Parliament being RTE Act and for that reason, it was not
open to the State to enact law on the same subject such as the impugned
Act of 2016. This argument is completely misplaced and tenuous. For,
the purpose for which the RTE Act has been enacted by the Parliament
is qualitatively different. It is to provide for free and compulsory education
to all children of the age of 6 to 14 years, which is markedly different
from the purpose for which the Act of 2016 has been enacted by the
State legislature. Merely because the Central Act refers to the expression
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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“capitation fee” as defined in Section 2(b) and also in Section 13 of the
RTE Act — mandating that no school or person shall, while admitting a
child, collect any capitation fee, does not mean that the Central Act
deals with the mechanism needed for regulating fee structure to ensure
that the schools do not collect fees resulting in profiteering and
commercialisation. By its very definition, the capitation fee under the
Central Act means any kind of donation or contribution or payment other
than the fee notified by the school. On the other hand, fee to be notified
by the school is to be done under the impugned Act of 2016 after it is so
determined by the school Management and approved by the SLFC or by
the Statutory Regulatory Authorities, as the case may be. Suffice it to
observe that the field occupied by the Central Act is entirely different
than the field occupied by the State legislation under the impugned Act
of 2016. The impugned Act of 2016 deals specifically with the subject of
regulating fee structure propounded by the private unaided school
management. Hence, there is no substance in this challenge.
52. Taking overall view of the matter, therefore, we uphold the
conclusion of the High Court in rejecting the challenge to the validity of
the impugned Act of 2016 and Rules framed thereunder. However, we
do so by reading down Sections 4, 7 and 10 of the Act in the manner
indicated in paragraphs 28; 37/38 and 42
respectively of this judgment.
These provisions as interpreted be given effect to, henceforth, in
conformity with the law declared in this judgment. For the reasons
mentioned hitherto, we hold that the High Court rightly concluded that
the provisions of the Act of 2016 as well as the Rules of 2017 are intra
vires the Constitution of India and not violative of Articles 13(2) and
19(1)(g) of the Constitution.
Re: Second Set:
53. These appeals assail the common judgment and order dated
18.12.2020 of the Division Bench of the High Court of Judicature for
Rajasthan at Jaipur whereby all the connected cases involving challenge
to the orders dated 09.04.2020, 07.07.2020 and 28.10.2020 issued by the
State Authorities were disposed of.
54. The order dated 09.04.2020 was issued by the Director,
Secondary Education, in the wake of COVID-19 pandemic, directing
the private schools recognised by the Primary and Secondary Education
Departments to defer collection of school fees for a period of three
months. The said order reads thus:
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“OFFICE OF DIRECTOR, SECONDARY EDUCATION,
RAJASTHAN, BIKANER
ORDER
As per the direction issued by Hon’ble Chief Minister, order is
being issued in regard to collection of fees by Elementary and
Secondary Education Department recognized non-government
schools, which is as follows:-
1. No fee will be charged by non-government schools from the
students/guardians of the period after 15th March, the applicable
fees at present and payment of advance fees which is deferred
for 3 months. In case of non deposition of fees during this period,
name of such student will not be struck off from the rolls of the
school.
2. In case of continuation of the studies in the non-government
schools, the deferred fees for the present session 2020-21 will be
chargeable after deferment period is over.
3. After completion of the Lock down period, if any student of
non-government school wants his Transfer Certificate for
continuing studies in another school then the same can be obtained
after depositing fees of the previous session 2019-20 and obtaining
the no-dues certificate.
(Saurabh Swami)
I.A.S.,
Director, Secondary Education, Rajasthan, Bikaner.
No.-Shivra-Ma/PSP/Sikayat/Vetan/2019-20
dated 09.04.2020"
55. Before expiry of the period noted in the aforementioned order,
the Director, Secondary Education issued another order on 07.07.2020.
The same reads thus:
“OFFICE OF DIRECTOR, SECONDARY EDUCATION,
RAJASTHAN, BIKANER
ORDER
In continuation of the Government letter No.P.8(3)
Shiksha-5/
COVID-19 Fees Staghan/2020 dated 01.07.2020, for collection
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of fees by Elementary and Secondary Education Department
recognized non-government schools, the following order is issued:-
1. The fee chargeable by non-government schools from the
students/guardians after 15th March, the applicable fees at present
and payment of advance fee was deferred for 3 months, as per
the direction of the State Government the said deferment is
extended till the reopening of the schools. In case of non-deposition
of fees during the said period, name of such student will not be
struck off from the rolls of the school.
2. Remaining all will be as per order No.
(Shivra/Ma/PSP/Sikayat/Vetan/2019-20) dated 09.04.2020.
(Saurabh Swami)
I.A.S.,
Director, Secondary Education,
Rajasthan, Bikaner.
No.-Shivra-Ma/PSP-C/A-2/60566/2019-20
Dated 07.07.2020"
6. The private unaided schools then filed writ petition(s) before
the High Court challenging the aforesaid orders dated 09.04.2020 and
07.07.2020. The learned Single Judge of the High Court Bench at Jaipur
considered the prayer for interim relief and vide order dated 07.09.2020
directed the school Authorities to allow the students to continue their
studies online and also to deposit only 70 per cent of the tuition fees
element from the total fees chargeable for the period from March 2020
in three instalments. The relevant extract of the order of the learned
Single Judge dealing with the prayer for interim relief at the instance of
the appellants-Schools
reads thus:
“13. I have considered the submissions as above and perusal the
material available on record.
14. While there are myriad issues involved in the present batch of
the writ petitions, which are required to be examined finally; at
this interim stage, this Court finds that a balance is required to be
struck between financial difficulty of the school management
relating to release of the salary of the staff and minimum upkeep
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of school on one side and the financial pressure, which has come
on the parents due to the pandemic and lock-down as noticed
above.
15. After noticing the judgments passed by the High Court of
Gujarat at Ahmedabad in the case of Nareshbhai Kanubhai Shah
Versus State of Gujarat & 2 Others: R/Writ Petition (PIL) No.64/
2020 and other connected matters decided on 31.7.2020, the High
Court of Punjab and Haryana at Chandigarh in the case of
Independent Schools Association Versus State of Punjab &
Others: CWP No.7409/2020 and other connected matters decided
on 30.6.2020 and the High Court of Delhi in the case of Rajat
Vats Versus Govt. of Nct of Delhi & Another: WP (C) No.2977/
2020 decided on 20.4.2020, this Court is of the view that prima
facie, members of the petitioner association cannot be deprived
of receiving the tuition fees for the students, who continued to
remain on their rolls.
16. However, this Court notices that total infrastructure cost, which
the school may incur for the regular studies during normal days,
has been definitely reduced day to day schools are not opening. It
is noticed that the tuition fees is assessed on the basis of the
infrastructure expenditure including staff salary and operation cost
incurred by the schools in terms of the provisions of the Rajasthan
Schools (Regulation of Fee) Act, 2016, after following the
procedures laid down therein.
17. This Court agrees prima facie with the counsel for intervenors
that while the
institutes had to incur certain additional expenditure
for developing online classes process, the same would be less
than individual expenditure being incurred by the parents for
providing infrastructure to their each ward, who is undergoing
online classes at home. There may be also cases where the parents
may have two or three children. To each one separate laptop or
computer will be required to provide as all of them would be
undergoing online classes at the same time. Thus, comparative
balance is required to be maintained.
18. Prima facie, this Court is also of the view that under the Act
of 2005, the authorities would have jurisdiction to lay down policy,
guideline and direction, which may be found to be suitable for the
purpose of providing the relief to the persons affected by the
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
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disaster as mentioned in Section 22 of the Act of 2005. The
guidelines can be laid down for mitigation of such loss to the
citizens. The powers and functions of the State Executive
Committee under Section 22(j) provide that the State Executive
Committee shall ensure that non-governmental organizations carry
out their activities in an equitable and non-discriminatory manner.
The petitioners are all non-governmental organizations and are
expected therefore to play their necessary role in mitigating the
sufferance caused to the public at large, while at the same time
also protect their own staff from facing financial difficulties. This
Court is also conscious of the fact that the State-respondents,
while passing the impugned orders, have not taken into
consideration the difficulties, which the staff of the concerned
school would face on account of non-payment of the fees.
However, burdening the parents with complete tuition fees would
not be appropriate and justified.
19. In view of the above, this Court by an interim measure and till
the situation gets normalized, directs the school authorities to allow
the students to continue their studies online and allow them to
deposit 70% of the tuition fees element from the total fees being
charged for the year. The said 70% of the tuition fees shall be
paid for the period from March, 2020 in three installments to the
respective schools. However, it is made clear that on
non-payment
of the said fees, the student(s) may not be allowed to join online
classes, but shall not be expelled from the school. The three
installments shall be fixed by depositing the first installment on or
before 30.9.2020 while the second installment shall be paid by
30.11.2020 and third installment shall be paid by 31.1.2021.
However, it is further made clear that the question regarding
remaining fees shall be examined at the stage of final disposal of
these writ petitions. The orders are being passed as interim
arrangement subject to final adjudication of the case.
20. The stay applications are accordingly disposed of.”
57. Against this decision, intra-court cross appeals came to be
filed. In those appeals, the Division Bench vide order dated 01.10.2020
stayed the operation of the interim order passed by the learned Single
Judge. The appeals were then heard on 12.10.2020 and reserved for
orders. However, as representations were received from several counsel
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that they were unable to interact with the court through video
conferencing, the matters were notified for further hearing on 14.10.2020.
The Court then directed listing of appeals on 20.10.2020. However, before
next date of hearing, the State Government vide order dated 16.10.2020
constituted a four-member Committee to give suggestions to the State
Government in relation to recovery of fees from parents/students by
Private/Non-Government Educational Institutions during the academic
session 2020-21. The High Court was apprised about this development
when the matters were taken up on 23.10.2020 as is noticed from the
said order, which reads thus:
“Order
23/10/2020
Mr. Rajesh Maharshi, AAG, submits that a committee has
been constituted for determination of fees to be charged by the
private schools for the period of lockdown imposed due to Covid-
19 Pandemic. The Committee is in process to finalize its
recommendations and accordingly the affidavit shall be filed on
behalf of the State Government on 2nd of November 2020 positively.
Mr. Kamlakar Sharma learned Senior advocate raised
serious objection and prayed for interim measure in view of the
great hardship being faced by the private schools to run their
institutions.
Considering the hardship of the private schools, it is directed
that the State Government shall issue necessary directions by
28.10.2020 positively regarding interim fees which the private
schools shall be allowed to charge subject to final
decision in this
regard.
In the meanwhile, necessary affidavit in compliance of
earlier directions shall be filed by the State Government by
02.11.2020 without fail after providing a copy of the same to all
the parties.
List on 03.11.2020"
58. The appeals were, thus, directed to be notified on 3.11.2020.
Before that date, however, the Director, Secondary Education issued
order dated 28.10.2020, which reads thus:
INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN
[A. M. KHANWILKAR, J.]
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“OFFICE OF DIRECTOR, SECONDARY EDUCATION,
RAJASTHAN, BIKANER
ORDER
The Hon’ble High Court in DB Special Appeal No.637/2020 Sunil
Samdria versus State of Rajasthan and other Special Appeals
passed an order dated 23.10.2020 directing the State Government
to take a decision in regard to charging of school fees from
guardians/students for academic session 2020-21 keeping in view
COVID pandemic and the guidelines be issued by 28.10.2020.
In compliance of the order passed by Hon’ble Rajasthan High
Court, Jaipur dated 23.10.2020 and in pursuance to the State
Government’s letter No. P.8(3) Shiksha-5/COVID-19 Fees
Staghan/2020 dated 28.10.2020, the guidelines for charging of
school fees for the academic session 2020-21 by non-
government educational institutions from students/guardians, are
issued which are as follows:-
A - THE DETAILS OF THE FEES TO BE CHARGED BY
THE SCHOOLS AFTER REOPENING
1. After reopening of the school only tuition fees will be charged
from the students.
2. The tuition fees will be as per the prescribed syllabus for
teaching. Like CBSE for class 9th to 12th has reduced 30% of the
syllabus and has prescribed 70% of the syllabus, hence, the fees
to be charged for this session will be 70% of the tuition
fees of last academic session. Similarly, Rajasthan Board of
Secondary Education for class 9th to 12th has reduced 40% of the
syllabus and has prescribed 60% of the syllabus, hence, the fees
to be charged for
this session will be 60% of the tuition
fees of last academic session.
3. Looking to the circumstance arising out of COVID-19 pandemic,
the decision to call the students of Class 1st to 8th to school has not
been taken, hence whenever the decision is taken and as per the
reduction of syllabus, in the same proportion the fees will be
charged.
4. The fees decided as per above payable to the school for which
guardians/student will be given option of payment of fees monthly/
quarterly.
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5. The schools will not change the uniform prescribed in the
previous academic session.
6. The facilities not being utilized by students like laboratory, sports,
library, curricular activities, development fees, boarding fees etc.
no fees under this head will be charged by schools.
7. For presence of the students in the school, written consent of
the guardians will be required.
8. In case the student is using conveyance provided by the school
like Bal Vaihani etc. then the conveyance charges can be charged
but it will not be more than the conveyance fees charged during
the previous academic session. The conveyance fees will be in
proportion to the number of working days after reopening of the
schools.
9. The conveyance being provide by the schools for students will
have to follow the COVID-19 guidelines prescribed by State
Government and any other directions issued by Government.
10. The SOP issued by State Government will have to be adhered
to by the non-government schools.
B - THE DETAILS OF THE FEES TO BE CHARGED BY
THE SCHOOLS BEFORE REOPENING
1. The schools will determine the fees to be charged from students
after reopening of the school as per the prescribed syllabus for
teaching.
2. Before opening of the schools the online teaching work was
for making them acquainted i.e. capacity building was the objective.
Hence, the fees chargeable will be termed as capacity building
fees.
3. The schools which were/which are imparting online teaching
then
capacity building fees can be charged from such students
which will be 60% of the tuition fees. For online teaching, the
consent of the guardians will be necessary and capacity building
charges can be charged from consenting students.
4. When the schools reopen, it will be duty of schools to impart
the complete syllabus as prescribed by the board to the students
who did not study in online classes and the said syllabus will have
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to be completed by the schools the schools will ensure equality
between the online and offline students.
5. The capacity building charges will be charge from the guardians
in monthly installments.
6. Till the permission is granted by Government for starting class/
classes of students and online teaching is imparted regularly for
that period only the capacity building fees will be charged.
7. If any student does not subscribe to the online education being
provided by the school, no capacity building fees will be charged.
C - DETERMINATION OF TUITION FEES
1. The fees determined by school fee committee formed as per
Rajasthan Schools (Regulation of Fees) 2016 and Rules 2017 will
be the basis for aforesaid determination of fees which will clearly
mention the various fees i.e. tuition fees, library fee etc.
2. The prescribed total fees and tuition fees of last year will not
be increased.
3. Every guardian will be provided of receipt of tuition fees/
capacity building fees. The said receipt will contain the details of
the prescribed fees and the reduced fees necessarily.
4. The students who are undergoing online classes and want to
continue with online classes but their guardians are unable to pay
the fees, in such cases a committee will be formed at school level
which will examine such cases and will take a decision in regard
to the relaxation of fees to be granted looking to the circumstances
from case to case.
5. The
remaining fees for the academic session 2019-20 (remaining
till the schools remained open) will be charged in equal monthly
installments. The guardians of such students will not compelled to
pay the fees in single installment.
6. No student will be prevented from registration for Board
Examination even if he has not attended the online classes and
has not paid the fees, even the transfer certificate of such students
will not be issued.
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7. If any student wants to take transfer certificate and has attended
online classes than capacity building fees as per aforesaid provision
can be charged.
8. For charging fees as per aforesaid the non-government schools
will pay prescribed salary to the employees had teachers and no
retrenchment will be done due to circumstances of COVID-19.
The aforesaid has been approved by competent level. All
concerned ensure the compliance.
(Saurabh Swami)
I.A.S.,
Director, Secondary Education,
Rajasthan, Bikaner.
No.-Shivra-Ma/PSP/C/A-2/60566/2019-20
Dated 28.10.2020"
59. This order was assailed by some of the private schools before
the High Court by way of substantive writ petition(s), which, as per the
High Court Rules was required to proceed before the Single Judge in
the first place. In addition, applications were filed in the pending intra-
court appeals before the Division Bench seeking liberty to challenge the
order dated 28.10.2020 issued by the Director, Secondary Education.
As a result, the Division Bench with the consent of parties thought it
appropriate to hear all the matters including involving challenge to the
order dated 28.10.2020 of the Director, Secondary Education.
60. Accordingly, the appeals and writ petitions were heard and
decided together by the common judgment and order pronounced on
18.12.2020, which is impugned in the present appeals. The Division Bench
vide impugned judgment opined that the State Government was competent
and had
jurisdiction to issue directions as given vide order dated 28.10.2020
of the Director, Secondary Education, being a policy decision necessitated
due to aftermath of pandemic situation. The Court held that in absence
of any legal provision to address the unprecedented difficulties faced by
the parents and their wards across the State, it was open to issue
administrative directions in exercise of power under Article 162 of the
Constitution and especially when there was no legal provision prohibiting
issuance of such directions. The Division Bench also opined that such
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order could be issued even in exercise of power under Section 22 of the
Disaster Management Act, 200521. The Division Bench rejected the
argument of the appellants that the stated order dated 28.10.2020 does
not mention the source of power under which the same has been issued
by the Director, Secondary Education or that it was vitiated due to lack
of opportunity of hearing to the school Management(s). Instead, the
Court held that even if there is no formal authentication of the order, it
would be of no consequence. For, the direction was given by the Chief
Minister being the administrative and political head of the State
Government. It was the bounden duty of the State Government to reckon
the ground realities and strike a balance between the interests of private
schools as well as of the parents and students and to mitigate the plight
of the citizens due to unprecedented crisis post COVID-19 pandemic.
The Court did advert to the fact that the school Management was obliged
to honour its commitment, rather obligation to pay salary to its staff on
account of governing statutory provisions despite the pandemic situation.
Further, the State of Rajasthan had adopted a different pattern of
substantially reducing the school fees in comparison to other States.
Nevertheless, it noted that it is always open to the school Management
as well as the parents to approach the statutory forum for determination
of just fee under the
Act of 2016. The Division Bench finally proceeded
to conclude as follows:
“In view of the above discussion, the rest of the petitions are
disposed of as under:-
I. All the private schools recognized by the Primary and
Secondary Education Department shall be entitled to collect school
fees from the parents of their students including the students of
pre-primary classes in terms of the order dated 28.10.2020 issued
by the State Government subject to special determination of fees
as being directed hereunder.
II. All the private schools are directed to form necessary
bodies required for special determination of fees within 15 days,
if such bodies have not been constituted so far in terms of Rajasthan
Schools (Regulation of Fee) Act 2016, and Rajasthan Schools
(Regulation of Fee) Rules 2017.
21 for short, “the Act of 2005”
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III. In order to safeguard the interests of the schools’
management and the parents, it is further directed that all the
private schools recognized by the Primary and Secondary School
Education Department shall specially determine the school fees
for the period in which schools remained closed due to COVID-
19 pandemic and after opening of the schools in the Session 2020-
2021 in terms of the provisions of Section 8 of Rajasthan Schools
(Regulation of Fee) Act, 2016 and for this purpose all the schools
shall publish necessary details including the strength and salary
paid to the staff during the period in which the schools remained
closed for such special determination on their notice boards as
well as on their websites. This special determination of school
fees shall be completed within two months from the date of order
positively.
IV. With the object to prevent any unfair practice of
collection of fees in the process of this special determination of
fees the component of tuition fees shall be specifically determined
and for that purpose, all heads of the school fees shall be bifurcated
as mandated under Section 6(4) of the Act of 2016.
V. Besides this, the schools’ management or the parents
may take recourse of the provision of appeal/reference before
Divisional Fee Regulatory Committee/Revision Committee, as the
case may be in case any of them are aggrieved of such special
determination.
Needless to say, that in the process of above special
determination of school fees, it will be open for the schools’
management and the parents to determine the fees in consonance
with the directions contained in order dated 28.10.2020 or they
may increase or decrease the fees to be collected for the current
session.
VI. The interim order dated 07.09.2020 passed by learned
Single Judge stands vacated.”
61. In this backdrop, the management of private unaided schools
in the State of Rajasthan have approached this Court to assail the
impugned judgment of the Division Bench of the High Court and also
the order dated 28.10.2020 issued by the Director, Secondary Education.
As a matter of fact, challenge to the orders issued by the Director,
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Secondary Education on 09.04.2020 and 07.07.2020 had worked outdue
to efflux of time. For, by these orders the school Management was merely
directed to defer collection of school fees for specified period as noted
therein; and that period had already expired. Thus, our focus in this
judgment will be and ought to be only on the legality and rationality of the
order issued by the Director, Secondary Education on 28.10.2020 and
applicable to academic year 2020-21 only, including the basis on which
the same has been upheld by the High Court vide impugned judgment.
62. According to the appellants (private unaided schools), the school
fee charged from their students was fixed by the SLFC in its meeting
held on 28.10.2017, by following procedure prescribed under the Act of
2016 and the Rules framed thereunder. The same was to remain in
force for the academic years 2018-19, 2019-20 and 2020-21. In the
present appeals, as aforementioned, we are concerned only with the
school fees pertaining to the academic year 2020-21, in light of the
impugned order dated 28.10.2020 issued by the Director, Secondary
Education.
63. The appellants would urge that being a responsive school
administration and also being deeply concerned with the development of
wards pursuing education in the concerned schools, the school
Management “on their own” had decided to offer scholarship of 25 per
cent of the annual fee to their students. That was to
mitigate the difficulties
faced by the parents and keeping in mind that certain recurring expenses
were not being incurred by the school Management during the lockdown
period. Be that as it may, in law, it is not open to the State Authorities to
modify the school fees once fixed by the SLFC for the relevant academic
year that too in the manner done by the Director, Secondary Education
vide order dated 28.10.2020. The fact that the parties are at liberty to
challenge the modification/reduction of school fees before the statutory
forum does not justify the issue of such an order — unless the State
Authorities have clear mandate to do so under the governing law. The
departure made by the Director, Secondary Education vide order dated
28.10.2020 was not acceptable to the school Management, being ex
facie illegal. It does not disclose the source of power under which it has
been issued. At best, it can rely on the interim observations made by the
High Court in the proceedings pending at the relevant time. Those
observations cannot confer power on the State Authorities when no such
power exists in the State Government in relation to modification/reduction
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of fee structure determined by the school Management and approved
by the SLFC. Moreover, it is well-established that there can be no rigid
uniform fee structure for all the private unaided schools in the State.
The High Court had erroneously assumed that the power exercised by
the Director, Secondary Education was ascribable to Article 162 of the
Constitution. For, the subject of school fees is fully covered and governed
by the provisions of the Act of 2016 and the Rules framed thereunder.
Therefore, in the name of policy decision, the impugned order dated
28.10.2020 cannot be sustained, which on the face of it is not in
conformity with the express statutory provisions governing the subject
of school fees.
64. It is urged that there was no express provision in the Act of
2016 permitting such intervention by the State Authorities in respect of
school fees already fixed under the Act of 2016. Reliance placed on
Section 18 of the Act of 2016 was completely inapposite as that merely
confers power upon the State Government to issue directions consistent
with the provisions of the Act of 2016 and for carrying out the purposes
of that Act or for giving effect to any of the provisions of that Act. Thus,
recourse cannot be taken by the State Authorities to the provisions of
the Act of 2016 much less Section 18 to justify the impugned order dated
28.10.2020. In any case that order, on the face of it, is unreasonable,
arbitrary and irrational. For, Section 8 provides
for the parameters for
determination of school fee and admittedly the school fee had already
been fixed by the SLFC on 28.10.2017 which was still in force and
applicable for the academic year 2020-21 as well. Therefore, it was not
open to reduce the same much less limit it to only one parameter of
tuition fee amongst other parameters referred to in Section 8.
65. It is urged that reliance placed on Section 18 of the Act of
2016 is completely ill-advised. There is no mechanism in the Act of 2016
to review or reduce the school fees once approved by the SLFC or
determined by the Statutory Regulatory Authorities. On the other hand,
as per Section 6(3) such school fee is binding on all concerned for three
academic years, which in the present case was to remain in force until
the academic year 2020-21.Further, the reduction of school fees has
been erroneously linked to the instructions issued by the concerned Board.
In fact, the Board had issued directives to complete the course including
through online training/teaching. Moreover, there is no concept of
“capacity building fee” under the Act of 2016. The expression “capacity
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building” obviously has been borrowed from the legislation such as the
Act of 2005. In any case, it is necessary to make factual enquiry school
wise as to whether the concerned school had completed the entire syllabus
for the relevant academic year; and also, whether the liability of the
school towards teaching and non-teaching staff and their administrative
and infrastructure (recurring) expenses, had been discharged by the school
Management.
66. It is then urged that the High Court committed manifest error
in upholding the impugned order dated 28.10.2020 as being ascribable to
exercise of power under the Act of 2005. For, the stated Act provides
express mechanism as to when and by whom the power to issue directions
can be exercised. The Director, Secondary Education has no such power
under the Act of 2005 nor the State Government could do so thereunder
much less to reduce the school fees fixed after approval of the SLFC in
terms of the mechanism stipulated under the Act of 2016. The provisions
of the Act of 2005 are limited to providing effective management of
disasters and for matters connected therewith or incidental thereto.
67. The manner and method of addressing such disaster and in
particular “disaster management” as defined in Section 2(e) of the Act
of 2005 is by preparation of a plan for disaster management by the
authority concerned under that Act. A National Plan, State Plan or District
Plan is required
to be prepared under the Act of 2005. That is in respect
of prevention of disasters or mitigation of their effects. It is the direct
effect of disaster that is required to be mitigated and not indirect hardship
caused to individuals much less in respect of contractual matters. The
plan must advert to the measures to be taken for the integration of
mitigation measures in the development plans and the measures to be
taken for preparedness and capacity building to effectively respond to
any threatening disaster situations or disaster including the roles and
responsibilities of different Ministries or Departments of the Government
of India. In any case, the action is to be initiated by the State Authorities,
established under the Act of 2005, namely, the Disaster Management
Authority at the concerned level. In the scheme of the Act of 2005,
there is nothing to indicate that the Authorities can interfere with
contractual matters or indirect hardships — such as inability of parents
to pay school fees due to pandemic situation. The Director, Secondary
Education, in no way, is concerned with the preparation of a disaster
plan or its enforcement and implementation under the Act of 2005. As a
result, the order dated 28.10.2020 cannot be sustained with reference to
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the provisions of the Act of 2005. The provision in the form of Section
72 of the Act of 2005 is also of no avail because the same is in reference
to the provisions of the Act, which, as aforesaid, in no way apply to the
subject of fixation and collection of school fees. That subject is exclusively
governed under the Act of 2016.
68. Even the invocation of provisions of the Rajasthan Epidemic
Diseases Act, 202022 by the State to justify the stated order has been
stoutly refuted by the appellants. The powers required to be exercised
by the State Government under the Act of 2020 are delineated in Section
4 of the Act of 2020. None of these measures (referred to in Section 4)
concern the subject of determination of school fees much less reduction
of school fees once it is approved by the SLFC and is in force for the
concerned academic year. The general provision in Section 4(2)(g)
permitting the Government to regulate or restrict the functioning of offices,
Government and private and educational institutions in the State, would
not give authority to the State Government to decide about the fee
structure of the concerned unaided private school. The regulation can
be in regard to the timings when the school should be opened and closed
and the protocol to be followed by the school during the working hours,
as the case may be. That provision does not empower the State
Government to reduce the school fees which is approved by the SLFC
and is in force for the
concerned academic year.
69. According to the appellants neither the order dated 28.10.2020
issued by the Director, Secondary Education can be sustained in law nor
the reasons weighed with the Division Bench of the High Court in the
impugned judgment to uphold the same can stand the test of judicial
scrutiny.
70. Learned counsel for the minority private unaided school
additionally contended that the order issued by the Director, Secondary
Education violates the fundamental rights guaranteed under Article
19(1)(g) as well as Article 30(1) of the Constitution. That the right to fix
the school fees is a fundamental right under Articles 19(1)(g) and 30 of
the Constitution which cannot be regulated by the State except for
preventing profiteering and capitation fee. To buttress his submission,
reliance was placed on the dictum in T.M.A. Pai Foundation23 (supra),
22 for short, “the Act of 2020”
23 paras 29-38, 45, 53-57, 61 and 122
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P.A. Inamdar24 (supra) and Modern School25 (supra). He would submit
that in the case of minorities, the State regulation on minority right has to
satisfy a dual test — the test of reasonableness and the test that it is
regulative of the educational character of the institution and is conducive
to make the institution an effective vehicle of education for the minority
community and for other persons to resort to it. Learned counsel has
also relied upon the decision dated 20.05.2020 of the Delhi High Court in
the case of Ramjas School vs. Directorate of Education26 wherein
the High Court noted that in the case of unaided educational institutions,
availability of surplus is no ground to disapprove the fee hike. Absent
any charging of capitation fee/profiteering, the State Authorities cannot
reject the fee proposal of the school Management and that the quantum
of fee to be charged is an element of administrative functioning of the
school, over which the autonomy of the unaided educational institution
cannot be compromised. He has also placed reliance on the decision of
the Delhi High Court in Naresh Kumar vs. Director of Education,
Delhi27 decided on 24.04.2020. He then invited our attention to the decision
of this Court in Pramati Educational and Cultural Trust (Registered)
& Ors. vs. Union of India & Ors.28 wherein the Constitution Bench
opined that the RTE Act will not apply to minority educational institutions.
Whereas, non-minority institutions are bound by the RTE Act to provide
25 per cent admission to economically weaker sections of the society
and to get reimbursement from the Government towards unit cost. In
substance, he has iterated the argument that the school Management(s)
of private unaided schools has a right to fix their fee structure and to
collect school fees as approved by the SLFC or the Statutory Regulatory
Authority.
71. Per contra, learned counsel appearing for the State and
representing the parents submit that due to extraordinary and
unprecedented situation arisen due to complete lockdown for such a
long period, the parents are not in a position to pay the fixed school fees.
It is only because of large number of representations made by them, the
State Government responded by issuing orders on 09.04.2020 and later
on 07.07.2020 to defer the payment of school fees and finally to reduce
24 paras 91-94, 104, 107 and 139-141
25 paras 16 and 17
26 Writ Petition (C) No.9688 of 2018 (paras 66, 78, 88 and 91)
27 Writ Petition (C) No.2993 of 2020 (paras 18 to 21)
28 (2014) 8 SCC 1 (paras 53 to 55)
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the school fees in terms of order dated 28.10.2020 issued by the Director,
Secondary Education. The dispensation provided in the order dated
28.10.2020 is merely to take mitigating measures and to assuage the
concerns of the parents who were in dire need of such assistance. The
measures taken by the State Government in terms of Sections 38 and 39
of the Act of 2005, cast onerous responsibility upon the Government to
take all measures for mitigation and capacity building in the wake of a
pandemic. These provisions must be given widest meaning as narrow
construction would result in curtailing the powers of a welfare State to
undertake measures for dealing with the unprecedented situation. The
spirit of the provisions must be kept in mind and the court must uphold
the validity of the impugned order which has been issued in larger public
interest. Reliance has been placed on the dictum of this Court in the
State of M.P. & Ors. vs. Nandlal Jaiswal & Ors.29 And Pathan
Mohammed Suleman Rehmatkhan vs. State of Gujarat & Ors.30, to
buttress this submission.
72. According to the respondents, Section 72 of the Act of 2005
gives an overriding effect over all other laws and, therefore, the power
of the State Government exercised in terms of Sections 38 and 39 in
respect of measures articulated therein, need not be constricted keeping
in mind the language of the said provisions. In other words, all that is
required to be done by the State to assuage the concerns of the
society
and citizenry related to the situation arisen from the lockdown due to
pandemic, is permissible within the meaning of the said provisions.
73. It is urged that mere omission to mention the source of power
will not invalidate the exercise of power itself as long as there is a valid
source to that exercise of power as noted by this Court in High Court
of Gujarat & Anr. vs. Gujarat Kishan Mazdoor Panchayat & Ors.31,
M.T. Khan & Ors. v. Govt. of A.P. & Ors.32 and N. Mani vs. Sangeetha
Theatre & Ors.33.
74. It is then urged that the order dated 28.10.2020 was necessitated
and was in furtherance of the observations made by the Division Bench
vide order dated 23.10.2020. That was, obviously, to fulfil the parens patriae
29 (1986) 4 SCC 566 (para 34)
30 (2014) 4 SCC 156 (para 10)
31 (2003) 4 SCC 712 (para 53)
32 (2004) 2 SCC 267 (para 16)
33 (2004) 12 SCC 278 (para 9)
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obligations of the court as well as of the State. It is urged that the State
has a legitimate interest under its parens patriae powers in providing
care to its citizens and since the direction issued is to fulfil that obligation
which was necessitated because of the unprecedented situation coupled
with the fact that even the High Court had expressed a benign hope that
the State Government ought to find out some arrangement, it became
necessary to issue direction vide order dated 28.10.2020. Such power
could be exercised even as a policy matter and the State Government is
competent to do so under Article 162 of the Constitution.
75. It is also urged that the direction given by the Director,
Secondary Education vide order dated 28.10.2020 could be issued by
the State in exercise of power under Section 18 of the Act of 2016 and
hence, no fault can be found with the State Government having exercised
that power.
76. It is urged on behalf of State that the issue in the present
appeals is limited to the justness of the order dated 28.10.2020 and,
therefore, the direction given to the State in the interim order passed by
this Court on 08.02.2021 to ensure that all government outstanding dues
towards unit cost payable to respective unaided school are settled within
one month from the date of the order, was inapposite and needs to be
recalled. It is urged that computation of the unit cost is complex and
assessment thereof is a
time-consuming process.
77. Learned counsel for the State in his written submission has
finally suggested to modulate the relief to be given in these appeals in
the following words:
“5. Re: Modulation of the relief in the present matter

The initial notification issued by the State Government on
09.04.2020 and 07.07.2020 have outlived its utility and
worked itself out. The Constitutional Courts do not
pronounce upon any academic matter. The validity of the
Circular dated 09.04.2020 and 07.07.2020 have become
academic in wake of subsequent events.

The order dated 28.10.2020 can also become passed if
following relief, with utmost humility, is granted:
(a) The management of each school shall propose the
fee structure in terms of Section 6(1) and place it before
the school-level committee within a period of 15 days
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from the date of judgment of this Hon’ble Court. This
shall be exclusively for Covid Year (2020-2021)
irrespective of earlier determination of fees.
(b) The management shall take into account the special
circumstances of the COVID and curtailment of
expenses during COVID along with the factors
mentioned in Section 8 of the Act of 2016. The
management shall be reasonable and explain expenditure
under each head as enjoined by the statute. Section 6(4)
read in conjunction with Section 8 of the Act.
(c) The school-level fee committee will approve the fee
within a period of 30 days.
(d) There shall be compulsory fixation of fee for COVID
year 2020-21 separately (alone) for each school in
accordance with the provisions of the Act of 2016.
(e) The fixation of fee for 2021-22 can, thereafter, take
place normally in accordance with the provisions of the
Act of 2016.

Thus, the final school fee shall come into existence for the
COVID year 2020-21 within a period of 45 days from the
date of judgment of this Hon’ble Court and the order of
28.10.2020 interim order passed by this Hon’ble Court shall
subsume in the same.”
78. According to Ms. Pragya Baghel, learned counsel representing
the parents, the State Government had not followed proper procedure
for determination of 70 per cent of the tuition fees and that decision is
not backed by any tangible material on record. Moreover, the impugned
decision was taken without giving opportunity to the stakeholders, in
particular the parents’ association. For which reason, such a decision
should not be allowed to be taken forward by the State Government. It
is then urged that the action taken under the Act of 2005 was obviously
in larger public interest and being a policy decision would not be amenable
to judicial review. In any case, the appropriate course would be to relegate
the parties before a special Committee comprising of a retired Judge of
the High Court, one Chartered Accountant and retired Teachers/Officers
nominated by the Director of Public Education Board, who can take an
appropriate decision after hearing all the stakeholders.
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79. A written submission has also been filed on behalf of parents
(by Mr. Sushil Sharma and others)contending that online classes are not
a recognised form of education and that is being done by the private
schools on their own without any defined syllabus by the Board. No
planning or infrastructure required for online education is in place. No
permission has been obtained by the private schools to conduct online
classes from the concerned Boards nor any feedback is taken from the
parents about the efficacy of the online teaching. It is urged that there is
no uniformity in the teaching methodology or any standard operating
procedure or protocol prescribed by the concerned Boards to be followed
by the private schools. The focus is essentially on the disadvantage of
online classes conducted by the private schools. It is also urged in the
written submission that the recommendation made by the State
Government and recognition of online classes as capacity building classes
are inappropriate. At the end, it is urged that this Court ought to direct
waiver of complete fees for the duration schools were closed and direct
the State to prescribe a fixed fee for online classes to a standard uniform
charge on par with NOIS across schools and to declare exams taken by
the schools so far as invalid in law and to issue such other direction as
may be necessary.
80. Another written submission filed for the intervener - Mr.
Charanpal
Singh Bagri, claiming to be parent in a private school in the
State of Punjab. He has raised several issues including the questions
pertaining to the matters concerning the schools in the State of Punjab
which are sub judice. In our opinion, it is not necessary to dilate on this
written submission as the present appeals pertain to the issues concerning
the private unaided schools in the State of Rajasthan governed by the
Act of 2016 and the Rules framed thereunder. It will be open to the
intervener to pursue all the points raised in the written submission in the
proceedings pending in the High Court or this Court concerning the private
schools in the State of Punjab. We may not be understood to have
expressed any opinion in that regard.
81. We also have the benefit of written submission filed by Mr.
Sunil Samdaria, appearing in-person who has essentially commended us
to uphold the impugned judgment and order dated 18.12.2020 of the
High Court of Rajasthan and seeking directions to further reduce the
school fees below the percentage specified in the order dated 28.10.2020
and as upheld by the High Court. In fact, he has gone to the extent of
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suggesting that no fee should be charged for the period the schools have
remained closed in the academic session 2020-21 as that would result in
profiteering by the school Management. According to this respondent,
the schools have saved colossal amount of money towards electricity
charges, water charges, stationary charges and other miscellaneous
charges which are required for physical running of the school and which
may not be collected by the school for the relevant period.
82. When the hearing of these appeals was in progress considering
the urgency involved, we thought it appropriate to pass interim directions
which were intended to address the concerns of all parties in some
measure. That order was passed on 08.02.2021, which reads thus:
“SLP (C) No(s). 619/2021
De-linked.
List the matter on 15th February, 2021.
SLP (C) Nos.27907-27916/2019, SLP (C) No. 27987/2019 SLP
(C) No. 27881/2019, SLP (C) No. 2942/2020, SLP (C) No. 5902/
2020, Diary No. 6803/2020, SLP (C) No. 5470/2020, SLP (C)
No. 5589/2020, SLP (C) No. 431/2021 Diary No(s). 44/2021 (XV),
SLP (C) No. 577-579/2021 and SLP (C) No(s). 619/2021
Special Leave Petition (C) Diary No. 3533 of 2021 is taken
up along with these matters, at the request of the petitioners therein.
The hearing of these cases has been commenced and is
part heard. But, since the hearing is likely to take some more
time, we deem it appropriate to pass interim directions which will
address the concerns of all parties in some
measure.
We propose to stay the impugned order on the following
conditions:
(a) The management/school may collect fees for the
academic year 2019-2020 as well as 2020-2021 from the
students, equivalent to fees amount notified for the academic
year 2019-2020, in six monthly installments commencing
from 5th March, 2021 and ending on 5th August, 2021.
(b) The Management shall not debar any student from
attending either online classes or physical classes on account
of non-payment of fees, arrears/outstanding fees including
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the installments, referred to above, and shall not withhold
the results of the examinations of any student on that account.
(c) Where the parents have difficulty in remitting the fee in
terms of this interim order, it will be open to those parents
to approach the school concerned by an individual
representation and the management of the school will
consider such representation on a case-to-case basis
sympathetically.
(d) The above arrangement will not affect collection of fees
for the academic year 2021-2022, which would be payable
by the students as and when it becomes due and payable,
and as notified by the management/school.
(e) In respect of the ensuing Board examinations for classes
X and XII (to be conducted in 2021) the school management
shall not withhold the name of any student/candidate on the
ground of non-payment of the fee/arrears, if any, on
obtaining undertaking of the concerned parent/student.
(f) The above arrangements would be subject to the outcome
of these matters including the final directions to be given to
the parties and without prejudice to the rights and contentions
of the parties in these proceedings.
(g) We also direct the State of Rajasthan to ensure that all
government outstanding dues towards unit cost payable to
respective unaided schools are settled within one month
from the today and, in any case, before 31st March, 2021.
Ordered accordingly.
Heard in part.
Hearing of the aforesaid
cases, shall continue on 15th
February, 2021.”
83. Learned counsel appearing for the appellants had stated that
if the Court were to make this interim arrangement absolute, the
appellants would be satisfied with such a direction. However, as aforesaid,
the respondents, namely, the State Government and the parents have a
different perception and have addressed us fully to oppose grant of any
relief to the appellants.
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84. We have heard Mr. Pallav Shishodia, Mr. Shyam Divan, learned
senior counsel, Mr. Puneet Jain and Mr. Romy Chacko, learned counsel
for the appellants, Dr. Manish Singhvi and Mr. Devadatt Kamat, learned
senior counsel for the State of Rajasthan and Mr. Sunil Samdaria, in-
person.
85. At the outset, in this judgment we consciously opt to limit our
analysis to the challenge/grounds concerning the legality and justness of
the order dated 28.10.2020 issued by the Director, Secondary Education
concerning private unaided schools in the State of Rajasthan and as
applicable to the academic year 2020-21 only. We do not wish to advert
to or analyse any other issue raised by the parties and we may not be
understood to have expressed any opinion either way in that regard.
86. Undeniably, an unprecedented situation has had evolved on
account of complete lockdown due to pandemic. It had serious effect on
the individuals, entrepreneurs, industries and the nation as a whole
including in the matter of economy and purchasing capacity of one and
all. A large number of people have lost their jobs and livelihood as
aftermath of such economic upheaval. The parents who were under
severe stress and even unable to manage their day-to-day affairs and
the basic need of their family made fervent representation to the school
Management(s) across the State. A public discourse in that regard
surfaced in the media which impelled the political dispensation to
intervene. Thus, on the
directions of the Chief Minister of the State of
Rajasthan, the Department initially issued order dated 09.04.2020 merely
to defer the collection of school fees which restriction was extended by
subsequent order dated 07.07.2020.
87. The matter had reached the High Court and by way of interim
arrangement, learned Single Judge of the High Court issued certain
directions against which the parties approached the Division Bench of
the High Court by way of intra-court appeals. During the pendency of
intra-court appeals in deference to the observations of the court, the
State Authority proceeded to issue further order on 28.10.2020, which,
essentially is the subject matter of assail in these appeals.
88. The State cannot be heard to rest its argument to defend the
impugned order dated 28.10.2020 as having been issued in light of benign
hope expressed by the High Court. It could do so only if the law permitted
the State Government to intervene on the subject of school fees of private
unaided schools (minority or non-minority, as the case may be).
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Resultantly, what we need to examine in these appeals is whether order
dated 28.10.2020 issued by the Director, Secondary Education can be
sustained in law.
89. Although the stated order makes no reference to the source
of power under which it had been issued, four different perspectives
have been invoked by the State to justify the exercise of that power.
First, it is competent to do so under Section 18 of the Act of 2016 itself.
Second, being a policy decision, it could issue an executive direction to
mitigate the concerns of the parents in exercise of power under Article
162 of the Constitution. Third, such power can be exercised by the State
Government for mitigating the concerns of the parents and for capacity
building of the stakeholders as one of the measures under the Act of
2005. Lastly, such direction could be issued also in exercise of power
under the Act of 2020 by the State Authorities.
90. We now proceed to test the correctness of the pleas taken by
the State Government in seriatim.
91. The source of power derived from Section 18 of the Act of
2016 is a flimsy argument. Section 18 of the Act of 2016 reads thus:
“18. Power to issue directions. - The State Government may
issue to any school such general or special directions consistent
with the provision of this Act and the rules made thereunder as in
its opinion are necessary or expedient for carrying out the purposes
of this Act or for giving effect to
any of the provisions contained
therein or in any rules or orders made thereunder and the
management of the school shall comply with every such direction.”
This provision does bestow power on the State Government to
issue general or special directions to any school within the State. However,
such direction must be consistent with the provisions of the Act of 2016
and the Rules framed thereunder. It cannot be in conflict with the mandate
of the Act and the Rules. Additionally, such directions must be necessitated
due to expediency for carrying out the purposes of the Act and the
Rules or to give effect to the applicable provisions. If the direction issued
by the State Government does not qualify these parameters, it must
follow that the same has been issued in excess of power bestowed under
Section 18 of the Act of 2016.
92. After analysing the scheme of the Act of 2016, at least two
aspects are amply clear. The first is that a firm mechanism has been
specified under the Act of 2016 regarding determination of fee structure
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in the form of approval by the SLFC and, if required, adjudication by the
DFRC and the Revision Committee. There is no express provision in the
Act or Rules authorising the stated functionaries/authorities to modify
the school fees once finalised in the manner provided by the Act of
2016. Whereas, the explicit mandate in the Act of 2016 is that, the fees
so fixed by the concerned functionaries/authorities shall be binding on all
concerned for three academic years. This is a clear indication of not
altering the school fees unilaterally after it is fixed under the Act of 2016
in any manner for the specified period. If we may say so, it is in the
nature of prohibition or a mandate to continue the same fee structure for
at least three academic years, after it is fixed by the concerned authority
under the Act. By its very nature, the direction given by the State
Government is in conflict with the scheme of finalisation of fee structure
under the Act of 2016 and also the binding effect thereof for the specified
period of three academic years on all concerned. Thus understood, the
direction issued by the State Government in the form of order dated
28.10.2020 does not satisfy the twin tests of being consistent with the
provisions of the Act; and also being necessary or expedient for carrying
out the purposes of the Act, as the case may be.
93. Suffice it to observe that the order dated 28.10.2020 being in
the nature of direction, has been issued in breach of the
pre-conditions
specified in Section 18 of the Act of 2016. As a matter of law, the State
Government had no power, whatsoever, to interdict the fee structure
much less which has been finalised and fixed by the concerned
functionaries/authorities under the Act of 2016 itself before expiry of
the statutory period as specified. As a result, Section 18 of the Act of
2016 will be of no avail to the respondents, in particular the State
Government to justify the order dated 28.10.2020.
94. A fortiori, even the argument of the respondents relying upon
the existence of executive power under Article 162 of the Constitution,
ought to fail. It is well-established position that the executive power of a
State under Article 162 of the Constitution extends to the matters upon
which the legislature of the State has competency to legislate and is not
confined to matters over which legislation has already been passed. It is
also well-settled that the State Government cannot go against the
provisions of the Constitution or any law. The subject of determination
of fee structure and whether it entails in profiteering, is already covered
by the legislation in the form of the Act of 2016 and the Rules framed
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thereunder. It is not as if there is no enactment covering that subject or
any incidental aspects thereof. The Act of 2016, which in itself is a self-
contained code on the said subject, not only provides for the manner in
which the concerned school ought to finalise its fee structure, but also
declares that the fee so finalised either by consensus or through
adjudication mode shall be binding on all concerned for a period of three
academic years. In any case, determination of fees including reduction
thereof is the exclusive prerogative of the management of the private
unaided school. The State can provide independent mechanism only to
regulate that decision of the school Management to the extent that it
does not result in profiteering and commercialisation.
95. Viewed thus, reliance placed on Union of India vs. Moolchand
Kharaiti Ram Trust34 will be of no avail. In that case, the hospitals
were obligated to render free treatment in lieu of allotment of government
land to them for earning no profit and held in trust for public good. The
Court opined that there was no necessity of enacting a law and the
policy formulated by the State Government in that regard cannot be
disregarded.
96. In the present case, we need not dilate on the factum as to
whether the Director, Secondary Education could have issued such a
policy document in exercise of executive power under Article 162 of the
Constitution, which power exclusively
vests in the State Government
alone. The fact remains that the direction issued in terms of impugned
order dated 28.10.2020, on the face of it, collide with the dispensation
specified in the Act of 2016 in the matter of determination of school fees
and its binding effect on all concerned for a period of three academic
years, without any exception. The fact that in the proceedings before
the High Court the State Government had ratified the impugned order,
does not take the matter any further. In that, there can be no ex post
facto ratification by the State Government in respect of subject, on which,
it itself could not issue such direction in law.
97. Even the exposition in Rai Sahib Ram Jawaya Kapur &
Ors. vs. State of Punjab35 and Secretary, A.P.D. Jain Pathshala &
Ors. vs. Shivaji Bhagwat More & Ors.36 Will not come to the aid of
34 (2018) 8 SCC 321 (paras 90 and 91)
35 AIR 1955 SC 549
36 (2011) 13 SCC 99
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the respondents for the same reasons. Notably, not only the subject of
finalisation of fee structure and the matters incidental thereto have been
codified in the form of the Act of 2016, but also a law has been enacted
to deal with the matters during the pandemic situation in the form of
Central Act, namely, the Act of 2005 including the State legislation i.e.,
the Act of 2020. In fact, the State legislation deals with the subject of
epidemic diseases and its management. Even those enactments do not
vest any power in the State Government to issue direction with regard to
commercial or economic aspects of matters between private parties
with which the State has no direct causal connection, which we shall
examine later at the appropriate place. In other words, the power of the
State Government to deal with matters during the pandemic situation
have already been delineated by the Parliament as well as the State
legislature.
98. As such, it is not open to the State Government to issue
directions in respect of commercial or economic aspects of legitimate
subsisting contracts/transactions between two private parties with which
the State has no direct causal connection, in the guise of management of
pandemic situation or to provide “mitigation to one” of the two private
parties “at the cost of the other”. This is akin to – rob Peter to pay Paul.
It is a different matter, if as a policy, the State Government takes the
responsibility to subsidise the school fees of
students of private unaided
schools, but cannot arrogate power to itself much less under Article 162
of the Constitution to issue impugned directions (to school Management
to collect reduced school fee for the concerned academic year). We
have no hesitation in observing that the asservation of the State
Government of existence of power to issue directions even in respect of
economic aspects of legitimate subsisting contracts/transactions between
two private parties, if accepted in respect of fee structure of private
unaided schools, is fraught with undefined infinite risk and uncertainty
for the State. For, applying the same logic the State Government may
have to assuage similar concerns in respect of other contractual matters
or transactions between two private individuals in every aspect of life
which may have bearing on right to life guaranteed under the Constitution.
That would not only open pandora’s box, but also push the State
Government to entertain demands including to grant subsidy, from different
quarters and sections of the society in the name of mitigating measures
making it financially impossible and unwieldy for the State and eventually
burden the honest tax payers - who also deserve similar indulgence.
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Selective intervention of the State in response to such demands may
also suffer from the vice of discrimination and also likely to impinge
upon the rights of private individual(s) — the supplier of goods or service
provider, as the case may be. The State cannot exercise executive power
under Article 162 of the Constitution to denude the person offering
service(s) or goods of his just claim to get fair compensation/cost from
the recipient of such service(s) or goods, whence the State has no direct
causal relationship therewith.
99. It is one thing to say that the State may regulate the fee structure
of private unaided schools to ensure that the school Management does
not indulge in profiteering and commercialisation, but in the guise of
exercise of that power, it cannot transcend the line of regulation and
impinge upon the autonomy of the school to fix and collect “just” and
“permissible” school fees from its students. It is certainly not an essential
commodity governed by the legislation such as Essential Commodities
Act, 1955 empowering the State to fix tariff or price thereof. In light of
consistent enunciation by this Court including the Constitution Bench,
that determination of school fee structure (which includes reduction of
fixed school fee for the relevant period) is the exclusive prerogative of
the school Management running a private unaided school, it is not open
to the Legislature to make a law touching
upon that aspect except to
provide statutory mechanism to regulate fees for ensuring that it does
not result in profiteering and commercialisation by the school
Management. Ex-consequenti, the State Government also cannot
exercise power under Article 162 of the Constitution in that regard.
100. Notably, the direction given in the impugned order to the
school Management is to collect only specified percentage of annual
tuition fees on the assumption that the schools will not be required to
complete the course for the academic year 2020-21. This assumption
has been rebutted by the appellants by relying on the instructions issued
by the concerned Board indicating to the contrary. In any case, that
does not extricate the school Management from incurring recurring capital
and revenue expenditure including to pay their academic and non-
academic staff their full salary and emoluments for the relevant period.
For, no corresponding authority is given to the school Management to
deduct suitable amount from their salaries. Thus, the effect of the
impugned order is to reduce school fees determined under the Act in
absence of authority to do so including under the Act of 2016. Further,